EXHIBIT 10.41
LEASE AGREEMENT
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BETWEEN
REHCO EAST, L.L.C.
(LANDLORD)
AND
▇▇▇▇▇▇ ▇▇▇▇, INC.
(TENANT)
Street Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
Dealership Name: ▇▇▇ ▇▇▇▇▇▇ Lincoln Mercury
LEASE AGREEMENT
This Lease Agreement ("LEASE") is entered into as of the 28th, day
of February, 2003 ("LANDLORD"), and ▇▇▇▇▇▇ ▇▇▇▇, INC., a Delaware corporation
("TENANT").
ARTICLE 1
LEASE OF PROPERTY
Section 1.1 PREMISES LEASED. Landlord leases to Tenant, and Tenant
leases from Landlord the real property described on Exhibit A (the "LAND"),
together with all of Landlord's rights, interests, estates, and appurtenances
thereto, all improvements thereon, and all other rights, titles, interests, and
estates, if any, of the Landlord in adjacent streets and roads.
Section 1.2 PREMISES DEFINED. All of the Land and the properties,
rights, and interests leased to Tenant pursuant to Section 1.1, together with
all improvements now or hereafter constructed thereon, are hereinafter
collectively referred to as the "PREMISES."
Section 1.3 HABENDUM. To have and to hold the Premises, together with
all and singular the rights, privileges, and appurtenances thereunto attaching
or in anywise belonging, exclusively unto Tenant, its successors and assigns,
upon the terms and conditions set forth herein and subject to the matters set
forth on EXHIBIT B.
ARTICLE 2
TERM OF LEASE
Unless sooner terminated as herein provided, this Lease shall continue
in effect for a term ("TERM") commencing on the Commencement Date, as
hereinafter defined, and ending at 11:59 p.m., Oklahoma City, Oklahoma time, on
the first date to occur of December 31, 2027 or the Early Termination Date. The
EARLY TERMINATION DATE shall be December 31, 2017 or December 31, 2022;
whichever of such dates (each of which dates is herein referred to as a
"POSSIBLE EARLY TERMINATION DATE") is designated by Tenant, in its sole
discretion, in a written notice delivered to Landlord no less than six months
prior to the Early Termination Date.
ARTICLE 3
RENT
Section 3.1 BASE RENT.
(a) Subject to the terms and provisions contained in this Section 3.1,
Tenant shall pay Landlord monthly Base Rent of an amount equal to Landlord's
cost of the Land and the Construction Costs, times 9.75%. (For example, if the
actual cost is $3,500,000 the annual base rent during the Initial Term would be
$341,250 per annum or $28,437.50 per month.). The actual cost of the Land is
$2,250,000. "Construction Costs" shall be defined as the actual cost of the
construction of building and other improvements, inclusive of direct interest
costs incurred relative to the construction of buildings and improvements (but
excluding any interest associated with the purchase of the land). Construction
Costs shall include the actual amounts paid to contractors, subcontractors,
architects and surveyors, for the zoning and construction of the Improvements.
Base Rent shall be paid in advance on or before the first day of each calendar
month during the Term, subject to adjustment as hereafter provided., in advance
on or before the first day of each calendar month
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during the Term, subject to adjustment as hereafter provided. If the Term
commences on a day other than the first day of a calendar month, or ends on a
day other than the last day of a calendar month, then the Base Rent for such
month shall be prorated on the basis of 1/30th of the monthly Base Rent for each
day of such month. If the CPI on any Adjustment Date shall be greater than the
CPI for the Commencement Date, monthly Base Rent commencing on the Adjustment
Date shall be adjusted to be the original monthly Base Rent specified in this
Section 3.1(a) plus an amount equal to one-half (1/2) of the product obtained by
multiplying: (i) the original monthly Base Rent specified in this Section 3.1
(a) by (ii) the percentage increase in the CPI from the Commencement Date
through the Adjustment Date. "ADJUSTMENT DATE" shall be January 1 of each of the
following years: 2008; 2013; 2018; 2023, and the term "CPI" shall have the
meaning specified therefor in Section 13.5.
During the Term, none of Landlord's Financing may be modified or
refinanced except in accordance with the following:
(i) Landlord may refinance or modify Landlord's Financing if the effect
of any such modification does not result in an increase in principal
and interest payable by Landlord during any Lease Year which exceeds
Primary Base Rent required to be paid by Tenant during such Lease Year.
As an example and not by way of limitation, Landlord may refinance
Landlord's Financing by (x) increasing the principal amount thereof
while maintaining the amount of the current principal and interest
payments (or payments which are less than the current payments) with
respect to Landlord's Financing but providing for a balloon payment
which is required to be paid after the end of the Term, or (y)
maintaining the amount of the current principal and interest payments
on Landlord's Financing (or payments which are less than the current
payments) but providing for an increased rate of interest thereunder
with an accrual feature permitting Landlord to defer accrued but unpaid
interest by adding the same to the principal balance of Landlord's
Financing so long as the payment of such accrued but unpaid interest is
required to be paid after the end of the Term. In connection with any
refinancing or modification permitted under this clause (i), Landlord
agrees to obtain for Landlord and Tenant from the applicable
refinancing lender a mutual recognition and attornment agreement
complying with all of the terms and provisions of Article 11.
(ii) If Landlord desires to refinance or modify Landlord's Financing in
any manner which does not comply with the requirements of the
immediately preceding clause (i), then prior to the date of such
refinancing, Landlord must deliver to Tenant from the refinancing
lender a mutual recognition and attornment agreement complying with all
of the terms and provisions of Article 11.
(b) As used herein, "COMMENCEMENT DATE" means the first day of the
month following completion of construction of the Lincoln Mercury dealership
facility improvements (including receipt of completion/occupancy permits from
the appropriate City of Oklahoma City officials) and the term "LEASE YEAR" means
the 12-month period commencing on the Commencement Date and each subsequent
12-month period during the Term.
Section 3.2 ADDITIONAL RENT AND RENT. All amounts required to be paid
by Tenant under the terms of this Lease, other than Base Rent, are herein from
time to time collectively referred to as "ADDITIONAL RENT." Base Rent and
Additional Rent are herein collectively referred to as "RENT."
Section 3.3 PAYMENT OF RENT. Base Rent shall be payable to Landlord at
the original or changed address of Landlord as set forth in Section 13.1 or to
such other persons or at
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such other addresses in the United States of America as Landlord may designate
from time to time in writing to Tenant; however, if Tenant receives notice of a
default under the Landlord's Financing (defined below), then Tenant shall have
the right, but not the obligation, to pay to Landlord's Financing Lender
(defined below) any sums due and owing on such Landlord's Financing and all such
payments by Tenant shall reduce the amount of Rent owing to Landlord. Additional
Rent shall be paid as herein set forth. Base Rent shall be paid by Tenant in
lawful money of United States of America without notice, demand, or offset
except as provided in this Lease.
ARTICLE 4
IMPOSITIONS, UTILITIES, NET LEASE
Section 4.1 IMPOSITIONS DEFINED. "IMPOSITIONS" means all taxes,
assessments, use and occupancy taxes, water, storm water and sewer charges,
rates and rents, charges for public utilities, excises, levies, license and
permit fees, and other charges by any public authority, general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever, including penalties levied for failure by Tenant to pay any of same
in a timely manner, which shall or may during the Term be assessed, levied,
charged, confirmed or imposed by any Governmental Authority (defined below) upon
(a) the Premises or any part thereof, (b) the buildings or improvements now or
hereafter comprising a part thereof, (c) the appurtenances thereto or the
sidewalks, streets, or vaults adjacent thereto, (d) the rent and income received
by or for the account of Tenant from any sublessees or for any use or occupation
of the Premises, (e) such franchises, licenses, and permits as may be pertinent
to the use of the Premises, or (f) any documents to which the Tenant is a party
creating or transferring an interest or estate in the Premises; in each case,
only to the event the same are attributable to the Premises. Impositions shall
not include any income tax, capital levy, estate, succession, inheritance or
transfer taxes, or similar tax of Landlord; any franchise tax imposed upon any
owner of the fee of the Premises; or any income, profits, or revenue tax,
assessment, or charge imposed upon the rent or other benefit received by
Landlord under this Lease by any municipality, county, state, the United States
of America, or any other governmental body, subdivision, agency, or authority
(all of such foregoing governmental bodies are collectively referred to herein
as "GOVERNMENTAL AUTHORITIES"). If at any time during the Term the present
method of taxation shall be so changed that the whole or any part of the taxes,
assessments, levies, impositions or charges now levied, assessed or imposed on
real estate and improvements thereon (herein collectively called "AD VALOREM
TAXES") shall be discontinued and in whole or partial substitution therefor,
taxes, assessments, levies, impositions, or charges shall be levied, assessed,
and/or imposed wholly or partially as a capital levy or otherwise on the rents
received from real estate or the Rents reserved herein or any part thereof, then
such substitute taxes, assessments, levies, impositions, or charges (herein
collectively called "SUBSTITUTE TAXES"), to the extent so levied, assessed, or
imposed, shall be deemed to be included within the term "Impositions."
Notwithstanding the foregoing, if a discontinuance occurs as to only a portion
of Ad Valorem Taxes and the substitution therefor provided in the immediately
preceding sentence has occurred, then if the remaining Ad Valorem Taxes are
subsequently reduced, then the amounts that Tenant is required to pay with
respect to Substitute Taxes shall be reduced by an amount equal to the fraction,
the numerator of which is the amount of the reduction in the remaining portion
of Ad Valorem Taxes over the amount of Ad Valorem Taxes immediately prior to
such reduction.
Section 4.2 TENANT'S OBLIGATIONS. During the Term, Tenant will pay all
Impositions before they become delinquent. Impositions that are payable by
Tenant for the tax year in which this Lease commences as well as during the year
in which the Term ends shall be apportioned so that Tenant shall pay its share
of the Impositions payable by Tenant for the portion
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of such Taxes allocable to the portion of such year occurring during the Term.
Where any Imposition that Tenant is obligated to pay may be paid pursuant to law
in installments and shall only be obligated to pay such installments that become
due during the Term, Tenant may pay such Imposition in installments as and when
such installments become due. Tenant shall, if so requested, deliver to Landlord
evidence of due payment of all Impositions Tenant is obligated to pay hereunder,
concurrently with the making of such payment. If Landlord's Financing Lender
requires Landlord to prepay Ad Valorem Taxes to Lender or its designee, then
upon notification from Landlord to Tenant, Tenant shall pay to Landlord with
each payment of Basic Rent due hereunder an amount equal to one-twelfth (1/12th)
of the estimated Ad Valorem Taxes for the then applicable calendar year. Such
estimate shall be based on the actual Ad Valorem Taxes paid for the Premises for
the immediately preceding calendar year. Notwithstanding anything to the
contrary contained in this Lease including, without limitation, this Section
4.2, Tenant's obligation to pay Ad Valorem Taxes as part of Impositions shall be
reduced by the amount of any payments made to Landlord in accordance with the
foregoing. In the event that such payments by Tenant exceed the amounts actually
paid in connection with such Ad Valorem Taxes, Landlord shall promptly return
the excess to Tenant. Landlord agrees that to the extent that Landlord has
collected any portion of such Ad Valorem Taxes from Tenant, Landlord shall pay
or cause to be paid all such sums to the applicable taxing authorities on or
before the applicable due date thereof to satisfy all applicable Ad Valorem
Taxes, and the remainder shall be returned to Tenant in accordance with the
foregoing terms.
Section 4.3 TAX CONTEST. Tenant may, at its expense, contest the
validity or amount of any Imposition for which it is responsible, in which event
the payment thereof may be deferred, as permitted by law, during the pendency of
such contest, if diligently prosecuted. Landlord shall cooperate with Tenant in
connection with any such contest but Landlord shall not be required to spend any
sums or incur any liability in cooperating with Tenant. Nothing herein
contained, however, shall be construed to allow any Imposition to remain unpaid
for such length of time as would permit the Premises, or any part thereof, to be
sold or seized by any Governmental Authority for the nonpayment thereof
Section 4.4 EVIDENCE CONCERNING IMPOSITIONS. The certificate, advice,
▇▇▇▇, or statement issued or given by the appropriate officials authorized by
law to issue the same or to receive payment of any Imposition of the existence,
nonpayment, or amount of such Imposition shall be prima facie evidence for all
purposes of the existence, nonpayment, or amount of such Imposition.
Section 4.5 UTILITIES. Tenant shall pay all charges for gas,
electricity, light, heat, air conditioning, power, telephone and other
communication services, and all other utilities and similar services rendered or
supplied to the Premises, and all water rents, sewer service charges, or other
similar charges levied or charged against, or in connection with, the Premises.
Section 4.6 NET LEASE. Except as expressly provided herein (including,
without limitation, Section 6.3), Landlord shall not be required to make any
expenditure, incur any obligation, or incur any liability of any kind whatsoever
in connection with the Premises or the financing, construction, maintenance,
operation, or repair of the Premises. It is expressly understood and agreed that
this is a completely net lease intended to assure Landlord the rentals herein
reserved on an absolute net basis.
ARTICLE 5
IMPROVEMENTS
Section 5.1 ALTERATIONS. At any time and from time to time during the
Term, Tenant may perform such alteration, renovation, repair, refurbishment, and
other work (herein such
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matters being connectively called the "ALTERATIONS") with regard to any
Improvements as Tenant may elect. All buildings, structures, and other
improvements located at any time on the Land are herein called the
"IMPROVEMENTS." Any and all alteration, renovation, repair, refurbishment, or
other work with regard thereto shall be performed, in accordance with the
following "CONSTRUCTION STANDARDS" herein so referenced):
(i) All such construction or work shall be performed in a good and
workmanlike manner in accordance with good industry practice for the type of
work in question;
(ii) All such construction or work shall be done in compliance with all
applicable building codes, ordinances, and other laws or regulations of
Governmental Authorities having jurisdiction;
(iii) No such construction or work shall be commenced until there shall
have been first obtained all licenses, permits, and authorizations required of
all Governmental Authorities having jurisdiction;
(iv) Tenant shall have obtained and shall maintain in force and effect
the insurance coverage required in Article 7 with respect to the type of
construction or work in question;
(v) After commencement, such construction or work shall be prosecuted
with due diligence to its completion;
(vi) Without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed and shall be deemed given if a request is not
approved or denied within thirty (30) days after receipt, no Alteration shall be
made which (x) involves any material repairs or modifications to the structural
portions of the Premises, or (y) would impair the market value, structural
integrity or usefulness of the Premises for the purposes for which the same are
presently being used; and
(vii) Tenant shall furnish Landlord with a copy of all plans and
specifications relating to each Alteration to the extent that such plans and
specifications have been furnished to Tenant.
Section 5.2 MECHANIC'S AND MATERIALMEN'S LIENS. Tenant shall have no
right, authority, or power to bind Landlord or any interest of Landlord in the
Premises for any claim for labor or for material or for any other charge or
expense incurred in construction of any Improvements or performing any
alteration, renovation, repair, refurbishment, or other work with regard
thereto, nor to render Landlord's interest in the Premises liable for any lien
or right of lien for any labor, materials, or other charge or expense incurred
in connection therewith, and Tenant shall in no way be considered as the agent
of Landlord in the construction, erection, or operation of any such
Improvements. If any liens or claims for labor or materials supplied or claimed
to have been supplied to the Premises shall be filed, Tenant shall promptly pay
or bond such liens to Landlord's reasonable satisfaction or otherwise obtain the
release or discharge thereof.
Section 5.3 OWNERSHIP OF IMPROVEMENTS. During the Term all currently
existing Improvements shall be solely the property of Landlord. All other
Improvements which may be added by Tenant (which do not constitute replacements
of existing Improvements) shall be the property of Tenant, but at the end of the
Term, all then-existing Improvements shall be the property of Landlord. However,
upon expiration or earlier termination of this Lease, Tenant shall have the
right to remove all movable equipment, furniture, furnishings and other personal
property located in the Premises and other items not permanently attached to the
Premises provided that Tenant repairs any damages caused by the removal of such
items.
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Section 5.4 CONDITION OF IMPROVEMENTS. Except as to any asbestos which
may be present, whether friable or unfriable, Tenant acknowledges that it
accepts the Improvements "as-is" and that except for the representations and
warranties expressly set forth in this Lease and in Exhibit C hereto, Landlord
makes no representations or warranties as to the condition of the Improvements.
Landlord shall remain fully liable and responsible for the presence of asbestos
on any portion of the Premises prior to the date of this Lease even if such
asbestos is in an unfriable state on the date of this Lease and Tenant
thereafter disturbs such asbestos in any manner including, without limitation,
in connection with any alterations performed by Tenant on the Premises. If
Tenant intentionally disturbs or causes to be disturbed by any contractor or
other party any asbestos presently located on the Premises of which Tenant has
actual knowledge, then any such disturbance of such asbestos shall only be done
in accordance with all laws, regulations, ordinances, or requirements of any
Governmental Authority having jurisdiction in the Premises including, without
limitation, those which govern the disposition of Hazardous Materials.
ARTICLE 6
USE, MAINTENANCE, AND REPAIRS
Section 6.1 USE.
(a) Subject to the terms and provisions hereof, Tenant may use and
enjoy the Premises only for the sale, lease, trade or repair of motor or other
vehicles and other uses in the course of prudent business practices normally
associated therewith including, without limitation, the sale of parts and
services. Without limiting the generality of the foregoing, the provisions
relating to use of the Premises shall be broadly construed to encompass all uses
normally associated with premises occupied by automobile, boat and recreational
vehicle dealerships. Tenant shall not use or occupy, permit the Premises to be
used or occupied, nor do or permit anything to be done in or on the Premises in
a manner which would constitute a public or private nuisance, or which would
violate (i) any laws, regulations, ordinances, or requirements of any
Governmental Authority having jurisdiction in the Premises including, without
limitation, those which relate to Hazardous Materials, or (ii) any recorded
restrictive covenants covering the Premises provided that such restrictive
covenants do not impair Tenant's use of the Premises for the purposes set forth
herein.
(b) Tenant covenants and agrees that Tenant shall not at any time
maintain on, dispose of or generate on or discharge or release to or from the
Premises, or permit any party in possession through or under Tenant to maintain
on, dispose of, discharge from or generate or release on the Premises, any
"Hazardous Materials" (hereafter defined), except for (i) any Hazardous
Materials that may be used, generated or maintained in the ordinary course of
Tenant's operations at the Premises for the use permitted under Section 6.1(a),
and (ii) any asbestos in any form existing on the Premises as of the date of
this Lease. Subject to the foregoing, Tenant or any party in possession through
or under Tenant or any persons occupying or present on the Premises with the
consent of Tenant shall not at any time discharge from, spill or release to the
Premises any Hazardous Materials. Except for any asbestos in any form existing
on the Premises as of the date of this Lease (the proper disposition of which
shall always be the responsibility of Landlord), Tenant agrees to comply, and to
cause all its employees, agents, contractors, invitees, customers and any other
persons occupying or present on the Premises with the consent of Tenant to
comply, with all applicable building codes and other federal, state and
municipal laws, directives, orders, ordinances and regulations (collectively
"Laws") relating to Hazardous Materials with respect to any use by Tenant of
such Hazardous Materials and with all Laws relating to the environment. The term
"Hazardous Materials" as used herein shall include any hazardous waste,
hazardous substances or any pollutant or contaminant as defined by
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42 U.S.C. Section 9601, and any toxic substances, petroleum, oil, asbestos or
other hazardous materials, chemical or substances now or hereafter regulated by
any Laws relating to hazardous or toxic materials, wastes or substances and/or
the environment. The foregoing covenants and agreements of Tenant shall survive
the term and expiration or termination of this Lease, and Tenant shall
immediately notify Landlord of its receipt of any report, citation, notice or
other writing by, to or from any governmental or quasi-government authority and
power to regulate or oversee any of the foregoing activities or in any way
related to or connected with Hazardous Materials.
Section 6.2 MAINTENANCE AND REPAIRS BY TENANT. Subject to Tenant's
rights under this Lease including, without limitation, Article 5 and Article 8,
and Landlord's obligations under this Lease including, without limitation, the
provisions of Section 6.3, Tenant shall maintain the Premises including, without
limitation, the roof (but excluding the structural support components thereof)
and the sidewalks and curbs around the Premises in good order, repair, and
condition at all times. In connection with Tenant's maintenance of the roof of
the Premises, if Tenant replaces any portion of the roof then such replaced
portion shall be deemed by the parties hereto to have a useful life equal to ten
years from the date of completion of such replacement ("Completion Date").
Except as to any Tenant New Improvements (as defined in Section 6.3), in the
event Tenant has replaced any portion of the roof of the Premises and prior to
the end of the ten-year useful life of such replace portion Tenant has exercised
its right to terminate this Lease in accordance with the provisions contained
herein, then Landlord shall pay to Tenant on the date that this Lease is
terminated an amount equal to the cost of such replaced portion of the roof
times a fraction, the numerator of which is 120 minus the number of months from
the Completion Date to the date this Lease is terminated, and the denominator of
which is 120.
Section 6.3 MAINTENANCE AND REPAIRS BY LANDLORD. Landlord shall
maintain and repair all structural portions of the Premises including, without
limitation, the foundation, all structural supports relating to the roof of the
Premises and all other structural support components of the Premises (herein
collectively called "Structural Components"). Subject to the immediately
following sentence, Landlord shall not be liable for any failure to make such
repairs or to perform any maintenance unless Landlord fails to commence such
repairs within thirty (30) days after its receipt of written notice of a need
for such repairs or maintenance from Tenant and diligently and continuously
prosecutes the completion of such repairs or maintenance on or before
one-hundred eighty (180) days after its receipt of such notice. In connection
with any maintenance or repair obligation of Landlord set forth herein which
Landlord fails to perform promptly upon receipt of notice from Tenant and which
is an imminent threat to the health, safety or welfare of any persons on the
Premises ("Emergency Repairs") and in addition to all other remedies Tenant may
have under this Lease and at law and in equity, Tenant may perform such
Emergency Repairs and shall be entitled to offset the amounts necessary for such
maintenance against any Rent due under this Lease in the regular order of
payment. If Landlord fails to maintain and repair the Premises in accordance
with the foregoing provisions, then Tenant shall have the option of either (i)
performing such maintenance or repairs and Tenant shall be entitled to credit
against the next accruing monthly rental payments all amounts relating to such
maintenance and repairs, (ii) terminating this Lease by giving written notice
thereof to Landlord, except in the case of Emergency Repairs, which are governed
by the foregoing provisions, or (iii) pursuing any and all other remedies
available to Tenant under this Lease, at law or in equity. Notwithstanding
anything to the contrary contained in this Section 6.3, in the event Tenant
constructs or causes to be constructed any new improvements ("Tenant New
Improvements") or causes any of the existing Structural Components to be
modified in any manner, then Landlord shall have no maintenance or repair
obligations with respect to such new improvements or the modified existing
Structural Components to extent so modified by Tenant.
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ARTICLE 7
INSURANCE AND INDEMNITY
Section 7.1 BUILDING INSURANCE. Tenant will, at its cost and expense,
keep and maintain in force the following policies of insurance:
(1) Insurance on the Improvements against loss or damage by fire and
against loss or damage by any other risk now and from time to time insured
against by "extended coverage" provisions of policies generally in force on
improvements of like type in the city in which the Premises are located, and in
builder's risk completed value form during construction, in amounts sufficient
to provide coverage for the full insurable value of the Improvements; the policy
for such insurance shall have a replacement cost endorsement or similar
provision. "FULL INSURABLE VALUE," shall mean actual replacement value
(exclusive of cost of excavation, foundations, and footings below the surface of
the ground or below the lowest basement level), and such full insurable value
shall be confirmed from time to time at the request of Landlord by one of the
insurers.
(2) Boiler and pressure apparatus insurance to the limit of not less
than $-0- with respect to any one accident, such limit to be increased if
requested by Landlord by an amount which may be reasonable at the time. If the
Improvements shall be without a boiler plant, no such boiler insurance will be
required.
(3) ▇▇▇▇▇▇▇'▇ Compensation Insurance as to Tenant's employees involved
in the construction, operation, or maintenance of the Premises in compliance
with applicable law.
(4) Such other insurance against other insurable hazards which at the
time are commonly insured against in the case of improvements similarly
situated, due regard being given to the height and type of the Improvements,
their construction, location, use, and occupancy.
Section 7.2 LIABILITY INSURANCE. Tenant shall secure and maintain in
force comprehensive general liability insurance, including contractual liability
specifically applying to the provisions of this Lease and completed operations
liability, with limits of not less than $6,000,000 with respect to bodily injury
or death to any number of persons in any one accident or occurrence and with
respect to property damage in any one accident or occurrence, such limits to be
increased in the event of request by Landlord by an amount which may be
reasonable at the time.
Section 7.3 POLICIES. All insurance maintained in accordance with the
provisions of this Article 7 shall be issued by companies reasonably
satisfactory to Landlord, the Landlord's Financing Lender and all Permitted
Mortgagees (hereafter defined), and shall be carried in the name of both
Landlord and Tenant, as their respective interests may appear, and shall contain
a mortgagee clause acceptable to the Landlord's Financing Lender and the
Permitted Mortgagees. All property policies shall (i) be subject to prior
written approval of Landlord, which shall not be unreasonably withheld or
delayed, and (ii) expressly provide that any loss thereunder may be adjusted
with Tenant, Landlord's Financing Lender and Permitted Mortgagees, but, unless
required otherwise under Landlord's Financing, shall be payable to Tenant and
disbursed as set forth in Section 8.2. All property and liability insurance
policies shall name Landlord as an additional named insured and shall include
contractual liability endorsements. Tenant shall furnish Landlord, Landlord's
Financing Lender and each Permitted Mortgagee with duplicate originals or copies
certified as being true and correct of all insurance policies required under
this Article 7, and shall furnish and maintain with each of such parties, at all
times, a certificate of the insurance carrier certifying that such insurance
shall not be canceled without at least fifteen (15) days advance written notice
to each of such parties.
Section 7.4 TENANT'S INDEMNITY. Subject to Section 7.6, Tenant shall
indemnify
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and hold harmless Landlord, its shareholders, partners, trustees, members,
directors, officers, employees ant its successors ant assigns (the "INDEMNIFIED
LANDLORD PARTIES"), from all claims, suits, actions, and proceedings whatsoever
("CLAIMS") which may be brought or instituted on account of or growing out of
any Default and any and all injuries or damages, including death, to persons or
property on the Premises and all losses, liabilities, judgments, settlements,
costs, penalties, damages, and expenses relating thereto, including but not
limited to attorneys' fees and other costs of defending against, investigating,
and settling the Claims, to the extent, but only to the extent, such Claims are
not attributable to (i) events or conditions that occurred or existed, in whole
or in part, prior to the date when Tenant first occupied the Premises or (ii)
any Structural Components that Landlord is required to maintain under the terms
of Section 6.3. Tenant shall assume on behalf of the Indemnified Landlord
Parties and conduct with due diligence and in good faith the defense of all such
Claims against any of the Indemnified Landlord Parties. Tenant may contest the
validity of any such Claims, in the name of Landlord or Tenant, as Tenant may
deem appropriate, provided that the expenses thereof shall be paid by Tenant.
The foregoing covenants and agreements of Tenant shall survive the Term and
expiration or termination of this Lease.
Section 7.5 LANDLORD'S INDEMNITY. Subject to Section 7.6, Landlord
shall indemnify and hold harmless Tenant, its shareholders, partners, trustees,
members, directors, officers, employees and its successors and assigns (the
"INDEMNIFIED TENANT PARTIES"), from all Claims which may be brought or
instituted on account of or growing out of any default by Landlord of its
obligations under this Lease and all injuries or damages, including death, to
persons or property on the Premises and all losses, liabilities, judgments,
settlements, costs, penalties, damages, and expenses relating thereto, including
but not limited to attorneys' fees and other costs of defending against,
investigating, and settling the Claims, to the extent, but only to the extent,
any such Claims are attributable to or arise out of events or conditions that
(i) existed or occurred, in whole or in part, prior to the date when Tenant
first occupied the Premises, (ii) arise out of the failure of any of Landlord's
representations or warranties made in this Lease or in Exhibit C to be true and
correct or (iii) relate to asbestos in any form which is present on the Premises
prior to the date of this Lease. Landlord shall assume on behalf of the
Indemnified Tenant Parties and conduct with due diligence and in good faith the
defense of all Claims against any of the Indemnified Tenant Parties. Landlord
may contest the validity of any Claims, in the name of Landlord or Tenant, as
Landlord may deem appropriate, provided that the expenses thereof shall be paid
by Landlord. The foregoing covenants and agreements of Landlord shall survive
the Term and expiration or termination of this Lease.
Section 7.6 SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each hereby waives any and all rights of
recovery, claims, actions, or causes of action against the other, its agents,
officers, and employees for any loss or damage that may occur to any
improvements located on the Premises, or any part thereof, or any personal
property of such party therein, by reason of fire, the elements, or any other
cause which is insured under standard "all risk of direct loss" insurance
policies available in the state in which the Premises are located, regardless of
cause or origin, including negligence of either party hereto, its agents.
officers, or employees. No insurer of one party shall hold any right of
subrogation against the other party as to any such loss or damage.
ARTICLE 8
CASUALTY; CONDEMNATION
Section 8.1 TENANT'S OBLIGATION TO RESTORE. In the event of damage to,
or destruction of, any Improvements by fire or other casualty, Tenant shall, to
the extent of the insurance proceeds actually received by Tenant or a Permitted
Mortgagee for such purpose, promptly repair, replace, restore, and reconstruct
the same, all in compliance with the provisions of Section
10
8.2. If insurance proceeds are unavailable due solely to Tenant's failure to pay
the premiums applicable to the insurance coverage referred to in Section 7.1,
then Tenant shall be obligated to promptly repair, replace, restore, and
reconstruct the Improvements, all in compliance with the provisions of Section
8.2, notwithstanding the unavailability of insurance proceeds for such purpose.
Notwithstanding the foregoing, in the event of destruction or damage involving
more than seventy-five percent (75%) of the interior floor area of the
Improvements which occurs at any time within the last twelve months of the Term,
then Landlord, at its election exercisable by written notice to Tenant within
thirty days following such destruction or damage, shall have the right to cancel
this Lease effective as of the date of such fire or other casualty. In the event
of a casualty loss where the Improvements will not be restored or replaced, the
insurance proceeds shall be applied, (1) first, to pay the cost of razing the
Improvements and leveling, cleaning and otherwise putting the Premises in good
order, (2) second, to Landlord's Financing Lender, (3) third, to the payment to
Tenant for any of its improvements, and (4) fourth, to Landlord, to the extent
of any remaining proceeds.
Section 8.2 RESTORATION AND DEPOSIT OF FUNDS.
(a) Prior to Tenant commencing any repair, restoration or rebuilding
pursuant to Section 8.1, involving an estimated cost of more than One Hundred
Thousand Dollars ($100,000), Tenant shall submit to Landlord for its approval,
which will not be unreasonably withheld or delayed: (i) plans and specifications
therefor, prepared by a licensed architect reasonably satisfactory to Landlord;
(ii) copies of appropriate governmental permits; (iii) an estimate of the cost
of the proposed work, certified to by said architect (iv) a fixed price
construction contract in an amount not in excess of such architect's estimated
cost from a reputable and experienced general contractor; and (v) satisfactory
evidence of sufficient contractor's comprehensive general liability insurance
covering Landlord, builder's risk insurance, and ▇▇▇▇▇▇▇'▇ compensation
insurance. Upon completion of any such work by or on behalf of Tenant, Tenant
shall provide Landlord with written evidence, in form and substance reasonably
satisfactory to Landlord, showing that (i) Tenant has paid all contractors for
all costs incurred in connection with such repair, restoration or rebuilding,
and (ii) that the Premises is not encumbered by any mechanic's or materialmen's
liens relating to such repair, restoration or rebuilding. Regarding Tenant's
obligations with respect to mechanic's or materialmen's liens, reference is made
herein to all of the terms and provisions of Section 5.2 in connection with such
repair, restoration or rebuilding.
(b) Provided that: (i) Landlord does not exercise its right to cancel
this Lease as provided in Section 8.1, (ii) the insurer does not deny liability
as to the insureds, and (iii) a Default does not then exist, then all sums
arising by reason of such loss under insurance policies maintained by Tenant,
shall be deposited with the Depositary (as hereinafter defined) to be available
to Tenant for the repair, restoration and rebuilding of the Premises. Tenant
shall diligently pursue the repair, restoration and rebuilding of the
improvements in a good and workmanlike manner using only materials which are of
a quality comparable to the quality of the materials used in the Improvements
prior to their destruction or damage. The insurance proceeds will be disbursed
to Tenant by the Depositary after delivery of evidence reasonably satisfactory
to the Depositary that (A) such repairs, restoration, or rebuilding have been
completed and effected in compliance with the plans and specifications for the
restoration or rebuilding, (B) no mechanic's and materialman's liens against the
Premises have been filed, or that all such liens have been paid or bonded
around, and (C) all payments for work performed and materials purchased as of
the date of such disbursement for which mechanic's and materialman's liens might
arise have been paid or will be paid from such disbursement or that all such
potential liens have been paid or bonded around. At the option of Tenant, such
proceeds shall be advanced in reasonable installments. Each such installment
(except the final installment) shall be advanced in an amount equal to the cost
of the construction work completed since the last prior advance (or since
commencement of work as to the first advance) less
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statutorily required retainage in respect of mechanic's and materialman's liens
or retainage which may be required by Landlord's Financing Lender in an amount
not to exceed ten percent (10%) of such cost. The amount of each installment
requested shall be certified as being due and owing by Tenant's architect in
charge, and each request shall include all bills for labor and materials for
which reimbursement is requested and reasonably satisfactory evidence that no
lien affidavit has been placed against the Premises for any labor or material
furnished for such work. The final disbursement, which shall be an amount equal
to the balance of the insurance proceeds, shall be made upon receipt of (C) an
architect's certificate of substantial completion as to the work from Tenant's
architect, and (D) reasonably satisfactory evidence that all bills incurred in
connection with the work have been paid. The term "DEPOSITARY", as used herein,
shall mean either: (i) Landlord's Financing Lender, or its designee (provided
that Landlord's Financing Lender is an institutional lender and its designee is
not an Affiliate of Landlord, as defined in Section 14.1, or related in any
other manner to Landlord), or (ii) such other party that is acceptable to
Landlord and Tenant, if there is no such Landlord's Financing Lender or if such
Landlord's Financing Lender has refused to act as Depositary.
(c) If no Default then exists, any excess of money received from
insurance policies remaining with the Depositary after the repair or rebuilding
of the Improvements shall, to the extent required by any Permitted Mortgagee, be
applied to payment of Tenant's Permitted Mortgage, otherwise any such proceeds
shall be paid to Tenant.
(d) If Tenant shall not commence the repair or rebuilding of the
Improvements within a period of sixty (60) days after damage or destruction by
fire or other casualty and prosecute the same thereafter with such dispatch as
may be necessary to complete the same within a reasonable period after said
damage or destruction occurs, not to exceed two hundred seventy (270) days from
the date of commencement of such repair or rebuilding; then, in addition to all
other remedies Landlord may have either under this Lease, at law or in equity,
the money received by and then remaining in the hands of the Depositary shall be
paid to and retained by Landlord as security for the continued performance and
observance by Tenant of Tenant's covenants and agreements hereunder.
(e) This Lease shall not terminate or be forfeited or be affected in
any manner by reason of damage to, or total, substantial or partial destruction
of, the Premises or any part thereof or by reason of the untenantability of the
same or any part thereof, for or due to any reason or cause whatsoever, and
Tenant, notwithstanding any law or statute, present or future, waives any and
all rights to quit or surrender the Premises or any part thereof. Tenant
expressly agrees that its obligations hereunder, including the payment of Rent,
shall continue as if the Premises, or any part thereof, had not been damaged or
destroyed, and without abatement, offset, suspension, diminution or reduction of
any kind (except that if Impositions are reduced on account of such damage or
destruction, Tenant shall be obligated to pay only such reduced amount).
Section 8.3 NOTICE OF DAMAGE. Tenant shall immediately notify Landlord
and each Permitted Mortgagee of any destruction or damage to the Premises.
Section 8.4 TOTAL TAKING. Should the entire Premises be taken (which
term, as used in this Article 8, shall include any conveyance in avoidance or
settlement of eminent domain, condemnation, or other similar proceedings) by any
Governmental Authority, corporation, or other entity under the right of eminent
domain, condemnation, or similar right, then Tenant's right of possession under
this Lease shall terminate as of the date of taking possession by the condemning
authority, and the award therefor will be distributed as follows: (1) first, to
the payment of all reasonable fees and expenses incurred in collecting the
award, (2) second, to Landlord's Financing Lender, and (3) third, to Landlord
and Tenant, to the extent of their interests in the Premises, as the
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applicable condemning authority shall determine taking into account certain
factors including, without limitation, the term of the leasehold estate of the
Tenant and the ownership interest of Landlord. After the determination and
distribution of the condemnation award as herein provided, the Lease shall
terminate.
Section 8.5 PARTIAL TAKING. Should a portion of the Premises be taken
by any Governmental Authority, corporation, or other entity under the right of
eminent domain, condemnation, or similar right, this Lease shall nevertheless
continue in effect as to the remainder of the Premises unless, in Tenant's
reasonable judgment, so much of the Premises shall be so taken as to make it
economically unsound to use the remainder for the uses and purposes contemplated
hereby, whereupon this Lease shall terminate as of the date of taking of
possession by the condemning authority in the same manner as if the whole of the
Premises had thus been taken, and the award therefor shall be distributed as
provided in Section 8.4. In the event of a partial taking where this Lease is
not terminated, all awards payable in respect thereof shall be payable to
Landlord and Tenant, to the extent of their interests in the Premises, as the
applicable condemning authority shall determine taking into account certain
factors including, without limitation, the term of the leasehold estate of the
Tenant and the ownership interest of Landlord. Tenant shall restore and repair
the Premises to the extent of the award actually received by Tenant and there
shall be no abatement or reduction in any rental because of such taking or
condemnation. Subject to the foregoing, Tenant shall promptly and diligently
proceed to make a complete architectural unit of the remainder of the
Improvements, complying with the procedure set forth in Section 8.2 (a). For
such purpose, and provided that a Default does not then exist, the amount of the
awards to Tenant and Landlord relating to the Improvements, shall be deposited
with the Depositary which shall disburse the awards towards the cost of said
repairing or restoration in accordance with the procedure set forth in Section
8.2. If Tenant does not make a complete architectural unit of the remainder of
the Improvements within a reasonable period after such taking or condemnation,
not to exceed two hundred seventy days after Tenant is required to vacate the
Premises and the applicable awards have been made and deposited with the
Depositary, then, in addition to whatever other remedies Landlord may have
either under this Lease, at law or in equity, the money received by and then
remaining in the custody of the Depositary shall, at Landlord's election, be
paid to Landlord, and the remaining portion which was deposited by Tenant with
the Depositary shall be held by Landlord as security for the continued
performance and observance by Tenant of Tenant's covenants and agreements
hereunder; provided, that Landlord shall be obligated to disburse the amounts
received by Landlord from the Depositary in accordance with the foregoing
provisions as if Landlord were the Depositary.
Section 8.6 TEMPORARY TAKING. If the whole or any portion of the
Premises shall be taken for temporary use or occupancy, the Term shall not be
reduced or affected and Tenant shall continue to pay the Rent in full. Except to
the extent Tenant is prevented from so doing pursuant to the terms of the order
of the condemning authority, Tenant shall continue to perform and observe all of
the other covenants, agreements, terms, and provisions of this Lease. In the
event of any temporary taking, Tenant shall be entitled to receive the entire
amount of any award therefor unless the period of temporary use or occupancy
shall extend beyond the expiration of the Term, in which case such award shall
be apportioned between Landlord and Tenant as of the day of expiration of the
Term in the same ratio that the part of the entire period for such compensation
is made falling before and that part falling after the day of expiration, bear
to such entire period.
Section 8.7 MORTGAGEE'S RIGHTS. Any Permitted Mortgagee shall, if it so
desires, be made a party to any condemnation proceeding.
Section 8.8 NOTICE OF TAKING, COOPERATION. Tenant shall immediately
notify Landlord and each Permitted Mortgagee of the commencement of any eminent
domain,
13
condemnation, or other similar proceedings with regard to Premises. Landlord and
Tenant covenant and agree to fully cooperate in any condemnation, eminent
domain, or similar proceeding in order to maximize the total award receivable in
respect thereof.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
Section 9.1 TENANT'S RIGHT TO ASSIGN. Tenant may assign its rights
hereunder or sublease all or a portion of the Premises without Landlord's prior
written approval provided that Tenant shall remain liable for all liabilities
and obligations arising under this Lease. Notwithstanding the foregoing, if
Tenant has assigned or subleased its rights under this Lease to any party other
than an affiliate or subsidiary of Tenant, then, to the extent that the rent
paid by any such other party exceeds the Rent and other amounts, if any,
required to be paid by Tenant under the terms of this Lease, fifty percent (50%)
of such excess amounts shall be paid to Landlord upon the receipt of same by
Tenant.
ARTICLE 10
TENANT'S FINANCING
Section 10.1 TENANT'S RIGHT TO ENCUMBER. Tenant shall have the right,
from time to time and at any time, without Landlord's consent or joinder, to
encumber its interest in this Lease and the leasehold estate hereby created with
one or more deeds of trust, mortgages, or other lien instruments to secure any
borrowings or obligations of Tenant. Any such mortgages, deeds of trust, and/or
other lien instruments, and the indebtedness secured thereby, provided that
Landlord has been given notice thereof as set forth in Section 10.2, are herein
referred to as "PERMITTED MORTGAGEES," and the holder or other beneficiary
thereof are herein referred to as "PERMITTED MORTGAGEES."
Section 10.2 MORTGAGEE PROTECTIVE PROVISIONS. If Tenant encumbers its
interest in this Lease and the leasehold estate hereby created with liens as
above provided, then Tenant shall notify Landlord thereof, providing with such
notice the name and mailing address of the Permitted Mortgagee in question,
Landlord shall upon request, acknowledge receipt of such notice, and for so long
as the Permitted Mortgage in question remains in effect the following shall
apply:
(a) Landlord shall give to the Permitted Mortgagee a duplicate copy of
any and all notices which Landlord gives to Tenant pursuant to the terms hereof,
including notices of default, and no such notice shall be effective until such
duplicate copy is actually received by such Permitted Mortgagee, in the manner
provided in Section 13.1.
(b) There shall be no cancellation, surrender, or modification of this
Lease by joint action of Landlord and Tenant without the prior written consent
of the Permitted Mortgagee.
(c) If a Default should occur hereunder, then Landlord specifically
agrees that:
(1) Landlord shall not enforce or seek to enforce any of its
rights, recourses, or remedies, until a notice specifying the event
giving rise to such Default has been received by the Permitted
Mortgagee, in the manner provided in Section 13.1, and if the Permitted
Mortgagee proceeds to cure the Default within a period of 30 days after
receipt of such notice or, as to events of Default which by their very
nature cannot be cured within such time period, the Permitted
Mortgagee, to the extent it is able to do so, commences curing such
Default within such time period and thereafter diligently pursues such
cure to completion
14
within 60 days thereafter, then any payments made and all things done
by the Permitted Mortgagee to effect such cure shall be as fully
effective to prevent the exercise of any rights, recourses, or remedies
by Landlord as if done by Tenant;
(2) if the Default is a non-monetary default, the Permitted
Mortgagee shall have a period of time in which to cure such Default
equal to the greater of (i) the time period for such curing that is
applicable to Tenant under the terms of this Lease, or (ii) 60 days
after the date that the Permitted Mortgagee has been notified of such
Default, provided that the Permitted Mortgagee cures all defaults
relating to the payment of Base Rent and neither Landlord nor the
Premises is or would be liable or subject to any lien, tax, penalty,
expense, liability, or damages because of such Default. If Landlord or
the Premises is or will be liable or subject to any such lien, tax,
penalty, expense, liability or damages because of the Default, then for
so long as the Permitted Mortgagee is diligently and with continuity
attempting to secure possession of the Premises (whether by foreclosure
or other procedures), Landlord shall allow the Permitted Mortgagee such
time as may be reasonably necessary under the circumstances to obtain
possession of the Premises in order to cure such Default, which shall
not exceed 180 days, and during such time Landlord shall not enforce or
seek to enforce any of its rights, remedies or recourses hereunder, and
(3) if the Default is a non-monetary default of such a nature
that it is not reasonably susceptible of being cured by the Permitted
Mortgagee (as, for example, a non-permitted assignment by Tenant), then
Landlord shall not enforce or seek to enforce any of its rights,
remedies, or recourses hereunder so long as Permitted Mortgagee pays
all Rent then due and thereafter keeps the monetary obligations of
Tenant hereunder current and complies with those other provisions of
this Lease which, by their nature, Permitted Mortgagee may then
reasonably comply with.
(d) No Permitted Mortgagee shall be or become liable to Landlord as an
assignee of this Lease until such time as such Permitted Mortgagee, by
foreclosure or other procedures, shall either acquire the rights and interests
of Tenant under this Lease or shall actually take possession of the Premises,
and upon such Permitted Mortgagee's assigning such rights and interests to
another party or upon relinquishment of such possession, as the case may be,
such Permitted Mortgagee shall have no further such liability.
ARTICLE 11
WARRANTY OF TITLE AND PEACEFUL POSSESSION
Landlord represents, warrants and covenants that (i) the
representations and warranties set forth in Exhibit C are true and correct, (ii)
it owns title to the Land and the Premises free and clear of all liens, claims
and encumbrances except the liens described in Exhibit B hereto securing the
financing described therein ("LANDLORD'S FINANCING") and the other encumbrances
specifically described in such Exhibit B, (iii) subject to the terms and
provisions of Section 3.1 (a), except as otherwise set forth in this Lease,
Landlord's Financing shall not be modified in any manner without the prior
written consent of Tenant and (iv) the lender providing such Landlord's
Financing ("LANDLORD'S FINANCING LENDER") has executed, caused to be
acknowledged (notarized in accordance with applicable law) and delivered to
Landlord and Tenant a mutual recognition and attornment agreement, in form and
substance reasonably satisfactory to Tenant, suitable for recording in the
appropriate records to notify third parties of the existence of such agreement
and that the Land and the Premises are subject thereto. Such agreement shall
provide, among other provisions, that the Tenant's interest under this Lease
shall be subordinate to the Landlord's Financing and that the Landlord's
Financing Lender shall (i) give to Tenant a duplicate copy of any and all
notices which
15
Landlord's Financing Lender gives to Landlord, including notices of default, and
no such notice shall be effective until such duplicate copy is actually received
by Tenant in the manner provided in Section 13.1, (ii) give Tenant the right and
opportunity to cure any defaults under the Landlord's Financing, and (iii)
recognize Tenant's rights under this Lease in the event of a foreclosure or deed
in lieu thereof so long as Tenant continues to perform its obligations under
this Lease. As used herein, the term (A) "Landlord's Financing Lender" shall
also include any lender that refinances Landlord's Financing, and (B)
"Landlord's Financing" shall include all financings secured by liens covering
all or any portion of the Premises which are permitted under the terms of this
Lease.
Moreover, Landlord covenants that Tenant shall and may peaceably and
quietly have, hold, occupy, use, and enjoy the Premises during the Term, and may
exercise all of its rights hereunder, subject only to the provisions of this
Lease and applicable governmental laws, rules, and regulations; and Landlord
agrees to warrant and forever defend Tenant's right to such occupancy, use, and
effort and the title to the Premises against the claims of any and all persons
whomsoever lawfully claim the same, or any part thereof, by, through or under
Landlord, but not otherwise, subject only to provisions of this Lease and all
applicable governmental laws, rules, and regulations.
Landlord's Financing Lender shall not be or become liable to Tenant as
an assignee of Landlord's interest in this Lease until such time as such
Landlord's Financing Lender, by foreclosure or other procedures, shall either
acquire the rights and interests of Landlord under this Lease, and upon
Landlord's Financing Lender's assigning such rights and interests to another
party, Landlord's Financing Lender shall have no further such liability.
ARTICLE 12
DEFAULT AND REMEDIES
Section 12.1 DEFAULT. Each of the following shall be deemed a "DEFAULT"
by Tenant hereunder and a material breach of this Lease:
(1) Whenever Tenant shall fail to pay any installment of Rent or any
other sum payable by Tenant to Landlord or any third party under this Lease on
the date upon which the same is due to be paid, and such default shall continue
for ten (10) days after Tenant shall have been given a written notice specifying
such default;
(2) Whenever Tenant shall fail to keep, perform, or observe any of the
covenants, agreements, terms, or provisions contained in this Lease that are to
be kept or performed by Tenant other than with respect to payment of Rent or
other liquidated sums of money, and Tenant shall fail to commence and take such
steps as are necessary to remedy the same within thirty (30) days after Tenant
shall have been given a written notice specifying the same, or having so
commenced, shall thereafter fail to proceed diligently and with continuity to
remedy the same within one hundred eighty (180) days after such failure;
(3) Whenever an involuntary petition shall be filed against Tenant
under any bankruptcy or insolvency law or under the reorganization provisions of
any law of like import or whenever a receiver of Tenant, or of all or
substantially all of the property of Tenant, shall be appointed without
acquiescence, and such petition or appointment is not discharged or stayed
within sixty (60) days after the happening of such event; or
(4) Whenever Tenant shall make an assignment of its property for the
benefit of creditors or shall file a voluntary petition under any bankruptcy or
insolvency law, or seek relief under any other law for the benefit of debtors.
16
Section 12.2 REMEDIES. If a Default occurs, then subject to the rights
of any Permitted Mortgagee as provided in Section 11.2, Landlord may at any time
thereafter prior to the curing thereof and without waiving any other rights
hereunder or available to Landlord at law or in equity (Landlord's rights being
cumulative), do any one or more of the following:
(1) Landlord may terminate this Lease by giving Tenant written notice
thereof, in which event this Lease and the leasehold estate hereby created and
all interest of Tenant and all parties claiming by, through, or under Tenant
(except for sublessees as provided in Section 10.2) shall automatically
terminate upon the effective date of such notice with the same force and effect
and to the same extent as if the effective date of such notice were the day
originally fixed in Article 2 hereof for the expiration of the Term; and
Landlord, its agents or representatives, shall have the right, without further
demand or notice, to reenter and take possession of the Premises and remove all
persons and property therefrom with or without process of law, without being
deemed guilty of any manner of trespass and without prejudice to any remedies
for arrears of Rent or existing breaches hereof. In the event of such
termination, Tenant shall be liable to Landlord for damages in an amount equal
to (A) the discounted present value of the amount by which the Rent reserved
hereunder for the remainder of the stated Term (assuming that the Term would
expire upon the next Possible Early Termination Date) exceeds the then net fair
market rental value of the Premises for such period of time, plus (B) all
expenses incurred by Landlord enforcing its rights hereunder.
(2) Landlord may terminate Tenant's right to possession of the Premises
and enjoyment of the rents, issues, and profits therefrom without terminating
this Lease or the leasehold estate created hereby, reenter and take possession
of the Premises and remove all persons and property therefrom (except for
sublessees as provided in Section 10.2) with or without process of law, without
being deemed guilty of any manner of trespass and without prejudice to any
remedies for arrears of Rent (assuming the Term would expire upon the next
Possible Early Termination Date) or existing breaches hereof, and lease, manage,
and operate the Premises and collect the rents, issues, and profits therefrom
all for the account of Tenant, and credit to the satisfaction of Tenant's
obligations hereunder the net rental thus received (after deducting therefrom
all reasonable costs and expenses of repossessing, leasing, managing, and
operating the Premises). If the net rental so received by Landlord exceeds the
amounts necessary to satisfy all of Tenant's obligations under this Lease,
nevertheless Landlord shall retain such excess. In no event shall Landlord be
liable for failure to so lease, manage, or operate the Premises or collect the
rentals due under any subleases and any such failure shall not reduce Tenant's
liability hereunder. If Landlord elects to proceed under this Section 12.2(2),
it may at any time thereafter elect to terminate this Lease as provided in
Section 12.2(1).
ARTICLE 13
MISCELLANEOUS
Section 13.1 NOTICES. Any notice provided for or permitted to be given
hereunder must be in writing and may be given by (a) depositing same in the
United States Mail, postage prepaid, registered or certified, with return
receipt requested, addressed as set forth in this Section 13.1; (b) delivering
the same to the party to be notified; or (c) sending a prepaid telex or
telegram, so addressed. Notice given in accordance herewith shall be effective
upon receipt at the address of the addressee, as evidenced by the executed
postal receipt or other receipt for delivery. For purposes of notice the
addresses of the parties hereto shall, until changed, be as follows:
Landlord: REHCO EAST, L.L.C.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
17
Tenant: ▇▇▇▇▇▇ ▇▇▇▇, Inc.
c/o Group 1 Automotive, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ Law Firm
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The parties hereto shall have the right from time to time to change their
respective addresses for purposes of notice hereunder to any other location
within the United States by giving a notice to such effect in accordance with
the provisions of this Section 13.1.
Section 13.2 PERFORMANCE OF OTHER PARTY'S OBLIGATIONS. If either party
hereto fails to perform or observe any of its covenants, agreements, or
obligations hereunder for a period of 30 days after notice of such failure is
given by the other party, then the other party shall have the right, but not the
obligation, at its sole election (but not as its exclusive remedy), to perform
or observe the covenants, agreements, or obligations which are asserted to have
not been performed or observed at the expense of the failing party and to
recover all costs or expenses incurred in connection therewith, together with
interest thereon from the date expended until repaid at an annual rate ("DEFAULT
RATE") equal to the lesser of: (A) three (3) percentage points above the prime
rate of interest established from time to time by NationsBank (or a comparable
rate of interest if such rate of interest is not in effect); or (B) the maximum
rate of interest permitted by applicable law. Any performance or observance by a
party pursuant to this Section 13.2 shall not constitute a waiver of the other
party's failure to perform or observe.
Section 13.3 MODIFICATION AND NON-WAIVER. No variations, modifications,
or changes herein or hereof shall be binding upon any party hereto unless set
forth in a writing executed by it or by a duly authorized officer or agent. No
waiver by either party of any breach or default of any term, condition, or
provision hereof, including without limitation the acceptance by Landlord of any
Rent at any time or in any manner other than as herein provided, shall be deemed
a waiver of any other or subsequent breaches or defaults of any kind, character,
or description under any circumstance. No waiver of any breach or default of any
term, condition, or provision hereof shall be implied from any action of any
party, and any such waiver, to be effective, shall be set out in a written
instrument signed by the waiving party.
Section 13.4 GOVERNING LAW. This Lease shall be construed and enforced
in accordance with the laws of the state in which the Premises are located.
Section 13.5 NUMBER AND GENDER; CAPTIONS; REFERENCES. Pronouns,
wherever used herein, and of whatever gender, shall include natural persons and
corporations and associations of every kind and character, and the singular
shall include the plural wherever and as often as may be appropriate. Article
and Section headings in this Lease are for convenience of reference and shall
not affect the construction or interpretation of this Lease. Whenever the terms
"hereof," hereby," herein," or words of similar import are used in this Lease
they shall be construed as referring to this Lease in its entirety rather than
to a particular Section or provision, unless the context specifically indicates
to the contrary. Any reference to a particular "Article" or "Section" shall be
construed as referring to the indicated Article or Section of this Lease.
18
As used herein, "CPI" shall mean the Consumer Price Index for All Urban
Consumers, All Items (Base Year 19 82-84 = 100) published by the United States
Department of Labor, Bureau of Labor Statistics (or if a separate index is
published by the Bureau of Labor Statistics for a metropolitan area within 100
miles of the Premises, then such metropolitan index). If the Bureau of Labor
Statistics substantially revises the manner in which the CPI is determined, an
adjustment shall be made in the revised index which would produce results
equivalent, as nearly as possible to those which would be obtained hereunder if
the CPI were not so revised. If the 1982-84 average shall no longer be used as
an index of 100, such change shall constitute a substantial revision. If the CPI
becomes unavailable to the public because publication is discontinued, or
otherwise, Tenant shall substitute therefor a comparable index based upon
changes in the cost of living or purchasing power of the consumer dollar
published by a governmental agency, major bank other financial institution,
university or recognized financial publisher. If the CPI is available on a
monthly (or alternating monthly) basis, the CPI for the months in which (or
immediately preceding, as the case may be) the Commencement Date and Adjustment
Date respectively occur shall be used.
Section 13.6 ESTOPPEL CERTIFICATE. Landlord and Tenant shall execute
and deliver to each other, promptly upon any request therefor by the other
party, a certificate addressed as indicated by the requesting party and stating:
(a) whether or not this Lease is in full force and effect;
(b) whether or not this Lease has been modified or amended in any
respect, and submitting copies of such modifications or amendments;
(c) whether or not there are any existing defaults hereunder known to
the party executing the certificate, and specifying the nature thereof;
(d) whether or not any particular Article, Section, or provision of
this Lease has been complied with; and
(e) such other matters as may be reasonably requested.
Section 13.7 SEVERABILITY. If any provision of this Lease or the
application thereof to any person or circumstance shall, at any time or to any
extent, be invalid or unenforceable, and the basis of the bargain between the
parties hereto is not destroyed or rendered ineffective thereby, the remainder
of this Lease, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
Section 13.8 ATTORNEY FEES. If litigation is ever instituted by either
party hereto to enforce, or to seek damages for the breach of, any provision
hereof, the prevailing party therein shall be promptly reimbursed by the other
party for all attorneys' fees reasonably incurred by the prevailing party in
connection with such litigation.
Section 13.9 SURRENDER OF PREMISES; HOLDING OVER. Upon termination or
the expiration of this Lease, Tenant shall peaceably quit, deliver up, and
surrender the Premises. If Tenant does not surrender possession of the Premises
at the end of the Term, such action shall not extend the Term, Tenant shall be a
tenant at sufferance, and during such time of occupancy Tenant shall pay to
Landlord, as damages, an amount equal to twice the amount of Rent that was being
paid immediately prior to the end of the Term. Landlord shall not be deemed to
have accepted a surrender of the Premises by Tenant, or to have extended the
Term, other than by execution of a written agreement specifically so stating.
19
Section 13.10 RELATION OF PARTIES. It is the intention of Landlord and
Tenant to hereby create the relationship of landlord and tenant, and no other
relationship whatsoever is hereby created. Nothing in this Lease shall be
construed to make Landlord and Tenant partners or joint venturers or to render
either party hereto liable for any obligation of the other.
Section 13.11 FORCE MAJEURE. As used herein "FORCE MAJEURE" means the
occurrence of any event whereby Landlord or Tenant shall be delayed or prevented
from the performance of any act required hereunder by reason of acts of God,
strikes, lockouts, labor troubles, failure or refusal of governmental
authorities or agencies to timely issue permits or approvals or conduct reviews
or inspections, civil disorder, inability to procure materials, restrictive
governmental laws or regulations or other cause without fault and beyond the
control of the party obligated (financial inability excepted). If Tenant or
Landlord shall be delayed, hindered, or prevented from performance of any of its
obligations by reason of Force Majeure, the time for performance of such
obligation shall be extended for the period of such delay.
Section 13.12 NON-MERGER. Notwithstanding the fact that fee title to
the land and to the leasehold estate hereby created may, at any time, be held by
the same party, there shall be no merger of the leasehold estate hereby created
unless the owner thereof executes and files for record in the appropriate real
property records a document expressly providing for the merger of such estates.
Section 13.13 ENTIRETIES. This Lease constitutes the entire agreement
of the parties hereto with respect to its subject matter, and all prior
agreements with respect thereto are merged herein. Any agreements entered into
between Landlord and Tenant of even date herewith are not, however, merged
herein.
Section 13.14 RECORDATION. Landlord and Tenant will, at the request of
the other, promptly execute an instrument in recordable form constituting a
short form of this Lease, which shall be filed for record in the appropriate
real property records, or at the request of either party this Lease shall be so
filed for record. In the event that Tenant has requested such filing and the
Premises are located in a jurisdiction where a tax or assessment will be due and
owing based on the amounts payable by Tenant under this Lease, then Tenant, at
its option, may require this Lease to be amended to provide that the Term shall
be an initial term of 10 years from the date hereof with four options to renew
the Term for a period of five years each upon notice to Landlord given at
anytime on or before 180 days before the expiration of the Term, as the same may
be extended. All of the terms and provisions of such modification shall be
subject to the written consent of Landlord and Tenant which shall not be
unreasonably withheld or delayed.
Section 13.15 SUCCESSORS AND ASSIGNS. This Lease shall constitute a
real right and covenant running with the Premises, and shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Whenever a reference is made herein to either party, such reference
shall include the party's successors and assigns.
Section 13.16 LANDLORD'S JOINDER. Landlord agrees to join with Tenant
in the execution of such applications for permits and licenses from any
Governmental Authority as may be reasonably necessary or appropriate to
effectuate the intents and purposes of this Lease, provided that Landlord shall
not incur or become liable for any obligation as a result thereof.
Section 13.17 NO THIRD PARTIES BENEFITTED. Except as herein
specifically and expressly otherwise provided with regard to notices and
opportunities to cure defaults and certain enumerated rights granted to
Permitted Mortgagees, the terms and provisions of this Lease are for
20
the sole benefit of Landlord and Tenant, and no third party whatsoever, is
intended to benefit herefrom.
Section 13.18 SURVIVAL. Any terms and provisions of this Lease
pertaining to rights, duties, or liabilities extending beyond the expiration or
termination of this Lease shall survive the end of the Term.
Section 13.19 PERPETUITIES. To the extent that the rule against
perpetuities is applicable thereto, but not otherwise, the rights granted to
Tenant in Article 14 hereof shall expire upon the earlier to occur of (a) the
date set forth for expiration of such rights in said Article 14 or (b) the date
which is 21 years after the date of death of the last to die of the following
parties: the last grandchild to survive of the presently living grandchildren of
▇▇▇▇▇▇ ▇. ▇▇▇▇, former President of the United States of America.
Section 13.20 TRANSFER OF LANDLORD'S INTEREST. Subject to the terms of
the Landlord's Financing, Landlord may freely transfer and/or mortgage its
interest in the Premises and under this Lease from time to time and at any time,
provided that any such transfer or mortgage is expressly made subject to the
terms, provisions, and conditions of this Lease, including specifically but
without limitation Tenant's rights under Article 14, and the transferee or
mortgagee agrees to be bound by the provisions hereof (in the case of a
mortgagee, such agreement being contingent upon the mortgagee actually
succeeding to the Landlord's interest in the Premises and hereunder by virtue of
a foreclosure or conveyance in lieu thereof).
Section 13.21 LANDLORD'S SEPARATE PROPERTY. If the state in which the
Premises are located is a community property state, Landlord hereby warrants
that the Premises are his sole or her sole and separate properly, and Tenant
hereby agrees to make all payments of Rent accordingly.
Section 13.22 GUARANTY. Group 1 Automotive, Inc. has executed that
certain Guaranty, a copy of which is attached hereto as Exhibit D.
Section 13.23 PAST DUE AMOUNTS. All amounts required to be paid by
Tenant or Landlord under the terms and provisions of this Lease shall bear
interest at the Default Rate from the date due until paid.
ARTICLE 14
OPTION TO PURCHASE PREMISES
Section 14.1 RIGHT OF FIRST REFUSAL.
(a) If Landlord shall receive a bona fide offer to purchase the
Premises during the Lease term or any renewal thereof from a party other than
(i) any person who is the Landlord or is a present shareholder, partner, or
member of Landlord, to the extent Landlord is an entity, and any such person's
or entity's shareholder's, partner's, or member's immediate family or any entity
in which such individuals, individually or collectively, own an interest and
such entity is subject to the control, as hereinafter defined, of such
individuals, or (ii) an Affiliate, as hereinafter defined (herein such
purchasing party other than an Affiliate and any such person described in clause
(i) is herein called an "APPROVED PURCHASER"), then any contract which may be
entered into between Landlord and a third party purchaser shall provide that the
sale shall be subject to Tenant's right of refusal set forth in this Section
14.1. If Landlord shall receive such offer or execute such contract, Landlord
shall send to Tenant a true and complete copy of the executed contract and the
complete terms of the offer
21
with Landlord's certification that it proposes to accept the offer, and Tenant
shall have the option, to be exercised within 30 days after receipt thereof, to
make a contract with Landlord on the same terms and conditions set forth in such
third party contract or offer. If Tenant, after receipt of the third party
contract or the terms of the offer acceptable to Landlord, shall fail to
exercise its option within the 30-day period, Landlord shall have the right to
conclude the proposed sale on the same terms as in the offer or contract
originally forwarded to Tenant, provided the sale shall close within 180 days
after the period within which Tenant is required hereby to exercise its option.
If the sale shall not close within said 180 days, Landlord shall repeat the
procedure specified in this Paragraph 14.1 before it can conclude any sale of
the Premises. Notwithstanding Tenant's failure to exercise its option, any sale
of the Premises shall be subject to this Lease. Tenant's option shall remain in
force and be binding on any party other than an Approved Purchaser to the same
extent as if said subsequent owner were Landlord herein, and said subsequent
owner shall be required to do all of the things required of Landlord in this
Lease prior to any such sale of the Premises. "AFFILIATE" shall mean and refer
to any person or entity controlling, controlled by, or under common control with
another such person or entity. "CONTROL" shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such controlled person or entity; the ownership, directly or
indirectly, of at least fifty-one percent (51%) of the voting securities of, or
possession of the right to vote, in the ordinary direction of its affairs, at
least fifty-one percent (51%) of the voting interest in, any person or entity
shall be presumed to constitute such control.
(b) If any third party contract or offer for the Premises shall include
property other than the Premises, Tenant's right of first refusal shall, at its
election, be either applicable to the entire property covered by such contract
or offer, or applicable to the Premises only at a purchase price which shall be
that part of the price offered by the third party, which the value of the
Premises shall bear to the value of all the property included in such third
party contract or offer.
(c) Tenant's right to purchase shall not be extinguished, canceled or
called into operation by any offer, contract or conveyance which is between a
nominee and his principal, or a sole shareholder and his corporation, or a
corporation and its subsidiary or affiliate.
(d) The price to be paid by Tenant if it exercises its right of first
refusal shall include the amount of any brokerage commission which is actually
paid by Landlord at the closing of the sale to Tenant to the extent, and only to
the extent, that such commission is paid to a bona fide third party agent or
broker pursuant to a written listing or brokerage agreement.
(e) Tenant may not exercise the option to purchase set forth in Section
14.1(a) above so long as any Default shall exist or during any period following
Tenant's notice to Landlord of its intention to terminate this Lease in
accordance with Article 2.
Section 14.2 SPECIFIC PERFORMANCE. It is expressly agreed that the
remedy at law for breach of any of the obligations set forth in this Article 14
is inadequate in view of the complexities and uncertainties in measuring the
actual damages that would be sustained by reason of the failure of Landlord or
Tenant to comply fully with each of such obligations. Accordingly, each of the
aforesaid obligations shall be, and is hereby expressly made, enforceable by
specific performance.
ARTICLE 15
ARBITRATION
Section 14.3 ARBITRATION PROVISIONS. EXCEPT FOR ANY MATTER RELATING TO
TENANT'S REASONABLE JUDGMENT AS SET FORTH IN SECTION 8.5, ANY
22
CONTROVERSY OR CLAIM BETWEEN THE PARTES HERETO RELATING TO THIS LEASE,
INCLUDING, WITHOUT LIMITATION, ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED
TORT, SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. SUCH ARBITRATION SHALL TAKE PLACE IN THE CITY IN WHICH
THE PREMISES ARE LOCATED. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION. EXCEPT FOR ANY MATTER RELATING TO TENANT'S
REASONABLE JUDGMENT AS SET FORTH IN SECTION 8.5, ANY PARTY TO THIS LEASE MAY
BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS LEASE APPLIES IN ANY COURT
HAVING JURISDICTION OVER SUCH ACTION. ALL ARBITRATION HEARINGS WILL BE COMMENCED
WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
SHALL ONLY, UPON SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR UP TO AN ADDITIONAL SIXTY (60) DAYS. ALL STATUTES OF
LIMITATIONS THAT WOULD OTHERWISE BE APPLICABLE SHALL) APPLY TO ANY DISPUTES
ASSERTED IN ANY ARBITRATION PROCEEDING HEREOF.
[The remainder of page intentionally left blank.]
23
EXECUTED as of the date and year first above written.
"LANDLORD"
REHCO EAST, L.L.C.,
an Oklahoma limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Manager/Member
"TENANT"
▇▇▇▇▇▇ ▇▇▇▇, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
24
STATE OF OKLAHOMA )
) ss.
COUNTY OF OKLAHOMA )
The foregoing instrument was acknowledged before me this 28 day of
February, 2003, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Manager/Member of REHCO EAST,
L.L.C., an Oklahoma limited liability company, on behalf of said company.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
NOTARY PUBLIC
My Commission No.:
#01017058
----------------------
My Commission Expires:
11/5/05
----------------------
(SEAL)
STATE OF TEXAS )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 28th day of
February, 2003, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President of ▇▇▇▇▇▇ ▇▇▇▇, Inc., a
Delaware corporation, on behalf of said corporation.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
NOTARY PUBLIC
My Commission Expires:
01-04-04
----------------------
(SEAL)
25
EXHIBIT A
[Description of Land]
EXHIBIT B
[Exceptions to title to Land]
EXHIBIT C
REPRESENTATIONS OF LANDLORD
Landlord represents and warrants to Tenant as of the date of this Lease
that:
(a) The Premises are not subject to any prior lease, easement, adverse
claim, or claims of parties in possession, whether or not shown by the public
records, except as set forth on Exhibit B.
(b) There is no pending or threatened condemnation action or agreement
in lieu thereof which will or may affect the Premises or any part thereof in any
respect whatsoever.
(c) There is no action, suit or proceeding, including environmental,
pending or threatened against or affecting the Premises or any part thereof.
(d) The execution, delivery and performance of this Lease by Landlord
has been duly authorized and this Lease is valid and enforceable against
Landlord in accordance with its terms.
(e) Landlord has no knowledge of any fact, action or proceeding,
including environmental, whether actual, pending or threatened, which could
result in the modification or termination of the present zoning classification
of the Premises, or the termination of full free and adequate access to and from
the Premises from all adjoining public highways and roads.
(f) Landlord has not agreed to lease or convey or granted any rights
with respect to or any part of the Premises or any interest therein to any other
person or entity except as shown on Exhibit B.
(g) The Premises are not subject to any restrictions (recorded or
unrecorded), building and zoning laws or ordinances, or other laws, ordinances,
rules, regulations and requirements of any Governmental Authority having
jurisdiction which do or could prohibit the use of the premises as an automobile
dealership.
(h) Landlord has not received any notice from any Governmental
Authority having jurisdiction over the Premises requiring or specifying any work
to be done to the Premises.
(i) Landlord has no knowledge of any existing, threatened or
contemplated action, circumstances or conditions (including but not limited to
subsurface conditions) which would materially interfere with the development or
use of the Premises for an automobile dealership.
(j) The Premises are in compliance in all material respects with all
restrictive covenants and other restrictions applicable to the Premises and all
applicable statutes, ordinances, rules and regulations (federal, state, county
and municipal), including without limitation all zoning, environmental (with
respect to asbestos), building, health, subdivision and "lot split" regulations.
Except as to matters relating to the presence of asbestos contained in the
Premises, if any, the representation and warranty set forth in this clause (j)
shall not be applicable to the matters covered under clause (m) hereinbelow.
(k) The Premises have public access to and from abutting roadways
dedicated to an accepted by the State, City, or County where the Premises are
located.
(l) To the extent zoning regulations are applicable to the Premises,
the Premises are zoned "I-2 Moderate Industrial" under the Oklahoma City,
Oklahoma Zoning Ordinance, and there are no special or unusual zoning conditions
or stipulations applicable to the Premises beyond the face of the Zoning
Ordinance except as set forth in written instruments delivered to Tenant by
Landlord prior to the date of this Lease.
(m) To the best of Landlord's actual knowledge and except as may
otherwise be disclosed to Tenant in any written environmental audit report
delivered to Tenant prior to the date of this Lease, no hazardous wastes,
pollutants or toxic substances have been dumped, deposited or buried upon, in or
under the Premises, there have been no leaks of petroleum, toxic or hazardous
materials from any of the underground storage tank facilities and there is no
contaminated soil, as defined by federal, state and/or local
laws or regulations, in, upon or under the Premises by reason of any such
wastes, pollutants, toxins, substances, or facilities.
(n) The Premises have an assured water supply sufficient to permit the
operations now being conducted thereon to be conducted in accordance with all
governmental requirements.
(o) All dimensions in the description to the Premises are net of
existing and proposed rights-of- way, easements and dedications except as set
forth on Exhibit B.
(p) The Premises are not located in a flood plane or a flood hazard
area for which flood insurance would be required or for which flood insurance is
available.
EXHIBIT D
GUARANTY
The undersigned, GROUP 1 AUTOMOTIVE, INC., a Delaware corporation,
hereby requests REHCO EAST, L.L.C., an Oklahoma limited liability company
("LANDLORD") to enter into that certain Lease dated ______________________, 2002
between Landlord and ▇▇▇▇▇▇ ▇▇▇▇, Inc., a Delaware corporation ("TENANT") (the
"LEASE"), and as an inducement to Landlord to do so, and as an additional
consideration therefore, the undersigned hereby (a) guarantees unconditionally
to Landlord the full, faithful and punctual performance, fulfillment and
observance of all of the obligations and liabilities of Tenant under said Lease
(the "TENANT OBLIGATIONS") throughout the Term, as defined therein, including
the payment of all amounts that may be or become payable by Tenant to or for the
benefit of Landlord under the Lease; (b) subject to the other terms and
provisions of this Guaranty, waives notice of and consents to any and all
amendments, extensions and renewals of said Lease, any and all assignments,
subleases and other action that may be permitted thereunder by Tenant or
Landlord, any and all other amendments, extensions, and renewals, any and all
other advances, extensions, settlements, compromises, favors and indulgences,
any and all other receipts, substitutions, additions and releases of persons
primarily or secondarily liable, any and all acceptances by Landlord of
negotiable instruments, commercial paper and other property, and agrees that
none of the foregoing, should there be any, shall discharge or affect in any way
the liability of the undersigned hereunder; (c) agrees that all rights and
remedies of Landlord under said Lease and hereunder shall survive and not be
affected by any such discharge, moratorium or other relief granted any person
primarily or secondarily liable in any proceeding under federal or state law
relating to bankruptcy, insolvency or the relief or rehabilitation of debtors,
or any disaffirmance or rejection of the Lease in such proceedings, and any
consent by Landlord to, or participation by Landlord in the proceeds of, any
assignment, trust or mortgage for the benefit of creditors, or any composition
or arrangement of debts, may be made without the undersigned being discharged or
affected in any way thereby; (d) waives any right to require marshaling or
exhaustion of any right or remedy against any person, collateral or other
property; (e) subject to the other terms and provisions of this Guaranty, waives
presentment, demand, protest and notice of default, nonpayment and protest and
all demands, notices and suretyship defenses generally; and (f) agrees that upon
the existence and continuance of a Default under the Lease, Landlord may have
and maintain an action upon this Guaranty against the undersigned and in like
manner may have and maintain successive actions upon this Guaranty for each and
every other such continuing Default; the undersigned expressly agreeing hereby
that its obligation hereunder shall not be exhausted by any such action or by
any number of such successive actions until and unless each of the Tenant
Obligations shall have been fully performed.
This Guaranty shall be absolute and continuing. Landlord shall not be
required to pursue any remedies that it may have against Tenant or pursue any
security or other parties as a condition to the enforcement of this Guaranty. It
is understood and agreed that Guarantor may be joined in any action against
Tenant and that recovery may be had against Guarantor in such action, or in any
independent action against Guarantor. This Guaranty shall not in any way be
affected or impaired by reason of Landlord asserting against Tenant any rights
or remedies reserved to the Landlord pursuant to the Lease, or available at law
or in equity, including any termination of the Lease or re-entry into the
Premises. If at any time payment of any of the Tenant Obligations under the
Lease is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Tenant, the obligations of the
Guarantor with respect to such payment shall be reinstated at such time as
though such payment had not been made.
Until all Tenant Obligations under the Lease are fully paid and
satisfied, Guarantor (a) shall have no right of subrogation against Tenant by
reason of Guarantor's performance under this Guaranty or monies or obligations
owed by Tenant to Guarantor; (b) waives any right to enforce any remedy which
Guarantor now has or may hereafter have against Tenant by reason of Guarantor's
performance under this Guaranty and (c) subordinates any liability or
indebtedness of Tenant now or hereafter held by or owed to Guarantor to the
Tenant Obligations.
This Guaranty and the obligations of the Guarantor under this Guaranty
shall not be modified, discharged, waived or terminated except by an agreement
in writing signed by Guarantor and Landlord.
This Guaranty shall bind Guarantor and the successors and assigns of
Guarantor. This Guaranty may be freely assigned, transferred or hypothecated by
Landlord and shall run in favor and inure to the benefit
of Landlord, its successors and assigns, and each subsequent holder of
Landlord's interest under the Lease. References to the term "Tenant" shall be
deemed to include Tenant's successors and assigns.
This Guaranty shall be governed by and construed in accordance with
Oklahoma law. Guarantor agrees to be subject to the jurisdiction of the courts
of Oklahoma. If this Guaranty is enforced by suit or otherwise, Guarantor shall
reimburse Landlord, upon demand, for all reasonable expenses incurred in
connection therewith, including reasonable attorney's fees.
Notices to the Guarantor shall be sent by certified or registered mail
to the address of Group 1 Automotive, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, and shall be effective upon being deposited in the United States
mail, postage prepaid. Alternatively, notices may be sent by Federal Express or
other recognized delivery service and shall be effective upon delivery to
Guarantor at the same address. Guarantor may change its address by giving
written notice to Landlord in accordance with this provision.
Guarantor shall have the right to give written notice to Landlord in
accordance with the Lease if at any time subsequent to the execution of this
Guaranty, the then current Tenant under the Lease is not a subsidiary or
affiliate of Guarantor. By its acceptance of this Guaranty, Landlord thereafter
agrees to give written notice to Guarantor of any event, which, with the giving
of notice or the passage of time, or both, would constitute a Default under the
Lease, and Guarantor shall have the same grace period afforded to the Tenant
under the Lease in which to cure the default in question.
Guarantor represents and warrants that it had the legal right and
capacity to execute this Guaranty, and each person executing this Guaranty on
behalf of Guarantor covenants and warrants that he is duly authorized by the
board of directors of Guarantor to execute and deliver this Guaranty on behalf
of the Guarantor.
WITNESS the execution hereof under seal as of the 28th day of
February, 2003.
GROUP 1 AUTOMOTIVE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Executive Vice President, CFO
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& Treasurer
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