EXHIBIT 99.2
FORM OF LEASE GUARANTY
THIS LEASE GUARANTY (this "Guaranty") is made this ___ day of August, 1999,
by SONIC AUTOMOTIVE, INC., a Delaware corporation ("Guarantor"), in favor of MMR
________________, a ________________________________________ ("Landlord").
WHEREAS, _________________________________________________________, a
________________________________________________________ ("Tenant"), and
Landlord executed that certain lease, dated August ___, 1999 (the "Lease"), the
terms and conditions of which Lease are hereby incorporated by reference, for
certain premises located at ___________________________________________________
in _________________________ County, ___________________ (the "Premises"); and
WHEREAS, Landlord under the Lease requires as a condition to its execution
of the Lease that Guarantor guarantee the performance and obligations of Tenant
under the Lease. Guarantor desires to have Landlord and Tenant enter into the
Lease and therefore desires to guaranty Tenant's performance under the Lease as
hereinafter provided.
NOW, THEREFORE, in consideration of, and as an inducement for the granting,
execution and delivery of the Lease, and in further consideration of the sum of
One Dollar ($1.00) and other good and valuable consideration paid by Landlord,
the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
covenants as follows:
1. Guaranty. Guarantor absolutely, unconditionally and irrevocably
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guarantees to Landlord the full, faithful and prompt performance of all
obligations imposed on Tenant by the terms of the Lease, including, but not
limited to: (a) the payment of any and all Rent payable by Tenant under the
Lease, and (b) the performance and observance of all the covenants, terms,
conditions and agreements of the Lease (including, without limitation, Section
3(c) thereof) to be performed and observed by Tenant. Guarantor does hereby
become surety to Landlord for and with respect to all of the aforesaid
obligations of Tenant under the Lease.
2. Covenants. If Tenant defaults in the payment of any Rent payable by
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Tenant under the Lease or in the performance of any of the covenants, terms,
conditions or agreements contained in the Lease, Guarantor will immediately: (a)
pay such Rent to Landlord and any arrears thereof; (b) faithfully perform and
fulfill all of such covenants, terms, conditions and agreements; and (c) pay to
Landlord all damages, costs and expenses that may arise in consequence of any
default by Tenant under the Lease (including, without limitation, all Reasonable
Attorneys' Fees (as defined hereafter) incurred by Landlord or caused by any
such default and/or by the enforcement of this Guaranty). This Guaranty is a
primary, absolute, continuing and unconditional guaranty of payment and of
performance and not of mere collection. Guarantor's liability hereunder is
direct and may be enforced without Landlord being required to resort to any
other right, remedy or security. The validity of this
Guaranty and the obligations of Guarantor hereunder shall not be terminated,
affected or impaired by reason of the assertion or the failure to assert by
Landlord against Tenant of any of the rights or remedies reserved to Landlord
pursuant to the provisions of the Lease.
3. Non-Release. This Guaranty shall remain in full force and effect
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without regard to, and shall not be released, discharged or in any way impaired
by: (a) any amendment or modification of, or supplement to, or extension or
renewal (pursuant to an option granted, holding over, or otherwise) of the Lease
(whether material or otherwise) or any assignment or transfer thereof, all of
which Guarantor hereby consents to; (b) any exercise or non-exercise of any
right, power, remedy or privilege under or in respect of the Lease or this
Guaranty or any waiver, consent or approval by Landlord with respect to any of
the covenants, terms, conditions or agreements contained in the Lease or any
indulgences, forbearance or extensions of time for performance or observance
allowed to Tenant from time to time and for any length of time; (c) the
voluntary or involuntary liquidation or dissolution of Tenant, the sale of
substantially all of the assets of Tenant, the marshaling of assets on
liabilities, receiverships, conservatorship, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganizations, arrangement, composition or
readjustment of, or other similar proceeding affecting Tenant or any of Tenant's
assets; (d) any limitation on the liability or obligation of Tenant under the
Lease or its estate in bankruptcy or of any remedy for the enforcement thereof,
resulting from the operation of any present or future provision of the National
Bankruptcy Act or other statute or from the decision of any court; or (e) any
extension, forbearance or leniency extended by Landlord to Tenant.
4. Rejection of Lease. This Guaranty will continue unchanged by any
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bankruptcy, reorganization or insolvency of Tenant or any successor or assignee
thereof, or by a disaffirmance or abandonment by a trustee of Tenant. If the
Lease is rejected or disaffirmed by Tenant or Tenant's trustee in bankruptcy
pursuant to any bankruptcy law or any other law affecting creditor's rights,
then Guarantor shall, and does hereby (without the necessity of any further
agreement or act) assume all obligations and liabilities of Tenant under the
Lease to the same extent as if: (a) Guarantor were originally named Tenant under
the Lease; and (b) there had been no such rejection or disaffirmance. Guarantor
shall, upon Landlord's request, promptly confirm in writing such assumption. No
limitation on the liability of Tenant under the Lease which may now or hereafter
be imposed by any federal, state or other statute, law or regulation applicable
to such proceedings shall in any way limit the obligation of Guarantor
hereunder, which obligation is co-extensive with Tenant's liability set forth
within the Lease without regard to any such statutory or legal limitation.
5. Waiver. Guarantor has been advised of and hereby waives and agrees
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not to assert or take advantage of any of the following rights: (a) presentment,
demand for payment, and protest of non-performance under the Lease; (b) notice
of any kind, including but not limited to notice of acceptance, notice of
default and/or notice of any obligations or liabilities contracted or incurred
by Tenant; (c) any right to require Landlord to enforce its rights and remedies
against Tenant under the Lease or otherwise; (d) any right to require Landlord
to proceed against any security held from Tenant or any other penalty; (e) any
and all right of subrogation; (f) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of Landlord to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any other person or
persons; (g) any defense based upon an election of remedies by Landlord; (h) any
invalidity, irregularity or unenforceability, in whole or in part, of any one or
more provisions
of the Lease; and (i) any defense based upon Sections 49-25 and/or 49-26 of the
Code of Virginia (1950), as amended.
6. Joint and Several Liability. Guarantor's liability shall be primary
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and joint and several with that of Tenant, notwithstanding the fact that
Guarantor has had no prior notice of any default or of any forbearance or
extension. Landlord may proceed against Guarantor under this Guaranty without
initiating or exhausting any legal remedy against Tenant and may proceed against
Tenant and Guarantor separately or concurrently. This is a guaranty of payment
and not of collection.
7. Assignment by Landlord. Landlord may, without notice, assign this
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Guaranty in whole or in part and no assignment or transfer of the Lease shall
operate to extinguish or diminish the liability of the Guarantor hereunder.
8. Tenant's Affiliates. Landlord may enter into leases with Affiliates
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of Tenant. As an inducement to Landlord entering into leases with Tenant's
Affiliates: (a) Guarantor hereby unconditionally and irrevocably subordinates
all payments due or to become due by Tenant by reason of any and all debts and
other obligations, including the obligation to pay salaries or other
compensation, and (b) Guarantor, Tenant and Tenant's Affiliates shall not
receive or collect any payments, dividends, disbursements, distributions,
contributions or any other sums from Tenant or Tenant's Affiliates at any time
after an Event of Default has occurred under the Lease or any other lease
between Landlord and: (i) Tenant; (ii) any Affiliate of Tenant; (iii) Guarantor;
or (iv) any Affiliate of Guarantor.
9. Representations, Warranties and Covenants. Guarantor hereby
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represents, warrants and covenants to Landlord as follows:
(a) Change in Financial Condition. The financial statements of
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Guarantor, and the notes related thereto, included in the Form 10K for the
fiscal year ended December 31, 1998, and 10Q for the quarter ended March 31,
1999, present fairly the consolidated financial condition of Guarantor as of the
dates indicated and the results of the operations and changes in consolidated
cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis; and as of the date of this Guaranty, there has occurred no
material adverse change in the financial condition of Guarantor since the date
of such financial statements.
(b) Proceedings. There is no action, suit, litigation or proceeding
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pending or, to the knowledge of Guarantor, threatened against the Tenants,
Guarantor, or the Premises that could reasonably be expected to have a material
adverse effect on the financial condition of Guarantor or its ability to execute
or deliver, or perform its obligations under, this Guaranty.
(c) Financial Statements. Guarantor shall provide Landlord and any
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mortgagee (as defined in the Lease), at the times set forth herein (or more
often as may be reasonably requested by Landlord), the following financial
information during the Lease Term (as defined in the Lease): (i) within forty-
five (45) days after the end of each fiscal quarter, Guarantor-prepared year-to-
date financial statements of Guarantor, prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied (the "Quarterly
Statements"); and (ii) within ninety (90) days after the end of each fiscal year
of Guarantor,
annual financial statements prepared in accordance with GAAP, consistently
applied, audited or reviewed by an independent certified public accountant (the
"Annual Statements").
(d) EBTDAR to Rent Ratio Certification. Guarantor shall provide to
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Landlord, within forty-five (45) days after the end of each fiscal quarter, a
written calculation, prepared by Guarantor and certified by Guarantor's chief
financial officer, evidencing that Guarantor shall have maintained a EBTDAR to
Rent Ratio, during the past four (4) calendar quarters taken as a whole, of no
less than 1.5 to 1.0, based on the Quarterly Statements and Annual Statements
delivered to Landlord pursuant to Section 10.1(c) above. For purposes of this
Guaranty, "EBTDAR Ratio" shall mean the quotient of (i) the sum of Guarantor's
net income (computed in accordance with GAAP, consistently applied) plus (A)
income taxes, (B) all rent payable under all leases for real property and
improvements that Guarantor has agreed to guarantee ("Aggregate Rent
Obligations"), (C) depreciation and amortization, (D) the annual LIFO
adjustment, and (E) other non-cash expenses, less recurring capital expenditures
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and principal payments under long-term debt, divided by (ii) the Aggregate Rent
Obligations. Guarantor shall provide to Landlord, within ten (10) days after
request, all evidence reasonably requested supporting the EBTDAR to Rent Ratio
calculations delivered to Landlord.
(e) Liquidity Ratio Certification. Guarantor shall provide to
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Landlord within forty-five (45) days after the end of each fiscal quarter, a
written calculation, prepared by Guarantor and certified by Guarantor's chief
financial officer, evidencing that Guarantor shall have maintained a Liquidity
Ratio during the past four (4) calendar quarters taken as a whole, of no less
than 1.25 to 1.00, based on the Quarterly Statements and Annual Statements
delivered to Landlord pursuant to Section 10.1(c) above. For purposes of this
Guaranty, "Liquidity Ratio" shall mean the ratio of current assets to current
liabilities, both computed in accordance with GAAP, consistently applied, except
that current liabilities shall mean all current liabilities, including all
floorplan borrowings, but excluding other indebtedness under short-term bridge
facilities and revolving credit agreements.
10. Miscellaneous.
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(a) No Waiver;. All of Landlord's rights and remedies under the
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Lease and under this Guaranty are intended to be distinct, separate and
cumulative and no such right and remedy therein or herein mentioned is intended
to be in exclusion of or a waiver of any of the others. The failure of Landlord
to enforce any of the respective rights or remedies hereunder, or to promptly
enforce any such rights or remedies, shall not constitute a waiver thereof nor
give rise to any estoppel against Landlord nor excuse any of the parties hereto
from their respective obligations hereunder. Any waiver of such right or remedy
must be in writing and signed by the party to be bound and must expressly state
that such right or remedy has been or thereby is waived.
(b) Authority. Guarantor represents and warrants to Landlord that:
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(i) the execution and delivery of this Guaranty has been duly authorized by the
Board of Directors of Guarantor and constitutes Guarantor's valid and legally
binding agreement in accordance with its terms; (ii) the making of this Guaranty
does not require any vote or consent of shareholders of Guarantor; and (iii)
Tenant is an indirect, wholly owned subsidiary of Guarantor. Guarantor hereby
acknowledges and agrees that the Leases to Tenant is a direct material
benefit to Guarantor, and that Landlord would not enter into the Lease without
the benefit of this Guaranty.
(c) Successors and Assigns. This Guaranty shall be legally binding
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upon Guarantor and its successors and assigns (but in the event of an
assignment, Guarantor shall not be relieved of its obligations hereunder) and
shall inure to the benefit of Landlord and its successors and assigns. Guarantor
hereby waives any acceptance of this Guaranty by Landlord and this Guaranty
shall immediately be binding upon Guarantor.
(d) Governing Law. This Guaranty shall be governed by the laws of
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the Commonwealth of Virginia without regard to conflicts of laws principles
thereof.
(e) Reasonable Attorney's Fees. As used herein, the term "Reasonable
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Attorney's Fees" shall mean reasonable attorney's fees actually incurred (based
on the actual number of hours worked by outside legal counsel and paralegals
multiplied by their usual and customary hourly rates then in effect) and actual
out-of-pocket legal expenses.
(f) Invalidity. The invalidity or unenforceability of any term here
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shall not affect the validity or enforceability of any other term.
(g) Waiver of Jury Trial. TO THE EXTENT ALLOWED BY APPLICABLE LAW,
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GUARANTOR AND LANDLORD HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT EITHER OF THEM OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR
ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT TO LANDLORD'S ACCEPTING THIS GUARANTY.
(h) Terms. All capitalized terms used but not defined herein shall
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have the meaning designated to them in the Lease unless otherwise set forth
herein.
(i) Survival. This Agreement shall be deemed to be continuing in
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nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under the Lease.
(j) No Subrogation; No Recourse Against Landlord. Notwithstanding
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the satisfaction by Guarantor of any liability hereunder, Guarantor's rights of
subrogation, contribution, reimbursement or indemnity, if any, or any right of
recourse to or with respect to the assets or property of Tenant, shall be
subject and subordinate to the rights of Landlord. Guarantor expressly agrees
not to exercise any and all rights of subrogation against Landlord.
(k) Amendment; Severability. Any amendments or modifications to
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this Guaranty, in order to be effective, shall be in writing and executed by
Landlord and Guarantor. A determination that any provision of this Guaranty is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Guaranty to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to any other persons or circumstances.
(l) Notice. All notices, demands, requests or other communications
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to be sent by one party to the other hereunder or required by law shall be in
writing and shall be deemed to have been validly given or served by delivery of
the same in person to the intended addressee, or certified mail or by depositing
the same with Federal Express or another reputable private courier service for
next business day delivery to the intended addressee at its address set forth in
the last section of this Agreement or at such other address as may be designated
by such party as herein provided. All notices, demands and requests shall be
effective upon such personal delivery, or one (1) business day after being
deposited with the private courier service, or two (2) business days after being
deposited in the United States mail as required above. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given as herein required shall be deemed to be receipt of
the notice, demand or request sent. By giving to the other party hereto at least
seven (7) days' prior written notice thereof in accordance with the provisions
hereof, each party shall have the right from time to time to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America. The following addresses shall
be used for notice purposes:
If to Landlord: MMR Holdings, L.L.C.
c/o Capital Automotive REIT
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Portfolio Manager
Facsimile: 000-000-0000
with a copy to: Xxxx Xxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: 202-663-8007
If to Guarantor: Sonic Automotive, Inc.
0000 X. Xxxxxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
Facsimile: 704-536-5116
(m) Captions for Convenience. The captions and headings of the
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section and paragraphs of this Guaranty are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
(n) Successive Actions. Separate and successive actions may be
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brought hereunder to enforce any of the provisions hereof at any time and from
time to time. No action hereunder shall preclude any subsequent action, and
Guarantor hereby waives any covenants to the maximum extent permitted by law not
to assert any defense in the nature of splitting of causes of action or merger
of judgments.
[Remainder Of This Page Left Intentionally Blank]
[Signature Follows On Next Page]
IN WITNESS WHEREOF, Guarantor, intending to be legally bound hereby, has
caused this Guaranty to be executed, sealed and delivered the date first written
above.
ATTEST: GUARANTOR:
SONIC AUTOMOTIVE, INC.,
a Delaware corporation
By: ____________________________ By: __________________________
Name: ____________________________ Name: __________________________
Its: ____________________________ Its: __________________________
Address:
0000 X. Xxxxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx,
Chief Financial Officer
FORM OF
FIRST AMENDMENT TO LEASE AGREEMENT
AND
REAFFIRMATION OF GUARANTY
THIS AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and entered
into effective as of September ___, 2001, by and between MMR __________, a
_______________ ("Landlord"), and ________________, a _______________
("Tenant"). SONIC AUTOMOTIVE, INC., a Delaware corporation ("Guarantor"), hereby
joins in the execution of this Amendment for purposes of consenting to all
provisions of this Amendment and ratifying, confirming and reaffirming its
obligations under that certain Lease Guaranty dated as of August ___, 1999 (the
"Lease Guaranty").
RECITALS:
A. Landlord and Tenant entered into that certain Lease Agreement
dated as of August ___, 1999 (the "Lease"), for that certain parcel of land and
improvements thereon known as _________________, as more particularly described
in Exhibit A to the Lease (the "Property").
B. Landlord and Tenant desire to amend the Lease to change the rent
payable under the Lease and make certain other modifications to the Lease in
connection therewith, upon the terms and conditions and as more particularly set
forth herein below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth hereinbelow and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties hereto, Landlord
and Tenant, intending legally to be bound, hereby agree as follows:
1. Purchase Price. The Partial Summary of Terms following
the title page to the Lease is hereby amended by adding the term
Purchase Price as set forth in Exhibit A-1 attached hereto.
2. Rent. Sections 4(a), (b) and (c) of the Lease are hereby
amended and restated by deleting Sections 4(a), (b) and (c) of the Lease
and substituting the following therefor:
(a) Monthly Base Rent. "MONTHLY BASE RENT" shall be
an amount equal to the Purchase Price (as defined in the Partial
Summary of Terms and as increased from time to time in
accordance with Paragraph 4(b)(ii)) multiplied by the then
effective Capitalization Rate, the product of which is divided
by twelve (12). The term "CAPITALIZATION
RATE" shall mean the then effective LIBOR Rate plus the
Applicable Basis Point Spread (or the fixed Capitalization Rate
as determined in 4(b)(iii) below, as applicable). The term
"LIBOR RATE" shall mean the British Banker's Association ("BBA")
interest settlement rate based on an average of rates quoted by
the BBA designated banks as being, in BBA's view the offered
rate at which deposits in U.S. Dollars are being quoted to prime
banks in the London interbank market at 11:00 a.m. (London time)
on the Determination Date for one month deposits, as reported by
"The Bloomberg Financial Markets, Commodities and News"
financial reporting service. The "DETERMINATION DATE" shall be
the Wednesday preceding the last Thursday of the second month
prior to the month for which the Monthly Base Rent is due,
(e.g., the Determination Date for the Monthly Base Rent due
October 1, 2001 shall be August 29, 2001 and the Determination
Date for the Monthly Base Rent due November 1, 2001 shall be
September 26, 2001). The LIBOR Rate shall be rounded to two (2)
decimal places. In the event that the LIBOR Rate is discontinued
or cannot be ascertained, the Landlord will substitute a
comparable rate and will notify Tenant of such substitution. The
"APPLICABLE BASIS POINT SPREAD" shall mean the number of basis
points based on the LIBOR Rate on the Determination Date as set
forth in the schedule set forth in Exhibit A-1. During each
month of the Lease Term, the Monthly Base Rent shall be adjusted
in accordance with this paragraph. Notwithstanding any provision
to the contrary in this Paragraph 4, in no event shall the
Capitalization Rate, as determined above, be less than the rate
set forth in Exhibit A-1. The Landlord shall endeavor to notify
Tenant of the Monthly Base Rent not later than the fifteen
(15th) day of the month prior to the date that the rent is due,
but Landlord's failure to provide the same will not be deemed a
waiver of Tenant's obligation to pay the Monthly Base Rent.
(b) Adjustment of Base Rent.
(i) Definitions. For the purpose of
calculating the cost of living adjustments, the
following definitions shall apply: (A) the term "BASE
MONTH" shall mean the calendar month which is five years
prior to the applicable Five Year Purchase Price
Adjustment Date (as hereinafter defined); and (B) the
term "PRICE INDEX" shall mean the "Consumer Price
Index-United States City Average All Urban Consumers"
published by the Bureau of Labor Statistics of the
United States Department of Labor (1982-84 = 100), or,
in the event such index is discontinued or no longer
readily available, any renamed local index covering the
metropolitan area in which the Premises are located or
any other successor or substitute index appropriately
adjusted.
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(ii) Adjustment. Effective as of: (A) the
fifth (5th) anniversary of the Prior Commencement Date;
and (B) each five year anniversary date thereafter
throughout the Term (each, a "FIVE YEAR PURCHASE PRICE
ADJUSTMENT DATE"), the Purchase Price used in the
computation of the Monthly Base Rent payable hereunder
shall be increased by an amount equal to the product of
(i) the Purchase Price used in computing the Monthly
Base Rent for the prior five year period multiplied by
(ii) the percentage increase between the Price Index for
the month preceding the applicable Five Year Purchase
Price Adjustment Date and the Price Index for the month
preceding the prior Five Year Purchase Price Adjustment
Date (or with respect to the first scheduled adjustment,
the month preceding the Prior Commencement Date);
provided that in no event shall the Purchase Price be
increased on any Five Year Purchase Price Adjustment
Date by less than five percent (5%) or greater than
fifteen percent (15%) (i.e., the Purchase Price used to
compute the Monthly Base Rent following each Five Year
Purchase Price Adjustment Date shall be no less than one
hundred five percent (105%) nor more than one hundred
fifteen percent (115%) of the Purchase Price used in
computing the Monthly Base Rent for the prior five (5)
year period). If the Price Index for the month preceding
the applicable Five Year Purchase Price Adjustment Date
is not available as of any Five Year Purchase Price
Adjustment Date, then the increase shall be calculated
using the most current available Price Index (and
re-calculated as soon as the Price Index for the month
preceding the applicable Five Year Purchase Price
Adjustment Date becomes available). In no event shall
any adjustment made pursuant to this Paragraph 4, or any
decrease in the Price Index, ever result in a decrease
in the Purchase Price (as previously increased).
(iii) Fixed Rate Conversion. During the
Initial Term, provided that Tenant is not in default
hereunder and at least five years remain during the
Initial Term, Tenant shall have the right to a one-time
conversion of the Capitalization Rate to a fixed rate to
be used during the remainder of the Initial Term and
during the Renewal Terms. The fixed Capitalization Rate
will be equal to the greater of (i) Capital Automotive
REIT's ("CARS") credit spread plus a 225 basis point
operating spread plus the current coupon on the Ten (10)
year US Treasury or (ii) 10.25%. An indication of the
current credit spread for CARS is BBB rated Commercial
Mortgage Backed Securities with a maturity matching the
remaining lease Term. In order to convert the
Capitalization Rate to a fixed rate, Tenant must give
Landlord irrevocable written notice electing and
designating a business day to be a conversion
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date at least thirty (30) days from the date of notice.
All fees and expenses incurred by the Landlord related
to the rate lock shall be paid by Tenant or reimbursed
to the Landlord.
(c) Payment of Monthly Base Rent. Tenant shall pay
the Monthly Base Rent in advance, on the first (1st) day of each
calendar month during the Lease Term without notice, demand or
setoff. The Monthly Base Rent for any partial month shall be
paid in advance and prorated daily from such date to the first
(1st) day of the next calendar month. The first (1st) payment of
Monthly Base Rent shall be due and payable on or before the date
of this Amendment. All Rent shall be made by direct deposit by
Tenant of immediately available funds into a checking account
established with a bank, savings bank or other depository
institution designated by Landlord ("BANK") and controlled
exclusively by Landlord entitled "Rent Collection Account" (or
such other name as may be designated by Landlord) ("RENT
COLLECTION ACCOUNT"). Landlord (or, at Landlord's option,
Landlord's agent, if any), or such officers or other agents as
may be designated by Landlord, shall be the sole signatory on
the Rent Collection Account. All interest accrued in the Rent
Collection Account shall belong to Landlord and shall not be
credited to Tenant. No funds in the Rent Collection Account
shall be subject to withdrawal by or for the benefit of Tenant.
"RENT" shall mean and include all Monthly Base Rent, additional
rent and other sums due hereunder.
3. Draft Withdrawal of Rent. Section 4(d) of the Lease is
hereby amended by inserting "Monthly" immediately preceding "Base Rent"
in the fifth (5th) line thereof.
4. Acceleration of Rent. In the event Landlord exercises
its rights to accelerate Rent following an Event of Default, pursuant to
Subsection 20(b)(i) and/or 20(b)(iv) of the Lease, and Tenant has not
previously exercised its right to convert the Capitalization Rate to a
fixed rate, then the Capitalization Rate used to calculate the Monthly
Base Rent payable for the period beginning on the date upon which
Landlord exercises its subject rights through the last day of the Lease
Term shall be deemed to be 10.25%.
5. Exhibit. The Lease is hereby amended by adding an
Exhibit A-1 thereto in the form attached hereto as Exhibit A-1.
6. Ratification. All references to "Lease" herein and in
the Lease shall refer to the Lease as hereby amended. Except as
otherwise expressly modified by the terms of this Amendment, the Lease
shall remain unchanged and continue in full force and effect. All terms,
covenants and conditions of the Lease not expressly modified herein are
hereby confirmed and ratified and remain in full force and effect, and,
as further amended hereby, constitute valid and binding obligations of
Tenant enforceable according to the terms thereof.
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7. Authority. Tenant and each of the persons executing this
Amendment on behalf of Tenant hereby covenants and warrants that: (i)
Tenant is a duly organized entity, validly existing and in good standing
under the laws of the State of its organization, and the State where the
Property is located, if different, (ii) that Tenant has full right and
authority to enter into this Amendment, and (iii) that the person
signing on behalf of Tenant is authorized to do so on behalf of such
entity.
8. Binding Effect. All of the covenants contained in this
Amendment, including, but not limited to, all covenants of the Lease as
modified hereby, shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, legal representatives and
permitted successors and assigns.
9. Effectiveness. The submission of this Amendment shall
not constitute an offer, and this Amendment shall not be effective and
binding unless and until fully executed and delivered by each of the
parties hereto.
10. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be an original, but all of which shall
constitute one and the same Amendment.
11. Recitals. The foregoing recitals are intended to be a
material part of this Amendment and are incorporated herein by this
reference
12. Defined Terms. Unless otherwise provided herein, all
defined terms not otherwise defined in this Amendment shall have the
meanings provided in the Lease.
-5-
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as
of the date first above written.
WITNESS: LANDLORD:
MMR _____________, a __________________
By: ______________, a _________________, its
______________
By: __________________, a
________________, its
________________
By: _________________, a
____________________, its
_________________
By:
------------------------ -----------------------
Name:
-----------------------
Title:
-----------------------
[SIGNATURE PAGE TO FIRST AMENDMENT TO LEASE AGREEMENT]
-6-
WITNESS: TENANT:
___________________, a _______ corporation
By:
--------------------------------------- ----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
SONIC AUTOMOTIVE, INC., a Delaware corporation, hereby consents to the
foregoing Amendment and ratifies, confirms and reaffirms its obligations under
the Lease Guaranty.
WITNESS: GUARANTOR:
SONIC AUTOMOTIVE, INC.,
a Delaware corporation
By:
------------------------------------ --------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
[SIGNATURE PAGE TO FIRST AMENDMENT TO LEASE AGREEMENT]
[EXHIBITS OMITTED]
-7-
