Exhibit 10.10.3
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") made this ____ day of October, 1996, by
and between STANDEFER INVESTMENT COMPANY, a Tennessee limited partnership
("Landlord"), and STANDEFER MOTOR SALES, INC., a Tennessee corporation
("Tenant").
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:
All that tract or parcel of land containing approximately
7.52 acres, lying and being in Hamilton County, City of
Chattanooga, Tennessee and being more particularly described
on EXHIBIT A, attached hereto and incorporated by reference
herein, and being known as 2121 Chapman Road, Chattanooga,
Tennessee 37421,
together with all improvements, fixtures and equipment 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 October 31, 2016 ("Term").
3. RENT.
(a) From the commencement date through October 31, 2001, Tenant
agrees to pay Landlord, as rent for the Premises ("Rent") the sum of Twenty
Seven Thousand Five Hundred and no/100 ($27,500) Dollars per month.
(b) On November 1, 2001, the monthly Rent shall be adjusted to an
amount equal to nine-tenths of one percent (0.9%) of the then Appraised Value
(as hereinafter defined and determined)
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and such adjusted Rent shall be payable monthly through October 31, 2006.
(c) On November 1, 2006, the monthly Rent shall be adjusted to an
amount equal to one percent (1%) of the then Appraised Value and such adjusted
Rent shall be payable monthly through October 31, 2011.
(d) On November 1, 2011, the monthly Rent shall be adjusted to an
amount equal to one percent (1%) of the then Appraised Value and such adjusted
Rent shall be payable monthly through October 31, 2016.
(e)(i) For purposes of this Lease, the Appraised Value shall be the
fair market value, in fee simple, unencumbered by this Lease, of the Premises
assuming, however, that the Premises is used and will be used as a car
dealership (and not necessarily for the highest and best use of the Premises)
and if any income analysis is utilized in determining such fair market value,
the fact that Landlord will not be obligated to pay taxes, insurance or
operating expenses of such car dealership shall be taken into account.
(ii) In determining the Appraised Value, no later than six (6) months
prior to each adjustment date provided above, Landlord shall give notice to
Tenant of five independent MAI appraisers from either Chattanooga, Tennessee or
Atlanta, Georgia certifying in such submittal to Tenant that Landlord has not
discussed the appraisal called for hereunder with any such appraisers and that
such appraisers are independent of Landlord. Within thirty (30) days after
receipt of such submittal from Landlord, Tenant shall either chose one (1)
appraiser that is acceptable to Tenant or reject them all and, if Tenant rejects
all such proposed appraisers, Tenant shall submit the names of five (5)
appraisers to Landlord having the same qualifications and with Tenant's
certification as provided above and Landlord shall pick one (1) such appraiser
to conduct the appraisal called for hereunder.
(iii) The appraiser so chosen shall conduct its appraisal and issue
its written report to
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Landlord and Tenant within thirty (30) days after being so chosen.
(iv) If Landlord fails to timely provide its list of appraisers to
Tenant, Tenant shall have the right to provide its list to Landlord within
thirty (30) days after Landlord was to have submitted its list to Tenant and
Landlord shall then have the right to chose one (1) appraiser within thirty (30)
days after Tenant's list is submitted to Landlord.
(v) Any dispute concerning the qualifications of the appraisers or
whether the appraiser utilized the proper standard for appraisal as provided
above, shall be resolved by the American Arbitration Association utilizing its
commercial arbitration rules as soon as possible ("Arbitration") and, until any
such dispute is resolved, the Tenant shall continue paying Rent at the previous
amount. After the resolution of such dispute, if any additional amounts of Rent
are due in excess of the amounts previously paid by Tenant, Tenant shall pay
such excess within thirty (30) days after the Arbitration decision. The cost of
the Arbitration shall be paid by the non-prevailing party in the Arbitration and
the arbitrators shall decide which is the prevailing party.
(vi) Notwithstanding the foregoing, at any Rent adjustment, Rent shall
not be reduced below the adjusted Rent for the immediately preceding period.
(vii) The cost of the appraisal shall be borne equally by Landlord and
Tenant.
4. 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, Landlord may, at its option and after providing Tenant
with at least thirty (30) days prior written notice, pay the same, and the
amount of the payment shall be payable to Landlord as additional rent.
5. USE OF THE PREMISES; ENVIRONMENTAL INDEMNITY. The Premises shall be
used for the
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operation of a new and used automobile dealership, service facility, paint and
body shop facility, and uses incidental thereto, and for any other purposes
which may be agreed to by the parties. Furthermore, Tenant shall not 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. By its execution hereof, Tenant does not waive whatever rights it may
have in law or equity against any person or entity in the event such existing
contaminants or such future contamination affects the Premises.
6. REPRESENTATION. Landlord hereby represents and warrants that:
(1) The Premises are adequate for the conduct of the respective
businesses of the Tenant as presently conducted;
(2) To the knowledge of the Landlord, the Premises conform in all material
respects with all applicable laws, ordinances, rules and regulations and other
Legal Requirements (as hereinafter defined) and no improvements thereon encroach
in any respect on property of others. For purposes hereof, Legal Requirements
shall mean all laws, ordinances, codes, rules, regulations, standards, judgments
and other requirements of all governmental, administrative or judicial entities;
(3) To the knowledge of the Landlord, there are no latent defects with
respect to the Premises;
(4) The Premises is currently zoned to permit the conduct of the
respective businesses of the
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Tenant as presently conducted;
(5) To the knowledge of the Landlord, no Certificate of Occupancy is
required with respect to the Premises;
(6) To the knowledge of the Landlord, all utilities servicing the Premises
are provided by publicly-dedicated utility lines and are located within public
rights-of-way and do not cross or encumber any private land;
(7) No notice of any pending, threatened or contemplated action by any
governmental authority or agency having the power of eminent domain has been
given to the Landlord with respect to the Premises;
(8) (i) Except as set forth in Schedule 2.11(a) of that certain Stock
Purchase Agreement (the "SPA") dated September 5, 1996 by and among United Auto
Group, Inc., Charles A. Standefer, Tenant and others, the Premises and any
property formerly owned, occupied or leased by the Landlord are in compliance
with all Environmental Laws (as defined below), (ii) the Landlord has obtained
all Environmental Permits (as defined below), (iii) such Environmental Permits
are in full force and effect, and (iv) the Landlord is in compliance with all
terms and conditions of such Environmental Permits. As used herein,
"Environmental Laws" shall mean all applicable requirements of environmental,
public or employee health and safety, public or community right-to-know,
ecological or natural resource laws or regulations or controls, including all
applicable requirements imposed by any law (including without limitation common
law), rule, order, or regulations of any federal, state, or local executive,
legislative, judicial, regulatory, or administrative agency, board, or
authority, or any applicable private agreement (such as covenants, conditions
and restrictions), which relate to, (i) noise, (ii) pollution or protection of
the air, surface water, groundwater, or soil, (iii) solid, gaseous, or liquid
waste generation, treatment, storage, disposal or transportation, (iv) exposure
to Hazardous Materials (as defined below), or (v)
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regulation of the manufacture, processing, distribution and commerce, use, or
storage of Hazardous Materials. As used herein, "Environmental Permits" shall
mean all permits, licenses, approvals, authorizations, consents or registrations
required under applicable Environmental Law in connection with the ownership,
use and/or operation of the Landlord's business or the Premises including, but
not limited to, underground storage tanks. As used herein, "Hazardous
Materials" shall mean, collectively, (i) those substances included within the
definitions of or identified as "hazardous chemicals," "hazardous waste,"
"hazardous substances," "hazardous materials," "toxic substances" or similar
terms in or pursuant to, without limitation, the Comprehensive Environmental
Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 ET SEQ.)
("CERCLA"), as amended by Superfund Amendments and Reauthorization Act of 1986
(Pub. L. 99-499, 100 State, 1613), the Resource Conservation and Recovery Act
of 1976 (42 U.S.C. Section 6901 ET SEQ.) ("RCRA"), the Occupational Safety and
Health Act of 1970 (29 U.S.C. Section 651 ET seq.) ("OSHA"), and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 ET SEQ. ("HMTA"), and in
the regulations promulgated pursuant to such laws, all as amended, (ii) those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 CFR part 302 and
amendments thereto), (iii) any material, waste or substance which is or contains
(A) petroleum, including crude oil or any fraction thereof, natural gas, or
synthetic gas usable for fuel or any mixture thereof, (B) asbestos, (C)
polychlorinated biphenyls, (D) designated as a "hazardous substance" pursuant to
Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 ET seq. (33 U.S.C.
Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33
U.S.C. Section 1317), (E) flammable explosives, (F) radioactive materials, and
(iv) such other substances, materials and wastes which are or become regulated
or classified as hazardous, toxic or as "special wastes" under any Environmental
Laws.
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(9) To the knowledge of the Landlord, the Landlord has not violated, done
or suffered any act which could give rise to liability under, and neither it nor
the Premises are otherwise exposed to liability under, any Environmental Law.
To the knowledge of the Landlord, no event has occurred with respect to the
Premises or any property formerly owned, occupied or leased by the Landlord,
which, with the passage of time or the giving of notice, or both, would
constitute a violation of or non-compliance with any applicable Environmental
Law. To the knowledge of the Landlord, the Landlord has no contingent liability
under any Environmental Law. There are no liens under any Environmental Law on
the Premises;
(10) (i) Except as set forth on Schedule 2.11(c) of the SPA, neither the
Landlord, the Premises or any portion thereof, or any property formerly owned,
occupied or leased by the Landlord, nor, to the knowledge of the Landlord, any
property adjacent to the Premises is being used or has been used for the
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Materials or as a landfill or other waste disposal
site and there has been no spill, release or migration of any Hazardous
Materials on or under the Premises and no Hazardous Material is present on or
under the Premises (provided, however, that certain petroleum products are
stored and handled on the Premises in the ordinary course of the Tenant's
business but such are in compliance with all Environmental Laws including the
existing regulations of the United States Environmental Protection Agency and
the State of Tennessee requiring spill protection, overfill protection and
corrosion protection by December 22, 1998), (ii) to the knowledge of the
Landlord, none of the Premises or portion thereof or any property formerly
owned, occupied or leased by the Landlord has been subject to investigation by
any governmental authority evaluating the need to investigate or undertake
Remedial Action (as defined below) at such property, and (iii) to the knowledge
of the Landlord, none of the Premises or any property formerly owned, occupied
or leased by the Landlord or any site or location
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where the Landlord sent waste of any kind, is identified on the current or
proposed (A) National Priorities List under 40 C.F.R. 300 Appendix B, (B)
Comprehensive Environmental Response Compensation and Liability Inventory System
list, or (C) any list arising from any statute analogous to CERCLA. As used
herein, "Remedial Action" shall mean any action required to (i) clean up, remove
or treat Hazardous Materials, (ii) prevent a release or threat of release of any
Hazardous Material, (iii) perform pre-remedial studies, investigations or post-
remedial monitoring and care, (iv) cure a violation of Environmental Law or (v)
take corrective action under sections 3004(u), 3004(v) or 3008(h) of RCRA or
analogous state law.
(11) Except as set forth on Schedule 2.11(d) of the SPA, to the knowledge
of the Landlord, there have been and are no (i) aboveground or underground
storage tanks, subsurface disposal systems, or wastes, drums or containers
disposed of or buried on, in or under the ground or any surface waters, (ii)
asbestos or asbestos containing materials or radon gas, (iii) polychlorinated
biphenyls ("PCB") or PCB-containing equipment, including transformers, or (iv)
wetlands (as defined under any Environmental Law) located within any portion of
the Premises, nor have any liens been placed upon any portion of the Premises or
any property formerly owned, occupied or leased by the Landlord in connection
with any actual or alleged liability under any Environmental Law.
(12) Except as set forth on Schedule 2.11(e) of the SPA, (i) there is
no pending or, to the knowledge of Landlord, threatened claim, litigation, or
administrative proceeding or known prior claim, litigation or administrative
proceeding arising under any Environmental Law involving the Premises, any
property formerly owned, leased or occupied by Tenant or Landlord, any offsite
contamination affecting the Premises or any operations conducted thereat, (ii)
there are no ongoing negotiations with or agreements with any governmental
authority relating to any Remedial Action or other
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environmentally related claim, (iii) Landlord has not submitted a notice
pursuant to Section 103 of CERCLA or analogous statute or notice under any other
applicable Environmental Law reporting a release of a Hazardous Material into
the environment, and (iv) Landlord has not received any notice, claim, demand,
suit or request for information from any governmental or private entity with
respect to any liability or alleged liability under any Environmental Law, nor
to Landlord's knowledge, has any other entity whose liability therefore, in
whole or in part, may be attributed to Landlord, received such notice, claim,
demand, suit or request for information.
(13) Landlord owns the Premises in fee simple, free and clear of all Liens
(as hereinafter defined) claims and encumbrances, except those disclosed in
Exhibit "B" attached hereto and incorporated herein by reference, none of which
currently or, to Landlord's knowledge, in the future will affect the use of the
Premises for the conduct of the respective businesses of the Tenant as presently
conducted. For purposes hereof, Liens shall mean any mortgages, pledges, title
defects or objections, liens, claims, security interests, conditional and
installment sale agreements, encumbrances or charges of any kind. No
assessments have been made against any portion of the Real Property which are
unpaid (except ad valorem taxes for the current year that are not yet due and
payable), whether or not they have become Liens. There are no disputes
concerning the location of the lines and corners of the Premises. No one has
been granted any right to purchase or lease the Premises.
(14) Landlord is a Tennessee limited partnership in good standing and the
only general partners thereof are Charles A. Standefer and Charles B. Standefer.
Landlord shall indemnify and agrees to fully defend, save and hold harmless
on an after-tax basis Tenant and any of its officers, directors, employees,
stockholders, advisors, representatives, agents and Affiliates (as defined in
the SPA)(each a "UAG Indemnified Party"), if a UAG Indemnified Party shall at
any time or from time to time suffer any Costs (as hereinafter defined) arising,
directly or indirectly,
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out of or resulting from, or shall pay or become obligated to pay any sum on
account of any untruth or inaccuracy in any representation or warranty of
Landlord provided herein and upon notice from a UAG Indemnified Party, Landlord
agrees to defend, contest or otherwise protect such UAG Indemnified Party
against third party claims at its sole cost and expense and otherwise pay all
Costs. Each UAG Indemnified Party shall have the right, but not the obligation,
to participate at its own expense in the defense thereof by counsel of its
choice. If Landlord fails timely to defend, contest or otherwise protect
against any third party claim, the UAG Indemnified Party shall have the right to
do so including, without limitation, the right to make any compromise or
settlement thereof and each UAG Indemnified Party shall be entitled to recover
the entire Costs thereof from Landlord including, without limitation, attorney's
fees, disbursements and amounts paid (or of which the UAG Indemnified Party has
become obligated to pay) as the result of any third party claim. Failure by
Landlord to notify the UAG Indemnified Party of its election to defend any third
party claim within fifteen (15) days after notice thereof shall have been given
to Landlord, shall be deemed a waiver by Landlord of its right to defend the
third party claim. If Landlord assumes the defense of the particular third
party claim, Landlord shall not consent to entry of any judgment or enter into
any settlement, except with the written consent of the affected UAG Indemnified
Party. In addition, Landlord shall not enter into any settlement of any third
party claim which does not include as an unconditional term thereof the giving
by the claimant to the UAG Indemnified Party a full release from all liability
in respect of such third party claim. Notwithstanding the foregoing, Landlord
shall not be entitled to control, and the UAG Indemnified Party shall be
entitled to have sole control over, the defense or settlement of any third party
claim to the extent the third party claim seeks an order, injunction or other
equitable relief against the UAG Indemnified Party which, if successful, could
materially interfere with the business, operations, assets, condition (financial
or otherwise) or prospects of the UAG Indemnified Party. In
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addition to and not in limitation of all rights of offset that a UAG Indemnified
Party may have under applicable law, Landlord and Tenant agree that, at Tenant's
option, any or all amounts owing to Tenant as a result of Landlord's
indemnification and hold harmless hereunder, may be recovered by Tenant as an
offset against any or all amounts due to Landlord. The rights of a UAG
Indemnified Party hereunder are in addition to such other rights and remedies
which such UAG Indemnified Party may have under this Lease, applicable law or
otherwise. Landlord and Tenant agree that notwithstanding anything herein to
the contrary, no UAG Indemnified Party shall be entitled to indemnification for
any Costs hereunder unless the aggregate amount of Costs incurred by all UAG
Indemnified Parties under the SPA and hereunder exceeds $200,000, in which event
each UAG Indemnified Party shall be entitled to indemnification for all Costs
thereafter. For purposes hereof, "Costs" shall mean all liabilities, losses,
costs and actual damages (not including consequential damages) and reasonable
expenses, reasonable attorney's fees, reasonable experts fees, reasonable
consultant's fees and reasonable disbursements of any kind or of any nature
whatsoever. The amount of any Costs arising from the breach of any
representation, warranty, covenant or agreement shall be the entire amount of
any Costs suffered, paid or required to be paid by the respective UAG
Indemnified Party as a result of such breach. Costs arising or resulting
hereunder shall be reduced to the extent of the amount of any tax savings
resulting from the indemnified matter to which such Costs relate which are
actually realized (or can be reasonably be expected to be realized in future
years) by the UAG Indemnified Party.
7. REPAIRS BY LANDLORD. Landlord shall be obligated to repair and
maintain the roof, foundation and all structural portions of the Premises. All
other repairs, replacements, and maintenance of any kind shall be the sole
responsibility of Tenant except to the extent the necessity therefor arose as a
result of a breach of the representations or warranties contained in Section 6
above.
8. REPAIRS BY TENANT. Subject to the representations and warranties of
Landlord provided in
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Section 6 above, Tenant accepts the condition of the Premises as of the date
hereof and agrees that the Premises are suited for the uses specified herein and
Tenant shall, throughout the Term, at its expense, maintain the Premises in good
order and repair, including but not limited to repair and maintenance of the
electrical, heating, ventilation and air conditioning and plumbing systems.
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 thirty (30) days prior written notice to
Tenant, maintain the same and Tenant shall pay to Landlord within thirty (30)
days after demand the commercially reasonable costs thereof together with
interest on said amount from the date of payment by Landlord at a rate equal to
ten percent (10%) per annum ("Interest Rate"). Subject to Landlord's repair
obligations hereunder, Tenant agrees to return the Premises to Landlord in as
good condition and repair as when first received by Tenant, natural wear and
tear, damage by storm, fire, lightening, earthquake or other casualties and
condemnation excepted.
9. TAX AND INSURANCE. Tenant shall promptly and on a timely basis pay as
additional rent 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
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certificates evidencing the required insurance coverage, Landlord may, following
at least twenty (20) 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 as additional rent 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.
10. 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 Tenant 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. If, however, the damage or
destruction (a) shall be to greater than seventy-five percent (75%) of the value
of the improvements upon the Premises; or (b) 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 ninety (90) days after the date of such damage or
destruction. If this Lease is terminated by Tenant, insurance proceeds with
respect to the building, structure and fixtures shall be paid to Landlord. The
rent payable under this Lease shall be abated beginning on the date of damage or
destruction within the scope of this Paragraph 10 and shall resume upon
recompletion to substantially the condition in which the Premises existed prior
to such damage or destruction; provided, however, that the rental abatement
shall be proportional to the extent to which the Premises are not useable (with
greater weight given to Tenant's inability to use the improved portions of the
Premises and its impact on revenues to Tenant) by Tenant and if the parties are
unable to agree upon the appropriate rental abatement either party may demand
Arbitration and Tenant shall pay Rent on the basis of the average of its
estimate of the abated Rent and Landlord's estimate of the abated Rent, with any
additional amount due to be paid within thirty (30) days after the arbitrator's
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determination and any excess to be either, at Tenant's option, credited against
the next due installment(s) of Rent or paid by Landlord to Tenant within thirty
(30) days of the arbitrator's decision.
11. INDEMNITY; WAIVER OF SUBROGATION. Subject to Landlord's obligations,
representations and warranties in this Lease, Tenant agrees to indemnify and
hold harmless Landlord against all claims and expenses, including actual
attorneys' fees reasonably incurred and court costs, for damage to persons or
property by reason of the use or occupancy of the Premises by Tenant. 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 reviewed
annually, and adjusted if necessary, in order to provide for adequate protection
to both Landlord and Tenant; provided, however, in no event shall any aggregate
percentage increases in Tenant's liability coverage obligations hereunder ever
exceed the cumulative percentage increases in the Consumer Price Index for all
wage earners for Chattanooga, Tennessee occurring during the corresponding
portion of the Term of this Lease. 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.
12. 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 or delayed, except
that Tenant may alter any wall that is not of a load-bearing nature without the
consent of Landlord so long as Tenant gives notice to Landlord of its intent to
do so no less than twenty (20) days prior to such alteration. Alterations,
additions and improvements shall be Tenant's property during the Term of this
Lease. Tenant may make non-structural changes and
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modifications to the Premises without Landlord's approval. In the event
Landlord has not responded to Tenant's written request for alterations within
twenty (20) days of when received, such alteration 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
request. 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, (iii) those changes recommended or required by the automobile
manufacturer whose automobiles are sold on the Premises. Tenant shall have the
right to finance any alterations or improvements permitted hereunder and may
pledge its interest in this Lease as security therefor; provided, however, that
any liens granted in connection with such financings shall be subordinate to the
rights of Landlord under this Lease. In the event Tenant grants a Deed of Trust
or other security interest with respect to its leasehold estate hereunder,
Landlord agrees to give the holder of such interest notice of any default by
Tenant and allow such holder thirty (30) days to cure such default or exercise
rights to acquire Tenant's interest in this Lease or cause another to acquire
Tenant's interest in this Lease before Landlord exercises its rights upon
default of Tenant under Sections 17 or 18 hereof and Landlord will not treat the
transfer of Tenant's rights hereunder as a result of such action as a transfer
or assignment requiring Landlord's consent under Section 15 of the Lease.
13. 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
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requirement to comply arises after the date of this Lease. Landlord shall have
no obligation of any kind for such compliance except to the extent it arose
prior to the date of this Lease.
14. CONDEMNATION. If all or a substantial part of the Premises is
condemned for any public use or purpose, then the Term shall cease 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 as to the
remaining portion of the Premises 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 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 to the total value of the Premises prior
to the taking, (ii) all condemnation awards shall be paid to Tenant to hold for
payment of repair and restoration to the Premises, and (iii) 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. Any sums remaining
after payment for such reconstruction shall be paid by Tenant to Landlord to the
extent they represent payment for a taking of Landlord's fee interest. 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, in Tenant's reasonable judgment, the ability of Tenant to
operate its business in a manner consistent with the operation of its
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business prior to such taking.
15. 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. All requests for assignment or subletting shall be made in writing and
delivered to Landlord. Failure by Landlord to disapprove of any proposed
assignment or subletting within twenty (20) days after receipt of Tenant's
written request with specific reasons therefor 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 as aforesaid. 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. Notwithstanding 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.
16. 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 as leasehold
improvements 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 at the end of the Term of this Lease.
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17. CANCELLATION OF LEASE BY LANDLORD. 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 ten (10) days
after receipt of written notice thereof from Landlord;
(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 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 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 and such
petition is not dismissed with prejudice 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
written notice from Landlord to Tenant to obtain satisfaction thereof.
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
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at once or within six (6) months thereafter (so long as such Event of Default is
continuing), 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.
18. RELETTING BY LANDLORD. If, after an Event of Default, Landlord has
not elected to terminate this Lease, Landlord shall, as Tenant's agent, without
terminating this Lease, enter upon and exercise good faith efforts to rent the
Premises at the best price obtainable by reasonable effort, for any term
Landlord deems proper. Tenant shall be liable to Landlord for the present value
of any deficiency between rent due hereunder and the Rent received by Landlord
upon reletting. For purposes of computing the "present value of any deficiency"
in accordance with the provisions of this paragraph, the parties agree to
utilize a discount rate equal to the then prevailing prime rate of interest
charged by leading money center banks as published in "THE WALL STREET JOURNAL".
19. WARRANTIES OF TITLE AND QUIET POSSESSION. Landlord warrants and
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. 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 the Premises or Tenant's use thereof without
the prior written
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consent of Tenant, which may be withheld in Tenant's sole discretion.
21. SUBORDINATION ATTORNMENT. Landlord represents that there is no Deed
of Trust or Mortgage with respect to the Premises currently in force. Should
Landlord ever give a Deed of Trust or Mortgage with respect to the Premises,
Landlord shall provide Tenant a Subordination, Non-Disturbance and Attornment
Agreement from such lender in the form attached hereto and incorporated herein
by reference as EXHIBIT "C" ("SNDA"). 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
to any encumbrance arising after the date of this Lease 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
SNDA. 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.
22. ATTORNEY'S FEES AND HOMESTEAD. In the event either party should seek
to enforce its rights under this Lease through judicial process, the prevailing
party in any such action shall be entitled to collect from the other party, in
addition to all other sums owing hereunder, its reasonable attorney's fees.
Tenant waives all homestead rights and exemptions which it may have under any
law as against any obligation owing under this Lease.
23. RIGHTS CUMULATIVE. All rights hereunder shall be cumulative but not
restrictive to those given by law.
24. 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
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recognized overnight courier (e.g. Federal Express or DHL), next business day
delivery, charges prepaid, addressed to the parties at
Landlord: Standefer Investment Company
3175 Kings Road
Chattanooga, Tennessee 37416
with a Ralph E. Tallant, Jr., Esq.
copy to: Gearhiser, Peters, Lockaby & Tallant
320 McCallie Avenue
Chattanooga, TN 37402
Tenant: Standefer Motor Sales, Inc.
c/o United Auto Group, Inc.
375 Park Avenue
Suite 2201
New York, New York 10152
Attn: George G. Lowrance, Esq.
with a
copy to: Stephen R. Leeds, Esq.
Rogers & Hardin
2700 International Tower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
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 deposit in the U.S. mail, or on the next business day if delivered by
overnight courier, or immediately upon delivery in person.
25. 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.
26. TIME OF ESSENCE. Time is of the essence under this Lease.
27. SUCCESSORS AND ASSIGNS. This Lease shall apply to, inure to the
benefit of, and be binding
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upon the parties hereof and their respective successors, permitted assigns, and
legal representatives except as otherwise expressly provided herein.
28. ENTIRE AGREEMENT; CONFLICT. This Lease, including any attachments
made a part hereof or thereof, contains the entire agreement between the parties
with respect to the lease of the Premises and no representations, inducements,
promises or agreements, oral or otherwise, between the parties, not embodied
herein shall be of any force or effect. The parties agree to execute and record
a memorandum of this Lease in the real property records of Hamilton County,
Tennessee. Notwithstanding the foregoing, however, nothing in this Lease shall
affect any rights of United Auto Group, Inc. or UAG Tennessee, Inc. under the
SPA.
29. 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.
30. 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.
31. AMENDMENT. This Lease may not be altered, waived, amended or extended
except by an instrument in writing signed by Landlord and Tenant.
32. 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.
33. GOVERNING LAW. This Lease shall be construed in accordance with the
laws of the State
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of Tennessee, and all obligations of the parties created hereunder are
performable in Hamilton County, Tennessee.
34. FORCE MAJEURE. 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.
35. EXTENSION OPTIONS. (a) Tenant shall have the option to extend the
term of this Lease for an additional five (5) years commencing on November 1,
2016 and ending at midnight October 31, 2021. To exercise such option, Tenant
shall give Landlord notice of its exercise of such option on or before April 30,
2016. If Tenant exercises such option the monthly Rent shall be adjusted to one
and five one-hundredths (1.05%) percent of the then Appraised Value during such
extended term as determined in accordance with the provisions of Section 3(e)
above; provided however, Landlord shall provide the list of five (5) appraisers
within thirty (30) days after Tenant's notice of its exercise of the option
provided herein.
(b) Tenant shall also have the option to extend the term of this Lease for
an additional five (5) years commencing on November 1, 2021 and ending at
midnight October 31, 2026. To exercise such option Tenant shall give Landlord
notice of its exercise of such option on or before April 30, 2021. If Tenant
exercises such option the monthly Rent shall be adjusted to one and five one-
hundredths (1.05%) percent of the then Appraised Value during such extended term
as determined in accordance with the provisions of Section 3(e) above; provided
however, Landlord shall provide the list of five (5) appraisers within thirty
(30) days after Tenant's notice of its exercise of the option provided herein.
IN WITNESS WHEREOF, the parties herein have hereunto caused their duly
authorized
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representatives to set their hands and seals the day and year first above
written.
LANDLORD:
STANDEFER INVESTMENT COMPANY,
a Tennessee limited partnership
By: /S/ Charles A. Standefer
---------------------------
Name: Charles A. Standefer
Title: General Partner
By: /S/ Charles B. Standefer
---------------------------
Name: Charles B. Standefer
Title: General Partner
TENANT:
STANDEFER MOTOR SALES, INC.
a Tennessee Corporation
By: /S/
---------------------------
Name:
------------------------
Title:
------------------------
[Corporate Seal]
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STATE OF _________________)
COUNTY OF ________________)
Personally appeared before me, ___________________, Notary Public,
_______________________________, with whom I am personally acquainted, and who
acknowledged that he/she executed the within instrument for the purposes therein
contained, and who further acknowledged that he/she is the
_______________________ of Standefer Motor Sales, Inc. and is authorized by
Standefer Motor Sales, Inc. to execute this instrument on behalf of Standefer
Motor Sales, Inc.
WITNESS my hand, at office, this _____ day of October, 1996.
_________________________________
Notary Public
My Commission Expires:
-25-
STATE OF _________________)
COUNTY OF ________________)
Personally appeared before me, ___________________, Notary Public,
_______________________________, with whom I am personally acquainted, and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is one of the General Partners
of Standefer Investment Company and is authorized by Standefer Investment
Company to execute this instrument on behalf of Standefer Investment Company.
WITNESS my hand, at office, this _____ day of _______________, 1996.
_________________________________
Notary Public
My Commission Expires:
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STATE OF _________________)
COUNTY OF ________________)
Personally appeared before me, ___________________, Notary Public,
_______________________________, with whom I am personally acquainted, and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is one of the General Partners
of Standefer Investment Company and is authorized by Standefer Investment
Company to execute this instrument on behalf of Standefer Investment Company.
WITNESS my hand, at office, this _____ day of _______________, 1996.
_________________________________
Notary Public
My Commission Expires:
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