LEASE AGREEMENT
(HICKMAN)
THIS LEASE AGREEMENT ("Lease") made this 12th day of July, 1996, by
and between LYNDA JANE HICKMAN, AS EXECUTRIX UNDER THE WILL OF JAMES FRANKLIN
HICKMAN, JR., DECEASED(referred to herein as "Landlord"), whose address is 339
Argonne Drive, Atlanta, Georgia 30305, and HICKMAN NISSAN, INC., a Georgia
corporation ("Tenant"), whose address is 5214 Peachtree Industrial Boulevard,
Chamblee, Georgia 30341.
W I T N E S S E T H:
FOR AND IN CONSIDERATION of the sum of $10.00 Dollars in hand paid and
of the mutual covenants and conditions contained herein, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. PREMISES. Landlord leases to Tenant and Tenant leases from
Landlord the following property:
(See Exhibit "A" attached hereto and incorporated
herein by reference.)
together with all improvements thereon and all rights, privileges, easements and
appurtenances pertaining thereto (collectively, the "Premises") upon the terms
contained herein.
2. TERM. The term hereof shall begin on the date hereof and shall
end on midnight June 30, 2016, unless extended or sooner terminated as provided
herein ("Term").
3. RENT.
(a) From the commencement date through December 31, 1997, Tenant
agrees to pay to Landlord, as rent for the Premises
("Rent"), the sum of Thirty-two Thousand Eighty-three and Fifty-two/One
Hundredths ($32,083.52) Dollars per month.
(b) On January 1, 1998, Rent shall be increased by the percentage
increase in the Consumer Price Index between June 30, 1996 and December 31,
1997.
(c) Thereafter, during the remainder of the Term, commencing January
1, 1999, Rent shall be increased each January 1st by the percentage increase in
the Consumer Price Index between the first day of the previous year and the last
day of the previous year.
(d) (i) For purposes of this Lease, the following definitions shall
apply:
(A) The term "CONSUMER PRICE INDEX" shall mean the
Consumer Price Index for All Urban Consumers of Atlanta, Georgia (all
items, 1982-84=100) published by the Bureau of Labor Statistics,
United States Department of Labor.
(B) In computing increases in the Consumer Price Index
the parties will utilize the Consumer Price Index most recently
published prior to the dates called for in this Lease.
(C) The increase in Rent shall be calculated by
multiplying (i) the Rent then currently in effect by (ii) the percentage
increase determined as of such date; provided,
2
however, that the Rent shall never decrease by virtue of this subparagraph.
Landlord shall notify Tenant in writing of the new Rent monthly installment
amount after the date on which the increase in Rent becomes effective. Tenant
shall continue to pay the previous Rent in the interim and shall begin paying
based upon the new monthly installment amount commencing with the first monthly
installment of Rent which is due after the date of Landlord's notification to
Tenant of the increase, and Tenant shall also pay at such time, in a lump sum,
any additional amount due with respect to any monthly payments previously made
by Tenant after the date on which such increase became effective but for which
the increased amount has not been paid. The 'percentage increase' means, when
computed for any particular date, a figure stated as a percentage derived by
first subtracting from the Consumer Price Index most recently published prior to
December 31 of the previous year before which the increase is being calculated
the Consumer Price Index most recently published prior to January 1 of such
previous year (except under (b) above where the date shall be June 30, 1996),
and then dividing the resultant figure by the latter Consumer Price Index. (For
example, in determining the Rent to be paid for calendar year 1999, if the Rent
for 1998 was $33,000.00 per month and the Consumer Price Index most recently
published prior to December 31, 1998 was 110 and the Consumer Price Index most
recently published prior to January 1, 1998 was 100,
3
then the percentage increase would be 110 - 100 = 10 DIVIDED BY 100 = 10% and
Rent for 1999 would be: $33,000 x 10% = $3,300 + $33,000 = $36,300.)
(ii) In the event that (A) the Consumer Price Index ceases
to use 1982-84=100 as the basis of calculation, or (B) the Consumer
Price Index shall be discontinued for any reason, the Bureau of Labor
Statistics shall be requested to furnish a new index comparable to the
Consumer Price Index together with information which will make
possible the conversion to the new index in computing the adjusted
Rent under this paragraph 3 and paragraph 40 of this Lease. If for
any reason the Bureau of Labor Statistics does not furnish such an
index and such information, the parties hereto shall hereafter accept
and use such other index or comparable statistics on the cost of
living for the City of Atlanta, Georgia as shall be computed and
published by an agency of the United States.
(a) Rent during the Term hereof shall be due and payable at
Landlord's office at the above address on or before the first day of each
calendar month thereof. Any Rent payment not received by the fifth (5th)
day after notice of non-payment to Tenant by Landlord shall be subject to a
one-time late charge equal to three (3%) percent of that rental installment
4
("Late Charge") and, beginning with the thirty-second (32nd) day after the
due date of such Rent installment, that Rent installment shall bear
interest at the prime commercial rate (as quoted on a daily basis by
NationsBank, or, if not available, another large banking institution with
offices situated in Atlanta, Georgia) plus five (5%) percent per annum
("Interest Rate") to the extent, but only to the extent, that such interest
exceeds the Late Charge, which charge the parties agree is a fair
estimation of the damages which may reasonably be expected to be incurred
by Landlord in connection with receiving such late payment.
Notwithstanding the foregoing, Landlord shall not be obligated to give
notice of nonpayment of Rent more than two (2) times in any calendar year
and upon the failure of Tenant to pay any Rent payment a third (3rd) time
in any calendar year, such Late Charge shall accrue after the fifth (5th)
of the month without additional notice. The imposition of interest is not
the full extent of damages Landlord may incur, time being of the essence of
this Lease in all respects.
(b) If the Term shall commence or end on a day other than the
first day of a calendar month, then the monthly Rent for any fractional
months of the Term shall be appropriately prorated.
5
(c) In no event shall the monthly Rent for any year be less than
the monthly Rent for the preceding period.
(d) Rent and additional rent under this Lease shall be payable
without any offset or deduction or demand therefor whatsoever.
2. UTILITIES. Tenant shall have all utilities listed in its name
and shall pay all utility bills, including, but not limited to water, sewer,
gas, electricity, fuel, light, and heat bills, for the Premises, and Tenant
shall pay all charges for garbage collection services or other sanitary services
rendered to the Premises or used by Tenant in connection therewith. If Tenant
fails to pay for such services, such amount shall be deemed additional rent and,
Landlord may, at its option and after providing Tenant with at least ten (10)
days prior written notice, pay the same, and the amount of the payment together
with interest at the Interest Rate from the date paid by Landlord shall be
payable to Landlord upon demand. Pursuant to the terms of this Lease, Landlord
shall not be or become liable for damages to Tenant alleged to be caused or
occasioned by or in any way connected with or the result of any interruption,
defect or breakdown of any utility.
3. USE OF THE PREMISES; ENVIRONMENTAL INDEMNITY. The Premises shall
be used only for the operation of a new and/or used automobile dealership,
service facility, body shop facility and
6
uses incidental thereto, and for any other purposes which may be agreed to by
the parties. The Premises shall not be used for any illegal purpose, nor in
violation of any regulation of any governmental body required to be remedied by
Tenant hereunder, nor in any manner which may create nuisance or trespass.
Furthermore, Tenant shall not, by its actions, violate any federal or state
environmental law, and Tenant agrees to indemnify and hold harmless Landlord
from any and all damages, costs, fines and expenses that might arise as a result
of any such violation and from its placement upon the Premises of hazardous
wastes and toxic substances that are placed on the Premises after the date
hereof. Notwithstanding anything to the contrary contained in this Paragraph 5,
there shall not be deemed to be a nuisance or trespass and Tenant's obligation
to indemnify and hold Landlord harmless shall not extend to any damages, claims,
or liabilities arising as a result of contaminants existing on the Premises on
the date hereof or migrating onto or beneath the Premises after the date hereof,
where such contamination is not caused by or attributable to Tenant.
4. NO REPAIRS BY LANDLORD. Landlord shall not be obligated to
repair or maintain the Premises after the date of this Lease, and all repairs,
replacements, and maintenance of any kind shall be the sole responsibility of
Tenant, but Tenant's obligation
7
shall not encompass such matters to the extent the necessity therefor arose on
or prior to the date hereof.
5. REPAIRS BY TENANT. Tenant accepts the condition of the Premises
as of the date hereof and agrees that the Premises are suited for the uses
specified herein. Tenant shall, throughout the Term, at its expense, maintain
the Premises in good order and repair, including but not limited to repair and
maintenance and, if necessary, replacement of the electrical, heating,
ventilation and air conditioning and plumbing systems, as well as the roof and
all structural components of buildings located on the Premises. Tenant further
agrees to care for all landscaping on the Premises, including the mowing of
grass, paving, policing, care of shrubs and general landscaping. If Tenant
fails to properly maintain and repair any portion of the Premises, Landlord may,
following at least twenty (20) days prior written notice to Tenant, maintain the
same including replacing of components and Tenant shall pay to Landlord within
thirty (30) days after demand the costs thereof together with interest on said
amount from the date of payment by Landlord at a rate equal to the Interest
Rate, which amount shall be deemed additional rent. Subject to the provisions
of Paragraphs 9 and 13 hereof, Tenant agrees to return the Premises to Landlord
in as good condition and repair as when first received by Tenant, natural wear
and tear excepted.
8
6. TAX AND INSURANCE. Tenant shall promptly and on a timely basis
pay during the Term all charges for taxes (including, but not limited to, ad
valorem taxes, special assessments and any other governmental charges) on the
Premises, which amounts shall be prorated between Tenant and Landlord for all
periods partially but not entirely within the Term. Tenant shall also maintain,
at all times during the Term of this Lease, fire and extended insurance coverage
on the Premises in amounts equal to the full replacement value of the Premises,
and written on policies issued by underwriters reasonably acceptable to
Landlord. Landlord agrees that such coverages may be provided by blanket
policies of insurance covering other locations in addition to the Premises. All
policies shall insure Landlord and Tenant as their respective interests shall
appear and shall contain a replacement cost endorsement. Should Tenant fail to
pay such tax expenses or fail to provide certificates evidencing the required
insurance coverage, such amounts shall be deemed to be additional rent hereunder
and Landlord may, following at least ten (10) days prior written notice to
Tenant, pay any such charges or secure such coverage, and Tenant shall pay to
Landlord within thirty (30) days after demand all amounts so expended by
Landlord together with interest on said amount from the date of payment by
Landlord at a rate equal to the Interest Rate.
9
7. DESTRUCTION OF OR DAMAGE TO THE PREMISES. If the Premises should
be damaged or destroyed by any insured peril whatsoever, all insurance proceeds
shall be delivered to Landlord and Tenant shall proceed with reasonable
diligence to rebuild and repair the Premises to substantially the condition in
which it existed prior to such damage or destruction; provided, however, that
Landlord agrees to disburse such proceeds to Tenant for such reconstruction
within five (5) days of submission of request for payment together with Tenant's
architect's certification that the work for which payment is requested has been
accomplished. If, however, the damage or destruction shall occur within the
last two (2) years of the Term, then Tenant may terminate this Lease as of the
date that such damage or destruction occurs by giving written notice to Landlord
of such election to terminate within sixty (60) days after the date of such
damage or destruction. If this Lease is terminated by Tenant, insurance
proceeds with respect to the building shall be paid to Landlord. If this Lease
is not terminated, the rent payable under this Lease shall not be abated as a
result of damage or destruction.
8. INDEMNITY; WAIVER OF SUBROGATION. Tenant agrees to indemnify and hold
harmless Landlord against all claims and expenses resulting therefrom, including
attorneys' fees actually reasonably incurred and court costs, for damage to
persons or property by reason of the use or occupancy of the Premises by
10
Tenant, except for any claims with respect to violations of laws for conditions
existing at the date of this Lease. Tenant shall periodically provide Landlord
with certificates of general liability insurance naming Landlord as an
additional insured, in an amount of not less than $5,000,000 and with an
insurance carrier reasonably satisfactory to Landlord. The dollar amount of
such insurance coverage shall be adjusted annually as of the first of each year
by the percentage increase in the Consumer Price Index calculated as provided in
Section 3(d)(i)(c) hereof.
Landlord and Tenant each hereby release and waive any right of
recovery against the other for any loss, claim, liability, or damage occurring
on or to the Premises, whether wholly or contributorily caused by the negligence
of the other party, to the extent that the same is compensated by actual receipt
of proceeds from insurance policies covering such loss, claim, liability, or
damage. Waiver of subrogation between Landlord and Tenant under this paragraph
shall be evidenced by waiver of subrogation endorsements on the respective
policies of the Landlord and the Tenant. Provided, however, Landlord shall not
be obligated to carry any such insurance but may do so at its sole discretion.
9. ALTERATIONS. Tenant shall make no structural alterations,
additions or improvements to the Premises without the express prior written
consent of Landlord which consent shall not be unreasonably withheld. Tenant
may make non-structural
11
alterations, additions and improvements to the Premises without Landlord's
approval. In the event Landlord has not responded to Tenant's written request
for alterations, additions or improvements, which request shall be accompanied
by preliminary drawings of such proposed changes, within twenty (20) days of
when received, such alterations, additions or improvements shall be deemed to
have been approved by Landlord. Tenant agrees to save Landlord harmless on
account of any claim or lien of mechanics, materialmen or other party, in
connection with any alterations, additions or improvements of or to the Premises
performed by Tenant. Tenant shall furnish such waivers of liens and appropriate
affidavits from the general contractor or subcontractors as Landlord may
reasonably require. Notwithstanding the foregoing, Tenant shall also be
entitled to make the following changes without necessity of Landlord's consent:
(i) any alterations required to be made by it pursuant to governmental orders,
rules, laws, regulations, ordinances or requirements, and (ii) any changes in
its signage or alterations, additions and improvements recommended or required
by the automobile manufacturer whose automobiles are sold on the Premises.
Tenant shall have the right to finance any alterations, additions or
improvements permitted hereunder and may pledge its interest in this Lease as
security therefor; provided, however, that any pledges or liens granted in
connection with such financings shall be subordinate to the rights of Landlord
under
12
this Lease and the instrument evidencing such pledge or lien shall not contain
insurance provisions contrary to those contained herein.
10. GOVERNMENTAL ORDERS. Tenant agrees, at its own expense, to
promptly comply with all requirements of any public authority made necessary by
reason of Tenant's occupancy of the Premises from and after the date hereof or
which may be necessary for Tenant's occupancy to continue if the requirement to
comply arises after the date of this Lease. Landlord shall have no obligation
of any kind for such compliance.
11. CONDEMNATION. If all or a substantial part of the Premises is
condemned for any public use or purpose, then the Term shall cease and this
Lease shall be terminated from the date when possession thereof is taken, and
rent shall be prorated as of that date; provided, however, that Tenant may elect
to continue this Lease in full force and effect notwithstanding any such taking.
Any termination shall be without prejudice to the rights of either Landlord or
Tenant to recover compensation and damage caused by such condemnation from the
condemnor. Except as provided herein, neither Tenant nor Landlord shall have
any rights in any award made solely to the other by any condemnation authority
notwithstanding the termination of the Lease as herein provided. If the Lease
is not terminated as provided above, then (i) this Lease shall continue in
effect with respect to the remaining portion of the
13
Premises, in which event the Rent payable hereunder during the unexpired portion
of the Term of this Lease shall be adjusted proportional to the ratio of the
value of the remaining portion of the Premises (after reconstruction as provided
below) to the total value of the Premises prior to the taking, and (ii) Tenant
shall proceed with reasonable diligence to rebuild and repair the untaken
portions of the Premises to as nearly as reasonably possible their value,
condition, and character as such existed immediately prior to such taking and
Landlord shall pay to Tenant the amount necessary for reconstruction and repair
of the Premises to complete architectural units for Tenant's conduct of its
business within the time and under the conditions provided in Paragraph 9
hereof. The phrase "substantial part," for purposes of this section shall mean
so much of the Premises, the improvements located thereon, access to the
Premises, or any combination of the foregoing, such that the taking thereof
would prevent or substantially impair the ability of Tenant to operate its
business in a manner consistent with the operation of its business prior to such
taking. Notwithstanding anything contained in this Paragraph 13 to the
contrary, if the cost to reconstruct and repair the Premises to complete
architectural units is more than the LESSER of (i) the condemnation award
payable to Landlord; or (ii) one year's rent under this Lease at the time of
such condemnation, then Landlord shall only pay such lesser amount to Tenant for
such purpose and Tenant shall have the
14
right, but not the obligation, to (x) pay the additional amount of such cost, in
which event this Lease shall continue with rent payable as provided above; or
(y) terminate this Lease by giving notice to Landlord, in which event this Lease
shall terminate and Tenant shall have no further obligations under this Lease.
12. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior
written consent of Landlord (which consent shall not be unreasonably withheld or
delayed), assign this Lease or any interest hereunder, or sublet the Premises or
any part thereof, or permit the use of the Premises by any party other than
Tenant, or pledge or hypothecate this lease except as provided elsewhere in this
Agreement. All requests for assignment or subletting shall be made in writing
and delivered to Landlord and include the most recent balance sheet and cash
flow statement of the proposed assignee or subtenant. Failure by Landlord to
disapprove of any proposed assignment or subletting with reasons therefor within
THIRTY (30) days after receipt of Tenant's written request shall result in such
request being deemed approved. Consent to any assignment or sublease shall not
invalidate this provision, and all later assignments or subleases shall be made
only on the prior written consent of Landlord. Any assignee of Tenant, at the
option of Landlord, shall become directly liable to Landlord for all obligations
of Tenant hereunder, but no sublease or assignment by Tenant shall relieve
Tenant of any liability hereunder. Notwith-
15
standing the foregoing, Tenant shall be entitled to freely assign or sublet its
interest in this Lease to any parent, subsidiary or other entity under common
control with Tenant or Tenant's parent, without the prior written consent of
Landlord. Moreover, the sale or transfer of all or any part of the capital
stock of Tenant shall not be deemed to be an assignment hereunder.
13. REMOVAL OF FIXTURES. Tenant may (so long as no Event of Default
has occurred and is continuing hereunder), prior to the end of the Term, remove
all trade fixtures and equipment which Tenant has purchased or placed in the
Premises subsequent to the date hereof, provided that Tenant repairs all damage
to the Premises caused by the removal. However, any buildings, fixtures, or
other attached property installed by Tenant as replacements of existing items,
or anything that cannot be removed without substantially changing the character
of the Premises, shall become the property of Landlord.
14. EVENTS OF DEFAULT. It shall be an "Event of Default" hereunder
if,
(a) Tenant fails to pay rent, including additional rent herein
reserved, when due, and fails to cure the failure to pay within five (5)
days after written notice thereof from Landlord; provided, however,
Landlord shall not be obligated to give Tenant more than two (2) such
notices in any calendar year and upon any third (3rd) failure to make a
payment hereunder in
16
such calendar year, no such notice shall be required, prior to Landlord's
exercise of its remedies;
(b) Tenant fails to perform any of the terms or provisions of
this Lease other than the provision requiring the payment of rent, and
fails to cure the default within thirty (30) days after the date of receipt
of written notice of default from Landlord; provided, however, that if the
nature of the default is such that the same cannot reasonably be cured
within said thirty (30) day period, Tenant shall not be deemed to be in
default if Tenant shall, within such period, commence such cure and
thereafter diligently prosecute the same to completion;
(c) Tenant is adjudicated bankrupt;
(d) a permanent or temporary receiver is appointed for Tenant's
property and the receiver is not removed within sixty (60) days after
written notice from Landlord to Tenant to obtain the removal;
(e) Tenant or any guarantor of Tenant's obligations under this
Lease files a petition seeking an order for relief under Title 11 of the
United States Code, as amended, or under any similar law or statute of the
United States or any state thereof, or a petition seeking an order for
relief under Title 11 of the United States Code, or any similar law or
statute of the United States or any state thereof, is filed against Tenant
17
or any guarantor of Tenant's obligations under this Lease and such petition
is not dismissed within sixty (60) days from the date of filing;
(f) Tenant makes an assignment for the benefit of creditors; or
(g) Tenant's effects should be levied upon or attached under
process against Tenant and not satisfied or dissolved within thirty (30)
days after such levy or attachment.
Upon the occurrence of an Event of Default, Landlord may pursue any right or
remedy against Tenant available at law or in equity. Without limitation to the
foregoing, Landlord, at its option, may elect to terminate this Lease by written
notice to Tenant; whereupon this Lease shall terminate. Any notice provided in
this section may be given by Landlord, or its attorney, or agent herein named.
Upon termination of the Lease by Landlord, Tenant shall at once surrender
possession of the Premises to Landlord and remove all of Tenant's effects
therefrom, or Landlord shall be entitled to remove all persons and effects
therefrom, using such force as may be necessary without being guilty of
trespass, forcible entry or detainer or other tort. Landlord may, at its option,
remove all or part of any Tenant property left on the Premises after Tenant
loses its right to possession, and Landlord may store the same without liability
to Tenant for loss thereof, and Tenant shall be liable to
18
Landlord for all expenses incurred in such removal and also storage of said
effects.
15. REMEDIES. If, after an Event of Default, Landlord has not
elected to terminate this Lease, Landlord may (but shall not be obligated to),
without terminating this Lease, enter upon and rent the Premises at the best
price obtainable by reasonable effort, for any term Landlord deems proper.
Landlord shall have the right to terminate the Tenant's possession of the
Premises without terminating this Lease, and termination of possession shall not
release Tenant, in whole or in part. Landlord may collect the rents from any
such reletting and apply the same first to the payment of the expenses of
reentry, repair and the expenses of reletting (including without limitation
standard broker's commissions and attorney's fees actually reasonably incurred),
second, to the reasonable cost of refurbishing the Premises in order to
facilitate the reletting, including performing of deferred maintenance, and
third, to the payment of annual rent herein provided to be paid by Tenant.
Tenant shall be liable to Landlord for any deficiency between rent as due
hereunder and the rent received by Landlord upon reletting. The foregoing
remedies are not exclusive and Landlord shall have all remedies available to it
at law or equity if there is an Event of Default by Tenant.
16. FINANCIAL STATEMENTS. Within fifteen (15) days after such are
prepared, but no later than September 30 of each calendar
19
year, commencing in 1997, Tenant shall deliver to Landlord audited consolidated
financial statements of United Auto Group, Inc. ("UAG") prepared in accordance
with generally accepted accounting principles consistently applied by an
independent certified public accountant.
17. FOR RENT SIGNS. Landlord may place "FOR RENT" or "FOR SALE"
signs in the Premises one hundred eighty (180) days before the end of the Term.
Landlord may enter the Premises at reasonable hours, and after reasonable
notice, to show the Premises to prospective purchasers or tenants and to inspect
the Premises to see that Tenant is complying with all its obligations hereunder.
Landlord shall have the right to enter the Premises without notice in the case
of an emergency.
18. EFFECT OF TERMINATION OF LEASE. No termination of this Lease
prior to the normal ending thereof, by lapse of time or otherwise, shall affect
Landlord's right to collect rent for the period prior to termination thereof.
19. REPRESENTATIONS OF TITLE AND QUIET POSSESSION. Landlord
represents that it has good and marketable title to the Premises and has full
right to make this Lease and that Tenant shall have quiet and peaceable
possession of the Premises during the Term so long as no Event of Default is in
existence and continuing hereunder.
20
20. SUBORDINATION ATTORNMENT. Landlord represents that there is no
indebtedness secured by the Premises. This Lease is subject and subordinate to
any deed of trust, mortgage, or other security instrument, which may in the
future cover the Premises, and to any increases, renewals, modifications,
consolidations, replacements, and extensions of any of such deed of trust,
mortgage, or security instrument, provided, however, that Tenant's subordination
shall be conditioned upon Landlord's delivery to Tenant of a non-disturbance
agreement in form reasonably satisfactory to Tenant containing the substantive
provisions of the Subordination, Non-Disturbance and Attornment Agreement
("SNDA") in the form attached hereto and incorporated herein by reference
executed by the Lender and Landlord in recordable form.
Notwithstanding the generality of the foregoing, any mortgagee shall
have the right at any time to subordinate any deed of trust, mortgage, or other
security instrument to this Lease. At any time, before or after the institution
of any proceedings for the foreclosure of any deed of trust, mortgage, or other
security instrument or sale of the Premises under any such deed of trust,
mortgage, or other security instrument, Tenant shall attorn to such purchaser
upon any such sale or the grantee under any deed in lieu of such foreclosure and
shall recognize such purchaser or grantee as Landlord under this Lease. The
agreement of Tenant to attorn contained in the immediately preceding sentence
shall survive any
21
such foreclosure sale, trustee's sale, or conveyance in lieu thereof. Tenant
shall, upon demand at any time, before or after any foreclosure sale, trustee's
sale, or conveyance in lieu thereof, execute, acknowledge, and deliver to
Landlord's mortgagee any written instruments and certificates evidencing such
attornment as Landlord's mortgagee may reasonably require. Upon Tenant's
written request and notice to Landlord, Landlord shall obtain from any such
mortgagee a written agreement that the rights of Tenant shall remain in full
force and effect during the Term of this Lease so long as there shall be no
Event of Default hereunder.
21. ESTATE CREATED; FUTURE GRANTS. Landlord and Tenant intend for
and agree that this Lease shall create a leasehold estate in the Premises for
the Term. Landlord agrees that, during the Term of this Lease, it will not
execute or join in any conveyances of easements or restrictive covenants or
other agreements restricting or affecting Tenant's use of the Premises without
the prior written consent of Tenant, which may be withheld in Tenant's sole
discretion.
22. HOLDING OVER. If Tenant remains in possession of the Premises
after expiration of the Term, with Landlord's acquiescence and without any
express agreement of parties, Tenant shall be a tenant at sufferance, subject to
ejectment for trespass. There shall be no month to month tenancy and there
shall be no renewal of this Lease by operation of law.
22
23. ATTORNEY'S FEES AND HOMESTEAD. If the Rent or any additional
rent or other sums owed by Tenant to Landlord under this Lease is collected by
law or through an attorney at law, Landlord shall be entitled to collect
attorney's fees actually reasonably incurred.
24. RIGHTS CUMULATIVE. All rights hereunder shall be cumulative but
not restrictive to those given by law.
25. SERVICE OF NOTICE. Any notice required or permitted to be
delivered hereunder may be delivered in person or by United States certified
mail, postage prepaid, return receipt requested, or by recognized overnight
courier (e.g. Federal Express or DHL), next business day delivery, charges
prepaid, addressed to the parties at the addresses indicated above or at such
other addresses as may be specified by written notice delivered in accordance
herewith. Such notices shall be deemed effective three (3) business days after
deposited in the U.S. mail, or on the next business day if delivered by
overnight courier, or immediately upon delivery in person.
26. WAIVER OF RIGHTS. Neither party's failure to exercise any power
given to them hereunder, or to insist upon strict compliance by the other party
with its obligations hereunder, nor any custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of such party's right
to demand exact compliance with the terms hereof.
23
27. TIME OF ESSENCE. Time is of the essence under this Lease.
28. SUCCESSORS AND ASSIGNS. This Lease shall apply to, inure to the
benefit of, and be binding upon the parties hereof and their respective
successors, permitted assigns, and legal representatives except as otherwise
expressly provided herein.
29. TRIPLE NET LEASE. This Lease shall be considered a "triple net
lease" so that, except as expressly set forth herein, Tenant shall bear all
responsibility as additional rent for all payments of any kind or nature
relating to the Premises, including but not limited to payment of all taxes
(except for income, estate, inheritance or gift taxes of Landlord), insurance,
repairs and maintenance arising after the date of this Lease to the extent
Tenant is obligated therefor under the terms of this Lease.
30. ENTIRE AGREEMENT; CONFLICT. This Lease and that certain Stock
Purchase Agreement dated as of June 7, 1996 by and among Landlord, UAG Atlanta
III, Inc., United Auto Group, Inc. and Tenant (the "SPA"), including any
attachments made a part hereof or thereof, contains the entire agreement between
the parties and no representations, inducements, promises or agreements, oral or
otherwise, between the parties, not embodied herein or in the SPA, shall be of
any force or effect. To the extent there is any conflict between the provisions
of this Lease and the SPA or the SPA provides remedies for the breach of any
representations or
24
warranties contained therein relating to the Premises or otherwise, the
provisions of the SPA and Tenant's and other parties' rights thereunder shall
control and be in full force and effect for two (2) years after the date hereof;
provided, however, that Rent and additional rent hereunder shall be payable
without regard to any claims under the SPA.
31. SEVERABILITY. If any term, provision or clause of this Lease, or
if the application thereof to any person or circumstances, shall to any extent
be invalid or unenforceable, then the remainder of this Lease or the application
of such term, provision or clause to persons or circumstances other than those
to which it is invalid or unenforceable shall not be affected thereby, and each
and every remaining term, provision, clause and application of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
32. EXECUTION IN COUNTERPARTS. This Lease may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
33. AMENDMENT. This Lease may not be altered, waived, amended or
extended except by an instrument in writing signed by Landlord and Tenant.
25
34. HEADINGS. The headings used in this Lease are for the purposes
of convenience only. They shall not be construed to limit or to extend the
meaning of any part of this Lease.
35. GOVERNING LAW. This Lease shall be construed in accordance with
the laws of the State of Georgia, and all obligations of the parties created
hereunder are performable in DeKalb County, Georgia.
36. FORCE MAJEURE. Except for the payment of Rent and additional
rent, wherever a period of time is herein prescribed for action to be taken by
either Landlord or Tenant, such party shall not be liable or responsible for,
and there shall be excluded from the computation of any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials,
wars, governmental laws, regulations or restrictions or other causes which are
beyond the control of Landlord or Tenant, as the case may be.
37. EXTENSION OPTIONS. Tenant shall have two (2) separate five (5)
year options to extend the Term of this Lease upon the following terms and
provisions:
(a) Notice of the exercise of an option to extend shall be given
no less than one hundred eighty (180) days prior to the then expiration of the
Term of this Lease;
(b) The Term shall be extended under all terms and provisions of
this Lease except the Rent to be paid hereunder which
26
shall be determined as follows: The Rent for the first year of both the first
and second five-year extensions shall be determined by the following, and the
Rent for the second and subsequent lease years of either the first or second
five-year extension shall be increased by the "percentage increase" in the
Consumer Price Index: At the commencement of any extension of this Lease, the
monthly Rent under this Lease shall be the then "fair market rental rate" as
hereinafter defined, as agreed upon by Landlord and Tenant not later than four
(4) months prior to the expiration of the initial term of this Lease or the
first Extended Term, as the case may be, or in the event Landlord and Tenant
cannot agree, an amount equal to the "fair market rental rate" as hereinafter
defined and established. The phrase "fair market rental rate" shall mean the
monthly rental rate (projected to the date of the commencement of the Extended
Term to which it applies) which Tenant would expect to pay and Landlord would
expect to receive under a lease for premises of comparable size and quality as
the Premises used as automobile dealerships in Northern DeKalb County, Georgia.
If Landlord and Tenant have not reached agreement on a fair market rental rate
and executed an amendment to this Lease setting forth such agreement on or
before the date four (4) months prior to the commencement of such extended Term,
then, within ten (10) days after that date each party shall appoint and employ,
at its cost, a real estate appraiser (who shall be a member of the American
Institute of Real
27
Estate Appraisers (MAI) with at least ten (10) years of full-time commercial
real estate appraisal experience, with substantial experience relative to
comparable premises in metropolitan Atlanta, Georgia) to appraise and establish
the "fair market rental rate" and notify the other party of the name and
qualification of such appraiser. If either party fails to so appoint its
appraiser, the other party may apply to a judge of the Superior Court of DeKalb
County for such appointment. The two appraisers, thus appointed, shall meet
promptly and attempt to agree upon and establish said rate, or, upon failing to
do so, shall then jointly designate a third appraiser meeting the qualifications
set forth above, all within ten (10) days after the date of appointment of the
last two appraisers. If they are unable to agree on the third appraiser, either
of the parties, after giving five (5) days notice to the other, may apply to a
judge of the Superior Court of DeKalb County (to whose jurisdiction for this
limited purpose both Landlord and Tenant hereby consent) for the selection of a
third appraiser meeting the qualifications stated above. Each of the parties
shall bear one-half of the cost of the appointment of the third appraiser and of
the third appraiser's fee. Within thirty (30) days after the selection of a
third appraiser, a majority of the appraisers shall agree upon the "fair market
rental rate." If a majority of the appraisers are unable to agree within the
stipulated time, the third appraiser shall select one of the determinations of
the first
28
two appraisers (either Landlord's or Tenant's) originally selected, without
modification or qualification. In any of said events, the determination shall
be final, conclusive and binding upon both Landlord and Tenant. PROVIDED,
HOWEVER, in no event shall Rent payable to Landlord under this Lease be less
than that payable in any previous lease year of the initial term or any extended
term and in determining fair market rental rate the appraisers shall take into
account that each year of each Extended Term the Rent is to be increased by the
percentage increase in the Consumer Price Index.
(c) Upon the request of either party, Landlord and Tenant shall
execute an acknowledgment setting forth the dates of the extended Term of the
Lease and the amount of the Rent for the applicable extension term, but the
failure to execute such acknowledgment shall not affect Tenant's exercise of its
option to extend the Term as provided herein.
38. RECORDATION. This Lease will not be recorded unless Landlord
fails to execute upon request, in recordable form, a Memorandum of Lease in form
required by Tenant's title insurance company.
39. RECOURSE. Recourse against the Landlord in connection with
Landlord's obligations and liability to Tenant with respect to this Lease shall
be limited solely to Landlord's fee simple interest in the Premises, and neither
Landlord nor any
29
partner of landlord, nor any officer, director, or shareholder, executor,
executrix, personal representative or assigns shall have any personal liability
whatsoever with respect to this Lease. In the event of any sale, transfer or
distribution of the Premises by the Landlord, the Landlord shall be and hereby
is entirely freed and relieved of all covenants and obligations of Landlord
hereunder accruing thereafter.
40. ESTOPPEL CERTIFICATE. Tenant agrees, at any time and from time
to time, to deliver within ten (10) days from the date of receipt of a request
therefor, a statement in writing certifying (a) that this Lease is unmodified
and in full force and effect and contains the full agreement between the parties
(or, if there have been modifications or additional agreements, that the Lease
is in full force and effect as modified and identifying the modifications
thereof or additional agreements), (b) the date to which the Rent, additional
rent and other charges due under this Lease have been paid, and (c) that insofar
as Tenant knows, Landlord is not in default under any provision of this Lease
and has performed all of the obligations to be performed by a Landlord to date
(or, if Tenant has knowledge of any default or of any unperformed obligations, a
statement of the nature thereof).
41. CROSS DEFAULT. The Tenant is also the tenant under that certain
Lease Agreement, dated the date hereof, with ARGONNE
30
ENTERPRISES, INC., demising premises used in conjunction with the business
conducted on the Premises. The Landlord under this Lease is affiliated with the
landlord under such other Lease Agreement, and, a default by the Tenant under
such other Lease Agreement shall be deemed to be a default by the Tenant under
this Lease.
IN WITNESS WHEREOF, the parties herein have hereunto caused their duly
authorized representatives to set their hands and seals the day and year first
above written.
LANDLORD:
Signed Sealed and Delivered /s/ Lynda Jane Hickman (SEAL)
-------------------------
in the presence of: Lynda Jane Hickman, as Executrix
Under the Will of James Franklin
Hickman, Jr., Deceased
Illegible
- ------------------------------
Unofficial Witness
Illegible
- ------------------------------
Notary Public
[Notarial Seal]
My Commission Expires:
Illegible
- -----------------------------
TENANT:
Signed Sealed and Delivered HICKMAN NISSAN, INC., a
in the presence of: Georgia Corporation
Illegible
- ------------------------------
Unofficial Witness
By: /s/ George Lowrance
----------------------------------------
Name: George Lowrance
-----------------------------------
Title: Vice President
-----------------------------------
Illegible
- -----------------------------
Notary Public
31
[Notarial Seal]
My Commission Expires:
- -----------------------------
32