LEASE AGREEMENT
This Lease Agreement ("Lease") is entered into by and between GEORGE
VALENTE and LENA E. VALENTE as Trustees of GEORGE AND LENA E. VALENTE TRUST,
(collectively, "Landlord"), whose address is 44165 El Macero Drive, El Macero,
California 94619, and SUN VALLEY FORD, INC., a California Corporation
("Tenant"), whose principal place of business is 2285 Diamond Blvd., Concord,
California 94520, to be effective as of June ____, 1992.
W I T N E S S E T H:
WHEREAS, Landlord is the owner of that certain property located in the City
of Concord, County of Contra Costa, State of California, as more particularly
described in that certain preliminary report from Chicago Title Company dated
September 17, 1992 attached hereto as Exhibit "A" and incorporated herein by
this reference (the "Property"); and
WHEREAS, Landlord is the assignee of that certain lease entered into on
March 16, 1965 by and between Arthur J. Brabant and Lionel G. Sullivan, as
Lessees, and the County of Contra Costa, as Lessor, as amended by that certain
First Addendum to Lease, dated as of March 1, 1967 (together the "County
Lease"), a copy of which are attached hereto at Exhibit B and incorporated
herein by reference, whereby the County leased that certain property as more
particularly described on Exhibit B (the "Leased Property"); and
WHEREAS, pursuant to a Lease Agreement dated May 21, 1980 ("Lease
Agreement") Landlord leased the Property and the Leased Property to Tenant, and
pursuant to a Supplement to and Modification of Lease Agreement dated August 29,
1980 ("Supplement") Landlord and Tenant amended the Lease Agreement; and
WHEREAS, Landlord wishes to cancel and terminate the Lease Agreement and
the Supplement and Tenant wishes to surrender its leasehold interest in and to
the Lease Agreement and the Supplement; and
WHEREAS, Landlord wishes to lease to Tenant the Property and the Leased
Property, and grant Tenant certain options to lease relating thereto, and Tenant
wishes to lease these parcels from Landlord and receive the benefit of the
options to lease relating thereto, all pursuant to the terms and conditions
hereafter set forth.
January 13, 1992
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NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other valuable consideration, the receipt and adequacy of
which is hereby acknowledged, Landlord and Tenant covenant and agree as follows:
ARTICLE 1. CERTAIN PRIOR LEASE AGREEMENTS.
1.1 CANCELLATION OF LEASE AGREEMENT AND SUPPLEMENT. Landlord hereby
cancels and terminates, and Tenant hereby surrenders its leasehold interest in
and to, the Lease Agreement and the Supplement, to be effective as of the
Commencement Date (as hereinafter defined).
1.2 LANDLORD'S TITLE TO DEMISED PREMISES. Landlord represents to Tenant
that Landlord has full authority to enter into this Lease and that Landlord has
fee title to the Property and the Improvements (as defined below) located
therein or thereon, and leasehold title to the Leased Property and the
Improvements located therein or thereon, subject only to the liens, charges,
claims, actions, encumbrances or title conditions or exceptions (herein called
"Exceptions") referred to in Exhibits "A" and "B", which are attached hereto.
Landlord further represents and warrants to Tenant that the leasehold interest
of Ford Leasing Development Company in and to the Demised Premises is terminated
as of the Commencement Date.
ARTICLE 2. DEMISED PREMISES.
2.1. DESCRIPTION OF DEMISED PREMISES. For and in consideration of the
payments and of the performance of Tenant of the covenants and undertakings
hereinafter set forth, Landlord hereby leases to Tenant (with the Options
[as hereinafter defined]) and Tenant leases from Landlord the following
property (herein collectively called the "Demised Premises"):
A. The Property and the Leased Property (collectively, the "Land");
and
B. All buildings, structures, and improvements located or erected on
the Land and all fixtures, equipment, and articles of personal property (if any)
installed upon or located in and used or useful in the maintenance and operation
of such buildings, structures, and improvements, other than Tenant's trade
fixtures, and removable equipment and articles of personal property (the
"Improvements").
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ARTICLE 3. TERM.
3.1. INITIAL TERM. The initial term ("Initial Term") of this Lease shall
be for a period of five (5) years, subject to the extension rights set forth in
Article 5 hereof. The "Commencement Date" of this Lease shall be July 1, 1992
and the initial term shall continue until midnight of June 30, 1997. As used
hereafter, the term "Lease Term" shall include the Initial Term and the term of
any option properly exercised pursuant to Article 5 hereof, unless this Lease is
terminated or canceled earlier as provided herein, in which case "Lease Term"
shall include only the abbreviated period.
ARTICLE 4. RENT.
4.1 BASIC RENT. Tenant covenants to pay Landlord a net monthly payment
("Basic Rent") during the Initial Term in an amount equal to Twenty Three
Thousand One Hundred Eighty Eight and 88/100 Dollars ($23,188.88). This payment
shall be remitted to Landlord by check in advance on or before the first (1st)
day of each and every calendar month during the Initial Term without notice or
demand.
4.2 ADDITIONAL RENT. Tenant covenants to pay to Landlord during the
Lease Term an amount equal to the amounts set forth in Articles 6 and 7 of this
Lease on terms and conditions stated therein ("Additional Rent").
ARTICLE 5. OPTIONS.
5.1 GRANT OF OPTIONS AND CONDITIONS FOR EXERCISE. Landlord hereby
grants to Tenant the options ("Options" and each an "Option") to lease the
Demised Premises specified in Sections 5.3 and 5.4 hereof. Tenant's right to
exercise each Option shall be conditioned upon the occurrence of each and all of
the following conditions precedent:
A. Landlord shall receive from Tenant written notice of the exercise
of each of the Options no earlier than twelve (12) months and no later than six
(6) months prior to the expiration of the Initial Term or the then-current term,
time being of the essence in the exercise of the Options. If notification of
the exercise of any Option is not so received, that Option and any remaining
Options shall automatically expire and this Lease shall terminate on the
expiration of the Initial Term or the then-current term.
B. This Lease shall be in full force and effect at the time notice
of exercise is given and on the last day of the Initial Term or the then-current
term.
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C. There shall not be a default (as defined in Section 18.1) by
Tenant from the time notice of exercise is given until the last day of the
Initial Term or the then-current term.
5.2 EFFECT OF EXERCISE OF OPTION. If the Options granted in Sections
5.3 and 5.4 hereof is or are properly exercised, each and every term and
condition of this Lease shall apply during the term of each of the Options which
are exercised except as specifically provided herein.
5.3 OPTION TO EXTEND. Landlord grants to Tenant the Option to extend
the term of this Lease from July 1, 1997 through June 30, 2007. The Basic Rent,
over and above the Additional Rent, during each annual period commencing July 1,
1997 and ending June 30, 2007 shall be a monthly amount equal to the monthly
Basic Rent paid during the immediately preceding annual period plus a percentage
of Twenty-Three Thousand One Eighty Eight and 88/100 Dollars ($23,188.88), said
percentage to be the lesser of (i) seven percent (7%) or (ii) the percentage
increase in the CPI for the month most recently preceding the adjustment date
over the CPI for the same month of the immediately preceding calendar year. As
used in this Lease, the term "CPI" shall mean the United States Department of
Labor's Bureau of Labor Statistics' Consumer Price Index, All Urban Consumers,
All Items, San Francisco-Oakland-San Jose, California (1982-84 equals 100), or
the successor of such index. If such index is changed so that the base period
shall be other than 1982-84 equals 100, then such index shall be subject to
conversion in accordance with the conversion factor published by the United
States Bureau of Labor Statistics. If such index is discontinued or revised,
the index designated as the successor or substitute index by the government of
the United States shall be substituted. If no index is so designated, Landlord
shall designate an index prepared by an appropriate governmental entity,
corporation or other entity.
5.4 SECOND OPTION TO EXTEND. Landlord grants to Tenant the Option to
extend the term of this Lease from July 1, 2007 through March 15, 2016. The
Basic Rent, over and above the Additional Rent, during each annual period
commencing June 29, 2007 and ending March 15, 2016 shall be a monthly amount
equal to the monthly Basic Rent paid during the immediately preceding annual
period plus a percentage of the monthly Basic Rent paid during the immediately
preceding annual period, said percentage to be the lesser of (i) seven percent
(7%) or (ii) the percentage increase in the CPI for the month most recently
preceding the adjustment date over the CPI for the same month of the immediately
preceding calendar year.
5.5 PAYMENT OF BASIC RENT. The Basic Rent shall be remitted to Landlord
by check in advance on or before the first (1st) day of each and every calendar
month during the Lease Term without notice or demand.
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5.6 LATE PAYMENT PENALTY. Tenant's failure to remit the Basic Rent to
Landlord with fifteen (15) days of the date due shall result in the imposition
of a five percent (5%) of the amount overdue as a late payment penalty as
additional rent to be paid by Tenant to Landlord. This late payment penalty
rent shall be in addition to any other and all remedies of Landlord hereunder.
ARTICLE 6. COUNTY LEASE PAYMENTS.
6.1 COUNTY LEASE PAYMENTS. Subject to Landlord maintaining the County
Lease as set forth in Article 24, below, Tenant covenants to pay as Additional
Rent directly to Landlord in advance, on or before the first (1st) day of each
and every calendar month during the Lease Term and any extension thereof,
without notice or demand, an amount equal to the monthly lease payment due by
Landlord to the County of Contra Costa ("County") under the County Lease for the
following month. Tenant acknowledges that the monthly amount of the County
Lease payments is currently Three Thousand One Hundred Dollars ($3,100.00).
Tenant agrees and acknowledges that the amount of the County Lease payments
shall be revalued pursuant to the terms of the County Lease, which revaluations
shall be effective as of March 16, 1995, March 16, 2005, and March 16, 2015.
Tenant further acknowledges the Landlord has made no representations to Tenant
regarding the prospective amounts of such increases in the County Lease
payments. Tenant hereby acknowledges receipt of the copy of the County Lease
and agrees to all of its covenants and conditions and accepts the Leased
Property subject to all of its terms, covenants, and conditions.
6.2 TENANT'S RIGHT OF PARTICIPATION. Landlord agrees to give Tenant or
its designee timely notice of, and any opportunity to participate in, all
hearings and negotiations regarding increases in the County Lease payments.
Upon written request of Tenant or its designee, Landlord will arrange a meeting
or meetings with officials of the County for the purpose of negotiating the
amount of any increase in the County Lease payments, and will extend to Tenant
or its designee a timely opportunity to participate in all such negotiations.
6.3 TENANT'S RIGHT TO CONTEST COUNTY LEASE RENT. Tenant or its designee
shall have the unrestricted right at its sole costs and expense and in its name,
or in the name of Landlord if required, to pursue such administrative and
judicial procedures as may be necessary to contest and appeal the amount of any
increase in the County Lease payments. At no cost to Landlord, Landlord agrees
to cooperate in all reasonable ways to further any such procedure by Tenant or
its designee.
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ARTICLE 7. TAXES.
7.1 APPLICABLE TAXES DEFINED. For the purposes of this Lease,
"Applicable Taxes" shall mean all general real property taxes and general
assessments, transit charges, fees or assessments, payments in lieu of taxes,
and any tax, fee or excise levied or assessed on the Demised Premises, any
portion thereof, or Landlord's interest therein, hereafter levied or assessed by
the United States of America, the State of California or any political
subdivision, public corporation, district or other political or public entity.
Notwithstanding anything herein to the contrary, Applicable Taxes shall not
include any portion of the foregoing which are due solely to reassessments due
to death or the transfer of the Demised Premises (or any part thereof).
7.2 TENANT TO PAY APPLICABLE TAXES. As Additional Rent and in addition
to all other sums to be paid by Tenant under this Lease, Tenant shall pay to
Landlord an amount equal to the Applicable Taxes which become due and payable
during each fiscal year during the Lease Term. Tenant shall pay all Applicable
Taxes to Landlord within thirty (30) days of Landlord's invoice to Tenant.
Tenant or its designee shall bear the expense of Applicable Taxes for whole
fiscal years during the Lease Term and, additionally, the expense thereof for
the fiscal years in which the Lease Term begins or terminates in the proportion
that the number of days the Lease Term exists within each of such fiscal years
bears to the total number of days in such fiscal year. Notwithstanding anything
herein to the contrary, Tenant shall pay all Applicable Taxes prior to the date
upon which a penalty shall be assessed by the respective taxing authorities for
the delinquent payment of any Applicable Taxes. Further, Tenant hereby agrees
to pay any penalties which may result from the delinquent payment of any
Applicable Taxes within 10 days of written demand for payment thereof by
Landlord to Tenant.
7.3 SPECIAL ASSESSMENTS. As Additional Rent and in addition all other
sums to be paid by Tenant under this Lease, Tenant shall pay to Landlord an
amount equal to any special assessments applicable to the Demised Premises, but
only to the extent that such assessments become due and payable in full or in
installments during the Lease Term. Special assessments for the fiscal years in
which the Lease Term begins or terminates shall be prorated between Landlord and
Tenant in the proportion that the number of days the Lease Term (or Tenant
occupies the Demised Premises, whichever is longer) exists within each of such
fiscal years bears to the total number of days in such fiscal year. For
purposes of this Section 7.3, payment in installments over the longest possible
term shall be deemed to have been elected in any instance where a determinable
option so to pay existed, notwithstanding that an assessment may have been, or
may hereafter be, paid in full, and Tenant shall bear the expense of only such
installments as would have become due and payable during the Lease Term had the
installment option been
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elected.
7.4 SPECIAL ASSESSMENT PARTICIPATION RIGHTS OF TENANT. Landlord agrees
to give Tenant timely notice of, and the opportunity to participate in, all
hearings and negotiations regarding special assessments affecting the Demised
Premises. Upon written request of Tenant, Landlord will arrange with proper tax
officials meeting(s) for the purposes of negotiating real estate tax assessments
against the Demised Premises, and Landlord will extend to Tenant timely notice
of, and the opportunity to participate in, all such negotiations.
7.5 TENANT'S RIGHT TO CONTEST TAXES. Tenant shall have the unrestricted
right and in its name, or in the name of Landlord if required, to pursue such
administrative and judicial procedures as may be necessary to contest and appeal
from any assessment or valuation, provided that Tenant shall post an appropriate
bond or pay under protest any billing or real estate taxes or assessments all or
part of which are borne by Tenant under the terms of this Lease as a condition
to Tenant's rights under this Section 7.5. At no cost to Landlord, Landlord
agrees to cooperate in all reasonable ways to further any such procedure by
Tenant; provided that benefits and expenses resulting from any contest with
respect to Applicable Taxes or special assessments for fiscal years in which the
Lease Term begins or terminates shall be borne ratably by Tenant and Landlord in
proportion to the amount of the reduction of the tax required to be borne by
each pursuant to the terms of this Lease in the absence of a contest thereof.
ARTICLE 8. TENANT'S TAXES.
8.1 TENANT'S TAXES GENERALLY. In addition to all other sums to be paid
by Tenant under this Lease, Tenant shall pay, before delinquency, any and all
taxes levied or assessed during the Lease Term, whether or not now customary or
within the contemplation of the parties hereto, (a) on Tenant's improvements,
equipment, furniture, fixtures and other personal property located in or on the
Demised Premises; (b) upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Demised Premises or any portion thereof; (c) upon, measured by or
reasonably attributable to the cost or value of Tenant's equipment, furniture,
fixtures and other personal property located in or on the Demised Premises or by
the cost or value of any leasehold improvements made in or to the Demised
Premises, regardless of whether title to such improvements shall be in Tenant or
Landlord; (d) upon any document to which Tenant is a party creating or
transferring an interest or an estate in the Demised Premises; and (e) all and
any other taxes which exist as of the Commencement Date and those which may be
levied and/or assessed during the Lease Term. Tenant shall reimburse Landlord
for any and all such taxes paid or payable by Landlord
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within thirty (30) days of Tenant's receipt of an invoice from Landlord.
ARTICLE 9. USE Of DEMISED PREMISES.
9.1 USE OF DEMISED PREMISES. Tenant shall use the Demised Premises as
an automobile dealership and other purposes related or incidental to an
automobile sales, leasing and service establishment. Tenant may use the Demised
Premises for purposes other than an automobile dealership and related and
ancillary uses if Tenant obtains Landlord's prior written consent which will not
be unreasonably withheld. Any change in use must comply with all zoning and
land use laws and regulations. No change of use shall be made which would
prevent, upon the termination of the Lease, the Demised Premises from
immediately being used as an automobile dealership without the necessity of
Landlord seeking a zoning change or a use permit.
ARTICLE 10. REPAIRS
10.1 ALTERATIONS. Any alterations shall remain on and be surrendered
with the premises on expiration or termination of the Lease Term, except that
Landlord can elect within thirty (30) days before expiration of the Lease Term,
or within five (5) days after the termination of the Lease Term, to require
Tenant to remove any alterations that Tenant has made to the premises. If
Landlord so elects, Tenant, at Tenant's sole cost and expense, shall restore the
premises to the condition designated by Landlord in its election, before the
last day of the Lease Term, or within 30 days after Notice of Election is given,
whichever is later. Except as herein provided, Tenant shall not, before or
during the Lease Term, make or allow to be made any alterations, physical
additions or improvement in or to the Demised Premises without First obtaining
Landlord's prior written consent, which consent shall not be unreasonably
withheld.
10.2 MAINTENANCE OF DEMISED PREMISES. Tenant shall at all times during
the Lease Term maintain the Demised Premises in good, clean and sanitary
condition at Tenant's sole cost and expense.
10.3 TENANT'S REPAIRS. Tenant shall, at its sole cost and expense,
maintain, repair, and replace the following: (a) the structural parts of the
building and other improvements that are part of the Demised Premises, which
structural parts include the foundations, bearing and exterior walls, glass and
doors, subflooring and roof; (b) the unexposed electrical, plumbing and sewage
systems, including, without limitation those portions of the systems lying
outside the premises; (c) window frames, gutters, and downspouts on the building
and other improvements that are part of the premises; (d) the entire interior
structures; (e) exterior
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landscaping and vegetative matter in and around the leased premises; (f) any and
all infrastructure, parking areas, curbs, gutters, sidewalks, and any other
structures in and about the Demised Premises. Tenant, upon demand by Landlord,
will assign and transfer to Landlord any warranty or guaranty received by Tenant
from any party who may have supplied labor, services and/or materials with
respect to any portion of the Demised Premises which Tenant is required to
repair or replace pursuant to this Lease.
10.4 MECHANIC'S LIENS. Tenant shall keep the Demised Premises free from
any liens arising out of any (a) work performed or material furnished to or on
behalf of Tenant to or for the Demised Premises for or during the Lease Term or
(b) obligations incurred by or for Tenant or any person claiming through or
under Tenant before or during the Lease Term. In the event that Tenant shall not
within thirty (30) days following the imposition of any such lien, cause same to
be released of record by payment or posting of a bond, reasonably satisfactory
to Landlord in form and substance, Landlord shall have, in addition to all other
remedies provided herein and by law, the right (but not the obligation) to cause
the lien to be released by such means as Landlord shall deem proper, including
payment of the claim giving rise to such lien. All such sums paid by Landlord
and all reasonable expenses incurred by it in connection therewith shall be
considered Additional Rent and shall be payable by Tenant within thirty (30)
days after demand. Landlord shall have the right at all times to post and keep
posted on the Demised Premises any notices permitted or required by law or that
Landlord shall reasonably deem proper for the protection of Landlord, the
Demised Premises and any other party having any interest therein, from
mechanics, materialmen and other liens. In addition to all other requirements
contained in this Lease, Tenant shall give to Landlord at least ten (10)
business days' prior written notice of commencement of any construction on the
Demised Premises.
10.5 STANDARDS FOR REPAIRS. All repairs, replacements and reconstruction,
including any alterations made pursuant to this Article 10, made by or on behalf
of Tenant or Landlord, or any person claiming through or under them, shall be
made and performed (a) in accordance with all applicable laws and regulations of
governmental authorities having jurisdiction over the Demised Premises, (b) in
accordance with such reasonable requirements as Landlord or Tenant may impose
with respect to insurance and bonds to be obtained by the other party in
connection with the proposed work, and (c) in compliance with such other
reasonable requirements as Landlord or Tenant may impose.
10.6 LANDLORD'S REPAIRS. Landlord shall make at its sole cost and
expense only those repairs necessitated by Landlord's acts or negligence of its
agents, employees or contractors.
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10.7 TENANT'S REMEDIES FOR LANDLORD'S REPAIRS. It is understood and
agreed that Landlord shall be under no obligation to make any repairs,
alterations, renewals, replacements or improvements to and upon the Demised
Premises at any time except as this Lease expressly provides. Anything to the
contrary notwithstanding contained in this Lease, Landlord shall not in any way
be liable to Tenant for failure to make repairs as herein specifically required
of it unless Tenant has previously notified Landlord in writing of the need for
such repairs and Landlord has failed to commence and complete such repairs
within a reasonable period of time following receipt of Tenant's written
notification. The cost of said repairs made by Tenant shall be Tenant's sole
and exclusive remedy against Landlord for the failure of Landlord to perform the
repairs required pursuant to this Lease.
10.8 SURRENDER OF DEMISED PREMISES. Any alteration, physical addition or
improvement in or to the Demised Premises before or during the Lease Term shall
become the property of the Landlord, and shall be surrendered to the Landlord
upon the expiration or earlier termination of this Lease; provided, however,
that this provision shall not apply to moveable equipment, trade fixtures or
furniture owned by Tenant. At Landlord's sole election, any or all of the
alterations made by or on behalf of Tenant shall be removed from the Demised
Premises at Tenant's sole cost and expense at the expiration or earlier
termination of this Lease and the Demised Premises shall be restored at Tenant's
sole cost and expense to their condition before the making of such alterations.
Tenant shall repair at its sole cost and expense all damage caused to the
Demised Premises by removal of Tenant's moveable equipment, trade fixtures or
furniture or such other alterations as Tenant shall be allowed or required to
remove from the Demised Premises by Landlord. Any of Tenant's moveable
equipment, trade fixtures or furniture not removed from the Demised Premises
within five (5) days following the expiration or earlier termination of this
Lease shall at Landlord's option become the property of Landlord or Landlord may
remove them and Tenant shall pay to Landlord the cost of removal.
ARTICLE 11. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS
11.1 COMPLIANCE WITH LAWS. Tenant, at Tenant's sole cost and expense,
shall comply during the Lease Term with all laws, orders and regulations of
federal, state, county and municipal authorities relating to Tenant's use or
occupancy of the Demised Premises or Tenant's operations thereon.
11.2. HAZARDOUS MATERIALS. Landlord acknowledges that Tenant from time to
time may use, generate, or store hazardous materials and contaminants (as
defined hereinbelow) on or about the Demised Premises as part of the normal
operation of Tenant's business and use of the Demised Premises as set forth in
Article 9. Tenant
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agrees at its sole cost and expense to comply with Federal, State and local
laws, ordinances, and regulations and all rules, licenses, permits, orders
relating to Tenant's use, generation, storage or disposal of such hazardous
materials or contaminates. Except as provided above, Tenant shall not cause or
permit the use, generation, storage or disposal on or about the Demised Premised
of any substances, materials or waste subject to regulation under any federal,
state or local laws from time to time in effect concerning hazardous, toxic or
radioactive materials unless Tenant shall have received Landlord's prior written
consent therefore, which Landlord may withhold or revoke at any time in its sole
discretion. In addition to and notwithstanding any other rights and remedies of
Landlord under this Lease and without any grace periods, Landlord shall have the
right, in its sole discretion to require Tenant (i) to cease and desist all
activities on the Demised Premises directly or indirectly resulting in a
violation of this Section 11.2 immediately upon notice of such violation from
Landlord, and (ii) to immediately commence cure of such violation at Tenant's
expense.
11.3 COMPLIANCE WITH INSURANCE POLICIES. Tenant shall not do anything or
permit anything to be done in or about the Demised Premises that shall
invalidate or be in conflict with the provisions of any fire or other insurance
policies covering the Demised Premises or any property located therein. Tenant,
at Tenant's expense, shall comply with all rules, orders, regulations or
requirements of any Board of Fire Underwriters or other similar body.
ARTICLE 12. SUBORDINATION
12.1 SUBORDINATION GENERALLY. Tenant agrees that this Lease shall be
subject and subordinate at all times to (a) all ground leases or underlying
leases that now exist as set forth in Exhibit A and B or hereafter may be
executed with the consent of Tenant affecting the Demised Premises or any
portion thereof, including without limitation the County Lease; (b) the lien of
any mortgage or deed of trust or other security instrument (and any advances
thereunder) that may now exist or hereafter be executed in any amount for which
the Demised Premises or any portion thereof, any ground leases or underlying
leases, or Landlord's interest or estate therein is specified as security; and
(c) all modifications, renewals, supplements, consolidations and replacements
thereof, provided in all cases that Landlord shall have obtained and delivered
to Tenant, in form and content acceptable to Tenant, the written agreement of
the mortgagees or beneficiaries named in the mortgages or deeds of trust
hereafter executed to recognize the interest and not disturb the possession, use
and enjoyment of Tenant under this Lease in the event of foreclosure of
mortgage, deed of trust or other security interest, provided that Tenant is not
in default under the terms and conditions of this Lease. Subject to the
foregoing, Landlord shall have the right to
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subordinate this Lease, or cause this Lease to be subordinated, to any such
ground leases, underlying leases or liens. If any ground lease or underlying
lease terminates for any reason, or any mortgage, deed or trust or other
security agreement is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall, notwithstanding any subordination, attorn
to and become the Tenant of the successor-in-interest to Landlord at the option
of such successor-in-interest to Landlord provided, however, that such
successor-in-interest shall recognize the leasehold estate of Tenant and not
disturb the possession, use and enjoyment and all rights of Tenant under all the
terms, covenants and conditions of the Lease for the remaining balance of the
lease Term, with the same force and effect as if such successor-in-interest were
the Landlord under the Lease. Tenant covenants and agrees to execute and
deliver upon demand by Landlord and in the form reasonably requested by
Landlord, but subject to the reasonable approval of Tenant, any additional
documents evidencing the priority or subordination of this Lease with respect to
any such ground leases, underlying leases, mortgages or deeds of trust or other
security instruments, or such other attornment and nondisturbance agreement.
ARTICLE 13. ASSIGNMENT AND SUBLETTING.
13.1 LANDLORD'S CONSENT TO ASSIGNMENT AND SUBLEASE. Subject to the
rights provided in Section 13.2, neither Tenant nor any sublessee or assignee of
Tenant shall, directly or indirectly, voluntarily or by operation of law, sell,
assign, encumber, pledge or otherwise transfer or hypothecate all or any part of
the Demised Premises or Tenant's leasehold estate hereunder, or sell or
transfer, whether pursuant to one or more transactions, including without
limitation, by consolidation, merger or reorganization, a majority of the voting
stock of Tenant if Tenant is a corporation, or a majority of the general
partnership interest of Tenant if Tenant is a partnership (each such act is
referred to herein as an "Assignment"), or sublet the Demised Premises or any
portion thereof or permit the Demised Premises to be used or occupied by anyone
other than Tenant (each such act is referred to herein as a "Sublease"), without
the prior written consent of a Landlord, which consent shall not be arbitrarily
or unreasonably refused. Landlord shall have ninety (90) days from the time
Landlord receives written notice from Tenant of its request for Landlord to
approve or disapprove of the proposed subtenant or assignee. In the event
Landlord withholds its consent to the Assignment or Sublease, Landlord shall set
forth the reasons for its withholding of consent. The failure of Landlord to
give notice of its refusal within ninety (90) days of its receipt of Tenant's
notice of Assignment or Sublease, shall be deemed an approval of the Assignment
or Sublease. Any Assignment or Sublease shall be void and, at the option of
Landlord, shall constitute a material default by Tenant under this Lease. The
acceptance of Basic Rent or Additional Rent by Landlord from a proposed
assignee, sublessee, or
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occupant of the Demised Premises shall not constitute consent to such Assignment
or Sublease by Landlord. If Tenant requests Landlord to consent to an
Assignment or Sublease, Tenant shall pay to Landlord, whether or not consent is
ultimately given, Landlord's reasonable expenses incurred in connection with
such request, including reasonable attorney's fees.
13.2 PERMITTED ASSIGNMENTS AND SUBLEASES. Notwithstanding anything in
Section 13.1 or in this Lease to the contrary, but subject to any restrictions
in the County Lease applying to the Leased Property, Tenant shall have the
right, without Landlord's consent, to make an Assignment or Sublease of the
Lease and its rights in the Demised Premises, or any portion thereof, to a
corporation which is a wholly owned subsidiary of Tenant or as part of a change
of ownership, the sale or transfer to a transferee of all or a part of the
capital stock of Tenant; provided, however that any transferee of said stock
other than Edmund G. Bartlett, Larry Wagner, and/or Donald Ludwig, or their
respective spouses or estates who has not been previously approved in writing by
Ford Motor Company to be an authorized dealer, shall execute a Personal
Guarantee of Tenant's obligation hereunder in a manner and form reasonably
acceptable to Landlord.
13.3 ALLOCATION OF SUBLEASE RENT OR ASSIGNMENT CONSIDERATION. If Tenant
receives any excess rental (Bonus Payments) from a subtenant or other payment as
consideration for assigning the Lease as part of a Sublease or Assignment, after
reimbursement of Tenant's reasonable costs, Landlord shall receive one-half
(1/2) and Tenant shall receive one-half (1/2) of such Bonus Payments.
ARTICLE 14. FIRE AND OTHER CASUALTY.
14.1 TOTAL LOSS. If the Demised Premises shall be damaged by fire,
casualty or act of God, or if any lawful authority shall order demolition or
removal (or non-use) of any structure or part thereof being a part of the
Demised Premises so as to render the Demised Premises substantially in their
entirety unfit for any of Tenant's uses referred to in Article 9 hereof (except
as a result of an act or omission of Tenant or its agents, employees,
contractors or anyone claiming under or through Tenant, or as a result of the
failure of Tenant to perform its obligations hereunder,) then Tenant, in its
reasonable discretion, shall have the right by giving written notice to landlord
within thirty (30) days after any such happening to terminate this Lease as of
the time of such happening; and Tenant's obligation to pay rent shall cease; and
rent paid shall be apportioned and the unearned portion thereof shall be
refunded to Tenant. If Tenant does not elect to terminate this Lease, Landlord
shall expeditiously rebuild and restore the Demised Premises and Basic Rent will
abate during the period that Tenant does not use the Demised Premises by reason
of such happening and the rebuilding and restoration of the Demised
13
Premises.
14.2 PARTIAL LOSS. If the Demised Premises shall be damaged by any
aforesaid happening to an extent which does not render the Demised Premises
substantially in their entirety unfit for any of Tenant's such uses, then
Landlord shall expeditiously rebuild and restore the Demised Premises and Basic
Rent shall abate pro rata in the proportion of the diminution in usefulness of
the Demised Premises for the uses set forth in Article 9 hereof during the
period that Tenant is deprived of the use of the entire Demised Premises by
reason of such happening and the rebuilding and restoration of the Demised
Premises.
14.3 LOSS COVERED BY INSURANCE. Upon the completion of any rebuilding
and restoration of the Demised Premises and the receipt by Tenant of a certified
statement of the cost thereof, Tenant shall reimburse Landlord for the portion
of such costs that would have been covered by the fire and extended coverage
insurance obtained by Tenant under Section 16.2 hereof but for any deductible
permitted under that Section.
14.4 TERMINATION OF RIGHTS. If Landlord fails in any of the foregoing
events expeditiously to rebuild and restore the Demised Premises, Tenant will
have the alternative right to terminate this Lease as of the date of the
happening (if the Demised Premises substantially in their entirety have become
unfit for Tenant's use) or (if the Premises have not become unfit to that
extent) ten (10) days after the giving of such termination notice by Tenant by
serving written notice upon Landlord; provided that if Landlord notifies Tenant
within such ten (10) day period of Landlord's intention to rebuild and restore
the Demised Premises, Tenant shall not have the right to terminate this Lease
during such period if Landlord diligently pursues the rebuilding and restoration
of the Demised Premises. The rights of the Tenant to terminate pursuant to this
paragraph 14.4 shall be the Tenant's sole and exclusive remedy in the event of
Landlord's failure to rebuild and restore the Demised Premises as a result of
the foregoing events.
14.5 LOSS DURING LAST PART OF TERM. If the Demised Premises are
destroyed or damaged during the last twenty-four (24) months of the lease Term
and the estimated cost of repair exceeds ten percent (10%) of the Basic Rent
payable during the remainder of the Lease Term, either party may at its option
cancel and terminate this Lease as of the date of occurrence of such damage by
giving written notice to the other party of its election to do so within fifteen
(15) days after the date of occurrence of such damage; provided, however, that
if Tenant has the Option to extend the then-current term pursuant to Article 5
hereof, Tenant shall have the right to exercise such Option for thirty (30) days
after receipt of such notice from Landlord. If either party shall not so elect
to terminate this Lease, the repair of such damage shall be governed by the
provisions of this Article 14.
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ARTICLE 15. INDEMNIFICATION.
15.1 INDEMNIFICATION BY TENANT. To the fullest extent permitted by law
and without limitation to Landlord's rights and remedies in the event of a
breach of this Lease by Tenant, Tenant shall indemnify Landlord, and its
employees, servants, and agents against and save Landlord harmless from and
defend Landlord through attorneys satisfactory to Landlord from and against any
and all claims, loss, cost, liability, damage and expense including, without
limitation, penalties, fines and reasonable attorneys' fees, court costs,
expenses and other costs of investigation and preparation for trial (including
without limitation attorneys' fees, court costs, expenses and other costs of
investigation and preparation incurred in connection with any appeal), incurred
in connection with or arising in whole or in part from (a) any default by Tenant
in the observance or performance of any of the terms, covenants, conditions or
other obligations of this Lease to be observed or performed by tenant, or the
failure of any representation made by Tenant in this Lease, (b) the use or
occupancy or manner of use or occupancy of the Demised Premises by Tenant or any
person claiming through or under Tenant, (c) the condition of the Demised
Premises or any occurrence or happening on the Demised Premises between the
Commencement Date and the time Landlord has accepted the surrender of the
Demised Premises after the expiration or termination of the Lease Term, (d) any
acts, omissions or negligence of Tenant or any person claiming through or under
Tenant, or of the contractors, agents, servants, employees, visitors in the
Demised Premises or licensees of Tenant or any person claiming through or under
Tenant, in, on or about the Demised Premises, or (e) any and all liability
related in any way to claims based on contamination in or on the ground or
groundwater underlying the Demised Premises, or any other claims based on the
release or releases of contaminants from the Demised Premises, which are
attributed to or caused by Tenant or any other employee, agent, supplier or
customer of Tenant or anyone claiming through or under Tenant during the Lease
Term and any prior lease and/or sublease between Tenant and Landlord concerning
the Demised Premises or any part thereof.
15.2 INDEMNIFICATION BY THE LANDLORD. To the fullest extent permitted by
law and without limitation to Tenant's rights and remedies in the event of a
breach of this Lease by Landlord, Landlord shall indemnify Tenant and its
employees, servants and agents against and save Tenant harmless from and defend
Tenant through attorneys satisfactory to Tenant from and against any and all
claims, loss, cost, liability, damage and expense, including, without
limitation, penalties, fines and reasonable attorneys fees, court costs,
expenses and other costs of investigation and preparation for trial (including
without limitation attorneys fees, court costs, expenses and other costs of
investigation and preparation incurred in connection with any appeal), incurred
in connection with or arising in whole or in part from (a) any default
15
by Landlord in the observance or performance of any of the terms, covenants,
conditions or other obligations of this Lease to be observed or performed by
Landlord, or the failure of any representation made by Landlord in this Lease,
(b) any intentional acts or omissions of the Landlord or any representative or
agent of the Landlord.
15.3 CONTAMINATION DEFINED. For the purposes of this Lease,
"contaminants" and "contamination" shall mean:
"(i) Any substance, product, waste or other material of any nature
whatsoever which is or becomes listed, regulated, or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601, ET SEQ. ("CERCLA"); the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, ET SEQ.; the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 ET SEQ. ("RCRA"); the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 ET SEQ.; the clean
Water Act, 33 U.S.C. Sections 1251 ET SEQ.; the California Hazardous
Waste Control Act, Health and Safety Code Sections 25100 ET SEQ.; the
California Hazardous Substance Account Act, Health and Safety Code Sections
25330 ET SEQ.; the California Safe Drinking Water and Toxic Enforcement
Act, Health and Safety Code Sections 25249.5 ET SEQ.; the California Health
and Safety Code Sections 25280 ET SEQ. (Underground Storage of Hazardous
Substances); the California Hazardous Waste Management Act, Health and
Safety Code Sections 25270.1 ET SEQ.; California Health and Safety Code
Sections 25501 ET SEQ.; (Hazardous Materials Release Response Plans and
Inventory); or the California Porter-Cologne Water Quality Control Act,
Water Code Sections 13000 ET SEQ., all as amended, (collectively referred
to as "the State Toxic Substances Laws") or any other federal, state or
local statute, law, ordinance, resolution, code, rule, regulation, order or
decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect, (ii) any substance,
product, waste or other material of any nature whatsoever which may give
rise to liability under any of the above statutes or under any statutory or
common law theory based on negligence, trespass, intentional tort, nuisance
or strict liability or under any reported decisions of a state or federal
court, (iii) petroleum or crude oil other than petroleum and petroleum
products which are contained within regularly operated motor vehicles, and
(iv) asbestos.
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15.4 SURVIVAL; EFFECT OF INSURANCE. The indemnification obligation of
this Article 15 shall survive the expiration of earlier termination of this
Lease. The indemnification obligations of a party under this Article shall be
limited to the sum that such obligation exceeds the amount of insurance
proceeds, if any, receivable to the party being indemnified.
15.5. CONDITION OF PREMISES UPON TERMINATION. Tenant hereby agrees to
deliver the premises free of all Contamination as defined hereinabove at the
termination of the Lease Term or upon vacation of the Demised Premises whichever
shall first occur.
ARTICLE 16. INSURANCE.
16.1 PUBLIC LIABILITY INSURANCE. Tenant shall maintain in full force
and effect during the Lease Term commercial general liability insurance against
claims for bodily injury or death and property damage occurring on, in or about
the Demised Premises and the streets and alleys adjoining the Demised Premises
affording protection with respect to bodily injury or death of at least Five
Million Dollars ($5,000,000.00) for any one person and at least Five Million
Dollars ($5,000,000.00) for any one occurrence and protection with respect to
property damage of at least Three Million Dollars ($3,000,000,00). Upon sixty
(60) days prior written notice, Landlord shall have the right, in its reasonable
discretion, to increase the minimum insurance required to be maintained by
Tenant under this Section 16.1 from time to time during the Lease Term, provided
such increase is consistent with the insurance typically maintained for
comparable properties.
16.2 PROPERTY DAMAGE INSURANCE. Tenant shall maintain during the term
of this Lease fire and extended coverage insurance (a) in an amount not less
than 90% of the then full replacement cost of the Improvements, full replacement
cost being the cost of replacing the Improvements exclusive of the cost of
excavation, foundations and footings below the lowest basement floor, and (b)
subject to a maximum deductible of the higher of $1,000.00 per occurrence or
commercially reasonable standards. Without limitation of the scope of insurance
required under this Article 16, such insurance shall specifically carry an
endorsement covering any plate glass windows located on the Demised Premises.
16.3 STANDARDS FOR INSURANCE. All insurance policies required to be
carried by Tenant under this Lease shall (i) be written by companies rated A/VII
or better in "Best's Insurance Guide" and authorized to do business in
California (if and as such policies with such insurers are available on
commercially reasonable terms after reasonable efforts), (ii) with respect to
Tenant liability and umbrella policies, name Landlord and any other parties
reasonably designated by landlord as additional insureds, (iii) with respect to
Tenant property and liability policies,
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contain loss payable clauses reasonably satisfactory to Landlord, including,
without limitation, clauses providing for payment of insurance proceeds, as
their interest may appear, to Tenant or to Landlord, (iv) provide coverage on an
occurrence basis (if and as available on commercially reasonable terms after
reasonable efforts), and (v) provide (to the extent obtainable after reasonable
efforts) that Landlord shall receive thirty (30) days notice from the insurer
before any cancellation or change in coverage, and ten (10) days notice from the
insurer of cancellation for non-payment of premiums. In the event that any of
the foregoing requirements or standards, or any other requirements or standards
herein pertaining to insurance policies required to be carried by Tenant
under the Lease, cannot be satisfied or are not available on commercially
reasonable terms after reasonable effort by Tenant, then commercially reasonable
terms for insurance policies applying to comparable properties at the time shall
apply under this Lease.
16.4 INSURANCE CERTIFICATES. Tenant shall deliver policies of such
insurance or certificates thereof to Landlord on or before the Commencement
Date, and thereafter at least thirty (30) days before the expiration dates of
expiring policies; and, in the event Tenant shall fail to procure such insurance
or to deliver such policies or certificates, Landlord may, at its option and in
addition to Landlord's other remedies in the event of a default by Tenant
hereunder, procure same for the account of Tenant, and the cost thereof shall be
paid by Tenant to Landlord as Additional Rent within thirty (30) days of written
notice by Landlord to Tenant.
16.5 WAIVER OF SUBROGATION. Tenant shall obtain and maintain, if
reasonably possible, throughout the Lease Term, in the insurance policies
provided for in this Article 16, provisions to the effect that such policies
shall not be invalidated should the insured waive, in writing, before a loss,
any or all right of recovery against any party for any loss which is an insured
loss under such policies. As long as such or similar provisions are included in
such insurance policies then in force, to the extent of such insurance, Landlord
and Tenant hereby each waive any right of recovery against the other and any
lessors under any ground leases, any mortgagee of Landlord's interest in all or
any portion of the Demised Premises, and any servant, agent, employee or
contractor of the other for any insured risk covered under such policies.
ARTICLE 17. CONDEMNATION
17.1 DEFINITIONS. The term "Taking" shall mean a taking or condemnation
for public or quasi-public use during the Lease Term of all or part of the
Demised Premises, or any transfer of the Demised Premises in avoidance of an
exercise of the power of condemnation or eminent domain proceedings, or damage
to all or any part of them as the result of condemnation or eminent domain
18
proceedings, or damage incidental to a public work. The term "Date of Taking"
shall mean the date on which the condemning authority is entitled to possession
or the damage is imposed, as the case may be.
17.2 NOTICE OBLIGATIONS. Forthwith upon the receipt by Landlord or
Tenant of any notice of the institution of any proceeding for the Taking of the
Demised Premises, or any part thereof, or for any street widening (other than a
Taking) or any change of grade affecting the Demised Premises or any part
thereof, the party receiving such notice shall promptly give written notice
thereof to the other party to this Lease.
17.3 TOTAL TAKING. In the event of a Taking of either the fee of, or
the use for more than twelve (12) months of, or a perpetual or temporary
easement upon, all of the Demised Premises, the term of this Lease shall
automatically expire as of the Date of Taking.
17.4 PARTIAL TAKING. In the event of a Taking of either the fee of, or
the use for more than twelve (12) months of, or a perpetual easement upon, less
than all of the Demised Premises, if Tenant, in its reasonable discretion, shall
determine that the remaining portions of the Demised Premises cannot be
satisfactorily used for all the specific purposes set forth in Article 9 hereof,
and shall forward a notice to Landlord of such determination within sixty (60)
days after the Date of Taking, then this Lease shall expire as of the Date of
Taking, or, if Tenant shall have remained in possession of the untaken part of
the Demised Premises after the Date of Taking, this Lease shall expire as of the
date specified in such notice by Tenant to Landlord; provided that such date
shall be no sooner than the date Tenant vacates the Demised Premises, nor later
than the one Hundred Eightieth (180th) day after the Date of Taking.
17.5 AWARD. In the event the term of this Lease shall expire in
accordance with the provisions of Sections 17.3 or 17.4 hereof or there is a
Taking for which the Lease continues for the remainder of the Demised Premises
in accordance with the provisions of Section 17.6, the aggregate of the awards
or other proceeds of the Taking (including any interest included in or paid with
respect to such award or proceeds) on account of Landlord's and Tenant's
interests in the Demised Premises shall be divided as between Landlord and
Tenant as follows:
A. Tenant shall be entitled to receive such portion of such
awards or proceeds, with the interest thereon, as shall represent compensation
for (i) compensation for the loss of business and goodwill; (ii) compensation
for Tenant's personal property; (iii) compensation for Tenant's unamortized
improvements; (iv) compensation for Tenant's relocation expense; (v) one half
(1/2) of the compensation received for loss of a
19
favorable lease. Any severance damages for restoration of the Demised Premises
shall belong to Tenant if Tenant has agreed to continue as a tenant on the
remaining property and to use all the severance damage award for restoration of
the Demised Premises. Otherwise the severance award shall belong to Landlord.
B. Landlord shall be entitled to receive the balance of such
awards or proceeds, with the interest thereon.
17.6 ABATEMENT OR REDUCTION OF RENT. In the event of a Taking of either
the fee of, or the use for more than twelve (12) months of, or a perpetual
easement upon, less than all of the Demised Premises, and if this Lease shall
not have terminated pursuant to the provisions of Section 17.4 hereof, this
Lease shall remain in full force and effect with respect to the remainder of the
Demised Premises, except that the monthly Basic Rent, from and after the Date of
Taking, shall he reduced pro rata in the proportion which the diminution in
usefulness of the Demised Premises bears to the usefulness of the Demised
Premises immediately before the Taking.
17.7 CERTAIN EVENTS OTHER THAN TAKING. In the event of any street
widening (other than a Taking) or change of grade affecting the Demised
Premises, the aggregate of the awards or other proceeds paid in connection
therewith (including any interest included in or paid in respect of such awards
or proceeds) shall, after deducting the reasonable expenses of Landlord and
Tenant in collecting the same, be allocated between Landlord and Tenant in the
same proportion as provided above with respect to a Taking of all of the Demised
Premises, and there shall be the same reduction in Basic Rent as recited in
Section 17.6 above.
17.8 TENANT'S PERSONAL PROPERTY. Except as provided hereinabove,
nothing contained in this Article 17 shall be deemed to give to Landlord any
interest in any award for any Taking of Tenant's property or the property of any
subtenant, and all such awards shall belong to Tenant or such subtenant, as the
case may be. All claims for any such award may be filed and prosecuted by
Tenant or any subtenant, respectively.
ARTICLE 18 REMEDIES IN CASE OF DEFAULT.
18.1 EVENTS OF DEFAULT - TENANT. The following shall constitute a
default by Tenant:
A. Failure to pay rent when due, if the failure continues for
five (5) days after notice has been given to Tenant.
B. Failure to perform any other provision of the Lease if the
failure to perform is not cured within thirty (30) days after notice has been
given to Tenant. If the default cannot be
20
cured in thirty (30) days; Tenant shall not be in default of the Lease if Tenant
commences to cure the default within the thirty (30) day period and diligently
and in good faith continues to cure the default. Any notice given to Tenant
shall specify the alleged default and the provision of the Lease that applies.
18.2 EVENT OF DEFAULT - LANDLORD. The following shall constitute a
default by Landlord:
A. Failure to perform a provision of the Lease if the failure
to perform is not cured within thirty (30) days after notice has been given to
Landlord. If the default cannot be cured in thirty (30) days, Landlord shall
not be in default of the Lease if Landlord commences to cure the default within
the thirty (30) day period and diligently and in good faith continues to cure
the default. Any notice given to Landlord shall specify the alleged default and
the provision of the Lease that applies.
18.3 REMEDIES. In the event of any breach of this Lease by Tenant,
Landlord shall have the following rights and remedies in addition to all other
rights and remedies available to Landlord at law or in equity:
(i) The right to terminate this Lease by giving notice to Tenant
in accordance with applicable law. In the event of any such termination, in
addition to all other amounts Landlord may recover from Tenant as a result of
such breach, Landlord shall be entitled to recover the worth at the time of the
award of the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss for the same period
that Tenant proves could be reasonably avoided. The worth at the time of award
as specified in California Civil Code Sections 1951.2 (a) (1) and 1951.2 (a) (2)
shall be computed with interest at the maximum allowable rate pursuant to
California law;
(ii) The remedy described in California Civil Code Section 1951.4
(Landlord may continue Lease in effect after Tenant's breach and abandonment and
recover rent as it becomes due, if Tenant has right to sublet or assign, subject
only to reasonable limitations). Acts of maintenance or preservation, efforts
to relet the Demised Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not of themselves
constitute a termination of Lessee's right to possession;
(iii) The right and power, as attorney in fact for Tenant, to
enter the Demised Premises and remove therefrom all persons and property, to
store such property in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and to sell such property and apply the proceeds
therefrom pursuant to applicable California law. In such event Landlord, as
attorney in fact for Tenant, may from time to time sublet the Demised Premises
21
or part thereof for such term or terms (which may extend beyond the term of this
Lease) and at such rent and such other terms as Landlord in its sole discretion
may deem advisable, with the right to make alterations and repairs to the
Demised Premises. Upon each such subletting, rents received shall be applied by
Landlord first, to payment of any indebtedness other than rent and other charges
due under this Lease from Tenant to Landlord; second, to the payment of any
costs of such subletting (including without limitation attorneys' and
accountants' fees, costs of alterations of the Demised Premises, interest costs
and brokers' fees); third to payment of rent and other charges due and unpaid
under this Lease; and the residue, if any, shall be held by Landlord and applied
in payment of future rent and other charges as they become due under this Lease.
If the amounts actually received from any such subtenant are at any time not
sufficient to pay all unpaid rent and other charges then due under this Lease,
Tenant shall promptly pay any such deficiency to Landlord along with any other
amounts due under this Lease. No taking possession of the Demised Premises by
Landlord, as attorney in fact for Tenant, shall be construed as an election on
Lessor's part to terminate this Lease unless a written notice of such
termination is given to Tenant. Landlord's subletting the Demised Premises
without termination shall not constitute a waiver of Landlord's right to
subsequently terminate this Lease for that (or any other) breach; and
(iv) The right to have a receiver appointed for Tenant, upon
application by Landlord, to take possession of the Demised Premises, to apply
any rent collected from the Demised Premises and to exercise all other rights
and remedies granted to Lessor as attorney in fact for Lessee pursuant to
Section (iii) above.
18.4 NON-EXCLUSIVE RIGHTS. The exercise of any remedy provided by law,
including without limitation Section 1951.2 of the California Civil Code, or the
provisions of this Lease shall not exclude any other remedies unless they are
expressly excluded by this Lease. Any notice of default given or required to be
given by Landlord to Tenant hereunder may be combined with, serve as or include
any statutory notice required in connection with the exercise by Landlord or any
of its remedies.
18.5 INTEREST. Tenant shall pay interest at the rate of ten (10)
percent per annum but in no event higher than the maximum rate allowable
pursuant to California law from the due date of the rent until the rent is
actually paid whether or not Tenant is in default.
18.6 ESCROW. If there is a dispute as to the amount of additional rent
owed and the amount of the disputed additional rent is in excess of $25,000, the
disputed amount shall be held in escrow until the dispute is settled. When the
actual amount due is determined, the party who claimed an amount which was
closest to the actual amount shall be relieved from paying any escrow costs,
22
and if any had been paid by such party, shall be entitled to be reimbursed by
the other party. Interest shall be paid on the amount actually due as defined
in paragraph 18.5 above.
ARTICLE 19. PRORATIONS UPON TERMINATION.
19.1 PRORATION OF CHARGES - GENERALLY. Upon any termination of this
Lease, Landlord and Tenant will prorate all Basic Rent, Additional Rent, and all
taxes, assessments, public utility charges and other charges (herein
collectively referred to as "Charges") required to be paid by Tenant hereunder
so that the Charges attributable to the periods up to and including the date of
any such termination of this Lease shall be borne by Tenant and the Charges
attributable to periods after the date of any such termination of this Lease
shall be borne by Landlord. The provisions of this Article shall survive any
termination of this Lease.
ARTICLE 20. RIGHT OF EACH PARTY TO PERFORM OTHER'S COVENANTS.
20.1 RIGHT OF PAYMENT OR PERFORMANCE. Each party shall have the right
at any time, after ten (10) days' notice to the other party (or without notice
in case of emergency or in case any fine, penalty, interest or cost may
otherwise be imposed or incurred), to make any payment or perform any act
required of such other party under any provision of this Lease and in exercising
such right, to incur necessary or incidental costs and expenses, including
reasonable attorney fees. Nothing herein shall imply any obligation on the part
of either party to make any payment or perform any act required of the other
party, and the exercise of the right so to do shall not constitute a release of
any obligation or a waiver of any default.
20.2 REIMBURSEMENT RIGHTS. All payments made and all costs and expenses
incurred in connection with any exercise of such right shall be reimbursed to
the party making such payments within ten (10) days after an invoice has been
sent to the other party, together with interest at the rate of ten percent (10%)
per annum, compounded monthly, or at such lower rate, if any, that is the
highest legal rate in the State of California from the respective dates of the
making of such payments or the incurring of such costs and expenses, to the
party making and paying the same. In addition to any other rights and remedies
available to either party, Landlord shall have, in respect of Tenant's failure
to make reimbursement of any amounts as aforesaid, the same rights and remedies
as in the case of default by Tenant in the payment of the Basic Rent.
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ARTICLE 21. ESTOPPEL CERTIFICATES.
21.1 RIGHT TO ESTOPPEL CERTIFICATE. Each party shall at any time and
from time to time within thirty (30) days after written notice from the other
party execute, acknowledge and deliver to the other party a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the dates to which the
Basic Rent and Additional Rent are paid in advance, if any, (ii) acknowledging
that there are not, to their actual knowledge, any uncured defaults on the part
of the other party hereunder, or specifying such defaults if any are claimed,
(iii) acknowledging (if true) the accuracy of such other facts as are included
in a proposed statement prepared by the other party, and (iv) containing other
such reasonable provisions as the other party may determine. Any such statement
may be relied upon by any prospective purchaser or encumbrancer or assignee or
sublessee of the Demised Premises or of all or any portion of the Land.
21.2 PRESUMPTION OF ESTOPPEL CERTIFICATE. A party's failure to deliver
such statement within such time shall be conclusive upon such party (i) that
this Lease is in full force and effect, without modification except as may be
represented by the party requesting the certificate, (ii) that there are no
uncured defaults in the other party's performance, (iii) that not more than one
month Basic Rent has been paid in advance, and (iv) that any other statements of
fact included by the other party in the proposed statement are correct.
ARTICLE 22. NOTICES.
22.1 NOTICES - GENERALLY. All notices, demands, consent and requests
required or permitted to be given or made under this Lease shall be effective
only if rendered in writing and sent by registered, certified or express mail,
overnight service, facsimile mail or other electronic mail (followed by a first
class mailing within three (3) days, delivered personally or delivered by
expedited messenger service, addressed to Landlord or Tenant as follows:
To Landlord:
George and Lena E. Valente
3215 El Macero Drive
El Macero, California 94619
24
To Tenant:
Sun Valley Ford
2285 Diamond Blvd.
Concord, CA 94520
Attn: Chief Executive Officer
Any such notice, demand, consent or request shall be deemed to have been
rendered or given on the date of receipt or refusal thereof. Either party may
change its address by giving notice to the other in the manner aforesaid.
ARTICLE 23. UTILITIES.
23.1 UTILITIES - GENERALLY. Tenant shall pay or cause to be paid all
charges incurred by Tenant for gas, electricity, light, heat and power and for
telephone and other communication services and for all other public or private
utility services which would be used, rendered or supplied upon, to or in
connection with the Demised Premises at any time during the Lease Term.
ARTICLE 24. COUNTY LEASE.
24.1 COUNTY LEASE. Landlord and Tenant acknowledge that the Leased
Property is leased by Landlord under and pursuant to the terms and conditions of
the County lease consisting of the documents recited in Exhibit B hereof.
Landlord represents and warrants to Tenant that as of the date of this Lease,
the County Lease is in full force and effect, that to their actual knowledge,
there are no material defaults on the part of the lessee under the County Lease,
and that the County Lease has not been modified or altered in any way except as
may be disclosed in Exhibit B hereof.
24.2 TENANT'S COMPLIANCE WITH COUNTY LEASE. Provided that Landlord is
not in material default of its obligations under this Lease, Tenant, in addition
to its covenants and obligations contained in this Lease, shall perform and
observe all the covenants and obligations of Landlord under the County Lease and
will comply with all rules and requirements of the County Lease applicable to
Landlord thereunder and Tenant will not do or cause to be done or permit to be
done any act or thing whereby any event of default shall occur under any
provision of the County Lease.
24.3 LANDLORD'S MAINTENANCE OF COUNTY LEASE. Provided that Tenant is
not in material default of its obligations under this Lease, Landlord agrees to
maintain the County Lease during the term of this Lease, and to pay all rental
provided for in the County Lease according to its terms and to comply with or
perform all obligations of the lessee under the County Lease that the Tenant is
not obligated to perform under this Lease. Landlord further agrees
25
not to modify or surrender the County lease without the prior consent of the
Tenant, such modification or surrender made without the consent of Tenant shall
be null and void and shall have no effect on the rights of the Tenant under this
Lease. Landlord further covenants and agrees to exercise its best efforts to
obtain from the County from time to time as may be requested in writing by
Tenant, an Estoppel Certificate, in form and substance acceptable to Tenant,
providing that the County Lease is unmodified and in full force and effect and
that the lessee thereunder is not in default thereunder. If requested in
writing by Tenant, Landlord shall also exercise its best efforts to obtain from
the County a Non-Disturbance and Recognition Agreement, in form and content
reasonably acceptable to Tenant, providing that in the event the County lease is
terminated for any reason prior to the termination of this Lease, and the Tenant
is not then in default under the terms of this Lease, the termination shall not
effect the validity of this Lease and that the Tenant's interest in and to the
Leased Property shall be deemed automatically assigned, transferred, and
conveyed to the County under the County Lease and that the County shall
thereafter be bound on this Lease as to the Leased Property to the same extent
that the Landlord was bound and shall have all the rights that the Landlord had
under this Lease as respects the Leased Property.
24.4 RIGHT TO CURE DEFAULT. The Tenant shall the right at any time, at
the Tenant's expense, to take any action required to be taken, but not timely
taken, by the Landlord that may be necessary to prevent a default under the
terms of the County Lease. The Tenant shall have the right to exercise any and
all of the rights and privileges of the lessee under the County Lease during the
term of this Lease and the Landlord shall consult with and cooperate with the
Tenant in the exercise of any such right.
24.5 TERMINATION RIGHT. If the County Lease shall terminate for any
reason other than by an act or omission of Tenant, its agents, employees,
contractors or anyone claiming under or through Tenant, Tenant at its option
upon giving not less than thirty (30) days advance notice of Landlord, in
addition to any other remedies it may have under this Lease or at law, may
terminate this Lease (or all of this Lease that affects the Leased Premises with
Basic Rent thereafter to be equitably abated as applies to the remaining portion
of the Demised Premises), and all of Tenant's obligations and liabilities
hereunder; provided, however, that all indemnification, hold harmless and
defense obligations relating to occurrences or omissions before the date of
termination shall survive such termination.
24.6 COUNTY CONSENT. If requested in writing by Tenant, Landlord shall
at its sole cost and expense obtain the County's consent to this Lease, as may
be required under the County Lease, in form and content reasonably acceptably to
Tenant.
26
ARTICLE 25. MISCELLANEOUS.
25.1 NO WAIVER. Neither this Lease nor any term or provision hereof may
be waived, and no breach thereof shall be waived, except by a written instrument
signed by the party against which the enforcement of the waiver is sought. No
failure by Landlord to insist upon the strict performance of any obligation of
Tenant under this Lease or to exercise any right, power or remedy consequent
upon a breach thereof, no acceptance of full or partial Basic Rent or Additional
Rent during the continuance of any such breach, no course of conduct between
Landlord and Tenant, and no acceptance of possession of the Demised Premises
before the termination of the Lease Term by Landlord shall constitute a waiver
of any such breach or a waiver or modification of any term, covenant or
condition of this Lease or operate as a surrender of this Lease. No waiver of
any breach shall affect or alter this Lease, but each and every term, covenant
and condition of this Lease shall continue in full force and effect with respect
to any other then-existing or subsequent breach thereof. No payment by Tenant
or receipt by Landlord of a lesser amount than the aggregate of all Basic Rent
and Additional Rent then due under this Lease shall be deemed to be other than
on account of the first items of such Basic Rent and Additional Rent then
accruing or becoming due, unless Landlord elects otherwise. No endorsement or
statement on any check and no letter accompanying any check or other payment of
Basic Rent or Additional Rent in any such lesser amount and no acceptance by
Landlord of any such check or other payment shall constitute an accord and
satisfaction. Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Basic Rent or Additional Rent or
to pursue any other legal remedy.
25.2 CORPORATE AUTHORITY. Tenant does hereby covenant and warrant that
it is a duly authorized and valid corporation under the laws of the State of
California, that it has and is qualified to do business in California, that it
has full right and authority to enter into this Lease, and that all persons
signing on behalf of Tenant are authorized to do so.
25.3 SEVERABILITY. If any provision of this Lease or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such provision
to persons or circumstance other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each provision of this Lease
shall remain in effect and shall be enforceable to the full extent permitted by
law.
25.4 INTEGRATION. The terms of this Lease (including the Exhibits
hereto) are intended by the parties as a final expression of their agreement
with respect to such terms as are included in this Lease and may not be
contradicted by evidence of any prior or
27
contemporaneous agreement, arrangement understanding or negotiation (whether
oral or written). The parties further intend that this Lease constitutes the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial proceeding involving this Lease.
Neither Landlord nor Landlord's agents has made any representations or
warranties with respect to the Demised Premise, the Land or this Lease except
as expressly set forth herein. The language in all parts of this Lease shall in
all cases be construed as a whole and in accordance with its fair meaning and
not restricted for or against any party.
25.5 SURRENDER. Subject to the provisions of Article 18, upon the
expiration or sooner termination of the Lease Term, Tenant will quietly and
peacefully surrender to Landlord the Demised Premises in the condition in which
they are required to be kept as provided in Article 10, ordinary wear and tear
excepted. Upon expiration or earlier termination of this Lease, Tenant shall,
within ten (10) days of a written request of Landlord, execute, acknowledge and
deliver to Landlord a recordable deed quitclaiming to Landlord all interest of
Tenant in the Demised Premises, the Land and this Lease. Tenant agrees and
acknowledges that Landlord may sustain substantial damage in the event that
Tenant shall fail to provide Landlord with a quitclaim deed as provided in this
Section 25.5.
25.6 HOLDING OVER. Any holding over after the expiration of the Lease
Term with the consent of Landlord shall be construed to be a tenancy from month
to month at the same Basic Rent AND ADDITIONAL RENT payable during the last
month of the Lease Term and shall otherwise be on the terms and conditions
herein specified so far as applicable. No holding over by Tenant after the
Lease Term shall operate to extend the Lease Term. In the event of any
unauthorized holding over, Tenant shall indemnify Landlord against all claims
for damages by any other Tenant to whom Landlord may have leased all or any part
of the Demised Premises commencing upon or after the expiration of the Lease
Term. Any holding over without Landlord's consent shall entitle Landlord to
reenter the Demised Premises as provided in Article 18, and to enforce all other
rights and remedies provided by law or this Lease.
25.7 LAW APPLICABLE TO CONSTRUCTION. This Lease shall be construed and
enforced in accordance with the laws of the State of California.
25.8 LANDLORD'S CONSENT. Landlord covenants with Tenant that any
consent or approval all required of Landlord herein shall not be withheld or
delayed unreasonably.
25.9 COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be
necessary to the validity of this Lease that any one
28
counterpart be signed by all the parties so long as each party shall have signed
at least one counterpart.
25.10 TIME OF ESSENCE. Time is of the essence of each and every
provision of this Lease in which time of performance is a factor.
25.11 SURVIVAL. All of Tenant's covenants and obligations contained in
this Lease, including without limitation all indemnification, hold harmless and
defense obligations relating to occurrences or omissions before the date of
expiration or earlier termination hereof, shall survive the expiration or
earlier termination of this Lease. No provision of this Lease providing for
termination in certain events shall be construed as a limitation or restriction
of Landlord's rights and remedies at law or in equity available upon a breach by
Tenant of this Lease.
25.12 AMENDMENTS. No amendments or modifications of this Lease or any
agreements in connection therewith shall be valid unless in writing duly
executed by both Landlord and Tenant, expressly indicating their intention to
amend or modify the Lease.
25.13 HEADINGS. The headings of the Articles and Sections in this
Lease are for convenience only, and shall not be used to construe or interpret
the scope or intent of this Lease or in any way affect the same.
25.14 ATTORNEYS' FEES. If either party commences an action or proceeding
against the other party arising out of or in connection with this Lease, or
institutes any proceeding in a bankruptcy or similar court which has
jurisdiction over the other party or any or all of its property or assets, the
prevailing party in such action or proceeding and in any appeal in connection
therewith shall be entitled to have and recover from the unsuccessful party
reasonable attorneys' fees, court costs, expenses and other cost of
investigation and preparation at trial or on appeal. If such prevailing party
recovers a judgment in any such action, proceeding or appeal, such attorneys'
fees, court costs and expenses shall be included in and as a part of such
judgment.
25.15 RECORDING. Tenant at its option may record this Lease, or at
Tenant's or Landlord's request, each party shall execute a short form of lease
for recording purposes. Landlord shall cooperate with Tenant in every
reasonable way to place this Lease (or short form, if executed) in recordable
form. Landlord shall not record this Lease without Tenant's written consent,
but may record a short for hereof.
29
25.16 BROKER. Each party represents that it has not had any dealings
with any real estate broker, finder or other person with respect to this Lease
in any manner. Each party shall hold harmless the other party from all
liability and damages resulting from any claims that may be asserted against the
other party by any broker, finder or other person, with whom the other party has
or purportedly has dealt.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
LANDLORD: TENANT:
- -------- ------
SUN VALLEY FORD, INC.
a California corporation
By: /s/ George Valente By: /s/ Edmund G. Bartlett
--------------------------- ---------------------------
George Valente, Trustee Edmund G. Bartlett
Its: Chairman and Chief
Executive
By: /s/ Lena E. Valente By: /s/ Larry Wagner
--------------------------- ---------------------------
Lena E. Valente, Trustee Larry Wagner
Its: President
By: /s/ Donald Ludwig
---------------------------
Donald Ludwig
Its: Vice President
30
EXTENSION AND AMENDMENT OF LEASE
(1252 Diamond Way, Concord, California)
THIS EXTENSION AND AMENDMENT OF LEASE ("Amendment") is made and entered
into as of December 1, 1996, by and between THE BARTLETT FAMILY PARTNERSHIP, a
California limited partnership ("Lessor"), as the successor-in-interest by
assignment to EDMUND G. BARTLETT, JR. and ANNA BARTLETT, and SUN VALLEY FORD,
INC., a California corporation ("Lessee").
RECITALS:
This Amendment is made and entered into with reference to and in reliance
upon the following facts:
A. Lessee and the predecessors-in-interest of Lessor entered into that
certain Standard Industrial Lease -- Net, dated December, 1986, as supplemented
and added to by that certain Addendum to Standard Industrial Lease -- Net, made
concurrently therewith, respecting the lease of the premises commonly known as
at 1252 Diamond Boulevard in the City of Concord, County of Contra Costa, State
of California (the "Premises"), a copy of which lease and addendum are attached
hereto as EXHIBIT "A".
B. The lease was modified and the option to extend the lease was
exercised pursuant to that certain letter agreement regarding extension of
lease, dated May 1, 1993, a copy of which is attached hereto as EXHIBIT "B".
(Hereinafter, the lease and the addendum set forth in EXHIBIT "A", as so
extended and modified by such letter agreement set forth in EXHIBIT "B", shall
be referred to as the "Lease".)
C. The Lease expires on November 30, 1998, unless sooner terminated in
accordance with its terms.
D. The Premises have been transferred and conveyed to the Lessor, and all
of the prior landlords' right, title and interest in, to and under the Lease
have been assigned to the Lessor.
E. Lessor and Lessee desire to extend the Lease for an additional ten
(10) years, provide for an option to extend the term of the Lease for an
additional eight (8) years, amend the base monthly rental, and make certain
other alterations and modifications to the Lease, all on the terms and
conditions set forth below. Lessee further desires to acknowledge that Lessor
is the successor-in-interest by assignment to the prior landlord under the
Lease.
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
promises hereinafter set forth, Lessor and Lessee agree as follows:
1. ACKNOWLEDGMENT OF CONVEYANCE OF PREMISES TO LESSOR AND ASSIGNMENT OF
LEASE: Lessee hereby acknowledges that the Premises have been conveyed to the
Lessor, and that the right, title and interest of the prior landlord under the
Lease have been assigned to Lessor.
2. EXTENSION OF TERM. The term of the Lease shall be extended for an
additional period of ten (10) years from and after November 30, 1998, so that
the term of the Lease during such extension term shall run from December 1, 1998
and continue until November 30, 2008.
3. MINIMUM MONTHLY RENT DURING THE EXTENSION PERIOD. Commencing on
December 1, 1998 and continuing until November 30, 2008, the base monthly rent
payable under Section 4 of the Lease shall be adjusted to TWENTY-SEVEN THOUSAND
FIVE HUNDRED SIXTY FIVE DOLLARS (27,565.00) payable in accordance with Section 4
of the Lease. In accordance with Section 4 of the Lease, during such extension
period rental adjustments for cost of living adjustments shall be made annually
as provided in Clause 49 (provided that all references in such Clause 49 to "the
minimum monthly rent set forth in paragraph 5" shall mean and refer to "the
minimum monthly rent set forth in paragraph 4"). The additional rent provision
set forth in Section 4.1 of the Lease, as so added by paragraph B of the May 1,
1993 letter agreement, shall be deleted and of no force and effect during such
extension period.
4. OPTION TO EXTEND. Lessee shall have an option to extend the term of
the Lease for an additional eight (8) years, which option period shall run from
December 1, 2008 to and including November 30, 2016, which option shall be
exercised in accordance with all of the terms and conditions of Section 50 of
the Lease (including, without means of limitation, the adjustment of the minimum
monthly rent during the option term as described in subsection (c) of Section
50), provided that the term "five (5) year period" referred to such section 50
shall be modified to mean the "eight (8) year period."
5. AMENDMENT OF LEASE. Commencing on the date of this Amendment, the
Lessor and Lessee hereby agree to modify and amend the Lease as follows: (a)
Section 48 of the Lease (commencing with the words "Lessors are acquiring these
premises from Coca Cola Bottling Company ... " and ending with "... paid to
Lessors (whether by Lessee or directly by CCBC)." shall be deleted in its
entirety; and (b) Section 56 of the Lease (commencing with the words "A
duplicate copy of any notice ..." and ending with
"Attention: Daniel N. Lempres") shall be deleted in its entirety.
6. CONSISTENT TERMS. In the event of any conflict between the terms of
this Amendment and terms of the Lease, the terms of this Amendment shall
control.
7. FULL FORCE AND EFFECT. Except as expressly provided in this
Amendment, all of the provisions of the Lease shall remain in full force and
effect.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of
the day and year first above set forth.
"Lessor" THE BARTLETT FAMILY LIMITED PARTNERSHIP,
A California Limited Partnership
By: /s/ Edmund G. Bartlett, Jr.
--------------------------------
Name: Edmund G. Bartlett, Jr.
Its: General Partner
By: /s/ Anna Bartlett
--------------------------------
Name: Anna Bartlett
Its: General Partner
"Lessee" SUN VALLEY FORD, INC.
A California Corporation
By: /s/ Larry Wagner
--------------------------------
Name: Larry Wagner
Its: President
By: /s/ Thomas Moore
--------------------------------
Name: Thomas Moore
Its: Secretary
EXHIBIT "A"
LEASE AGREEMENT
WRITTEN CONSENT AND ASSIGNMENT FORM
Body Shop and Annex Building
1260 Diamond Way, Concord
CONSENT TO ASSIGNMENT
Edmund G. Bartlett as General Partner and the Bartlett Family Partnership,
the "Lessor", under a certain commercial lease dated December 1986 with Sun
Valley Ford, a California Corporation. Under paragraph twelve of the Commercial
Lease, the Lessor consents to the assignment of Sun Valley Ford's rights and
interests under the Commercial Lease to Lithia Motors, Inc. or its nominee, as
stated below. This consent will not be deemed a consent to any subsequent
assignment of the Commercial Lease, but rather any subsequent assignment will
require the consent of the Lessor. This consent may be executed in counterpart.
Faxed signature pages are acceptable.
Dated: July 15, 1997 /s/ Edmund G. Bartlett
------------------------------------------------
Edmund G. Bartlett, General Partner
The Bartlett Family Partnership
ASSIGNMENT
For valuable consideration, the receipt and adequacy of which are expressly
acknowledged, Sun Valley Ford assigns all of its right, title and interest in
and to that certain Commercial Lease dated December 1986 between the Bartlett
Family Partnership and Sun Valley Ford Lessee to Lithia Motors Inc which assumes
all rights and obligations under the commercial lease as set forth below.
Dated: July 16, 1997 Sun Valley Ford
By: /s/ J. Larry Wagner
------------------------------------------------
J. Larry Wagner, President
ASSUMPTION OF LEASE
For value received, and in consideration of the above assignment by Sun
Valley Ford Inc and the written consent of Lessor herein, the undersigned hereby
agrees to and accepts the foregoing assignment, and expressly assumes and agrees
to keep, perform and fulfill all of the terms, covenants, conditions and
obligations required to be kept, performed and fulfilled by Sun Valley Ford as
lessee under the Commercial Lease, including the making of all payments due to
or payable on behalf of Lessor under the Lease when due and payable. Lithia
Motors, Inc. indemnifies and holds harmless Sun Valley Ford Inc its officers,
directors, employees and shareholders, of and from any and all claims arising
under the Commercial Lease on and after the effective date of this Assumption of
Lease, which shall be on the date escrow closes for Lithia Motors, Inc's
purchase of the assets of Sun Valley Ford Inc, a California Corporation.
Dated: July 21, 1997 Lithia Motors, Inc.
By: /s/ [ILLEGIBLE]
------------------------------------------------
its Pres.
---------------------------------------------
CONSENT TO ASSIGNMENT OF LEASE
2285 DIAMOND BOULEVARD, CONCORD, CALIFORNIA 94520
GERALD VALENTE, individually and as Trustee of the JARED A. MONEZ 1994
TRUST (collectively "Landlord") under that certain Lease Agreement effective as
of June 1992, with SUN VALLEY FORD, INC., A California Corporation ("Tenant")
hereby consents to the assignment of Tenant's interest to LITHIA MOTORS, INC.
("Assignees"), provided said Assignee has been approved by Ford Motor Company as
an authorized dealer as of the date of the assignment of said Tenant's interest.
This consent shall not be deemed to be a consent to any subsequent assignment of
the Leasehold Estate. Faxed signature pages shall be acceptable.
Dated: August 4, 1997 /s/ Gerald Valente
--------------------------------
GERALD VALENTE, as an individual
Dated: August 4, 1997 /s/ Gerald Valente
--------------------------------
GERALD VALENTE, Trustee
WRITTEN CONSENT AND ASSIGNMENT FORM
2285 Diamond Boulevard
CONSENT TO ASSIGNMENT
The Jared A. Monez 1994 Trust under a certain commercial lease dated June
30, 1992 with Sun Valley Ford, a California Corporation. Under Section 14.
Subleases and Assignments, page 7 of the Commercial Lease, the Lessor consents
to the assignment of Sun Valley Ford's rights and interests under the Commercial
Lease to Lithia Motors, Inc. or Lithia Real Estate Inc, as stated below. This
consent will not be deemed a consent to any subsequent assignment of the
Commercial Lease, but rather any subsequent assignment will require the consent
of the Lessor. This consent may be executed in counterpart. Faxed signature
pages are acceptable.
Dated: July ___, 1997
---------------------------------------------
by:
For the Jared Monez 1994 Trust
ASSIGNMENT
For valuable consideration, the receipt and adequacy of which are expressly
acknowledged, Sun Valley Ford assigns all of its right, title and interest in
and to that certain Commercial Lease dated June 30, 1992 between the Jared Monez
1994 Trust and Sun Valley Ford Lessee to Lithia Motors Inc or Lithia Real Estate
Inc which assumes all rights and obligations under the commercial lease as set
forth below.
Dated: July 31, 1997 Sun Valley Ford
By: /s/ J. Larry Wagner
---------------------------------------------
J. Larry Wagner, President
ASSUMPTION OF LEASE
For value received, and in consideration of the above assignment by Sun
Valley Ford Inc and the written consent of Lessor herein, the undersigned hereby
agrees to and accepts the foregoing assignment, and expressly assumes and agrees
to keep, perform and fulfill all of the terms, covenants, conditions and
obligations required to be kept, performed and fulfilled by Sun Valley Ford as
lessee under the Commercial Lease, including the making of all payments due to
or payable on behalf of Lessor under the Lease when due and payable. Lithia
Motors, Inc. indemnifies and holds harmless Sun Valley Ford Inc its officers,
directors, employees and shareholders, of and from any and all claims arising
under the Commercial Lease on and after the effective date of this Assumption of
Lease, which shall be on the date escrow closes for Lithia Motors, Inc's
purchase of the assets of Sun Valley Ford Inc, a California Corporation.
Dated: July 31, 1997 Lithia Motors, Inc.
By: /s/ [ILLEGIBLE]
--------------------------------------------------
its V.P.
-----------------------------------------------