Item 20. Indemnification of Directors
and Officers.
In addition to the rights to indemnification and related obligations of the registrants described below,
Sonic maintains insurance against liabilities under the Securities Act for the benefit of its officers and directors and the officers, directors and managers of the other registrants. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, each of the registrants has been informed that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
The following summary is qualified in its entirety by
reference to the complete text of any statutes referred to below and the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of Sonic, as well as the organizational documents of each of the other registrants.
Sonic Automotive, Inc.
Sonic’s Amended and Restated Bylaws effectively provide that, to the full extent permitted by Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) as may be
amended from time to time, Sonic shall indemnify all persons whom it may indemnify pursuant thereto. Section 145 permits a corporation to indemnify its directors and officers against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlements actually and reasonably incurred by them in connection with any action, suit or proceeding brought by a third party if such directors or officers acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reason to believe their conduct was unlawful. In a derivative action, indemnification may be made only for expenses actually and
reasonably incurred by directors and officers in connection with the defense or settlement of an action or suit and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was
brought shall determine upon application that the defendant officers or directors are reasonably entitled to indemnity for such expenses despite such adjudication of liability.
In addition, Sonic’s Amended and Restated Certificate of Incorporation eliminates personal liability of its directors to the full
extent permitted by Section 102(b)(7) of the DGCL. Section 102(b)(7) provides that a corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for willful or negligent conduct in paying dividends or repurchasing stock out of other than lawfully available funds or (iv) for any
transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective.
Sonic maintains insurance against liabilities under the Securities Act for the benefit of its officers and directors. Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
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Alabama Registrants
(a) Each of SAI AL HC1, Inc., SAI AL HC2, Inc. and Sonic – Williams Cadillac, Inc. (the “Alabama Corporate Registrants”) is a corporation incorporated under the laws of the State of
Alabama.
Division E of Article 8 of Chapter 2 of the Alabama Business and Nonprofit Entity Code (the “Alabama
Code”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to a director, officer, employee or agent of the corporation under certain circumstances and subject to certain limitations.
Under
Section 10A-2-8.30
of the Alabama Code, a
director of any of the Alabama Corporate Registrants shall not be liable for any action taken as a director or any failure to take any action if such director performed the duties of his or her office (i) in good faith, (ii) with the care
an ordinarily prudent person in a like position would exercise under similar circumstances and (iii) in a manner he or she reasonably believes to be in the best interests of the corporation.
Neither the articles of incorporation nor the bylaws of any of the Alabama Corporate Registrants establish any express obligation on the
part of the corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to the corporation or otherwise.
(b) Each of SAI Irondale Imports, LLC, SAI Irondale L, LLC, SAI Montgomery B, LLC, SAI Montgomery BCH, LLC, SAI Montgomery CH,
LLC, SRE Alabama – 2, LLC and SRE Alabama – 5, LLC is a limited liability company organized under the laws of the State of Alabama.
The Alabama Limited Liability Company Act (the “ALLCA”), particularly Section
10A-5A-4.10,
permits a limited
liability company to indemnify and hold harmless a member or other person, pay in advance or reimburse expenses incurred by a member or other person, and purchase and maintain insurance on behalf of a member or other person under certain
circumstances and subject to certain limitations.
The operating agreement of each of SAI Irondale Imports, LLC, SAI Irondale
L, LLC, SAI Montgomery B, LLC, SAI Montgomery BCH, LLC, SAI Montgomery CH, LLC and SRE Alabama – 2, LLC generally provides that any person who at any time serves or has served as a member, manager or officer of such limited liability company,
or who serves or has served at the request of such limited liability company, as a member, manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint
venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, shall have a right to be indemnified by such limited liability company to the fullest extent permitted by law against reasonable expense, including
attorneys’ fees, actually and necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on
behalf of such limited liability company, seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine,
penalty or settlement for which that person may have become liable in any such action, suit or proceeding.
The operating
agreement of SRE Alabama – 5, LLC generally provides that such limited liability company shall hold harmless, and provide indemnification to, the managers, officers and organizer of such limited liability company to the fullest extent allowed
under the ALLCA. The operating agreement of SRE Alabama – 5, LLC also generally provides that if the ALLCA is amended to authorize further elimination of, or limitations on, the liability of managers, officers or other persons, or to provide
greater indemnification to such persons, then the liability of the managers, officers and organizer shall be eliminated or limited to the fullest extent permitted by the ALLCA, as amended.
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California Registrants
(a) Each of Autobahn, Inc., FAA Beverly Hills, Inc., FAA Capitol N, Inc., FAA Concord H, Inc., FAA Concord T, Inc., FAA Dublin N, Inc., FAA Dublin VWD, Inc., FAA Holding Corp., FAA Poway H, Inc.,
FAA Poway T, Inc., FAA San Bruno, Inc., FAA Santa Monica V, Inc., FAA Serramonte, Inc., FAA Serramonte H, Inc., FAA Serramonte L, Inc., FAA Stevens Creek, Inc., FAA Torrance CPJ, Inc., Franciscan Motors, Inc., Kramer Motors Incorporated, SAI Long
Beach B, Inc., SAI Monrovia B, Inc., SAI Santa Clara K, Inc., Santa Clara Imported Cars, Inc., Sonic – Buena Park H, Inc., Sonic – Calabasas A, Inc., Sonic Calabasas M, Inc., Sonic – Calabasas V, Inc., Sonic – Carson F, Inc.,
Sonic – Carson LM, Inc., Sonic – Downey Cadillac, Inc., Sonic Fremont, Inc., Sonic – Harbor City H, Inc., Sonic – Massey Chevrolet, Inc., Sonic Santa Monica M, Inc., Sonic Santa Monica S, Inc., Sonic – Stevens Creek B, Inc.,
Sonic Walnut Creek M, Inc., Sonic – West Covina T, Inc., Sonic Wilshire Cadillac, Inc. and Stevens Creek Cadillac, Inc. is a corporation incorporated under the laws of the State of California.
Section 317 of the California Corporations Code (the “CCC”) authorizes a court to award, or a corporation’s board of
directors to grant, indemnity to any agent of the corporation under certain circumstances and subject to certain limitations.
Section 204(a)(10) of the CCC permits a corporation to provide in its articles of incorporation that a director of the corporation
shall not be personally liable to the corporation or its shareholders for monetary damages for breach of such director’s duties, subject to certain limitations.
The articles of incorporation or bylaws of each of Autobahn, Inc., FAA Beverly Hills, Inc., FAA Capitol N, Inc., FAA Concord H, Inc., FAA Concord T, Inc., FAA Dublin N, Inc., FAA Dublin VWD, Inc., FAA
Holding Corp., FAA Poway H, Inc., FAA Poway T, Inc., FAA San Bruno, Inc., FAA Santa Monica V, Inc., FAA Serramonte, Inc., FAA Serramonte H, Inc., FAA Serramonte L, Inc., FAA Stevens Creek, Inc., FAA Torrance CPJ, Inc., Franciscan Motors, Inc.,
Kramer Motors Incorporated, SAI Long Beach B, Inc., SAI Monrovia B, Inc., SAI Santa Clara K, Inc., Santa Clara Imported Cars, Inc., Sonic – Calabasas M, Inc., Sonic – Calabasas V, Inc., Sonic Fremont, Inc., Sonic Santa Monica M, Inc.,
Sonic Santa Monica S, Inc., Sonic – Stevens Creek B, Inc., Sonic Walnut Creek M, Inc., Sonic Wilshire Cadillac, Inc. and Stevens Creek Cadillac, Inc. generally provide that such corporation is authorized to indemnify its directors, officers and
agents to the fullest extent permitted under California law. Additionally, the bylaws of each of FAA Beverly Hills, Inc., FAA Capitol N, Inc., FAA Concord H, Inc., FAA Dublin N, Inc., FAA Dublin VWD, Inc., FAA Holding Corp., FAA Poway H, Inc., FAA
Poway T, Inc., FAA San Bruno, Inc., FAA Santa Monica V, Inc., FAA Serramonte, Inc., FAA Serramonte H, Inc., FAA Serramonte L, Inc., FAA Stevens Creek, Inc., FAA Torrance CPJ, Inc., SAI Long Beach B, Inc., SAI Monrovia B, Inc., SAI Santa Clara K,
Inc., Santa Clara Imported Cars, Inc., Sonic – Calabasas M, Inc., Sonic – Calabasas V, Inc., Sonic Fremont, Inc., Sonic Santa Monica M, Inc., Sonic Santa Monica S, Inc., Sonic – Stevens Creek B, Inc., Sonic Walnut Creek M, Inc., Sonic
Wilshire Cadillac, Inc. and Stevens Creek Cadillac, Inc. generally and more specifically also provide that such corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director or officer of such corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another entity or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection therewith.
Neither the articles of incorporation nor the bylaws of any of Sonic – Buena Park H, Inc., Sonic – Calabasas A,
Inc., Sonic – Carson F, Inc., Sonic – Carson LM, Inc., Sonic – Downey Cadillac, Inc., Sonic – Harbor City H, Inc., Sonic – Massey Chevrolet, Inc. or Sonic – West Covina T, Inc. establish any express obligation on the
part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to such corporation or otherwise.
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(b) Each of Ontario L, LLC, SRE California – 1, LLC, SRE California – 2,
LLC, SRE California – 3, LLC, SRE California – 4, LLC, SRE California – 5, LLC, SRE California – 6, LLC, SRE California – 7 SCB, LLC, SRE California – 8 SCH, LLC and SRE California 10 LBB, LLC (the “California LLC
Registrants”) is a limited liability company organized under the laws of the State of California.
Section 17701.05(l) of the California Revised Uniform Limited Liability Company Act (the “CRULLCA”) permits a limited
liability company to indemnify any person.
The operating agreement of Ontario L, LLC generally provides that any person who
at any time serves or has served as a member, manager or officer of such limited liability company, or who, while serving as a member, manager, governor, director, officer, trustee, employee or agent of another entity, shall have the right to
indemnification from such limited liability company to the fullest extent permitted by law. In addition, the operating agreement of Ontario L, LLC provides that, to the extent permitted by law, expenses incurred by a member, manager or officer of
such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by
such individual to repay such amount unless it is ultimately determined that such individual is entitled to indemnification under the terms of the operating agreement.
The operating agreement of each of the other California LLC Registrants generally provides that such limited liability company will indemnify its managers and officers to the fullest extent permitted
pursuant to the CRULLCA.
Colorado Registrants
(a) Each of Mountain States Motors Co., Inc., SAI Denver B, Inc., SAI Denver C, Inc., SAI Denver M, Inc., SAI Roaring Fork LR, Inc., Sonic – Denver T, Inc. and Sonic – Lone Tree
Cadillac, Inc. is a corporation incorporated under the laws of the State of Colorado.
Section 7-109
of the Colorado Business Corporation Act (the “CBCA”) authorizes a
court to award, or a corporation’s board of directors to grant, indemnity to officers, directors, employees, fiduciaries or agents of the corporation under certain circumstances and subject to certain limitations.
Section 7-108-401(4)
of the CBCA provides that a
director or officer of a corporation shall not be liable to the corporation or its shareholders for any action the director or officer takes or omits to take as a director or officer if, in connection with such action or omission, the director or
officer performed the duties of the position (i) in good faith, (ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances and (iii) in a manner the director or officer reasonably
believes to be in the best interests of the corporation.
Section 7-108-402
of the CBCA permits a corporation to provide in its articles of incorporation that a
director shall not be personally liable to the corporation or its shareholders for monetary damages for breach of such director’s duties, subject to certain limitations.
The articles of incorporation of Mountain States Motors Co., Inc. generally provide that such corporation may indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably
believed to be in the best interests of such corporation and, with respect to a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful; and, with respect to a proceeding by or in the right of such corporation, has
not been adjudged liable for negligence or misconduct in the performance of his or her duty to such corporation. The articles of incorporation of Mountain States Motors Co., Inc. also generally provide that expenses incurred by a director, officer,
employee, fiduciary or agent of such corporation shall be
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paid to the extent that such person is successful on the merits in the defense of the proceeding and may be paid in advance of the final disposition of such proceeding upon receipt of an
undertaking by such person to repay such amount if it is ultimately determined that such person is not entitled to indemnification. Pursuant to the articles of incorporation of Mountain States Motors Co., Inc., such corporation may procure insurance
on behalf of any such person described in this paragraph.
The bylaws of Mountain States Motors Co., Inc. generally provide
that such corporation shall indemnify any director or officer or person who serves, at such corporation’s request, as a director or officer of another corporation in which such corporation owns shares or of which it is a creditor against all
reasonable costs, expenses and liabilities (including reasonable attorneys’ fees) actually or necessarily incurred by or imposed upon such person in connection with a claim, action, suit, proceeding, investigation or inquiry in which such
person is a party, except in situations in which such person has been finally adjudged to be liable for willful misconduct, willful neglect, or negligence toward or on behalf of such corporation. Furthermore, the bylaws of Mountain States Motors
Co., Inc. generally provide that such corporation may procure insurance on behalf of any such person described in this paragraph.
The bylaws of each of Sonic – Denver T, Inc. and Sonic – Lone Tree Cadillac, Inc. generally provide that such corporation shall indemnify any person who serves or served as a director of such
corporation or who, while serving as a director of such corporation, served, at the request of such corporation, as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or as
a trustee or administrator under an employee benefit plan, to the fullest extent permitted by law. The bylaws of each of Sonic – Denver T, Inc. and Sonic – Lone Tree Cadillac, Inc. also provide that each such corporation’s
board of directors may extend these indemnification rights to officers, employees or agents of such corporation, and that expenses incurred by a director of each such corporation shall be paid by such corporation in advance of the final disposition
of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of such director to repay such amount unless it shall ultimately be determined that the director is entitled to be indemnified by such corporation.
The bylaws of SAI Denver B, Inc., SAI Denver C, Inc., SAI Denver M, Inc. and SAI Roaring Fork LR, Inc. generally provide that each such
corporation shall indemnify any person who serves or served as a director of such corporation or who, while serving as a director of such corporation, served, at the request of such corporation, as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, to the fullest extent permitted by law against reasonable expense, including attorneys’ fees, actually
and necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of such corporation,
seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which that person
may have become liable in any such action, suit or proceeding. The bylaws of each of SAI Denver B, Inc., SAI Denver C, Inc., SAI Denver M, Inc. and SAI Roaring Fork LR, Inc. also provide that each such corporation’s board of directors may
extend these indemnification rights to officers, employees or agents of such corporation, and that expenses incurred by a director of each such corporation shall be paid by such corporation in advance of the final disposition of such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of such director to repay such amount unless it shall ultimately be determined that the director is entitled to be indemnified by such corporation.
(b) Each of SRE Colorado – 1, LLC, SRE Colorado – 2, LLC, SRE Colorado – 3, LLC, SRE Colorado – 4 RF,
LLC, SRE Colorado – 5 CC, LLC, TT Denver, LLC and TTRE CO 1, LLC is a limited liability company organized under the laws of the State of Colorado.
Section 7-80-407
of the Colorado Limited Liability Company Act (“COLLCA”) provides that a limited liability
company shall reimburse and indemnify any person who is or was a member or manager of the limited
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liability company for liabilities incurred by the person, in the ordinary course of the business or for preservation of its business or property, if such payments were made without violation of
the person’s duties to the limited liability company.
The operating agreement of each of SRE Colorado – 1, LLC, SRE
Colorado – 2, LLC and SRE Colorado – 3, LLC generally provides that each such limited liability company shall hold harmless, and provide indemnification to, the managers and officers of such limited liability company and the
organizer to the fullest extent allowed under the COLLCA. If the COLLCA is amended to authorize further elimination of, or limitations on, the liability of managers, officers or other persons, or to provide greater indemnification to such persons,
then the liability of the managers, officers and the organizer of each such limited liability company shall be eliminated or limited to the fullest extent permitted by the COLLCA, as amended.
The operating agreement of each of SRE Colorado – 4 RF, LLC, SRE Colorado – 5 CC, LLC, TT Denver, LLC and TTRE CO 1, LLC
generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager, or officer of such limited liability company, serves or has served,
at the request of such limited liability company, as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or
as a trustee or administrator under an employee benefit plan, shall have a right to be indemnified by such limited liability company to the fullest extent permitted by law against reasonable expense, including attorneys’ fees, actually and
necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of such limited liability
company, seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which
that person may have become liable in any such action, suit or proceeding. The operating agreement of each of SRE Colorado – 4 RF, LLC, SRE Colorado – 5 CC, LLC, TT Denver, LLC and TTRE CO 1, LLC also generally provides that each such
limited liability company’s manager may extend these indemnification rights to employees or agents of such limited liability company, and that expenses incurred by a manager or officer of each such limited liability company shall be paid by
such limited liability company in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of such manager or officer to repay such amount unless it shall ultimately be determined that the
manager or officer is entitled to be indemnified by such limited liability company.
Delaware Registrants
(a) Each of Avalon Ford, Inc., EchoPark Automotive, Inc. and FirstAmerica Automotive, Inc. (the “Delaware Corporate
Registrants”) is a corporation incorporated under the laws of the State of Delaware.
Section 145 of the DGCL
authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors, officers, employees and agents of the corporation under certain circumstances and subject to certain limitations.
Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the
corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, subject to certain limitations.
The bylaws of each of the Delaware Corporate Registrants generally provide that such corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another entity or other enterprise, to the fullest extent now or hereafter permitted by applicable law. The
bylaws of each of the Delaware Corporate Registrants also generally provide that expenses incurred by a director or officer of such corporation shall be paid
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in advance of the final disposition of such action, suit or proceeding to the fullest extent permitted by law upon an undertaking by such person to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to indemnification. Furthermore, the bylaws of each of the Delaware Corporate Registrants generally provide that such corporation may procure insurance or other arrangement on
behalf of any such person described in this paragraph.
The certificate of incorporation of each of Avalon Ford, Inc. and
EchoPark Automotive, Inc. provides that a director of each such corporation shall not be personally liable to such corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the
DGCL, except for liability (i) for any breach of the director’s duty of loyalty to such corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL relating to an unlawful payment of a dividend or unlawful stock purchase or redemption or (iv) for any transaction from which the director derived any improper personal benefit; provided that,
if the DGCL is amended to eliminate or limit the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the DGCL, as amended.
(b) Sonic – LS, LLC is a limited liability company organized under the laws of the State of Delaware.
Section 18-108
of the Delaware Limited Liability Company Act (“DLLCA”) permits a
limited liability company to indemnify any member or manager of the limited liability company from and against any and all claims and demands whatsoever.
Section 18-1101
of the DLLCA permits a limited liability company to provide in its limited liability company agreement that a member, manager or other person
shall not be liable for breach of contract and breach of duties to the limited liability company or to another member or manager or to another person that is a party to or is otherwise bound by the limited liability company agreement, subject to
certain limitations.
The operating agreement of Sonic – LS, LLC provides that such limited liability company shall
indemnify any manager, member or any person to whom the managers have delegated authority, as well as any person acting on behalf of a manager or member pursuant to legal authority, for all costs, losses, liabilities and damages paid or accrued by
such person in connection with the business of such limited liability company to the fullest extent provided or allowed by the DLLCA, including the advance of costs of participation in any pending or threatened dispute, litigation, arbitration or
other proceeding with respect to the business of such limited liability company, subject to certain limitations.
Florida Registrants
(a) Each of SAI FL HC2, Inc., SAI FL HC3, Inc., SAI FL HC4, Inc., SAI FL HC7, Inc., Sonic Automotive – 1720
Mason Ave., DB, Inc., Sonic Automotive – 6008 N. Dale Mabry, FL, Inc., Sonic – Lloyd Nissan, Inc., Sonic – Lloyd Pontiac-Cadillac, Inc., Sonic – Sanford Cadillac, Inc. and Sonic – Shottenkirk, Inc. (the “Florida
Corporate Registrants”) is a corporation incorporated under the laws of the State of Florida.
Section 607.0850
of the Florida Business Corporation Act (the “FBCA”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to officers, directors, employees or other agents of the corporation under certain
circumstances and subject to certain limitations. In addition, Section 607.0831 of the FBCA provides that a director shall not be personally liable for monetary damages to the corporation or any other person for any statement, vote, decision or
failure to act regarding corporate management or policy by such director, subject to certain limitations.
Neither the
articles of incorporation nor the bylaws of any of the Florida Corporate Registrants establish any express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to
costs or expenses related to an action, suit or proceeding involving or related to such corporation or otherwise.
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(b) Each of EchoPark FL, LLC, SAI Clearwater T, LLC, SAI Fort Myers B, LLC, SAI Fort
Myers H, LLC, SAI Fort Myers M, LLC, SAI Fort Myers VW, LLC, SAI Orlando CS, LLC, SAI Pensacola A, LLC, Sonic Automotive – 1720 Mason Ave., DB, LLC, SRE Florida – 1, LLC and SRE Florida – 2, LLC is a limited liability company
organized under the laws of the State of Florida.
Section 608.0408 of the Florida Revised Limited Liability Company
Act (the “FRLLCA”) permits a limited liability company to indemnify a member, manager or other person under certain circumstances and subject to certain limitations.
Section 605.04093 of the FRLLCA provides that a manager in a manager-managed limited liability company or a member in a member-managed limited liability company is not personally liable for monetary
damages to the limited liability company, its members, or any other person for any statement, vote, decision or failure to act regarding management or policy decisions by a manager in a manager-managed limited liability company or a member in a
member-managed limited liability company under certain circumstances and subject to certain limitations.
The operating
agreement of each of SRE Florida – 1, LLC and SRE Florida – 2, LLC generally provides for the indemnification and limitation of liability of any manager, member or officer to the fullest extent permitted by law.
The operating agreement of each of EchoPark FL, LLC and SAI Pensacola A, LLC generally provides that each such limited liability company
shall indemnify each of its managers for all costs, losses, liabilities and damages paid or accrued in connection with the business of such limited liability company or because he or she is a manager of the limited liability company to the fullest
extent permitted by Florida law. In addition, the operating agreement of each of EchoPark FL, LLC and SAI Pensacola A, LLC provides that each such limited liability company shall advance to any of its managers all costs of participation in any
proceeding relating to such limited liability company, and that any of its managers may, in his or her sole discretion, indemnify any other employee and agent of such limited liability company for all costs, losses, liabilities and damages paid or
accrued by the agent or employee in connection with the business of such limited liability company or because such person is an agent or employee to the fullest extent provided or allowed by Florida law.
The operating agreement of each of SAI Clearwater T, LLC, SAI Fort Myers B, LLC, SAI Fort Myers H, LLC, SAI Fort Myers M, LLC, SAI Fort
Myers VW, LLC, SAI Orlando CS, LLC and Sonic Automotive – 1720 Mason Ave., DB, LLC generally provides that any person who at any time serves or has served as a member, manager or officer of each such limited liability company, or who serves or
has served at the request of such limited liability company, as a member, manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or
other enterprise, or as a trustee or administrator under an employee benefit plan, shall have a right to be indemnified by such limited liability company to the fullest extent permitted by law against reasonable expense, including attorneys’
fees, actually and necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of such
limited liability company, seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or
settlement for which that person may have become liable in any such action, suit or proceeding.
Georgia Registrants
Each of AM GA, LLC, AM Realty GA, LLC, SAI Atlanta B, LLC, SAI Chamblee V, LLC, SAI GA HC1, LLC, SAI Peachtree, LLC, SAI S. Atlanta
JLR, LLC and SAI Stone Mountain T, LLC (the “Georgia LLC Registrants”) is a limited liability company organized under the laws of the State of Georgia.
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Section 14-11-306
of the Georgia Limited Liability
Company Act permits a limited liability company to indemnify a member, manager or other person under certain circumstances and subject to certain limitations.
The operating agreement of each of the Georgia LLC Registrants generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or
who, while serving as a member, manager or officer of such limited liability company, serves or has served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company,
partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law against
reasonable expense, including attorneys’ fees, actually and necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and
whether or not brought by or on behalf of such limited liability company, seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any
judgment, money decree, fine, penalty or settlement for which that person may have become liable in any such action, suit or proceeding. The operating agreement of each of the Georgia LLC Registrants also generally provides that each such limited
liability company’s board of managers may extend these indemnification rights to employees or agents of such limited liability company, and that, to the extent permitted by law, expenses incurred by a member, manager or officer of each such
limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by such
person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating agreement.
Hawaii Registrant
Windward, Inc. is a corporation incorporated under
the laws of the State of Hawaii.
Sections
414-241
through
414-250
of the Hawaii Business Corporation Act (the “HBCA”) contain certain provisions describing indemnification of, and advances for expenses to, corporate directors and officers relating to certain
liabilities and expenses (including attorneys’ fees) incurred as a result of proceedings involving such persons in their capacities as directors, officers, employees or agents of a corporation or of another enterprise at the request of the
corporation.
Sections
414-244
and
414-247
of
the HBCA permit a corporation, before final disposition of a proceeding, to advance funds to pay for or reimburse the reasonable expenses (including attorneys’ fees) incurred by a director or officer who is a party to a proceeding because the
director or officer is a director or officer of the corporation if the director or officer delivers to the corporation certain written affirmations and undertakings.
Section 414-248
and other provisions of the HBCA permit a corporation to purchase insurance on behalf of its directors, officers, employees or agents against
certain liabilities and expenses.
Section 414-222
of the HBCA permits a
corporation, through a provision in its articles of incorporation, to eliminate or limit the personal liability of its directors in any action brought by the shareholders or the corporation for monetary damages against a director of the corporation
for any action taken, or any failure to take any action, as a director. The law does not allow a corporation to eliminate or limit the personal liability of a director for: (i) the amount of a financial benefit received by a director to which
the director is not entitled, (ii) an intentional infliction of harm on a corporation or its shareholders, (iii) a violation of
Section 414-223
of the HBCA relating to unlawful distributions or
(iv) an intentional violation of criminal law.
The bylaws of Windward, Inc. generally provide that such corporation
shall indemnify a director, officer or employee of the corporation or a person serving at the request of any of the foregoing as a director, officer or employee of certain other entities for any expenses (including attorneys’ fees) actually and
reasonably incurred
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by such director, officer or employee in connection with an action, suit or proceeding with respect to which he or she is successful on the merits or otherwise in defense of the action. The
bylaws of Windward, Inc. also generally provide that such corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or
in the right of such corporation) by reason of the fact that such person is or was a director, officer or employee of such corporation, or is or was serving at the request of such corporation as a director, officer or employee of another entity if
he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of such corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The bylaws of Windward, Inc. also further generally provide that such corporation may indemnify a person who was or is a party or is threatened to be made a party to any action by or in the right of such corporation on similar
terms and according to a similar standard of conduct;
provided,
however
, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to such corporation unless the court in which such action was brought shall determine that such person is reasonably entitled to indemnity for expenses which such court shall deem proper in view of
all the circumstances of the case.
The bylaws of Windward, Inc. also generally provide that permissive indemnification of a
director, officer or employee of such corporation may be made by such corporation only as authorized in a specific case upon a determination that indemnification of such director, officer or employee is proper because he or she has met the
applicable standard of conduct. The bylaws of Windward, Inc. also generally provide that expenses incurred in defending a civil or criminal action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding
upon receipt by such corporation of an undertaking by such person to repay all amounts so advanced unless it shall ultimately be determined that such person is entitled to indemnification. Pursuant to the bylaws of Windward, Inc., such corporation
may procure insurance or other arrangement on behalf of any person who is or was a director, officer or employee of such corporation.
Maryland Registrants
(a) SAI MD HC1, Inc. is a corporation incorporated under the laws of the State of Maryland.
Section 2-418
of the Maryland General Corporation Law (the “MGCL”) authorizes a
court to award, or a corporation’s board of directors to grant, indemnity to an officer, director, employee or agent of the corporation under certain circumstances and subject to certain limitations. In addition,
Section 2-405.1
of the MGCL and
Section 5-417
of the Maryland Courts and Judicial Proceedings Article provide that a director shall have no liability by reason
of being or having been a director of a corporation if such director performs his or her duties (i) in good faith, (ii) in a manner he or she reasonably believes to be in the best interests of the corporation and (iii) with the care
that an ordinarily prudent person in a like position would use under similar circumstances.
Neither the articles of
incorporation nor the bylaws of SAI MD HC1, Inc. establish any express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action,
suit or proceeding involving or related to such corporation or otherwise.
(b) Each of SAI Rockville Imports, LLC, SAI
Rockville L, LLC and SRE Maryland – 1, LLC is a limited liability company organized under the laws of the State of Maryland.
Section 4A-203
of the Maryland Limited Liability Company Act (the “MLLCA”) provides that a limited liability company has the power, whether or not
set forth in its articles of organization, to indemnify and hold harmless any member, agent or employee from and against any and all claims and demands, except in the case of action or failure to act by the member, agent or employee which
constitutes willful misconduct or recklessness, and subject to the standards and restrictions, if any, set forth in the limited liability company’s articles of organization or operating agreement.
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The operating agreement of each of SAI Rockville Imports, LLC and SAI Rockville L, LLC
generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager, governor or officer of such limited liability company, serves or has
served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an
employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law against reasonable expense, including attorneys’ fees, actually and necessarily incurred by that person in
connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of such limited liability company, seeking to hold that person
liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which that person may have become liable in
any such action, suit or proceeding. The operating agreement of each of SAI Rockville Imports, LLC and SAI Rockville L, LLC also generally provides that each such limited liability company’s board of managers may extend these indemnification
rights to employees or agents of such limited liability company, and that, to the extent permitted by law, expenses incurred by a manager or officer of each such company in defending any civil or criminal action, suit or proceeding shall be paid by
such limited liability company in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to
indemnification under the terms of the operating agreement.
The operating agreement of SRE Maryland – 1, LLC generally
provides that such limited liability company shall hold harmless, and provide indemnification to, the managers and officers of such limited liability company and the organizer as the person signing the articles of organization of such limited
liability company to the fullest extent allowed pursuant to the MLLCA, or pursuant to any succeeding provisions of Maryland law.
Michigan
Registrants
(a) Each of Sonic – Capitol Cadillac, Inc. and Sonic – Plymouth Cadillac, Inc. (the
“Michigan Corporate Registrants”) is a corporation incorporated under the laws of the State of Michigan.
Sections 450.1561 through 450.1565 of the Michigan Business Corporation Act (the “MBCA”) authorize a court to award, or a
corporation’s board of directors to grant, indemnity to directors, officers, employees or agents of the corporation under certain circumstances and subject to certain limitations. Section 450.1209(c) of the MBCA permits a corporation to
provide in its articles of incorporation that a director of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for any action taken or any failure to take any action as a director under certain
circumstances and subject to certain limitations.
The bylaws of each of the Michigan Corporate Registrants generally provide
that each such corporation shall indemnify any person who serves or served as a director of such corporation or who, while serving as a director of such corporation, served, at the request of such corporation, as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, to the fullest extent permitted by law. The bylaws of each of the Michigan Corporate
Registrants also generally provide that each such corporation’s board of directors may extend these indemnification rights to officers, employees or agents of such corporation, and that expenses incurred by a director shall be paid by each such
corporation in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of such director to repay such amount unless it shall ultimately be determined that the director is entitled to be
indemnified by such corporation.
(b) SAI Ann Arbor Imports, LLC is a limited liability company organized under the
laws of the State of Michigan.
Section 450.4216 of the Michigan Limited Liability Company Act (“Michigan LLC
Act”) permits a limited liability company to indemnify a member, manager or other person under certain circumstances and subject to
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certain limitations. Section 450.4407 of the Michigan LLC Act permits a limited liability company to provide in its articles of organization or operating agreement that a manager shall not
be personally liable to the limited liability company or its members for breach of fiduciary duty of the manager, except for liability arising from (i) the receipt of a financial benefit to which the manager is not entitled, (ii) a
violation of Section 450.4308 of the Michigan LLC Act, (iii) a knowing violation of law, or (iv) an act or omission occurring before the date when the provision eliminating such personal liability becomes effective.
Section 450.4404 of the Michigan LLC Act provides that a manager shall not be liable for an action taken as a manager or the failure
to take an action if such manager performs the duties of his or her office (i) in good faith, (ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances and (iii) in a manner he or
she reasonably believes to be in the best interests of the limited liability company.
The operating agreement of SAI Ann
Arbor Imports, LLC generally provides that any person who at any time serves or has served as a manager or officer of such limited liability company, or who, while serving as a member, manager or officer of such limited liability company, serves or
has served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an
employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law. The operating agreement of SAI Ann Arbor Imports, LLC also generally provides that, to the extent permitted by
law, expenses incurred by a member, manager or officer of such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of such
action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating agreement.
Nevada Registrants
(a) Each of FAA Las Vegas H, Inc., Sonic Automotive of Nevada, Inc. and Sonic Resources, Inc. is a corporation incorporated under
the laws of the State of Nevada.
Section 78.7502 of the General Corporation Law of Nevada (the “GCLN”)
authorizes a court to award, or a corporation’s board of directors to grant, indemnity to officers and directors of the corporation under certain circumstances and subject to certain limitations. In addition, Section 78.138(7) of the GCLN
provides that, unless the articles of incorporation or an amendment thereto filed after October 1, 2003 provide for greater individual liability, a director or officer is not individually liable to a corporation or its stockholders or creditors
for any damages as a result of any act or failure to act in such person’s capacity as a director or officer unless it is proven that (i) such person’s act or failure to act constituted a breach of his or her fiduciary duties as a
director or officer and (ii) such person’s breach of those duties involved intentional misconduct, fraud or a knowing violation of law.
The articles of incorporation of Sonic Automotive of Nevada, Inc. provide that persons acting as directors or incorporators shall not be individually liable to such corporation or its stockholders or
creditors for any monetary damages for their activities performed in connection with the organization of such corporation.
The bylaws of each of FAA Las Vegas H, Inc. and Sonic Automotive of Nevada, Inc. generally provide that any person who at any time serves
or has served as a director or officer of each such corporation or serves at the request of such corporation as a director, officer, trustee, employee or agent of another entity, or as a trustee or administrator under an employee benefit plan, shall
have a right to be indemnified by such corporation to the fullest extent permitted by law in connection with any threatened, pending or completed action, suit or proceeding against expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and necessarily incurred by him or her in connection with such action, whether or not brought on behalf of such corporation, and reasonable payments made in satisfaction of any judgment, money decree, fine,
penalty or settlement for which he or she may have become liable.
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Neither the articles of incorporation nor the bylaws of Sonic Resources, Inc. establish any
express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to such corporation or
otherwise.
(b) Each of Sonic Automotive F&I, LLC, Sonic Automotive Support, LLC, Sonic Automotive West, LLC,
Sonic Divisional Operations, LLC, Sonic – Integrity Dodge LV, LLC, Sonic – Las Vegas C West, LLC, Sonic – Volvo LV, LLC and SRE Nevada – 2, LLC (the “Nevada LLC Registrants”) is a limited liability company organized
under the laws of the State of Nevada.
Under Chapter 86 of the Nevada Revised Statutes (NRS 86.411), a limited liability
company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the
right of the limited liability company, by reason of the fact that the person is or was a manager, member, employee or agent of the limited liability company, or is or was serving at the request of the limited liability company as a manager, member,
employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with the action, suit or proceeding if the person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the limited liability company.
The operating agreement of each of the Nevada LLC Registrants generally provides that each such limited liability company
agrees to hold harmless and provide indemnification to the managers and officers of such limited liability company to the fullest extent allowed under Nevada law, or any succeeding Nevada law.
North Carolina Registrants
(a) Each of Arngar, Inc., Marcus David Corporation and Town and Country Ford, Incorporated is a corporation incorporated under the laws of the State of North Carolina.
Part 5 of Article 8 of the North Carolina Business Corporation Act (the “NCBCA”) authorizes a court to award, or a
corporation’s board of directors to grant, indemnity to an officer, director, employee or agent of the corporation under certain circumstances and subject to certain limitations.
Section 55-2-02(b)(3)
of the NCBCA permits a
corporation to provide in its articles of incorporation that a director of the corporation shall not be personally liable in an action by or in the right of the corporation for monetary damages for any breach of duty as a director under certain
circumstances and subject to certain limitations.
Sections 55-8-30(d)
and
55-8-42(d)
of the NCBCA provide that a director or officer of a corporation shall not be liable for any action taken as a director or officer or any failure to take any action if he or she performed the duties of his or her office (i) in good faith,
(ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances and (iii) in a manner he or she reasonably believes to be in the best interests of the corporation.
The articles of incorporation or bylaws of each of Arngar, Inc. and Marcus David Corporation generally provide that any person who at any
time serves or has served as a director, officer, employee or agent of each such corporation shall have a right to be indemnified by such corporation to the fullest extent permitted by the NCBCA, and that directors of each such corporation are not
liable to such corporation for monetary damages for breach of duty as a director to the fullest extent permitted by the NCBCA. Pursuant to the bylaws of Arngar, Inc., the board of directors of such corporation must designate officers, employees or
agents of such corporation individually in order for such individuals to be entitled to indemnification.
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Neither the articles of incorporation nor the bylaws of Town and Country Ford, Incorporated
establish any express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to such
corporation or otherwise.
(b) Each of AnTrev, LLC, EchoPark NC, LLC, EP Realty NC, LLC, SAI Charlotte M, LLC, Sonic
Automotive Aviation, LLC, Sonic Automotive – 9103 E. Independence, NC, LLC, Sonic Development, LLC, SRE Holding, LLC, SRE North Carolina – 2, LLC and SRE North Carolina – 3, LLC (the “North Carolina LLC Registrants”) is a
limited liability company organized under the laws of the State of North Carolina.
Section 57D-3-31
of the North Carolina Limited Liability Company Act (the “NCLLCA”) authorizes a limited liability company to indemnify any person who is or was a member, manager or other
company official under certain circumstances and subject to certain limitations.
Section 57D-3-21
of the NCLLCA provides that a manager shall not be liable for any action taken as a manager or any failure to take any action if the manager performs the duties of his or her office
(i) in good faith, (ii) with the care an ordinary prudent person in a like position would exercise under similar circumstances and (iii) in the manner the manager reasonably believes to be in the best interests of the limited
liability company.
The operating agreement of each of the North Carolina LLC Registrants generally provides that each such
limited liability company shall hold harmless, and provide indemnification to, the managers and officers and, in some cases members, of such limited liability company to the fullest extent allowed pursuant to the NCLLCA.
The operating agreement of each of AnTrev, LLC, SRE North Carolina – 2, LLC and SRE North Carolina – 3, LLC generally provides
that each such limited liability company shall hold harmless, and provide indemnification to, the managers, officers and organizer of such limited liability company to the fullest extent allowed under the NCLLCA. If the NCLLCA is amended to
authorize further elimination of, or limitations on, the liability of managers, officers or other persons, or to provide greater indemnification to such persons, then the liability of the managers, officers and organizer shall be eliminated or
limited to the fullest extent permitted by the NCLLCA, as amended.
The operating agreement of each of EchoPark NC, LLC, EP
Realty NC, LLC and SAI Charlotte M, LLC generally provides that each such limited liability company shall indemnify each manager for all costs, losses, liabilities and damages paid or accrued in connection with the business of such limited liability
company or because he or she is a manager of such limited liability company to the fullest extent permitted by North Carolina law. The operating agreement of each of EchoPark NC, LLC, EP Realty NC, LLC and SAI Charlotte M, LLC also generally
provides that each such limited liability company shall advance to each manager all costs of participation in any proceeding relating to such limited liability company, and that the manager may, in his or her sole discretion, indemnify all other
employees and agents of such limited liability company for all costs, losses, liabilities and damages paid or accrued by any employee or agent in connection with the business of such limited liability company or because such person is an agent or
employee, to the fullest extent provided or allowed by the laws of the State of North Carolina.
The operating agreement of
Sonic Automotive Aviation, LLC generally provides that any person who at any time serves or has served as a manager or officer of such limited liability company, or who, while serving as a member, manager or officer of such limited liability
company, serves or has served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law against reasonable expense, including attorneys’ fees, actually and necessarily
incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
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administrative or investigative, and whether or not brought by or on behalf of such limited liability company, seeking to hold that person liable by reason of the fact that that person is or was
acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which that person may have become liable in any such action, suit or proceeding. The operating
agreement of Sonic Automotive Aviation, LLC also generally provides that such limited liability company’s board of managers may extend these indemnification rights to employees or agents of such limited liability company, and that, to the
extent permitted by law, expenses incurred by a manager or officer of such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of
such action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating agreement.
The operating agreement of SRE Holding, LLC generally provides that such limited liability company shall indemnify the member, managers
and officers for all costs, losses, liabilities and damages paid or accrued by the member, managers and officers in connection with the business of such limited liability company or because such person is a member, manager or officer, to the fullest
extent provided or allowed by the laws of the State of North Carolina. The operating agreement of SRE Holding, LLC also generally provides that the managers shall cause such limited liability company to advance costs of participation in any legal
proceeding to the member, managers and officers, and that the managers may, with the consent of the member, indemnify all other employees and agents of such limited liability company for all costs, losses, liabilities and damages paid or accrued by
any employee or agent in connection with the business of such limited liability or because such person is an employee or agent, to the fullest extent provided or allowed by the laws of the State of North Carolina.
The operating agreement of each of Sonic Automotive – 9103 E. Independence, NC, LLC and Sonic Development, LLC does not establish
any express obligation on the part of each such limited liability company to indemnify the members, managers, officers or employees of such limited liability company for costs or expenses, either with respect to costs or expenses related to an
action, suit or proceeding involving or related to such limited liability company or otherwise.
Ohio Registrants
Each of SAI Columbus Motors, LLC, SAI Columbus T, LLC, SAI Columbus VWK, LLC, SRE Ohio 1, LLC and SRE Ohio 2, LLC (the “Ohio LLC
Registrants”) is a limited liability company organized under the laws of the State of Ohio.
Section 1705.32 of
the Ohio Revised Code (the “ORC”) permits a limited liability company to indemnify any person who was or is a party, or who is threatened to be made a party, to any threatened, pending or completed civil, criminal, administrative or
investigative action, suit or proceeding, other than an action by or in the right of the company, because he or she is or was a manager, member, partner, officer, employee or agent of the limited liability company or is or was serving at the request
of the limited liability company as a manager, director, trustee, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, subject to certain limitations. Furthermore,
Section 1705.29(D) of the ORC provides that, unless otherwise provided in the articles of incorporation or operating agreement, a manager of a limited liability company shall be liable for damages for any action that such manager takes or fails
to take as a manager only if it is proved by clear and convincing evidence in a court with jurisdiction that his or her action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the limited liability
company or undertaken with reckless disregard for the best interests of the limited liability company.
The operating
agreement of each of the Ohio LLC Registrants generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager or officer of such
limited liability company, serves or has served as a manager, governor,
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director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law. The operating agreement of each of the Ohio LLC Registrants also generally provides
that, to the extent permitted by law, expenses incurred by a member, manager or officer of each such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance
of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating
agreement.
Oklahoma Registrants
(a) SAI OK HC1, Inc. is a corporation incorporated under the laws of the State of Oklahoma.
Section 1031 of the Oklahoma General Corporation Act (the “OGCA”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to an officer, director,
employee or agent of the corporation under certain circumstances and subject to certain limitations.
Section 1006(B)(7)
of the OGCA permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for any breach of a fiduciary duty as a
director, subject to certain limitations.
Neither the certificate of incorporation nor the bylaws of SAI OK HC1, Inc.
establish any express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to such
corporation or otherwise.
(b) Each of SAI Broken Arrow C, LLC, SAI Oklahoma City C, LLC, SAI Oklahoma City H, LLC,
SAI Oklahoma City T, LLC, SAI Riverside C, LLC, SAI Tulsa N, LLC, SAI Tulsa T, LLC, SRE Oklahoma – 1, LLC, SRE Oklahoma – 2, LLC and SRE Oklahoma – 5, LLC is a limited liability company organized under the laws of the State of
Oklahoma.
Sections 2003 and 2017 of the Oklahoma Limited Liability Company Act (the “OLLCA”) permit a
limited liability company to indemnify a member, manager, agent or employee of the limited liability company under certain circumstances and subject to certain limitations.
Section 2016(4) of the OLLCA provides that a manager shall not be liable for any action taken as a manager or any failure to take any action if the manager performed the duties of the office in
compliance with the business judgment rule as applied in Oklahoma to directors and officers of a corporation.
The operating
agreement of each of SAI Broken Arrow C, LLC,
SAI Oklahoma City C, LLC, SAI Oklahoma City H, LLC, SAI Oklahoma City T, LLC, SAI Riverside C, LLC, SAI Tulsa N, LLC and SAI Tulsa T, LLC generally provides that any person who at any time serves
or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager or officer of such limited liability company, serves or has served, at the request of such limited liability company, as a
manager, governor, director, officer, trustee, employee or agent of another entity, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law against reasonable expense (including
attorneys’ fees) actually and necessarily incurred by such person in connection with any threatened, pending or completed action, suit or proceeding seeking to hold that person liable by reason of the fact that the person is or was acting in
such capacity, along with reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which that person may have become liable in such action, suit or proceeding. The operating agreement of
each of SAI Broken Arrow C, LLC,
SAI Oklahoma City C, LLC, SAI Oklahoma City H,
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LLC, SAI Oklahoma City T, LLC, SAI Riverside C, LLC, SAI Tulsa N, LLC and SAI Tulsa T, LLC also generally provides that each such limited liability company may extend these rights to employees or
agents of such limited liability company, and that expenses incurred by a manager or officer of each such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in
advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by such individual to repay such amount unless it is ultimately determined that such individual is entitled to indemnification under the terms of the
operating agreement.
The operating agreement of each of SRE Oklahoma – 1, LLC, SRE Oklahoma – 2, LLC and SRE
Oklahoma – 5, LLC generally provides that each such limited liability company shall hold harmless, and provide indemnification to, the managers, officers and organizer of such limited liability company to the fullest extent allowed
pursuant to the OLLCA, or any succeeding provisions of Oklahoma law.
South Carolina Registrants
(a) Each of Fort Mill Ford, Inc., Sonic Automotive 2752 Laurens Rd., Greenville, Inc., Sonic – Capitol Imports, Inc., Sonic
– Newsome Chevrolet World, Inc., Sonic – Newsome of Florence, Inc. and Sonic – North Charleston Dodge, Inc. (the “South Carolina Corporate Registrants”) is a corporation incorporated under the laws of the State of South
Carolina.
Article 5 of Chapter 8 of the South Carolina Code of Laws (the “SCCL”) authorizes a corporation to
indemnify a director if the director (i) conducted himself or herself in good faith; (ii) reasonably believed that his or her conduct was in the best interest of the corporation or that his or her conduct was at least not opposed to the
best interest of the corporation; and (iii) in the case of any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The articles of incorporation of each of Sonic Automotive 2752 Laurens Rd., Greenville, Inc., Sonic – Newsome Chevrolet World, Inc. and Sonic – Newsome of Florence, Inc. provide that the
incorporator and every director of each such corporation shall be indemnified by such corporation against all expenses and liabilities, including attorneys’ fees, reasonably incurred by or imposed upon him or her in any proceeding to which he
or she may be made a party or in which he or she may become involved, by reason of having served as an incorporator or director of such corporation, or any settlement thereof, except such cases where such person may be adjudged guilty of willful
misfeasance or malfeasance in the performance of his or her duties.
Neither the articles of incorporation nor the bylaws of
any of the other South Carolina Corporate Registrants establish any express obligation on the part of such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an
action, suit or proceeding involving or related to such corporation or otherwise.
(b) Each of EchoPark SC, LLC, EP
Realty SC, LLC, SRE South Carolina – 2, LLC, SRE South Carolina – 3, LLC and SRE South Carolina – 4, LLC is a limited liability company organized under the laws of the State of South Carolina.
Chapter 44 of the SCCL is the South Carolina Uniform Limited Liability Company Act of 1996 (the “SCULLCA”).
Section 33-44-403
of the SCULLCA authorizes a limited liability company to indemnify a member or manager of the limited liability company under certain circumstances and
subject to certain limitations.
The operating agreement of each of EchoPark SC, LLC, EP Realty SC, LLC, SRE South Carolina
– 3, LLC and SRE South Carolina – 4, LLC generally provides that each such limited liability company shall hold harmless, and provide indemnification to, the managers and officers of such limited liability company and the organizer to the
fullest extent allowed under the SCULLCA. If the SCULLCA is amended to authorize further
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elimination of, or limitations on, the liability of managers, officers or other persons, or to provide greater indemnification to such persons, then the liability of the managers, officers and
the organizer shall be eliminated or limited to the fullest extent permitted by the SCULLCA, as amended.
The operating
agreement of SRE South Carolina – 2, LLC generally provides that such limited liability company shall indemnify the member, managers and officers for all costs, losses, liabilities and damages paid or accrued by the member, managers and
officers in connection with the business of such limited liability company or because such person is a member, manager or officer, to the fullest extent provided or allowed by the laws of the State of South Carolina. The operating agreement of SRE
South Carolina – 2, LLC also generally provides that the managers shall cause such limited liability company to advance costs of participation in any legal proceeding to the member, managers and officers, and that the managers may, with the
consent of the member, indemnify all other employees and agents of such limited liability for all costs, losses, liabilities and damages paid or accrued by any employee or agent in connection with the business of such limited liability company or
because such person is an employee or agent, to the fullest extent provided or allowed by the laws of the State of South Carolina.
Tennessee Registrants
(a) Massey Cadillac, Inc. is a corporation incorporated under the laws of the State of Tennessee.
Section 48-18-502
of the Tennessee Code (the
“TC”) authorizes a court to award, or a corporation to grant, indemnity to a director of the corporation under certain circumstances and subject to certain limitations.
The articles of incorporation of Massey Cadillac, Inc. generally provide that any director shall not have personal liability to such
corporation or its shareholders for monetary damages for a breach of fiduciary duty as a director, except for this limitation does not eliminate or limit the liability of a director (i) for any breach of such director’s duty of loyalty to
such corporation or its shareholders or (ii) for any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or unlawful distributions.
(b) Each of SAI Chattanooga N, LLC, SAI Cleveland N, LLC, SAI Nashville CSH, LLC, SAI Nashville H, LLC, SAI Nashville M, LLC, SAI
Nashville Motors, LLC, SAI TN HC1, LLC, SAI TN HC2, LLC, SAI TN HC3, LLC, Sonic Automotive of Chattanooga, LLC, Sonic Automotive of Nashville, LLC, Sonic 2185 Chapman Rd., Chattanooga, LLC, SRE Tennessee – 1, LLC, SRE Tennessee – 2, LLC,
SRE Tennessee – 3, LLC, SRE Tennessee – 4, LLC and SRE Tennessee 6, LLC is a limited liability company organized under the laws of the State of Tennessee.
Chapter 249 of the TC is the Tennessee Revised Limited Liability Company Act (the “TRLLCA”).
Section 48-249-115(b)
of the TRLLCA authorizes a limited liability company to indemnify a member or manager of the limited liability company under certain
circumstances and subject to certain limitations.
The operating agreement of each of SAI Nashville H, LLC, SAI TN HC2, LLC,
SAI TN HC3, LLC, Sonic Automotive of Chattanooga, LLC and Sonic 2185 Chapman Rd., Chattanooga, LLC generally provides that each such limited liability company shall indemnify to the fullest extent permitted by law the member, governor or officer, as
well as any person acting on behalf of an indemnitee pursuant to legal authority, including without limitation, the indemnitee’s legal guardian or an authorized employee, director, officer, member, partner, trustee or administrator from and
against all losses, claims, costs, liabilities and damages incurred by such person by reason of any act performed or omitted to be performed by such person in connection with the business of such limited liability company, including attorneys’
fees incurred by such person in connection with the defense of any action based on any such act or omission;
provided, however
, no such person shall be indemnified from any liability for fraud, bad faith, willful misconduct or gross
negligence.
The operating agreement of each of SAI Chattanooga N, LLC, SAI Cleveland N, LLC, SAI Nashville CSH, LLC, SAI
Nashville M, LLC, SAI TN HC1, LLC, Sonic Automotive of Nashville, LLC and SRE Tennessee 6,
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LLC generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager or officer
of such limited liability company, serves or has served as a manager, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a
trustee or administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law against reasonable expense, including attorneys’ fees, actually and
necessarily incurred by that person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of such limited liability
company, seeking to hold that person liable by reason of the fact that that person is or was acting in such capacity, and reasonable payments made by that person in satisfaction of any judgment, money decree, fine, penalty or settlement for which
that person may have become liable in any such action, suit or proceeding. The operating agreement of each of SAI Chattanooga N, LLC, SAI Cleveland N, LLC, SAI Nashville CSH, LLC, SAI Nashville M, LLC, SAI TN HC1, LLC, Sonic Automotive of Nashville,
LLC and SRE Tennessee 6, LLC also generally provides that each such limited liability company’s board of managers may extend these indemnification rights to employees or agents of such limited liability company, and that, to the extent
permitted by law, expenses incurred by a manager or officer of each such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of
such action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating agreement.
The operating agreement of each of SAI Nashville Motors, LLC and SRE Tennessee – 4, LLC generally provides that each such limited
liability company shall hold harmless, and provide indemnification to, the managers, officers and organizer of such limited liability company to the fullest extent allowed under the TRLLCA. If the TRLLCA is amended to authorize further elimination
of, or limitations on, the liability of managers, officers or other persons, or to provide greater indemnification to such persons, then the liability of the managers, officers and organizer shall be eliminated or limited to the fullest extent
permitted by the TRLLCA, as amended.
The operating agreement of each of SRE Tennessee – 1, LLC, SRE Tennessee – 2,
LLC and SRE Tennessee – 3, LLC generally provides that each such limited liability company shall indemnify the member, governors and officers for all costs, losses, liabilities and damages paid or accrued by the member, governors and
officers in connection with the business of such limited liability company or because such person is a member, manager or officer, to the fullest extent provided or allowed by the laws of the State of Tennessee. The operating agreement of each of
SRE Tennessee – 1, LLC, SRE Tennessee – 2, LLC and SRE Tennessee – 3, LLC also generally provides that the governors of each such limited liability company shall cause such limited liability company to advance costs of participation
in any legal proceeding to the member, governors and officers, and that the governors may, with the consent of the member, indemnify all other employees and agents of such limited liability company for all costs, losses, liabilities and damages paid
or accrued by any employee or agent in connection with the business of such limited liability company or because such person is an employee or agent, to the fullest extent provided or allowed by the laws of the State of Tennessee.
Texas Registrants
(a) Each of L Dealership Group, Inc. and Sonic of Texas, Inc. is a corporation incorporated under the laws of the State of Texas.
Under Section 8.102 of the Texas Business Organizations Code (the “TBOC”), a corporation may indemnify a
governing person or a former governing person against a judgment and expenses under certain circumstances and subject to certain limitations.
The bylaws of L Dealership Group, Inc. generally provide that any person who at any time serves or has served as a director or officer of such corporation or serves or has served at the request of such
corporation as a
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director, officer, trustee, employee or agent of another entity, or as a trustee or administrator under an employee benefit plan, shall have a right to be indemnified by such corporation to the
fullest extent permitted by law in connection with any threatened, pending or completed action, suit or proceeding against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and necessarily incurred
by him or her in connection with such action, whether or not brought on behalf of such corporation, and reasonable payments made in satisfaction of any judgment, money decree, fine, penalty or settlement for which he or she may have become liable.
Neither the articles of incorporation nor the bylaws of Sonic of Texas, Inc. establish any express obligation on the part of
such corporation to indemnify its directors, officers or employees for costs or expenses, either with respect to costs or expenses related to an action, suit or proceeding involving or related to such corporation or otherwise.
(b) Each of EchoPark Realty TX, LLC, EchoPark TX, LLC, SAI McKinney M, LLC, SAI Philpott T, LLC, SAI West Houston B, LLC, SRE
Texas 9, LLC, SRE Texas 10, LLC, SRE Texas 11, LLC, SRE Texas 12, LLC, SRE Texas 13, LLC, SRE Texas 14, LLC and SRE Texas 15, LLC is a limited liability company organized under the laws of the State of Texas.
Under Section 101.402 of the TBOC, a limited liability company shall have the power to indemnify members, managers, officers and
other persons, to pay in advance or reimburse expenses incurred by a person and to purchase and maintain liability insurance for such persons.
The operating agreement of each of EchoPark Realty TX, LLC, EchoPark TX, LLC, SAI McKinney M, LLC and SAI West Houston B, LLC generally provides that each such limited liability company shall indemnify
each manager for all costs, losses, liabilities and damages paid or accrued in connection with the business of such limited liability company or because he or she is a manager of such limited liability company to the fullest extent permitted by the
laws of the State of Texas. The operating agreement of each of EchoPark Realty TX, LLC, EchoPark TX, LLC, SAI McKinney M, LLC and SAI West Houston B, LLC also generally provides that each such limited liability company shall advance to its
respective managers all costs of participation in any proceeding relating to such limited liability company, and that any of its respective managers may, in his or her sole discretion, indemnify all other employees and agents of such limited
liability company for all costs, losses, liabilities and damages paid or accrued by any employee or agent in connection with the business of such limited liability company or because such person is an employee or agent, to the fullest extent
provided or allowed by the laws of the State of Texas.
The operating agreement of each of SAI Philpott T, LLC, SRE Texas 10,
LLC, SRE Texas 11, LLC, SRE Texas 12, LLC, SRE Texas 13, LLC, SRE Texas 14, LLC and SRE Texas 15, LLC generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who,
while serving as a member, manager or officer of such limited liability company, serves or has served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company,
partnership, joint venture, trust or other enterprise, or as a trustee or administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law. The operating
agreement of each of SAI Philpott T, LLC, SRE Texas 10, LLC, SRE Texas 11, LLC, SRE Texas 12, LLC, SRE Texas 13, LLC, SRE Texas 14, LLC and SRE Texas 15, LLC also generally provides that, to the extent permitted by law, expenses incurred by a
member, manager or officer of each such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid by such limited liability company in advance of the final disposition of such action, suit or proceeding,
upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to indemnification under the terms of the operating agreement.
The operating agreement of SRE Texas 9, LLC generally provides that such limited liability company shall defend, indemnify and save
harmless the members and officers of such limited liability company from and
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against all losses, claims, costs, liabilities and damages incurred by such person by reason of any act performed or omitted to be performed by such person in connection with the business of such
limited liability company, including attorneys’ fees incurred by such person in connection with the defense of any action based on any such act or omission;
provided, however
, no such person shall be indemnified from any liability for
fraud, bad faith, willful misconduct or gross negligence.
(c) Each of Philpott Motors, Ltd., Sonic Advantage PA,
L.P., Sonic Automotive of Texas, L.P., Sonic Automotive – 3401 N. Main, TX, L.P., Sonic Automotive – 4701
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East, TX, L.P., Sonic – Cadillac D, L.P., Sonic – Camp Ford, L.P., Sonic
– Carrollton V, L.P., Sonic – Clear Lake Volkswagen, L.P., Sonic – Fort Worth T, L.P., Sonic – Frank Parra Autoplex, L.P., Sonic Houston JLR, LP, Sonic Houston LR, L.P., Sonic – Houston V, L.P., Sonic – Jersey Village
Volkswagen, L.P., Sonic – LS Chevrolet, L.P., Sonic – Lute Riley, L.P., Sonic Momentum B, L.P., Sonic Momentum JVP, L.P., Sonic Momentum VWA, L.P., Sonic – Richardson F, L.P., SRE Texas – 1, L.P., SRE Texas – 2, L.P., SRE
Texas – 3, L.P., SRE Texas – 4, L.P., SRE Texas – 5, L.P., SRE Texas – 6, L.P., SRE Texas – 7, L.P. and SRE Texas – 8, L.P. (the “Texas LP Registrants”) is a limited partnership formed under the laws of the
State of Texas.
Section 8.003 of the TBOC provides that (i) the certificate of formation of an enterprise may
restrict the circumstances under which the enterprise must or may indemnify or may advance expenses to a person; and (ii) the written partnership agreement of a limited partnership may restrict the circumstances in the same manner as the
certificate of formation under subsection (i).
The agreement of limited partnership of each of the Texas LP Registrants
generally provides that no partner shall have any liability in damages or otherwise for any loss, damage, cost, liability or expense incurred by reason of any act or omission by such person except under certain circumstances. The agreement of
limited partnership of each of the Texas LP Registrants also generally provides that each such limited partnership agrees to indemnify any partner as well as any person acting on behalf of a partner for any judgments, settlements, penalties, fines,
expenses and attorneys’ fees incurred at any time by reason of or arising out of any action, or refraining from taking any action, on behalf of such limited partnership or in furtherance of the interests of such limited partnership.
Virginia Registrants
Each of SAI Fairfax B, LLC, SAI Tysons Corner H, LLC, SAI Tysons Corner I, LLC, SRE Virginia – 1, LLC and SRE Virginia – 2,
LLC is a limited liability company organized under the laws of the Commonwealth of Virginia.
Section 13.1-1009(16)
of the Virginia Limited Liability Company Act (the “VLLCA”) permits a limited liability company to indemnify members, managers or other persons from and against any and all
claims and demands whatsoever, and to pay for or reimburse any member, manager or other person for reasonable expenses incurred by such a person who is a party to a proceeding in advance of final disposition of the proceeding.
The operating agreement of SRE Virginia – 1, LLC generally provides that neither the members, managers, nor officers of such limited
liability company shall be liable as members, managers or officers for the liabilities of such limited liability company, and that such limited liability company shall indemnify the members, managers and officers for all costs, losses, liabilities
and damages paid or accrued by the members, managers and officers in connection with the business of such limited liability company or because such person is a member, manager or officer, to the fullest extent provided or allowed by the laws of the
Commonwealth of Virginia. The operating agreement of SRE Virginia – 1, LLC also generally provides that the managers shall cause such limited liability company to advance costs of participation in any legal proceeding to the members, managers
and officers, and that the managers may, with the consent of the members, indemnify all other employees and agents of such limited liability company for all costs, losses, liabilities and damages paid or accrued by any employee or agent in
connection with the business of such limited liability company or because such person is an employee or agent, to the fullest extent provided or allowed by the laws of the Commonwealth of Virginia.
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The operating agreement of SRE Virginia – 2, LLC generally provides that that such
limited liability company shall hold harmless, and provide indemnification to, the managers, officers and organizer of such limited liability company to the fullest extent allowed under the VLLCA. If the VLLCA is amended to authorize further
elimination of, or limitations on, the liability of managers, officers or other persons, or to provide greater indemnification to such persons, then the liability of the managers, officers and organizer shall be eliminated or limited to the fullest
extent permitted by the VLLCA, as amended.
The operating agreement of each of SAI Fairfax B, LLC, SAI Tysons Corner H, LLC
and SAI Tysons Corner I, LLC generally provides that any person who at any time serves or has served as a manager or officer of each such limited liability company, or who, while serving as a member, manager or officer of such limited liability
company, serves or has served as a manager, governor, director, officer, trustee, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, shall have the right to indemnification from such limited liability company to the fullest extent permitted by law. The operating agreement of each of SAI Fairfax B, LLC, SAI Tysons Corner H, LLC and SAI
Tysons Corner I, LLC also generally provides that, to the extent permitted by law, expenses incurred by a member, manager or officer of each such limited liability company in defending any civil or criminal action, suit or proceeding shall be paid
by such limited liability company in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by such person to repay such amount unless it is ultimately determined that such person is entitled to
indemnification under the terms of the operating agreement.