Subscription Agreement

Subscription Agreement

by Sonic Automotive
August 8th, 1997

                             SUBSCRIPTION AGREEMENT


         This Subscription Agreement (the "Agreement"), dated as of June 30,
1997, by and between SONIC AUTO WORLD, INC., a Delaware corporation (the
"Corporation"), and WILLIAM S. EGAN, a resident of the State of South Carolina
("Egan"), sets forth the terms and conditions of Egan's subscription for the
capital stock of the Corporation.

         WHEREAS, subject to the filing of a Certificate of Amendment (the
"Certificate") to the Certificate of Incorporation of the Corporation, such
Certificate to be substantially in the form attached hereto as Exhibit A, with
and by the Secretary of State of the State of Delaware in accordance with
applicable law, the authorized capital stock of the Corporation consists of (i)
50,000,000 shares of Class A Common Stock with par value of $.01 per share, (ii)
15,000,000 shares of Class B Common Stock with par value of $.01 per share, (the
"Class B Common Stock"), and (iii) 3,000,000 shares of preferred stock with par
value of $.10 per share;

         WHEREAS, Egan is the owner of certain shares of the common stock (the
"Egan Shares") of Marcus David Corporation, a North Carolina corporation
("MDC");

         WHEREAS, in connection with a proposed reorganization of the operations
of the Corporation and various automobile dealerships and the entities having
interests therein substantially as outlined on Exhibit B hereto (the
"Reorganization"), the parties hereto propose to effect an exchange of the Egan
Shares for Class B Common Stock as described herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties to this Agreement
hereby agree as follows:

         1. SUBSCRIPTION FOR SHARES. Egan hereby subscribes to and agrees to
purchase 473 shares of the Class B Common Stock in consideration for the
transfer to the Corporation of all of the Egan Shares (the "Egan Transfer").
Egan hereby agrees to take all actions necessary to effect the Egan Transfer.
The Corporation hereby accepts the subscription by Egan for 473 shares of the
Class B Common Stock and agrees that, upon consummation of the Egan Transfer,
the Corporation will issue Egan, or a corporation, limited liability company,
partnership or other entity with at least 80% of the outstanding equity of such
entity owned by Egan, his spouse or lineal descendants of Egan (an "Egan
Entity"), a stock certificate representing 473 shares of the Class B Common
Stock and that upon issuance such shares will be validly issued, fully paid and
non-assessable.

         2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EGAN. Egan hereby
represents, warrants and covenants that:

                  (a) He has good and valid title to all of the Egan Shares,
         free and clear of all liens, pledges, encumbrances, claims, security
         interests, charges, voting trusts, voting agreements, other agreements,
         rights, options, warrants or restrictions or claims of any




         kind, nature or description, and that all such Egan Shares, in respect
         of MDC, are validly issued, fully paid and non-assessable;

                  (b) He is purchasing the Class B Common Stock hereby
         subscribed for investment only, for his own account, and not with a
         view to the distribution thereof; provided, however, that Egan may
         transfer or assign such Class B Common Stock or the subscription rights
         therefor to an Egan Entity;

                  (c) He understands that the Class B Common Stock hereby
         subscribed will be issued without registration with the Securities and
         Exchange Commission (the "SEC") under the Securities Act of 1933, as
         amended (the "Act"), and will be issued under one or more exemptions
         from registration in the Act and state securities laws that depend upon
         the intent hereby represented and that the Corporation will rely on
         such representation in issuing such Class B Common Stock without
         registration;

                  (d) Except for an assignment or transfer of the Class B Common
         Stock hereby subscribed for or the subscription rights therefor by Egan
         to an Egan Entity, he will make no transfer of his securities acquired
         hereunder in violation of the Act, any rules of the SEC, any state
         securities law or statute or this Agreement, and will not offer, sell,
         mortgage, pledge or otherwise dispose of the securities he acquires
         hereunder, unless, in the opinion of counsel satisfactory to the
         Corporation, registration under applicable federal or state securities
         laws is not required; and

                  (e) He agrees that the stock certificate issued pursuant to
         this Agreement, and any replacements thereof, may be marked with a
         legend to the effect that such Class B Common Stock cannot be sold or
         transferred without either (i) registration under federal and state
         securities laws, or (ii) an opinion of counsel satisfactory to the
         Corporation that neither the sale nor the proposed transfer constitutes
         a violation of any federal or state securities law.

         3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION. The
Corporation hereby represents, warrants and covenants that:

                  (a) It is purchasing the stock of MDC hereby for investment
         only, for its own account, and not with a view to the distribution
         thereof;

                  (b) It understands that the stock of MDC will be transferred
         without registration with the SEC under the Act, and will be
         transferred under one or more exemptions from registration in the Act
         and state securities laws that depend upon the intent hereby
         represented and that Egan will rely on such representation in
         transferring such stock without registration;


                  (c) It will make no transfer of the securities acquired by it
         hereunder in violation of the Act, any rules of the SEC, any state
         securities law or statute or this

                                       2


         Agreement, and will not offer, sell, mortgage, pledge or otherwise
         dispose of the securities it acquired hereunder, unless, in the opinion
         of counsel satisfactory to Egan, registration under applicable federal
         or state securities laws is not required;

                  (d) The execution and delivery of this Agreement and the
         issuance of the Class B Common Stock by the Corporation have been duly
         and validly authorized by the Corporation and no other action or
         proceeding on the part of the Corporation is necessary to authorize
         this Agreement or to consummate the transactions contemplated hereby;
         and

                  (e) The stock certificate issued to it pursuant to this
         Agreement, and any replacements thereof, may be marked with a legend to
         the effect that such securities cannot be sold or transferred without
         either (i) registration under federal and state securities laws, or
         (ii) an opinion of counsel satisfactory to Egan that neither the sale
         nor the proposed transfer constitutes a violation of any federal or
         state securities law.

         4. DETERMINATION OF THE VALUE OF THE EGAN SHARES. The parties
acknowledge that the Board of Directors of the Corporation has determined in the
exercise of its reasonable business judgment as of the date hereof the values of
the consideration provided Egan hereunder in relation to the consideration
provided by other subscribers for the Class B Common Stock as of the date hereof
and giving effect to the Reorganization. Therefore, it is understood and agreed
that, after the Egan Transfer and giving effect to the Reorganization, Egan (or
an Egan Entity) will own 4.73% of the Class B Common Stock of the Corporation.

         5. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to Egan's subscription for Class B
Common Stock of the Corporation and with respect to the Egan Transfer.

         6. MODIFICATION. No modification of or amendment to this Agreement
shall be binding unless executed in writing by both parties.

         7. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware.

         8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument, and this Agreement
shall be effective when at least one counterpart hereof has been executed by
each of the parties hereto.

                                        3



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                         SONIC AUTO WORLD, INC.


                                         By:  /s/   Theodore M. Wright
                                              ----------------------------------
                                              Theodore M. Wright, Vice President


                                         /s/   William S. Egan
                                         ---------------------------------------
                                         William S. Egan

                                       4