EX-10
Exhibit 10.25.2 Lease; Consent; Cont Guaranty
EXHIBIT 10.25.2
LEASE
THIS LEASE (hereinafter the "Lease") is entered into this 3 day of
September, 1997, at Redding, California, between BR ENTERPRISES, a General
Partnership, hereinafter referred to as "Lessor", and LITHIA MOTORS, INC.,
a(n) Oregon corporation, hereinafter referred to as "Lessee";
RECITALS
WHEREAS, Lessor is the owner of certain real property described as
Assessor's Parcel Number 000-000-00 and more commonly known as 155, 165, 175
and 000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx, upon which has been
constructed buildings and improvements, hereinafter designated the
"Premises", as more fully described on Exhibit "A" which is attached hereto
and incorporated herein by reference;
WHEREAS, Lessee is desirous of obtaining a triple net lease of the
Premises from Lessor pursuant to the terms of this Lease;
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto do hereby agree as follows:
ARTICLE 1. PREMISES
Premises
Section 1.01 Lessor hereby leases to Lessee, and Lessee hereby
hires from Lessor, for the term, at the rental and upon the conditions
hereinafter set forth, the Premises as heretofore described.
Quiet Enjoyment
Section 1.02. Lessor covenants and agrees that Lessee, upon payment
of the rent and performance of the covenants herein contained, shall and may
peaceably and quietly hold and enjoy the Premises for the term of this Lease
without hindrance from Lessor, Lessor's agent or other person claiming under
Lessor.
ARTICLE 2. USE
Permitted Use
Section 2.01. The Premises are to be used for an automobile
dealership and associated uses and for no other use without the prior written
consent of Lessor, not to be unreasonably withheld.
Use To Comply With All Laws
Section 2.02. Lessee shall not do or permit anything to be done on
or about the Premises which shall in any way conflict with any law,
ordinance, rule or regulation affecting the occupancy and use of the
Premises, which is or may hereafter be enacted or promulgated by any public
authority. Lessee shall comply with all laws concerning the Premises or
Lessee's use of the Premises including, without limitation, the obligation at
Lessee's cost to alter, maintain, or restore the Premises in compliance and
conformity with all laws relating to the condition, use or occupancy of the
Premises during the term.
Within ten (10) days after receipt, Lessee shall advise Lessor in
writing, and provide Lessor with copies of (as applicable), any notice, claim
or action relating to or alleging violation of any State, Federal or other
governmental or quasi-governmental law, rule or regulation (including, but
not limited to, the Americans with Disabilities Act of 1990 ("ADA") relating
to the Premises.
Prohibition Against Assignment or Subletting
Section 2.03. Lessee shall not assign or encumber this Lease, or
any interest therein, or sublet the Premises or any of its parts, or permit
the Premises to be used by any person, persons, or entity other than Lessee,
Lessee's employees, customers or clients without the prior written consent of
Lessor, which consent shall not be unreasonably withheld. Lessor's consent
to any such assignment, subletting, encumbrance or use shall not operate as a
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waiver of the necessity for Lessee to obtain Lessor's consent to any
subsequent assignment, subletting, encumbrance or use and the terms of such
consent shall be binding upon any person or entity holding by, under or
through Lessee.
Any assignment, subletting, encumbrance or use without such consent
shall be voidable and shall, at the option of Lessor, constitute a default of
this Lease. This Lease shall not, nor shall any interest therein, be
assignable as to the interest of Lessee by operation of law without the prior
written consent of Lessor.
Lessee immediately and irrevocably assigns to Lessor, as security for
Lessee's obligations under this Lease, all rent from any subletting of all or
a part of the Premises as permitted by this Lease and Lessor, as assignee and
as attorney-in-fact for Lessee, or a receiver for Lessee appointed on
Lessor's application may, upon the occurrence of an act of default by Lessee,
collect such rent and apply it toward Lessee's obligations under this Lease;
except that, until the occurrence of an act of default by Lessee, Lessee
shall have the right to collect and retain such rent for Lessee's account.
Signs by Lessor
Section 2.04. During the last one hundred eighty (180) days of the
term of this Lease, Lessor shall have the right to place signs on or about
the Premises for the purpose of notifying prospective lessees that such
Premises may be rented or leased.
Signs by Lessee
Section 2.05. Lessee may permit or suffer any signs,
advertisements, or notices to be displayed, inscribed upon, or affixed to any
part of the Premises or the exterior of the building of which they are part,
provided that any such sign, advertisement, or notice shall comply with
any/all applicable government and/or quasi-governmental rules or regulations
affecting the Premises and/or such sign, advertisement or notice.
Waste
Section 2.06. Lessee shall not commit waste on the Premises, or any
public or private nuisance, or any act or thing which will interfere with or
disturb the quiet enjoyment of any other lessee or person, whether such
person or lessee shall be located about or adjacent to the Premises or the
surrounding real property.
ARTICLE 3. TERM
Term
Section 3.01 The term of this Lease shall be for a period of
fifteen (15) years. The term shall commence on the date of the Closing with
respect to that certain Agreement for the Sale of Certain Assets of Century
Ford, Inc., a California corporation, entered into between Century Ford,
Inc., and Lithia Motors, Inc., a(n) Oregon corporation, dated August 30,
1997, and shall expire fifteen (15) years subsequent thereto, unless
otherwise terminated as provided within this Lease.
Surrender of Premises
Section 3.02. Lessee agrees to surrender the Premises at the
termination of the tenancy herein created in the same condition as they have
been received, reasonable use and wear thereof excepted, along with any
improvements, modifications, or structures constructed thereon.
ARTICLE 4. LEASE PAYMENTS
Lease Payments
Section 4.01. Lessee shall pay monthly lease payments during the
term of this Lease, in advance, on or before the first day of each month, to
Lessor at 000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, 00000. In the event the
Closing (referenced in Section 3.01) shall occur on a date other than the
first day of a month, Lessee shall pay Lessor at the Closing a prorated
amount reflecting that portion of the monthly lease payment from the date of
the Closing until the final day of that month, along with the following
month's monthly lease payment.
Subject to further adjustment as provided within this Lease, the
monthly lease payment during the term of this Lease shall be as follows:
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LEASE YEAR MONTHLY LEASE PAYMENT
1 $39,000.00
2 76,000.00
3 76,000.00
4 76,000.00
5 76,000.00
6 79,000.00
7 79,000.00
8 79,000.00
9 79,000.00
10 79,000.00
11-15 See (a) Below
(a) The monthly lease payment shall be subject to an increase at the
commencement of the eleventh year of the term, as follows:
The Consumer Price Index-California, All Urban Consumers, All
Items (1982-84), San Francisco/Oakland Average, published by the United
States Department of Labor, Bureau of Labor Statistics, hereinafter
designated "Index," which is in effect on the date of the commencement
of the sixth year of the term, hereinafter designated "Beginning
Index", shall be compared with the Index figure which is in effect on
the date of the commencement of the eleventh year of the term,
hereinafter designated "Adjustment Index". If the Adjustment Index has
increased over the Beginning Index, the monthly lease payment shall be
determined by multiplying the monthly lease payment provided in Section
4.01 by a fraction, the numerator of which is the Adjustment Index and
the denominator of which is the Beginning Index.
Should the Index be changed such that the base year differs from
that in effect at the commencement of the initial term, the Index shall
be converted in accordance with the conversion factor published by the
United States Department of Labor, Bureau of Labor Statistics. If the
Index is discontinued or revised during the term, such other government
index or computation with which is replaced shall be used in order to
obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised.
In no event shall the monthly lease payment, as adjusted, be less
than the monthly lease payment in effect during the immediately
preceding year of the term.
Not withstanding the foregoing, subject to further adjustment as
provided in this lease, the monthly lease payment as adjusted pursuant
to this Section 4.01 shall not exceed Eighty-Six Thousand Nine Hundred
Dollars ($86,900).
(b) In the event that Lessee become delinquent in the payment of the
monthly lease payment due hereunder, such amount shall bear interest from the
date of delinquency until paid at the rate of two percent (2%) above the
Prime rate as quoted by Bank of America on the first day of the preceding
month.
Costs and Assessments
Section 4.02. If during the term of this Lease any improvements are
made by a public agency which result in the imposition of a general or
special assessment against the Premises or the land upon which the Premises
are located, Lessee shall pay such accrued costs or assessments as additional
rent.
ARTICLE 5. TAXES, UTILITIES AND SERVICES
Taxes
Section 5.01. Lessee agrees to pay to Lessor not less than ten (10)
days prior to the delinquency date all taxes, fees and assessments of
whatever nature that are levied upon the Premises, or otherwise, including,
but not limited to, fees, taxes and assessments levied by any governmental
agency or agencies as reflected on statements provided by Lessor.
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The taxes, fees and assessments levied against the Premises during the
first and last years of this Lease shall be prorated between Lessor and
Lessee for purposes of this Section as of 12:01 a.m., on the date of
commencement and termination, respectively, of this Lease.
Lessee shall pay before delinquency all taxes, assessments, fees and
other charges that are levied and assessed against Lessee's personal property
installed or located in or on the Premises and that become payable during the
term. Upon demand of Lessor, Lessee shall furnish Lessor with satisfactory
evidence of these payments.
Utilities
Section 5.02. Lessee shall pay, in addition to the rents above
specified, all gas, electricity, sewer, water, trash disposal and any and all
other utility charges levied, taxed or charged against the Premises during
the term of this Lease. Lessor shall have no obligation to provide or make
available utility services of any nature. Lessor shall not be liable to
Lessee for the interruption of utility services.
ARTICLE 6. IMPROVEMENTS AND REPAIRS
Mechanics' Liens
Section 6.01. Lessee shall not suffer or permit any mechanic's
liens or materialmen's liens to be filed against the Premises nor against
Lessee's leasehold interest in the Premises. Lessor shall have the right at
all reasonable times to post and keep posted on the Premises such reasonable
notices which it deems necessary for protection from such liens. If any such
liens are so filed Lessor, at its election, may pay and satisfy the same and,
in such event, the sums so paid by Lessor, with interest at the maximum rate
an individual is permitted by law to charge per annum from the date of
payment, shall be deemed to be an additional lease payment due and payable by
Lessee at once without notice or demand.
Maintenance and Repairs by Lessee
Section 6.02. Lessee shall, at its own cost and expense, maintain
the Premises so that at all times the Premises and appurtenances thereto
shall be in good order, condition and repair. Lessee shall not make
alterations, modifications, additions or improvements to the Premises without
the prior written consent of Lessor, which consent shall not be unreasonably
withheld.
Should the Premises or any building or improvement thereon be damaged
or destroyed during the term of this Lease, Lessee shall, subject to the
provisions of this Section, at its own cost, forthwith rebuild, restore and
reconstruct the same to substantially the condition in which the same existed
immediately prior to such damage or destruction, and all insurance proceeds
received by Lessor or Lessee or both of them on account thereof shall be
used, in full, to defray such costs.
All alterations, improvements, or changes to the Premises shall become
the property of Lessor and shall remain upon and be surrendered with the
Premises at the end of the term of this Lease free and clear of all
encumbrances of any kind or nature. At the end of the term of this Lease,
Lessor shall have the right to require Lessee to remove all personal property
of Lessee. With the written consent of Lessor, Lessee shall have the right
to leave its personal property on the Premises. If Lessee's personal
property is left on the Premises without the written consent of Lessor the
title to such personal property shall automatically transfer to Lessor at the
end of the term of this Lease. Lessee hereby agrees to hold Lessor harmless
for the retention or disposition of such property.
Right of Inspection
Section 6.03. Lessor or any duly authorized agents of Lessor shall
have the right at all reasonable times to inspect the Premises during normal
business hours upon giving prior notice to Lessee. Lessee shall not modify,
replace, install, or otherwise change in any manner a locking mechanism,
security device or the key or combination associated therewith without the
prior written consent of Lessor. The provisions of this Section are not in
limitation of any other rights of Lessor as provided within this Lease.
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Condemnation
Section 6.04. If title to the entirety of the Premises is taken for
any public or quasi-public use under any statute or by right of eminent
domain, or other governmental authority of a similar nature, or if so much of
the Premises is taken as will render impractical the use of the remainder of
the Premises for the use and purpose for which the Premises are leased, this
Lease shall terminate on the date that the Premises are so taken. The
damages awarded for the taking of the Premises shall belong to Lessor and
Lessee shall make no claim for the value of the unexpired term hereof.
In the event of a partial taking, the rental amount contained within
Section 4.01 herein shall be reduced in a direct ratio as the value of the
portion taken bears to the value of the whole of the area of the Premises;
provided however, should the portion so taken render impractical the use of
the remainder of the Premises for the contemplated use thereof, then all
rents shall cease and this Lease shall be deemed terminated.
If any part of the Premises shall be so taken and the remaining part of
the Premises shall be reasonably suited for Lessee's continued occupancy for
the purpose and uses for which the Premises are leased, the Lease shall, as
to the part so taken, terminate as of the date that possession of such part
is taken, while continuing in effect for the remainder of the Premises.
A voluntary sale by Lessor to any body having power of eminent domain,
either under threat of condemnation or while condemnation proceedings are
pending, shall be deemed a taking by eminent domain for the purposes of this
article.
ARTICLE 7. INSURANCE AND INDEMNIFICATION
Duty of Lessee to Provide Liability Insurance
Section 7.01. Lessee agrees to, and shall, during the term of this
Lease, secure from a good, responsible company or companies doing insurance
business in the State of California and maintain during the term of this
Lease public liability insurance for the joint and several protection and
indemnity of Lessor and Lessee with limits for bodily injury or death of not
less than two hundred and fifty thousand dollars ($250,000.00) per person,
and one million dollars ($1,000,000.00) per occurrence in case of injury or
death to more than on person in the same accident and/or property damage.
Lessee further agrees to secure and maintain at its sole expense insurance
covering fire and special form, naming Lessor (and Lessor's lender) as
additional insured; said insurance shall be maintained at all times during
the term of this Lease in an amount equal to 100% of the present day
replacement cost of the improvements, and said amount of insurance coverage
shall be adjusted on each renewal, or at least every year, whichever occurs
first, in keeping with the then current building cost. Lessor and Lessor's
lender shall be provided with a certificate of insurance which verifies the
required coverage(s). The proceeds of the aforementioned fire and special
form insurance shall be used exclusively for restoration of the Premises
unless this Lease is terminated, in which case said proceeds shall be the
property of and paid to Lessor. Lessee shall further secure and maintain
pollution liability insurance in such form and with such limits as may be
reasonably required by Lessor or as required by governmental or
quasi-governmental rules and/or regulations; such policy shall name Lessor
(and Lessor's lender) as an additional insured.
Indemnification of Lessor
Section 7.02. Lessee agrees to hold Lessor harmless from and defend
Lessor against any and all claims or liability for any injury or damage to
any persons or property whatsoever occurring in, on, or about the Premises
which is in any part or in whole caused by the act, negligence or fault of,
or omission of, any duty of Lessee, its agents, servants, or employees.
Exculpation of Lessor
Section 7.03. Lessor shall not be liable to Lessee for any injury
or damage within the leased Premises which results to any person or the
personal properly of Lessee, or any other person, by or from any cause
whatsoever, unless caused by the gross negligence or willful misconduct of
Lessor.
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ARTICLE 8. DEFAULT
Acts of Default Defined
Section 8.01. The occurrence of any of the following shall be
deemed a default by Lessee:
(a) Use of the Premises for any use other than as authorized in this
Lease.
(b) Failure to pay the rent herein reserved or any other sums owing
when due.
(c) Failure by Lessee to observe, keep and perform any of the terms,
conditions, agreements and provisions contained in this Lease, if such
failure is not cured within thirty (30) days after written notice has been
provided to Lessee. If the default cannot reasonably be cured within said
thirty (30) days, Lessee shall not be in default of this Lease if Lessee
commences to cure the default within the thirty (30) day period and
diligently and in good faith continues to cure the default.
(d) The abandonment of the Premises by Lessee without rental payment;
the filing of either voluntary or involuntary proceedings by or against
Lessee in the bankruptcy court; the making by Lessee of a general assignment
for the benefit of creditors; the taking by Lessee of the benefit of any
insolvency act or law; the appointment of a permanent receiver or trustee in
bankruptcy for Lessee's property; the appointment of a temporary receiver
which is not vacated or set aside within ninety (90) days from the date of
such appointment.
Lessor's Remedies in Event of Default
Section 8.02. Lessor shall have the following remedies if Lessee
commits a default. These remedies are not exclusive; they are cumulative in
addition to any remedies now or later allowed by law:
(a) Lessor has the remedy described in California Civil Code Section
1951.4. (Lessor may continue lease in effect after Lessee's breach and
abandonment and recover rent as it becomes due, if Lessee has right to sublet
or assign, subject only to reasonable limitations). Lessor can continue in
effect, as long as Lessor does not terminate Lessee's right to possession,
and Lessor shall have the right to collect rent when due. During the period
Lessee is in default, Lessor can enter the Premises and relet them, or any
part of them, to third parties for Lessee's account. Lessee shall be liable
immediately to Lessor for all costs Lessor incurs in reletting the Premises
including, without limitation, broker's or Realtor's commissions and like
costs. Reletting can be for a period shorter or longer than the remaining
term of this Lease. Lessee shall pay to Lessor the rent due under this Lease
on the date the rent is due, less the rent Lessor received from any
reletting. In no event shall Lessee be entitled to any excess rent received
by Lessor. No act by Lessor allowed by this paragraph shall terminate this
Lease unless Lessor notifies Lessee that Lessor elects to terminate this
Lease. After Lessee's default and for as long as Lessor does not terminate
Lessee's right to possession of the Premises, if Lessee obtains Lessor's
prior written consent, Lessee shall have the right to assign or sublet its
interest in this Lease, but Lessee shall not be released from liability;
Lessor's consent to a proposed assignment or subletting shall not be
unreasonably withheld.
(b) Lessor can terminate Lessee's right to possession of the Premises
at any time. No act by Lessor other than giving notice to Lessee shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises, or
the appointment of a receiver on Lessor's initiative to protect Lessor's
interest under this Lease shall not constitute a termination of Lessee's
right to possession. Upon termination, Lessor has the right to recover from
Lessee:
(1) The worth, at the time of the award, of the unpaid rent
that had been earned at the time of termination of this Lease;
(2) The worth, at the time of the award, of the amount by which
the unpaid rent that would have been earned after the date of termination of
this Lease until the time of award exceeds the amount of the loss of rent
that Lessee proves could have been reasonably avoided;
(3) The worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of the loss of rent that Lessee proves could have been reasonably
avoided; and
(4) Any other amount and court costs necessary to compensate
Lessor for all detriment proximately caused by Lessee's default.
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"The worth, at the time of award," as used in (1) and (2) of this
subsection (b), is to be computed by allowing interest at the maximum
rate an individual is permitted by law to charge. "The worth, at the
time of award," as used in (3) of this subsection (b), is to be
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one (1) percent.
(c) At any time during this Lease, rent not paid when due shall bear
interest at the maximum rate an individual is permitted by law to charge.
(d) If at any time during this Lease Lessee shall commit a default,
Lessor may cure the default at Lessee's cost. If Lessor at any time, by
reason of Lessee's default, pays any sums or does any act that requires the
payment of any sum, the sum paid by Lessor shall be due immediately from
Lessee to Lessor at the time the sum is paid and, if paid at a later date,
shall bear interest at the maximum rate an individual is permitted by law to
charge from the date the sum is paid by Lessor until Lessor is reimbursed by
Lessee. The sum, together with interest on it, shall be additional rent.
Delay or Omission Not A Waiver
Section 8.03. No delay or omission in the exercise of any right or
remedy of Lessor on any default by Lessee shall impair such a right or remedy
or be construed as a waiver.
The receipt and acceptance by Lessor of delinquent rent shall not
constitute a waiver of any other default; it shall constitute only a waiver
of timely payment for the particular rent payment involved.
No act or conduct other than a notice from Lessor to Lessee shall
constitute acceptance of the surrender of the Premises and accomplish a
termination of this Lease.
Lessor's consent to or approval of any act by Lessee requiring Lessor's
consent or approval shall not be deemed to waive or render unnecessary
Lessor's consent to or approval of any subsequent act by Lessee.
Any waiver by Lessor of any default shall not be a waiver of any other
default concerning the same or any other provision of this Lease.
ARTICLE 9. GENERAL PROVISIONS
Lessee's Certification
Section 9.01. Lessee shall at any time and from time to time, upon
not less than ten (10) days' prior request by Lessor, execute, acknowledge
and deliver to Lessor a statement in writing certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications) and, if so, the dates to which the fixed rent and any other
charges have been paid in advance, it being intended that any such statement
delivered pursuant to this Section may be relied upon by any prospective
purchaser or encumbrancer of the Premises.
Subordination
Section 9.02. This Lease is and shall be subordinate to any
encumbrance now of record or recorded after the date of this Lease affecting
the Premises. Such subordination is effective without any further act of
Lessee. Lessee shall from time to time at the request of Lessor execute and
deliver any documents or instruments that may be required by a lender to
effectuate any subordination. If Lessee fails to execute and deliver any
such documents or instruments, Lessee irrevocably constitutes and appoints
Lessor as Lessee's special attorney-in-fact to execute and deliver any such
documents or instruments. Notwithstanding the foregoing, with respect to the
Right of First Negotiation referenced in Section 9.17, if Lessor's lender
requires that this Lease be subordinate to any such encumbrance, Lessor shall
provide prior notice to Lessee and Lessee shall provide Lessee's consent to
such subordination.
Covenants
Section 9.03. It is mutually agreed that the letting hereunder is
made subject to the terms, covenants and conditions of this Lease and that
Lessee covenant as a material part of the consideration for this Lease to
keep and perform each and all of said terms, covenants, and conditions by
Lessee to be kept or performed and that this Lease is made upon the condition
of such performance. All provisions, whether covenants or conditions, on
part of Lessee shall be deemed to be both covenants and conditions.
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Time of Essence
Section 9.04. Time is of the essence in the performance of each of
the provisions of this Lease.
Attorney's Fees
Section 9.05. In the event of commencement of suit to enforce the
terms and conditions of this Lease, the prevailing party shall be entitled to
recover its reasonable attorney's fees and court costs, in addition to such
other award as may be made by the Court.
Notices
Section 9.06. Any notices, demands, or communication under, or in
connection with this Lease may be served upon Lessor by personal service, or
by mailing the same by registered or certified mail in the United States Post
Office, postage prepaid, and directed to Lessor at 000 Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxx, 00000, and may likewise be served upon Lessee by
personal service or by so mailing by registered or certified mail and
directed to Lessee at 000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx, 00000.
Either Lessor or Lessee may change such address by notifying the other party
in writing as to such new address as Lessee or Lessor may desire used and
which address shall continue as the address until further written notice.
Sole Agreement
Section 9.07. This instrument contains all of the agreements and
conditions made between the parties to this Lease and may not be modified
orally or in any other manner than by an agreement in writing signed by all
the parties to this Lease or their respective successors in interest.
Agency
Section 9.08. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or of joint venture or
of any other association other than Lessor and Lessee.
Interpretation
Section 9.09. This Lease shall be construed and interpreted in
accordance with the laws of the State of California.
Severability
Section 9.10. The unenforceability, invalidity or illegality of any
provision of this Lease shall not render the other provisions unenforceable,
invalid or illegal.
Paragraph Headings
Section 9.11. Paragraph headings are for convenience only and are
not to be construed as defining, limiting or modifying the provisions hereof.
Binding Nature of Agreement
Section 9.12. This Lease shall extend to and be binding upon and
inure to the benefit of the heirs, executors, administrators, successors and
assigns of the respective parties hereto.
Rule of Construction
Section 9.13. The parties to this Lease agree to waive any and all
rights to apply the rule of construction which provides that ambiguities are
to be resolved against the drafter of the agreement. The parties agree that
ambiguities, if any, are to be resolved in the same manner as would have been
the case if this Lease had been jointly conceived and drafted.
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Triple Net Lease
Section 9.14. All provisions of this Lease shall be construed to
the end that during the Lease, Lessor shall not be required to incur any
costs or expenses or make any payments with respect to the Premises except as
expressly herein set forth.
Reciprocal Access Rights
Section 9.15. Lessee shall provide unfettered access to Lessor and
its lessees and respective agents, assigns, and invitees for purposes of
ingress and egress to and upon the common driveway/entryway located at the
North and South boundaries of the Premises. Lessee further agrees that the
construction, placement or installation of fencing, walls, or other
obstruction (including landscaping) in excess of thirty (30) inches in height
between the Premises and the adjacent property is prohibited. The Lessee
acknowledged and agrees to stand in the place and stead of Lessor with
respect to any reciprocal grants of easement respecting the Premises,
including, but not limited to, those certain agreements entered into between
Lessor and Xxxxxxx Xxxxxxxxx and Xxxxxx Enterprises. The parties further
agree that in the event Lessee shall exercise its option to purchase the
Premises as provided in this Lease, that prior to close of escrow the grant
deed shall contain a restriction and/or reciprocal access easement(s) which
will be recorded and contain language which is consistent with the subject
matter described in this Section. The parties agree to execute such
documents and take such steps as are reasonable and necessary in order to
further the foregoing. The Lessee acknowledges and agrees that this Lease is
subject to all matters of record.
Memorandum of Lease
Section 9.16. This Lease shall not be recorded. Upon the request
of either party, the parties agree to execute and record a Memorandum of
Lease in the form attached hereto as Exhibit "C".
Lessee's Right of First Negotiation
Section 9.17. If Lessor determines to sell or to relet the premises
for a term commencing subsequent to the expiration of this Lease, Lessor
shall notify Lessee in writing of the terms upon which Lessor shall be
willing to sell or relet. If Lessee, within fifteen (15) days after service
of Lessor's notice, indicates in writing Lessee's agreement to purchase or
relet the Premises on the terms stated in Lessor's notice or upon such terms
which may have been mutually agreed to by the parties Lessor shall sell and
convey, or relet, the Premises to Lessee upon those terms. If Lessee does
not indicate its agreement within fifteen (15) days, Lessor shall thereafter
have the right to sell and convey, or relet, the Premises to a third party
whether or not on the same terms as stated in the notice. Lessor shall have
no obligation to notify Lessee of any future transaction(s) and the
provisions of this Section shall not be applicable to any such transaction(s).
If Lessee purchases the Premises, this Lease shall terminate on the
date of recordation of the deed.
Lessee's right of first negotiation shall not apply to a transfer
between Lessor and a blood relative of Lessor, either outright or in trust,
or to a legal entity (i.e., partnership, corporation, trust, or like entity)
in which the majority interest is owned by Lessor.
Lessor's Consent Prior to Relinquishment/Sale of Franchise(s)
Section 9.18. Lessee acknowledges that an important aspect of
Lessor's consideration with regard to entering into this Lease is Lessee's
presently holding the franchises for the sale and servicing of new Ford
vehicles. Lessee agrees that it will not sell, transfer or relinquish the
above-reference franchise without the prior written consent of Lessor, which
consent shall not be unreasonably withheld.
Option to Purchase
Section 9.19.
(a) Exercise of Option. Provided Lessee is not in default under this
Lease, Lessee shall have an option to purchase the Premises during the option
period. The option period shall commence December 1, 1997, and shall expire
at the close of business on November 30, 1998. Lessee shall provide written
notice to Lessor during the option period of Lessee's exercise of its option
to purchase.
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(b) Purchase Price. In the event Lessee shall exercise its option to
purchase pursuant to this Section, the purchase price to be paid by Lessee
shall be Nine Million One Hundred Thousand Dollars ($9,100,000.00), all cash
net to Lessor. Payment of the purchase price by Lessee shall be in cash or
by certified or cashier's check to Lessor. The conveyance of the title to
Lessee shall be by Grant Deed and in form for recording and shall convey the
fee title to the Premises to Lessee, subject to all matters of record.
(c) Escrow. In the event Lessee shall provide the specified notice
of Lessee's option to purchase, Lessee shall, and hereby covenants and agrees
to, complete such purchase upon the terms herein indicated. Upon exercise of
such option by Lessee, the parties shall, within five (5) business days, open
an escrow at Chicago Title Company, 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx,
for the consummation of the sale transaction. Said escrow shall be on the
terms provided in this Section. Lessee shall pay the cost of said escrow,
transfer stamps, title insurance and all other expenses, and Lessee shall
receive from escrow at the close thereof a standard owner's CLTA policy of
title insurance in the sum of the purchase price. The escrow instructions
shall provide that escrow shall close within sixty (60) days from opening of
escrow.
(d) Lessor's Right to Sell. Notwithstanding the option granted to
Lessee by this Section, Lessor shall have the right at any time to sell the
Premises to any person or entity, provided that any such sale shall not
invalidate Lessee's rights under this Section. Lessor shall first notify
Lessee promptly in writing of the fact, in order that Lessee may exercise his
rights pursuant to Section 9.17 herein.
(e) The sale of the Premises is made on "As-Is" basis, and Lessor
makes no warranty, either express or implied, with respect to the property.
Continuing Guaranty of Performance
Section 9.20. In the event of an assignment by Lessee pursuant to
the agreement referenced in Section 2.03, Lessee and any/all partners,
owners, or shareholders of the assignee agree to execute the Continuing
Guaranty of Performance which is attached hereto as Exhibit "B" and
incorporated herein by reference.
Execution
IN WITNESS WEHREOF, the parties hereto have executed this Lease as of
the date and the year first hereinabove set forth.
LESSOR:
BR ENTERPRISES
By: /s/ BR Enterprises
General Partner
LESSEE:
LITHIA MOTORS, INC.
By: /s/ X. Xxxx
Executive Vice President
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CONSENT TO ASSIGNMENT OF LEASE
155, 165, 175 AND 000 X. XXXX XXXXXX XXXXX
XXXXXX, XXXXXXXXXX
BR Enterprises, as the Lessor under that certain Lease Agreement dated
September 3, 1997, between BR Enterprises (Lessor), and Lithia Motors, Inc.,
an Oregon corporation (Lessee), hereby consents to the assignment of Lessee's
interest to Lithia Real Estate, Inc., a wholly owned subsidiary of Lithia
Motors, Inc. Lessor also gives Lithia Real Estate, Inc., the right to
sublease the property to any other wholly owned subsidiary of Lithia Motors,
Inc., subject to obtaining the prior written consent of Lessor, which will
not be unreasonably withheld, and the owner(s), partners or shareholders of
said assignee(s) executing a Continuing Guaranty of Performance in the form
set forth in Exhibit B.
The Lessee has also executed a Continuing Guaranty of Performance,
which is attached hereto and incorporated herein by reference.
BR ENTERPRISES
/s/ BR Enterprises 11-25-97
LITHIA MOTORS, INC.
/s/ Xxxxxx X. XxXxxx 11-18-97
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CONTINUING GUARANTY OF PERFORMANCE
TO:
1. For valuable consideration the undersigned, hereinafter
designated "Guarantors", unconditionally guarantee and promise to perform for
or in favor of BR Enterprises, hereinafter designated "Lessor", or order, on
demand, any and all contractual obligations of Lithia Real Estate, Inc., an
Oregon corporation, hereinafter designated "Lessee", to Lessor. The words
"contractual obligations" as used herein include, but are not limited to, the
prompt and complete performance or satisfaction by Lessee of any and all
covenants, conditions, warranties, representations, promises and/or
undertakings contained in any lease agreement or addendum or modification
thereto, or other agreement relating thereto, hereinafter designated the
"Agreement", entered into between Lessee and Lessor, now existing or
hereafter entered into between Lessee and Lessor, and the payment of all
damages, costs, expenses and other losses which by virtue of the Agreement,
or any breach or non-performance thereunder, become recoverable by Lessor
from Lessee.
2. This Guaranty shall bind and obligate each of the undersigned,
their heirs, successors and assigns, with Lessee, jointly and severally, for
the performance of said contractual obligations precisely as of the same had
been contracted and was due and owing by them in person. The obligations
hereunder are independent of the obligations of Lessee and a separate action
or actions may be brought and prosecuted against any one or more Guarantors,
whether action is brought against Lessee; Guarantors waive the benefit of any
statute of limitations affecting their liability hereunder or the enforcement
thereof. Guarantors further waive any action required by any statute, upon
notice, against Lessee or Guarantors.
3. This Guaranty shall not be revocable at any times or times by the
undersigned Guarantors, and shall in all respects remain in force and effect
as to said contractual obligations.
4. Lessor may, without notice, assign this Guaranty in whole or in
part.
5. Guarantors waive any right to require Lessor to (a) proceed
against Lessee; or (b) pursue any other remedy in Lessor's power whatsoever.
Guarantors waive any defense arising by reason of any disability or other
defense of Lessee or by reason of the cessation, from any cause whatsoever,
of the liability of Lessee. Until all contractual obligations of Lessee
shall have been paid in full, Guarantors shall have no right to enforce any
remedy which Lessor now has, or may hereafter have, against Lessee, or to
participate in or have the benefit of any security now or hereafter held by
Lessor. Guarantors waive all demands for performance, notices of
non-performance and/or the existence, creation, or incurring of new or
additional contractual obligations between Lessor and Lessee.
6. Guarantors agree to pay a reasonable attorney's fee and all other
costs and expenses which may be incurred by Lessor in the enforcement of this
Guaranty.
7. All words used herein in the plural shall be deemed to have been
used in the singular and all words used in the masculine shall include the
feminine and neuter, where the context and construction so require; upon
execution of this Guaranty by more than one Guarantor, the word "Guarantors"
shall mean all and any one of them.
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IN WITNESS WHEREOF, the undersigned Guarantors have executed this
Guaranty this 18th day of November, 1997.
LITHIA MOTORS, INC.
By: /s/ Xxxxxx X. XxXxxx
President
(Shareholder of Lithia Real Estate Inc.)
By: /s/ Xxxxxx X. XxXxxx
President
(Shareholder of Lithia Real Estate Inc.)
By: __________________________
Its: __________________________
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