<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1998
-------------
Capital Automotive REIT
-----------------------
(Exact name of registrant as specified in its charter)
Maryland 000-23733 54-1870224
- -------- --------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
1420 Springhill Road, Suite 525, McLean, Virginia 22102
-------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (703) 288-3075
Not Applicable
--------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 23, 1998 Capital Automotive REIT (the "Company") completed the
acquisition of the following real property and improvements (collectively, the
"Properties"):
<TABLE>
<CAPTION>
LOCATION DATE PROPERTY LAND BUILDING LESSEE TERM/
ACQUIRED USE SQUARE SQUARE RENEWAL
FEET FEET
(APPROX) (APPROX)
<S> <C> <C> <C> <C> <C> <C>
500 East State Blvd, 6/17/98 Chevrolet 351,747 89,365 Kelley 15 years with five
Fort Wayne, IN dealership Chevrolet, 5-year renewal
Inc. options
1313 South 13th St. 6/17/98 multiple 479,770 33,428 Courtesy 15 years with
Decatur, IN automobile Motors, Inc. five
dealerships 5-year renewal
options
2400 N. Heidelbach 6/17/98 Chevrolet 191,839 29,678 Northside 15 years with
Evansville, IN dealership Chevrolet, five
L.P.. 5-year renewal
options
1818 Research Dr. 6/17/98 Auto Parts 239,580 67,000 Midwest 15 years with
Fort Wayne, IN Warehouse Auto Parts, five
Inc. 5-year renewal
options
5900 Peachtree 6/17/98 Buick 270,371 51,196 Kelley Buick 15 years with
Chamblee, GA dealership of Atlanta, five
Inc. 5-year renewal
options
11458 Alpharetta 7/23/98 Buick 388,996 60,568 Kelley Buick 15 years with
Roswell, GA dealership of Atlanta, five
Inc. 5-year renewal
options
5764 and 5784 6/17/98 Saturn 77,965 11,506 Kelley Saturn 15 years with five
Peachtree dealership of Atlanta, 5-year renewal
Chamblee, GA Inc. options
2520 Pleasant Hill 6/17/98 Saturn 384,940 19,243 Kelley Saturn 15 years with five
Duluth, GA dealership of Atlanta, 5-year renewal
Inc. options
633 Avenue of Autos, 7/23/98 Pontiac/GMC 282,704 47,998 Tom Kelley 15 years with five
Fort Wayne, IN dealership Pontiac, Inc. 5-year renewal
options
</TABLE>
Page 2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
811 and 818 Avenue of
Autos, 7/23/98 Buick and 317,378 40,871 Tom Kelley 15 years with five
Fort Wayne, IN GMC Truck Buick GMC 5-year renewal
dealerships Truck, Inc. options
911 Avenue of Autos 6/17/98 Cadillac 129,765 20,189 Tom Kelley 15 years with five
Fort Wayne, IN dealership Cadillac, Inc. 5-year renewal
options
910 Avenue of Autos 6/17/98 Saturn 58,283 11,123 Saturn of 15 years with five
Fort Wayne, IN dealership Fort Wayne, 5-year renewal
Inc. options
</TABLE>
The Properties were acquired from Thomas W. Kelley, James E. Kelley and Midwest
Auto Realty Co. L.P. (together "Sellers") pursuant to a Real Property Purchase
and Contribution Agreement, as amended, entered into on April 14, 1998.
Affiliates of the Sellers have engaged and will continue to conduct motor
vehicle retail and/or motor vehicle related businesses from these Properties.
In connection with these acquisitions, the Company entered into or assumed long-
term leases for each Property pursuant to which the Company receives rent from
affiliates of Sellers either directly or through a sublease arrangement.
The acquisitions were effected through sale or contribution of the
Properties to Capital Automotive L.P,. the Company's operating partnership
subsidiary (the "Operating Partnership"). The transaction was completed in two
stages. Nine of the properties were conveyed to the Company on June 17, 1998.
The three remaining properties were conveyed on July 23, 1998. The aggregate
consideration paid (including estimated closing costs through June 30, 1998) was
approximately $48.1 million paid through a combination of 87,644 units of
limited partnership interest in the Operating Partnership ("Units") valued at
approximately $1.3 million, approximately $24.6 million in the assumption and
repayment of mortgage debt and approximately $22.2 million in cash. The
consideration for the Properties was arrived at through arms-length negotiations
between the Sellers and the Company. The Company used proceeds of its initial
public offering of common shares of beneficial interest that initially closed on
February 19, 1998 to fund the acquisition of the Properties. The Sellers were
not related to the Company prior to the acquisition although Midwest Auto Realty
Co. L.P. now owns Units in the Operating Partnership.
Pursuant to the partnership agreement of the Operating Partnership, each
Unit may be redeemed by the holder thereof for cash or, at the Company's
election, one share of the Company's common stock, on or after February 19,
1999, unless the Operating Partnership otherwise delays such redemption.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Not required.
Page 3
<PAGE>
Exhibit Description
- ------- -----------
99.1 Real Property Contribution and Purchase Agreement by and among
Capital Automotive L.P., Capital Automotive REIT, Thomas W. Kelley,
James E. Kelley and Midwest Auto Realty Co. L.P. dated April 14, 1998
99.2 Amendment to Real Property Contribution and Purchase Agreement by and
among Capital Automotive L.P., Capital Automotive REIT, Thomas W.
Kelley, James E. Kelley and Midwest Auto Realty Co. L.P. dated June
17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL AUTOMOTIVE REIT
By: /s/ David S. Kay
----------------------
Title: Vice President, CFO and Secretary
Date: August 7, 1998
Page 4
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
99.1 Real Property Contribution and Purchase Agreement by and among
Capital Automotive L.P., Capital Automotive REIT, Thomas W.
Kelley, James E. Kelley and Midwest Auto Realty Co. L.P. dated
April 14, 1998
99.2 Amendment to Real Property Contribution and Purchase Agreement by
and among Capital Automotive L.P., Capital Automotive REIT,
Thomas W. Kelley, James E. Kelley and Midwest Auto Realty Co.
L.P. dated June 17, 1998
<PAGE>
CAPITAL AUTOMOTIVE L.P.
-----------------------
REAL PROPERTY PURCHASE AND CONTRIBUTION AGREEMENT
-------------------------------------------------
KELLEY AUTOMOTIVE GROUP
APRIL 14, 1998
<PAGE>
SUMMARY OF TERMS
EFFECTIVE DATE: April 14, 1998
SELLERS/CONTRIBUTORS James E. Kelley
and Thomas W. Kelley
Midwest Auto Realty Co., L.P.
SELLERS'/CONTRIBUTORS'
ADDRESSES: James E. Kelley
c/o Kelley Chevrolet, Inc.
P.O. Box 5015
Fort Wayne, Indiana 46895
Telephone 219-484-5566
Fax: 219-484-0330
Thomas W. Kelley
c/o Tom Kelley Buick GMC Truck, Inc.
811 Avenue of Autos
Fort Wayne, Indiana 46804
Telephone 219-434-4700
Fax: 219-434-4707
Midwest Auto Realty Co., L.P.
Attn: Thomas W. Kelley and James E. Kelley
811 Avenue of Autos
Fort Wayne, Indiana 46804
Telephone 219-434-4700
Fax: 219-434-4707
AGGREGATE PURCHASE PRICE: as set forth herein
AGGREGATE CONTRIBUTION
AMOUNT: as set forth herein
AGGREGATE PURCHASE PRICE
AND CONTRIBUTION AMOUNT: $47,100,000.00
RATE OF RETURN: 10%
LEASE GUARANTORS: Kelley Chevrolet, Inc., Courtesy Motors, Inc.,
Northside Chevrolet, L.P., Midwest Auto Parts,
Inc., Kelley Buick of Atlanta, Inc., Kelley
Saturn of
-ii-
<PAGE>
Atlanta, Inc., Tom Kelley Pontiac, Inc., Tom
Kelley Buick GMC Truck, Inc., Tom Kelley Cadillac,
Inc., Saturn of Fort Wayne, Inc.
CLOSING DATES:
-------------------------------------
and PLACE:
-------------------------------------
-------------------------------------
INDEMNITOR: None other than as set forth herein
-iii-
<PAGE>
TABLE OF CONTENTS
Page
I. PURCHASE AND SALE................................................. 1
-----------------
1.1 Certain Definitions...................................... 2
-------------------
1.2 Agreement to Purchase and Sell........................... 3
------------------------------
1.3 Consideration for Contribution........................... 4
------------------------------
1.4 Subject to Partnership Agreement......................... 5
--------------------------------
1.5 Capitalized Terms........................................ 5
-----------------
1.6 Redemption of Units...................................... 5
-------------------
II. OPERATION OF PROPERTY THROUGH ITS CLOSING......................... 5
-----------------------------------------
2.1 Business Practice........................................ 5
-----------------
2.2 No Sale or Encumbrance................................... 6
----------------------
2.3 Leases, Service Contracts and Management Contracts....... 6
--------------------------------------------------
2.4 Termination of Leases; New Company Leases................ 6
-----------------------------------------
2.5 Compliance............................................... 7
----------
2.6 Notice of Inaccuracy or Incompleteness................... 7
--------------------------------------
2.7 Access................................................... 7
------
2.8 Insurance................................................ 7
---------
2.9 Fulfillment of Obligation................................ 7
-------------------------
2.10 Financial Statements and Reports......................... 7
--------------------------------
2.11 Under Construction Property.............................. 7
---------------------------
III. STATUS OF TITLE TO PROPERTY...................................... 10
---------------------------
3.1 State of Title.......................................... 10
--------------
3.2 Preliminary Evidence of Title........................... 10
-----------------------------
3.3 Title Defects........................................... 12
-------------
IV. CLOSING PRORATIONS AND ADJUSTMENTS............................... 13
----------------------------------
4.1 Prorations and Adjustments.............................. 13
--------------------------
V. CLOSING.......................................................... 14
-------
5.1 Closing Date............................................ 14
------------
5.2 Closing Documents....................................... 14
-----------------
5.2.1 Sellers/Contributors............................. 14
--------------------
5.2.2 Partnership...................................... 16
-----------
5.3 Conditions to the Partnership's Obligation to Close..... 17
---------------------------------------------------
5.4 Conditions to the Sellers' Obligation to Close.......... 18
----------------------------------------------
5.5 Transaction Costs....................................... 19
-----------------
-iv-
<PAGE>
VI. CASUALTY LOSS AND CONDEMNATION.................................. 20
------------------------------
6.1 Casualty................................................ 20
--------
6.2 Condemnation or Taking.................................. 20
----------------------
VII. REPRESENTATIONS AND WARRANTIES OF THE SELLERS................... 21
---------------------------------------------
7.1 Organization............................................ 21
------------
7.2 Authority............................................... 21
---------
7.3 Interest in Properties.................................. 22
----------------------
7.4 No Defaults............................................. 22
-----------
7.5 No Litigation; No Condemnation.......................... 23
------------------------------
7.6 No Violation............................................ 23
------------
7.7 Required Obligations.................................... 24
--------------------
7.8 Condition of Properties................................. 24
-----------------------
7.9 Warranties.............................................. 24
----------
7.10 Utilities............................................... 24
---------
7.11 Zoning.................................................. 24
------
7.12 Improvements............................................ 24
------------
7.13 Environmental Matters................................... 25
---------------------
7.14 Insurance............................................... 27
---------
7.15 Compliance.............................................. 27
----------
7.16 Leases.................................................. 27
------
7.17 Service Contracts; Management Contracts................. 28
---------------------------------------
7.18 Permits................................................. 28
-------
7.19 Other Liabilities....................................... 29
-----------------
7.20 Tax Matters............................................. 29
-----------
7.21 Taxes................................................... 29
-----
7.22 Special Filings......................................... 29
---------------
7.23 Books and Records....................................... 29
-----------------
7.24 No Brokers.............................................. 29
----------
7.25 Survival of Warranties, Representations and Covenants... 29
-----------------------------------------------------
7.26 Investment.............................................. 30
----------
VIII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
-----------------------------------------------------
PARTNERSHIP..................................................... 31
-----------
8.1 Organization, Good Standing and Qualification........... 31
---------------------------------------------
8.2 Authorization........................................... 31
-------------
8.3 No Violation............................................ 32
------------
8.4 Tax Status.............................................. 32
----------
8.5 No Litigation........................................... 32
-------------
8.6 No Brokers.............................................. 32
----------
8.7 Survival................................................ 33
--------
IX. COVENANTS....................................................... 33
---------
-v-
<PAGE>
9.1 Covenants of the Company and the Partnership........... 33
--------------------------------------------
9.2 Covenants of the Sellers and the Contributing Entities. 35
------------------------------------------------------
9.3 No Claim Against Property.............................. 36
-------------------------
9.4 DRO Election; Bottom Guaranty Election................. 36
--------------------------------------
X. DUE DILIGENCE PERIOD............................................ 38
--------------------
10.1 Due Diligence Period................................... 38
--------------------
10.2 Access to Properties and Materials..................... 38
----------------------------------
10.3 Environmental Reports.................................. 39
---------------------
10.4 Adjustment Following Due Diligence..................... 40
----------------------------------
XI. DEFAULTS AND REMEDIES........................................... 41
---------------------
11.1 Indemnification by Sellers/Contributors................ 41
---------------------------------------
11.2 Personal Indemnitor.................................... 42
-------------------
11.3 Indemnification by the Company and the Partnership..... 42
--------------------------------------------------
11.4 Indemnification Procedures............................. 42
--------------------------
XII. MISCELLANEOUS................................................... 45
-------------
12.1 Assignment............................................. 45
----------
12.2 Entire Agreement....................................... 45
----------------
12.3 Notices................................................ 45
-------
12.4 Governing Law.......................................... 46
-------------
12.5 Litigation Costs....................................... 47
----------------
12.6 Counterparts........................................... 47
------------
12.7 Offer and Acceptance................................... 47
--------------------
12.8 Further Assurances..................................... 47
------------------
12.9 Waiver................................................. 47
------
12.10 Severability........................................... 48
------------
12.11 Section Headings; Construction......................... 48
------------------------------
12.12 Time of Essence........................................ 48
---------------
12.13 Real Property Adjacent to Certain of the Property...... 48
-------------------------------------------------
-vi-
<PAGE>
EXHIBITS
A Capital Automotive L.P. Limited Partnership Agreement
2.4(c) Guaranty and Subordination Agreement
5.2.1(e) Prior Occupant Termination Letter
5.2.1(f) Opinion of Seller's/Contributor's Counsel
5.2.1(i) Investor Questionnaires
SCHEDULES
1.2 Schedule of Properties; Ownership Interests in Properties and
Purchase Price
1.2(a) Possibly Excluded Property
1.3(a) Units and Cash for Transferred Properties
1.3(b) Mortgage Debt
2.1 Prior Occupants
3.1 Scheduled Exceptions
7.3 Limitations on Sellers'/Contributors' Ownership
7.13.6(a) The Treatment, Storage and Disposal Locations for Substances of
Concern
7.13.6(b) Storage Tanks
7.13.6(f) Environmental Permits and Authorizations
7.14 Insurance
7.17 Service Contracts and Management Contracts
10.3 Certain Properties in Connection with Environmental Reports
-vii-
<PAGE>
CAPITAL AUTOMOTIVE L.P.
REAL PROPERTY PURCHASE AND CONTRIBUTION AGREEMENT
-------------------------------------------------
THIS REAL PROPERTY PURCHASE AND CONTRIBUTION AGREEMENT (the "Agreement") is
made and entered into as of the date first stated in the Summary of Terms (the
"Effective Date"), by and among the persons and entities named in the Summary of
Terms, consisting of all of the owners of all of the fee simple interests in and
to any of the Properties listed on Schedule 1.2 (each individually, a
------------
"Seller/Contributor," and, if more than one Seller/Contributor, collectively,
the "Sellers/Contributors"), and CAPITAL AUTOMOTIVE L.P., a Delaware limited
partnership (the "Partnership"), having offices at 1420 Springhill Road, Suite
525, McLean, Virginia 22102, and CAPITAL AUTOMOTIVE REIT, a Maryland real estate
investment trust (the "Company"), having offices at 1420 Springhill Road, Suite
525, McLean, Virginia 22102 on its own behalf and as the general partner of the
Partnership.
RECITALS
--------
A. The Sellers/Contributors are or will be the legal and beneficial
owners of all of the interests in fee simple title to all of the real property
and improvements set forth on such Schedule 1.2 hereto except as set forth in
------------
Schedule 1.2(a) (including the residual interests in any tenant improvements
- ---------------
thereon), which are individually referred to as a "Property" and collectively,
the "Properties." Such Properties are identified on Schedule 1.2 by metes and
-------------
bounds, street address and property tax identification number, or if such
Properties constitute more than one parcel, by the several applicable property
tax identification numbers and the description of such Properties shall be
finally determined by the surveys of such Properties performed in connection
with Section 3.2.4 hereof.
B. Each Seller/Contributor desires to transfer all of its interest in
each of the Properties to the Partnership in exchange for Units (as hereafter
defined) in the Partnership and cash in the amounts of each set forth in
Schedule 1.3(a) upon and subject to the terms and conditions of this Agreement.
- ---------------
C. The Partnership was formed on November 13, 1997. At each of the
Closings, the Limited Partnership Agreement, as amended and restated, will be
substantially in the form appended hereto as Exhibit A (the "Partnership
---------
Agreement"). The Partnership is an umbrella partnership real estate investment
trust in which the Company is the sole general partner.
NOW THEREFORE, in consideration of and in reliance upon the above Recitals,
the terms, covenants and conditions contained in this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
I. PURCHASE AND SALE
-----------------
<PAGE>
1.1 Certain Definitions. For purposes of this Agreement:
-------------------
1.1.1 "Mortgage Debt" means the aggregate amount of mortgage
indebtedness (principal and interest), if any, encumbering
any of the Properties as set forth opposite the description
of each Property on Schedule 1.3(b).
---------------
1.1.2 "Purchase Price" means the amount of the acquisition cost,
in U.S. dollars, as identified on Schedule 1.3(a) , of each
---------------
Purchased Property for which the Sellers/Contributors shall
receive cash. "Aggregate Purchase Price" means the total
amount of the acquisition cost of each Contributed Property
for which the Sellers shall receive cash.
1.1.3 "Affiliate" means with respect to any Person, (i) any Person
that holds direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of voting securities or other voting
interests representing at least five percent (5%) of the
outstanding voting power of a Person or equity securities or
other equity interests representing at least five percent
(5%) of the outstanding equity securities or interests in a
Person, or (ii) any Person that directly, or indirectly
through one or more intermediaries, controls, or is
controlled by, or is under common control with such Person.
1.1.4 A "Person" shall mean and include natural persons,
corporations, limited partnerships, general partnerships,
joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts,
business trusts, Indian tribes or other organizations,
whether or not legal entities, and governments and agencies
and political subdivisions thereof.
1.1.5 For purposes of this Agreement, the "knowledge" of a Person
shall mean the actual knowledge of such Person's officers,
senior executives, managing partners, general partners,
majority shareholders, key employees or their equivalents.
1.1.6 "Units" means units of limited partnership interest in the
Partnership, including the limited partnership interests
held by the Company and those to be issued to the
Contributors pursuant to this Agreement. The Units to be
issued to the Contributors pursuant to this Agreement are
sometimes referred to herein as the "Initial Units."
1.1.7 "Shares" means the common shares of beneficial interest, par
value $.01 per share, of the Company.
2
<PAGE>
1.1.8 "Purchased Properties" means those of the Properties on
Schedule 1.2 which the parties have determined will be
transferred and conveyed by the Sellers/Contributors to the
Partnership for cash. "Contributed Properties" means those
of the Properties on Schedule 1.2 which the parties have
determined will be transferred and conveyed by the
Sellers/Contributors to the Partnership in exchange for
Units in the Partnership.
1.1.9 "Contribution Amount" means the amount of the acquisition
cost of each Contributed Property for which the Sellers
shall receive Units (which amount shall aggregate no more
than $11 million), as identified on Schedule 1.3(a) which
---------------
Contribution Amount shall be used in the calculation of the
number of Units to be issued to the Contributors at Closing
in exchange for their contribution of the Contributed
Properties to the Partnership. "Aggregate Contribution
Amount" means the total amount of the acquisition cost of
each Contributed Property for which the Sellers shall
receive Units.
1.1.10 "Consideration Amount" means the amount of the acquisition
cost of each Contributed Property as identified on Schedule
--------
1.3(a). "Aggregate Consideration Amount" means the sum of
------
the Aggregate Purchase Price and the Aggregate Contribution
Amount.
1.2 Agreement to Purchase and Sell. Subject to the terms and conditions
------------------------------
of this Agreement, at each of the Closings (as defined in Section 5.1 hereto)
and except as set forth on Schedule 1.2(a), each Seller/Contributor shall convey
---------------
and transfer its entire right, title and interest in the Properties identified
on Schedule 1.2 as being transferred at that Closing to the Partnership
------------
including, without limitation
1.2.1 All buildings, improvements, structures and Fixtures (as
hereinafter defined) now located or presently being
constructed on the Properties, including, without
limitation, sidewalks, landscaping, parking lots and
structures, roads, drainage and all above ground and
underground utility structures and conduits (on-site or off-
site), equipment systems and other so-called
"infrastructure" improvements that are not Excluded Personal
Property (as hereafter defined) (the "Improvements");
1.2.2 All equipment, machinery, fixtures, and other items of real
and/or personal property, including all components thereof,
located in, on or used in connection with, and which are
permanently affixed to or incorporated into, the
Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and
water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems
3
<PAGE>
and fire and theft protection equipment, and similar
systems, all of which, to the greatest extent permitted by
law, are hereby deemed to constitute real estate, together
with all replacements, modifications, alterations and
additions thereto (collectively the "Fixtures")
The right, title and interest in the Properties to be transferred shall
not include all furniture, equipment, inventory and other items of movable
personal property whether or not attached to such Properties that relate to the
business conducted on such Properties that may readily be removed from such
Properties without material damage whether or not such items might legally be
considered to be "fixtures," ("Excluded Personal Property"). The interests and
Properties to be transferred as herein provided are hereinafter collectively
referred to as the "Contribution." The Sellers/Contributors shall transfer,
cover or contribute each Property free and clear of all liabilities, obligations
and commitments of Sellers/Contributors and free and clear of all liens and
encumbrances other than Permitted Exceptions.
1.3 Consideration for Contribution.
------------------------------
1.3.1 In consideration for the Aggregate Consideration Amount, the
Partnership shall:
a. purchase and accept from Sellers/Contributors all the
right, title and interest of Sellers/Contributors in and
to the Purchased Properties for the Aggregate Purchase
Price minus the Mortgage Debt (as hereafter defined)
encumbering such Purchased Properties in the amount
stated in the Summary of Terms in U.S. Dollars.
b. issue to each Seller/Contributor the number of Units in
consideration for each Contributed Property as set forth
on Schedule 1.3(a) hereto.
---------------
1.3.2 The number of Units to be issued in consideration for each
Contributed Property (the "Contribution Value") shall be
calculated as follows. The Sellers shall determine the
quotient of the Contribution Amount for such Property minus
the Mortgage Debt (as hereafter defined) encumbering such
Property divided by the value of the Shares calculated and
limited as follows. The fair market value of the Shares
shall equal ninety three percent (93%) of the average of the
closing price of the Shares during the thirty (30) days
ending the last business day prior to the initial
announcement to the public of the execution of this
Agreement provided, that Units to be issued in consideration
for all the Contributed Properties shall not exceed the
number of Units which, when multiplied by 100% of the
average of the closing price of the Company stock during the
thirty
4
<PAGE>
(30) days prior to the initial announcement to the public of
the execution of this Agreement, produces a number no
greater than $11 million.
1.3.3 The Sellers/Contributors represent and warrant that each
Property is subject to mortgage indebtedness set forth
opposite the description of such Property on Schedule 1.3(b)
---------------
of this Agreement. The number of Units issuable as
consideration for the Properties and the Aggregate Purchase
Price, as applicable, will be adjusted pursuant to Sections
3.3, 5.2.1(e), 6.1, 6.2, 10.3, 10.4 and 12.7 of this
Agreement, as applicable. In the event of any stock split,
stock dividend, reclassification, recapitalization or other
adjustment in respect of the outstanding Shares prior to the
Closing Date, the number of Units to be issued to the
Contributors will be proportionately adjusted so Units will
continue to equate to the Shares on a one-to-one basis.
1.4 Subject to Partnership Agreement. The Units issued pursuant to this
--------------------------------
Agreement shall be subject in all respects to the terms and provisions of the
Partnership Agreement.
1.5 Capitalized Terms. Capitalized terms used in this Agreement that are
-----------------
not otherwise defined herein shall have, unless otherwise indicated, the
meanings assigned to them in the Partnership Agreement or, if not defined
therein, be required by context.
1.6 Redemption of Units. The rights of the Contributors to redeem
--------------------
their Units shall be governed by Section 8.05 of the Partnership Agreement.
II. OPERATION OF PROPERTY THROUGH ITS CLOSING
-----------------------------------------
Through the Closing Date for each of the Properties:
2.1 Business Practice. Except as otherwise provided in this Article II,
-----------------
the Sellers/Contributors shall continue, or shall cause any Affiliate, tenant,
or third party managing, maintaining or occupying, as the case may be, any of
the Properties not yet transferred to the Partnership (referred to herein
individually as a "Prior Occupant" and collectively as the "Prior Occupants") to
continue, to manage, to maintain and to operate the Properties in accordance
with sound and prudent business practices and keep the Properties and the
tangible personal property thereon in good condition and repair, ordinary wear
and tear excepted. The Sellers/Contributors shall maintain Thomas W. Kelley and
James E. Kelley in the positions and with the authority held on the Effective
Date and shall instruct such Prior Occupant not to make any change in its
maintenance or operation of the Properties or in its normal and customary other
practices. The Prior Occupants are identified on Schedule 2.1 to this
------------
Agreement.
5
<PAGE>
2.2 No Sale or Encumbrance. None of the Sellers/Contributors shall sell,
----------------------
mortgage, pledge, hypothecate or otherwise transfer or dispose of all, or any
part of any Property not yet transferred to the Partnership or any interest
therein, nor shall any Seller/Contributor initiate, consent to, approve or
otherwise take any action with respect to zoning or any other governmental rules
or regulations presently applicable to all or any part of any Property not yet
transferred to the Partnership, nor shall any Seller/Contributor permit any new
limited or general partners, shareholders or members to be admitted to any
Seller/Contributor. Notwithstanding the foregoing sentence,
Sellers/Contributors shall have the right and ability through the Closing Date
to modify restrictive covenants on certain platted Property in Indiana commonly
known as the "Auto Mall" but only to the extent necessary in order for
Sellers/Contributors to construct a body shop on certain platted undeveloped
real property on the "Auto Mall" belonging to Sellers/Contributors and not being
transferred hereunder.
2.3 Leases, Service Contracts and Management Contracts. Except as
--------------------------------------------------
provided in Section 2.4, the Sellers/Contributors shall not, nor shall they
cause or permit any Prior Occupant to terminate, modify, extend, amend or renew
any Lease (as defined in Section 4.1.3 hereof), Service Contract (as defined in
Section 7.17 hereof), or Management Contract (as defined in Section 7.17 hereof)
or enter into any new Lease (other than the Company Lease pursuant to Section
2.4 of this Agreement) or Service Contract without the prior written consent of
the Company or the Partnership; provided, however, that the failure of the
Company or the Partnership to object to any such action within thirty (30) days
after written notice to it by Seller shall be deemed to reflect the Company's or
the Partnership's consent thereto. Notwithstanding the foregoing, all Service
Contracts and Management Contracts relating to the respective Properties shall
remain in effect after the Closing Date, except for those Service Contracts and
Management Contracts that the Partnership requires, in writing, to be terminated
as of the Closing Date.
2.4 Termination of Leases; New Company Leases. On or as of the Closing
-----------------------------------------
Date for any Property, the Sellers/Contributors shall cause the termination of
all Leases relating to such Property. On or before the Effective Date, the
Sellers shall cause the Prior Occupant of such Property, or an Affiliate thereof
(subject to the approval of the Partnership), to execute and deliver to the
Partnership an occupancy lease with the Partnership for such Property
substantially in the form attached hereto as Exhibit 2.4(a) (referred to
--------------
hereafter individually as a "Company Lease" and collectively as the "Company
Leases"), on the terms and conditions (including Rent (as defined in such
Company Lease)) set forth in Exhibit 2.4(a) including the summary of terms
thereof. The Initial Base Annual Rent (as defined in the Company Lease) called
for under the Company Lease for each Property shall be the percentage of the
Consideration Amount stated in the Summary of Terms (the "Rate of Return") for
such Property. The effective date of a Company Lease shall be the Closing Date
for the Property subject to such Company Lease. To the extent that the Company
Leases shall be guaranteed by the persons or entities stated in the Summary of
Terms, the parties shall enter into a Guaranty and Subordination Agreement
substantially in the form attached hereto as Exhibit 2.4(b).
--------------
6
<PAGE>
2.5 Compliance. None of the Sellers/Contributors shall knowingly take or
----------
fail to take any action that will cause the Properties to fail to comply with
any federal, state, municipal and other governmental laws, ordinances,
requirements, rules, regulations, notices, codes and orders, or any agreements,
covenants, conditions, easements and restrictions currently in effect relating
to the Properties.
2.6 Notice of Inaccuracy or Incompleteness. The Sellers/Contributors
--------------------------------------
shall promptly give written notice to the Company of the occurrence of any event
of which Sellers/Contributors have knowledge and which may adversely affect the
completeness or accuracy of any representation or warranty made or to be made by
Sellers/Contributors under or pursuant to this Agreement.
2.7 Access. The Sellers/Contributors shall cause the Company and the
------
Partnership and its representatives to have reasonable access to the Properties,
subject to the prior rights, if any, of any Prior Occupant; provided, however,
--------
that without the consent of the Seller/Contributor, the representatives of the
Partnership shall not disclose to any Prior Occupant the existence of this
Agreement or the transactions contemplated hereby.
2.8 Insurance. The Sellers/Contributors shall cause the existing
---------
insurance coverages on the Properties and the business of the
Sellers/Contributors to be maintained in full force and effect through the
Closing Date.
2.9 Fulfillment of Obligation. To the extent any Seller/Contributor is
-------------------------
obligated, pursuant to any contract, agreement, covenant, lease, including any
Lease, or other understanding entered into prior to the Effective Date with any
Prior Occupant, governmental subdivision or any other third party, to effect any
construction, make any improvements or take any action, the Sellers/Contributors
shall cause any such construction, improvements and/or action to be taken,
completed and fully paid for by such Seller/Contributor, at its expense, prior
to the Closing Date for the Property that is the subject of such construction,
improvements and/or actions to be taken. No such obligation shall be
unfulfilled, and no liability for or payment in respect of any such obligation
shall be unsatisfied as of the applicable Closing Date.
2.10 Financial Statements and Reports. The Sellers shall provide to
--------------------------------
the Company financial statements and other financial, operating or statistical
information for each Property upon any reasonable request of the Company, and
the general partner or chief financial officer, as the case may be, of each
Seller/Contributor shall verify under penalty of perjury that, to the best of
his or its knowledge, such financial statements and other reports are true,
accurate and complete in all material respects.
2.11 Under Construction Property. Notwithstanding anything to the
---------------------------
contrary contained in this Agreement, the Partnership and the Company recognize
that the Property identified on Schedule 1.2 to this Agreement as being under
------------
construction (the "Under Construction Property") is presently being improved
pursuant to the construction contracts listed on Exhibit 2.11(a)
---------------
7
<PAGE>
hereto and the plans and specifications listed on Exhibit 2.11(b) hereto. The
---------------
contracts, plans and specifications so listed are referred to herein,
collectively, as the "Contract Documents." With respect to the Under
Construction Property, the parties to this Agreement agree as follows:
2.11.1 The Consideration Amount of such Property, as stated in
Schedule 1.2 to this Agreement, is based upon the assumption
------------
that such Property will be conveyed to the Partnership at
the Closing Date identified in Section 5.1 hereto, but in no
event later than the date to which the Sellers/Contributors
and the Partnership shall agree in writing:
a. with all improvements called for under the Contract
Documents complete in all respects and in substantial
conformity with all requirements of the Contract
Documents;
b. free of all liens and claims of any and all persons,
firms, companies, corporations or other entities
supplying any labor, services, materials, supplies or
other things of value in connection with or in respect
of any construction or other improvement to the Under
Construction Property (the "Construction
Service/Material Suppliers"); and
c. with certificates of occupancy and/or other certificates
issued by all appropriate governmental bodies or
agencies attesting to the fact of the completion of all
improvements in conformity with all building, zoning and
other applicable codes or regulations so as to permit
the immediate occupancy of the improvements for the
purposes contemplated by the Company Lease.
2.11.2 The Sellers/Contributors of the Under Construction Property
agree that they will do all things necessary to convey the
Under Construction Property as contemplated in Section
2.11.1 hereto.
2.11.3 If the Sellers/Contributors of the Under Construction
Property shall have any dispute with any Construction
Service/Material Supplier referred to in Section 2.11.1.b
above, and that dispute prevents the delivery of the
Property free of any lien or claim, such
Sellers/Contributors may deliver the Property so affected
subject to such lien or claim; provided however that:
a. by such Sellers'/Contributors' "bonding off" or posting
money with the Partnership's Title Insurer, such Title
Insurer will "insure over" the lien or claim in
question; and
8
<PAGE>
b. such Sellers/Contributors diligently pursues the dispute
to its conclusion.
2.11.4 If for any reason (including the resolution of a dispute
specified in Section 2.11.3 above) the Sellers/Contributors
are required to pay more money (the "Excess") than is
specified in the Contract Documents as they exist on the
date of this Agreement, then if the Partnership determines
that the Excess, when added to the Consideration Amount
specified in this Agreement, results in an aggregate amount
not in excess of fair market value of the Property in
question, the Consideration Amount specified in this
Agreement for the Property in question will be increased by
the amount of the Excess and the Base Annual Rent payable
under the applicable Company Lease will be increased by an
amount equal to the amount of the Excess times the Rate of
Return. Notwithstanding anything else in this Section
2.11.4, in the event that an Excess exists as to a Property
and (i) the Partnership does not increase the Consideration
Amount specified by this Agreement for such Property by the
amount of the Excess and (ii) the aggregate amount of the
Excess added to the Consideration Amount specified in this
Agreement for such Property exceeds the Consideration Amount
specified in this Agreement for such Property by more than
fifteen (15%), Sellers/Contributors shall have the right to
terminate this Agreement as to such Property.
2.11.5 The Sellers/Contributors of the Under Construction Property
agree that nothing in this Section 2.11 shall lessen the
Sellers'/Contributors' obligations under other provisions of
this Agreement or lower the requirements with respect to
such Property as specified herein.
2.11.6 Notwithstanding the foregoing provisions of this Section
2.11, the closing of the conveyance of the Under
Construction Property shall occur on the Closing Date
provided in Section 5.1 hereto only if the construction
project on the Under Construction Property shall be
substantially complete. For purposes of this Section 2.11.6,
"substantially complete" means completion except for the
typical "punch-list" items (a list of which shall be
completed by Sellers/Contributors (as the agent for the
Partnership) and the contractor), which items are capable of
completion within thirty (30) days of the Closing Date. The
Sellers/Contributors shall enforce their right to obtain
completion of the construction under the Contract Documents
by way of hold-back or other mechanism to guaranty to the
Partnership that the punch-list items are completed within
thirty (30) days of the Closing Date. If the construction
project on the Under Construction Property is not
substantially complete as of the Closing Date, Contributors
and the Partnership shall agree to an alternative date to
close
9
<PAGE>
the conveyance of the Under Construction Property to the
Partnership, which date shall be no later than forty-five
(45) days following the completion of the construction
project.
III. STATUS OF TITLE TO PROPERTY
---------------------------
3.1 State of Title. At the Closing for any of the Properties, the Sellers
--------------
shall own, beneficially and of record, good and marketable fee simple title to
such Properties, subject only to the mortgages creating the Mortgage Debt listed
on Schedule 1.2 hereto and those covenants, conditions and restrictions set
------------
forth on Schedule 3.1 hereto. The Mortgage Debt and Scheduled Exceptions (as
------------
defined in Section 3.3 hereto) are referred to collectively herein as the
"Permitted Exceptions."
3.2 Preliminary Evidence of Title. Within no more than thirty (30) days
-----------------------------
after the Effective Date for a Property, the Partnership and
Sellers'/Contributors shall jointly obtain at Sellers'/Contributors' expense, in
a form acceptable to the Partnership, the following documents to evidence the
condition of the title to such Property:
3.2.1 Commitment (the "Title Commitment" and collectively the
"Title Commitments") to the Partnership for ALTA Form B
(1987) Owner's Title Insurance Policies from Chicago Title
Insurance Company (which may act in conjunction with Ticor
Title Company) (or such other title company acceptable to
the Partnership) committing to insure, at standard rates,
title to such Property as being good and marketable, subject
only to the Permitted Exceptions, in the amount of the
Consideration Amount of such Property, issued by a title
company acceptable to the Company and the Partnership (the
"Title Insurer"). The aggregate insured amount of all Owners
Title Insurance Policies issued for the Properties shall not
exceed the Aggregate Consideration Amount of the Properties.
The Title Commitment shall be effective as of the Closing
Date for that Property, and shall reflect that fee simple
title is held by the respective Seller Contributor prior to
the Contribution. Each Owner's Title Insurance Policy to be
issued to the Partnership at a Closing ("Title Insurance
Policy") shall contain an extended coverage endorsement over
the general or standard exceptions which are a part of the
printed form of the policy and subject only to the Scheduled
Exceptions. Each Title Insurance Policy shall, in addition,
(a) include provisions for co-insurance, in such amounts of
liability acceptable to the Partnership and the Company not
to exceed in the aggregate, the Aggregate Consideration
Amount of the Properties; (b) not contain any survey
exception, (c) not contain any exceptions for (i) liens for
labor or material, whether or not of record, (ii) parties in
possession (other than Prior Occupants under the Leases,
solely as such
10
<PAGE>
Prior Occupants), (iii) unrecorded easements, and (iv) taxes
and special assessments not shown on the public records, (d)
provide for the following endorsements: (i) an access
endorsement insuring that there is direct and unencumbered
access to the land from all adjacent public streets and
roads, (ii) a survey endorsement insuring that all
foundations in place as of the date of such policy are
within the lot lines and applicable setback lines, that the
Improvements do not encroach on adjoining land or any
easements, and that there are no encroachments of
Improvements from adjoining land on any or the Properties or
any part thereof, (iii) an ALTA Form 3.1 zoning endorsement
insuring that the Properties are zoned for the buildings and
the operation thereof as contemplated by the terms and
provisions of this Agreement, (iv) a non-imputation
endorsement, by which the Title Insurer waives any defense
based upon knowledge of any person or entity (other than the
knowledge of the Partnership or its designees), (v) a
statement that each Property constitutes a separate lot of
record and is separately assessed for real estate tax
purposes, (vi) an endorsement commonly referred to as a
"Fairway endorsement," providing among other things, that
the Title Insurer waives any defense based on a dissolution
or termination of the insured partnership or the formation
of a new partnership solely by reason of one or more
transfers of all or any part of the partnership interests of
any one or more of the general partners of the insured to
the Company or the Partnership and/or any one or more of the
limited partners of the insured, and/or the transfer of any
one or more of the limited partner's interests to the
current general partner, the Company or the Partnership, and
(vii) such other endorsements as the Partnership and the
Company may reasonably require.
3.2.2 Written results of searches reflecting any liens,
judgements, tax liens, bankruptcies, and open dockets (the
"UCC Searches"), conducted by a company reasonably
acceptable to the Partnership. The UCC Searches shall name
each Seller/Contributor, Prior Occupant, and Property, and
shall search the appropriate land records and central filing
office for Uniform Commercial Code financing statements.
3.2.3 Legible copies of all documents of record referred to in any
Title Commitment or disclosed by the UCC Searches, and all
other documents evidencing or, to the extent in the
possession or control of the Sellers Contributors, relating
to, matters reflected in any Title Commitment or the UCC
Searches.
3.2.4 From a surveyor chosen by the Sellers/Contributors who (i)
is a registered surveyor under the laws of the state in
which the surveyed Properties are located and (ii) is and
will work under and be subject to the sole direction,
11
<PAGE>
instruction and supervision of the Partnership), current
ALTA/ACSM land title surveys of each of the Properties (the
"Surveys") dated on or after the date of this Agreement,
certified to the Partnership and the Title Insurer (and such
other persons or entities as the Partnership may designate)
by a surveyor registered in the State where the Property is
located. Each Survey shall be in form and substance
acceptable to the Partnership and the Title Insurer, and
shall include items 1, 2, 3, 4, 6, 7a, 7b(1), 8, 9, 10, 11
and 13 of Table A of the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys.
3.2.5 A zoning compliance letter from the zoning authority from
each jurisdiction in which a Property is located indicating
that the use and operation of the Improvements on each
Property is in compliance with the applicable zoning
ordinance or a zoning certificate or compliance letter from
the zoning authority setting forth the zoning information
that such authority provides as part of its standard
procedure.
3.3 Title Defects. The Partnership shall have the right to review the
-------------
Title Commitments, UCC Searches or Surveys (or any revision or update of any of
them) and to require the Sellers/Contributors to remove, correct, and cure any
defects in the title or other such matters relating to the title that the
Partnership determines, in its sole discretion, are unacceptable (including, but
not limited to, such title defects or other such matters that the Partnership or
the Company may have been informed of or known about prior to the execution of
this Agreement). The Partnership shall notify the Sellers/Contributors within
ten (10) business days after the Partnership receives the last of the Title
Commitments, UCC Searches or Surveys, as the case may be for Properties to be
transferred in a Closing, of any such defects or matters that the Partnership
finds to be unacceptable, and, within fifteen (15) days of receiving such
notice, but not later than five days prior to such Closing Date (whichever
period is shorter), such Sellers/Contributors shall (i) as to any such exception
or other matter of a nonmonetary nature, use reasonable efforts to remove,
correct and cure such defects or such other matters, and (ii) as to any such
defect or other matter of a monetary nature subject to Section 2.11.3, cause
such lien or encumbrance or other matter to be discharged and released, or "bond
off" or post money with the Partnership's Title Insurer, such that the Title
Insurer will "insure over" the lien or claim in question in all cases to the
reasonable satisfaction of the Partnership. If such Seller/Contributor fails
to remove, correct and cure such defects or such other matters, the Partnership
may, at its option and as its exclusive remedy, (x) terminate this Agreement,
in which event this Agreement, without further action of the parties, shall
become null and void and neither party shall have any further rights or
obligations under this Agreement, (y) elect to accept title to such Property and
discharge or release any liens, encumbrances or other matters of a monetary
nature or which may otherwise be discharged, released or removed by the payment
of a monetary sum and reduce the Consideration Amount by the amount necessary to
correct or cure such monetary liens, encumbrances or other matters, or (z)
terminate this Agreement with respect to such Property and reduce the
Consideration Amount by the Consideration Amount for such Property
12
<PAGE>
with respect to which the Sellers/Contributors fail to correct and cure such
defects or other such matters, provided that, if the acquisition cost as set
--------
forth on Schedule 1.2(a) of the Properties that the Partnership seeks to
---------------
terminate pursuant to this clause (z) aggregate in excess of fifteen percent
(15%) of the Aggregate Consideration Amount, Sellers/Contributors may, at their
option and as their exclusive remedy terminate this Agreement, in which event
this Agreement, without further action of the parties, shall become null and
void and neither party shall have any further rights or obligations under this
Agreement. If the Partnership fails to make any such election, the Partnership
shall be deemed to have elected the option contained in clause (z). Items
identified in the Title Commitments, UCC Searches or Surveys to which the
Partnership does not object shall be referred to as the "Scheduled Exceptions."
IV. CLOSING PRORATIONS AND ADJUSTMENTS
----------------------------------
4.1 Prorations and Adjustments. All prorations and adjustments (the
--------------------------
"Prorations") with respect to each Property, for the period up to and through
the Closing Date for such Property, shall be the responsibility of or belong to
the Sellers/Contributors. All Prorations for the period after the Closing Date
shall be the responsibility of or belong to the tenant under the applicable
Company Lease. The Company and the Partnership shall have no liability for, and
shall receive no payments and no adjustments against the Aggregate Purchase
Price in respect of, the Prorations. Such Prorations shall include, but not be
limited to, the following:
4.1.1 real estate and personal property taxes and assessments;
4.1.2 common area maintenance fees and reimbursements for prior
years property taxes payable by Prior Occupants;
4.1.3 the rent payable by Prior Occupants under leases in effect
immediately prior to the Closing Date (the "Leases") as set
forth on Schedule 2.1 hereto;
------------
4.1.4 the full amount of security deposits paid under the Leases,
together with interest thereon if required by law or
otherwise;
4.1.5 water, electric, telephone and all other utility and fuel
charges (those that are meter read will be read by the
appropriate utility and service transferred as of the
applicable Closing Date);
4.1.6 amounts due and prepayments under the Service Contracts;
4.1.7 assignable license and permit fees;
4.1.8 other expenses of operation and similar items;
13
<PAGE>
4.1.9 all or any other disbursements, payments, and obligations
relating to the Property;
4.1.10 notwithstanding the foregoing, any refunds of real or
personal property taxes for tax years beginning prior to
applicable Closing Date shall belong to Sellers/Contributors,
and if paid to the Partnership shall be promptly refunded by
the Partnership to Sellers/Contributors in cash; and
4.1.11 with respect to Mortgage Debt, at the time of a Closing, all
obligations accrued up to the applicable Closing Date,
whether the same shall constitute principal, interest, or
other payments, shall be paid by the Seller/Contributor by
way of a reduction to the Aggregate Consideration Amount in
the amount of such obligations.
V. CLOSING
-------
5.1 Closing Date. The parties will engage in one or more closings of the
------------
transactions contemplated by this Agreement (each a "Closing") as follows:
5.1.1 The Closing on the Properties indicated on Schedule 1.2 as
------------
included in the first closing ("Initial Closing") shall occur
no later than ten (10) days following the expiration of the
Due Diligence Period at the location and time identified in
the Summary of Terms, or such other time as the
Sellers/Contributors and the Company shall agree in writing,
provided that all conditions to Closing have been satisfied
or waived.
5.1.2 The Closing on the Properties currently under construction
shall occur as set forth in Section 2.11 hereof (each a
"Construction Closing")
5.1.3 The Closing on each of the Properties not closed in the
Initial Closing or currently under construction shall occur
no later than ten (10) days following the Closing Date (as
defined hereafter) indicated on Schedule 1.2 or such other
------------
date to which the Sellers/Contributors and the Partnership
shall agree in writing ("Later Closing"). The "Closing Date"
shall be the date of a Closing.
5.2 Closing Documents.
-----------------
5.2.1 Sellers/Contributors. Not later than five (5) business days
--------------------
prior to each Closing Date, the Sellers/Contributors shall
deliver to the Company and the Partnership, to be held in
escrow pending Closing pursuant to an escrow agreement
mutually agreeable to the parties, the following:
14
<PAGE>
a. deeds and assignments for each of the Properties to be
transferred at such Closing;
b. for each Seller/Contributor that is a corporation, a
corporate resolution authorizing the transactions
contemplated by this Agreement, a certificate of good
standing, a certified copy of its articles or certificate
of incorporation and bylaws, and a certificate of
incumbency certifying the titles and signatures of the
corporate officers authorized to consummate the
transactions contemplated hereunder on behalf of
Seller/Contributor and such other evidence of such
Seller's/Contributor's power and authority as the Company
or Partnership reasonably requests;
c. for each Seller/Contributor that is a partnership or a
limited liability company, a partnership resolution
authorizing the transactions contemplated by this
Agreement, a certificate of good standing, a certified
copy of the partnership or operating agreement governing
such Seller/Contributor, and a certificate of incumbency
certifying the titles and signatures of the general
partners or members authorized to consummate the
transactions contemplated hereunder on behalf of such
Seller/Contributor and such other evidence of power and
authority of such Seller/Contributor as the Company or
Partnership reasonably requests;
d. for each Seller/Contributor, an affidavit stating, under
penalty of perjury, its U.S. taxpayer identification
number and that it is not a foreign person within the
meaning of Section 1445 of the Internal Revenue Code of
1986, as amended (the "Code");
e. agreements effective as of the Closing Date for the
Properties, in the form attached hereto as Exhibit
-------
5.2.1(e), from each Prior Occupant who leases any
--------
Property terminating its Lease with Sellers/Contributors
and containing an estoppel certificate from each such
Prior Occupant stating that it has no claims, actions or
causes of action under the Lease. If the Partnership does
not receive such estoppel certificate (in a form
acceptable to the Partnership), then the Partnership and
the Company, at their option and as a non-exclusive
remedy, upon notice to the Sellers/Contributors, may
immediately terminate this Agreement, or may terminate
this Agreement with respect to the relevant Property, in
which case the Aggregate Consideration Amount shall be
reduced by the Consideration Amount of such Property.
15
<PAGE>
f. an opinion of Seller's/Contributor's counsel
substantially in the form attached hereto as Exhibit
-------
5.2.1(f); and
--------
g. all other documents reasonably required by the
Partnership or the Company in connection with the
transactions contemplated by this Agreement.
h. a counterpart of the Partnership Agreement executed by
each Seller/Contributor;
i. investor questionnaires ("Investor Questionnaires") in
the form attached to this Agreement as Exhibit 5.2.1(i)
----------------
executed by each Seller/Contributor;
j. pay-off letters from the mortgagees of the Mortgage Debt
stating the amount of the principal and interest of the
Mortgage Debt as of the Closing Date.
5.2.2 Partnership. At the Closing, the Partnership shall deliver
-----------
the following:
a. (i) certificates representing the Number of Units as
required by Section 1.3 of this Agreement, if applicable,
and (ii) the Aggregate Purchase Price, less any amounts
to be used to pay off Mortgage Debt at Closing, and less
any other amounts deductible from the Aggregate Purchase
Price under this Agreement, in immediately available
funds;
b. a closing statement;
c. all other documents required of the Partnership under
this Agreement to be delivered at Closing.
d. an executed counterpart of the Partnership Agreement
executed by the Company, as the General Partner of the
Partnership.
e. For the Partnership, a Certificate of Good Standing from
the Office of the Secretary of State of the State of
Delaware.
f. for the Company, a resolution of its Board of Trustees
authorizing the transactions contemplated hereby and a
certificate of good standing from the State Department of
Assessments and Taxation of the State of Maryland;
16
<PAGE>
g. for the Partnership, a certified copy of the Partnership
Agreement and a Certificate of Limited Partnership
certified by the Secretary of State of Delaware; and
h. an opinion of Wilmer, Cutler & Pickering, substantially
in the form attached hereto as Exhibit 5.2.2(h).
----------------
5.3 Conditions to the Partnership's Obligation to Close. At the option
---------------------------------------------------
of the Partnership, the obligations of the Company and the Partnership under
this Agreement are subject to the satisfaction of the following conditions
(unless explicitly waived in writing) at each Closing:
5.3.1 Each Seller/Contributor shall have terminated such existing
Management Contracts that the Partnership has required, in
writing, to be terminated prior to the Closing Date for any
Property to be transferred at such Closing Date.
5.3.2 Each Seller/Contributor shall have terminated all Leases as
of the Closing Date for any Property to be transferred at
such Closing Date.
5.3.3 Each Seller/Contributor shall have terminated such existing
Service Contracts pertaining to the Properties (other than
franchise agreements) that the Partnership has required, in
writing, to be terminated prior to the Closing Date for any
Property to be transferred at such Closing Date.
5.3.4 Each and every representation and warranty of the
Sellers/Contributors contained in this Agreement is true,
correct and complete in all material respects as of the
Effective Date and at all times through the last Closing
Date.
5.3.5 The Sellers/Contributors shall have fully performed and
satisfied each and every material obligation, term and
condition to be performed and satisfied by them under this
Agreement.
5.3.6 All consents, authorizations, certificates, termination
agreements and approvals required to be obtained by the
Sellers/Contributors in connection with the Agreement shall
have been obtained, including but not limited to all
consents, approvals and authorizations (without any
conditions or requirements) required to be obtained under any
franchise agreement, mortgage, deed of trust or other
instrument relating to any of the Properties or pursuant to
which any of the Sellers/Contributors are bound in order to
complete the transactions contemplated under this Agreement.
17
<PAGE>
5.3.7 Prior to or on the Closing Date for a Property, the
Sellers/Contributors shall have paid in full such Mortgage
Debt and other indebtedness secured by the Properties as
required by the Company and Partnership and shall have
provided the Company and Partnership with satisfactory
evidence thereof, and to the extent that such Mortgage Debt
is to be paid off following Closing, the mortgagee shall
deliver pay-off letters to the Company and the Partnership.
5.3.8 The condition of the Property shall not have materially
changed.
5.3.9 The Partnership shall have received an Owner's Title
Insurance Policy (or marked-up commitment therefor) for each
Property insuring fee simple title to such Property in the
amount of the purchase price of such Property subject only to
Scheduled Exceptions, and otherwise in the form and condition
required by this Agreement;
5.3.10 The Sellers/Contributors shall have delivered to the Company
all closing documents required by Section 5.2.1 hereof.
5.3.12 Sellers/Contributors and/or Affiliates thereof and Capital
Automotive shall previously have entered into Company Leases
for all Properties.
5.4 Conditions to the Sellers' Obligation to Close. The obligations of
----------------------------------------------
the Sellers/Contributors under this Agreement are subject to the satisfaction of
the following conditions (unless explicitly waived in writing) at each Closing:
5.4.1 Each of the representations and warranties of the Partnership
contained in this Agreement is true, correct and complete as
of the Effective Date and at all times through each Closing
Date.
5.4.2 The Partnership and the Company shall have fully performed
and satisfied each and every obligation, term and condition
to be performed and satisfied by them under this Agreement.
5.4.3 All consents, authorizations and approvals required to have
been obtained by the Company and the Partnership in
connection with this Agreement shall have been obtained.
5.4.4 Sellers/Contributors and/or Affiliates thereof and Capital
Automotive shall have entered into Company Leases for all
Properties being transferred as of a Closing Date
18
<PAGE>
5.4.5 The execution by the Company on or prior to the Initial
Closing of a race car sponsorship agreement with Kelley
Racing, Inc. in a form mutually agreeable to the Company,
Kelley Racing, Inc. and the Sellers/Contributors within ten
(10) days of the Effective Date.
5.4.6 Sellers/Contributors shall have obtained all consents,
authorizations, certificates, termination agreements and
approvals required to be obtained by the Sellers/Contributors
from any automobile manufacturers in connection with the
Agreement relating to any of the Properties or pursuant to
which any of the Sellers/Contributors are bound in order to
complete the transactions contemplated under this Agreement,
provided however, that, to the extent that Sellers/
--------
Contributors cannot obtain any consent, authorizations,
certificates, termination agreements or approvals prior to
the last Closing Date, Sellers/Contributors shall have the
right to terminate this Agreement only as to such Property or
Properties for which it could not obtain such consent,
authorizations, certificates, termination agreements or
approvals.
5.5 Transaction Costs.
-----------------
5.5.1 Except for the costs of appraisals ordered by the Company and
Partnership, the Sellers/Contributors shall pay all costs
(including, but not limited to, any recordation and transfer
taxes, current ALTA surveys, title insurance (including all
special endorsements), environmental reports the
Sellers/Contributors have agreed hereunder to pay including
"Phase I" environmental assessments, searches made pursuant
to Section 3.2.2 hereof, and fees and expenses of going to
record in connection with the transfer by the
Sellers/Contributors of the Properties (collectively referred
to as the "Closing Costs"). The Company and the Partnership
shall bear the cost of their due diligence activities
including, but not limited to the costs of appraisals ordered
by the Company and Partnership. Notwithstanding anything
herein to the contrary, at the option of Sellers/Contributors
in lieu of paying the Closing Costs or Consent Fees (as
hereafter defined), the Sellers/Contributors may elect to
deduct from the Aggregate Purchase Price of the Properties
all or part of the Partnership's reasonable estimate of such
Closing Costs or Consent Fees determined as of a date at
least five business days prior to Closing, by advising
Capital Automotive in writing to reduce the Aggregate
Consideration Amount otherwise due from the Sellers at
Closing by the amount of such estimated Closing Costs and
Consent Fees. Within ten business days of the Closing Date,
the parties shall determine the actual Closing Costs and/or
Consent Fees owed by Sellers/Contributors and, the
19
<PAGE>
party owing the difference between the estimated and final
figures shall remit cash in the amount of such difference to
the other party.
5.5.2 The Sellers/Contributors shall pay all prepayment penalties,
premiums, lender's consent fees or other such charges
("Consent Fees") imposed in connection with the transactions
contemplated hereby, and all Consent Fees imposed by all
other lenders in connection with the transactions
contemplated hereby.
5.5.3 Except as specified above and elsewhere in this Agreement,
each party shall bear and pay its expenses in connection with
this Agreement and the transactions contemplated herein,
including the fees of their respective professional advisors.
VI. CASUALTY LOSS AND CONDEMNATION
------------------------------
6.1 Casualty. Prior to Closing on a Property, all risk of loss relating
--------
thereto shall belong to the Sellers/Contributors. If, prior to Closing, the
Properties to be transferred at such Closing, or any part thereof shall be
destroyed or materially damaged by fire or other casualty, the Partnership may,
at its option, either (i) require the appropriate Sellers/Contributors to repair
such damage prior to Closing to the reasonable satisfaction of the Partnership,
at no cost or expense to the Company or the Partnership, in which event the
proceeds of any insurance applicable thereto shall be paid to the
Seller/Contributor, or (ii) itself settle the loss under all policies of
insurance applicable to the destruction or damage and rebuild the Property in
which case the Partnership shall receive the proceeds of insurance applicable
thereto, and the Seller/Contributor shall, at Closing and thereafter, execute
and deliver to the Partnership all required proofs of loss, assignments of
claims and other similar items. Notwithstanding anything herein to the contrary,
in the event such loss or casualty shall constitute a total or substantial loss
or casualty or, in the opinion of the Company, in its sole discretion, shall
render the Property unsuitable for its intended purpose for a period of ninety
(90) days or longer, then the Company and the Partnership, at their option, may
terminate this Agreement with respect to such Property upon notice to the
Seller/Contributor, and reduce the Aggregate Consideration Amount by the
Purchase Price or Contribution Amount of such Property.
6.2 Condemnation or Taking. If, prior to Closing, any Property to be
----------------------
transferred at such Closing or any part thereof shall be condemned or taken and
such condemnation or taking materially interferes with the existing business use
of such Property, the Company and the Partnership may (i) terminate this
Agreement solely as to such Properties as are affected by the condemnation or
taking, or (ii) complete the transactions contemplated by this Agreement
notwithstanding such condemnation. If the Company and the Partnership elect to
complete the transactions contemplated hereby, the Partnership shall be entitled
to receive the condemnation proceeds and the appropriate Seller/Contributor
shall, at Closing and thereafter, execute and
20
<PAGE>
deliver to the Partnership and the Company all required assignments of claims
and other similar items. If the Partnership and the Company elect to terminate
this Agreement, then upon written notice to the Sellers/Contributors and without
further action of the parties, this Agreement shall become null and void and no
party shall have any rights or obligations under this Agreement. If the
Partnership and the Company elect to terminate this Agreement solely with
respect to the affected Property, the Aggregate Consideration Amount shall be
reduced by the Consideration Amount of such Property.
VII. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
---------------------------------------------
The Sellers/Contributors, jointly and severally, represent and
warrant to the Company and the Partnership that, except as described on the
Schedules attached hereto and incorporated by reference herein, the following
- ---------
are true, complete and correct as of the date of this Agreement and as of each
of the Closing Dates:
7.1 Organization. Each Seller/Contributor is duly organized and validly
------------
existing and in good standing under the laws of the state of its organization,
and has all requisite power and authority to own or lease and operate its
properties (including the Properties) and assets and conduct its business in the
manner in which they are being owned or leased and operated and conducted, as
the case may be. Each Seller/Contributor is duly qualified and authorized and is
in good standing in all jurisdictions where its ownership, lease or operation of
assets and properties (including the Properties) or the conduct of its business
requires such qualification or authorization.
7.2 Authority. The execution and delivery of this Agreement and all
---------
agreements, documents and instruments contemplated hereby and the performance of
all transactions contemplated herein or therein, have been duly and validly
authorized by all requisite partnership, corporate or trust action, as the case
may be, and by the general partners, board of directors, stockholders, or
trustees of each Seller/Contributor, as the case may be. This Agreement and the
agreements, documents and instruments executed and delivered in connection
herewith constitute the legal, valid and binding obligations of the
Sellers/Contributors, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except to the extent that rights to indemnification and sale and
purchase under or contemplated by this Agreement or such other agreements may be
limited by federal or state securities laws or public policy relating thereto.
To the knowledge of the Sellers/Contributors, none of the Sellers/Contributors
are required to obtain any consent, authorization, approval or waiver from any
governmental agency or authority or from any third party in connection with the
execution and delivery of, and the performance of the obligations to be
performed under, this Agreement and the documents other
21
<PAGE>
than the consent of manufacturers pursuant to the terms of franchise agreements
relating to the Properties, the consent of General Motors Corporation or its
Affiliates in connection with agreements containing site and use restrictions
and lease agreements, and instruments executed and delivered in connection
herewith, or if any of the foregoing is required, it has been obtained or
Sellers/Contributors shall use their best efforts to obtain prior to the Closing
for that Property. Sellers/Contributors are in the process of diligently
pursuing any required consents and have no knowledge that any required consents
will not be timely given. In the event that any consents have not been obtained
prior to the Closing of that Property, The Company shall, at its sole
discretion, (i) accept the transfer of such Property regardless, (ii) delay the
Closing of such Property until the consent is granted, provided that the Closing
--------
shall not be delayed beyond the Closing Date of any of the other Properties and,
if it is, the Company may elect subsection (i) or (iii), or (iii) terminate this
Agreement with respect to such Property
7.3 Interest in Properties. Except as set forth on Schedule 7.3, each
---------------------- ------------
Seller/Contributor is the record and beneficial owner of, and has good and
marketable and insurable fee simple title to, the interests in the Properties
set forth opposite such Seller's/Contributor's name on Schedule 1.2, (except as
------------
such Properties have already been transferred to the Partnership in a Closing)
free and clear of all liens, options, rights of first offer or refusal, adverse
claims or encumbrances, except the Permitted Exceptions (and as of Closing for
such Property, subject only to the Scheduled Exceptions), and Schedule 1.2 is
------------
true, accurate and complete in all material respects as to each
Seller/Contributor. Between the Effective Date and the Closing Date for the
transfer of a Property, no liens, claims or encumbrances will be created or
permitted to be created on such Property other than the Permitted Exceptions. As
of a Closing all monetary encumbrances on any Property to be transferred at that
Closing, other than the Scheduled Exceptions, shall have been duly canceled,
removed and discharged of record, and proof thereof satisfactory to the Title
Insurer, the Company and the Partnership shall have been delivered to the
Company and the Partnership or Sellers/Contributors shall have "bonded off" or
posted money with the Partnership's Title Insurer, such that the Title Insurer
will "insure over" the lien or claim in question. Except for Prior Occupants and
the tenant under the Courtesy Motors body shop lease, there are no parties in
possession of any part of a Property as of the Closing Date for such Property,
and, except as set forth on Schedule 7.3, there are no other rights of
possession, or agreements providing for the sale, assignment or transfer of
title to any such Property or portion thereof, which have been granted to any
third parties. Such Seller/Contributor has the full power, capacity and
authority to sell, transfer and assign the legal and equitable ownership of
his/her or its interest to the Partnership as provided in this Agreement, and
the Sellers/Contributors have not entered into any agreement and have no
knowledge of any agreement or understanding to issue any additional interests in
any Seller/Contributor to any other person or entity.
7.4 No Defaults. (a) No Seller/Contributor is in default of any of its
-----------
material obligations under any agreement, franchise, license, contract, deed,
mortgage, lease, instrument, certificate, affidavit or covenant affecting title
to the Properties except with respect to working capital requirements which
obligations such franchisor is not enforcing, provided that in the
--------
22
<PAGE>
event that a franchisor gives notice to Sellers/Contributors of its intent to
enforce such working capital requirements, Sellers/Contributors then comply with
such working capital requirements; (b) there are no material contracts or
agreements, such as maintenance, service, or utility contracts affecting the
Properties other than the Service Contracts, and no party to such contracts is
in material default or breach under the terms and conditions thereof; and (c)
there are no contracts or agreements, and there will be no contract or agreement
in effect, between Seller/Contributor and any third party for the management or
leasing of any Property other than the Management Contracts and no such contract
is in material default or breach under the terms and conditions thereof, and
there will be no leasing commission due and owing, or to become due and owing,
in connection with any of the Leases; and (d) except for the Scheduled
Exceptions, the Service Contracts and the Management Contracts, there are no
contracts, agreements, liabilities, claims or obligations of any kind or nature
relating to the Properties and to which any Seller/Contributor will be bound or
the Properties will be subject after the Closing.
7.5 No Litigation; No Condemnation. There are no actions, suits,
------------------------------
proceedings or claims pending, or, to the knowledge of any Seller/Contributor,
threatened or contemplated, with respect to or in any manner affecting the
Properties, or any Seller's/Contributor's interest therein; or the ability of
any Sellers/Contributors to complete the transactions contemplated by this
Agreement or which could prevent any Seller/Contributor from satisfying its
obligations under this Agreement. No Seller/Contributor has received notice of
any pending or threatened condemnation or similar proceedings or special
assessments affecting the Properties, or any part thereof.
7.6 No Violation. The execution and delivery of this Agreement and the
------------
agreements, documents and instruments executed and delivered in connection
herewith, the consummation of the transactions contemplated hereby or thereby,
and the operation of any Property shall not: (a) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement, contract, mortgage, deed, lease, license, franchise or
instrument to which any Seller/Contributor is a party or is subject or to which
any Property is subject; (b) to Sellers'/Contributors' knowledge, violate any
agreement, contract, mortgage, deed, lease, license, franchise, restriction,
easement, restrictive covenant, or instrument to which any Seller/Contributor or
any Property is subject; (c) to Sellers'/Contributors' knowledge, constitute a
violation of any applicable code, resolution, law, statute, regulation,
ordinance, rule, judgment, decree or order; (d) with respect to each
Seller/Contributor that is an entity, violate any provision of its charter,
bylaws or other organizational document; (e) except as to any indebtedness in
respect of which the consent of the lender shall have been obtained prior to the
Closing Date, result in the acceleration of any indebtedness or any encumbrance
pertaining to any Seller/Contributor or any Property, or the cancellation of any
contract, agreement, franchise, license, instrument or lease pertaining to any
Property (other than as specifically requested by the Company or the Partnership
pursuant to this Agreement); or (f) except as to any Permitted Exceptions,
result in the creation of any lien, encumbrance or security interest upon any
Property. None of the Sellers have received any written notice of any violation
(both as to condition of the Property and use) of any applicable laws, statutes,
ordinances, codes (including,
23
<PAGE>
but not limited to, zoning, building, subdivision, pollution, environmental
protection, water disposal, health, fire and safety engineering codes, and laws
and regulations with respect to the submetering of any utilities serving any
Property), and the rules and regulations of, by governmental authority having
jurisdiction over the Properties. Notwithstanding the first sentence of Section
7.6, to the extent that consummation of the transactions contemplated hereby or
thereby would violate sections (a) and (b) thereof, there shall be no such
conflict, breach, default or violation of any agreement, contract, mortgage,
deed, lease, license, franchise or instrument so long as consent of the other
party or parties thereto to such breach, default or violation shall have been
obtained prior to the Closing Date of that Property.
7.7 Required Obligations. The Sellers/Contributors have paid and
--------------------
performed all material obligations relating to the Properties required to have
been paid or performed prior to the Effective Date and prior to the Closing
Date, including but not limited to all principal installments, interest
payments, taxes, penalties and other charges in connection with all indebtedness
relating to or secured by any of the Properties or an interest in any of the
Properties.
7.8 Condition of Properties. No Seller/Contributor has been notified
-----------------------
that the structural, mechanical, electrical, plumbing, roofing and other major
systems on any Property and items of equipment and components located thereon,
require to be replaced or are in need of material repair.
7.9 Warranties. From and after January 1, 1997, the Sellers/Contributors
----------
have not released or modified any warranties of builders, contractors,
manufacturers or other trades persons that have been given to any
Seller/Contributor without the consent of the Company or the Partnership.
7.10 Utilities. Usable sanitary and storm sewers and public water, and
---------
electrical utilities (collectively, the "Utilities") of adequate capacity
required for the operation of the Properties, are installed in, and are duly
connected to, the Properties and can be used without any charge except the
normal user charges for sanitary sewers and the normal and usual charges imposed
for public water, gas and electric utilities.
7.11 Zoning. To the best of Sellers/Contributors' knowledge and after
------
reasonable inquiry, (i) each Property is currently located in the areas zoned
for its current use, which classification permits the development, use and
operation of the Improvements on such Property as such Improvements currently
are being used without special exception or permit, and (ii) the
Seller/Contributor is in compliance with the zoning ordinance applicable to each
Property. The Sellers/Contributors have no knowledge of any threat of, and have
not received written notice of, any proceeding to change adversely or down-zone
the existing zoning classification as to any portion of any Property.
7.12 Improvements. To Sellers'/Contributors' knowledge, all Improvements
------------
on the Properties have been constructed in accordance with, and substantially
comply with, all
24
<PAGE>
requirements of all applicable laws, ordinances, regulations and orders,
including without limitation applicable zoning, building and fire safety codes
and all restrictive covenants, if any, and other easements, encumbrances or
agreements affecting title to any Properties or Improvements. For purposes of
this Section 7.12, "substantially" means that Sellers/Sellers shall not be
permitted to engage in even de minimis non-compliance with applicable laws,
ordinance, regulations and orders if such de minimis non-compliance could result
in any governmental, administrative or other authority executing any penalty,
fine, remedy or other disciplinary action against such Seller/Contributor or
such Seller's/Contributor's Business (as defined in the Company Lease).
7.13 Environmental Matters.
---------------------
7.13.1 For purposes of this Agreement:
a. "Environmental Claim" means any claim, action, cause of
action, investigation, or notice (written or oral) by any
person or entity alleging potential liability (including,
without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal
injuries, or civil or criminal penalties) arising out of
or resulting from (i) the actual or alleged presence or
release into the environment of any Substance of Concern
at any location, whether or not owned or operated by the
Seller/Contributor, or (ii) circumstances forming the
basis of any actual or alleged violation of any
Environmental Law.
b. "Environmental Laws" means all federal, state, local, and
foreign laws and regulations relating to pollution or
protection of human health or the environment (including,
without limitation, ambient air, surface water, ground
water, wetlands, land surface, subsurface strata, and
indoor and outdoor workplace), including, without
limitation, (i) laws and regulations relating to
emissions, discharges, releases, or threatened releases
of Substances of Concern, and (ii) common law principles
of tort liability.
c. "Substances of Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous
substances, radioactive materials or genetically modified
organisms, which are, have been or become regulated by
any federal, state or local government authority
including, without limitation, (i) petroleum or any
fraction thereof, (ii) asbestos, (iii) any substance or
material defined as a "hazardous substance" pursuant to
(S) 101 of the Comprehensive Environmental Response,
Compensation, and
25
<PAGE>
Liability Act (42 U.S.C. (S) 9601), or (iv) any substance
or material defined as a "hazardous chemical" pursuant to
the federal Hazard Communication Standard (29 C.F.R. (S)
1910.1200).
7.13.2 Each Seller/Contributor and Property are in full compliance
with all applicable Environmental Laws, which compliance
includes, but is not limited to, possession by each
Seller/Contributor of all permits and other governmental
authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof. No
Seller/Contributor has received any communication (written or
oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that such
Seller/Contributor or Property is not in full compliance with
the Environmental Laws, and, to the Sellers'/Contributors'
best knowledge after due inquiry, there are no circumstances
that may prevent or interfere with such full compliance in
the future.
7.13.4 There is no Environmental Claim pending or, to the best of
Sellers/Contributors' knowledge, threatened against any
Seller/Contributor or, to each Seller's/Contributors' best
knowledge after due inquiry, against any person or entity
whose liability for any Environmental Claim any
Seller/Contributor has retained or assumed either
contractually or by operation of law.
7.13.5 To the Sellers'/Contributors' knowledge, there are no past or
present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the
release, emission, discharge, presence, or disposal of any
Substance of Concern, at or relating to any of the Properties
that could form the basis of any Environmental Claim against
any Seller/Contributor or, to each Seller's/Contributor's
best knowledge after due inquiry, against any person or
entity whose liability for any Environmental Claim any Seller
has retained or assumed either contractually or by operation
of law.
7.13.6 Without in any way limiting the generality of the foregoing,
to the best of any Seller's/Contributor's knowledge, within
the past fifteen years (a) all on-site and off-site locations
where any Seller/Contributor has treated, disposed, or
arranged for the disposal of Substances of Concern or stored
hazardous wastes (as defined under the Resource Conservation
and Recovery Act or analogous state laws) are identified in
Schedule 7.13.6(a); (b) all underground and aboveground
------------------
storage tanks, whether or not currently in use, and the
capacity and contents of such tanks, located on any of the
Properties are identified in Schedule 7.13.6(b), and other
------------------
than as
26
<PAGE>
identified in Schedule 7.13.6(b), no underground or above
------------------
ground storage tank that has been removed from any Property,
or that is currently located at any Property, has leaked or
is leaking; (c) there is no asbestos contained in or forming
part of any building, building component, structure or office
space on any Property; (d) no polychlorinated biphenyls
(PCBs) are used or stored on any Property; (e) the
Sellers/Contributor have previously provided to the Company
copies of all environmental audit reports, Phase I and Phase
II investigation reports, technical reports regarding
environmental sampling results, and similar environmental
reports in the possession of the Sellers/Contributors or
their contractors or agents relating to any Property; and (f)
all permits and other governmental authorizations currently
held by any Seller for any Property pursuant to the
Environmental Laws are identified in Schedule 7.13.6(f).
------------------
7.14 Insurance. Schedule 7.14 contains a complete and correct description
--------- -------------
of all policies of insurance presently maintained by the Sellers/Contributors
with respect to all Properties and the operations thereof. To the knowledge of
the Sellers/Contributors, each Seller/Contributor and Property is in compliance
with the requirements of each such policy, there is no violation of any of the
provisions thereof, and each such policy is in full force and effect. No
Seller/Contributor has received from any insurance company which carries
underwriters insurance on any Property, or any Board of Fire Underwriters, any
notice of any defect or inadequacy in connection with any Property or its
operation which, since the date of such notice, has not been corrected.
7.15 Compliance. To each Seller's/Contributor's knowledge, each
----------
Seller/Contributor has complied in all material respects with all laws,
ordinances, rules, regulations and orders of all governmental authorities
applicable to the ownership, management, operation, construction, maintenance
and repair of any Property.
7.16 Leases.
------
7.16.1 Schedule 2.1 contains a true, complete and correct list of
------------
all current Leases for the Properties or any part thereof.
7.16.2 No Prior Occupant or anyone else has an option or right of
refusal to purchase any Property or any part thereof other
than certain agreements with General Motors Corporation or
its Affiliates which the Sellers/Contributors disclosed to
the Company prior to the Effective Date.
7.16.3 Except as specified in the Estoppel Letter approved by the
Company and sent to a Prior Occupant, no Prior Occupant is
entitled to any rebate, concession, deduction or offset.
27
<PAGE>
7.16.4 Except as specified in the Estoppel Letter approved by the
Company and sent to a Prior Occupant, no Prior Occupant has
paid any rent, additional rent or other charge of any nature
for a period of more than thirty (30) days in advance.
7.16.5 No Prior Occupant has any claim or basis for any claim for
reduction, deduction or set-off against the landlord or the
rent under such Lease.
7.16.6 No Prior Occupant has refused to execute and deliver the
Company Lease at Closing, or no Prior Occupant has refused
to vacate its premises or such Property, or otherwise to
cease occupancy of its premises or such Property.
7.16.7 Except as set forth on Schedule 2.1, the Seller/Contributor
------------
is the landlord under the Leases.
7.17 Service Contracts; Management Contracts. Schedule 7.17 is a list
--------------------------------------- -------------
of all contracts affecting or pertaining to the Properties or
Sellers'/Contributors' Business (as defined in the Company Lease) carried out on
the Properties that have a monetary obligation of at least $25,000 per year and
are not cancelable without penalty by Sellers/Contributors upon notice of one
year or less, including all employment, union, purchase, service and maintenance
agreements, franchise agreements, leasing agreements, listing agreements,
equipment leases and any other agreements, contracts, licenses and permits
affecting or pertaining to the Properties or any part thereof (the "Service
Contracts"), and of all management contracts relating to the Properties (the
"Management Contracts"). No Seller/Contributor is a party to any licenses or
leases of personal property or any other contracts or agreements, written or
oral, of any kind or character, relating to the management, operation,
maintenance or repair of any Property, that have a monetary obligation of at
least $25,000 per year and are not cancelable without penalty by
Sellers/Contributors upon notice of one year or less, except for the Leases, the
Service Contracts and the Management Contracts. The Sellers/Contributors have
performed all obligations required to be performed by them and are not in
default under any of the Service Contracts. Each of the Service Contracts is in
full force and effect and constitutes the legal, valid and binding obligation of
the respective parties thereto, enforceable in accordance with its terms, and
has not been modified, amended or extended. Each of the Management Contracts is
in full force and effect and constitutes the legal, valid and binding obligation
of the respective parties thereto, enforceable in accordance with its terms, and
has not been modified, amended or extended.
7.18 Permits. All permits, licenses, inspections and other approvals
-------
from all applicable governmental authorities having jurisdiction over each
Seller/Contributor and Property that are necessary in connection with the
operation of the use, ownership and operation of each Property as it is
currently used, have been obtained and are in full force and effect.
28
<PAGE>
7.19 Other Liabilities. Other than the Mortgage Debt, there are no
-----------------
debts, liabilities or obligations (whether known or unknown, disputed or
undisputed, fixed, contingent or otherwise) associated with or relating to any
of the Properties, or secured by any of the Properties.
7.20 Tax Matters. The Sellers/Contributors have relied solely on their own
-----------
counsel for advice on any and all federal, state and local tax matters relating
to this Agreement and the transactions contemplated herein and have not relied
on any advice or representations of the Company, the Partnership, or their
counsel with respect to any federal, state and local tax matters relating to
this Agreement or the transactions contemplated herein.
7.21 Taxes. The Sellers/Contributors have filed all federal, state
-----
and local tax returns required to be filed by the Sellers/Contributors. With
respect to any periods prior to the Closing Date, each Seller/Contributor (i)
has no knowledge of any unpaid taxes that would create a lien on any Property
which taxes are due and payable, and (ii) has paid in full all taxes and
assessments payable or is diligently pursing with the appropriate authority any
dispute such Seller/Contributor has regarding any unpaid taxes or assessments as
of the Closing Date.
7.22 Special Filings. No Seller/Contributor is required to submit any
---------------
notice, report or other filing to any governmental or regulatory authority in
connection with the execution, delivery or performance of this Agreement or any
document or instrument executed and delivered in connection herewith or the
consummation of the transactions contemplated hereby other than the filing of
the tax returns required by the terms of this Agreement; and no consent,
approval or authorization of any governmental or regulatory authority is
required to be obtained by any Seller/Contributor in connection with the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
7.23 Books and Records. The books and records of each Seller/Contributor
-----------------
with respect to each Property, all of which have been or will be made available
to the Company and the Partnership, are, and will be at all times until Closing,
complete and correct in all material respects. All of such books and records
shall be made available to the Company prior to the Closing and, at the
Company's request, a copy of such books and records shall be delivered to the
Company prior to the Closing.
7.24 No Brokers. No Seller/Contributor has dealt with any agent,
----------
broker or other person acting pursuant to express or implied authority of any
Seller/Contributor (each a "Broker"), and no person or entity is entitled to a
commission or finder's fee in connection with the sale and purchase described by
this Agreement or will be entitled to make any claim against the Company, or the
Partnership for a commission or finder's fee by reason of any Seller/Contributor
having engaged such Broker.
7.25 Survival of Warranties, Representations and Covenants. The
---------------------- ------------------------------
representations, warranties and covenants of Sellers/Contributors made in this
Agreement shall survive the Closing and consummation of the transactions
contemplated hereby, and shall remain in full
29
<PAGE>
force and effect thereafter only to the extent that the Partnership or the
Company provides the Seller/Contributor with written notice of any breach,
violation or right to indemnification thereunder within a period ending twenty-
four (24) months from the date of this Agreement, except that in the case of any
claim arising out of the representations or warranties herein relating to
Section 7.13 (Environmental Matters) and Section 7.21 (Taxes) shall survive the
closing in each case until the applicable statute of limitations has run. After
Closing, neither the Company nor the Partnership shall prosecute any claim
against any Seller/Contributor for a breach of the foregoing representations and
warranties if the Company or the Partnership obtained knowledge of such breach
prior to Closing.
7.26 Investment. Each Seller/Contributor hereby represents and warrants
----------
that:
7.26.1 Such Seller/Contributor is acquiring the Units issued
hereunder for investment for his own account and not as an
agent or nominee for any other person or entity.
7.26.2 Such Seller/Contributor will not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or
otherwise dispose of such Units (each such action, a
"Transfer") unless (a) such Transfer complies with the
provisions of the Partnership Agreement, if applicable, and
this Agreement, (b) either (i) the Transfer is pursuant to
an effective registration statement under the Act, or (ii)
such Seller/Contributor shall have furnished the Company or
the Partnership, as the case may be, with an opinion of
counsel which opinion of counsel shall be reasonably
satisfactory to the Partnership or the Company, as the case
may be, to the effect that no such registration is required
because of the availability of an exemption from
registration under the Act, and (iii) such Transfer shall be
in compliance with any applicable state or foreign
securities and "blue sky" laws.
7.26.3 Such Seller/Contributor has been advised by the Partnership
that: (a) neither the offer nor sale of the Units have been
registered under the Act or any state or foreign securities
and "blue sky" laws; (b) the Units are characterized as a
"restricted security" under the Act inasmuch as they are
being acquired from the Partnership or the Company, as the
case may be, in a transaction not involving a public
offering; (c) the Units must be held indefinitely and such
Seller/Contributor must continue to bear the economic risk
of the investment in the Units, unless the offer and sale of
such Units are subsequently registered under the Act or an
exemption from such registration is available and all
applicable state or foreign securities and "blue sky" laws
are complied with; (d) it is not anticipated that there will
be any public market for the Units in the foreseeable
future; (e) Rule 144 promulgated under the Act is not
presently available with respect to offers or sales of the
securities of the Company or the Partnership and
30
<PAGE>
neither the Company nor the Partnership has covenanted to
make such Rule available nor has it made any covenants with
respect to other rules by which offers or sales may be made;
(f) when and if the Units may be disposed of without
registration under the Act in reliance on Rule 144, such
disposition can be made only in limited amounts in
accordance with the terms and conditions of such Rule; and
(g) if the Rule 144 exemption is not available, public offer
or sale of the Units without registration will require the
availability of another exemption under the Act.
7.26.4 Such Seller/Contributor is (a) an "accredited investor" as
defined in the Act and (b) has such knowledge, skill and
experience in business, financial and investment matters so
that it is capable of evaluating the merits, risks and
consequences of an investment in the Units and is able to
bear the economic risk of loss of this investment .
7.26.5 Such Seller/Contributor has been afforded (a) the
opportunity to ask such questions as the Seller/Contributor
has deemed necessary of, and to receive answers from,
representatives of the Partnership or the Company, as the
case may be, concerning an investment in the Units and the
merit and risks of investing in the Units and (b) access to
information about the Partnership's and the Company's
financial condition, business, results of operations and
prospects sufficient to enable the Seller/Contributor to
evaluate an investment in the Units.
VIII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PARTNERSHIP
-----------------------------------------------------------------
The Partnership and the Company, jointly and severally, represent and
warrant to the Seller/Contributor that the following are true, complete and
correct as of the date of this Agreement and as of the Closing:
8.1 Organization, Good Standing and Qualification. Each of the Company
---------------------------------------------
and the Partnership (i) is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) has
all requisite power and authority to carry on its business and own or lease and
operate its assets and properties in the manner in which it is being conducted
and owned or leased and operated, as the case may be, and (ii) is duly qualified
to transact business and is in good standing in all jurisdictions where its
ownership, lease or operation of its properties or assets or the conduct of its
business requires such qualification.
8.2 Authorization. The execution and delivery of this Agreement and all
-------------
agreements, documents and instruments contemplated hereby and the performance of
all transactions contemplated herein or therein, have been duly and validly
authorized by all requisite action by the Company and its board of trustees;
and by all requisite action of the Partnership. This
31
<PAGE>
Agreement and the agreements, documents and instruments executed and delivered
in connection herewith constitute the legal, valid and binding obligation of
each of the Company and the Partnership, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that rights to
indemnification and sale and purchase under or contemplated by this Agreement or
such other agreements may be limited by federal or state securities laws or
public policy relating thereto. To the knowledge of the Partnership, the
Partnership is not required to obtain any consent, authorization, approval or
waiver from any governmental agency or authority or from any third party in
connection with the execution and delivery of, and the performance of the
obligations to be performed under, this Agreement and the documents and
instruments executed and delivered in connection herewith, or if any of the
foregoing is required, it has been obtained.
8.3 No Violation. The execution and delivery of this Agreement and the
------------
agreements, documents and instruments executed and delivered in connection
herewith, the consummation of the transactions hereby or thereby, and the
operation of any Property shall not: (i) conflict with, violate, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement, contract, mortgage, deed, lease, license, franchise or
instrument to which the Company or the Partnership is a party or is subject;
(ii) constitute a violation of any applicable code, resolution, law, statute,
regulation, ordinance, rule, judgment, decree or order to the Company or the
Partnership; or (iii) violate any provision of the organizational documents of
the Company or the Partnership.
8.4 Tax Status. As of the Closing, the Partnership will be qualified as a
----------
partnership for Federal income tax purposes, and the Company will be qualified
as a real estate investment trust organized under the laws of the State of
Maryland.
8.5 No Litigation. Neither the Partnership nor the Company is involved in
-------------
any pending or, to its knowledge, threatened litigation that would materially or
adversely effect its operations or financial condition or the ability to perform
under this Agreement or the Partnership Agreement.
8.6 No Brokers. Neither the Partnership nor the Company has dealt with
----------
any agent, broker or other person acting pursuant to express or implied
authority of either such party, and no person or entity is entitled to a
commission or finder's fee in connection with the transactions contemplated by
this Agreement or will be entitled to make any claim against any
Seller/Contributor for a commission or finder's fee by reason of the Company or
the Partnership having engaged him/her/it.
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<PAGE>
8.7 Survival. The representations and warranties of the Company and the
--------
Partnership made in this Article VIII shall survive the Closing and consummation
of the transactions contemplated hereby, and shall remain in full force and
effect so long as the Sellers/Contributors provide the Company or the
Partnership with written notice of any breach, violation or right to
indemnification thereunder within a period ending twenty-four (24) months from
the date of this Agreement. The covenants in Section 9.1.3 and Section 9.1.8 of
this Agreement shall survive the Closing and consummation of the transactions
contemplated hereby, and shall remain in full force and effect so long as the
Sellers/Contributors provide the Company or the Partnership with written notice
of any breach, violation or right to indemnification thereunder within the time
periods set forth in those Sections. After Closing, the Seller/Contributor
shall not prosecute any claim against the Company or the Partnership for a
breach of the foregoing representations and warranties if the
Sellers/Contributors obtained knowledge of such breach prior to Closing.
IX. COVENANTS
---------
9.1 Covenants of the Company and the Partnership. Each of the Company and
--------------------------------------------
the Partnership hereby covenants as follows:
9.1.1 (a) If this Agreement is terminated for any reason the
Partnership and the Company shall promptly return to
Sellers/Contributors all materials furnished by
Sellers/Contributors to the Partnership and the Company
pursuant to this Agreement, and (b) regardless of whether or
not this Agreement is consummated or terminated, the
Partnership and the Company shall promptly restore the
Properties to substantially the same condition in which they
existed immediately before any physical tests conducted by
or on behalf of the Partnership and the Company pursuant to
the purposes of this Agreement.
9.1.2 In connection with inspection of the Properties, the
Partnership and the Company shall not unreasonably interfere
with any Prior Occupants or any Seller's/Contributor's
business operations.
9.1.3 The parties acknowledge and agree that the
Sellers/Contributors and their affiliates are required under
this Agreement and the Company Leases to provide to the
Company certain confidential financial information (the
"Confidential Information") with respect to the business
conducted on the Leased Properties, except that such
Confidential Information shall not include (a) information
that is or becomes known publicly through no fault of the
Company or the Partnership; (b) information the Company
obtains from a third party whom the Sellers/Contributors
have authorized to disclose such information to the Company
or the Partnership; (c) information regarding the
Sellers/Contributors or its business already
33
<PAGE>
known to the Company or the Partnership before receipt from
the Sellers/Contributors; (d) information that the
Sellers/Contributors have divulged to third parties on an
unrestricted basis; and (e) information that the Company or
the Partnership is required to disclose pursuant to
securities laws or pursuant to an order of any court or
government agency or entity. Prior to and after the Closing
Date, except as may be required to be disclosed by law
(including federal and state securities laws, and the rules
and regulations thereunder), regulation or legal process,
unless otherwise consented to in writing by the
Sellers/Contributors which consent shall not be unreasonably
withheld, the Partnership and the Company shall keep all
information learned by the Partnership and the Company in
connection with the Properties or any operation thereof
confidential. In the event the Company is required to
disclose certain confidential financial information in
connection with the disclosure required by Section 9.1.3(e),
the Company agrees to use all reasonable efforts to make
such required disclosure in a manner so as to preserve as
much as possible and lawful the confidentiality of such
confidential financial information. The Company will also
use its best efforts to implement policies and procedures at
the Board of Trustees level so as to minimize the disclosure
of Confidential Information to Trustees or to anyone else
having interest in businesses that compete with the
Sellers/Contributors and their affiliates.
9.1.4 Between the date of this Agreement and the Closing Date, the
Partnership and the Company will use their best efforts to
cause the conditions in this Agreement to be satisfied.
9.1.5 The Partnership shall be entitled from time to time as
necessary to seek and rely on a certificate, signed either
by the Transfer Agent or by the holders of a majority of the
then outstanding Initial Units issued hereunder to the
Sellers/Contributors, of the basis and at risk amounts
relevant to the provisions of this Section.
9.1.6 For purposes of Section 704(c) of the Code, the Partnership
will use the traditional with ceiling method of making
allocations respecting all properties contributed to the
Partnership at or before the Closing. For purposes of this
Section 9.1.8, upon disposition of a Property, the
Partnership may make a curative allocation of the type
described in Treasury Regulation Section 1.704-
3(c)(3)(iii)(B).
9.1.7 So long as the Limited Partners of the Partnership (except
for the Company in its capacity as a Limited Partner) hold
10% or more of the Initial Units, the Company agrees that
from and after the Closing Date
34
<PAGE>
substantially all of the Company's business for profit shall
be conducted by or through the Partnership; provided,
however, that business may be conducted through the Company
or a Company subsidiary provided that all labor, services
and goods furnished by the Company or its subsidiary shall
be at the cost of such entity, substantially all of the
pecuniary benefit derived from such activity shall inure to
the benefit of the Partnership, and the Company shall not
make any distributions to its shareholders from any funds,
other than distributions that the Company receives from the
Partnership in respect of its Units.
9.1.8 For a period of sixty months following the Effective Date,
that Sellers/Contributors or an Affiliate of
Sellers/Contributors shall have the right to transfer and
convey additional real property to the Company on the same
relevant material terms and conditions as this Agreement and
the Company Leases at a price acceptable to the Company
which price shall be no less than the fair market value of
the real property to be transferred, provided that (i) the
--------
material terms and conditions of this Agreement and the
Company Leases are economically feasible for the Company,
within the Company's sole discretion, in light of the
economic conditions existing at the time that
Sellers/Contributors or an Affiliate thereof seek to
transfer and convey any real property and (ii) without
contemporaneous written consent of the Company,
Sellers/Contributors or an Affiliate thereof may transfer
such real property only for cash in U.S. dollars in the
amount of the purchase price for such real property.
9.2 Covenants of the Sellers and the Contributing Entities. The
------------------------------------------------------
Sellers/Contributors hereby covenant and agree as follows:
9.2.1 If this Agreement is terminated as to all Properties for any
reason, the Sellers/Contributors shall promptly return to
the Company or the Partnership, as the case may be, all
materials furnished by the Company or the Partnership, to
such Sellers/Contributors pursuant to this Agreement.
9.2.3 Prior to the Closing Date, except as may be required to be
disclosed by law (including federal and state securities
laws, and the rules and regulations thereunder), regulation
or legal process, unless otherwise known to others through
no fault of the Sellers/Contributors or unless otherwise
consented to in writing by the Company and the Partnership,
each Seller/Contributor shall keep all information relating
to the Partnership or the Company or any operation thereof
confidential.
9.2.4 In the event that facts or circumstances are discovered or
develop that could form the basis of an Environmental Claim
with respect to a specific
35
<PAGE>
Property or Properties, the Seller(s)/Contributor(s) of such
Property or Properties shall take all actions necessary to
fully address such circumstances, including, without
limitation, providing notice to appropriate governmental
authorities; conducting environmental studies, sampling and
testing procedures; taking remedial action; and modifying
operations or physical facilities to otherwise eliminate
potential liability and ensure full compliance with the
Environmental Laws. Without limiting the foregoing, each
Seller/Contributor shall ensure that it has identified any
underground storage tanks ("USTs") used in conjunction with
its operations and that all registration, investigation,
remedial action and technical upgrade requirements have been
complied with fully in respect of each such UST.
9.2.5 Between the date of this Agreement and the Closing Date,
Sellers/Contributors shall use their best efforts to cause
the conditions in this Agreement to be satisfied.
9.2.6 Each Seller/Contributor hereby represents, warrants,
covenants and agrees that it presently has and that it shall
maintain for a period of two (2) years after the Closing
Date, a tangible net worth (such term meaning net worth
exclusive of the value (if any) of goodwill, going concern
value and similar assets, but inclusive of the value of
shares of stock, interests in partnerships and other
business enterprises and similar assets) of not less than
the Seller's/Contributors proportional share of the
difference of the Aggregate Consideration Amount, minus all
Mortgage Debt for all Properties being acquired by the
Partnership pursuant to this Agreement.
9.2.7 Each Seller/Contributor hereby represents, warrants,
covenants and agrees that it will complete all schedules not
completed as of the Execution Date within eight (8) days of
the Execution Date.
9.3 No Claim Against Property. Each Seller/Contributor hereby represents,
-------------------------
warrants, covenants and agrees that, as of the Closing Date, each
Seller/Contributor: (i) will have no claim of any kind or nature against any
Property by reason of the execution of this Agreement; (ii) hereby waives,
releases and discharges any claim it has or may have; and (iii) shall not make
any claim or bring any action against any Property or the Company or the
Partnership for or in respect thereof. Notwithstanding Section 7.25, this
representation, warranty, covenant and agreement shall survive the closing of
the transactions contemplated hereby and shall continue in effect.
9.4 DRO Election; Bottom Guaranty Election.
--------------------------------------
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<PAGE>
9.4.1 The Partnership hereby agrees to send to each
Seller/Contributor (the "Annual Notice") who holds Units the
following information on an annual basis at least 30 days
prior to the filing of the tax return of the Partnership:
a. the amount of the debt secured by the Partnership's
properties and the amount of the Partnership's total
recourse, non-recourse and partner non-recourse debt as
of the end of the most recent fiscal year;
b. the amount of recourse, nonrecourse, and partner non-
recourse debt allocated to each such
Seller/Contributor;
c. the adjusted basis of the Partnership's properties as
of the end of the most recent fiscal year; and
d. the projected taxable income or loss of the Partnership
for such fiscal year.
9.4.2 Each Seller/Contributor who holds Units, at its written
election but with no obligation to do so, may affirmatively
make on an annual basis (a) a DRO Election or (b) a Bottom
Guaranty Election. Any such election shall be made by notice
delivered to the Partnership no later than the 30th day
after the Annual Notice was given.
9.4.3 A DRO Election shall state that if the Seller/Contributor
has a deficit balance in its capital account following the
liquidation of the Seller's/Contributor's interest in the
Partnership or the liquidation of the Partnership, as the
case may be, such Seller/Contributor shall contribute to the
capital of the Partnership, no later than the end of the
fiscal year during which the Seller's/Contributor's interest
in the Partnership is liquidated or during which the
Partnership is liquidated, as the case may be (or, if later,
90 days after the date on which the Seller's/Contributor's
interest in the Partnership is liquidated, as the case may
be) (the "Liquidation Date") an amount of money equal to a
designated portion of the deficit in the
Seller's/Contributor's capital account. The term
"liquidation" shall have the meaning given to it in Treas.
Regs. Section 1.704-1.
9.4.5 A Bottom Guaranty Election shall state that if the
Partnership shall be in default with respect to the mortgage
securing any of the properties of the Partnership, then the
Seller/Contributor agrees to contribute to the capital of
the Partnership a designated portion of the principal
balance of such mortgage (the "Contribution Limit");
however, such contribution shall only occur if the mortgage
lender shall have exhausted all of its remedies
37
<PAGE>
against such property in order to collect the amount owing
the mortgage lender, and such Contribution Limit shall be
reduced on a dollar-for-dollar basis for every dollar
received by the mortgage lender from exercising such
remedies. Any such contribution shall be made by the
Liquidation Date. For example, if the amount of the mortgage
were $10,000,000 and the amount of the Contribution Limit
were $1,000,000, the capital contribution would only be
required if the Property were sold in foreclosure and the
proceeds of sale were less than $1,000,000. In the event
that more than one Partner submits a Bottom Guaranty
Election with respect to the same debt, the Partnership
shall notify each such Partner and allow such Partners to
appropriately modify their respective Bottom Guaranty
Elections.
X. DUE DILIGENCE PERIOD
--------------------
10.1 Due Diligence Period. The "Due Diligence Period" shall be the
--------------------
period beginning with the Effective Date and ending forty-five (45) days
thereafter. The Due Diligence Period may be extended by mutual consent of the
parties.
10.2 Access to Properties and Materials. During the Due Diligence
----------------------------------
Period and upon twenty-four (24) hours' prior notice, the Company and the
Partnership and their agents, engineers, surveyors, appraisers, auditors,
counsel and other representatives shall have the right to enter upon the
Properties to inspect, examine, survey, obtain engineering inspections and
environmental studies, appraise, and otherwise do that which, in the opinion of
the Partnership and the Company, is necessary to determine the boundaries,
acreage and condition of the Properties and to determine the suitability of the
Properties for the uses intended by the Partnership (including, without
limitation, inspect, review and copy any and all documents in the possession or
control of Sellers/Contributors, or their respective agents, contractors or
employees, and which pertain to the construction, ownership, title, use,
occupancy or operation of the Properties or any part thereof). During the Due
Diligence Period, the Sellers/Contributors, at their expense and at such times
as will not unreasonably interfere with the business being conducted on the
Property or hinder the Partnership's due diligence review, shall make available
to the Company and the Partnership copies or originals of all of their
respective books, files and records relating in any way to the Properties,
complete copies (or originals when requested) of all title information and title
insurance policies, easements, leases, brokerage agreements, licenses, permits,
surveys, zoning information, environmental reports, structural reports,
violation or default notices, contracts, tax bills and assessments, information
regarding pending or threatened claims, suits or proceedings, and all consents
and other documents required to be obtained for the completion of the
transactions contemplated hereunder or reasonably requested by the Partnership
or the Company. Not later than 15 days after the Effective Date,
Sellers/Contributors shall deliver to the Partnership:
38
<PAGE>
10.2.1 Complete and accurate copies of all Leases for each of the
Properties and all parts thereof, as amended through the
Effective Date, provided that, to the extent that
--------
Sellers/Contributors are unable to locate such Leases after
diligent searching, Sellers/Contributors may provide a
certified list of such missing Leases together with their
material terms and conditions and a statement from the
Company that other than as delivered or set forth on the
certified list there are no Leases on any of the Properties;
10.2.2 certified copies of all of any and all building plans,
surveys, site plans, as-built drawings and plans, and
complete warranty book including all contractors and
subcontractors in the possession of Sellers/Contributors or
which Sellers/Contributors may obtain with reasonable
effort;
10.2.3 any bonds, warranties or guaranties which are in any way
applicable to any Property or any part thereof to the extent
any of the foregoing are in the possession or control of
Sellers/Contributors provided that, to the extent that
--------
Sellers/Contributors are unable to locate such bonds,
warranties or guaranties after diligent searching,
Sellers/Contributors may provide a certified list of such
missing bonds, warranties or guaranties together with their
material terms and conditions and a statement from the
Company that, other than as delivered or set forth on the
certified list, there are no bonds, warranties or guaranties
Leases on any of the Properties.
10.3 Environmental Reports. Notwithstanding Section 5.5.1 hereto, the
---------------------
Company or the Partnership may, within ten (10) business days of the Effective
Date, request the Sellers/Contributors to pay at Closing for "Phase I"
environmental assessments for any of the Properties. If following review of any
Phase I the Partnership reasonably determines that the Phase I reports disclose
environmental issues or problems, and that it would be advisable to complete a
"Phase II" environmental assessment for any Property, then the Partnership may
with the prior written approval of the Sellers/Contributors (which approval
shall not be unreasonably withheld or delayed) obtain a Phase II environmental
assessment. Such Phase I and Phase II reports shall be conducted by an
environmental firm chosen by agreement of the parties, provided that the
--------
environmental firm conducting the Phase II reports shall be different from the
environmental firm conducting the Phase I reports. As to Properties other than
the Properties set forth on Schedule 10.3, Sellers/Contributors shall pay the
-------------
initial Five Thousand Dollars ($5,000) cost of any Phase II performed and
Sellers/Contributors and the Partnership shall each pay half of the cost of any
Phase II in excess of Five Thousand Dollars ($5,000). Sellers'/Contributors
payment of its share of Phase II costs will be made at Closing. To the extent
that the Partnership determines that a Phase II environmental assessment is
required for any of the Properties set forth on Schedule 10.3, the Partnership
-------------
shall pay the entire cost of such Phase IIs. In addition to the obligations of
the Seller/Contributor provided in Section 9.2.4 hereto, Sellers/Contributors
shall have the obligation to correct or resolve such environmental problems or
issues as may be identified in the Phase I and Phase II reports for the
Properties other than those Properties set
39
<PAGE>
forth in Schedule 10.3 if requested to do so by the Partnership provided that,
--------
in the event that the cost of such corrective action is estimated to exceed
$75,000 and Sellers/Contributors refuse in writing to take such corrective
action, the Partnership may, at its option and as its exclusive remedy, (x)
terminate this Agreement, in which event this Agreement, without further action
of the parties, shall become null and void and neither party shall have any
further rights or obligations under this Agreement, (y) elect to accept title to
such Property and if it accepts title to such Property, Sellers/Contributors
shall not be liable for the cost of any corrective action or resolution of any
environmental problems or issues Partnership performs so long as such corrective
actions or resolutions are performed within the discretion of the Partnership
and are not performed because of any Environmental Claim actually asserted, or
(z) terminate this Agreement with respect to such Property and reduce the
Consideration Amount by the Consideration Amount for such Property with respect
to which the Sellers/Contributors refuse to take such corrective action. If the
Partnership fails to make any election of its remedies, the Partnership shall be
deemed to have elected the option contained in clause (z); however if the
-------
acquisition costs (as set forth on Schedule 1.2(a)) of the Properties that the
----------------
Partnership seeks to terminate pursuant to clause (z) aggregate in excess of
fifteen percent (15%) of the Aggregate Consideration Amount,
Sellers/Contributors may, at their option and as their exclusive remedy
terminate this Agreement, in which event this Agreement, without further action
of the parties, shall become null and void and neither party shall have any
further rights or obligations under this Agreement. To the extent that the
Partnership requests that the Sellers/Contributors correct environmental
problems or issues concerning any of the Properties set forth on Schedule 10.3
-------------
which the Sellers/Contributors are not otherwise obligated to address pursuant
to Section 9.2.4 , Sellers/Contributors may, but are not required to, correct or
resolve such environmental problems or issues. Notwithstanding anything else in
this Section 10.3, if the Partnership elects to purchase any Property for which
an environmental problem or issue has been identified, Sellers/Contributors
shall nevertheless indemnify and hold harmless the Partnership according to
Article XI hereof for such environmental problem or issue if the same is or
becomes the basis for an Environmental Claim at any time before or after the
Closing.
10.4 Adjustment Following Due Diligence. If the Company or
----------------------------------
Partnership determines that one or more representations or warranties or any
information included on any Schedule relating to any Property is incomplete or
--------
inaccurate in any material respect (the "Non-Conforming Property"), the Company
shall have the option to: (a) proceed with the transactions contemplated in this
Agreement, (b) declare this Agreement null and void in which case no party shall
have any rights or obligations under this Agreement, or (c) terminate this
Agreement with respect to such Non-Conforming Property and proceed with the
transactions hereby with respect to the other Properties, in which case the
Aggregate Purchase Price shall be reduced by the Purchase Price of such Non-
Conforming Property, provided that if the Aggregate Consideration Amount of Non-
--------
Conforming Properties that the Company seeks to terminate exceeds 15% of the
Aggregate Consideration Amount, Sellers/Contributors shall have option to
declare this Agreement null and void in which case no party shall have any right
or obligation under this Agreement.
40
<PAGE>
XI. DEFAULTS AND REMEDIES
---------------------
11.1 Indemnification by Sellers/Contributors. The Sellers/Contributors,
---------------------------------------
jointly and severally (each, for purposes of Sections 11.1 and 11.2, a
"Seller/Contributor Indemnifying Party"), shall indemnify, defend and hold
harmless the Partnership, the Company and their respective shareholders,
partners, trustees, officers, agents, representatives, employees, Affiliates,
successors and assigns (collectively, for purposes of this paragraph, the
"Company Indemnified Parties") from and against, and shall pay to the Company
Indemnified Parties the amount of, any and all losses, damages, claims,
liabilities, actions, suits, proceedings and costs and expenses of investigation
or defense thereof (including reasonable attorneys' fees payable as incurred) or
diminution in value (whether or not involving a third party claim) arising out
of or relating to any (a) misrepresentation or breach of warranty by any
Seller/Contributor or nonfulfillment of any covenant or agreement to be
performed or complied with by such Seller/Contributor under this Agreement and
any agreement, document, instrument, certificate, schedule or exhibit
contemplated hereby; (b) untrue or incomplete statement of a material fact
contained in any statement or information, provided by any Sellers/Contributors
or other persons to the Company or the Partnership which to the knowledge of the
Sellers/Contributors is materially untrue or incomplete or based on any omission
to state therein a material fact required to be stated therein or other
information necessary to make the statements therein not misleading; (c) debts,
liabilities or obligations (whether known or unknown, disputed or undisputed,
fixed, contingent or otherwise) associated with or relating to any of the
Sellers/Contributors, their officers, directors, partners, trustees or
Affiliates or the Properties, or secured by any of the Sellers/Contributors, or
by any of the Properties, including any obligations under any of the Leases,
Service Contracts and Management Contracts, to the extent any such obligation
was to be performed prior to the Closing Date, or was to be performed after the
Closing Date as a result of a breach or default under any of the Leases or
Service Contracts by any Seller/Contributor or its Affiliates prior to the
Closing Date; (d) any action taken, or any failure to act, by any
Seller/Contributor in connection with this transaction and the transactions
contemplated herein constituting a breach of this Agreement or any agreement,
document or instrument contemplated hereby or a breach of a duty owed to any
person, including, without limitation, any action taken to redeem or otherwise
liquidate the interest of certain holders in anticipation of the transactions
contemplated herein, to the extent such action or failure to act results in a
violation (or alleged violation) of applicable laws or of the fiduciary duties
owed to such holders; (e) pollution or threat to human health or the
environment, or any Environmental Claim against any person or entity whose
liability for such Environmental Claim any Seller/Contributor has assumed or
retained either contractually or by operation of law, that is related in any way
to any of the Properties, including, without limitation, all on-site and off-
site activities relating to any of the Properties involving Substances of
Concern, and that occurred, existed, arises out of conditions or circumstances
that occurred or existed, or was caused, in whole or in part, on or before the
Closing Date, whether or not the pollution or threat to human health or the
environment, or the existence of any Environmental Claim, is known to any
Seller/Contributor and regardless of whether it arises as a breach of any
representation or warranty, any debts, liabilities or obligations of any
Seller/Contributor (whether known or unknown, disputed or undisputed, fixed,
41
<PAGE>
contingent or otherwise) of, associated with or relating to any asset or
property other than the Properties; and (f) any and all actual damages and
expenses incident to any of the foregoing or to the enforcement of this Section
11.1, excluding incidental or consequential damages.
11.2 Personal Indemnitor. Subject to subsection 11.2.2 and 11.2.3
-------------------
hereof, after the Closing hereunder, the Company or the Partnership, in the
event of a breach of any representation or warranty under Section 9 hereof, also
may proceed against the person or entity identified in the Summary of Terms as
the Indemnitor.
11.3 Indemnification by the Company and the Partnership. The Company
--------------------------------------------------
and the Partnership (each, for purposes of this Section 11.3, a "Company
Indemnifying Party") shall indemnify, defend and hold harmless each
Seller/Contributor and their respective shareholders, partners, directors,
officers, partners, agents, employees, Affiliates, successors and assigns
(collectively, for purposes of this paragraph, "Seller/Contributor Indemnified
Parties") from and against any and all losses, damages, claims, liabilities,
actions, suits, proceeds and costs and expenses of defense therefore, including
reasonable attorneys' fees payable as incurred, arising out of or relating to
any (a) misrepresentation or breach of warranty by such Company Indemnifying
Party or nonfulfillment of any covenant or agreement to be performed or complied
with by such Company Indemnifying Party under this Agreement; (b) untrue or
incomplete statement (or allegation by a third party of an untrue or incomplete
statement) of a material fact contained in any statement or information provided
by such Company Indemnifying Party or based on any omission (or allegation by a
third party of an untrue or incomplete statement) to state therein a material
fact required to be stated therein or other information necessary to make the
statements therein not misleading, to the extent such alleged untrue or
incomplete statement or omission was made with the Company's or the
Partnership's knowledge that the statement was untrue or incomplete or omitted
to state a material fact; (c) any action taken, or any failure to act, by the
Company or the Partnership in connection with this transaction and the
transactions contemplated herein constituting a breach of this Agreement or any
agreement, document or instrument contemplated hereby or a breach of a duty owed
to any person; and (d) any and all actual damages and expenses incident to any
of the foregoing or to the enforcement of this Section 11.3, excluding
incidental or consequential damages.
11.4 Indemnification Procedures. All claims for indemnification under
--------------------------
this Article XI shall be asserted and resolved as follows:
11.4.1 In the event that any Seller/Contributor Indemnified
Party or Company Indemnified Party (the "Indemnified
Party") has a Claim against any Seller/Contributor
Indemnifying Party or Company Indemnifying Party
obligated to provide indemnification pursuant to
Sections 11.1 or 11.2 hereof, on the one hand, or
Section 11.3 hereof, on the other hand (the
"Indemnifying Party"), which does not involve a claim
being asserted against or sought to be collected by a
third party, the Indemnified Party shall with reasonable
promptness send a written notice (the "Claim
42
<PAGE>
Notice") with respect to such claim to the Indemnifying
Party. If the Indemnifying Party does not notify the
Indemnified Party within the fifteen days thereafter
(the "Notice Period") that the Indemnifying Party
disputes such claim, the amount of such claim shall be
conclusively deemed a liability of the Indemnifying
Party hereunder. In case an objection is made in writing
in accordance with this Section 11.4.1, the Indemnified
Party shall have thirty (30) days to respond in a
written statement to the objection. If after such thirty
(30) day period there remains a dispute as to any
claims, the parties shall attempt in good faith for
sixty (60) days to agree upon the rights of the
respective parties with respect to each of such claims.
If the parties should so agree, a memorandum setting
forth such agreement shall be prepared and signed by
both parties.
11.4.2 In the event that any claim for which the Indemnifying
Party would be liable to an Indemnified Party hereunder
is asserted, or any action or proceeding commenced,
against an Indemnified Party by a third party, the
Indemnified Party shall with reasonable promptness
notify the Indemnifying Party of such claim, specifying
the nature of such claim and the amount or the estimated
amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of
such Claim) (the "Third Party Claim Notice"). The
Indemnifying Party shall have 30 days from the receipt
of the Claim Notice (the "Third Party Notice Period") to
notify the Indemnified Party (a) whether or not such
party disputes the liability to the Indemnified Party
hereunder with respect to such claim and (b) if such
party does not dispute such liability, whether or not
the Indemnifying Party desires, at the sole cost and
expense of the Indemnifying Party, to defend against
such claim, provided that such party is hereby
authorized (but not obligated) prior to and during the
Third Party Notice Period to file any motion, answer or
other pleading and to take any other action which the
Indemnifying Party shall deem necessary or appropriate
to protect the Indemnifying Party's interests. In the
event that the Indemnifying Party notifies the
Indemnified Party within the Third Party Notice Period
that the Indemnifying Party does not dispute the
Indemnifying Party's obligation to indemnify hereunder
and desires to defend the Indemnified Party against such
claim, except as hereinafter provided, such party shall
have the right to defend by appropriate proceedings. No
Indemnifying Party may enter into a non-monetary
settlement of any such matter without the written
consent of the Indemnified Party, which consent shall
not be unreasonably withheld. Any such settlement
(whether of the whole matter or a part thereof) must
completely and unconditionally release the Indemnified
Party, unless the Indemnified Party waives the
requirement of a complete and unconditional
43
<PAGE>
release in writing. If the Indemnified Party desires to
participate in, but not control, any such defense or
settlement the Indemnified Party may do so at its sole
cost and expense. If the Indemnifying Party elects not
to defend the Indemnified Party against such claim,
whether by failure of such party to give the Indemnified
Party timely notice as provided above or otherwise, then
the Indemnified Party, without waiving any rights
against such party, may settle or defend against any
such claim in the Indemnified Party's sole discretion
and the Indemnified Party shall be entitled to recover
from the Indemnifying Party the amount of any settlement
or judgment to the extent the Indemnified Party is
entitled to indemnification and, on an ongoing basis,
all indemnifiable costs and expenses of the Indemnified
Party with respect thereto, including interest from the
date such costs and expenses were incurred.
11.4.3 If at any time, in the reasonable opinion of the
Indemnified Party, notice of which shall be given in
writing to the Indemnifying Party, any such claim seeks
material prospective or other relief which could have a
material adverse effect on the assets, liabilities,
financial condition, results of operations or business
prospects of any Indemnified Party or in the reasonable
opinion of counsel for the Indemnified Party (which
counsel has no material business relationship with the
Indemnified Party and has not been retained to defend,
litigate or otherwise advise the Indemnified Party in
connection with such Claim) a material conflict exists,
the Indemnified Party shall have the right to control or
assume (as the case may be) the defense of any such
claim and the amount of any judgment or settlement and
the reasonable costs and expenses of defense shall be
included as part of the indemnification obligations of
the Indemnifying Party hereunder. If the Indemnified
Party should elect to exercise such right, the
Indemnifying Party shall have the right to participate
in, but not control, the defense of such claim or demand
at the sole cost and expense of the Indemnifying Party.
11.4.4 Nothing herein shall be deemed to prevent the
Indemnified Party from making a claim, and an
Indemnified Party may make a claim hereunder, for
potential or contingent claims or demands provided the
Claim Notice or Third Party Claim Notice, as the case
may be, sets forth the specific basis for any such
potential or contingent claim or demand to the extent
then feasible and the Indemnified Party has reasonable
grounds to believe that such a claim or demand may be
made.
11.4.5 The Indemnified Party's failure to give reasonably
prompt notice as required by this Section 11.4 of any
actual, threatened or possible claim, demand, action or
proceeding which may give rise to a right of
44
<PAGE>
indemnification hereunder shall not relieve the
Indemnifying Party of any liability which the
Indemnifying Party may have to the Indemnified Party
unless the failure to give such notice materially and
adversely prejudiced the Indemnifying Party or increases
the amount of indemnification which the Indemnifying
Party is obligated to pay hereunder. In any such event,
the amount of indemnification which the Indemnified
Party will be entitled to receive hereunder shall be
reduced to an amount which the Indemnified Party would
have been entitled to receive had such notice been
timely.
XII. MISCELLANEOUS
-------------
12.1 Assignment. Neither this Agreement nor any interest hereunder
----------
may be assigned or transferred by any Seller/Contributor without the prior
written consent of the Company or the Partnership. As of the Closing Date, the
Company or the Partnership may assign, transfer or demise any or all of its
interest in any Property to any Affiliates without the prior consent of the
Sellers/Contributors, subject to the terms of the Company Lease for such
Property.
12.2 Entire Agreement. Any prior agreement or understanding among
----------------
the parties concerning the subject matter hereof is hereby superseded. This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and the transactions contemplated herein and shall not be
modified or amended except in a written document signed by all of the parties
hereto. The parties intend that this Agreement shall be binding on and inure to
the benefit of each of them and their heirs, successors, personal
representatives and assigns.
12.3 Notices. All notices or other communications required or
-------
permitted under this Agreement shall be in writing and delivered personally or
by registered or certified mail, return receipt requested, postage prepaid, or
by a nationally recognized overnight courier (such as Federal Express) with
receipted delivery. Notices to the Sellers/Contributors and their counsel shall
be addressed as stated in the Summary of Terms hereto with a copy to:
Haller & Colvin, P.C.
Attn: Vincent J. Heiny, Esq. and
Charles J. Heiny, Esq.
444 East Main Street
Fort Wayne, Indiana 46802.
Facsimile No. 219-422-0274
Notices to the Partnership or to the Company shall be addressed to:
45
<PAGE>
Capital Automotive REIT
1420 Springhill Road
Suite 525
McLean, Virginia 22102
Attn: Portfolio Manager
Facsimile No.: 703-288-3375
With a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, DC 20037
Attn: George P. Stamas, Esq. and
John B. Watkins, Esq.
Facsimile No.: 202-663-6363
All notices given in accordance with the terms hereof shall be deemed effective
on the earlier of actual receipt or (a) if delivered in person when received or
(b) if delivered by overnight courier, one business day after deposit with an
overnight courier, (c) if sent by registered or certified mail, three (3)
business days after deposit with the U.S. mail or (d) if sent by facsimile,
provided that the time period in which a response to any notices must be given
- --------
shall commence on the date of receipt thereof. Any party hereto may change its
address by written notice to all parties hereto sent in accordance with the
terms of this Section and any such notice of change of address shall be
effective five (5) days after delivery. Receipt of notices hereunder shall
occur upon actual delivery to an individual party or to an officer, member, or
general or limited partner of a party or to any agent or employee of such party
at the address of such party set forth above, subject to change as provided
hereinbelow. An attempted delivery in accordance with the foregoing,
acceptance of which is refused or rejected, shall be deemed to be and shall
constitute receipt; and an attempted delivery in accordance with the foregoing
by mail, messenger, or courier service (whichever is chosen by the sender) which
is not completed because of changed address of which no notice was received by
the sender in accordance with this provision prior to the sending of the notice
shall also be deemed to be and constitute receipt.
12.4 Governing Law. This Agreement shall be governed and interpreted
-------------
in accordance with the laws of the Commonwealth of Virginia without regard to
its principles of conflicts of laws, and any action brought under or arising out
of this Agreement or the matters relating hereto shall be submitted to the
jurisdiction of the United States District Court for the Eastern District of
Virginia. Each party acknowledges and agrees to such jurisdiction and agrees
that this Section 12.4 shall in no way be construed to constitute an agreement
that jurisdiction and/or venue for any actions or disputes brought under or
arising out of the Lease between the Company and the Partnership and
Sellers/Contributors or Affiliates thereof of even date herewith be in the
United States District Court for the Eastern District of Virginia.
46
<PAGE>
12.5 Litigation Costs. If there is any legal action or proceeding
----------------
between the parties hereto arising from or based upon this Agreement, the
unsuccessful party to such action or proceeding shall pay to the prevailing
party all reasonable litigation costs and expenses, including reasonable
attorneys' fees, incurred by such prevailing party in such action or proceeding
and in any appeal in connection therewith, and if such prevailing party recovers
a judgment in any such action, proceeding or appeal, such costs, expenses and
attorneys' fees shall be included in as part of such judgment.
12.6 Counterparts. This Agreement may be executed in any number of
------------
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
12.7 Offer and Acceptance. This Agreement constitutes an offer by the
--------------------
Company and the Partnership which must be accepted, by delivery to the Company
of a duly signed and completed signature page hereof, by all of the
Sellers/Contributors within five (5) days after the date this Agreement is
signed by the Company and the Partnership. If, within such time period, less
than all of the persons owning any interest in a Seller/Contributor shall have
signed this Agreement, then the Seller/Contributor and the Property owned by
such Seller/Contributor shall, at the sole option of the Company, be excluded
from the sale and purchase hereunder, this Agreement shall remain in full force
and effect as to the other Sellers/Contributors and Properties, and an
appropriate adjustment shall be made with respect to the relevant Property, in
which case the Aggregate Purchase Price shall be reduced by the Purchase Price
of such Property as provided in this Agreement; if after the expiration of such
time period all of the Sellers/Contributors execute this Agreement, the Company,
at its sole option, may elect to re-include, or may continue to exclude, any
such Seller/Contributor and Property.
12.8 Further Assurances. The parties agree (a) to furnish upon
------------------
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purposes of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
12.9 Waiver. The rights and remedies of the parties to this Agreement
------
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party
47
<PAGE>
or of the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents referred
to in this Agreement.
12.10 Severability. If any provision of this Agreement is held invalid
------------
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provisions of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.11 Section Headings; Construction. The headings of the Sections in
------------------------------
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless, otherwise expressly provided, the word
"including" does not limit the preceding words or term.
12.12 Time of Essence. With regard to all dates and time periods, set
---------------
forth or referred to in this Agreement, time is of the essence.
12.13 Real Property Adjacent to Certain of the Property. The parties
-------------------------------------------------
hereto acknowledge that Seller/Contributor, James E. Kelley, has advised the
Partnership that the City of Fort Wayne, Indiana, (the "City") has recently
given notice to James E. Kelley that in connection with a diking public works
project being completed by the City near the real estate presently owned by
James E. Kelley (which real estate is legally described on Attachment A to
Scheduled 1.2 to this Agreement (sometimes hereinafter referred to as the
"Kelley Chevrolet Real Estate") and leased to Kelley Chevrolet, Inc., the fee
simple owner of the Kelley Chevrolet Real Estate may be required or requested to
provide certain consents and/or waive or assign certain rights with respect to
certain real property not owned by James E. Kelley which is adjacent to the
Kelley Chevrolet Real Estate and is presently used as a public road or for other
public purposes ("Adjacent Property") (which rights may include the right to
receive ownership of certain of the Adjacent Property) that the fee simple owner
of the Kelley Chevrolet Real Estate would otherwise hold. The Partnership and
the Company, for themselves and their successors in interest in ownership of all
or any portion of the Kelley Chevrolet Real Estate, hereby irrevocable appoint
James E. Kelley as their power of attorney for an eighteen (18) month period to
execute any and all documents reasonably requested by the City of Fort Wayne,
Indiana, to provide said consents and/or approvals and or waivers or assignments
of rights held by the fee simple owner of the Kelley Chevrolet Real Estate with
respect to the Adjacent Property but not the right to sell or assign or encumber
or otherwise transfer the Kelley Chevrolet Real Estate itself.
[the remainder of this page is left intentionally blank]
48
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal, with the intention that it be a sealed instrument, as of the date
set forth above.
WITNESS CAPITAL AUTOMOTIVE REIT
By: /s/ By: /s/ David S. Kay (SEAL)
-------------------------- --------------------------
Name: Name: David S. Kay
--------------------------
Title: Title: Vice President, CFO and Secretary
--------------------------
CAPITAL AUTOMOTIVE L.P.
WITNESS By: Capital Automotive REIT,as
General Partner
By: /s/ By: /s/ David S. Kay (SEAL)
-------------------------- --------------------------
Name: Name: David S. Kay
--------------------------
Title: Title: Vice President, CFO and Secretary
--------------------------
WITNESS JAMES E. KELLEY:
By: /s/ By: /s/ James E. Kelley (SEAL)
-------------------------- --------------------------
Name: James E. Kelley
--------------------------
Title: Social Security #or TIN:
-------------------------- ---------
WITNESS THOMAS W. KELLEY:
By: /s/ By: /s/ Thomas W. Kelley (SEAL)
-------------------------- ---------------------------
Name: Thomas W. Kelley
--------------------------
Title: Social Security # or TIN:
-------------------------- ---------
WITNESS MIDWEST AUTO REALTY CO., L.P.:
Social Security # or TIN: (SEAL)
---------
By: /s/ By: /s/ James E. Kelley (SEAL)
-------------------------- ---------------------------
Name: Name: James E. Kelley
--------------------------
Title: Title: A General Partner
--------------------------
WITNESS
By: /s/ By: /s/ Thomas W. Kelley (SEAL)
-------------------------- ---------------------------
Name: Name: Thomas W. Kelley
--------------------------
Title: Title: A General Partner
--------------------------
49
<PAGE>
County of :
------------------------
SS:
State of :
------------------------
This is to certify that on this ____ day of ________, 1998, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Capital Automotive REIT in the capacity stated by his signature, and that he
acknowledged the within document to be the act and deed of the Capital
Automotive REIT.
----------------------------------------
Notary Public
My commission expires:
County of :
-----------------------
SS:
State of :
------------------------
This is to certify that on this ____ day of ________, 1998, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Capital Automotive L.P. in the capacity stated by his signature, and that he
acknowledged the within document to be the act and deed of Capital Automotive
L.P.
----------------------------------------
Notary Public
My commission expires:
50
<PAGE>
Exhibit A
Partnership Agreement
Incorporated by reference to Exhibit 10.3 filed with Form S-11 Registration
Statement 33-41183.
<PAGE>
Exhibit 2.4(a)
LEASE No. __
LEASE AGREEMENT
BETWEEN
CAPITAL AUTOMOTIVE L.P., LANDLORD
AND
[ TENANT]
DATED: April 14, 1998
<PAGE>
SUMMARY OF TERMS
EXECUTION DATE: April 14, 1998
TENANT:
--------------------------
TENANT STATE OF FORMATION: Indiana
TENANT ADDRESS:
--------------------------
--------------------------
--------------------------
--------------------------
and
--------------------------
--------------------------
--------------------------
--------------------------
LEASED PROPERTY ADDRESS:
--------------------------
--------------------------
--------------------------
INITIAL BASE ANNUAL RENT:
--------------------------
BASE ANNUAL RENT ADJUSTMENT: 50% of CPI, maximum of 2%; measurement for first
rent adjustment year is based on change in CPI
between (i) year prior to year on which first rent
adjustment is calculated and (ii) the year on
which the first rent adjustment is calculated.
FIRST RENT ADJUSTMENT YEAR: Fourth Year
SECURITY DEPOSIT Personal guarantees by Thomas W. Kelley and James
E. Kelley in the aggregate amount of one month's
rent
LEASE TERM: 15 years (unless otherwise extended pursuant to
the terms of the Lease)
RENEWAL OPTIONS: five 5-year renewal options by the Tenant unless
Tenant provides 12 month's notice of nonrenewal.
<PAGE>
COMMENCEMENT DATE:
--------------------------
EXPIRATION DATE:
--------------------------
GUARANTOR: Kelley Chevrolet, Inc., Courtesy Motors, Inc.,
Northside Chevrolet, L.P., Midwest Auto Parts,
Inc., Kelley Buick of Atlanta, Inc., Kelley Saturn
of Atlanta, Inc., Tom Kelley Pontiac, Inc., Tom
Kelley Buick GMC Truck, Inc., Tom Kelley Cadillac,
Inc., Saturn of Fort Wayne, Inc.
GUARANTOR ADDRESS:
--------------------------
ii
<PAGE>
TABLE OF CONTENTS
Page
----
I LEASE AGREEMENT, LEASED PROPERTY AND TERM............................... 1
-----------------------------------------
1.01 Lease Agreement................................................... 1
---------------
1.02 Contingent Upon Acquisition of the Leased Property................ 2
--------------------------------------------------
1.03 Term.............................................................. 2
----
1.04 Holding Over...................................................... 4
------------
1.05 Surrender......................................................... 4
---------
1.06 Deliveries at Commencement........................................ 4
--------------------------
1.07 Additional Leased Properties; Lease Supplement.................... 4
----------------------------------------------
II. RENT.................................................................... 5
----
2.01 Base Rent......................................................... 5
---------
2.02 Additional Rent................................................... 5
---------------
2.03 Base Annual Rent Adjustment....................................... 5
---------------------------
2.04 Security Deposit.................................................. 6
----------------
2.05 Place of Payment of Rent; Direct Payment of Additional Rent....... 6
-----------------------------------------------------------
2.06 Net Lease......................................................... 6
---------
2.07 No Termination, Abatement, Etc.................................... 6
------------------------------
III. IMPOSITIONS AND UTILITIES............................................... 7
-------------------------
3.01 Payment of Impositions............................................ 7
----------------------
3.02 Definition of Impositions......................................... 8
-------------------------
3.03 Utilities......................................................... 9
---------
3.04 Escrow of Impositions............................................. 9
---------------------
3.05 Discontinuance of Utilities.......................................10
---------------------------
3.06 Liens.............................................................10
-----
3.07 Impositions Statements............................................10
----------------------
IV. INSURANCE...............................................................11
---------
4.01 Insurance.........................................................11
---------
4.02 Insurance Limits..................................................12
----------------
4.03 Insurance Requirements............................................12
----------------------
4.04 Replacement Cost..................................................13
----------------
4.05 Blanket Policy....................................................14
--------------
4.06 No Separate Insurance.............................................14
---------------------
4.07 Waiver of Subrogation.............................................14
---------------------
4.08 Mortgages.........................................................14
---------
4.09 Other Insurance Requirements......................................14
----------------------------
V. INDEMNITY; SUBSTANCES OF CONCERN..................................15
--------------------------------
iii
<PAGE>
5.01 Tenant's Indemnification..........................................15
------------------------
5.02 Substances of Concern.............................................16
---------------------
5.03 Audits............................................................18
------
5.04 Landlord's Option Re: Compliance..................................18
--------------------------------
5.05 Environmental Indemnification.....................................18
-----------------------------
5.06 Tenant's Cleanup Obligation.......................................19
---------------------------
5.07 Existing Environmental Conditions.................................19
---------------------------------
5.08 Survival of Tenant's Obligations..................................19
--------------------------------
VI. USE AND ACCEPTANCE OF PREMISES..........................................20
------------------------------
6.01 Use of Leased Properties..........................................20
------------------------
6.02 Acceptance of Leased Properties...................................20
-------------------------------
6.03 Conditions of Use and Occupancy...................................20
-------------------------------
6.04 Financial Statements and Other Information........................21
------------------------------------------
VII. REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS.....................22
---------------------------------------------------
7.01 Maintenance.......................................................22
-----------
7.02 Compliance with Laws..............................................22
--------------------
7.03 Required Alterations..............................................23
--------------------
7.04 Mechanics' Liens..................................................23
----------------
7.05 Replacements of Fixtures..........................................23
------------------------
7.06 Encroachments; Restrictions.......................................24
---------------------------
VIII.ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL ADDITIONS TO THE
------------------------------------------------------------------
LEASED PROPERTIES.......................................................25
-----------------
8.01 Tenant's Right to Construct.......................................25
---------------------------
8.02 Scope of Right....................................................26
--------------
8.03 Cooperation of Landlord...........................................26
-----------------------
8.04 Commencement of Construction......................................27
----------------------------
8.05 Rights in Tenant Improvements.....................................28
-----------------------------
8.06 Personal Property.................................................28
-----------------
8.07 Requirements for the Tenant's Personal Property...................28
-----------------------------------------------
8.08 Financings of Capital Additions to a Leased Property..............29
----------------------------------------------------
IX. DEFAULTS AND REMEDIES...................................................30
---------------------
9.01 Events of Default.................................................30
-----------------
9.02 Remedies..........................................................32
--------
9.03 Right of Set-Off..................................................34
----------------
9.04 Performance of Tenant's Covenants.................................35
---------------------------------
9.05 Late Charge.......................................................35
-----------
9.06 Litigation; Attorneys' Fees.......................................35
---------------------------
9.07 Remedies Cumulative...............................................36
-------------------
9.08 Escrows and Application of Payments...............................36
-----------------------------------
iv
<PAGE>
9.09 Power of Attorney.................................................36
-----------------
X. DAMAGE AND DESTRUCTION..................................................36
----------------------
10.01 General...........................................................36
-------
10.02 Landlord's Inspection.............................................37
---------------------
10.03 Landlord's Costs..................................................37
----------------
10.04 Rent Abatement....................................................38
--------------
10.05 Substantial Damage During Lease Term..............................38
------------------------------------
10.06 Damage Near End of Term...........................................39
-----------------------
10.07 Risk of Loss......................................................39
------------
XI. CONDEMNATION............................................................39
------------
11.01 Total Taking......................................................39
------------
11.02 Partial Taking....................................................39
--------------
11.03 Restoration.......................................................40
-----------
11.04 Landlord's Inspection.............................................40
---------------------
11.05 Award Distribution................................................40
------------------
11.06 Temporary Taking..................................................41
----------------
XII. ADDITIONAL REPRESENTATIONS, WARRANTIES AND FINANCIAL COVENANTS..........42
--------------------------------------------------------------
12.01 Organization and Qualification....................................42
------------------------------
12.02 Material Agreements...............................................43
-------------------
12.03 Changes in Condition..............................................43
--------------------
12.04 Franchises, Licenses, etc.........................................43
-------------------------
12.05 Litigation........................................................44
----------
12.06 Authorization and Enforceability..................................44
--------------------------------
12.07 No Legal Obstacle to Lease........................................44
--------------------------
12.08 Certain Business Representations:.................................45
--------------------------------
12.09 Certain Financial Covenants.......................................46
---------------------------
12.10 Cash Flow Coverage Ratio Covenant.................................46
---------------------------------
12.11 Disclosure........................................................46
----------
12.12 Covenant Not to Acquire...........................................47
-----------------------
XIII.ASSIGNMENT AND SUBLETTING; ATTORNMENT...................................47
-------------------------------------
13.01 Prohibition Against Subletting and Assignment.....................47
---------------------------------------------
13.02 Changes of Control................................................47
------------------
13.03 Operating/Service Agreements......................................48
----------------------------
13.04 Assignment........................................................49
----------
13.05 REIT Limitations..................................................49
----------------
13.06 Attornment........................................................50
----------
XIV. ARBITRATION.............................................................51
-----------
v
<PAGE>
14.01 Arbitration.......................................................51
-----------
14.02 Appointment of Arbitrators........................................51
--------------------------
14.03 Arbitration Procedure.............................................51
---------------------
14.04 Expenses..........................................................51
--------
14.05 Enforcement of the Arbitration Award..............................51
------------------------------------
XV. QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATES.......52
-----------------------------------------------------------------
15.01 Quiet Enjoyment...................................................52
---------------
15.02 Landlord Mortgages; Subordination.................................52
---------------------------------
15.03 Attornment........................................................52
----------
15.04 Estoppel Certificates.............................................53
---------------------
15.05 Waiver of Landlord's Lien.........................................54
-------------------------
XVI. RIGHT OF FIRST OFFER; RIGHT TO PURCHASE; APPRAISAL METHOD
---------------------------------------------------------
16.01 Right of First Offer During Lease Term or Extension Term..........54
--------------------------------------------------------
16.02 Right to Purchase at End of Term and Extension Terms..............57
----------------------------------------------------
16.03 Appraisal Method..................................................58
----------------
XVII.MISCELLANEOUS...........................................................59
-------------
17.01 Notices...........................................................59
-------
17.02 Advertisement of a Leased Property................................60
----------------------------------
17.03 Landlord's Access.................................................60
-----------------
17.04 Entire Agreement..................................................60
----------------
17.05 Severability......................................................60
------------
17.06 Captions and Headings.............................................60
---------------------
17.07 Governing Law.....................................................61
-------------
17.08 Memorandum of Lease or Certain Rights Under the Lease.............61
-----------------------------------------------------
17.09 Waiver............................................................61
------
17.10 Assignment; Binding Effect........................................61
--------------------------
17.11 Consents and Approvals............................................61
----------------------
17.12 Single Property...................................................61
---------------
17.13 Modification......................................................61
------------
17.14 Incorporation by Reference........................................62
--------------------------
17.15 No Merger.........................................................62
---------
17.16 Force Majeure.....................................................62
-------------
17.17 Laches............................................................62
------
17.18 Waiver of Jury Trial..............................................62
--------------------
17.19 Permitted Contests................................................62
------------------
17.20 Construction of Lease.............................................63
---------------------
17.21 Counterparts......................................................63
------------
17.22 Relationship of Landlord and Tenant...............................63
-----------------------------------
vi
<PAGE>
SCHEDULES
A Leased Properties
B Permitted Exceptions
12.02 Material Agreements
12.03 Changes in Condition
EXHIBITS
2.05 Payment Account Information
5.07 Environmental Reports
15.02 Form of Subordination and Non-Disturbance Agreement
15.04(a) Tenant Estoppel Certificate
15.04(b) Landlord Estoppel Certificate
C Guaranty and Subordination Agreement
D Guaranty Agreement
vii
<PAGE>
LEASE AGREEMENT
This Lease Agreement ("Lease") dated as of the date stated in the
Summary of Terms by and between CAPITAL AUTOMOTIVE L.P., a Delaware limited
partnership ("Landlord"), having its principal office at 1420 Springhill Road,
Suite 525, McLean, Virginia 22102 and the person or entity stated in the Summary
of Terms ("Tenant").
RECITALS
WHEREAS, Tenant or an Affiliate (as hereafter defined) has conveyed or
will convey to Landlord certain parcels of real estate and improvements thereon
upon which Tenant engages in motor vehicle retail and/or motor vehicle related
businesses or such other business(es) for which the Landlord, in its reasonable
discretion, has provided prior written consent (the "Business"), which parcels
of real estate and improvements thereon are described on Schedule A attached
----------
hereto and incorporated herein by reference (each hereinafter a "Leased
Property" or collectively, the "Leased Properties"), and Landlord and Tenant
desire to provide for the lease by Landlord to Tenant of the Leased Properties;
and
WHEREAS, Landlord and Tenant desire that each of the Leased Properties
shall be the subject of this Lease and be used by Tenant in its operation of the
Business; and
WHEREAS, this Lease provides that additional real estate and
improvements thereon may be made subject to the operation and effect of this
Lease, upon execution by Landlord and Tenant of a Lease Supplement designating
each such additional property as a Leased Property hereunder.
NOW, THEREFORE, in consideration of the foregoing premises and of
their respective agreements and undertakings herein, and of other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:
I LEASE AGREEMENT, LEASED PROPERTY AND TERM
-----------------------------------------
1.01 Lease Agreement. Landlord does hereby let and lease unto Tenant,
---------------
and Tenant does hereby take and hire from Landlord, the Leased Properties, which
shall respectively consist of:
(a) The parcels of land described and located at the addresses listed
in Schedule A hereto, as more particularly described therein,
----------
together with any additional parcels of real estate and
improvements thereon subsequently designated as a Leased Property
by the parties pursuant to a Lease Supplement as provided for
herein, together with all rights, titles, appurtenant interests,
covenants, licenses, privileges and benefits thereto belonging,
and any easements, rights-of-way, rights of ingress or egress or
other interests in, on, or to any land, highway, street, road or
avenue, open or proposed, in, on, across, in front of, abutting
or adjoining such real property including, without
<PAGE>
limitation, any strips and gores adjacent to or lying between
such real estate and any adjacent real estate (the "Land");
(b) All buildings, improvements, structures and Fixtures (as
hereinafter defined) now located or to be located or to be
constructed on the Land, including, without limitation,
sidewalks, landscaping, parking lots and structures, roads,
drainage and all above ground and underground utility structures
and conduits (on-site or off-site), equipment systems and other
so-called "infrastructure" improvements (the "Improvements");
(c) All equipment, machinery, fixtures, and other items of real
and/or personal property, including all components thereof,
located in, on or used in connection with, and which are
permanently affixed to or incorporated into, the Improvements,
including, without limitation, all furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control,
waste disposal, air-cooling and air-conditioning systems and
apparatus, sprinkler systems and fire and theft protection
equipment, and similar systems, all of which, to the greatest
extent permitted by law, are hereby deemed to constitute real
estate, together with all replacements, modifications,
alterations and additions thereto (collectively the "Fixtures");
and
(d) All easements, rights and appurtenances relating to the Land and
the Improvements.
SUBJECT, HOWEVER, to the liens, encumbrances, restrictions, agreements, and
other title matters listed or specifically referred to in Schedule B ("Permitted
----------
Exceptions").
The Leased Properties shall however exclude all furniture, equipment,
inventory and items of moveable personal property attached to the Land or
Improvements that relate to the business being conducted on the Leased Property
which items may readily be removed without material damage to the Land and
Improvements whether or not such items might legally be considered to be
"fixtures" (all of which are owned by Tenant and shall hereinafter be defined as
the "Excluded Personal Property").
1.02 Contingent Upon Acquisition of the Leased Property. In the event
--------------------------------------------------
this Lease is executed prior to the conveyance of any given Leased Property by
Tenant, or an Affiliate, to Landlord, the parties acknowledge that the
effectiveness of this Lease in respect of such Leased Property is contingent
upon the closing of such conveyance. The commencement date of this Lease as to
such Leased Property shall be the date of the closing of such conveyance (the
"Commencement Date").
2
<PAGE>
1.03 Term. The initial term of the Lease (the "Term") shall be: (i) for
----
any given Leased Property a fixed term of One Hundred and Eighty (180) months,
unless otherwise specifically and expressly provided in this Lease, commencing
on the Commencement Date for such Leased Property and (ii) for any Leased
Property designated in a Lease Supplement a fixed term of One Hundred and
Eighty Months, unless otherwise specifically and expressly provided in this
Lease, after the Commencement Date of such Lease Supplement. Tenant shall have
the right to extend this Lease and/or the Lease Supplement for any or all of the
Leased Properties, at Tenant's option, for one Sixty (60) month renewal term
from the expiration of the Term (the "First Extension Term"), provided that no
Event of Default (as defined in Section 9.01 hereof) shall exist and be
continuing. In addition, Tenant shall have the right to extend this Lease for
any or all of the Leased Properties, at Tenant's option, for four additional
extension terms each of Sixty (60) months from the end of the previous
Extension Term (the "Second Extension Term," the "Third Extension Term," the
"Fourth Extension Term," and the "Fifth Extension Term," each an "Extension
Term," and collectively with the First Extension Term, the "Extension Terms")
provided that no Event of Default (as defined in Section 9.01 hereof) shall
exist and be continuing. Tenant shall be deemed to have exercised the First
Extension Term for all of the Leased Properties unless it provides written
notice to Landlord specifying on which Leased Properties it determines not to
extend the Lease no later than twelve months prior to the end of the Term.
Tenant shall be deemed to have exercised the Second Extension Term, Third
Extension Term, Fourth Extension Term, and Fifth Extension Term, as applicable,
of any Leased Property which the Tenant is still leasing pursuant to this Lease,
unless it provides written notice to Landlord specifying on which Leased
Properties it decides not to extend the Lease, no later than twelve (12) months
prior to the end of the previous Extension Term. Notwithstanding anything else
to the contrary in this Lease, the Base Annual Rent during the First, Second,
Third and Fourth Extension Terms shall be the Base Annual Rent for the Leased
Properties as to which the Lease is being extended and the Base Annual Rent
during the Fifth Extension Term shall be the Fair Market Rent (as hereafter
defined) for the Leased Properties as to which the Lease is being extended (each
an "Extended Lease Property"). Fair Market Rent shall be the aggregate fair
market rent for each of the Extended Lease Properties for that Extension Term
which shall be determined as soon as possible after receipt by Landlord of
Tenant's notice of option exercise, on the basis of appraisals of independent
appraisers selected in accordance with the provisions of Section 16.03, provided
--------
that, if during the Term or Extension Terms of this Lease, Tenant has financed
or otherwise constructed at its own cost and expense any Tenant Improvements or
Capital Additions pursuant to the terms of this Lease and has performed an
appraisal pursuant to Section 8.01, the Appraisers' determination of Fair
Market Rent shall not consider any increase in the value of a Leased Property
due to the difference in value between such Tenant-constructed Improvements (as
hereafter defined) and any Tenant Improvements or Capital Additions replaced by
such Tenant-constructed Improvements. The Tenant shall have the right, in its
sole discretion, to rescind the exercise of Tenant's option to extend the Lease
as to any Extended Lease Property for the Fifth Extension Term, during a period
of fifteen (15) business days after the determination of the fair market rent
for such Extended Lease Property. If Tenant shall fail to exercise the right to
rescind within such fifteen (15) day period, the election to extend shall be
irrevocable and the Fair Market Rent so determined shall be the Base Annual Rent
during the Fifth Extension Term notwithstanding any changes in the market rental
rates, whether upward or downward, which may occur after such
3
<PAGE>
determination. However, notwithstanding anything else in this Lease, Fair Market
Rent shall become the Base Annual Rent (as defined hereafter) in the Fifth
Extension Term and shall be subject to Base Annual Rent Adjustments as set forth
in Section 2.03.
1.04 Holding Over. Should Tenant, without the express consent of Landlord,
------------
continue to hold and occupy any Leased Property after the expiration or earlier
termination of the Term or any Extension Term, as the case may be, such holding
over beyond the Term and the acceptance or collection of Rent (as defined
hereinafter) by Landlord shall operate and be construed as creating a tenancy
from month-to-month and not for any other term whatsoever. During any such
holdover period Tenant shall pay to Landlord for each month (or portion thereof)
Tenant remains in such Leased Property, in lieu of the Base Annual Rent (as
defined hereafter) for such Leased Property, an amount equal to the sum of one-
twelfth (1/12) of (i) one hundred fifty percent (150%) of such Base Annual Rent
(the "Holdover Rate"), and (ii) as applicable, one hundred percent (100%) of the
Additional Rent (as defined hereinafter) for such Leased Property, each as in
effect on the expiration date. Said month-to-month tenancy may be terminated
by Landlord by giving Tenant thirty (30) days written notice, and at any time
thereafter Landlord may re-enter and take possession of such Leased Property.
1.05 Surrender. Except as a result of (a) Tenant Improvements and
---------
Capital Additions (as defined hereinafter); (b) normal and reasonable wear and
tear (subject to the obligation of Tenant to maintain each Leased Property in
good order and repair during the Term); and (c) casualty, taking or other damage
and destruction not required to be repaired by Tenant, Tenant shall surrender
and deliver up each Leased Property at the expiration or termination of the Term
or the Extension Term therefor, as the case may be, broom clean, in good order
and repair, free of the Excluded Personal Property and any additional items of
Tenant's personal property (together with the Excluded Personal Property, the
"Tenant's Personal Property"), all of which Tenant shall remove prior to such
surrender and delivery, and in as good order and condition as of the
Commencement Date.
1.06 Deliveries at Commencement. On the Commencement Date, Tenant shall
--------------------------
deliver to Landlord:
(a) A binding insurance certificate stating that Capital Automotive
L.P. is an additional named insured under the Tenant's insurance
policy;
(b) A certified copy of the Tenant's organizational documents, as
amended and in existence on that date; and
(c) A certificate of good standing from the jurisdiction in which
Tenant is organized, and if Tenant is organized in a jurisdiction
other than the situs of the Leased Property, a certificate of
good standing and foreign qualification from the jurisdiction in
which the Leased Property is located;
4
<PAGE>
(d) A consent or resolutions of the Tenant authorizing the Tenant to
enter into this Lease.
1.07 Additional Leased Properties; Lease Supplement Tenant and Landlord
----------------------------------------------
hereby agree that, for a period of sixty months following the Effective Date,
that Tenant or an Affiliate of Tenant (including, but not limited to James E.
and/or Thomas W. Kelley) shall have the right to transfer and convey additional
real property to the Landlord on the same relevant material terms and conditions
as the Lease (pursuant to a Lease Supplement) and that Real Property Purchase
and Contribution Agreement by and between Landlord and Tenant or its Affiliate
executed in connection with the execution of this Lease ("Purchase and
Contribution Agreement") at a price acceptable to the Landlord which price shall
be not less than the fair market value of the real property to be transferred,
provided that (i) the material terms and conditions of this Lease and the
- --------
Purchase and Contribution Agreement are economically feasible for the Landlord,
within the Landlord's sole discretion, in light of the economic conditions
existing at the time that Tenant or an Affiliate thereof seek to transfer and
convey any real property and (ii) without contemporaneous written consent of the
Landlord, Tenant or an Affiliate thereof may transfer such real property only
for cash in U.S. dollars in the amount of the purchase price for such real
property.
II. RENT
----
2.01 Base Rent. Tenant shall pay Landlord annual base rent (the "Base
---------
Annual Rent") as to the Leased Property for each year during the Term or the
Extension Term (each such year a "Lease Year"), which Base Annual Rent shall be
subject to upward adjustment pursuant to Section 2.03. In each of the first
three (3) Lease Years for any Leased Property that is the subject of this Lease
(including any property included in this Lease by a Lease Supplement), the Base
Annual Rent shall be in the amount set forth in the Summary of Terms (the
"Initial Base Annual Rent"), paid to Landlord in twelve equal monthly
installments in each such Lease Year.
2.02 Additional Rent. As to each Leased Property, in addition to the Base
---------------
Annual Rent, Tenant shall pay all other amounts, liabilities, obligations and
Impositions (as defined in Section 3.02 hereto) which Tenant assumes or agrees
to pay under this Lease and any fine, penalty, interest, charge and cost which
may be added for nonpayment or late payment of such items (collectively, the
"Additional Rent"). The Base Annual Rent and Additional Rent are hereinafter
referred to as "Rent."
2.03 Base Annual Rent Adjustment.
---------------------------
(a) The Base Annual Rent shall be adjusted during the Lease Term or
the Extension Terms under the procedures set forth in the Summary
of Terms (the "Base Annual Rent Adjustment").
(b) As used herein and in the Summary of Terms, "CPI" shall mean the
CPI-U published by the United States Department of Labor, Bureau
of Labor
5
<PAGE>
Statistics Consumer Price Index for All Urban Consumers,
U.S. City Average. If at any time during the Term or the
Extension Term, as the case may be, the CPI shall be
discontinued, Landlord shall select a substitute index, subject
to Tenant's reasonable and timely approval, being an existing
official index published by the Bureau of Labor Statistics or its
successor or another, similar governmental agency, which index is
most nearly equivalent to the CPI.
2.04 Security Deposit. Prior to the Commencement Date, Tenant shall
----------------
deliver to Landlord a personal guarantee by the parties and in the amount stated
in the Summary of Terms, which shall be held by Landlord as security (the
"Security Deposit") for the performance of Tenant's payment and other
obligations under this Lease. Upon an Event of Default and the continuance
thereof, Landlord shall have the right, but not the obligation, to apply the
Security Deposit as set forth in Section 9.08. Landlord shall return the
Security Deposit, without interest, after expiration of this Lease, if Tenant
has fully and faithfully carried out all of the terms, covenants and conditions
hereof.
2.05 Place of Payment of Rent; Direct Payment of Additional Rent. Landlord
------------------------------------------------------------
shall have all legal, equitable and contractual rights, powers and remedies
provided in this Lease or by statute or otherwise in the case of nonpayment of
the Rent for each Leased Property. Except as otherwise specifically and
expressly provided in this Lease, Tenant shall pay the Base Annual Rent without
notice, demand, set-off or counterclaim in advance, in lawful money of the
United States of America and payable in consecutive monthly installments
commencing on the Commencement Date and thereafter on the first day of each
month during the Term. Unless Landlord shall direct otherwise, Tenant shall
make all payments of Base Annual Rent to Landlord by direct deposit of
immediately available funds to the bank account specified in Exhibit 2.05 (which
------------
account Landlord may change from time to time upon Notice to Tenant). At the
direction of the Landlord and in the event of an uncured Event of Default,
Tenant shall make payments of Additional Rent directly to the person or persons
to whom such amount is owing at the time and times when such payments are due,
and Tenant shall give to Landlord such evidence of such direct payments as
Landlord shall reasonably request.
2.06 Net Lease. This Lease shall be deemed and construed to be an
----------
"absolute net lease" or "triple net lease," (i.e. that Tenant shall pay all
costs and expenses related to the ownership and operations of each Leased
Property, thereby leaving all Rent as an absolutely net return to Landlord) and
as to each Leased Property, Tenant shall pay all Rent, Impositions, and other
charges and expenses in connection with such Leased Property throughout the Term
and any Extension Term, without abatement, deduction or set-off except as
otherwise specifically and expressly provided in this Lease.
2.07 No Termination, Abatement, Etc. Except as otherwise specifically and
-------------------------------
expressly provided herein, Tenant shall remain bound by this Lease in accordance
with its terms. Except as otherwise specifically and expressly provided herein,
Tenant shall not, without the prior written consent of Landlord, modify,
surrender or terminate this Lease as to any Leased Property, nor seek
6
<PAGE>
nor be entitled to any abatement, deduction, deferment or reduction of Rent, or
set-off against the Rent as to any Leased Property for any reason whatsoever.
Notwithstanding any other provision in this Lease, in the event that Landlord
materially fails to observe and perform the conditions and requirements of
Sections 15.01, 16.01 and 16.02, after written notice thereof and an opportunity
to cure within a thirty (30) day period after such notice is given Landlord by
Tenant, Tenant shall be entitled reasonably to abate, deduct, or reduce Base
Annual Rent ("Rent Reduction"), provided that, in the event that Tenant's Rent
--------
Reduction is held by a court of competent jurisdiction to exceed the amount of
Rent Reduction to which Tenant is entitled, Tenant shall be liable for
liquidated damages, in addition to any other remedies to which Landlord is
entitled, in the amount of the excess Rent Reduction and the interest thereon at
the New York Prime Rate from the date on which such rent was otherwise due. The
term "New York Prime Rate" means the prime rate published in the "Money Rates"
column of The Wall Street Journal. Except as specifically and expressly provided
in this Lease, the obligations of Landlord and Tenant shall not be affected by
reason of: (a) the lawful or unlawful prohibition of, or restriction upon,
Tenant's use of any Leased Property, or any part thereof, the interference with
such use by any person, corporation, partnership or other entity, other than
Landlord or any person or entity acting by or through or under Landlord; (b) any
claim which Tenant has or might have against Landlord or by reason of any
default or breach of any warranty by Landlord under this Lease or any other
agreement between Landlord and Tenant, or to which Landlord and Tenant are
parties; (c) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Landlord or any assignee or transferee of Landlord; (d) any damage to, or
destruction of, any Leased Property or any portion thereof for whatever cause,
or any taking of the Leased Property or any portion thereof; or (e) any other
cause, whether similar or dissimilar to any of the foregoing, other than a
discharge of Tenant from any such obligations as a matter of law. Except as
otherwise specifically and expressly provided in this Lease, and to the maximum
extent permitted by law, Tenant hereby specifically waives all rights, including
but not limited to any rights under any statute relating to rights of tenants in
the jurisdictions where the Leased Properties are located, which may now be
conferred upon it by law, relating to: (a) the modification, surrender or
termination of this Lease, or the quitting or surrender of any Leased Property
or any portion thereof; (b) any abatement, reduction, suspension or deferment of
the Rent or other sums payable by Tenant hereunder; (c) any rights of redemption
and (d) any right to demand or notice of termination or eviction. Except as
otherwise specifically and expressly provided in this Lease, as to each Leased
Property, the obligations of Landlord and Tenant hereunder shall be separate and
the Rent and all other sums shall continue to be payable in all events unless
the obligations to pay the same shall be terminated or abated or reduced
pursuant to the express provisions of this Lease or by termination of this Lease
other than by reason of an Event of Default.
III. IMPOSITIONS AND UTILITIES
-------------------------
3.01 Payment of Impositions. The Landlord and Tenant intend that Landlord
----------------------
shall bear none of the costs of the ownership and operation of the Leased
Property except for payment of the federal, state or local income taxes, and
that Tenant shall pay all costs in every respect of the
7
<PAGE>
ownership and operation of the Leased Property except for Landlord's payment of
federal, state or local income taxes. By way of example and in no means by way
of limitation, the Tenant shall pay as follows: subject to the adjustments set
forth herein, Tenant shall pay, in the manner set forth in Section 3.04, as
Additional Rent, to the Landlord an amount equal to the amount necessary to pay
all Impositions that may be levied or become a lien on any Leased Property or
any part thereof at any time (whether prior to or during the Term), without
regard to prior ownership of said Leased Property, before the same becomes
delinquent. Tenant's obligation to pay such Impositions shall be deemed
absolutely fixed upon the date such Impositions become a lien upon any Leased
Property or any part thereof. Tenant, at its expense, shall prepare and file all
tax returns and reports in respect of any Imposition as may be required by
governmental authorities, provided, however, that Tenant shall provide to
--------
Landlord copies of all filings of such tax returns or reports in respect of any
real property or Fixtures owned by Landlord. Tenant shall be entitled to any
refund due in respect of such Impositions from any taxing authority if no Event
of Default shall have occurred hereunder and be continuing. Any refunds in
respect of such Impositions retained by Landlord due to an Event of Default
shall be applied as provided in Section 9.08. Landlord and Tenant shall, upon
request of the other, provide such data as is maintained by the party to whom
the request is made with respect to a Leased Property as may be necessary to
prepare any required tax returns and reports. In the event governmental
authorities classify any Fixtures or other property covered by this Lease as
personal property, Landlord and Tenant shall file all personal property tax
returns in such jurisdictions where it may legally so file with respect to their
respective owned personal property. Landlord, to the extent it possesses the
same, and Tenant, to the extent it possesses the same, will provide the other
party, upon request, with cost and depreciation records necessary for filing
such returns or reports for any property so classified as personal property. To
the extent that Landlord is legally required to file personal property tax
returns, Tenant will be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Tenant to file a
protest. Tenant may, upon notice to Landlord, at Tenant's option and at Tenant's
sole cost and expense, protest, appeal, or institute such other proceedings as
Tenant may deem appropriate to effect a reduction of real estate or personal
property assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action. Tenant shall
provide Landlord copies of all materials filed or presented in connection with
any such proceeding. Tenant shall promptly reimburse Landlord for all taxes paid
by Landlord, which were not paid with deposits received from Tenant, upon
receipt of billings accompanied by copies of a bill therefor and payments
thereof which identify the property with respect to which such payments are
made. Impositions imposed with respect to the tax-fiscal period during which the
Term commences and terminates as to each Leased Property shall be adjusted and
prorated between Landlord and Tenant on a per diem basis, with Tenant being
obligated to pay its pro rata share from and including the Commencement Date to
and including the expiration or termination date of the Term or Extension Term,
as the case may be, whether or not such Imposition is imposed before or after
such commencement or termination, and Tenant's obligation to pay its prorated
share thereof shall survive such termination. Tenant shall also pay to Landlord
a sum equal to the amount which Landlord may be caused to pay of any privilege
tax, sales tax, gross receipts tax, rent tax, occupancy tax or like tax
(excluding any tax based on net income), hereinafter levied, assessed, or
imposed by any federal,
8
<PAGE>
state, city, county or municipal or other local governmental authority, or any
subdivision thereof, upon or measured by rent or other consideration required to
be paid by Tenant under this Lease.
3.02 Definition of Impositions. "Impositions" means, collectively:
-------------------------
(a) taxes (including without limitation, all real estate and personal property
ad valorem (whether assessed as part of the real estate or separately assessed
as unsecured personal property), sales and use, business or occupation, single
business, gross receipts, transaction, privilege, rent or similar taxes, but not
including income or franchise or excise taxes payable with respect to Landlord's
receipt of Rent); (b) assessments, whether in the nature of a special assessment
or otherwise (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not to be completed within the Term or any Extension
Term, as the case may be); (c) ground rents, water, sewer or other rents and
charges, excises, tax levies, and fees (including, without limitation, license,
permit, inspection, authorization and similar fees); (d) to the extent they may
become a lien on a Leased Property, all taxes imposed on Tenant's operations of
such Leased Property including without limitation, employee withholding taxes,
income taxes and intangible taxes; and (e) all other governmental charges, in
each case whether general or special, ordinary or extraordinary, or foreseen or
unforseen, of every character in respect of each Leased Property or any part
thereof, the Business conducted by Tenant thereon, and/or the Rent (including
all interest and penalties thereon due to any failure in payment by Tenant),
which at any time prior to, during or in respect of the Term or any Extension
Term, as the case may be, hereof may be assessed or imposed on or in respect of
or be a lien upon (i) Landlord or Landlord's interest in any Leased Property or
any part thereof; (ii) any Leased Property or any part thereof or any rent
therefrom or any estate, right, title or interest therein; or (iii) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on, or in connection with any Leased Property or the leasing or use of any
Leased Property or any part thereof. Tenant shall not, however, be required to
pay: (x) any tax based on net income (whether denominated as a franchise or
capital stock or other tax) imposed on Landlord or (y) subject to the terms of
this Lease, any tax imposed with respect to the sale, exchange or other
disposition by Landlord of a Leased Property or the proceeds thereof; provided,
however, that if any tax, assessment, tax levy or charge which Tenant is
obligated to pay pursuant to the first sentence of this definition and which is
in effect at any time during the Term hereof is totally or partially repealed,
and a tax, assessment, tax levy or charge set forth in clause (x) or (y)
immediately above is levied, assessed or imposed expressly in lieu thereof
Tenant shall then pay such tax, levy, or charge set forth in said clause (x) or
(y).
3.03 Utilities. Tenant shall contract for, in its own name, and will pay,
---------
as Additional Rent all taxes, assessments, charges/deposits, and bills for
utilities, including without limitation charges for water, gas, oil, sanitary
and storm sewer, electricity, telephone service, trash collection, and all other
utilities which may be charged against the occupant of the Improvements during
the Term. Tenant shall at all times maintain that amount of heat necessary to
ensure against the freezing of water lines. Tenant hereby agrees to indemnify
and hold Landlord harmless from and against any liability or damages to the
utility systems of each Leased Property that may result from Tenant's failure to
maintain sufficient heat in the Improvements therefor.
9
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3.04 Escrow of Impositions. Following an Event of Default not cured within
---------------------
the applicable cure period, if any, at Landlord's option, Tenant shall
thereafter deposit with Landlord on the first day of each month during the Term
hereof and any Extension Term, as the case may be, a sum equal to one-twelfth
(1/12th) of the Impositions assessed against such Leased Property which sums
shall be used by Landlord toward payment of such Impositions. If, at the end of
any applicable tax year, any such funds held by Landlord are insufficient to
make full payment of taxes or other Impositions for which such funds are held,
Tenant, on demand, shall pay to Landlord any additional funds necessary to pay
and discharge in full the obligations of Tenant pursuant to the provisions of
this Section. If, however, at the end of any applicable tax year, such funds
held by Landlord are in excess of the total payment required to satisfy taxes or
other Impositions for which such funds are held, Landlord shall apply such
excess amounts to a tax and Imposition escrow fund for the next tax year. With
respect to each Leased Property, if any such excess exists following the
expiration or earlier termination of this Lease, and subject to the terms of
this Lease, Landlord shall promptly refund such excess amounts to Tenant. The
receipt by Landlord of the payment of such Impositions by and from Tenant shall
only be as an accommodation to Tenant and the taxing authorities, and shall not
be construed as rent or income to Landlord, Landlord serving, if at all, only as
a conduit for delivery purposes.
3.05 Discontinuance of Utilities. Landlord will not be liable for damages
---------------------------
to person or property or for injury to, or interruption of, business for any
discontinuance of utilities at any Leased Property nor will such discontinuance
in any way be construed as an eviction of Tenant from such Leased Property or
cause an abatement of Rent as to such Leased Property or operate to release
Tenant from any of Tenant's obligations as to such Leased Property under this
Lease. Notwithstanding the forgoing, however, provided that if Tenant has
--------
complied with Section 3.07 hereof, Landlord shall be liable for damages to
person or property or for injury to, or interruption of business, for any
discontinuance of utilities at any Leased Property, in the event and to the
extent, such damages or injury are caused by the negligence or wilful misconduct
of the Landlord and which damages are not otherwise fully covered (excluding
deductibles) by payments to Tenant under its insurance.
3.06 Liens. Subject to Section 17.19 relating to contests, Tenant shall
-----
not directly or indirectly create or allow to remain, and will promptly
discharge at its expense, any lien, encumbrance, attachment, title retention
agreement or claim upon any Leased Property or any attachment, levy, claim or
encumbrance in respect of any Rent provided under this Lease, not including,
however: (a) this Lease; (b) utility easements and road rights-of-way in the
customary form (i) provided the same do not adversely affect the intended use of
the Leased Properties (including the Improvements) and do not create a material
adverse effect on the value of the Leased Properties or (ii) which result solely
from the action or inaction of Landlord; (c) zoning and building laws or
ordinances, provided the Tenant will promptly cure any manner in which the
Leased Properties and the Business are not in compliance with same; (d) such
encumbrances as are subsequently consented to in writing by Landlord, but
excluding liens in respect of Impositions required to be paid under Section
3.01; (e) liens for Impositions so long as (i) the same are not yet payable or
are payable without the addition of any fine or penalty or (ii) such liens are
being
10
<PAGE>
contested as permitted under Section 17.19; and (f) other encumbrances,
easements, rights of way or liens, including such as Tenant may place on its
leasehold estate in the Leased Property (which liens on Tenant's leasehold
estate shall be permitted without the consent of Landlord) (i) provided the same
do not adversely affect the intended use of the Leased Properties (including the
Improvements), do not create a material adverse effect on the value of the
Leased Properties and do not adversely affect the Landlord's rights or estate in
and to the Leased Property or those of any person claiming in, through or under
Landlord, including any pledgee or mortgagee thereof, or (ii) which result
solely from the action or inaction of Landlord or (iii) which are Permitted
Exceptions shown on the final marked up commitment or policy of title insurance
for the Leased Properties provided to the Landlord pursuant to the Purchase and
Contribution Agreement.
3.07 Impositions Statements. Tenant shall immediately after the
----------------------
Commencement Date notify the appropriate taxing authorities, utility providers,
and other entities that would send invoices for Impositions in the jurisdiction
in which the Leased Properties are situated that all tax statements, assessments
and bills for Impositions shall be delivered directly to Tenant for payment.
Tenant shall deliver to Landlord copies of all statements of taxes, special
assessments or other Impositions within ten (10) days of Tenant's receipt
thereof. To the extent that Landlord receives any tax statements, tax
assessments and bills for Impositions directly from such taxing authority,
utility provide or other similar entity, Landlord shall deliver to Tenant copies
of all statements of taxes, special assessments or other Impositions within ten
(10) days of Landlord's receipt thereof. Immediately upon Tenant's receipt of
such copies from Landlord, Tenant shall immediately arrange for all future
notices from that source to be delivered directly to Tenant for payment. In the
event that Tenant has complied with this Section 3.07 and Landlord receives
bills for Impositions, Landlord shall promptly deliver copies of such bills for
Impositions to Tenant. If Landlord fails to deliver copies of such bills to
Tenant at least five (5) business days prior to the time Tenant would need to
pay such bills in order to obtain discounts on or to avoid penalties, fines or
interest in connection with such bills, Landlord shall be responsible for
payment to Tenant of the amount of any lost discount, or penalties, fines or
interest arising solely from Landlord's non-timely delivery of such bills to
Tenant.
IV. INSURANCE
---------
4.01 Insurance. Tenant shall, at Tenant's expense, keep the Improvements,
---------
Fixtures, and other components of each Leased Property insured against the
following risks:
(a) Loss or damage by fire with extended coverage (including
windstorm and subsidence), vandalism and malicious mischief,
sprinkler leakage and all other physical loss perils commonly
covered by "All Risk" ("Special Form") insurance in an amount not
less than one hundred percent (100%) of the then full replacement
cost thereof (as hereinafter defined). Such policy shall include
an agreed amount endorsement if available at a reasonable cost.
Such policy shall also include endorsements for contingent
liability for operation of building laws, demolition costs, and
increased cost of construction.
11
<PAGE>
(b) Loss or damage by explosion of steam boilers, pressure vessels,
or similar apparatus, now or hereafter installed on any Leased
Property, in commercially reasonable amounts acceptable to
Landlord.
(c) Loss of rent under a rental value or Business interruption
insurance policy covering risk of loss during the first twelve
(12) months of reconstruction necessitated by the occurrence of
any hazards described in Sections 4.01(a) or 4.01(b), above, and
which causes an abatement of Rent as provided in Article X
hereof, in an amount sufficient to prevent Landlord or Tenant
from becoming a co-insurer, containing endorsements for extended
period of indemnity and premium adjustment, and written with an
agreed amount clause, if the insurance provided for in this
clause (c) is available.
(d) If the Land or any portion thereof related to a Leased Property
is located in whole or in part within a designated flood plain
area as shown on the ALTA survey performed in connection with the
Purchase and Contribution Agreement, loss or damage caused by
flood in commercially reasonable amounts acceptable to Landlord.
(e) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper
currency, depositor's forgery, and loss of property accepted by
Tenant for safekeeping, in commercially reasonable amounts
acceptable to Landlord.
(f) Workers' compensation insurance as required by statute in respect
of any work or other operations on or about each Leased Property.
(g) Comprehensive liability insurance as to each Leased Property in
amounts equal to the greater of (i) One Million Dollars
($1,000,000) for each occurrence and Two Million Dollars
($2,000,000) in the aggregate, or (ii) the limits of liability
generally required under the franchise agreements or other
agreements pursuant to which Tenant operates the Businesses
conducted on or about each Leased Property.
(h) Commercial comprehensive catastrophic liability insurance with
limits of liability of not less than the greater of (i) Five
Million ($5,000,000) and (ii) the limits of liability generally
required under the franchise agreements or other agreements
pursuant to which Tenant operates the Businesses conducted on or
about each Leased Property.
(i) During the period when any addition, alteration, construction,
installation or demolition is being made or performed to any part
of the Leased Property, contingent liability, public liability,
completed value, builder's risk (non-
12
<PAGE>
reporting form) workers' compensation and other insurance as is
deemed prudent by Landlord.
4.02 Insurance Limits. Deductible provisions for the insurance required
----------------
under Section 4.01(a) shall not exceed Twenty-Five Thousand Dollars ($25,000)
per location per occurrence and One Hundred Thousand Dollars ($100,000)
aggregate per occurrence; under clause(d), Twenty-Five Thousand Dollars
($25,000) per occurrence, except that if federal flood insurance is available
then such deductible shall not be greater than the lowest deductible available
with respect to such federal flood insurance; under clause (g), Twenty-Five
Thousand Dollars ($25,000) per occurrence; under clause (h), Twenty-Five
Thousand Dollars ($25,000) per occurrence; and under clause (j), Twenty-Five
Thousand Dollars ($25,000) per occurrence.
4.03 Insurance Requirements. The following provisions shall apply to all
----------------------
insurance coverages required hereunder:
(a) The carriers of all policies shall have a Best's Rating of "A-"
or better and a Best's Financial Category of XII or larger and
shall be authorized to do insurance business in the jurisdiction
in which the Leased Property is located.
(b) Tenant shall be the "named insured" and Landlord and any
mortgagee of Landlord shall be an "additional named insured" on
each policy, except the insurance required by Section 4.01(f)
hereto.
(c) Tenant shall deliver to Landlord certificates or policies showing
the required coverages and endorsements. Each policy or
certificate of insurance shall provide that such policy or
certificate (i) may not be canceled, (ii) may not lapse for
failure to renew, and (iii) no material change or reduction in
coverage may be made, without Landlord's approval after at least
thirty (30) days' prior written notice to Landlord.
(d) The policies shall contain a severability of interest and/or
cross-liability endorsement, provide that the acts or omissions
of Tenant will not invalidate Landlord's coverage, and provide
that Landlord shall not be responsible for payment of premiums.
(e) All loss adjustment shall require the written consent of Landlord
and Tenant, as their interests may appear.
(f) At least (30) thirty days prior to the expiration of each policy,
Tenant shall deliver to Landlord a certificate showing renewal of
such policy and payment of the annual premium therefor.
13
<PAGE>
Tenant shall have the right to select any insurance company or companies
meeting the standards set forth in this Section IV to provide the insurance
coverage required by this Lease. Landlord shall have the right to review the
insurance coverages required hereunder with Tenant from time to time, to obtain
the input of third party professional insurance advisors (at Landlord's expense)
with respect to such insurance coverages, and to consult with Tenant in Tenant's
annual review and renewal of such insurance coverages. All insurance coverages
hereunder shall be in such form, substance and amounts as are customary or
standard in Tenant's industry, but at a minimum shall comply with the
requirements set forth herein.
4.04 Replacement Cost. The term "full replacement cost" means the actual
----------------
replacement cost of the Improvements from time to time including increased cost
of construction, with no reductions or deductions. Tenant shall, not later than
thirty (30) days after the anniversary of each policy of insurance, increase the
amount of the replacement cost endorsement for the Improvements to the extent
necessary to reflect increased costs of construction. If Tenant makes any
Permitted Alterations (as hereinafter defined) to any Leased Property, Landlord
may have such full replacement cost redetermined at any time after such
Permitted Alterations are made, regardless of when the full replacement cost was
last determined.
4.05 Blanket Policy. Tenant may carry the insurance required by this
--------------
Article under a blanket policy of insurance, provided that the coverage afforded
Tenant will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all of the requirements of
this Lease and the Landlord approves the form of the policy.
4.06 No Separate Insurance. Tenant shall not take out separate insurance
---------------------
concurrent in form or contributing in the event of loss with that required in
this Article, or increase the amounts of any then existing insurance by securing
an additional policy or additional policies, unless all parties having an
insurable interest in the subject matter of the insurance, including Landlord
and any mortgagees, are included therein as additional named insureds or loss
payees, the loss is payable under said insurance in the same manner as losses
are payable under this Lease, and such additional insurance is not prohibited by
the existing policies of insurance required pursuant to this Article. Tenant
shall immediately notify Landlord of the taking out of such separate insurance
or the increasing of any of the amounts of the existing insurance by securing an
additional policy or additional policies. The term "mortgages" as used in this
Lease includes, but is not limited to, Deeds of Trust and the term "mortgagees"
includes, but is not limited to, trustees and beneficiaries under a Deed of
Trust.
4.07 Waiver of Subrogation. Each party hereto hereby waives any and every
---------------------
claim which arises or may arise in its favor and against the other party hereto
during the Term or any Extension Term or renewal thereof, for any and all loss
of, or damage to, any of its property located within or upon, or constituting a
part of, any Leased Property, which loss or damage is covered by valid and
collectible insurance policies, to the extent that such loss or damage is
recoverable in full under such policies. Said mutual waiver shall be in
addition to, and not in limitation or derogation of, any other waiver or release
contained in this Lease with respect to any loss or damage to property of the
parties
14
<PAGE>
hereto. Inasmuch as the said waivers will preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an insurance company (or
any other person), each party hereto agrees immediately to give each insurance
company which has issued to it policies of insurance, written notice of the
terms of said mutual waivers, and to have such insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverage
by reason of said waivers, so long as such endorsement is available at a
reasonable cost.
4.08 Mortgages. The following provisions shall apply if Landlord now or
---------
hereafter places a mortgage on any Leased Property or any part thereof: (a)
Tenant shall obtain a standard form of mortgage clause insuring the interest of
the mortgagee (which requirement shall not include a mortgagee policy of title
insurance); (b) Tenant shall deliver evidence of insurance to such mortgagee;
and (c) loss adjustment shall require the consent of the mortgagee but such
consent shall not be unreasonably withheld and may not include any requirement
that the funds be paid to mortgagee in lieu of reconstruction.
4.09 Other Insurance Requirements. Notwithstanding anything in this Lease
----------------------------
to the contrary and not by way of limitation, in addition to the types and
amounts of insurance required to be carried by Tenant herein, Tenant covenants
to insure and continue in effect such types and amounts of insurance as the
Tenant shall be required to carry pursuant to any contract, agreement,
instrument, statute, law, rule or regulation relating to the use of the Leased
Property and the operations of any Business or other activities thereon,
including noncancellable written notice to mortgagee.
V. INDEMNITY; SUBSTANCES OF CONCERN
--------------------------------
5.01 Tenant's Indemnification. Subject to Section 4.07 and except for any
------------------------
acts or omissions or negligence, gross negligence or wilful misconduct of
Landlord or any of its agents, employees, representatives or contractors, Tenant
hereby agrees to indemnify and hold harmless Landlord, its agents, and employees
from and against any and all demands, claims, causes of action, fines,
penalties, damages (including punitive and consequential damages), losses,
liabilities (including strict liability), judgments, costs and expenses
(including, without limitation, reasonable attorneys' fees, court costs, and the
costs set forth in Section 9.06) (the "Claims") incurred in connection with or
arising from: (a) the use, condition, operation or occupancy of the Leased
Properties; (b) any activity, work, or thing done, or permitted or suffered by
Tenant in, on or about the Leased Properties; (c) any acts, omissions, or
negligence of Tenant or any person claiming under Tenant, or the contractors,
agents, employees, invitees, or visitors of Tenant or any such person; (d) any
breach, violation, or nonperformance by Tenant or any person claiming under
Tenant or the employees, agents, contractors, invitees, or visitors of Tenant or
of any such person, of any term, representation, warranty, covenant, or
provision of this Lease or any law, ordinance, or governmental requirement of
any kind; (e) any injury or damage to the person, property or Business of
Tenant, its employees, agents, contractors, invitees, visitors, or any other
person entering upon any Leased Property; (f) any accident, injury to or death
of persons or loss or damage to any item of property
15
<PAGE>
occurring on or about any Leased Property; and (g) any Environmental Law or any
pollution or other threat to human health or the environment at, arising out of
or relating to any Leased Property as set forth in Section 5.05. If any action
or proceeding is brought against Landlord, its employees, or agents by reason of
any such demand, claim, or cause of action, Tenant, upon notice from Landlord,
will defend the same at Tenant's expense with counsel reasonably satisfactory to
Landlord. In the event Landlord reasonably determines that its interests and the
interests of Tenant in any such action or proceeding are not substantially the
same and that Tenant's counsel cannot adequately represent the interests of
Landlord therein, Landlord shall have the right to hire separate counsel in any
such action or proceeding and the reasonable costs thereof shall be paid for by
Tenant. Tenant's indemnification obligations with respect to a Claim shall
survive the expiration or earlier termination of this Lease until the later of
(i) two (2) years from the Execution Date, or (ii) the expiration of the period
ninety (90) days after the date on which Landlord has actual knowledge of the
existence of such Claim, provided, however, that Tenant's indemnification
obligations shall survive the expiration or earlier termination of this Lease
until ninety (90) days after the expiration of the applicable statute of
limitations for Claims incurred in connection with, arising out of, or related
to (i) Section 5.01(g) or (ii) the failure to pay, as provided for in this
Agreement, any Imposition.
5.02 Substances of Concern.
---------------------
(a) For purposes of this Section 5:
(i) "Substances of Concern" means, without limitation,
chemicals, pollutants, contaminants, wastes, toxic
substances, radioactive materials or genetically modified
organisms, which are, have been or become regulated by any
federal, state or local government authority including,
without limitation, (1) petroleum or any fraction thereof,
(2) asbestos, (3) any substance or material defined as a
"hazardous substance" pursuant to (S) 101 of the
Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. (S) 9601), or (4) any substance or
material defined as a "hazardous chemical" pursuant to the
federal Hazard Communication Standard (29 C.F.R. (S)
1910.1200).
(ii) "Environmental Laws" means all federal, state, local, and
foreign laws and regulations relating to pollution or
protection of human health or the environment (including,
without limitation, ambient air, surface water, ground
water, wetlands, land surface, subsurface strata, and
indoor and outdoor workplace), including, without
limitation, (1) laws and regulations relating to emissions,
discharges, releases, or threatened releases of Substances
of Concern, and (2) common law principles of tort
liability.
16
<PAGE>
(b) Tenant shall not, either with or without negligence, injure,
overload, deface, damage or otherwise harm any Leased Property or
any part or component thereof; commit any nuisance; permit the
emission of any Substances of Concern; allow the release or other
escape of any biologically or chemically active substances or
materials or other Substances of Concern so as to impregnate,
impair or in any manner affect, even temporarily, any element or
part of any Leased Property or neighboring property, or allow the
storage or use of such substances or materials in any manner not
sanctioned by law and by reasonable standards prevailing in the
automobile retail and related industries for the storage and use
of such substances or materials; nor shall Tenant permit the
occurrence of objectionable noise or odors; or make, allow or
suffer any waste whatsoever to any Leased Property. Landlord may
inspect each Leased Property from time to time upon reasonable
prior notice, and Tenant will cooperate with such inspections.
(c) Notwithstanding the foregoing, Tenant anticipates using, storing
and disposing of certain Substances of Concern in connection with
operation of its Business. Such Substances of Concern include,
but are not limited to, the following: motor oil, waste motor oil
and filters, transmission fluid, antifreeze, refrigerants, waste
paint and lacquer thinner, batteries, solvents, lubricants,
degreasing agents, gasoline and diesel fuels. Tenant shall
ascertain and comply fully with all applicable Environmental Laws
and environmental standards and requirements set by federal,
state or local laws, rules, regulations or governmental
directives related to the Leased Properties or Tenant's use or
occupancy of the Leased Property ("Environmental Standards"),
including but not limited to any laws or standards (a) regulating
the use, storage, generation or disposal of Substances of
Concern, (b) regulating the monitoring or use of any underground
or aboveground storage tanks at the Leased Properties, or (c)
establishing any permitting, notification or reporting
requirements. As promptly as practicable after the Commencement
Date (but in no event later than 120 days thereafter), Tenant
shall establish and implement a program of compliance with all
applicable Environmental Laws and Environmental Standards
("Environmental Compliance Program"). Tenant shall update such
Environmental Compliance Program every three (3) years during the
Term. Tenant shall submit its Environmental Compliance Program
and each update thereto to Landlord; provided, however, such
submittal shall not relieve Tenant of its obligations pursuant to
this Section 5. Tenant's Environmental Compliance Program shall
include a program for monitoring Tenant's compliance with
Environmental Laws and Environmental Standards and a plan for
correcting immediately any incident of noncompliance. Tenant
shall comply with its Environmental Compliance Program.
17
<PAGE>
(d) In the event of any noncompliance with any Environmental Laws or
Environmental Standards or any spill, release or discharge of
Substances of Concern in a reportable quantity under federal,
state or local law, Tenant shall:
(i) give Landlord immediate notice of the incident by
telephone or facsimile, providing as much detail as
possible. Such notice shall be provided to Landlord's
National Dealership Real Estate Manager or to such other
person as Landlord shall designate in accordance with
Section 16.01 below;
(ii) as soon as possible, but no later than seventy-two (72)
hours, after discovery of an incident of noncompliance,
submit a written report to Landlord, identifying the
source or case of the noncompliance or spill, release or
discharge (including the names and quantities of any
Substances of Concern involved) and the method or action
required to correct the problem; and
(iii) cooperate with Landlord or its designated agents or
contractors with respect to the investigation and
correction of such problem.
Tenant shall also be solely responsible for providing any notice to any federal,
state or local governmental authority required by applicable laws and
regulations as a result of such incident.
5.03 Audits. Landlord shall have the right to conduct, at its expense,
------
periodic audits of Tenant's compliance with the Environmental Compliance Program
and management of Substances of Concern at the Leased Properties and/or periodic
tests of air, soil, surface water or groundwater at or near the Leased
Properties. Landlord shall provide Tenant with the results of any audit or
tests, provided that Tenant agrees promptly to modify its Environmental
--------
Compliance Program or its operations if in Landlord's reasonable judgement (i)
Tenant has breached its obligations under this Lease and/or (ii) any of the
Leased Properties is in violation of Environmental Laws. Tenant agrees to
remediate or remove a spill, release or discharge of Substances of Concern in
accordance with Section 5.06 below. If Landlord reasonably determines that
alterations or improvements of equipment or buildings located on the Leased
Property are necessary to remedy any violation of Environmental Law or of
Tenant's obligations under this Lease, Tenant shall perform such alterations or
improvements as are reasonable under the circumstances and pay all costs and
expenses relating thereto. If Tenant shall fail to pay any such costs or
expenses, Tenant shall deposit with Landlord the full amount necessary to pay
such costs in full within ten (10) days of Landlord's demand. Nothing contained
herein shall be construed to obligate or require Landlord to perform any audits,
tests, inquiry or investigation. Landlord shall not be liable in any way for
the truth or accuracy of the results of any such audit or tests that Landlord
provides to Tenant.
18
<PAGE>
5.04 Landlord's Option Re: Compliance. If Tenant, after notice from
--------------------------------
Landlord, fails to comply with or perform any of its obligations pursuant to
this Section 5, including, but not limited to, obligations to clean up spills,
releases or discharges, Landlord may, but shall not be obligated to, perform
such obligations and Tenant shall pay Landlord within ten (10) days of demand
Landlord's costs therefor, including any overhead and administrative costs.
5.05 Environmental Indemnification. Tenant shall indemnify and hold
-----------------------------
harmless Landlord from and against all demands, claims, causes of action, fines,
penalties, damages (including punitive and consequential damages), losses,
liabilities (including strict liability), judgments, and expenses (including,
without limitation, reasonable attorneys' fees, court costs, and the costs set
forth in Section 9.06) imposed upon or asserted against Tenant, Landlord or any
Leased Property on account of any Environmental Law (irrespective of whether
there has occurred any violation of any Environmental Law) relating to any
Leased Property, including (a) response costs and costs of removal and remedial
action incurred by the United States Government or any state or local
governmental unit to any other person or entity, or damages from injury to or
destruction or loss of natural resources, including the reasonable costs of
assessing such injury, destruction or loss, incurred pursuant to any
Environmental Law, (b) costs and expenses of abatement, investigation, removal,
remediation, correction or cleanup, fines, damages, response costs or penalties
which arise from the provisions of any Environmental Law, (c) liability for
personal injury or property damage arising under any statutory or common-law
tort theory, including damages assessed for the maintenance of a public or
private nuisance or for carrying on of a dangerous activity, (d) liability by
reason of a breach of an environmental representation or warranty by Tenant, and
(e) failure of Tenant to complete in a timely manner alterations or improvements
of equipment or buildings located on the Leased Property required to be
completed by Tenant pursuant to Section 5.03 in a manner acceptable to Landlord.
5.06 Tenant's Cleanup Obligation. If any spill, release or discharge
---------------------------
of Substances of Concern occurs on, at or from the Leased Properties during the
Term, Tenant shall promptly take all actions, at its sole expense, as are
necessary to remove or remediate such spill, release or discharge and to return
the Leased Property to the condition existing prior to the introduction of any
such Substances of Concern to the Leased Property, provided that Landlord's
approval of such actions shall first be obtained, so long as any delay that
would result from waiting to obtain Landlord's approval would not in the
reasonable judgment of Tenant risk further harm to person or property. Landlord
shall not unreasonably withhold its approval so long as Tenant's actions would
not potentially have any material adverse effect on the Leased Property.
Notwithstanding any provision in this Section 5.06 to the contrary, Tenant at
all times shall have the absolute right to immediately take without the consent
of Landlord such cleanup actions as required by federal, state, or local law or
ordinance or police/safety authorities to prevent or minimize further harm to
person or property.
5.07 Existing Environmental Conditions. Tenant acknowledges that it
---------------------------------
has had the opportunity to review the Environmental Reports identified in
Exhibit 5.07 hereto. Tenant hereby represents that it has reviewed and is aware
- ------------
of the matters disclosed in the Environmental Reports.
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As a material consideration for Landlord's willingness to enter into
this Lease, Tenant, for itself and its Affiliates, and each of their
shareholders, directors, officers, employees, agents, contractors,
representatives, insurers, successors and assigns hereby waives and releases
Landlord and its Affiliates and each of their shareholders, directors, officers,
employees, representatives, agents, contractors, representatives, insurers,
successors and assigns from any and all claims, demands, liabilities, costs,
expenses, causes of action and rights of action whatsoever, past, present or
future, known or unknown, suspected or unsuspected, which arise out of or relate
in any way to the violation of Environmental Laws or the use, storage,
treatment, disposal, presence, spill, release, or discharge of Substances of
Concern at, on or from the Leased Properties before the Commencement Date
(collectively, the "Released Claims").
In the event that Landlord is ordered by a governmental agency, or
determines that it is in its best interest, to remedy any violation of
Environmental Laws or to remove or remediate any Substances of Concern present
on, under or about the Leased Properties on the Commencement Date, or spilled,
released or discharged on, at or from the Leased Properties before the
Commencement Date, Tenant shall immediately upon notice from Landlord take all
actions, at Tenant's sole expense, to promptly complete such removal or
remediation.
5.08 Survival of Tenant's Obligations. Tenant's obligations under
--------------------------------
this Section 5 shall survive the expiration or earlier termination of this
Lease. During any period of time employed by Tenant after the termination of
this Lease to complete the removal from the Leased Property of any Substances of
Concern, if the premises are not rentable for uses contemplated under this
Lease, Tenant shall continue to pay the full amount of Rent due under this
Lease, which Rent shall be prorated daily for the final month of such period of
time.
VI. USE AND ACCEPTANCE OF PREMISES
------------------------------
6.01 Use of Leased Properties. For so long as this Lease is in effect
------------------------
(including following any sublease or assignment thereof), Tenant shall use and
occupy each Leased Property exclusively for the purpose of conducting the
Business or for any other legal purpose for which such Leased Property is being
used as of the Commencement Date, and for no other purpose without the prior
written consent of Landlord which consent shall be subject to the Landlord's
reasonable discretion. Tenant shall obtain and maintain all approvals, licenses,
and consents needed to use and operate the Leased Properties for such purposes.
Tenant shall promptly deliver to Landlord complete copies of surveys,
examinations, certification and licensure inspections, compliance certificates,
and other similar reports issued to Tenant by any governmental agency. Tenant
shall be entitled to install, at its own expense, one or more signs setting
forth Tenant's business name and/or operations, provided that any such sign
--------
shall comply with all applicable laws, ordinances, orders, rules, regulations,
and other governmental requirements
6.02 Acceptance of Leased Properties. Except as otherwise specifically and
-------------------------------
expressly provided in this Lease, Tenant acknowledges (i) Tenant and its agents
have had an opportunity to
20
<PAGE>
inspect each Leased Property; (ii) Tenant has found each Leased Property fit for
Tenant's use; (iii) delivery of each Leased Property to Tenant is in an "as-is"
condition; (iv) Landlord is not obligated to make any improvements or repairs to
any Leased Property; and (v) the roof, walls, foundation, heating, ventilating,
air conditioning, telephone, sewer, electrical, mechanical, utility, plumbing,
and other portions of each Leased Property are in good working order. LANDLORD
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE
LEASED PROPERTIES OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN
OR CONDITION OR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OR THE
MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH
RISKS ARE TO BE BORNE BY TENANT. The foregoing sentence is not intended to, and
does not, limit Tenant's rights under Section 15.01 of this Lease.
6.03 Conditions of Use and Occupancy. Tenant agrees that during the Term
-------------------------------
it shall use and keep each Leased Property in a careful, safe and proper manner;
not commit or suffer waste thereon; not use or occupy any Leased Property for
any unlawful purposes; not use or occupy any Leased Property or permit the same
to be used or occupied, for any purpose or business deemed extra hazardous on
account of fire or otherwise; keep each Leased Property in such repair and
condition as may be required by the local board of health, or other city, state
or federal authorities, free of all cost to Landlord; not permit any acts to be
done which will cause the cancellation, invalidation, or suspension of any
insurance policy; and permit Landlord and its agents to enter upon each Leased
Property at all reasonable times after reasonable prior notice to Tenant to
examine the condition thereof. In addition, at any time and from time to time
upon not less than fifteen (15) days prior written notice, Tenant shall permit
Landlord and any mortgagee or lender and their authorized representatives, to
inspect the Leased Properties during normal Business hours, provided that such
inspections shall not unreasonably interfere with Business of Tenant.
6.04 Financial Statements and Other Information.
------------------------------------------
(a) Tenant shall provide Landlord and any mortgagee or lender of
Landlord regularly (or more often as may be reasonably requested
by Landlord in writing), the following financial information: (i)
as to each Leased Property within thirty (30) days after each
fiscal quarter during the Term or any Extension Term, as the case
may be, (except the fourth quarter), Tenant-prepared financial
statements prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied; and (ii) as
to each Leased Property and itself, Tenant shall provide Landlord
no later than one hundred and twenty (120) days after the end of
each fiscal year of Tenant during the Term or any Extension Term,
as the case may be, financial statements, audited, reviewed or
compiled by a certified public accountant (the "Annual Financial
Statements") provided that Landlord must receive such Annual
--------
Financial Statements in sufficient time for Landlord timely to
comply with any requirements of any federal or state governmental
21
<PAGE>
authorities, provided further that in no event shall Tenant be
-------- -------
required to provide the Annual Financial Statements to Landlord
before the expiration of ninety (90) days after the end of each
fiscal year of Tenant. Tenant shall also deliver to Landlord
such additional financial information as Landlord may reasonably
request, provided the same is of a type normally maintained by
Tenant or can be obtained without undue cost or burden on
Tenant's personnel and does not constitute information which
Tenant reasonably determines to be proprietary or confidential.
Additionally, upon Landlord's request, Tenant shall provide
Landlord with copies of Tenant's annual capital expenditure
budgets for each Leased Property and any reports generated by
Tenant regarding maintenance and repairs of each Leased Property.
(b) The parties acknowledge and agree that the information provided
by Tenant to Landlord under this Section 6.04 includes
confidential financial information (the "Confidential
Information") with respect to the Business conducted on the
Leased Properties (such Confidential Information shall not
include (i) information that is or becomes known publicly through
no fault of the Landlord; (ii) information the Landlord obtains
from a third party whom the Tenant has authorized to disclose
such information to the Landlord; (iii) information already known
to the Landlord before receipt from the Tenant; (iv) information
that the Tenant has divulged to third parties on an unrestricted
basis; and (v) information that the Landlord is required to
disclose pursuant to securities laws or pursuant to an order of
any court or government agency or entity. Prior to and after the
Execution Date, except as may be required to be disclosed by law
(including federal and state securities laws, and the rules and
regulations thereunder), regulation or legal process, unless
otherwise consented to in writing by the Tenant, the Landlord
shall keep all Confidential Information provided to it in
connection with this Section 6.04 confidential. In the event that
Landlord is required to disclose certain confidential financial
information in connection with the disclosure required by Section
6.04(b)(v), Landlord agrees to use all reasonable efforts to make
such required disclosure in a manner so as to preserve as much as
possible and lawful the confidentiality of such confidential
financial information.
VII. REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS
---------------------------------------------------
7.01 Maintenance. Tenant shall maintain each Leased Property in good
-----------
order, repair and appearance, and repair each Leased Property, including without
limitation, all interior and exterior, structural and nonstructural repairs and
replacements to the roof, foundations, exterior walls, building systems, HVAC
systems, parking areas, sidewalks, water, sewer and gas connections, pipes, and
mains. Tenant shall pay as Additional Rent the full cost of such maintenance,
repairs, and replacements. Tenant shall maintain all drives, sidewalks, parking
areas, and lawns on or about each
22
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Leased Property in a clean and orderly condition, free of accumulations of dirt,
rubbish, snow and ice. Tenant shall permit Landlord to inspect each Leased
Property at all reasonable times and upon reasonable prior notice, and shall
implement all reasonable suggestions of Landlord as to the maintenance and
repair of each Leased Property, if implementation of such suggestion is
necessary for Tenant to be in compliance with the maintenance obligations
established by the first sentence of this Section 7.01.
7.02 Compliance with Laws. Tenant shall comply with all laws, ordinances,
--------------------
orders, rules, regulations, and other governmental requirements relating to the
use, condition, or occupancy of each Leased Property, whether now or hereafter
enacted and in force including without limitation: (a) licensure requirements
for operation of the Business; (b) requirements of any board of casualty
insurance underwriters or insurance service office for any other similar body
having jurisdiction over any Leased Property; (c) all zoning and building codes;
and (d) Environmental Laws. At Landlord's request, from time to time, Tenant
shall deliver to Landlord copies of certificates or permits evidencing
compliance with such laws, including without limitation, copies of any
applicable licenses, certificates of occupancy and building permits. Tenant
shall provide Landlord with copies of any notice from any governmental authority
alleging any non-compliance by Tenant or any Leased Property with any of the
foregoing requirements and such evidence as Landlord may reasonably require of
Tenant's remediation thereof. Tenant hereby agrees to defend, indemnify and
hold Landlord, its agents, and employees from and against any and all demands,
claims, causes of action, fines, penalties, damages (including punitive and
consequential damages), losses, liabilities (including strict liability),
judgments, costs and expenses (including, without limitation, attorneys' fees,
court costs, and the costs set forth in Section 9.06) resulting from any failure
by Tenant to comply with any laws, ordinances, rules, regulations, and other
governmental requirements.
7.03 Required Alterations. Tenant shall, at Tenant's sole cost and
--------------------
expense, make any additions, changes, improvements or alterations to each Leased
Property, including structural alterations, which may be required by any
governmental authorities, including those required to continue to satisfy any
licensure requirements related to the operation of the Business, whether such
changes are required by Tenant's use, changes in the law, ordinances, or
governmental regulations, defects existing as of the date of this Lease, or any
other cause whatsoever. Tenant shall provide thirty (30) days prior written
notice to Landlord of any changes to a Leased Property pursuant to this Section
7.03 which involve changes to the structural integrity thereof or materially
affect the operational capabilities thereof. All such additions, changes,
improvements or alterations shall be deemed to be a Tenant Improvement and shall
comply with all laws relating to such alterations and with the provisions of
Section 8.01.
7.04 Mechanics' Liens. Tenant shall have no authority to permit or
----------------
create a lien against Landlord's interest in any Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in each Leased Property against liens. Tenant hereby agrees
to defend, indemnify, and hold Landlord harmless from and against any mechanics'
liens against any Leased Property by reason of work, labor services or materials
supplied or claimed to have been supplied on or to such Leased Property. Tenant
shall immediately remove, bond-off, or
23
<PAGE>
otherwise obtain the release of any mechanics' lien filed against any Leased
Property. Tenant shall pay all expenses in connection therewith, including
without limitation, damages, interest, court costs and reasonable attorneys'
fees.
7.05 Replacements of Fixtures.
------------------------
(a) Tenant shall not remove Fixtures from any Leased Property except
to replace such Fixtures with other items used for similar or
analogous purposes, which replacement items are of equal or
greater quality and utility. Items being replaced by Tenant may
be removed and shall become the property of Tenant and items
replacing the same shall be the sole and absolute property of
Tenant during the Term and any Extension Term, as the case may
be, of this Lease (in respect of such Leased Property). Upon the
expiration or early termination of this Lease in respect to a
Leased Property, all items that Tenant has replaced on such
Leased Property shall become the sole and absolute property of
the Landlord (or the Tenant to the extent that the Tenant has
purchased such Leased Property pursuant to Article XVI). Without
limiting the generality of the foregoing, prior to the expiration
or early termination of this Lease in respect of a Leased
Property, Tenant shall be entitled to all federal and state
income tax benefits associated with all such replacement Fixtures
located on such Leased Property that Tenant has replaced. In the
event that items are replaced by Landlord or at Landlord's
expense, such replacement Fixtures shall be the sole and absolute
property of the Landlord. To the extent that such replacement
Fixtures are owned by Landlord, Tenant shall execute, upon
written request from Landlord, any and all documents necessary to
evidence Landlord's ownership of the Fixtures and any Fixtures
that Landlord shall replace.
(b) Tenant may not finance replacements of Fixtures by security
agreement or equipment lease unless: (a) Landlord has consented
to the terms and conditions of the equipment lease or security
agreement; (b) the equipment lessor or lender has entered into a
non-disturbance agreement with Landlord upon terms and conditions
acceptable to Landlord, including without limitation (i) Landlord
shall have the right (but not the obligation) to assume such
security agreement or equipment lease upon the occurrence of an
Event of Default not cured within the applicable cure period, if
any, by Tenant hereunder; (ii) the equipment lessor or lender
shall promptly notify Landlord of any default by Tenant under the
equipment lease or security agreement and give Landlord a
reasonable opportunity to cure such default; and (iii) Landlord
shall have the right to assign its rights under the equipment
lease, security agreement, or non-disturbance agreement; (c) the
equipment lessor or lender shall subordinate its security
interest to the security interest of any of Landlord's lessors,
mortgagors or lenders, whether now created or
24
<PAGE>
hereafter existing, and (d) Tenant shall, within ten (10) days
after receipt of an invoice from Landlord, reimburse Landlord for
all costs and expenses incurred in reviewing and approving the
equipment lease, security agreement, and non-disturbance
agreement, including without limitation, reasonable attorneys'
fees and costs.
7.06 Encroachments; Restrictions. If any of the Improvements shall, at any
---------------------------
time, encroach upon any property, street or right-of-way adjacent to a Leased
Property, or shall violate the agreements or conditions contained in any
restrictive covenant or other agreement affecting a Leased Property, other than
one which is created or consented to by Landlord without Tenant's consent, or
shall impair the rights of others under an easement or right-of-way to which a
Leased Property is subject, other than one which is created or consented to by
Landlord without Tenant's consent, then promptly upon the request of Landlord or
at the request of any person affected by any such encroachment, violation or
impairment, Tenant shall, at its expense, subject to its right to contest the
existence of any encroachment, violation or impairment and in such case, in the
event of an adverse final determination, either (a) obtain valid and effective
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation or impairment, whether the same shall affect
Landlord or Tenant or (b) make such changes in the Improvements and take such
other actions as shall be necessary to remove such encroachment and to end such
violation or impairment, including, if necessary, the alteration of
improvements. Any such alteration shall be made in conformity with the
requirements of Article VIII.
VIII. ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL ADDITIONS TO THE
------------------------------------------------------------------
LEASED PROPERTIES
-----------------
8.01 Tenant's Right to Construct. As to each Leased Property, during the
---------------------------
Term of this Lease or any Extension Term, as the case may be, so long as no
Event of Default shall have occurred and be continuing as to such Leased
Property, Tenant may make Capital Additions (as defined herein), or other
alterations, additions, changes and/or improvements to such Leased Property as
deemed necessary or useful to operate such Leased Property for Tenant's Business
(individually, a "Tenant Improvement," or collectively, the "Tenant
Improvements"). "Capital Additions" shall mean the construction of one or more
new buildings or one or more additional structures annexed to any portion of any
of the Improvements on a Leased Property, which are constructed on any parcel or
portion of the Land comprising a Leased Property, including the construction of
a new floor, or the repair, replacement, restoration, remodeling or rebuilding
of the Improvements or any portion thereof on a Leased Property which are not
normal, ordinary or recurring to maintain such Leased Property. "Required
Tenant Improvements" shall mean Tenant Improvements or Capital Additions which
the Tenant is required by a federal or state governmental authority, applicable
law, or, as to a Leased Property, are required to be constructed by the
automobile manufacturer(s) with whom the Tenant has a franchise agreement and
which does not result in a material decrease in value of the Leased Property.
Except as otherwise agreed to by Landlord herein or otherwise in writing, any
such Tenant Improvement or Capital Addition shall be made at Tenant's sole
expense and, upon
25
<PAGE>
termination of the Lease, shall become the property of the Landlord (or the
Tenant to the extent that the Tenant has purchased the Leased Property on which
such Tenant Improvement or Capital Addition has been constructed pursuant to
Article XVI). Unless made on an emergency basis to prevent injury to person or
property, as to each Leased Property, Tenant must obtain Landlord's prior
written approval, such approval not to be unreasonably withheld or delayed, for
(a) any Capital Addition or for any Tenant Improvement which is not a Capital
Addition and which has a cost of more than One Hundred Thousand Dollars
($100,000) or a cost which, when aggregated with the costs of all such Tenant
Improvements on such Leased Property in a given Lease Year, would cause the
total costs of all such Tenant Improvements or Capital Additions on such Leased
Property to exceed Two Hundred Fifty Thousand Dollars ($250,000), unless such
Tenant Improvements or Capital Additions are also Required Tenant Improvements,
in which case Tenant shall, notwithstanding anything herein to the contrary,
have the right to make or construct such Required Tenant Improvements without
the consent of Landlord so long as (i) such Required Tenant Improvements
increase the quality and utility of the Leased Property and (ii) Tenant provides
thirty (30) days prior written notice of the Required Tenant Improvements and
their scope and effect on the Tenant's Business. Additionally, in connection
with any Tenant Improvement, including any Capital Addition or Required Tenant
Improvement, Tenant shall provide Landlord with copies of any plans and
specification therefor, Tenant's budget relating thereto, any required
governmental permits or approvals, any construction contracts or agreements
relating thereto, and any other information relating to such Tenant Improvement
as Landlord shall reasonably request. Additionally, in order for Tenant to
require, pursuant to this Lease, that any appraisal or valuation of the Leased
Property not include any increase in value arising from Capital Additions,
Tenant Improvements and Required Tenant Improvements constructed, financed or
installed solely by or through Tenant ("Tenant-constructed Improvements"),
Tenant must prior to any construction notify Landlord in writing of its intent
to perform an appraisal of the value of the Leased Property on which the Tenant-
constructed Improvements will be made both before and after such Tenant-
constructed Improvements and reach agreement with Landlord, whose agreement
shall not be unreasonably withheld, on the name of the appraiser and the terms
under which the appraisal shall be made. Such appraiser shall, at a minimum, be
either a MAI Appraiser, as defined below, or shall hold a state license
qualifying him or her to appraise properties of the type being appraised and
shall have qualifications and experience equivalent to that required of an MAI
Appraiser. Unless otherwise agreed between the parties, the first appraisal
shall be performed within thirty (30) days prior to the beginning of
construction of the Tenant-constructed Improvements and the second appraisal
shall be performed within thirty (30) days of the completion of the Tenant-
constructed Improvements.
8.02 Scope of Right. Subject to Section 8.01 herein and Section 7.03
--------------
concerning required alterations, at Tenant's cost and expense, Tenant shall have
the right to:
(a) seek any governmental approvals, including building permits,
licenses, conditional use permits and any certificates of need
that Tenant requires to construct any Tenant Improvement or
Capital Addition;
26
<PAGE>
(b) erect upon each Leased Property such Tenant Improvements or
Capital Additions as Tenant deems desirable;
(c) make additions, alterations, changes and improvements in any
Tenant Improvement or Capital Addition so erected; and
(d) engage in any other lawful activities that Tenant determines are
necessary or desirable for the development of each Leased
Property in accordance with the Tenant's Business;
provided, however, that in exercising the rights conferred on Tenant under this
Section 8.02, Tenant shall not make any Tenant Improvement which would, in
Landlord's reasonable judgment, impair the value of the Leased Property or the
Tenant's Business without Landlord's prior written consent and provided, further
that, except as otherwise specifically and expressly provided in this Lease,
Tenant shall not be permitted to create a mortgage, lien or any other
encumbrance on any Leased Property without Landlord's prior written consent.
8.03 Cooperation of Landlord. Landlord shall cooperate with Tenant and
-----------------------
take such actions, including the execution and delivery to Tenant of any
applications or other documents, reasonably requested by Tenant in order to
obtain any governmental permits, licenses or approvals sought by Tenant to
construct any Tenant Improvement or Capital Addition within fifteen (15)
business days following the later of: (a) the date Landlord receives Tenant's
request or (b) the date of delivery of any such application or document to
Landlord; provided, the taking of such action by Landlord, including the
execution of said applications or documents, shall be without cost to Landlord
(or if there is a cost to Landlord, such actual cost shall be reimbursed by
Tenant), shall not cause Landlord to be in violation of any law, ordinance or
regulation, and shall not be deemed a waiver by Landlord of any of its rights or
of any of Tenant's obligations, including but not limited to indemnification.
8.04 Commencement of Construction. Tenant agrees that:
----------------------------
(a) Tenant shall diligently seek all governmental approvals relating
to the construction of any Tenant Improvement or Capital
Addition;
(b) Once Tenant begins the construction of any Tenant Improvement or
Capital Addition, Tenant shall diligently oversee any such
construction to completion in accordance with applicable
insurance requirements and the laws, rules and regulations of all
governmental bodies or agencies having jurisdiction over the
subject Leased Property;
(c) Landlord shall have the right at any time and from time to time
to post and maintain upon each Leased Property such notices as
may be necessary to
27
<PAGE>
protect Landlord's interest from mechanics' liens, materialmen's
liens or liens of a similar nature;
(d) Tenant shall not suffer or permit any mechanics' liens or any
other claims or demands arising from the work of construction of
any Tenant Improvement or Capital Addition to be enforced against
any Leased Property or any part thereof, and Tenant agrees to
hold Landlord, its agents and employees and said Leased Property
free and harmless from all demands, claims, causes of action,
fines, penalties, damages (including punitive and consequential
damages), losses, liabilities (including strict liability),
judgments, costs and expenses (including, without limitation,
reasonable attorneys' fees, court costs, and the costs set forth
in Section 9.06) incurred in connection with or arising
therefrom;
(e) All work shall be performed in a satisfactory and workmanlike
manner consistent with standards in the industry; and
(f) Except as permitted under Sections 3.06 and 13.01 and subject to
Section 8.08 in the case of Capital Additions, (i) Tenant shall
not secure any construction or other financing for the Tenant
Improvements or Capital Addition which is secured by a portion of
any Leased Property without Landlord's prior written consent and
(ii) any such financing (y) shall not exceed the cost of the
Tenant Improvements or Capital Additions, (z) shall be
subordinate to any mortgage or encumbrance against or in
Landlord's estate in the Leased Property now existing or
hereinafter created with respect to such Leased Property, and
(iii) shall be limited solely to Tenant's interest in the subject
Leased Property.
8.05 Rights in Tenant Improvements. Notwithstanding anything to the
------------------------------
contrary in this Lease, all Tenant Improvements and Capital Additions existing
on the Leased Property or constructed upon each Leased Property pursuant to
Section 8.01, any and all subsequent additions thereto and alterations and
replacements thereof shall be the sole and absolute property of Tenant during
the Term and any Extension Term, as the case may be, of this Lease (in respect
of such Leased Property). Upon the expiration or early termination of this
Lease in respect of a Leased Property, all such Tenant Improvements and Capital
Additions located thereon shall become the sole and absolute property of the
Landlord (or the Tenant to the extent that the Tenant has purchased such Leased
Property pursuant to Article XVI). Without limiting the generality of the
foregoing, prior to the expiration or early termination of this Lease in respect
of a Leased Property, Tenant shall be entitled to all federal and state income
tax benefits associated with all Tenant Improvements and Capital Additions
located on such Leased Property.
8.06 Personal Property. Tenant shall install, place, and use on each
-----------------
Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Fixtures as
28
<PAGE>
may be required or as Tenant may, from time to time, deem necessary or useful to
operate such Leased Property in the operation of the Business.
8.07 Requirements for the Tenant's Personal Property. Tenant shall comply
-----------------------------------------------
with all of the following requirements in connection with the Tenant's Personal
Property:
(a) The Tenant's Personal Property shall be installed in a good and
workmanlike manner, in compliance with all governmental laws,
ordinances, rules, and regulations and all insurance
requirements, and be installed free and clear of any mechanics'
liens.
(b) Tenant shall, at Tenant's sole cost and expense, maintain,
repair, and replace the Tenant's Personal Property.
(c) Tenant shall, at Tenant's sole cost and expense, keep the
Tenant's Personal Property insured against loss or damage by
fire, vandalism and malicious mischief, sprinkler leakage, and
other physical loss perils commonly covered by fire and extended
coverage, boiler and machinery, and difference in conditions
insurance (which insurance shall meet the requirements of Section
4.03 hereof) in an amount not less than the full replacement cost
thereof, and Tenant shall use the proceeds from any such policy
for the repair and replacement of such items of Tenant's Personal
Property.
(d) Tenant shall pay all Impositions and other taxes applicable to
Tenant's Personal Property.
(e) If Tenant's Personal Property is damaged or destroyed by fire or
otherwise, Tenant shall promptly repair or replace Tenant's
Personal Property unless Tenant is entitled to and elects to
terminate the Lease pursuant to Section 10.05.
(f) As to each Leased Property, unless an Event of Default (or any
event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default) has occurred and remains
uncured beyond any applicable cure period, if any, Tenant may
remove Tenant's Personal Property from such Leased Property from
time to time provided that: (i) the items removed are not
required or necessary to operate the Business on such Leased
Property (unless such items are being replaced by Tenant) and
(ii) Tenant promptly repairs any damage to such Leased Property
resulting from the removal of Tenant's Personal Property.
(g) As to each Leased Property, Tenant shall remove all of Tenant's
Personal Property upon the termination or expiration of the Lease
and shall promptly
29
<PAGE>
repair any damage to such Leased Property resulting from the
removal thereof to the reasonable satisfaction of Landlord;
provided, however, if Tenant fails to remove Tenant's Personal
Property from such Leased Property within thirty (30) days after
the termination or expiration of this Lease with respect thereto,
then Tenant shall be deemed to have abandoned such items of
Tenant's Personal Property, all of which shall become the
property of Landlord, and Landlord may remove, store and dispose
of such property and Tenant shall have no claim or right against
Landlord for such property or the value thereof regardless of the
disposition thereof by Landlord. Tenant shall pay Landlord, upon
demand, all expenses incurred by Landlord in removing, storing,
and disposing of such items of Tenant's Personal Property and
repairing any damage caused by such removal. Tenant's obligations
hereunder shall survive the termination or expiration of this
Lease as to such Leased Property.
(h) Tenant shall perform its obligations under any equipment lease or
security agreement for Tenant's Personal Property.
8.08 Financings of Capital Additions to a Leased Property. Landlord may,
-----------------------------------------------------
but shall be under no obligation to, provide or arrange construction, permanent
or other financing for any Capital Addition proposed to be made to a Leased
Property by Tenant. Any financing so provided by Landlord shall be made in
accordance with, and subject to, a written Addendum to this Lease.
IX. DEFAULTS AND REMEDIES
---------------------
9.01 Events of Default. The occurrence of any one or more of the following
-----------------
shall be an event of default ("Event of Default") hereunder as to the specific
Leased Property or Leased Properties as to which the Event of Default exists and
not as to any other Leased Property:
(a) Tenant fails to pay in full any installment of Rent, or any other
monetary obligation payable by Tenant to Landlord hereunder,
within ten (10) days after the due date thereof and after written
notice thereof and an opportunity to cure within a ten (10) day
period after such notice is given to Tenant by Landlord. In the
event of Tenant's failure to make timely payment of such
obligations two (2) times during any twelve (12) month period
wherein such ten (10) day notice was given, each subsequent such
failure within the twelve (12) months immediately following such
failure shall immediately constitute an Event of Default, and
Landlord shall not be required to provide notice thereof, nor
shall Tenant have any further opportunity to cure such failure;
(b) Tenant fails to observe and perform any covenant (other than the
covenant in respect of insurance set forth in Article IV),
condition or agreement
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hereunder to be performed by Tenant (except those described in
Section 9.01(a) of this Lease) and such failure continues for a
period of thirty (30) days after written notice thereof is given
to Tenant by Landlord or if such failure shall be incapable of
cure within thirty (30) days, if Tenant shall not commence to
cure such failure within such thirty (30) day period and
continuously prosecute the performance of the same to completion
within ninety (90) days after such thirty (30) day period;
(c) If Tenant: (i) admits in writing its inability to pay its debts
generally as they become due; (ii) files a petition in bankruptcy
or a petition to take advantage of any insolvency act; (iii)
makes an assignment for the benefit of its creditors; (iv) is
unable to pay its debts as they mature; (v) consents to the
appointment of a receiver of itself or of the whole or any
substantial part of its property; or (vi) files a petition or
answer seeking reorganization or arrangement under the federal
bankruptcy laws or any other applicable law or statute of the
United States of America or any state thereof;
(d) If Tenant, on insolvency proceedings or on a petition in
bankruptcy filed against it, is adjudicated as bankrupt or a
court of competent jurisdiction enters an order or decree
appointing, without the consent of Tenant, a receiver of Tenant
of the whole or substantially all of its property, or approving a
petition filed against it seeking reorganization or arrangement
of Tenant under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state thereof, and such judgment, order or decree is not vacated,
dismissed or set aside within sixty (60) days from the date of
the entry thereof;
(e) If the estate or interest of Tenant in a Leased Property or any
part thereof is levied upon or attached in any proceeding and the
same is not vacated or discharged within fifteen (15) days after
commencement thereof (unless Tenant is contesting such lien or
attachment in accordance with this Lease) or if such estate or
interest of Tenant is assigned, conveyed or involuntarily
transferred in violation of this Lease;
(f) Any representation, warranty or covenant made by Tenant on behalf
of itself or an Affiliate in this Lease or in any certificate,
demand or request made pursuant hereto proves, despite Tenant's
diligent effort and due to Tenant's gross negligence or wilful
misconduct, to be incorrect, in any material respect, as of the
date of issuance or making thereof and such incorrect
representation, warranty or covenant continues for a period of
thirty (30) days after written notice thereof is given to Tenant
by Landlord or if such incorrect representation, warranty or
covenant shall be incapable of cure within thirty (30) days, if
Tenant shall not commence to cure such failure
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within such thirty (30) day period and continuously prosecute the
performance of the same to completion within ninety (90) days
after such thirty (30) day period;
(g) Conviction of Tenant or an Affiliate of a crime or offense
constituting a felony in the jurisdiction in which committed or
under federal law which conviction results in the termination of
the franchise.
(h) Termination or relinquishment of the franchise or license
pursuant to which Tenant or an Affiliate conducts business on or
from any Leased Property, provided that such event shall not
constitute an Event of Default if (i) no other Event of Default
enumerated in this Section 9.01 shall occur and be continuing,
and (ii) at a date no later than twenty-four (24) months
following such date of termination or relinquishment, Tenant or
an Affiliate has entered into written new or amended franchises
or licenses for operation of motor vehicle retail or motor
vehicle related businesses at such Leased Property satisfactory
to Landlord in its sole discretion applying commercially
reasonable standards;
(i) Default under any franchise or license pursuant to which Tenant
or an Affiliate conducts business at a Leased Property, which
default results in the termination of, or the material adverse
change to the terms of, the franchise or license;
(j) A final, non-appealable judgment or judgments exceeding $100,000
for the payment of money not fully covered (excluding
deductibles) by insurance is rendered against Tenant and the same
remains undischarged, unvacated, unbonded, unappealed or unstayed
for a period of thirty (30) consecutive days;
(k) Tenant shall fail to observe the covenant in respect to insurance
under Article IV provided Landlord shall have provided notice of
such failure to Tenant and Tenant shall have failed to cure such
failure within three (3) business days of such notice; or
(l) Except after the effective date of a permitted assignment meeting
the requirements of Article XIII, if Tenant is liquidated or
dissolved, or begins proceedings toward liquidation or
dissolution, or in any manner permits the sale or divestiture of
substantially all of its assets.
9.02 Remedies. To the extent an Event of Default exists only to a specific
--------
Leased Property or specific Leased Properties (in accordance with Section 9.01
above), such Event of Default shall not constitute an Event of Default as to any
of the other Leased Properties and the remedies set forth
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herein shall be exercisable solely with respect to the Leased Property or Leased
Properties as to which an Event of Default exists, and shall not be exercisable
with respect to any other Leased Property. Subject to the foregoing provisions,
Landlord may exercise any one or more of the following remedies as to each and
every Leased Property as to which there exists an Event of Default not cured
within the applicable cure period, if any:
(a) Landlord may terminate this Lease, exclude Tenant from possession
of the subject Leased Property. Landlord agrees to use reasonable
efforts, commencing upon the exclusion of Tenant from possession
of the subject Leased Property, to lease the subject Leased
Property to others on commercially reasonable terms. If this
Lease is terminated pursuant to the provisions of this
subparagraph (a) with respect to one or more, but less than all,
of the Leased Properties identified on Schedule A hereto, Tenant
----------
will remain liable to Landlord for the Rent for all of the Leased
Properties identified on Schedule A and other sums then due and
----------
for the balance of the Term as if the Lease had not been
terminated with respect to the subject Leased Property, less the
net proceeds, if any, of any re-letting of the subject Leased
Property by Landlord subsequent to such termination, after
deducting all Landlord's expenses in connection with such re-
letting, including without limitation, the expenses set forth in
Section 9.02(b)(ii) below. Notwithstanding the termination of
this Lease with respect to a subject Leased Property, Tenant
shall pay to Landlord all amounts due as Rent, and such other
amounts then due, under this Lease on the days that such Rent and
such other amounts become due and payable as required by this
Lease.
(b) Without demand or notice, Landlord may re-enter and take
possession of the subject Leased Property or any part thereof;
and repossess such Leased Property as of Landlord's former
estate; and expel Tenant and those claiming through or under
Tenant from such Leased Property; and, remove the effects of both
or either, without being deemed guilty of any manner of trespass
and without prejudice to any remedies for arrears of Rent or
preceding breach of covenants or conditions. If Landlord elects
to re-enter, as provided in this paragraph (b) or if Landlord
takes possession of such Leased Property pursuant to legal
proceedings or pursuant to any notice provided by law, Landlord
will use reasonable efforts, from time to time, without
terminating any portion of this Lease, re-let such Leased
Property or any part of such Leased Property, either alone or in
conjunction with other portions of the Improvements of which such
Leased Property are a part, in Landlord's name but for the
account of Tenant, on commercially reasonable terms (which may be
a greater or lesser term than the period which would otherwise
have constituted the balance of the Term of this Lease,
concessions of free rent, and the alteration and repair of such
Leased Property) . Landlord may collect and receive the Rents for
such Leased Property. So long as Landlord has
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used reasonable efforts to relet the Leased Property on
commercially reasonable terms, Landlord will not be responsible
or liable for any failure to re-let such Leased Property, or any
part of such Leased Property, or for any failure to collect any
Rent due upon such re-letting. No such re-entry or taking
possession of such Leased Property by Landlord will be construed
as an election on Landlord's part to terminate this Lease unless
a written notice of such intention is given to Tenant. No notice
from Landlord under this Lease or under a forcible entry and
detainer statute or similar law will constitute an election by
Landlord to terminate this Lease unless such notice specifically
says so. Landlord reserves the right following any such re-entry
or re-letting, or both, to exercise its right to terminate this
Lease by giving Tenant such written notice, and, in that event
such Lease will terminate as specified in such notice.
(c) If Landlord elects to take possession of a Leased Property
according to subparagraph (b) of this Section 9.02 without
terminating this Lease, Tenant will pay Landlord (A) the Rent and
other sums which would be payable under this Lease with respect
to such Leased Property if such repossession had not occurred,
less (B) the net proceeds, if any, of any re-letting of such
Leased Property after deducting all of Landlord's expenses
incurred in connection with such re-letting, including without
limitation, all repossession costs, brokerage commissions,
reasonable legal expenses, reasonable attorneys' fees, expense of
employees, alteration, remodeling, repair costs, and expense of
preparation for such re-letting. Landlord agrees it will use
reasonable efforts to relet the subject Leased Property on
commercially reasonable terms. If, in connection with any re-
letting, any resulting lease term for the subject Leased Property
extends beyond the existing Term or Extension Term, as the case
may be, or such Leased Property covered by such re-letting
includes areas which are not part of such Leased Property, a fair
apportionment of the Rent received from such re-letting and the
expenses incurred in connection with such re-letting will be made
in determining the net proceeds received from such re-letting.
In addition, in determining the net proceeds from such re-
letting, any rent concessions will be apportioned over the term
of the new lease. Tenant will pay such amounts to Landlord
monthly on the days on which the Rent and all other amounts owing
under this Lease would have been payable if possession had not
been retaken, and Landlord will be entitled to receive the rent
and other amounts from Tenant on each such day. Notwithstanding
anything herein to the contrary, Landlord, at its option, may
collect and apply any Rent received from such re-letting in
accordance herewith and in such case shall remit any balance
thereof to Tenant. Landlord shall incur no liability or
obligation to Tenant arising out of the collection or application
of Rent by Landlord hereunder.
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(d) Landlord may re-enter the applicable Leased Property and have,
repossess and enjoy such Leased Property as if this Lease had not
been made, and in such event, (i) Tenant and its successors and
assigns shall remain liable for any contingent or unliquidated
obligations or sums owing at the time of such repossession, and
(ii) Tenant and its successors and assigns shall not be liable
for any amounts that relate to the period after such re-entry.
(e) Landlord may take whatever action at law or in equity as may
appear necessary or desirable to collect the Rent and other
amounts payable hereunder with respect to the subject Leased
Property then due and thereafter to become due, or to enforce
performance and observance of any obligations, agreements or
covenants of Tenant under this Lease. In taking any such action
Landlord agrees it will use reasonable efforts to relet the
Leased Property on commercially reasonable terms.
9.03 Right of Set-Off. Landlord may, and is hereby authorized by
-----------------
Tenant, at any time and from time to time, after advance notice to Tenant, to
set-off and apply any and all sums held by Landlord in respect of a Leased
Property, including all sums held in any escrow for Impositions, any
indebtedness of Landlord to Tenant, and any claims by Tenant against Landlord,
against any obligations of Tenant under this Lease in respect of such Leased
Property and against any claims by Landlord against Tenant, whether or not
Landlord has exercised any other remedies hereunder. Landlord shall set-off and
apply such sums first, to delinquent real estate taxes, unless such taxes are
being protested in good faith and no lien has attached to any Leased Property
with respect thereto, second, to currently due and owing real estate taxes, and
next, to other Tenant's obligations in the order which Landlord may determine.
The rights of Landlord under this Section are in addition to any other rights
and remedies Landlord may have against Tenant.
9.04 Performance of Tenant's Covenants. Landlord may, without waiving or
---------------------------------
releasing any obligation of Tenant, and without waiving or releasing any
obligation or default, perform any obligation of Tenant which Tenant has failed
to perform within thirty (30) business days after Landlord has sent a written
notice to Tenant informing it of its specific failure (provided no such notice
shall be required if Landlord has within the previous twelve (12) months
notified Tenant of such failure under the provisions of Section 9.01). In the
event Landlord deems, in its reasonable discretion, that Tenant's failure to
perform such obligation has given rise to an emergency situation, Landlord may
perform such obligation without waiving or releasing any obligation of Tenant,
and without waiving or releasing any obligation or default; provided, however,
that Landlord shall notify Tenant of such performance as soon as it is
reasonably practicable to do so. Tenant shall reimburse Landlord on demand, as
Additional Rent, for any expenditures thus incurred by Landlord and shall pay
interest thereon at the New York Prime Rate.
9.05 Late Charge. Tenant's first payment of Rent within any twelve month
-----------
period that is made more than five (5) business days after the due date shall be
subject to a late charge of four percent (4%) of the amount of such overdue
payment. Each subsequent payment of Rent within any
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twelve (12) month period more than 5 business days after the due date shall be
subject to a late charge of seven percent (7%) of the amount of such overdue
payment and shall constitute an Event of Default under the Lease.
9.06 Litigation; Attorneys' Fees. Within ten (10) days after Tenant has
---------------------------
knowledge of any litigation or other proceeding related to or arising out of
this Agreement or the Leased Property in which claims are asserted in an amount
in excess of $100,000, that (1) may be instituted against any Leased Property to
secure or recover possession thereof, (2) may affect the title to or the
interest of Landlord in any Leased Property or (3) may affect the Landlord's
rights or Tenant's obligations related to or arising out of this Agreement or
the Leased Property, Tenant shall give written notice thereof to Landlord. In
the event that Landlord determines that Tenant has failed to give adequate
cooperation or information with respect to any such litigation, investigation,
receivership, administrative, bankruptcy, insolvency or other similar
proceeding, Landlord may, after notice to Tenant, undertake such investigation
or proceeding and Tenant shall pay all reasonable costs and expenses (the
"Costs") related thereto that are incurred by Landlord, whether or not Landlord
has received notice from Tenant of such investigation or proceeding, and whether
or not an Event of Default has actually occurred or has been declared and
thereafter cured, which Costs shall include, without limitation: (a) the
reasonable fees, expenses, and costs of any such litigation, investigation,
receivership, administrative, bankruptcy, insolvency or other similar
proceeding; (b) reasonable attorney, paralegal, consulting and witness fees and
disbursements; and (c) the reasonable expenses, including, without limitation,
lodging, meals, and transportation, of Landlord and its employees, agents,
attorneys, and witnesses in investigating or preparing for such litigation,
administrative, bankruptcy, insolvency or other similar proceedings and
attendance at hearings, depositions, and trials in connection therewith. Within
ten (10) days of Landlord's presentation of an invoice of Costs incurred by
Landlord pursuant to the preceding sentence or otherwise incurred by Landlord in
enforcing or preserving Landlord's rights under this Lease, whether or not an
Event of Default has actually occurred or has been declared and thereafter
cured, Tenant shall pay all such Costs. All such Costs as incurred shall be
deemed to be Additional Rent under this Lease.
9.07 Remedies Cumulative. The remedies of Landlord herein are cumulative
-------------------
to and not in lieu of any other remedies available to Landlord at law or in
equity. The use of, or failure to use, any one remedy shall not be taken to
exclude or waive the right to use any other remedy.
9.08 Escrows and Application of Payments. As security for the performance
-----------------------------------
of its obligations hereunder, Tenant hereby assigns to Landlord all its right,
title and interest in and to all monies escrowed with Landlord under this Lease
and all deposits with utility companies, taxing authorities, and insurance
companies; provided, however, that Landlord shall not exercise its rights
hereunder with respect to any Leased Property until an Event of Default has
occurred in respect of such Leased Property. Any payments received by Landlord
under any provisions of this Lease during the existence, or continuance of an
Event of Default shall be applied to Tenant's obligations, first, to delinquent
real estate taxes, unless such taxes are being protested in good faith and no
lien has attached to any Leased Property with respect thereto, second, to
currently due and owing real estate taxes, and next, to other Tenant's
obligations in the order which Landlord may determine.
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9.09 Power of Attorney. Tenant hereby irrevocably and unconditionally
-----------------
appoints Landlord, or Landlord's authorized officer, agent, employee or
designee, as Tenant's true and lawful attorney-in-fact, to act, after an Event
of Default not cured within the applicable cure period, if any, for Tenant in
Tenant's name, place, and stead, and for Tenant's and Landlord's use and
benefit, to execute, deliver and file all applications and any and all other
necessary documents or things, to effect a transfer, reinstatement, renewal
and/or extension of any and all licenses and other governmental authorizations
issued to Tenant in connection with Tenant's operation of the Leased Properties,
and to do any and all other acts incidental to any of the foregoing. Tenant
irrevocably and unconditionally grants to Landlord as its attorney-in-fact full
power and authority to do and perform, after an Event of Default not cured
within any applicable cure period, if any, every act necessary and proper to be
done in the exercise of any of the foregoing powers as fully as Tenant might or
could do if personally present or acting, with full power of substitution,
hereby ratifying and confirming all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled with an
interest and is irrevocable prior to the full performance of Tenant's
obligations hereunder.
X. DAMAGE AND DESTRUCTION
----------------------
10.01 General. Tenant shall notify Landlord if any Leased Property is
-------
damaged or destroyed by reason of fire or any other cause. Tenant shall
promptly repair, rebuild, or restore such Leased Property, at Tenant's expense,
so as to make such Leased Property at least equal in value to such Leased
Property existing immediately prior to such occurrence and as nearly similar to
it in character as is practicable and reasonable. Before beginning such repairs
or rebuilding, or executing any contracts in connection with such repairs or
rebuilding, Tenant will submit for Landlord's approval, which approval Landlord
will not unreasonably withhold or delay, complete and detailed plans and
specifications for such repairs or rebuilding. Promptly after receiving
Landlord's approval of the plans and specifications, Tenant will begin such
repairs or rebuilding and will prosecute the repairs and rebuilding to
completion with diligence, subject, however, to strikes, lockouts, acts of God,
embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any fire or other casualty insurance paid to Landlord for such repair or
rebuilding as the same progresses, after deduction of any costs of collection,
including attorneys' fees. Payment will be made against properly certified
vouchers of a competent architect or competent licensed engineer selected by
Tenant to be in charge of the work and approved by Landlord. Prior to
commencing the repairing or rebuilding, Tenant shall deliver to Landlord for
Landlord's approval a schedule setting forth the estimated monthly draws for
such work. Landlord will contribute to such payments out of the insurance
proceeds an amount equal to the proportion that the total net amount received by
Landlord from insurers bears to the total estimated cost of the rebuilding or
repairing, multiplied by the payment by Tenant on account of such work.
Landlord may, however, withhold ten percent (10%) from each such payment and
shall disburse such amount after: (a) the work of repairing or rebuilding is
completed and proof has been furnished to Landlord that no lien or liability has
attached or will attach to such Leased Property or to Landlord in connection
with such repairing or rebuilding and (b) Tenant has obtained a certificate
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of use and occupancy (or its functional equivalent) for the portion of such
Leased Property being repaired or rebuilt. Upon the completion of rebuilding or
repairing and the furnishing of such proof, the balance of the net proceeds of
such insurance payable to Tenant on account of such repairs or rebuilding will
be paid to Tenant. Tenant will obtain and deliver to Landlord a temporary or
final certificate of occupancy before such Leased Property is reoccupied for any
purpose. Tenant shall complete such repairs or rebuilding free and clear of
mechanic's or other liens, and in accordance with the building codes and all
applicable laws, ordinances, regulations, or orders of any state, municipal, or
other public authority affecting the repairs or rebuilding, and also in
accordance with all requirements of the insurance rating organization, or
similar body. Any remaining proceeds of insurance after such restoration will be
Tenant's property and Landlord shall forthwith deliver the same to Tenant.
10.02 Landlord's Inspection. During the progress of such repairs or
----------------------
rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the subject Leased Property and will be furnished, if required by them,
with copies of all plans, shop drawings, and specifications relating to such
repairs or rebuilding. Tenant will keep all plans, shop drawings, and
specifications available, and Landlord and its architects and engineers may
examine them at all reasonable times. If, during such repairs or rebuilding,
Landlord and its architects and engineers determine that the repairs or
rebuilding are not being done in accordance with the approved plans and
specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such repairs or rebuilding do not accord with the approved
plans and specifications. Upon the receipt of any such notice, Tenant will
cause corrections to be made to any deficiencies, omissions, or such other
respect. Tenant's obligations to supply insurance, according to Article IV,
will be applicable to any repairs or rebuilding under this Section 10.02.
10.03 Landlord's Costs. If, after notice from Landlord pursuant to
----------------
Section 10.02, Tenant fails timely to cause corrections to be made to any
deficiencies, omissions or other respects in which any repairs, building or
rebuilding are not being done in compliance with approved plans and
specifications, Tenant shall, within fifteen (15) days after receipt of an
invoice from Landlord, pay the reasonable costs, expenses, and reasonable fees
of any architect or engineer employed by Landlord in connection with the
correction of any such deficiencies, omissions or other respects, including
review of any plans and specifications and supervision and approval of any
construction, or for any reasonable charges for reasonable services performed
by Landlord's attorneys in connection therewith.
10.04 Rent Abatement. In the event that the provisions of Section
--------------
10.01 above shall become applicable as to any Leased Property, and subject to
the last sentence of this Section 10.04, the applicable Base Annual Rent shall
be abated or reduced proportionately during any period in which, by reason of
such damage or destruction, (a) there is substantial interference with the
operation of the Business of Tenant in such Leased Property, having regard to
the extent to which Tenant may be required to discontinue any Business on such
Leased Property, (b) Tenant does not receive payments (excluding deductibles)
under its insurance fully covering such lost rent. In such circumstances, such
Base Annual Rent abatement or reduction shall continue for the period
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commencing with the later of (y) the destruction or damage and (z) the time at
which payments to Tenant under its insurance policies (excluding deductibles)
do not fully cover such Base Annual Rent and ending with the substantial
completion by Tenant of such work or repair and/or reconstruction. In the event
that only a portion of any Leased Property is rendered untenantable or incapable
of such use, the Base Annual Rent payable hereunder in respect thereof shall be
reduced proportionately considering the extent to which the Tenant is unable to
practicably use the Leased Property for Business and the extent of any insurance
coverage. Tenant shall use reasonably diligent efforts to make the Leased
Property tenantable and capable of such use. Notwithstanding any other
provision hereof, such rental abatement shall be limited to the amount of any
rental or Business interruption insurance proceeds actually received by Landlord
under Article IV.
10.05 Substantial Damage During Lease Term. Notwithstanding Section
------------------------------------
10.01 and provided that Tenant has fully complied with Section 4.01 hereof
(including actually maintaining in effect rental value insurance or Business
interruption insurance provided for in clause (c) thereof), if, at any time
during the Term or any Extension Term of this Lease, any Leased Property is
damaged by fire or otherwise to such a magnitude that the improvements thereon
cannot be rebuilt or repaired through diligent prosecution of such repairs and
rebuilding so as to allow Tenant to conduct a substantial part of its Business
(as determined by a reasonable dealer in the trade, in light of standard trade
practices) within one calendar year, then Tenant may, within ninety (90) days
after such damage, give notice of its election to terminate this Lease with
respect to such Leased Property and, subject to the further provisions of this
Section, this Lease will cease with respect to such Leased Property on the
thirtieth (30th) day after the delivery of such notice, unless Landlord
disagrees with Tenant's contention as to the magnitude of the damage and the
length of time necessary to repair or rebuild the Leased Property and has sought
determination of and is diligently prosecuting this dispute in a judicial (or
other mutually agreeable) proceeding during this thirty (30) day period, in
which case this Lease shall continue in full force and effect unless and until
such proceeding shall result in a final award upholding the Tenant's position.
In the event of a final award upholding Tenant's position, this Lease shall be
deemed to have been terminated on the thirtieth (30th) day after delivery of
notice of Tenant's election to terminate the Lease and Landlord shall rebate the
Rent paid by Tenant after this thirty (30) day period.. If the Lease is
terminated pursuant to Tenant's election or to a final award upholding the
Tenant's position under this Section 10.05, (a) Tenant will have no obligation
to repair, rebuild or replace such Leased Property, and the entire insurance
proceeds will belong to Landlord, and (b) Tenant will pay (or cause to be paid)
to Landlord the entire insurance proceeds. If the Lease is not terminated
pursuant to this Section 10.05, Tenant shall rebuild such Leased Property in
accordance with Section 10.01.
10.06 Damage Near End of Term. Notwithstanding any provisions of
-----------------------
Sections 10.01 or 10.05 to the contrary, if damage to or destruction of any
Leased Property occurs during the last twelve (12) months of the Term, and if
such damage or destruction renders the Leased Property Completely Destroyed or
Partially Destroyed, either party shall have the right to terminate this Lease
as to such Leased Property by giving notice to the other within sixty (60) days
after the date of damage or destruction, in which event Landlord shall be
entitled to retain the insurance proceeds and Tenant shall pay to Landlord on
demand the amount of any deductible or uninsured loss arising in
39
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connection therewith; provided, however, that any such notice given by Landlord
shall be void and of no force and effect if Tenant exercises an available option
for an Extension Term with respect to such Leased Property pursuant to
provisions of this Lease within fifteen (15) business days following receipt of
such termination notice.
10.07 Risk of Loss. Notwithstanding anything herein to the contrary,
------------
during the Term or any Extension Term, as the case may be, the risk of loss of
or decrease in the enjoyment and beneficial use of the Leased Properties in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise is assumed by Tenant, and Landlord
shall in no event be answerable or accountable therefor except in the case of
gross negligence, willful misconduct or breach of this Lease by Landlord
resulting in such damage or destruction. In addition, all risk of loss or
decrease in enjoyment and beneficial use in consequence of foreclosures,
attachments, levies or executions is assumed by Tenant except for foreclosure
due to Landlord's indebtedness.
XI. CONDEMNATION
------------
11.01 Total Taking. If at any time during the Term or any Extension
------------
Term, as the case may be, any Leased Property is totally and permanently taken
by right of eminent domain or by conveyance made in response to the threat of
the exercise of such right ("Condemnation"), this Lease shall terminate as to
such Leased Property on the Date of Taking (which shall mean the date the
condemning authority has the right to possession of the property being
condemned), and Tenant shall promptly pay all outstanding applicable Rent and
other charges through the date of termination, provided, however, this Lease
shall not so terminate if the Condemnation occurred due to the failure of Tenant
to maintain such Leased Property as required by Article VII hereof or other
applicable provisions hereof, whether or not such failure on the part of Tenant
constituted an Event of Default hereunder at the time of the Condemnation.
11.02 Partial Taking. If a portion of a Leased Property is taken by
--------------
Condemnation, this Lease shall remain in effect as to such Leased Property if
such Leased Property is not thereby rendered Unsuitable for the continuation of
Tenant's Business on that Leased Property (For purposes of this Lease,
"Unsuitable" shall mean that such Leased Property is in such a state or
condition such that in the good faith judgment of Tenant, reasonably exercised,
it cannot be used for the continued feasible and economic operation of the
Business), but in such event Landlord and Tenant shall negotiate in good faith
an equitable adjustment of the Rent to reflect such partial taking. In the
event that the parties cannot agree on an equitable adjustment of the Rent, the
parties shall submit the dispute to arbitration subject to the arbitration
provisions set forth in Article XIV. If the Leased Property is rendered
Unsuitable for the continuation of Tenant's Business on that Leased Property,
this Lease shall terminate as to such Leased Property on the Date of Taking,
provided such Condemnation was not as a result of Tenant's failure to maintain
such Leased Property as provided for in Section 11.01.
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11.03 Restoration. If there is a partial taking of any Leased Property
-----------
and this Lease remains in full force and effect pursuant to Section 11.02,
Landlord shall retain the amount of any Landlord Award (as hereafter defined)
received by Landlord, Landlord shall apply such Landlord Award to accomplish all
necessary restoration to the Leased Property, and any excess after such
application shall be retained by Landlord. If there is a partial taking of any
Leased Property and this Lease remains in full force and effect pursuant to
Section 11.02, Tenant shall retain the amount of any Tenant Award (as hereafter
defined) received by Tenant, Tenant shall apply such Tenant Award to accomplish
all necessary restoration of Tenant's property, and any excess after such
application shall be retained by Tenant. Notwithstanding anything in this
Section to the contrary, in the event that there is a partial taking of any
Leased Property and this Lease remains in full force and effect pursuant to
Section 11.02, and there is a single Award with respect to such partial taking,
then the Landlord and Tenant shall use their good faith efforts to determine the
proper apportionment of such Award (as hereafter defined) to restoration of
Landlord's and Tenant's respective properties. In the event that the parties are
unable to agree on such apportionment within thirty (30) days, the parties shall
submit to arbitration of an apportionment subject to the arbitration provisions
set forth in Article XIV.
11.04 Landlord's Inspection. During the progress of such restoration,
---------------------
Landlord and its architects and engineers may, from time to time, inspect the
subject Leased Property and will be furnished, if required by them, with copies
of all plans, shop drawings, and specifications relating to such restoration.
Tenant will keep all plans, shop drawings, and specifications available, and
Landlord and its architects and engineers may examine them at all reasonable
times. If, during such restoration, Landlord and its architects and engineers
determine that the restoration is not being done in accordance with the approved
plans and specifications, Landlord will give prompt notice in writing to Tenant,
specifying in detail the particular deficiency, omission, or other respect in
which Landlord claims such restoration does not accord with the approved plans
and specifications. Upon the receipt of any such notice, Tenant will cause
corrections to be made to any deficiencies, omissions, or such other respect.
Tenant's obligations to supply insurance, according to Article IV, will be
applicable to any restoration under this Section.
11.05 Award Distribution. The entire compensation, sums or anything of
------------------
value awarded, paid or received on a total or partial Condemnation of a Leased
Property that is awarded to Landlord shall belong to Landlord (the "Landlord
Award"). The entire compensation, sums or anything of value awarded, paid or
received on a total or partial Condemnation of a Leased Property that is awarded
to Tenant shall belong to Tenant (the "Tenant Award", collectively with the
Landlord Award, the "Awards", and each, individually, an "Award").
Notwithstanding anything in this Section to the contrary, in the event that
there is a total or partial Condemnation of a Leased Property and there is a
single Award with respect to such Condemnation, then the Landlord and Tenant
shall use their good faith efforts to determine the proper apportionment of such
Award to Landlord's and Tenant's respective properties. In the event that the
parties are unable to agree on such apportionment within thirty (30) days, the
parties shall seek the parties shall submit to arbitration of an apportionment
subject to the arbitration provisions set forth in Article XIV.
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11.06 Temporary Taking. The taking of any Leased Property, or
----------------
any part thereof, by military or other public authority shall constitute a
taking by Condemnation only when the use and occupancy by the taking authority
has continued for longer than twenty four (24) months. Any taking of twenty four
(24) months or less shall be a temporary taking. During the first six (6) months
of any such temporary taking period (or twenty four (24) months in the event
that the temporary taking does not render the Leased Property Unsuitable for the
continuation of the Tenant's Business), all the provisions of this Lease shall
remain in full force and effect as to such Leased Property with no abatement of
rent payable by Tenant hereunder. If the temporary taking extends beyond six (6)
months but less than twenty four (24) months and the temporary taking does
render the Leased Property Unsuitable for the continuation of the Tenant's
Business, Tenant shall have the right to cease payment of Base Annual Rent for
the length of such temporary taking in excess of six (6) months but less than
twenty four (24) months for which Tenant has not received payments under its
insurance (excluding deductibles) necessary to pay its Base Annual
Rent ("Rebate Period"), provided that the Term or Extension Term of the Lease,
--------
as applicable, shall be extended for the number of months equal to the Rebate
Period during which time Tenant shall pay Base Annual Rent at the rate in effect
during such Rebate Period. If a taking extends beyond twenty four (24) months,
the taking shall be deemed a Condemnation and the provisions of Section 11.01
shall apply. In the event of any temporary taking, the amount of any such Award
made for such temporary taking allocable to the Term hereof, whether paid by way
of damages, Rent or otherwise, shall be paid to Tenant and Landlord in
proportion to the amount of time each bore the cost of the temporary taking.
XII. ADDITIONAL REPRESENTATIONS, WARRANTIES AND FINANCIAL COVENANTS
--------------------------------------------------------------
Tenant hereby represents, warrants and covenants to Landlord as
follows:
12.01 Organization and Qualification.
------------------------------
(a) Tenant is duly organized, validly existing and in good
standing under the laws of its state of incorporation or
organization, with all power and authority, corporate or
otherwise, necessary to: (i) enter into and perform this
Lease and (ii) own and lease its assets and properties, and
conduct its Business, as it is now being conducted or
proposed to be conducted. Tenant is duly qualified as a
foreign corporation or other entity, as the case may be, to
conduct its Business and own and lease its assets and
properties, and is in good standing, in each jurisdiction
where the character of its assets and properties owned or
held under lease or the nature of its Business makes such
qualification necessary or advisable, and is duly qualified
and licensed under all laws, regulations, ordinances or
orders of public or governmental authorities, or otherwise
to carry on its Business and own or lease its assets and
properties in the places and in the manner in which they
are owned,
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leased or conducted or proposed to be owned, leased or
conducted, except where the failure to be so organized,
qualified and in good standing or to have such authority,
qualification or licensing could not result in a Material
Adverse Change. Complete and correct copies of Tenant's
Charter, as in effect on the date hereof, and Tenant's by-
laws, also as in effect on the date hereof, have been
delivered to Landlord.
(b) Each Affiliate that conducts operations or business on or
from any Leased Property, whether now or at any time in the
future, is duly organized, validly existing and in good
standing under the laws of its organization, with all power
and authority, corporate or otherwise, necessary to own and
lease its assets and properties, and conduct its business,
as it is now being conducted or proposed to be conducted.
Each Affiliate is duly qualified as a foreign corporation
or other entity, as the case may be, to do business and own
and lease its assets and properties, and is in good
standing, in each jurisdiction where the character of its
assets and properties owned or held under lease or the
nature of its activities or business makes such
qualification necessary or advisable, and is duly qualified
and licensed under all laws, regulations, ordinances or
orders or public or governmental authorities or otherwise
to carry on its business and own or lease its assets and
properties in the places and in the manner in which they
are owned, leased or is conducted or proposed to be owned,
leased or conducted, except where the failure to be so
organized, qualified and in good standing or to have such
authority, qualification or licensing could not result in a
Material Adverse Change.
"Material Adverse Change" since a particular specified date, or a date
which may be specified from the circumstances existing immediately prior to the
happening of a specified event or occurrence, or, if no date or event is
specified, with reference to the most recent Annual Financial Statements
delivered pursuant to this Lease, means a material adverse change in the
Business, assets, properties, franchises, financial condition or income of
Tenant or the operations, business, assets, properties, franchises, financial
condition, income or prospects of any Affiliate, whether or not such event or
occurrence is an Event of Default.
"Affiliate" means with respect to any Person, (i) any Person that holds
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of voting securities or other
voting interests representing at least five percent (5%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least five percent (5%) of the outstanding equity securities or
interests in a Person, or (ii) any Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with such Person.
A "Person" shall mean and include natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks,
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trust companies, land trusts, business trusts, Indian tribes or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
12.02 Material Agreements. Schedule 12.02 is a complete list of all
------------------- --------------
agreements to which Tenant is a party that are material to the ownership and use
of the Leased Property or the operation of Tenant's Business, and Tenant has
delivered to Landlord a copy of each of these agreements (including all
exhibits, schedules and amendments thereto).
12.03 Changes in Condition. Since the date of the latest Annual
---------------------
Financial Statements, no Material Adverse Change has occurred between such date
and the date hereof, and neither Tenant nor any Affiliate has entered into any
material transaction outside the ordinary course of its or their operations or
business, including the Business, except as set forth in Schedule 12.03 and the
--------------
matters contemplated by this Lease.
12.04 Franchises, Licenses, etc. Tenant and its subsidiaries own, or
--------------------------
have sufficient interests in, all franchises, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses, permits, authorizations
and other rights as are necessary for the conduct of Tenant's Business and its
subsidiaries' businesses as now conducted or as currently proposed to be
conducted by Tenant or any Affiliate, as well as rights under any agreement
under which Tenant or its subsidiaries has access to confidential information
used by Tenant or its subsidiaries in Tenants' Business or the businesses of its
subsidiaries, as the case may be (collectively, the "Intellectual Property").
All Intellectual Property is in full force and effect in all material respects,
and Tenant and its subsidiaries are in substantial compliance with the foregoing
without any conflict with the valid rights of others, which has resulted, or
could be reasonably likely to result in any Material Adverse Change. Neither
Tenant nor any Affiliate has violated, or received any communication that by
conducting its Business or any Affiliate's businesses, it or any Affiliate would
violate any franchises, licenses, patents, trademarks, service marks, trade
names, copyrights, trade secrets, proprietary rights or processes of any other
Person (as hereafter defined) nor is Tenant or any Affiliate aware of any such
violations. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such license,
franchise or other right or affect the rights of Tenant or any Affiliate so as
to result in or reasonably be likely to result in any Material Adverse Change
except with respect to working capital requirements which obligations such
franchisor is not enforcing, provided that in the event that a franchisor gives
--------
notice to Tenant of its intent to enforce such working capital requirements,
Tenant then complies with such working capital requirements. There is no
litigation or other proceeding or dispute or, to the knowledge of Tenant or any
Affiliate, threat thereof with respect to the validity or, where applicable, the
extension or renewal, of any of the foregoing which has resulted, or could
result, in any Material Adverse Change.
12.05 Litigation. No litigation, at law or in equity, or any
-----------
proceeding before any court, board or other governmental or administrative
agency or any arbitrator or other forum of alternative dispute resolution is
pending or, to the knowledge of Tenant or any Affiliate, threatened which
involves any risk of any final judgment, order or liability which, after giving
effect to any applicable insurance, has resulted, or could result, in any
Material Adverse Change or which seeks to enjoin
44
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the execution and consummation of this Lease and the performance of Tenant's
obligations hereunder. No judgment, decree or order of any court, board or other
governmental or administrative agency or any arbitrator has been issued against
or binds Tenant or any Affiliate, which has resulted, or could result, in any
Material Adverse Change.
12.06 Authorization and Enforceability. Tenant has taken all corporate
---------------------------------
or other action required to execute, deliver and perform this Lease. This Lease
constitutes the legal, valid and binding obligation of Tenant and is enforceable
against Tenant in accordance with its terms.
12.07 No Legal Obstacle to Lease. Neither the execution and delivery
---------------------------
of this Lease nor the performance of any obligation hereunder has constituted or
resulted in or will constitute or result in:
(a) any breach, violation of, conflict with, default under or
termination of any agreement, contract, mortgage, instrument,
deed or lease to which Tenant or any Affiliate is a party or
by which it or they are bound;
(b) the violation of or conflict with any law, statute,
ordinance, judgment, decree, order, rule or regulation
applicable to Tenant, any Affiliate, any Improvements or any
Leased Property; or
(c) any violation of or conflict with Tenant's or any Affiliate's
Charter or By-Laws or other organizational documents, as the
case may be.
No approval, authorization or other action by, or declaration to or filing
with, any governmental or administrative authority or any other Person is
required to be obtained or made by Tenant in connection with the execution,
delivery and performance of this Lease.
12.08 Certain Business Representations:
--------------------------------
(a) Labor Relations. No dispute or controversy between Tenant
---------------
or any Affiliate and its or their employees has resulted in,
or is reasonably likely to result in, any Material Adverse
Change, and neither Tenant nor any Affiliate anticipates that
its relationships with its unions or employees will result,
or are reasonably likely to result, in any Material Adverse
Change. Tenant and each Affiliate is in compliance in all
material respects with all federal and state laws relating to
employees and labor relations, including, but not limited to,
laws relating to health and safety in the workplace, non-
discrimination in employment and the payment of wages.
(b) Antitrust. Tenant and each Affiliate is in compliance in all
----------
material respects with all federal and state antitrust laws
relating to Tenant's Business and the subsidiaries'
businesses and the geographic concentration thereof.
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(c) Consumer Protection. Neither Tenant nor any Affiliate is in
--------------------
violation of any rule, regulation, order, or interpretation
of any rule, regulation or order of the Federal Trade
Commission (including truth-in-lending) or other federal,
state or local public or governmental authority or agency,
with which the failure to comply, in the aggregate, has
resulted in, could result in, a Material Adverse Change.
(d) Future Expenditures. Neither Tenant nor any Affiliate, knows
-------------------
or has reason to know of any further expenditures by Tenant
or any Affiliate necessary to meet the provisions of any
federal, state or foreign governmental statutes, orders,
rules or regulation as in existence on the Execution Date
which could result in any Material Adverse Change.
(e) Benefit Liabilities. Neither Tenant nor any ERISA Affiliate
-------------------
maintains, contributes to, or is obligated to contribute to,
nor has Tenant or any ERISA Affiliate maintained, contributed
to, been obligated to contribute to, or had any direct,
indirect, or contingent liability with respect to, any Title
IV Plan (as hereafter defined). Each Tenant Benefit Plan has
been maintained in compliance with its terms and with
applicable laws (including specifically the Code and the
Employee Retirement Income Security Act of 1974 ("ERISA").
"Tenant Benefit Plan" means any plan, fund, or other similar
program described in Section 3(2) of ERISA and established or
maintained or with respect to which Tenant and/or any ERISA
Affiliate has an obligation to contribute for the benefit of
its employees (or for which Tenant could be directly or
contingently liable). "Title IV Plan" means an "employee
benefit plan" (as defined in Section 3(3) of ERISA) that is
subject to Title IV of ERISA and is or has been established
or maintained, by Tenant or any ERISA Affiliate, or to which
contributions are, have been, or should have been made.
"ERISA Affiliate" means any trade or business, whether or not
incorporated, that, together with Tenant, is or has been
under common control, within the meaning of Section 414(b),
(c), (m), or (o) of the Code or Section 4001 of ERISA.
12.09 Certain Financial Covenants. Tenant or an Affiliate, as applicable,
---------------------------
is in compliance in all material respects with all material financial covenants
required to be maintained pursuant to any franchise or other agreement pursuant
to which Tenant or such Affiliate operates its business, except in such other
respects as shall not result in any franchisor under any franchise or operating
agreement to which Tenant is a party taking any action that could result in a
Material Adverse Change and except with respect to working capital requirements
which obligations such franchisor is not enforcing, provided that in the event
--------
that a franchisor gives notice to Tenant of its intent to enforce such working
capital requirements, Tenant then complies with such working capital
requirements.
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12.10 Cash Flow Coverage Ratio Covenant. On the date of this Lease and
---------------------------------
measured on June 30 of each year after the date of this Lease (each a "Cash
Flow Measurement Date"), Tenant shall have maintained a Cash Flow Coverage Ratio
of not less than 1.5 to 1.0 based on the Annual Financial Statements to be
delivered to Landlord in accordance with Section 6.04 hereof. "Cash Flow
Coverage Ratio" means the aggregate of net income before taxes plus mortgage
interest, rent expense, depreciation, compensation of principals of the
Business, management fees plus the annual LIFO adjustment and other non-cash
expenses, less recurring capital expenditures and gain (loss) on sale of real
estate, dividends and/or profits taken out of Tenant divided by the aggregate of
the Tenant's obligations under this Lease. "Cash Flow Coverage Ratio" shall be
measured on a consolidated and/or combined basis, i.e., computed based upon the
consolidated or combined financial performance of all the Businesses operated on
Leased Properties leased to Jim E. Kelley or Thomas W. Kelley or corporations or
other entities in which they or their direct descendants hold directly or
indirectly a controlling ownership interest. Notwithstanding anything herein to
the contrary, in the event that Tenant shall not be in compliance with this
covenant at a Cash Flow Measurement Date or Tenant shall have knowledge of such
non-compliance prior to any Cash Flow Measurement Date, the Tenant shall have
the right to cure such breach through any reasonable commercial means,
including, but not limited to, providing guarantees acceptable to Landlord,
increasing capital, or cross collateralizing with any other property of Tenant
or an Affiliate, provided that such breach is cured within one hundred and
eighty (180) days after Notice by Landlord to Tenant of the existence of such
breach.
12.11 Disclosure. This Lease does not contain any untrue statement of a
----------
material fact or omit to state a material fact necessary in order to make any
statement contained herein not misleading in light of the circumstances under
which it was made. To Tenant's knowledge, there is no event, fact or occurrence
that has resulted, or in the future (so far as Tenant can reasonably foresee)
could result, in any Material Adverse Change, except to the extent that present
or future general and sector-specific economic conditions may result in a
Material Adverse Change.
12.12 Covenant Not to Acquire. Tenant covenants and agrees that during
-----------------------
the Term and any Extension Term, as the case may be, Tenant and its controlling
shareholders or its or their Affiliates will not acquire, directly or
indirectly, more that 9.90% of the outstanding common shares of beneficial
interest of Capital Automotive REIT. Tenant covenants and agrees that it will
divest itself of such shares of Capital Automotive REIT as may be necessary to
satisfy the limitations of this Section 12.12.
XIII ASSIGNMENT AND SUBLETTING; ATTORNMENT
-------------------------------------
13.01 Prohibition Against Subletting and Assignment. Subject to
---------------------------------------------
Section 13.03, Tenant shall not, without the prior written consent of Landlord,
or upon compliance with any conditions established by Landlord, in its sole
discretion, assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer (except to an Affiliate) this Lease or any interest herein, or all or
any part of any Leased Property, or suffer or permit this Lease or the leasehold
estate created hereby or any other
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rights arising hereunder to be assigned, transferred, mortgaged, pledged,
hypothecated or encumbered, in whole or in part, whether voluntarily,
involuntarily or by operation of law. For purposes of this Section 13.01, an
assignment of this Lease shall be deemed to include any Change of Control of
Tenant, as if such Change of Control were an assignment of the Lease. In the
event that (i) Landlord shall withhold any consent to any assignment or transfer
of this Lease or any interest herein, and (ii) such assignee or transferee is
approved by the relevant manufacturer for continuation as a franchisee, there
shall be a presumption that such assignment or transfer was reasonable and
Landlord shall have the burden of rebutting such presumption and of proving that
such consent was in fact reasonably withheld (or that such conditions were
reasonable). No assignment shall in any way impair the continuing primary
liability of the assigning Tenant hereunder. Notwithstanding anything else in
this Lease, Tenant shall have the right, without prior written consent of
Landlord, to mortgage, pledge, hypothecate or otherwise encumber its leasehold
estate in any Leased Property, provided, that the same does not adversely
--------
affect the Landlord's rights or estate in and to the Leased Property or those of
any person claiming through or under the Landlord, including any pledgee or
mortgagee thereof.
13.02 Changes of Control. A Change of Control requiring the consent of
------------------
Landlord shall mean:
(a) the issuance and/or sale by Tenant or the sale by any
shareholder or equity holder of Tenant of a Controlling (which
shall mean, as applied to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise)
interest in Tenant to a Person other than an Affiliate or
Immediate Family Member (as hereafter defined) of Tenant, other
than in either case a distribution to the public pursuant to an
effective registration statement under the Securities Act of
1933, as amended (a "Registered Offering");
(b) the sale, conveyance or other transfer of all or substantially
all of the assets of Tenant (whether by operation of law or
otherwise) provided, however, that no Change of Control shall
be deemed to have occurred in the event of (i) the transfer of
assets (whether by operation of law, devise, descent or
otherwise) to an Immediate Family Member or to an entity owned
and Controlled by one or more Immediate Family Members or by an
Affiliate or (ii) as a result of the death of a person involved
in the Business, so long as the transferee is approved by the
manufacturer for the continuation of the Business; or
(c) any transaction pursuant to which Tenant is merged with or
consolidated into another entity (other than an entity owned
and Controlled by an Affiliate), and Tenant is not the
surviving entity.
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(d) "Immediate Family Member" shall mean any spouse, parent, sibling
(natural born or adopted) or child (natural born or adopted) or
other direct descendants of James E. Kelley and/or Thomas W.
Kelley or any trust or similar entity established for the benefit
of such spouse, parent, sibling (natural born or adopted) or
child or other direct descendants (natural born or adopted) of
James E. Kelley and/or Thomas W. Kelley.
13.03 Operating/Service Agreements.
-----------------------------
(a) Permitted Agreements. Tenant shall, without Landlord's prior
--------------------
approval, be permitted to enter into such operating/service
agreements for portions of each Leased Property (including, but
not limited to, leases for car wash and/or quick change oil
facilities and specifically including a lease for a body shop on
the Leased Property set forth in Schedule A located in Decatur
Indiana) to various licensees in connection with Tenant's
Business as are customarily associated with or incidental to the
operation of such Leased Property, which agreements may be in the
nature of a sublease agreement.
(b) Terms of Agreements. Each operating/service agreement concerning
-------------------
a Leased Property shall be subject and subordinate to the
provisions hereof. No agreement made as permitted by Section
13.03(a) shall affect or reduce any of the obligations of Tenant
hereunder, and all such obligations shall continue in full force
and effect as if no agreement had been made. No agreement shall
impose any additional obligations on Landlord hereunder.
(c) Copies. Tenant shall, within ten (10) days after the execution
------
and delivery of any operating/service agreement permitted by
Section 13.03(a), deliver a duplicate original thereof to
Landlord.
(d) Assignment of Rights in Agreements. As security for performance
----------------------------------
of its obligations hereunder, Tenant hereby grants, conveys and
assigns to Landlord all right, title and interest of Tenant in
and to all operating/service agreements now in existence or
hereinafter entered into for each Leased Property, and all
extensions, modifications and renewals thereof and all rents,
issues and profits therefrom, to the extent the same are
assignable by Tenant. Landlord hereby grants to Tenant a license
to collect and enjoy all rents and other sums of money payable
under any such agreement; provided, however, that Landlord shall
have the absolute right at any time after the occurrence and
continuance of an Event of Default upon notice to Tenant and any
vendors or licensees to revoke said license and to collect such
rents and sums of money and to retain the same. Tenant shall not
(i) after the occurrence and continuance of an Event of Default,
consent to, cause, or allow, any material modification or
alteration of any of the terms, conditions or covenants of any
49
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of the agreements or the termination thereof, without the prior
written approval of Landlord nor (ii) accept any rents (other
than customary security deposits) more than thirty (30) days in
advance of the accrual thereof nor permit anything to be done,
the doing of which, nor omit or refrain from doing anything, the
omission of which, will or could be a breach of or default in the
terms of any of the agreements.
(e) Licenses, Etc. For purposes of Section 13.03, the
-------------
operating/service agreements shall mean any licenses, concession
arrangements, or other arrangements relating to the possession or
use of all or any part of any Leased Property.
13.04 Assignment. If Landlord shall withhold its consent to any
----------
assignment or if Landlord shall have established conditions to approval of any
assignment but such conditions shall not have been complied with, to the
reasonable satisfaction of Landlord, such assignment shall not in any way
impair the continuing primary liability of Tenant hereunder. No consent to any
assignment in a particular instance shall be deemed to be a general waiver of
the prohibition set forth in Article XIII. Any assignment shall be solely of
Tenant's entire interest in this Lease with respect to the subject Leased
Property or Leased Properties and shall not relieve Tenant of its obligations
hereunder. To the extent that Tenant assigns, pursuant to prior written consent
of the Landlord, its interest hereunder in any Leased Property to a person that
is neither an Affiliate nor an Immediate Family Member and that no Event of
Default exists with respect to such Leased Property, such assignee shall assume
and be liable for any and all Lease obligations but only to the extent that such
obligations solely and directly relate to or arise from or under such assigned
Leased Property. Any assignment or other transfer of all or any portion of
Tenant's interest in this Lease in contravention of Article XIII shall be
voidable at Landlord's option.
13.05 REIT Limitations.
----------------
(a) Anything contained herein to the contrary notwithstanding, Tenant
shall not: (a) sublet or assign a Leased Property or this Lease
on any basis such that the rental or other amounts to be paid by
the sublessee or assignee thereunder would be based, in whole or
in part, on the income or profits derived by the business
activities of the sublessee or assignee; (b) sublet or assign a
Leased Property or this Lease to any Person that, under Section
856(d)(2)(B) of the Internal Revenue Code of 1986, as amended
(the "Code"), Landlord or its general partner owns, directly or
indirectly (by applying constructive ownership rules set forth in
Section 856(d) (5) of the Code, a ten percent (10%) or greater
interest; or (c) sublet or assign a Leased Property or this Lease
in any other manner or otherwise derive any income which could
cause any portion of the amounts received by Landlord pursuant
hereto or any sublease to fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Code, or
which could cause any other income
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received by Landlord to fail to qualify as income described in
Section 856(c) (2) of the Code. The requirements of this Section
13.05 shall likewise apply to any further subleasing by any
subtenant.
(b) Tenant acknowledges that it is its understanding that Capital
Automotive REIT, a Maryland real estate investment trust and the
general partner of Landlord (the "Company"), intends to elect to
be taxed as a real estate investment trust (a "REIT") under the
Code. Tenant shall not do anything which would adversely affect
the Company's status as a REIT. Tenant hereby agrees to
modifications of this Lease which do not materially adversely
affect Tenant's rights and liabilities if such modifications are
required to retain or clarify the Company's status as a REIT.
13.06 Attornment. Tenant shall insert in each sublease permitted under
----------
Section 13.03(a) provisions to the effect that: (a) such sublease is subject
and subordinate to all of the terms and provisions of this Lease and to the
rights of Landlord hereunder; (b) in the event this Lease shall terminate before
the expiration of such sublease, the sublessee thereunder will, at Landlords'
option, attorn to Landlord and waive any right the sublessee may have to
terminate the sublease or to surrender possession thereunder, as a result of the
termination hereof; and (c) in the event the sublessee receives a written notice
from Landlord or Landlord's assignees, if any, stating that Tenant is in default
under this Lease, the sublessee shall thereafter be obligated to pay all rentals
accruing under said sublease directly to the party giving such notice, or as
such party may direct. All rentals received from the sublessee by Landlord or
Landlord's assignees in respect of a Leased Property, if any, as the case may
be, shall be credit against the amounts owing by Tenant hereunder with respect
to such Leased Property.
XIV. ARBITRATION
-----------
14.01 Arbitration. The parties agree that any controversy or
-----------
controversies arising under this Lease that this Lease specifically and
expressly provides shall be determined by arbitration, will be determined by
arbitration as hereafter provided in this Article.
14.02 Appointment of Arbitrators. The party or parties requesting
--------------------------
arbitration shall serve upon the other a demand therefor, in writing, specifying
in detail the controversy and matter(s) to be submitted to arbitration in
accordance with Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes. The party or parties giving notice shall
request a listing of available arbitrators from the Center for Public Resources,
and each party shall respond in the selection process within fifteen (15) days
after each receipt of such listings until a panel of three (3) arbitrators has
been designated. If either party fails to respond within fifteen (15) days, it
is agreed that the Center for Public Resources may make such selections as are
necessary to complete the panel of three (3) arbitrators. All arbitrators shall
be independent and neutral.
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14.03 Arbitration Procedure. Within five (5) business days after
---------------------
the selection of the arbitration panel, the arbitrators shall give written
notice to each party as to the time and the place of each meeting, which shall
be held in Chicago, Illinois, at which the parties may appear and be heard,
which shall be no later than fifteen (15) days after certification of the
arbitration panel. The parties agree that they will limit discovery to that
which is reasonably necessary to determination of the issue or dispute submitted
to arbitration. The parties agree to further waive the applicability of rules of
evidence or rules of procedure in the proceedings. The applicable rules shall be
those Center for Public Resources Rules for Non-Administered Arbitration of
Business Disputes in effect at the time. The arbitrators shall take such
testimony and make such examination and investigations as the arbitrators
reasonably deem necessary. The decision of the arbitrators shall be in writing
signed by a majority of the panel which decision shall be final and binding upon
the parties to the controversy. Provided, however, in rendering their decisions
and making awards, the arbitrators shall not add to, subtract from or otherwise
modify the provisions of this Lease.
14.04 Expenses. The expenses of the arbitration shall be assessed
--------
by the arbitrators and specified in the written decision. In the absence of a
determination or assessment of expenses of the arbitration procedure in the
award, all of the expenses of such arbitration shall be divided equally between
Landlord and Tenant. Each party in interest shall be responsible for and pay the
fees, costs and expenses of its own counsel, unless the arbitration award
provides for an assessment of reasonable attorneys' fees and costs.
14.05 Enforcement of the Arbitration Award. There shall be no
------------------------------------
appeal from the decision of the arbitrators, and upon the rendering of an award,
any party thereto may file the arbitrators' decision in the United States
District Court for the Eastern District of Virginia for enforcement as provided
by applicable law.
XV. QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATES
-----------------------------------------------------------------
15.01 Quiet Enjoyment. So long as Tenant performs all of its
---------------
obligations under this Lease, Tenant's possession, use and enjoyment of the
Leased Properties will not be disturbed by or through Landlord, or by any person
or entity acting by or through or under Landlord, and in the event Landlord or
any such other person or entity breaches said covenant of quiet enjoyment
provided for in this Section 15.01, Tenant shall be entitled to recover from
Landlord and any other person acting by or through or under Landlord all
damages, both direct and indirect, arising from such breach, together with all
reasonable and actual attorney fees and cost incurred in making such recovery.
15.02 Landlord Mortgages; Subordination. Subject to Section 15.03,
---------------------------------
without the consent of Tenant, Landlord may, from time to time, directly or
indirectly, create or otherwise cause to exist any liens, encumbrances, security
interests or title retention agreements on any Leased Property, or any portion
thereof or any interest therein, whether to secure any borrowing or other means
of financing or refinancing. Tenant shall execute, acknowledge and deliver to
Landlord, at any time
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and from time to time upon demand by Landlord or any mortgagee or any holder of
any mortgage or other instrument described in this Section, without cost to
Landlord, a Subordination and Non-Disturbance Agreement in the form attached
hereto as Exhibit 15.02, which provides that (i) Tenant's rights hereunder are
subordinate to any ground lease or underlying lease, first mortgage, first deed
of trust, or other first lien against any Leased Property, together with any
renewal, consolidation, extension, modification, or replacement thereof, which
now or at any subsequent time affects any Leased Property or any interest of
Landlord in any Leased Property, except to the extent that any such instrument
expressly provides that this Lease is superior; and (ii) in the event such party
succeeds to Landlord's interest under the Lease by foreclosure or purchase or
otherwise and provided that no Event of Default not cured by Tenant within any
applicable grace period exists, such party will not disturb Tenant's possession,
use or occupancy of the subject Leased Property. If Tenant fails or refuses to
deliver such Subordination and Non-Disturbance Agreement to Landlord within five
(5) business days after the request of Landlord, then Landlord shall request in
writing such delivery a second time. If Tenant fails or refuses to execute,
acknowledge and deliver such Subordination and Non-Disturbance Agreement within
ten (10) days after such second written demand, then Landlord or such successor
in interest may execute, acknowledge and deliver such Subordination and Non-
Disturbance Agreement on behalf of Tenant as Tenant's attorney-in-fact. Tenant
hereby constitutes and irrevocably appoints Landlord, its successors and
assigns, as Tenant's attorney-in-fact to execute, acknowledge, and deliver on
behalf of Tenant the Subordination and Non-Disturbance Agreement. This power of
attorney is coupled with an interest and is irrevocable.
15.03 Attornment. If any holder of any mortgage, indenture, deed of
----------
trust, or other similar instrument described in Section 15.02 succeeds to
Landlord's interest in any Leased Property, Tenant will pay to such holder all
Rent subsequently payable hereunder as to such Leased Property. Tenant shall,
upon request of anyone succeeding to the interest of Landlord, automatically
become the tenant of, and attorn to, such successor in interest without changing
this Lease. The successor in interest will not be bound by: (a) any payment of
Rent for more than one (1) month in advance; (b) any amendment or modification
hereof made without its written consent prior to the date on which the successor
succeeded to the Landlord's interest; (c) any claim against Landlord arising
prior to the date on which the successor succeeded to Landlord's interest; or
(d) any claim or offset of Rent against Landlord relating to the period of time
prior to the date on which the successor succeeded to the Landlord's interests.
15.04 Estoppel Certificates.
---------------------
(a) At the request of the other party or any mortgagee or
purchaser of a Leased Property or any permitted assignee
of this Lease or any permitted purchaser of Tenant's
Business, Tenant or Landlord, as applicable, shall
execute, acknowledge, and deliver an estoppel certificate
substantially in the form attached hereto as Exhibit
15.04(a) or Exhibit 15.04(b), as applicable, or such
other form as requested by Tenant or Landlord, as
applicable, and is reasonable under the circumstances, in
favor of the party requesting the estoppel certificate
certifying the following as to such Leased Property: (i)
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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; (ii) the date to which Rent and other
charges have been paid; (iii) that neither Tenant nor
Landlord is in default nor is there any fact or condition
which, with notice or lapse of time, or both, would
constitute a default, if that be the case, or specifying
any existing default; (iv) that Tenant has accepted and
occupies such Leased Property; (v) in the case of
Tenant's estoppel certificate, that Tenant has no
defenses, set-offs, deductions, credits, or counterclaims
against Landlord, if that be the case, or specifying such
that exist; (vi) in the case of Tenant's estoppel
certificate, that Landlord has no outstanding
construction or repair obligations; and (vii) such other
information as may reasonably be requested by the other
party or any mortgagee or purchaser. Any purchaser or
mortgagee may rely on this estoppel certificate.
(b) If Tenant fails to deliver the estoppel certificate to
Landlord within ten (10) days after such request by the
Landlord, then Landlord shall be required to notify
Tenant in writing that the ten (10) day period has
expired. If Tenant does not deliver the estoppel
certificate within five (5) business days of such notice,
then Tenant shall be deemed to have certified that: (i)
this Lease is in full force and effect and has not been
modified, or that this Lease has been modified as set
forth in the certificate delivered to Tenant; (ii) Tenant
has not prepaid any Rent or other charges except for the
current month; (iii) Tenant has accepted and occupies
such Leased Property; (iv) neither Tenant nor Landlord is
in default nor is there any fact or condition which, with
notice or lapse of time, or both, would constitute a
default; (v) Landlord has no outstanding construction or
repair obligation; and (vi) Tenant has no defenses, set-
offs, deductions, credits, or counterclaims against
Landlord.
(c) If Landlord fails to deliver the estoppel certificate to
Tenant within ten (10) days after such request by the
Tenant, then Tenant shall be required to notify Landlord
in writing that the ten (10) day period has expired. If
Landlord does not deliver the estoppel certificate within
five (5) business days of such notice, then Landlord
shall be deemed to have certified that: (i) this Lease is
in full force and effect and has not been modified; (ii)
Tenant is not in arrears on any Rent or other charges;
(iii) Tenant has accepted and occupies such Leased
Property; and (iv) neither Tenant nor Landlord is in
default nor is there any fact or condition which, with
notice or lapse of time, or both, would constitute a
default.
(d) Tenant hereby irrevocably appoints Landlord as Tenant's
attorney-in-fact to execute, acknowledge and deliver on
Tenant's behalf any estoppel certificate if the time
period established by Section 15.04(c) has passed and
Tenant has
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not delivered an estoppel certificate. This power of
attorney is coupled with an interest and is irrevocable.
(e) Landlord appoints Tenant as Landlord's attorney-in-fact
to execute, acknowledge and deliver on Landlord's behalf
any estoppel certificate if the time period established
by Section 15.04(d) has passed and Landlord has not
delivered an estoppel certificate, This power of attorney
is coupled with an interest and is irrevocable.
15.05 Waiver of Landlord's Lien. Landlord agrees to and does hereby
-------------------------
Waiver its Landlord's lien and any other rights that it may have with respect to
property or assets representing the security or collateral under Tenant's
"floor-plan" or similar financing arrangements, during the Term or any Extension
Term. Landlord shall, upon request by any such lender, execute an acknowledgment
of such waiver.
XVI. RIGHT OF FIRST OFFER; RIGHT TO PURCHASE; APPRAISAL METHOD
---------------------------------------------------------
16.01 Right of First Offer During Lease Term or Extension Term.
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(a) If and when during the Term or Extension Term, as the
case may be, Landlord shall decide to sell any or all of
the Leased Properties to a Person who is not an Affiliate
of Landlord (the "Decision to Sell"), provided that no
Event of Default has occurred and is continuing under the
Lease, Landlord shall notify Tenant in writing within ten
(10) business days after Landlord makes a Decision to
Sell. Tenant shall have ten (10) business days thereafter
in which to notify Landlord in writing of its desire to
purchase any or all of the Leased Properties encompassed
by the Decision to Sell. If Tenant shall give such
notice, Tenant shall have a period of thirty (30) days
within which to make a written offer to purchase such
property (the "First Offer"). The First Offer must, at a
minimum, be in the amount of the Tenant's estimate of the
fair market value of each of the Leased Properties as to
which Tenant has given notice of its desire to purchase
and set forth the proposed purchase price, deposit
amounts and closing date and any and all other terms and
conditions being proposed by Tenant. If Tenant has
performed an appraisal pursuant to Section 8.01 hereof
for any Tenant-constructed Improvements and has not prior
to the date of the First Offer transferred its ownership
of such Tenant-constructed Improvements to Landlord,
Tenant's estimate of the fair market value of the Leased
Properties shall exclude an amount equal to the then
current value of such Tenant-constructed Improvements
whose ownership has not, to the date of the First Offer,
transferred to Landlord less the estimated current value
of any Tenant Improvements or Capital Additions not owned
by Tenant that are replaced by such Tenant-constructed
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Improvements ("Tenant Improvement Value").
Notwithstanding anything in this Section to the contrary,
Tenant shall include in its First Offer a statement
setting forth its reasonable valuation, based upon the
Section 8.01 appraisal, of the amount of increase in the
fair market value of the Leased Property due to the
Tenant Improvement Value. To the extent, that Landlord
challenges such Tenant Improvement Value and the parties
cannot agree upon the Tenant Improvement Value within
five (5) days of Landlord's receipt of the First Offer,
Landlord and Tenant shall jointly retain an appraiser
meeting the qualifications set forth in Section 16.03
(and, if available, the jointly approved appraiser shall
be the appraiser who performed the prior Section 8.01
appraisal) to determine this Tenant Improvement Value
within fifteen (15) days of his retention. Such
appraiser's decision shall be final and unappealable. For
purposes of valuing the purchase price of the Tenant's
First Offer for a Leased Property with the purchase price
offered by any third party for a Leased Property pursuant
to Sections 16.01(b) and (c), the Landlord shall
calculate the value of the Tenant's First Offer as to a
Leased Property as the sum of the purchase price of the
First Offer and the Tenant Improvement Value for such
Leased Property.
(b) Within thirty (30) days of receipt of the First Offer,
Landlord shall give Tenant written notice of its
acceptance or rejection thereof. If accepted, Tenant
shall, within ten (10) days after receipt of the
acceptance notice, make the deposit called for in the
First Offer and the parties shall proceed to contract and
closing upon the purchase price (not including the Tenant
Improvement Value) and other terms thereof. If the First
Offer is rejected, then, subject to the provisions of
subsections (c) and (d) of this Section 16.01, Tenant
shall have no further rights under this Section 16.01
with respect to the purchase of the Leased Properties
that are the subject of the First Offer during the Term
or Extension Term, as the case may be.
(c) If Landlord shall reject the First Offer, for a one year
period thereafter it may proceed to sell the Leased
Properties that are the subject of the First Offer,
subject to the Lease and the remaining Term or Extension
Term thereof, as the case may be, to any third party,
provided (i) the purchase price received on the sale of
any Leased Property subject to the First Offer shall
exceed the sum of the purchase price for such Leased
Property specified in the First Offer and the Tenant
Improvement Value, if applicable, or (ii) if the purchase
price of the sale of any Leased Property subject to the
First Offer does not exceed that specified in the First
Offer, the terms of such sale, taken together, are more
favorable to Landlord, in Landlord's reasonable
judgement, than those of the First Offer. There shall be
a presumption that Landlord's judgment was reasonable and
Tenant shall have the burden of
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rebutting such presumption and of proving that such
judgment was in fact unreasonable.
(d) So long as there is no Event of Default that has occurred
and that has not been removed within the applicable cure
period (if any), and so long as Tenant shall attorn to
the person acquiring title by purchase or otherwise, and
so long as Tenant continues to pay the rent and other
amounts due hereunder and fully complies with the other
terms and requirements of this Lease, this Lease shall
not terminate by reason of such transfer and Tenant's use
and enjoyment of the Leased Property shall not be
disturbed.
(d) If no sale of the Leased Properties subject to the First
Offer is effected by Landlord within the period specified
in subsection (c) above, then if Landlord thereafter
desires to sell such Leased Properties, the procedure set
forth in subsections (a), (b) and (c) shall be followed.
(e) This option shall terminate in any event twenty (20)
years after the death of the last descendant of George
Herman Walker Bush, former President of the United
States, living at the time of execution of this Lease.
16.02 Right to Purchase at End of Term and Extension Terms.
-----------------------------------------------------
(a) Landlord hereby grants the Tenant the right and option to
purchase any or all of the Leased Properties (the "Option
to Purchase") at an aggregate amount equal to such Leased
Properties' Property Consideration (as hereafter defined)
upon termination of the Term or any Extension Term, if
applicable, of this Lease. The Option to Purchase shall
not be granted as to a Leased Property if, on the Option
Exercise Date (as hereafter defined), an Event of Default
with respect to such Leased Property exists and has not
been cured within any applicable cure period. The Tenant
shall notify Landlord in writing of its intent to
exercise any Option to Purchase, at least twelve (12)
months prior to the end of the Term or an Extension Term,
if applicable, of this Lease.
(b) The consideration to be paid for any Leased Property upon
exercise of the Option to Purchase (the "Property
Consideration") shall be the Appraised Value (as
hereafter defined) of such Leased Property is determined
as set forth in Section 16.03(a).
(c) Within thirty (30) days after the Property Consideration
of such Leased Property is determined, Tenant shall
notify Landlord in writing of its irrevocable decision
either (i) to exercise the Option to Purchase as to a
Leased Property or (ii) to decline to purchase such
Leased Property
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("Irrevocable Decision"). In the event that Tenant's
Irrevocable Decision is to exercise its Option to
Purchase, Landlord and Tenant agree to cooperate to close
the sale and purchase of such Leased Property entirely
for cash on an "as is, where as basis" and with no
warranties by Landlord other than in a special warranty
deed, with the Closing to be in the final thirty (30)
days prior to the end of the Term or Extension Term, as
applicable (the "Option Closing Period"). In the event
that either (A) Tenant's Irrevocable Decision is not to
exercise its Option to Purchase as to a Leased Property
or (B) the sale and purchase of such Leased Property does
not close within the Option Closing Period due to
Tenant's failure to consummate the sale and purchase of
such Leased Property, then (Y) the Term or Extension
Term, as applicable, shall be extended for the number of
months between the Tenant's initial notification of its
intent to exercise any Option to Purchase and the time at
which the Tenant either makes an Irrevocable Decision not
to Exercise its Option to Purchase or fails to consummate
the Sale of of the Leased Property within the Option
Closing Period; and (Z) Landlord shall have no further
obligations to Tenant pursuant to this Section 16.02(a)
as to each Leased Property that was the subject of
Tenant's Irrevocable Decision not to exercise its Option
to Purchase. This Lease shall terminate as to any Leased
Property purchased by Tenant pursuant to Sections 16.01
or 16.02 upon the closing of any such purchase.
16.03 Appraisal Method.
-----------------
(a) For purposes of Section 16.02 and whenever an appraisal
is otherwise required under this Lease, the Appraised
Value of the Leased Property shall be determined by (1)
an independent appraiser, who is a member of the
Appraisal Institute, and will be selected by Landlord,
(the "Landlord MAI Appraiser"), (2) a second appraiser,
who is a member of the Appraisal Institute, and will be
selected by the Tenant (the "Tenant MAI Appraiser"), and
(3) a third MAI Appraiser selected by agreement of the
Landlord MAI Appraiser and the Tenant MAI Appraiser (the
"Third MAI Appraiser") (each an "Appraiser" and,
collectively, the "Appraisers"). Landlord and Tenant
shall select their respective Appraisers, (i) no later
than thirty (30) days after the Tenant notifies Landlord
of its intent to exercise the Option to Purchase or (ii)
in all other cases, in no event later than ten (10) days
following the date an appraisal is required, . The Third
MAI Appraiser shall be selected no later than five (5)
days after the selection of the other Appraisers. If MAI
Appraisers are not reasonably available, then each
appraiser shall, at a minimum, hold a state license
qualifying him or her to appraise properties of the type
being appraised and shall have qualifications and
experience equivalent to that required of an MAI
Appraiser. The costs of the Appraisers' appraisals shall
be shared equally by the parties. As promptly as possible
but
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in no event later than forty-five (45) days after
selection of the Third Appraiser, each Appraiser shall
deliver his or her written report of the Appraisers'
determination of the fair market value of the Leased
Properties, which determination shall be based, for each
Leased Property, upon the highest and best use of such
Leased Property, taking into consideration the location
of such Leased Property, other properties comparable
thereto and the terms of the Lease provided that in the
--------
event and to the extent that the appraisal is an
appraisal that is being performed pursuant to Section
16.02, such appraisal may consider that the Lease has
been in place in the past, but the appraisal shall also
take into consideration that the Lease will terminate
upon sale of the Property to Tenant pursuant to Section
16.02 and that there may not be a lease on the Property
after the sale. Notwithstanding anything else in this
Section 16.03(a), if, during the Term or Extension Term
of this Lease, as applicable, Tenant-constructed
Improvements have been made, the ownership thereof has
not, prior to the date of such appraisal, been
transferred to Landlord and the appraisal set forth in
Section 8.01 was performed, the Appraisers' determination
of fair market value in connection with any appraisal to
determine Tenant's rights or obligations under this
Agreement including Section 16.02 shall exclude the
Tenant Improvement Value.
(b) The "Appraised Value" of the Leased Properties shall be
equal to the arithmetic mean of the two (2) fair market
value determinations of the Appraisers that are closest
in value. In the event that the values of (i) the
difference between the highest appraisal value and the
next lower appraisal value, and (ii) the difference
between the lowest appraisal value and the next higher
appraisal value, are equal, then the "Appraised Value"
shall be equal to the arithmetic mean of the fair market
value determinations of all Appraisers.
XVII. MISCELLANEOUS
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17.01 Notices. Landlord and Tenant hereby agree that all notices,
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demands, requests, and consents (hereinafter "Notices") required to be given
pursuant to the terms of this Lease shall be in writing and shall be addressed
as follows:
If to Sellers, then to the address given in the Summary of Terms with a copy to:
Haller & Colvin, P.C.
Attn: Vincent J. Heiny, Esq. and
Charles J. Heiny, Esq.
444 East Main Street
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Fort Wayne, Indiana 46802.
If to Landlord:
Capital Automotive REIT
1420 Springhill Road
Suite 525
McLean, Virginia 22102
Attn: Portfolio Manager
With a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attn: George P. Stamas, Esq. and
John B. Watkins, Esq.
and shall be served by (a) personal delivery; (b) certified mail, return receipt
requested, postage prepaid; or (c) nationally recognized overnight courier. All
notices shall be deemed to be given upon the earlier of actual receipt or three
(3) days after mailing, or one (1) business day after deposit with the overnight
courier, provided that the time period in which a response to any Notices must
--------
be given shall commence on the date of receipt thereof. Receipt of Notices
hereunder shall occur upon actual delivery to an individual party or to an
officer, member, or general or limited partner of a party or to any agent or
employee of such party at the address of such party set forth above, subject to
change as provided hereinbelow. Landlord or Tenant may change its notice
address at any time by giving the other party Notice of such change. Any such
Notice of change of address shall be effective five (5) days after delivery. An
attempted delivery in accordance with the foregoing, acceptance of which is
refused or rejected, shall be deemed to be and shall constitute receipt; and an
attempted delivery in accordance with the foregoing by mail, messenger, or
courier service (whichever is chosen by the sender) which is not completed
because of changed address of which no notice was received by the sender in
accordance with this provision prior to the sending of the Notice shall also be
deemed to be and constitute receipt.
17.02 Advertisement of a Leased Property. In the event the parties
----------------------------------
hereto have not executed a renewal lease, or agreed to the Extension Term, as to
the Leased Property within twelve (12) months prior to the expiration of the
Term or an Extension Term, as the case may be, then Landlord or its agent shall
have the right to enter such Leased Property at all reasonable times for the
purpose of exhibiting such Leased Property to others and to place upon such
Leased Property for and during the period commencing twelve (12) months prior
to the expiration of the Term or an Extension Term, as the case may be, up to
two (2) "for sale" or "for rent" notices or signs which notices or signs shall
not unreasonably interfere with Tenant's Business.
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17.03 Landlord's Access. Landlord, or its designated agents or
-----------------
contractors, shall have the right to enter upon each Leased Property, upon
reasonable prior notice to Tenant, for purposes of inspecting the same and
assuring Tenant's compliance with this Lease provided, any such entry by
Landlord shall be subject to all rules, guidelines and procedures prescribed by
Tenant in connection therewith. Landlord shall not be allowed entry to a Leased
Property unless accompanied by such of Tenant's personnel as Tenant shall
require and which Tenant shall promptly provide.
17.04 Entire Agreement. This Lease contains the entire agreement
----------------
between Landlord and Tenant with respect to the subject matter hereof. No
representations, warranties, and agreements have been made by Landlord or Tenant
except as set forth in this Lease.
17.05 Severability. If any term or provision of this Lease is held by
------------
Landlord to be invalid or unenforceable as to a Leased Property, such holding
shall not affect the remainder of this Lease as to such Leased Property, or the
validity or enforceability of this Lease as to any other Leased Property, and
the same shall remain in full force and effect, unless such holding
substantially deprives Tenant of the use of such Leased Property or Landlord of
the Rents therefor, in which case this Lease shall forthwith terminate as to
such Leased Property as if by expiration of the Term or an Extension Term, as
the case may be, but shall remain in full force and effect with respect to each
other Leased Property.
17.06 Captions and Headings. The captions and headings are inserted
----------------------
only as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Lease or the intent of any provision hereof.
17.07 Governing Law. This Lease shall be construed under the laws of
-------------
the state in which the Leased Property is situated (without application of
choice of law provisions).
17.08 Memorandum of Lease or Certain Rights Under the Lease. Landlord
-----------------------------------------------------
and Tenant agree that on or before the Commencement Date of this Lease, the
parties shall execute a Memorandum of Lease approved by Landlord and Tenant
with respect to each Leased Property. Each Memorandum of Lease shall be in
recordable form under the laws of the state in which the Leased Property is
situated and each of Tenant and Landlord shall have the right to record each
such Memorandum of Lease. The party recording such memorandum must bear all
costs of such recording.
17.09 Waiver. No waiver by either party of any condition or covenant
------
herein contained, or of any breach of any such condition or covenant, shall be
held or taken to be a waiver of any subsequent breach of such covenant or
condition, or to permit or excuse its continuance or any future breach thereof
or of any condition or covenant. The acceptance of Rent by Landlord at any time
when Tenant is in default in the performance or observance of any condition or
covenant herein shall not be construed as a waiver of such default, or of
Landlord's right to terminate this Lease or exercise any other remedy granted
herein on account of such default.
61
<PAGE>
17.10 Assignment; Binding Effect. Except as otherwise set forth
--------------------------
herein, this Lease shall not be assignable by Tenant, without the prior written
consent of Landlord. This Lease will be binding upon and inure to the benefit
of the heirs, successors, personal representatives, and permitted assigns of
Landlord and Tenant.
17.11 Consents and Approvals. In each instance in this Lease where the
----------------------
Landlord is required or permitted to give a consent or approval, or to make a
determination or exercise discretion (except where this Lease specifically
provides that Landlord may exercise its sole discretion), the Landlord's
decision and any conditions thereon must not be unreasonably delayed and must be
reasonable under the circumstances. Except as provided in Section 13.01, there
shall be a presumption that each such decision and any conditions thereon by
Landlord was in fact reasonable, and Tenant shall have the burden of proof in
any attempt to rebut that presumption. With respect to Section 13.01, there
shall be a presumption that each such decision and any conditions thereon by
Landlord was in fact unreasonable, and Landlord shall have the burden of proof
in any attempt to rebut that presumption.
17.12 Single Property. Throughout the form of this Lease there are
---------------
references to "Leased Properties". If, in fact, there is only one Leased
Property being leased hereunder, all such references shall, without further
action, be deemed amended to refer solely to such Leased Property and all
provisions relating to Leased Properties, including remedies applicable to only
one Leased Property, shall likewise be amended to the extent necessary, but only
to the extent necessary, to give effect to the fact that there is only one
Leased Property.
17.13 Modification. This Lease may only be modified by a writing
------------
signed by both Landlord and Tenant.
17.14 Incorporation by Reference. All schedules and exhibits referred
---------------------------
to in this Lease are incorporated herein by reference.
17.15 No Merger. As to each Leased Property, the surrender of this
---------
Lease by Tenant or the cancellation of this Lease by agreement of Tenant and
Landlord or the termination of this Lease on account of Tenant's default will
not work a merger, and will, at Landlord's option, terminate any subleases or
operate as an assignment to Landlord of any subleases. Landlord's option under
this paragraph will be exercised by notice to Tenant and all known subtenants of
such Leased Property.
17.16 Force Majeure. Landlord, its agents and employees, will not be
-------------
liable for any loss, injury, death, or damage (including consequential damages)
to persons, property, or Tenant's Business occasioned by theft, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order,
requisition, order of governmental body or authority, fire, explosion, falling
objects, steam, water, rain or snow, leak or flow of water (including water from
the elevator system), rain or snow from any Leased Property or into any Leased
Property or from the roof, street, subsurface or from any other place, or by
dampness or from the breakage, leakage, obstruction, or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting
fixtures of any
62
<PAGE>
Leased Property, or from construction, repair, or alteration of any Leased
Property or from any acts or omissions of any other occupant or visitor of any
Leased Property, or from the release, emission, discharge, presence or disposal
of any hazardous substance or material on or from any Leased Property, or from
any other cause beyond Landlord's control.
17.17 Laches. No delay or omission by either party hereto to exercise
-------
any right or power accruing upon any noncompliance or default by the other party
with respect to any of the terms hereof shall impair any such right or power or
be construed to be a waiver thereof.
17.18 Waiver of Jury Trial. Landlord and Tenant waive trial by jury in
--------------------
any action, proceeding or counterclaim brought by either of them against the
other on all matters arising out of this Lease or the use and occupancy of any
Leased Property (except claims for personal injury or property damage). If
Landlord commences any summary proceeding for nonpayment of Rent, Tenant will
not interpose, and waives the right to interpose, any counterclaim in any such
proceeding, provided that Tenant shall have the right to raise any affirmative
--------
defense based upon the Landlord's alleged breach of Tenant's right of quiet
enjoyment of the Leased Property or the rights of Tenant to purchase the Leased
Property pursuant to Sections 16.01 and 16.02.
17.19 Permitted Contests. Tenant, on its own or on Landlord's behalf
-------------------
(or in Landlord's name), but at Tenant's expense, may contest, by appropriate
legal proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any legal
requirement or insurance requirement or any lien, attachment, levy, encumbrance,
charge or claim provided that: (a) in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Landlord and from the subject Leased Property; (b) neither the subject Leased
Property nor any Rent therefrom nor any part thereof or interest therein would
be in any immediate danger of being sold, forfeited, attached or lost; (c) in
the case of a legal requirement, Landlord would not be in any immediate danger
of civil or criminal liability for failure to comply therewith pending the
outcome of such proceedings; (d) in the event that any such contest shall
involve a sum of money or potential loss in excess of Twenty Five Thousand
Dollars ($25,000), Tenant shall deliver to Landlord and its counsel an opinion
of Tenant's counsel to the effect set forth in clauses (a), (b) and (c), to the
extent applicable; (e) in the case of a legal requirement and/or an Imposition,
lien, encumbrance, or charge, Tenant shall give such reasonable security as may
be demanded by Landlord to insure ultimate payment of the same and to prevent
any sale or forfeiture of a subject Leased Property or the Rent in respect
thereof by reason of such nonpayment or noncompliance; provided, however, the
provisions of this Section shall not be construed to permit Tenant to contest
the payment of Rent (except as to contests concerning the method of computation
or the basis of levy of any Imposition or the basis for the assertion of any
other claim) or any other sums payable by Tenant to Landlord hereunder; (f) in
the case of an insurance requirement, the coverage required by Article IV shall
be maintained; and (g) if such contest be finally resolved against Landlord or
Tenant, Tenant shall, as Additional Rent due hereunder, promptly pay the amount
required to be paid, together with all interest and penalties accrued thereon,
or comply with the applicable legal requirement or insurance requirement.
63
<PAGE>
Landlord, at Tenant's expense, shall execute and deliver to Tenant such
authorizations and other documents as may be reasonably required in any such
contest, and, if reasonably requested by Tenant or if Landlord so desires,
Landlord shall join as a party therein. Tenant hereby agrees to indemnify and
hold harmless Landlord, its officers, trustees, employees, shareholders,
affiliates and agents from and against any and all demands, claims, causes of
action, fines, penalties, damages (including punitive and consequential
damages), losses, liabilities (including strict liability), judgments, costs and
expenses (including, without limitation, attorneys' fees, court costs, and the
costs set forth in Section 9.06) that may be incurred in connection with or
arise from any such contest.
17.20 Construction of Lease. This Lease has been reviewed by Landlord
---------------------
and Tenant and their respective professional advisors. Landlord and Tenant
believe that this Lease is the product of all their efforts, that they express
their agreement, and agree that they shall not be interpreted in favor of either
Landlord or Tenant or against either Landlord or Tenant merely because of any
party's efforts in preparing such documents.
17.21 Counterparts. This Lease may be executed in duplicate
------------
counterparts, each of which shall be deemed an original hereof or thereof.
17.22 Relationship of Landlord and Tenant. The relationship of
-----------------------------------
Landlord and Tenant is the relationship of lessor and lessee. Landlord and
Tenant are not partners, joint venturers, or associates.
64
<PAGE>
{remainder of this page left intentionally blank}
65
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Lease or caused
the same to be executed by their respective duly authorized officers as of the
date first set forth above.
CAPITAL AUTOMOTIVE L.P.
By: Capital Automotive REIT,
Its General Partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
-------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
66
<PAGE>
SCHEDULE A - LEASED PROPERTIES
------------------------------
To be provided within 10 days of Execution Date
67
<PAGE>
SCHEDULE B - PERMITTED EXCEPTIONS
---------------------------------
To be provided within 10 days of Execution Date
68
<PAGE>
SCHEDULE 12.02 - MATERIAL AGREEMENTS
------------------------------------
To be provided within 10 days of Execution Date
69
<PAGE>
SCHEDULE 12.03 - CHANGES IN CONDITION
-------------------------------------
To be provided within 10 days of Execution Date
70
<PAGE>
EXHIBIT 2.05
------------
Payment Account Information
Wiring instructions for the Landlord's operating account are as follows:
FIRST UNION NATIONAL BANK OF VIRGINIA
CHARLOTTE, NC
ABA# 051400549
For Credit to: CAPITAL AUTOMOTIVE L.P., Operating Account
Account # 2020000352150
Contact Name: Martha Conley
Phone Number: 703-760-5441
<PAGE>
EXHIBIT 15.02
-------------
SUBORDINATION AND NON-DISTURBANCE AGREEMENT
-------------------------------------------
THIS AGREEMENT is made as of this ___ day of __________, 1998, among
_____________, a ___________ organized under the laws of the State of
_____________ ("Lender"), __________________ ("Tenant"), and CAPITAL AUTOMOTIVE
L.P., a Delaware limited partnership ("Landlord").
WITNESSETH:
-----------
WHEREAS, Landlord and Tenant have entered into a certain Lease, dated
____________________ , which lease and all amendments, modifications,
assignments, subleases and other agreements related thereto are attached hereto
as Exhibit A and incorporated herein by this reference (collectively, the
---------
"Lease"), which Lease relates to the premises described therein (the
"Premises"), and
WHEREAS, Lender has made or has committed to make a first mortgage loan to
Landlord in the principal amount not to exceed $_________ (the "Loan"), the Loan
being secured by a mortgage, deed of trust or security deed (collectively, the
"Mortgage") and an assignment(s) of leases and rents from Landlord to Lender
covering the Premises; and
WHEREAS, Tenant has agreed that the Lease shall be subject and subordinate
to the Mortgage held by Lender, provided Tenant is assured of continued
occupancy of the Premises under the terms of the Lease including the right to
exercise the Right of First Offer and Right to Purchase set forth therein;
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the sum of Ten Dollars ($10.00) and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
and notwithstanding anything in the Lease to the contrary, it is hereby agreed
as follows:
1. Subordination of Lease. Lender, Tenant and Landlord do hereby
----------------------
covenant and agree that the Lease with all rights, options, liens and charges
created thereby, is and shall continue to be subject and subordinate in all
respects to the Mortgage and to any renewals, modifications, consolidations,
replacements and extensions thereof and to all advancements made thereunder.
2. Nondisturbance of Tenant. Lender does hereby agree with Tenant that,
------------------------
in the event Lender becomes the owner of the Premises by foreclosure, conveyance
in lieu of foreclosure or otherwise, so long as Tenant complies with and
performs its obligations under the Lease, (a) Lender will take no action which
will interfere with or disturb Tenant's possession or use of the Premises or
other rights under the Lease, and (b) the Premises shall be subject to the Lease
and Lender shall recognize Tenant as the tenant of the Premises for the
remainder of the terms of the Lease in
<PAGE>
accordance with the provisions thereof, provided, however, that Lender shall not
be subject to any offsets or defenses which Tenant might have against any prior
landlord except those which arose under the provisions of the Lease out of such
landlord's default and accrued after Tenant had notified Lender and given Lender
the opportunity to cure same as hereinbelow provided, nor shall Lender be liable
for any act or omission of any prior landlord, nor shall Lender be bound by any
rent or additional rent which Tenant might have paid for more than the current
month to any prior landlord nor shall it be bound by any amendment or
modification of the Lease made after it makes the Loan without its consent.
3. Attornment by Tenant. Tenant does hereby agree with Lender that, in
--------------------
the event Lender becomes the owner of the Premises by foreclosure, conveyance in
lieu of foreclosure or otherwise, then Tenant shall attorn to and recognize
Lender as the landlord under the Lease for the remainder of the term thereof,
and Tenant shall perform and observe its obligations thereunder, subject only to
the terms and conditions of the Lease. In such event, Lender shall not be
liable for any act or omission of any prior landlord, liable for return of the
security deposit unless same was actually delivered to Lender, bound by any
amendment to or assignment of the Lease made after it makes the Loan without its
consent, bound by any rent paid more than thirty (30) days in advance, or be
subject to any set-off or defense Tenant might have had against any prior
landlord. Tenant further covenants and agrees to execute and deliver upon
request of Lender or its assigns, an appropriate Agreement of Attornment to
Lender and any subsequent titleholder of the Premises.
4. Acknowledgment of Acquisition Rights. Lender acknowledges that Tenant
------------------------------------
has certain purchase rights under the lease. So long as Tenant complies with
the provisions of the Lease, Lender acknowledges that Tenant may exercise such
rights and Lender will honor such rights so long as Tenant pays the acquisition
price to Lender or otherwise obtains a release from Lender.
5. Curative Rights, Modification of Lease, and Advance Payment of Rent.
-------------------------------------------------------------------
So long as the Mortgage remains outstanding and unsatisfied:
(a) Tenant will mail or deliver to Lender, at the address and in the
manner hereinbelow provided, a copy of all notices permitted or required to be
given to the Landlord by Tenant under and pursuant to the terms and provisions
of the Lease. At any time before the rights of the Landlord shall have been
forfeited or adversely affected because of any default of the Landlord, or
within the time permitted the Landlord for curing any default under the Lease as
therein provided, Lender may, but shall have no obligation to, pay any taxes and
assessments, make any deposits or do or make any repairs and improvements or any
other act or thing required of the Landlord by the terms of the Lease; and all
payments so made and all things so done and performed by Lender shall be as
effective to prevent the rights of the Landlord from being forfeited or
adversely affected because of any default under the Lease as the same would have
been if done and performed by the Landlord.
(b) Tenant will not consent to the modification of the Lease, nor to the
termination thereof, without the prior written consent of Lender, such consent
not to be unreasonably withheld or delayed, nor will Tenant pay any rent under
the Lease more than thirty (30) days in advance.
-2-
<PAGE>
6. Consent to Assignment. Tenant acknowledges that Landlord will execute
---------------------
and deliver to Lender an assignment of the Lease as security for the Loan, and
Tenant hereby expressly consents to such assignment.
7. Limitation of Liability. Lender shall have no liability whatsoever
-----------------------
hereunder prior to becoming the owner of the Premises; and Tenant agrees that if
Lender becomes the owner of the Premises, Tenant shall look solely to the estate
or interest of Lender in the Premises (which shall be the ownership of the
Premises) for satisfaction of any obligation which may be or become owing by
Lender to Tenant hereunder or under the Lease.
8. Landlord and Tenant Certifications. Landlord and Tenant hereby
----------------------------------
certify to Lender that the Lease has been duly executed by Landlord and Tenant
and is in full force and effect, that the Lease and any modifications and
amendments specified herein are a complete statement of the agreement between
Landlord and Tenant with respect to the leasing of the Premises, and the Lease
has not been modified or amended except as specified herein; that to the
knowledge of Landlord and Tenant, no party to the Lease is in default
thereunder; that no rent under the Lease has been paid more than thirty (30)
days in advance of its due date; and that Tenant, as of this date, has no
charge, lien or claim of offset under the Lease, or otherwise, against the rents
or other charges due or to become due thereunder.
9. Tenant Estoppel Certifications. With the knowledge that Lender, as
------------------------------
beneficiary of the mortgage encumbering the premises, will place substantial
reliance thereon in connection with the closing and funding of the Loan, Tenant
hereby makes the following certifications:
(a) The term of the Lease commenced on ________, 19__, and will terminate
on ______________.
(b) The Lease, as described above, has not been modified, amended,
assigned or subleased except as set forth in Exhibit A attached hereto, and is
---------
in good standing and in full force and effect.
(c) The Lease provides for rental payments over the term of the Lease, all
as specifically provided in the Lease. No rent under the Lease has been paid
more than thirty (30) days in advance of the due date of same. For the year
____, monthly payments, which are due on the first (1st) day of each month, are
as follows:
Basic Rent - $________
Payment of the above amount was timely made for the months of ______,
___and _____, ____, and the next payment of the above amount will be due on
________, ____. In addition to the
-3-
<PAGE>
above amount, certain additional sums are due to Landlord from Tenant under the
Lease, all as specifically set forth in the Lease.
(d) Tenant has paid a security deposit under the Lease.
(e) To Tenant's knowledge there are no defaults by Landlord under the Lease
and there are no existing circumstances which, with the passage of time, or
notice, or both, would give rise to a default under the Lease.
(f) Tenant has accepted and is occupying the Premises, and Landlord has no
unperformed obligation under the Lease to construct any improvements for the
Tenant related to the Premises.
(g) As of the date hereof, Tenant has no charge, lien, claim of set-off or
defense against rents or other charges due or to become due under the Lease or
otherwise under any of the terms, conditions, or covenants contained therein.
(h) Tenant has received no notice from any insurance company of any defects
or inadequacies in the Premises or in any part thereof which would adversely
affect the insurability of the Premises.
(i) Except as provided in the Lease, Tenant does not have any right or
option to purchase the Premises.
(j) Except as provided in the Lease, Tenant does not have any rights or
options to renew the Lease or to lease additional space in any building owned by
the Landlord.
10. Tenant Covenants.
----------------
(a) From and after the date hereof, Tenant will not pay any rent under the
Lease more than thirty (30) days in advance of its due date.
(b) From and after the date hereof, so long as there shall be any
assignment of Landlord's interest in the Lease to Lender, or any successor
thereto, Tenant will not: consent to the modification of the Lease nor to the
termination thereof without the prior written consent of the Lender or any
successor holder of the Loan or the Mortgage which consent shall not be
unreasonably withheld or delayed (either of them being called "Mortgagee"), nor
seek to terminate the Lease by reason of any act or omission of Landlord until
Tenant shall have given written notice of such act or omission to such
Mortgagee's last address furnished Tenant) and until a reasonable period of time
shall have elapsed following the giving of such notice, during which period the
Mortgagee shall have the right, but not the obligation, to remedy such act or
omission.
-4-
<PAGE>
(c) Upon written notice of the default by Landlord under any of the loan
documents held by Mortgagee and assignment of the Landlord's interest under the
Lease by Landlord to Mortgagee, Tenant, if Mortgagee so requests, will recognize
such Mortgagee as the Landlord under the Lease and will thereafter pay rent and
other sums to Mortgagee (or to the party designated by the Mortgagee in writing)
in accordance with the terms of the Lease, and, in such event, such Mortgagee
will not be liable for any act or omission of any prior lessor, liable for
return of the security deposit unless same was actually delivered to Mortgagee,
bound by any amendment to or assignment of the Lease made after it makes the
Loan without its consent, bound by any rent paid more than thirty (30) days in
advance, or be subject to any set-off or defense Tenant might have had against
any prior lessor for any rent or other amounts due prior to Tenant receiving
notice of default by Landlord.
11. Notices. Unless and except as otherwise specifically provided herein,
-------
any and all notices, elections, approvals, consents, demands, requests and
responses thereto ("Communications") permitted or required to be given under
this Agreement shall be in writing, signed by or on behalf of the party giving
the same, and shall be deemed to have been properly given and shall be effective
upon the earlier of receipt thereof or three (3) days after deposit thereof in
the United States mail, postage prepaid, certified with return receipt
requested, to the other party at the address of such other party set forth
hereinbelow or at such other address within the continental United States as
such other party may designate by notice specifically designated as a notice of
change of address and given in accordance herewith; provided, however, that the
time period in which a response to any Communication must be given shall
commence on the date of receipt thereof, and provided further that no notice of
change of address shall be effective with respect to Communications sent prior
to the time of receipt of such change. Receipt of Communications hereunder
shall occur upon actual delivery (whether by mail, facsimile transmission,
messenger, courier service, or otherwise) to an individual party or to an
officer, member, or general or limited partner of a party or to any agent or
employee of such party at the address of such party set forth hereinbelow,
subject to change as provided hereinabove. An attempted delivery in accordance
with the foregoing, acceptance of which is refused or rejected, shall be deemed
to be and shall constitute receipt; and an attempted delivery in accordance with
the foregoing by mail, messenger, or courier service (whichever is chosen by the
sender) which is not completed because of changed address of which no notice was
received by the sender in accordance with this provision prior to the sending of
the Communication shall also be deemed to be and constitute receipt. Any
Communication, if given to Lender, must be addressed as follows, subject to
change as provided hereinabove:
----------------------------------
----------------------------------
and, if given to Tenant, must be addressed as follows, subject to change as
provided hereinabove:
----------------------------------
----------------------------------
----------------------------------
-5-
<PAGE>
with a copy to:
Haller & Colvin, P.C.
Attn: Vincent J. Heiny, Esq.
Charles J. Heiny, Esq.
444 East Main Street
Fort Wayne, Indiana 46802
and, if given to Landlord, must be addressed as follows, subject to change as
provided hereinabove:
Capital Automotive, L.P.
----------------------------------
----------------------------------
12. Miscellaneous. This Agreement shall be binding upon and inure to the
-------------
benefit of the parties hereto and their respective heirs, legal representatives,
successors, successors-in-title and assigns. When used herein, the term
"Landlord" or "landlord" refers to Landlord and to any successor to the interest
of Landlord under the Lease.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
LENDER:
Signed, sealed and delivered
in the presence of: By:
Title:
- --------------------------------- ------------------------------------
Witness
(CORPORATE SEAL)
TENANT:
Signed, sealed and delivered
in the presence of: By:
Title:
- --------------------------------- ------------------------------------
Witness (CORPORATE SEAL)
LANDLORD:
Signed, sealed and delivered
in the presence of: By:
Title:
- --------------------------------- ------------------------------------
Witness (PARTNERSHIP SEAL)
-7-
<PAGE>
EXHIBIT A
---------
Lease Dated __________ from ________________ to _______________ with Exhibit A
attached, all in the form attached hereto as Attachment to Exhibit A.
------------------------
-8-
<PAGE>
County of
--------------------:
SS:
State of
----------------------:
This is to certify that on this ____ day of ________, 1997, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Lender in the capacity stated by his signature, and that he acknowledged the
within document to be the act and deed of the Lender.
---------------------------------------
Notary Public
My commission expires:
-9-
<PAGE>
County of
--------------------:
SS:
State of
---------------------:
This is to certify that on this ____ day of _________, 1997, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Tenant in the capacity stated by his signature, and that he acknowledged the
within document to be the act and deed of the Tenant.
----------------------------------
Notary Public
My commission expires:
-10-
<PAGE>
County of
-------------------:
SS:
State of
--------------------:
This is to certify that on this ____ day of _______, 1997, personally
appeared before me, a notary public of the County (City) aforesaid, known to me
(or satisfactorily identified to me) to be the individual signing on behalf of
Landlord in the capacity stated by his signature, and that he acknowledged the
within document to be the act and deed of the Landlord.
------------------------------------
Notary Public
My commission expires:
-11-
<PAGE>
EXHIBIT 15.04(a)
Tenant Name:
-------------------------
TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant") hereby warrants, represents and certifies to and
agrees with _________________, whose mailing address is ____________________
("Lender"), the following statements set forth below in this Tenant Estoppel
Certificate (the "Certificate") with the understanding that Lender is relying on
such warranties, representations, certifications and agreements in this
Certificate as an inducement to the Lender in making a permanent loan (the
"Loan") to ___________________ ("Landlord"), secured by, among other things,
that certain deed of trust/mortgage, assignment of rents and security agreement
executed (or to be executed) by Landlord for the benefit of Lender (the
"Instrument") encumbering the land and buildings located on the property as more
particularly described on Exhibit A attached hereto (the "Mortgaged Property").
---------
Based upon the foregoing, Tenant hereby warrants, represents and certifies as
follows:
1. The Tenant is the tenant under that certain lease (the "Lease") dated
____________________, 19__ as amended on _____________ between Landlord, as
landlord, and Tenant, as tenant, covering the Mortgaged Property and the
following information concerning the Lease, the Tenant and the Demised Premises
is true and correct.
(a) A true, correct and complete copy of the Lease together with all
amendments, modifications, side letters, guaranties, letters of credit and other
documents evidencing, governing or securing the Tenant's obligations under the
Lease are attached hereto as Exhibit B. The Lease constitutes the entire
---------
agreement between the Landlord and the Tenant concerning the Mortgaged Property
and there are no other agreements, written or oral, between the Landlord and the
Tenant relating thereto except as attached in Exhibit B. [The guarantor(s) of
---------
the Lease is _____________].
(b) The Lease has commenced pursuant to its terms and is in full force
and effect. Except as otherwise set forth in the Lease, the Tenant has no right
to vacate the Mortgaged Property or cease to operate its business therefrom,
except as provided in the Lease.
(c) The Lease commenced on ___________ and expires on __________. The
Tenant has ___________ remaining options to renew the Lease for a successive
period of _________ years.
(d) The Lease is an absolute net lease, and the Tenant is presently
obligated under the lease to pay (i) monthly Rent to the Landlord [$___________]
(subject to annual upward adjustment after an initial abatement period), and
(ii) all taxes, assessments, water, sewer and other
<PAGE>
charges, levies and fees, utilities government charges and other sums or amounts
of any kind that come due or are payable during the term of the Lease.
(e) The Tenant has paid the monthly rent described in subparagraph
1(d)(i) above through and including the month of ______________, 19__. The
Tenant has paid the charges described in subparagraphs 1(d)(ii) through the most
recent billing period for such charges.
(f) The Tenant is in possession of the Mortgaged Property, is
presently open and conducting business with the public at the Mortgaged Property
under the trade name of _________________.
(g) As of the date hereof, except as otherwise expressly set forth on
the attached schedule (if necessary), the Tenant is not entitled to any credits,
reductions, offsets, defenses, free rent, rent concessions or abatements of rent
under the Lease or otherwise against the payment of rent or other charges under
the Lease.
(h) No rent has been paid more than (1) month in advance.
(i) As of the date hereof, all of the obligations of the Landlord
under the Lease have been duly performed and completed including, without
limitations, any obligations of the Landlord to make or to pay the Tenant for
any improvements, alterations or work done on the Mortgaged Property.
(j) There are no existing or claimed conditions which are or with the
passage of time would constitute a default on the part of the Landlord or the
Tenant under the terms of the Lease. The Tenant has not assigned, transferred,
mortgaged, or hypothecated the Lease or any interest therein or subleased all or
any portion of the Mortgaged Property.
(k) The Landlord is holding a security deposit in the amount of
$__________.
(l) Neither Tenant nor any guarantor of the Lease is presently the
subject of any proceeding pursuant to the United States Bankruptcy Code of 1978,
as amended.
2. The Certificate shall apply to, bind and inure to the benefit of the
Lender and the Tenant and their respective successors and assigns. As used
herein, the term "Tenant" shall mean and include the present tenant under the
Lease, any permitted subtenant under the Lease, any permitted assigned of Tenant
under the Lease and any successor of any of them. The term "Lender" as used
herein shall include the current holder of the Instrument [__________], the
successors and assigns of Lender of [__________], and any person, party or
entity which shall become the owner of (a) the Mortgaged Property by reason of a
foreclosure of the Instrument or the acceptance of a deed or assignment in lieu
of foreclosure or otherwise and/or (b) the Loan and Instrument; provided,
however, any party listed herein as included in the definition of "Lender" shall
only be liable for any acts, omissions, liabilities or obligations of that
particular party and not for any such matters of any
-2-
<PAGE>
other party included in the definition of "Lender." The term "Landlord" as used
herein shall mean and include the present landlord under the Lease and such
landlord's predecessors and successors in interest under the Lease.
TENANT:
-------------------------------------
a
-----------------------------------
By:
----------------------------------
Title:
-------------------------------
-3-
<PAGE>
EXHIBIT 15.04(b)
Landlord Name:
-------------------------
LANDLORD ESTOPPEL CERTIFICATE
The undersigned ("Landlord") hereby warrants, represents and certifies to
and agrees with _________________, whose mailing address is ____________________
("_________"), the following statements set forth below in this Landlord
Estoppel Certificate (the "Certificate")
[(if Lender to Tenant) with the understanding that Tenant's Lender is relying
on such warranties, representations, certifications and agreements in this
Certificate as an inducement to the Tenant's Lender in making a permanent loan
(the "Loan") to ___________________ ("Tenant"), secured by, among other things,
that certain deed of trust/mortgage executed (or to be executed) by Tenant for
the benefit of Tenant's Lender (the "Instrument") encumbering the encumbering
the Tenant's leasehold estate (the "Mortgaged Leasehold") in the property
("Property") both Mortgage Leasehold and Property as more particularly described
on Exhibit A attached hereto.] Based upon the foregoing, Landlord hereby
---------
warrants, represents and certifies as follows:
1. The Landlord is the Landlord under that certain lease (the "Lease")
dated ____________________, 19__ as amended on _____________ between Landlord,
as landlord, and Tenant, as tenant, covering the Property and the Mortgaged
Leasehold therein and the following information concerning the Lease, the Tenant
and the Demised Premises is true and correct.
(a) A true, correct and complete copy of the Lease together with all
amendments, modifications, side letters and other documents evidencing,
governing or securing the Landlord's obligations under the Lease are attached
hereto as Exhibit B. The Lease constitutes the entire agreement between the
---------
Landlord and the Tenant concerning the Property and there are no other
agreements, written or oral, between the Landlord and the Tenant relating
thereto except as attached in Exhibit B. [The guarantor(s) of Tenant's
---------
obligations under the Lease is _____________].
(b) The Lease has commenced pursuant to its terms and is in full force
and effect. Except as otherwise set forth in the Lease, the Tenant has no right
to vacate the Mortgaged Leasehold or cease to operate its business therefrom,
except as provided in the Lease.
(c) The Lease commenced on ___________ and expires on __________. The
Tenant has ___________ remaining options to renew the Lease for a successive
period of _________ years.
(d) The Lease is an absolute net lease, and the Tenant is presently
obligated under the lease to pay (i) monthly Rent to the Landlord [$___________]
(subject to annual upward
<PAGE>
adjustment after an initial abatement period), and (ii) all taxes, assessments,
water, sewer and other charges, levies and fees, utilities government charges
and other sums or amounts of any kind that come due or are payable during the
term of the Lease.
(e) The Tenant has paid the monthly rent described in subparagraph
1(d)(i) above through and including the month of ______________, 19__. The
Tenant has paid the charges described in subparagraphs 1(d)(ii) through the most
recent billing period for such charges.
(f) The Tenant is in possession of the Property, is presently open and
conducting business with the public at the Property under the trade name of
_________________.
(g) No rent has been paid more than (1) month in advance.
(h) As of the date hereof, all of the obligations of the Tenant under
the Lease have been duly performed and completed including, without limitations,
any obligations of the Tenant to make or to pay the Landlord for any
improvements, alterations or work done on the Property.
(i) There are no existing or claimed conditions which are or with the
passage of time would constitute a default on the part of the Landlord or the
Tenant under the terms of the Lease.
(j) The Landlord is holding a security deposit in the amount of
$__________.
(k) Landlord in not presently the subject of any proceeding pursuant
to the United States Bankruptcy Code of 1978, as amended.
2. The Certificate shall apply to, bind and inure to the benefit of the
______________ and the Landlord and their respective successors and assigns. As
used herein, the term "Landlord" shall mean and include the present landlord
under the Lease and such landlord's predecessors and successors in interest
under the Lease. [The term "Tenant's Lender" as used herein shall include the
current holder of the Instrument [__________], the successors and assigns of
Tenant's Lender of [__________], and any person, party or entity which shall
become the owner of (a) the Mortgaged Leasehold by reason of a foreclosure of
the Instrument or the acceptance of a deed or assignment in lieu of foreclosure
or otherwise and/or (b) the Loan and Instrument; provided, however, any party
listed herein as included in the definition of "Tenant's Lender" shall only be
liable for any acts, omissions, liabilities or obligations of that particular
party and not for any such matters of any other party included in the definition
of "Tenant's Lender."] The term "Tenant," as used herein, shall mean and include
the present tenant under the Lease, any permitted subtenant under the Lease, any
permitted assigned of Tenant under the Lease and any successor of any of them.
shall mean and include the present tenant under the Lease, any permitted
subtenant under the Lease, any permitted assigned of Tenant under the Lease and
any successor of any of them.
-5-
<PAGE>
LANDLORD:
-----------------------------------
a
----------------------------------
By:
--------------------------------
Title:
-----------------------------
-6-
<PAGE>
EXHIBIT A
Property and Mortgaged Leasehold
-7-
<PAGE>
EXHIBIT C
Guaranty and Subordination Agreement
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement"), made as of
the 14th day of April, 1998, by Kelley Chevrolet, Inc., an Indiana corporation,
Courtesy Motors, Inc., an Indiana corporation, Northside Chevrolet, L.P., an
Indiana limited partnership, Midwest Auto Parts, Inc., an Indiana corporation,
Kelley Buick of Atlanta, Inc., an Indiana corporation, Kelley Saturn of Atlanta,
Inc., an Indiana corporation, Tom Kelley Pontiac, Inc., an Indiana corporation,
Tom Kelley Buick GMC Truck, Inc., an Indiana corporation, Tom Kelley Cadillac,
Inc., an Indiana corporation, and Saturn of Fort Wayne, Inc., an Indiana
corporation (each a "Guarantor" or a "Tenant" and collectively referred to
herein as "Guarantors" or "Tenants"), in favor of Capital Automotive, L.P., a
Delaware limited partnership ("Landlord").
WITNESSETH:
----------
WHEREAS, Landlord has this day entered into multiple leases (the "Leases")
of certain Properties identified on Schedule A hereto (individually a "Property"
and collectively the "Properties") each with one of the above Tenants as
identified on Schedule A hereto, this Agreement being attached to each Lease;
WHEREAS, Tenants are Guarantors and affiliates of each other; and
WHEREAS, Landlord has required, as a condition to entering into the Lease,
that Tenants jointly and severally guarantee performance of and each and every
obligation imposed upon any Tenant by any of the Leases.
NOW, THEREFORE, to induce Landlord to enter into the Leases and in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor, for itself, its successors and assigns, hereby covenants and
agrees for the benefit of Landlord, as follows:
1. Guaranty. Guarantors, jointly and severally, do hereby
--------
unconditionally and irrevocably guarantee to Landlord the full, complete and
timely performance of all obligations imposed on each of the Tenants by the
terms of the Lease to which such Tenant is a party, including, but not limited
to, the full, complete and timely payment of rent and all other sums due by each
Tenant under its Lease, and the payment as required by each of the Leases of all
damages to Landlord which may result from a Tenant's breach of any provision of
its Lease, including, but not limited to, those relating to damage to any
Property or the leased premises.
2. Guaranty of Payment and Performance. Guarantors acknowledge and agree
-----------------------------------
that this is a guaranty of payment and performance and not mere collection. The
liability of Guarantors under this Agreement shall be direct and immediate and
not conditional or contingent
-1-
<PAGE>
upon the pursuit of any remedies against Tenants or any other person or entity.
Guarantors waive any right to require that an action be brought against Tenants
or any other person or entity. In the event, on account of the Bankruptcy Reform
Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, any Tenant shall be
relieved of the Lease or any debt, obligation or liability as provided in the
Leases, Guarantors shall nevertheless be fully liable for the complete and
timely performance of all obligations imposed on any Tenant by its Lease
throughout the entire term of such Lease, all to the same extent as if
Guarantors had been the original tenant thereunder and such Lease shall be
deemed unaffected by any such relief granted to such Tenant. In the event of a
default under any of the Leases which is not cured within any applicable grace
or cure period, Landlord shall have the right to enforce its rights, powers and
remedies thereunder or hereunder, in any order to the maximum extent permitted
by law, and all rights, powers and remedies provided thereunder or hereunder or
by law or in equity. If the obligations guaranteed hereby are partially
performed, paid or discharged by reason of the exercise of any of the remedies
available to Landlord, this Agreement shall nevertheless remain in full force
and effect, and Guarantors shall continue to be liable for all remaining
obligations guaranteed hereby, even though any rights which Guarantors may have
against Tenants may be destroyed or dismissed by the exercise of any such
remedy.
3. Waivers by Guarantors. To the extent permitted by law, Guarantors
---------------------
hereby waive and agree not to assert or take advantage of:
(a) Any right to require Landlord to proceed against Tenants or any
other person or entity or to proceed against or exhaust any security held by
Landlord at any time or to pursue any other remedy in Landlord's power or under
any other agreement before proceeding against Guarantors;
(b) 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:
(c) Any defense based upon an election of remedies by Landlord;
(d) Any right or claim or right to cause a marshaling of the assets of
any of the Tenants or Guarantors;
(e) Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more provisions of any of the Leases;
(f) Any modification of any of the Leases or of any obligation of any
Tenant thereunder by amendments to such Lease, by waivers granted by Landlord or
by operation of law or by action of any court, whether pursuant to the
Bankruptcy Reform Act of 1978, as amended,
-2-
<PAGE>
or any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or
otherwise.
4. Subordination. Guarantors and those parties signing below for the
-------------
purpose of being bound by this Section 4 (collectively, "Section 4 Signers)
hereby unconditionally and irrevocably subordinate (i) all payments due or to
become due by any of the Tenants to the Section 4 Signers, or any of them, by
reason of any and all debts or other obligations, including the obligation to
pay salaries or other compensation (collectively "Debt Payments") and (ii) the
receipt of all dividends or other distributions of any kind or nature
(collectively, "Distributions") to the payment of all sums currently due from
time to time by Tenants to Landlord under the Leases, including the payment of
Rent and all damages due by reason of any Tenant's breach of its Lease;
provided, however, that for so long as there shall be no existing Event of
Default under any of the Leases that has occurred and is subsisting, after the
payment of each monthly installment of Rent, the Section 4 Signers shall be
entitled to receive and retain (and the Landlord shall have no claim against)
Debt Payments and Distributions currently due or made prior to the month in
which such an Event of Default first occurs. Notwithstanding the foregoing in
the event that Landlord fails to notify Section 4 Signers of an Event of Default
by a Tenant within 120 days of the end of any cure period applicable to such
Event of Default, the Debt Payments and Distributions to Section 4 Signers shall
not be subordinated to sums due or to become due under such Lease by the Tenant
based upon such specific Event of Default. To the extent that Landlord does
notify Section 4 Signers of an Event of Default within 120 days of the end of
any cure period applicable to such Event of Default, the Debt Payments and
Distributions to Section 4 Signers will be subordinated to sums due or to become
due under such Lease by the Tenant based upon such specific Event of Default
from the month in which such Event of Default first occurs. Failure of Landlord
to notify Section 4 Signers of any Event of Default shall not waive Landlord's
rights hereunder as to another Event of Default or, in the case of a continuing
Event of Default, as to the time after which Landlord has provided notice to
Section 4 Signers.
5. General Provisions.
------------------
(a) Survival. This Agreement shall be deemed to be continuing in
--------
nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under any of the Leases;
(b) No Subrogation; No Recourse Against Landlord. Notwithstanding the
--------------------------------------------
satisfaction by Guarantors of any liability hereunder, Guarantors' rights of
subrogation, contribution, reimbursement or indemnity, if any, or any right of
recourse to or with respect to the assets or property of Tenants, shall be
subject and subordinate to the rights of Landlord. Guarantors expressly waive
any and all rights of subrogation against Tenants.
(c) Entire Agreement; Amendment; Severability. This Agreement
-----------------------------------------
contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements, whether written or oral, between
the parties respecting such matters. Any
-3-
<PAGE>
amendments or modifications hereto, in order to be effective, shall be in
writing and executed by Landlord and Guarantors. A determination that any
provision of this Agreement 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 Agreement 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.
(d) Governing Law: Binding Effect; Waiver of Acceptance. This
---------------------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia without regard to conflicts of laws principles thereof.
This Agreement shall bind Guarantors, their successors and assigns (but in the
event of an assignment, Guarantors shall not be relieved of their obligations
hereunder), and shall inure to the benefit of Landlord, its successors and
assigns. Guarantors hereby waive any acceptance of this Agreement by Landlord
and this Agreement shall immediately be binding upon Guarantors.
(e) Notice. All notices, demands, requests or other communications 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.
(f) No Waiver; Time of Essence. The failure of either party 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 such party 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. This Agreement is
subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof.
(g) Captions for Convenience. The captions and headings of the
------------------------
section and paragraphs of this Agreement are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
-4-
<PAGE>
(h) Attorney's Fees. In the event it is necessary for Landlord to
---------------
retain the services of an attorney or any other consultants in order to enforce
this Agreement, or any portion hereof, Guarantors shall promptly pay to Landlord
any and all costs and expenses, including, without limitation, reasonable
attorney's fees, incurred by Landlord as a result thereof and such costs, fees
and expenses shall be included in the costs of the case to the extent the
Landlord wins the issue under contest.
(i) Successive Actions. Separate and successive actions may be
------------------
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
Guarantors hereby waive to the maximum extent permitted by law any defense in
the nature of splitting of causes of action or merger of judgments.
(j) Reliance. Landlord would not enter into the Leases without this
--------
Agreement. Accordingly, Guarantors intentionally, irrevocably and
unconditionally enter into the covenants and agreements as set forth above and
understand that, in reliance upon and in consideration of such covenants and
agreements, the Leases have been made.
4. Notices: The following addresses shall be used for notice purposes:
-------
If to Landlord: Capital Automotive L.P.
1420 Springhill Road
Suite 525
McLean, Virginia 22102
Attention: Portfolio Manager
With copies to: Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attention: George P. Stamas, Esq. and John B. Watkins,
Esq.
If to Guarantors: _____________________________________
_____________________________________
_____________________________________
_____________________________________
With copies to: Haller & Colvin, P.C.
Attn: Vincent J. Heiny, Esq. and
Charles J. Heiny, Esq.
444 East Main Street
Fort Wayne, Indiana 46802.
-5-
<PAGE>
IN WITNESS WHEREOF, Guarantors have executed this Agreement under seal as
of the day and year first above written:
ATTEST/WITNESS: GUARANTOR:
KELLEY CHEVROLET, INC.
By: By: /s/
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
ATTEST/WITNESS: GUARANTOR:
COURTESY MOTORS, INC.
By: By: /s/
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-6-
<PAGE>
ATTEST/WITNESS: GUARANTOR:
NORTHHSIDE CHEVROLET, L.P.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
MIDWEST AUTO PARTS, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
KELLEY BUICK OF ATLANTA, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
KELLEY SATURN OF ATLANTA, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-7-
<PAGE>
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY PONTIAC, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY BUICK GMC TRUCK, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY CADILLAC, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
ATTEST/WITNESS: GUARANTOR:
SATURN OF FORT WAYNE, INC.
By: By: /s/
--------------------------- ----------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
-8-
<PAGE>
EXHIBIT D
GUARANTY AGREEMENT
------------------
THIS GUARANTY AGREEMENT ("Agreement") is made as of April 10, 1998 by
THOMAS W. KELLEY AND JAMES E. KELLEY (each a "Guarantor" and collectively
"Guarantors") in connection with certain Lease Agreements dated as of April 14,
1997 (the "Lease Agreements") each by and between CAPITAL AUTOMOTIVE L.P.,
("Landlord") and as set forth on Exhibit A Kelley Chevrolet, Inc., Courtesy
Motors, Inc., Northside Chevrolet, L.P., Midwest Auto Parts, Inc., Kelley Buick
of Atlanta, Inc., Kelley Saturn of Atlanta, Inc., Tom Kelley Pontiac, Inc., Tom
Kelley Buick GMC Truck, Inc., Tom Kelley Cadillac, Inc., Saturn of Fort Wayne,
Inc. (each a "Tenant" and collectively "Tenants") entered into in connection
with that certain Real Property Purchase and Contribution Agreement ("Purchase
Agreement") dated April 14, 1998 by and between LANDLORD, CAPITAL AUTOMOTIVE
REIT (collectively "Purchasers") and GUARANTORS. Capitalized terms used without
definition in this Agreement have the meanings assigned to them in the Lease
Agreements.
WHEREAS, each of the Guarantors is an affiliate of each of the Tenants and
a party to the Purchase Agreement and will benefit from the transactions
contemplated by Leases and the Purchase Agreement; and
WHEREAS, Landlord requires, as a condition of entering into the Leases and
the Purchase Agreement, in lieu of one month's security deposit from each of the
Tenants that each of the Guarantors jointly and severally guarantee the amount
of one month's rent under each of the Leases (which amounts are set forth on
Exhibit A hereto) (the amount of one month's rent
<PAGE>
-2-
under each Lease hereafter each a "Guaranteed Amount" and collectively the
"Aggregate Guaranteed Amount"), and the Guarantors are willing to provide such a
guaranty.
NOW THEREFORE, in consideration of the foregoing recitals, of the benefits
that the Kelleys and the Tenants will receive from the transactions
contemplated by the Leases and the Purchase Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Guarantors hereby agree as follows:
1. Incorporation of Recitals. The foregoing recitals are hereby
-------------------------
incorporated as part of this Agreement.
2. Guarantee. The Guarantors jointly and severally hereby unconditionally
---------
and irrevocably guarantee to Landlord the full and punctual payment of the
Aggregate Guaranteed Amount. Upon an Event of Default under any of the Leases
and the continuance thereof after any applicable grace period, Guarantors shall
forthwith on demand pay the Guaranteed Amount for such Lease at the place, in
the manner and at the time specified in the pertinent Lease. This guarantee is
a guarantee of payment and performance, and not of collectibility.
3. Guarantee Unconditional.
-----------------------
The obligations of the Guarantors hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by any of the following matters with
respect to any Tenant:
(a) any modifications or amendment of or supplement to the Leases, the
Purchase Agreement or any related document; provided, however, that following
such modification, amendment or supplement, the obligations guaranteed hereunder
shall be Tenants' obligations
<PAGE>
-3-
under the Leases or such related document as so modified, amended or
supplemented provided that the Guaranteed Amount shall in no event be exceed in
--------
aggregate $392,500.00;
(b) any release, non-perfection or invalidity of any direct or indirect
guarantee of or security for any obligation of Tenants under the Leases or any
related document;
(c) any change in the corporate existence, structure or ownership of any of
the Tenants or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any of the Tenants or their assets or any resulting release
or discharge of any obligation of any of the Tenants contained in the Lease for
such Tenant;
(d) the existence of any claim, set-off, or other rights which the
Guarantors may have at any time against any of the Tenants or any other
corporation or person or entity, whether in connection with the Leases, the
transactions contemplated by the Purchase Agreement or any unrelated
transactions; provided, however, that nothing herein shall prevent the assertion
-------- -------
of any such claim by separate suit or compulsory counterclaim or affirmative
defense;
(e) any invalidity or unenforceability relating to or against any of the
Tenants for any reason of Leases or any related document, or any provision of
applicable law or regulation relating to Tenants purporting to prohibit the
performance of any obligation or the payment of any amount payable by Tenants
under the Leases or any related document;
(f) any other act or omission to act or delay of any kind by any of the
Tenants;
(g) any other circumstance whatsoever which might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of the Guarantors'
obligations hereunder; provided, however, that nothing in this Paragraph 3 shall
-------- -------
be deemed to constitute a waiver by the
<PAGE>
-4-
Guarantors of any counterclaim or defense based on a breach of representation,
warranty, or covenant of Landlord under any of the Leases that would have been a
defense to the failure of any Tenant to make any payment or perform any
obligation in respect of which a claim is made under this Agreement. The
guarantee provided in this Agreement shall encompass any modification,
supplement or amendment of the Leases.
4. Discharge only upon Performance In Full; Reinstatement in Certain
-----------------------------------------------------------------
Circumstances.
- -------------
Guarantors' obligations for each Guaranteed Amount hereunder shall remain
in full force and effect for so long as the Tenant under the Lease relating to
the Guaranteed Amount has any obligations under such Lease except that the
Guaranty shall terminate for all purposes upon James E. Kelley and/or Thomas W.
Kelley making payments hereunder that in the aggregate total $392,500.00. If at
any time any payment of any amount payable by any Tenant under the applicable
Lease is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy, or reorganization of a Tenant, Guarantors' obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
5. Waiver of Presentment
---------------------
Guarantors irrevocably waive acceptance hereof, presentment, demand,
protest, and any notice not provided for herein, as well as any requirement that
at any time any action be taken by any person or entity against any Tenant or
any other person or entity, including without limitation that any action be
taken to pursue other remedies or to mitigate damages resulting from a failure
by any Tenant to make any payment or perform any obligation under the Lease.
6. Entire Agreement; Amendment; Severability.
-----------------------------------------
<PAGE>
-5-
This Agreement contains the entire agreement between the parties respecting
the matters herein set forth and supersedes all prior agreements, whether
written or oral, between the parties respecting such matters. Any amendments or
modifications hereto, in order to be effective, shall be in writing and executed
by Landlord and Guarantors. A determination that any provision of this
Agreement 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 Agreement 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.
<PAGE>
-6-
IN WITNESS WHEREOF, the Guarantors have executed this Agreement as of the
date first written above.
Witness: GUARANTORS:
______________________________ /s/
-------------------------------
Name:_________________________ Thomas W. Kelley
Witness:
______________________________ /s/
-------------------------------
Name:_________________________ James E. Kelley
<PAGE>
-7-
Exhibit A
- --------------------------------------------------------------------------------
Lease No. Tenant Street Address Guaranteed
Amount
- --------------------------------------------------------------------------------
1 Kelley Chevrolet, Inc. 500 East State Blvd. $55,000.00
Fort Wayne, IN
- --------------------------------------------------------------------------------
2 Courtesy Motors, Inc. 1313 South 13th Street $24,500.00
Decatur, IN
- --------------------------------------------------------------------------------
3 Northside Chevrolet, L.P. 2400 N. Heidelbach $22,000.00
Evansville, IN
- --------------------------------------------------------------------------------
4 Midwest Auto Parts, Inc. 1818 Research Drive $15,000.00
Fort Wayne, IN
- --------------------------------------------------------------------------------
5 Kelley Buick of Atlanta, Inc. 5900 Peachtree $50,000.00
Chamblee, GA
- --------------------------------------------------------------------------------
6 Kelley Buick of Atlanta, Inc. 11458 Alpharetta Inc. $50,000.00
Roswell, GA
- --------------------------------------------------------------------------------
7 Kelley Saturn of Atlanta, Inc. 5764, 5784 Peachtree $26,000.00
Chamblee, GA
- --------------------------------------------------------------------------------
8 Kelley Saturn of Atlanta, Inc. 2520 Pleasant Hill $35,000.00
Duluth, GA
- --------------------------------------------------------------------------------
9 Tom Kelley Pontiac, Inc. 633 Avenue of Autos $45,000.00
Fort Wayne, IN
- --------------------------------------------------------------------------------
10 Tom Kelley Buick GMC Truck, 811 and 818 Avenue of $40,000.00
Inc. Autos
Fort Wayne,IN
- --------------------------------------------------------------------------------
11 Tom Kelley Cadillac, Inc. 911 Avenue of Autos $20,000.00
Fort Wayne, IN
- --------------------------------------------------------------------------------
12 Saturn of Fort Wayne, Inc. 910 Avenue of Autos $10,000.00
Fort Wayne, IN
- --------------------------------------------------------------------------------
AGGREGATE GUARANTEED AMOUNT $392,500.00
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 2.4(c)
Guaranty and Subordination Agreement
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement"), made as of
the ______ day of April, 1998, by Kelley Chevrolet, Inc., an Indiana
corporation, Courtesy Motors, Inc., an Indiana corporation, Northside
Chevrolet, L.P., an Indiana limited partnership, Midwest Auto Parts, Inc., an
Indiana corporation, Kelley Buick of Atlanta, Inc., an Indiana corporation,
Kelley Saturn of Atlanta, Inc., an Indiana corporation, Tom Kelley Pontiac,
Inc., an Indiana corporation, Tom Kelley Buick GMC Truck, Inc., an Indiana
corporation, Tom Kelley Cadillac, Inc., an Indiana corporation, and Saturn of
Fort Wayne, Inc., an Indiana corporation (each a "Guarantor" or a "Tenant" and
collectively referred to herein as "Guarantors" or "Tenants"), in favor of
Capital Automotive, L.P., a Delaware limited partnership ("Landlord").
WITNESSETH:
----------
WHEREAS, Landlord has this day entered into multiple leases (the "Leases")
of certain Properties identified on Schedule A hereto (individually a "Property"
and collectively the "Properties") each with one of the above Tenants as
identified on Schedule A hereto, this Agreement being attached to each Lease;
WHEREAS, Tenants are Guarantors and affiliates of each other; and
WHEREAS, Landlord has required, as a condition to entering into the Lease,
that Tenants jointly and severally guarantee performance of and each and every
obligation imposed upon any Tenant by any of the Leases.
NOW, THEREFORE, to induce Landlord to enter into the Leases and in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor, for itself, its successors and assigns, hereby covenants and
agrees for the benefit of Landlord, as follows:
1. Guaranty. Guarantors, jointly and severally, do hereby
--------
unconditionally and irrevocably guarantee to Landlord the full, complete and
timely performance of all obligations imposed on each of the Tenants by the
terms of the Lease to which such Tenant is a party, including, but not limited
to, the full, complete and timely payment of rent and all other sums due by each
Tenant under its Lease, and the payment as required by each of the Leases of all
damages to Landlord which may result from a Tenant's breach of any provision of
its Lease, including, but not limited to, those relating to damage to any
Property or the leased premises.
2. Guaranty of Payment and Performance. Guarantors acknowledge and agree
-----------------------------------
that this is a guaranty of payment and performance and not mere collection. The
liability of Guarantors under
-2-
<PAGE>
this Agreement shall be direct and immediate and not conditional or contingent
upon the pursuit of any remedies against Tenants or any other person or entity.
Guarantors waive any right to require that an action be brought against Tenants
or any other person or entity. In the event, on account of the Bankruptcy Reform
Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, any Tenant shall be
relieved of the Lease or any debt, obligation or liability as provided in the
Leases, Guarantors shall nevertheless be fully liable for the complete and
timely performance of all obligations imposed on any Tenant by its Lease
throughout the entire term of such Lease, all to the same extent as if
Guarantors had been the original tenant thereunder and such Lease shall be
deemed unaffected by any such relief granted to such Tenant. In the event of a
default under any of the Leases which is not cured within any applicable grace
or cure period, Landlord shall have the right to enforce its rights, powers and
remedies thereunder or hereunder, in any order to the maximum extent permitted
by law, and all rights, powers and remedies provided thereunder or hereunder or
by law or in equity. If the obligations guaranteed hereby are partially
performed, paid or discharged by reason of the exercise of any of the remedies
available to Landlord, this Agreement shall nevertheless remain in full force
and effect, and Guarantors shall continue to be liable for all remaining
obligations guaranteed hereby, even though any rights which Guarantors may have
against Tenants may be destroyed or dismissed by the exercise of any such
remedy.
3. Waivers by Guarantors. To the extent permitted by law, Guarantors
---------------------
hereby waive and agree not to assert or take advantage of:
(a) Any right to require Landlord to proceed against Tenants or any
other person or entity or to proceed against or exhaust any security held by
Landlord at any time or to pursue any other remedy in Landlord's power or under
any other agreement before proceeding against Guarantors;
(b) 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:
(c) Any defense based upon an election of remedies by Landlord;
(d) Any right or claim or right to cause a marshaling of the assets of
any of the Tenants or Guarantors;
(e) Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more provisions of any of the Leases;
(f) Any modification of any of the Leases or of any obligation of any
Tenant thereunder by amendments to such Lease, by waivers granted by Landlord or
by operation of law
-3-
<PAGE>
or by action of any court, whether pursuant to the Bankruptcy Reform Act of
1978, as amended, or any other debtor relief law (whether statutory, common law,
case law or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, or otherwise.
4. Subordination. Guarantors and those parties signing below for the
-------------
purpose of being bound by this Section 4 (collectively, "Section 4 Signers)
hereby unconditionally and irrevocably subordinate (i) all payments due or to
become due by any of the Tenants to the Section 4 Signers, or any of them, by
reason of any and all debts or other obligations, including the obligation to
pay salaries or other compensation (collectively "Debt Payments") and (ii) the
receipt of all dividends or other distributions of any kind or nature
(collectively, "Distributions") to the payment of all sums currently due from
time to time by Tenants to Landlord under the Leases, including the payment of
Rent and all damages due by reason of any Tenant's breach of its Lease;
provided, however, that for so long as there shall be no existing Event of
Default under any of the Leases that has occurred and is subsisting, after the
payment of each monthly installment of Rent, the Section 4 Signers shall be
entitled to receive and retain (and the Landlord shall have no claim against)
Debt Payments and Distributions currently due or made prior to the month in
which such an Event of Default first occurs. Notwithstanding the foregoing in
the event that Landlord fails to notify Section 4 Signers of an Event of Default
by a Tenant within 120 days of the end of any cure period applicable to such
Event of Default, the Debt Payments and Distributions to Section 4 Signers shall
not be subordinated to sums due or to become due under such Lease by the Tenant
based upon such specific Event of Default. To the extent that Landlord does
notify Section 4 Signers of an Event of Default within 120 days of the end of
any cure period applicable to such Event of Default, the Debt Payments and
Distributions to Section 4 Signers will be subordinated to sums due or to become
due under such Lease by the Tenant based upon such specific Event of Default
from the month in which such Event of Default first occurs. Failure of Landlord
to notify Section 4 Signers of any Event of Default shall not waive Landlord's
rights hereunder as to another Event of Default or, in the case of a continuing
Event of Default, as to the time after which Landlord has provided notice to
Section 4 Signers.
5. General Provisions.
------------------
(a) Survival. This Agreement shall be deemed to be continuing in
--------
nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under any of the Leases;
(b) No Subrogation; No Recourse Against Landlord. Notwithstanding the
--------------------------------------------
satisfaction by Guarantors of any liability hereunder, Guarantors' rights of
subrogation, contribution, reimbursement or indemnity, if any, or any right of
recourse to or with respect to the assets or property of Tenants, shall be
subject and subordinate to the rights of Landlord. Guarantors expressly waive
any and all rights of subrogation against Tenants.
(c) Entire Agreement; Amendment; Severability. This Agreement
-----------------------------------------
contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements, whether written or oral, between
the parties respecting such matters. Any amendments
-4-
<PAGE>
or modifications hereto, in order to be effective, shall be in writing and
executed by Landlord and Guarantors. A determination that any provision of this
Agreement 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 Agreement 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.
(d) Governing Law: Binding Effect; Waiver of Acceptance. This
---------------------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia without regard to conflicts of laws principles thereof.
This Agreement shall bind Guarantors, their successors and assigns (but in the
event of an assignment, Guarantors shall not be relieved of their obligations
hereunder), and shall inure to the benefit of Landlord, its successors and
assigns. Guarantors hereby waive any acceptance of this Agreement by Landlord
and this Agreement shall immediately be binding upon Guarantors.
(e) Notice. All notices, demands, requests or other communications 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.
(f) No Waiver; Time of Essence. The failure of either party 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 such party 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. This Agreement
is subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof.
(g) Captions for Convenience. The captions and headings of the
------------------------
section and paragraphs of this Agreement are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
-5-
<PAGE>
(h) Attorney's Fees. In the event it is necessary for Landlord to
---------------
retain the services of an attorney or any other consultants in order to enforce
this Agreement, or any portion hereof, Guarantors shall promptly pay to Landlord
any and all costs and expenses, including, without limitation, reasonable
attorney's fees, incurred by Landlord as a result thereof and such costs, fees
and expenses shall be included in the costs of the case to the extent the
Landlord wins the issue under contest.
(i) Successive Actions. Separate and successive actions may be
------------------
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
Guarantors hereby waive to the maximum extent permitted by law any defense in
the nature of splitting of causes of action or merger of judgments.
(j) Reliance. Landlord would not enter into the Leases without this
--------
Agreement. Accordingly, Guarantors intentionally, irrevocably and
unconditionally enter into the covenants and agreements as set forth above and
understand that, in reliance upon and in consideration of such covenants and
agreements, the Leases have been made.
4. Notices: The following addresses shall be used for notice purposes:
-------
If to Landlord: Capital Automotive L.P.
1420 Springhill Road
Suite 525
McLean, Virginia 22102
Attention: Portfolio Manager
With copies to: Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attention: George P. Stamas, Esq.
and John B. Watkins, Esq.
If to Guarantors:
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
With copies to: Haller & Colvin, P.C.
Attn: Vincent J. Heiny, Esq. and
Charles J. Heiny, Esq.
444 East Main Street
Fort Wayne, Indiana 46802
-6-
<PAGE>
IN WITNESS WHEREOF, Guarantors have executed this Agreement under seal as
of the day and year first above written:
ATTEST/WITNESS: GUARANTOR:
KELLEY CHEVROLET, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
COURTESY MOTORS, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-7-
<PAGE>
ATTEST/WITNESS: GUARANTOR:
NORTHSIDE CHEVROLET, L.P.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST WITNESS: GUARANTOR:
MIDWEST AUTO PARTS, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
KELLEY BUICK OF ATLANTA, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
KELLEY SATURN OF ATLANTA, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-8-
<PAGE>
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY PONTIAC, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY BUICK GMC TRUCK, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
TOM KELLEY CADILLAC, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
ATTEST/WITNESS: GUARANTOR:
SATURN OF FORT WAYNE, INC.
By: By:
------------------------- ----------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
-9-
<PAGE>
EXHIBIT 5.2.1(e)
Prior Occupant Termination Agreement
------------------------------------
TO: Capital Automotive L.P. and its General Partner, Capital
Automotive REIT
FROM: [appropriate persons or entities] (each of the foregoing
collectively, the "Landlords")
LESSEES: [all of the lessees] (each of the foregoing collectively,
the "Lessees")
SUBLESSORS/SUBLICENSEES [ ] (each of the foregoing collectively, the
"Sublessors/Licensors")
SUBLESSEES/LICENSEES: [ ] (each of the foregoing collectively, the
"Sublessees/Licensees")
RE: Termination of Existing Leases, Subleases and Licenses and Prior
Occupant Estoppel
DATE:
The premises respectively known as [ describe premises] (the foregoing
premises collectively, the "Premises") will each be acquired by the Capital
Automotive L.P. (the "Operating Partnership"). As a result thereof, each of the
parties identified above as the Landlords, the Lessees, the
Sublessors/Licensors, and the Sublessees/Licensees hereby agree that each of the
respective leases, subleases, and licenses attached hereto as Exhibit A
(collectively the "Lease Agreements"), by and between the respective Landlords,
Lessees, Sublessors/Licensors, and Sublessees/Licensees are hereby terminated
and canceled effective upon the closing of the transactions effecting the sale
of the Premises to the Operating Partnership (the "Closing"). In addition, each
Landlord, each Sublessor/Licensor, each Lessee and each Sublessee/Licensee
individually represents and warrants that the Lease Agreements attached as
Exhibit A represent all such agreements that have been entered into by and
between parties affiliated with the ________________ Automotive Group for use of
any portion of the Premises that are effective as of the date of this letter.
Each Lessee and each Sublessee/Licensee further represent and warrant that
effective as of the Closing (i) except for any new lease agreements (the "New
Lease Agreements") that may have been entered into by such Lessee or such
Sublessee/Licensee with the Operating Partnership for the lease of any portion
of the Premises, copies of each of such New Lease Agreements are attached hereto
as Exhibit B, it has no continuing right, title or other interests to any
portion the Premises and (ii) it has no claims against any Landlord or
Sublessor/Licensee under any of the Lease Agreements and will assert no claims
against the Operating Partnership as landlord or sublessor/licensee for any and
all claims, actions or causes of action arising under or in connection with any
Lease Agreement regardless of when the
-10-
<PAGE>
same may arise or may have arisen and irrespective of when any action or
omission may have occurred or transpired which gave or may give rise to any such
claims, actions or causes of action. Each Lessee and Sublessee/Licensee further
states that it quit claims to the Operating Partnership all of its right, title
and interest in and to any alterations, additions, modifications, improvements,
and fixtures located on any portion of the Premises that may be considered
realty.
TENANT:
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
-11-
<PAGE>
EXHIBIT 5.2.1(f)
Opinion of Seller's Counsel
---------------------------
1. The Sellers are duly organized or formed, validly existing and in good
standing under the laws of their respective State's of organization or
formation.
2. Each of the Sellers has the requisite corporate, partnership or other
entity power and authority to execute and deliver, and to perform its
obligations under the Agreement and to carry on its business.
3. The execution and delivery by each of the Sellers has been duly
authorized by all necessary corporate, partnership or other entity actions and
the persons executing the Agreement have been duly authorized to do so.
4. The execution, delivery and performance by the Company will not
violate the charter, organizational documents, bylaws, operating agreements or
partnership agreements of any of the Sellers.
5. The Agreement has been duly executed and delivered by each of the
Sellers in compliance with the laws of the State of Indiana, and is the legal,
valid and binding obligation of each, enforceable against each in accordance
with its terms, except that enforcement may be limited by bankruptcy,
insolvency, reorganization, arrangement, moratorium, or similar laws, or by
equitable principles, relating to or limiting the rights of creditors generally.
6. To the undersigned's knowledge, without investigation, the execution
and delivery of the Agreement will not breach or otherwise violate the
provisions of or cause an event of default under any agreement, contract,
mortgage or other binding commitment or existing obligation of any of the
Sellers and will not breach or otherwise violate any permit, license, court
judgment, decree or order of any Court or any law, rule or regulation of any
governmental body to which any of Sellers are subject to or bound.
7. To the undersigned's knowledge, there are no actions, suits or
proceedings pending or threatened against any of the Sellers or the Properties
that affect the Properties or would materially affect the Sellers ability to
perform under the Agreement or which seeks to affect the enforceability of the
Agreement.
8. To the undersigned's knowledge, no Seller is in default or has
received any notice of default with respect to any judgment, order, writ,
injunction or decree or any lease, contract, agreement, commitment, instrument
or obligation to which it is a party or by which the Property is bound or may be
subject that affects the Property or could materially affect any
Seller's/Contributor's ability to perform its obligations under the Agreement.
-12-
<PAGE>
9. To the undersigned's knowledge, all consents, approvals, or
authorization required by any third party or governmental authority in
connection with the Sellers'/Contributors' obligations under the Agreement have
been properly obtained and Sellers have complied with all applicable provisions
of law requiring any filing, registration or qualification with any governmental
authority in connection with the execution and delivery of the deeds to the
Properties.
-13-
<PAGE>
EXHIBIT 5.2.1(i)
----------------
Investor Questionnaires
CAPITAL AUTOMOTIVE L.P.
UNITS OF LIMITED PARTNERSHIP INTEREST
CONFIDENTIAL PURCHASER QUESTIONNAIRE
(NATURAL PERSONS)
Capital Automotive REIT
1420 Springhill Road
Suite 525
McLean, Virginia 22102
The information contained in this Investor Questionnaire is being furnished
in order to determine whether the undersigned is accredited to purchase units of
limited partnership interest (the "Units") of Capital Automotive L.P. (the
"Partnership") pursuant to the Real Property Contribution Agreement dated
_________ __, ____ (the "Contribution Agreement"), by and among the persons and
entities named on Schedule I hereto consisting of all of the owners of an
----------
interest in any of the Properties (as hereafter defined) (each individually, a
"Purchaser" and collectively, the "Purchasers"), and Capital Automotive REIT, a
Maryland real estate investment trust (the "Company"), and the Partnership.
ALL INFORMATION CONTAINED IN THIS INVESTOR QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. Any offer or sale to any Purchaser will be made by the
Partnership. You understand, however, that the Company may be required to
present this Investor Questionnaire to such parties as it deems appropriate if
called upon to establish that the proposed offer and sale of the Units are
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state securities or blue sky laws or if
otherwise required. Further, the undersigned understands that the offering and
sale of the Units may be required to be reported to the Securities and Exchange
Commission and reported or registered under applicable state securities or blue
sky laws.
Name(s) of Purchaser(s):/*/
(1)
------------------------------------------------------
(2)
------------------------------------------------------
- -------------------
/*/ If there is more than one Purchaser (other than husband and wife), a
separate Confidential Purchaser Questionnaire must be completed for each such
Purchaser and attached to this Confidential Purchaser Questionnaire.
<PAGE>
1. Background Information.
a. Home Address:
------------------------------------------------
b. Home Telephone:
------------------------------------------------
c. Social Security #s:
------------------------------------------------
d. U.S. Citizen: Yes No
----------- --------
e. Occupation:
------------------------------------------------
f. Employer:
------------------------------------------------
g. Bus. Address:
------------------------------------------------
h. Bus. Telephone:
------------------------------------------------
i. Age:
------------------------------------------------
j. Send Mail to: Home Office
------- -------
Other:
------------------------------------------
k. State your education and degrees earned:
Degree School Year
--------------------------------------------------------------------
--------------------------------------------------------------------
l. Do you currently own securities or other types of investments?
------
--------------------------------------------------------------------
m. Do you have means of providing for your needs and personal
contingencies?
--------------------------------------------------------------------
<PAGE>
n. Do you have a preexisting business relationship with the person who
contacted you in connection with the offering of the Units?
--------------------------------------------------------------------
2. Type of Ownership.
Indicate type of ownership you intend to subscribe for (if other than for a
single individual):
Individual
------
Joint Tenants with Rights of Survivorship
------
Tenants in Common
------
Tenants by the Entirety
------
3. Purchaser Suitability.
Please indicate whichever of the following (if any) certifications apply to
you by initialing the appropriate space:
(i) I certify that I am an "accredited investor" because I have an
individual net worth/**/ (or joint net worth with my spouse) in excess of
$1,000,000.
Yes No
---- ----
(ii) I certify that I am "accredited investor" because I had an
individual income (not including any amounts attributable to my spouse
or to property owned by my spouse) of more than $200,000 in each of
the previous two calendar years and I reasonably expect to reach the
same income level in the current year.
Yes No
---- ----
- -----------------------
/**/ For purposes of this Questionnaire, a purchaser's "net worth" is
equal to the excess of total assets at fair market value over total
liabilities. Net worth may include the equity value (i.e., current
appraised value less mortgage indebtedness) of real property owned by the
Purchaser.
<PAGE>
(iii) I certify that I am an "accredited investor" because I had a
joint income with my spouse in excess of $300,000 in each of the previous
two calendar years and I reasonably expect to reach the same income level
in the current year.
Yes No
---- ----
4. The Purchaser hereby acknowledges and represents and warrants that:
1. (a) He/she has read and understands the risks associated with an
investment in the Units and understands those risks, (b) the information
contained in this Investor Questionnaire is true, complete and accurate as of
the date hereof, and (c) he/she will contact Capital Automotive REIT immediately
if any material change in any of this information occurs.
2. The Units will be acquired for the Purchaser's own account for
investment, and not for distribution or resale to others. The Purchaser agrees
that it will not sell or otherwise transfer the Units unless any third party
consents as required are first obtained and unless the securities are registered
under the Securities Act, and under applicable state securities laws or unless
an exemption from such registration is available. There is no market for the
Units and none is expected to develop.
3. All documents, records and books pertaining to this investment have
been made available to the Purchaser and his/her respective attorney, accountant
or investment representative; the Partnership has provided answers to all of
his/her or their questions concerning the offering and an investment in the
Partnership; and the books and records of the Partnership will be available upon
reasonable notice for inspection during normal business hours of the Partnership
at the Partnership's principal place of business.
4. The Purchaser has such knowledge and experience in financial and
business matters in general and in particular with respect to this type of
investment that it is, he/she is capable of evaluating the merits and risks of
an investment in the Partnership, and will be able to bear the financial risks
of this investment for an indefinite period of time.
5. The Purchaser has discussed with his/her investment representative,
lawyer, accountant or tax advisor, as applicable, the suitability of an
investment in the Partnership for its particular tax and financial situation.
6. The Purchaser is acquiring the Units without being furnished any
offering.
7. The Purchaser has kept confidential all information furnished to
them by or on behalf of the Partnership and has not provided the same to anyone
other than their agents (including counsel and accountants) on a need to know
basis.
<PAGE>
5. Reliance by Partnership.
I understand that the Partnership will be relying on the accuracy and
completeness of my responses to the foregoing questions and I represent,
warrant and covenant to the Partnership as follows:
1. I/We certify under the penalties of perjury that the social security
number provided below and information provided with respect to Section
3406(a)(1)(C) of the Internal Revenue Code is true, correct and complete; and
2. The answers to the above questions are complete and correct and may be
relied upon by the Partnership in determining whether the offering in connection
with which I have executed this Questionnaire is exempt from registration under
the Securities Act and applicable state securities laws; and hereby agree to
indemnify the Partnership and its partners, affiliates, agents, employees and
control persons, and hold each of them harmless against any and all loss,
damages, liability or expense, including reasonable attorney's fees, which they
or any of them may suffer, sustain or incur by reason of or in connection with
any misrepresentation or breach of warranty or agreement made by the undersigned
under this Investor Questionnaire or in connection with the sale or distribution
by the undersigned of the Units purchased by the undersigned pursuant hereto in
violation of the Securities Act or any other applicable law.
- ----------------------------------------------------------
(please print the exact name(s) and title in which
the Units should be issued)
(Signature of Purchaser)
------------------------------------------
(Name Typed or Printed)
------------------------------------------
(Date)
------------------------------------------
(Signature of Co-Purchaser)
------------------------------------------
(Name Typed or Printed)
------------------------------------------
<PAGE>
CAPITAL AUTOMOTIVE L.P.
UNITS OF LIMITED PARTNERSHIP INTEREST
CONFIDENTIAL PURCHASER QUESTIONNAIRE
(ENTITIES)
Capital Automotive REIT
1420 Springhill Road
Suite 525
McLean, Virginia 22102
The information contained in this Investor Questionnaire is being furnished
in order to determine whether the undersigned is accredited to purchase units of
limited partnership interest (the "Units") of Capital Automotive L.P. (the
"Partnership") pursuant to the Real Property Contribution Agreement dated
________ __, ____ (the "Contribution Agreement"), by and among the persons and
entities named on Schedule I hereto consisting of all of the owners of an
----------
interest in any of the Properties (as hereafter defined) (each individually, a
"Purchaser" and collectively, the "Purchasers"), and Capital Automotive REIT, a
Maryland real estate investment trust (the "Company"), and the Partnership.
ALL INFORMATION CONTAINED IN THIS INVESTOR QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. Any offer or sale to any Purchaser will be made by the
Partnership. You understand, however, that the Company may be required to
present this Investor Questionnaire to such parties as it deems appropriate if
called upon to establish that the proposed offer and sale of the Units are
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state securities or blue sky laws or if
otherwise required. Further, the undersigned understands that the offering and
sale of the Units may be required to be reported to the Securities and Exchange
Commission and reported or registered under applicable state securities or blue
sky laws.
1. Background Information.
a. Name of Investing Entity:
-----------------------------------------
b. Address:
-----------------------------------------
-----------------------------------------
Address for correspondence (if different):
-----------------------------------------
<PAGE>
-----------------------------------------
-----------------------------------------
c. Telephone Number:
-----------------------------------------
d. Description of Business:
-----------------------------------------
-----------------------------------------
e. Federal Tax ID Number:
-----------------------------------------
f. Individual(s) authorized to execute documents on behalf of the entity
in connection with this investment:
Name:
-----------------------------------------
Position or title:
-----------------------------------------
Note: In the case of a partnership or trust, a power of attorney
is required if such entity's Partnership Agreement or Trust
Agreement does not specifically authorize the above-named
individual(s) to make this investment for such Partnership or
Trust. In the case of a corporate investor, corporate resolutions
(or other evidence of corporate authority) authorizing this
investment and specifying the individuals authorized to execute
investment documents on behalf of the corporation are required to
be delivered herewith.
2. Type of Entity: Corporation
------
Limited Partnership
------
General Partnership
------
Limited Liability Company
------
Revocable Trust/***/
------
- ------------------------------
/***/ UNLESS (i) the Trust has total assets in excess of $5,000,000; (ii) the
Trust was not formed for the specific purpose of acquiring the Interest; and
(iii) the purchase by the Trust is directed by a person who has such knowledge
and experience in financial and business matters that he/she is capable of
evaluating the merits and risks of an investment in the Units, the grantor(s) of
the Trust also must provide a completed individual investor questionnaire for
each
(continued...)
<PAGE>
Irrevocable Trust
------
Pension or Profit
Sharing Plan or Trust
(indicate type of Plan
or Trust)
------
Individual Retirement
Account (Note: The
beneficiary of an
Individual Retirement
Account also must provide
a complete individual
investor questionnaire)
------
a. Place of Organization:
--------------------------------------------
b. Date of Organization:
--------------------------------------------
c. Was the entity organized for the specific purpose of investing in
Capital Automotive L.P.?
Yes No
----- -----
d. Does the entity have a preexisting business relationship with the
person who contacted it in connection with the offering of the Units?
Yes No
----- -----
e. Number of equity owners (Note: an "equity owner" for the purposes of
this Questionnaire means (1) stockholders in the case of a
corporation, (2) limited partners only in the case of a limited
partnership, (3) general partners in the case of a general
partnership, (4) grantor(s) in the case of a trust revocable at the
sole option of grantor(s) or (5) beneficiaries in the case of other
trusts):
-------
3. Accredited Investors.
- ------------------------------
/***/ (...continued)
grantor.
<PAGE>
All Purchasers will be required to represent that they meet at least
one of the following requirements. Please indicate which of the
following you meet:
(i) All of the equity owners of the entity meet either (1), (2) or
(3) below:
(1) have an individual net worth/***/ (or joint net worth
with spouse) in excess of $1,000,000;
(2) had an individual income (not including any amounts
attributable to spouse or to property owned by spouse) of
more than $200,000 in each of the previous two calendar
years and a reasonable expectation to reach the same
income level in the current year; or
(3) had a joint income with spouse in excess of $300,000 in
each of the previous two calendar years and a reasonable
expectation to reach the same income level in the current
year.
Yes No
---- ----
(ii) The Purchaser is any of the following entities (please indicate
which by initialing the appropriate line(s)):
(1) A bank is defined in Section 3(a)(2) of the
--- Securities Act or a savings and loan association or
other institution defined in Section 3(a)(5)(A) of
the Securities Act whether acting in its individual
or fiduciary capacity.
(2) A broker/dealer registered pursuant to Section 15 of
--- the Securities Exchange Act of 1934 (the "Exchange
Act").
(3) An insurance company as defined in Section 2(13) of
--- the Securities Act.
(4) An investment company registered under the Investment
--- Company Act of 1940 or a business development company
as defined in Section (2)(a)(48) of that Act.
- ------------------------
/***/ For purposes of this Questionnaire, a purchaser's "net worth" is equal
to the excess of total assets at fair market value over total liabilities
(excluding home and home furnishings).
<PAGE>
(5) Small Business Investment Company licensed by the
--- U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958.
(6) A plan established and maintained by a state, its
--- political subdivisions, or any agency or
instrumentality thereof, for the benefits of its
employees, if such plan has total assets in excess of
$5,000,000.
(7) An employee benefit plan within the meaning of the
--- Employee Retirement Income Security Act of 1974
"ERISA"), if the investment decision is made a plan
fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association,
insurance company, or registered investment adviser,
or if the employee benefit plan has total assets in
excess of $5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that
are accredited investors.
(8) A private business development company as defined in
--- Section 202(a)(22) of the Investment Advisers Act of
1940.
(9) An organization described in Section 501(c)(3) of the
--- Internal Revenue Code of 1986, as amended (the
"Code"), a corporation, Massachusetts or similar
business trust or partnership not formed for the
specific purpose of acquiring the Units with total
assets in excess of $5,000,000.
(10) A trust with total assets in excess of $5,000,000 not
--- formed for the specific purpose of acquiring the
whose purchase is directed by a sophisticated person
as described in Rule 506(b)(2)(ii) under the
Securities Act.
4. Additional Information
a. If for a Trust:
A Trust must attach a copy of its Declaration of Trust or other
governing instrument, as amended, as well as all other documents that
authorize the Trust to invest in the Units. All documentation must be
complete and correct.
b. If for a Retirement Plan:
<PAGE>
The Retirement Plan must attach copies of all documents governing the
Plan as well as all other documents authorizing the Retirement Plan to
invest in the Units. Include, as necessary, documents defining
permitted investments by the Retirement Plan and demonstrating the
authority of the signing individual to act on behalf of the Plan. All
documentation must be complete and correct.
5. The Purchaser hereby acknowledges and represents and warrants that:
1. (a) He/she/it has read and understands the risks associated with an
investment in the Units and understands those risks, (b) the information
contained in this Investor Questionnaire is true, complete and accurate as of
the date hereof, and (c) he/she will contact Capital Automotive REIT immediately
if any material change in any of this information occurs.
2. The Units will be acquired for the Purchaser's own account for
investment, and not for distribution or resale to others. The Purchaser agrees
that it will not sell or otherwise transfer the Units unless any third party
consents as required are first obtained and unless the securities are registered
under the Securities Act, and under applicable state securities laws or unless
an exemption from such registration is available. There is no market for the
Units and none is expected to develop.
3. All documents, records and books pertaining to this investment have
been made available to the Purchaser and his/her/it respective attorney,
accountant or investment representative; the Partnership has provided answers to
all of his/her or their questions concerning the offering and an investment in
the Partnership; and the books and records of the Partnership will be available
upon reasonable notice for inspection during normal business hours of the
Partnership at the Partnership's principal place of business.
4. The Purchaser has such knowledge and experience in financial and
business matters in general and in particular with respect to this type of
investment that it is, he/she is capable of evaluating the merits and risks of
an investment in the Partnership, and will be able to bear the financial risks
of this investment for an indefinite period of time.
5. The Purchaser has discussed with his/her investment representative,
lawyer, accountant or tax advisor, as applicable, the suitability of an
investment in the Partnership for its particular tax and financial situation.
6. The Purchaser is acquiring the Units without being furnished any
offering.
7. The Purchaser has kept confidential all information furnished to
them by or on behalf of the Partnership and has not provided the same to anyone
other than their agents (including counsel and accountants) on a need to know
basis.
<PAGE>
6. Reliance by Partnership.
I understand that the Partnership will be relying on the accuracy and
completeness of my responses to the foregoing questions and I represent,
warrant and covenant to the Partnership as follows:
1. I/We certify under the penalties of perjury that the social security
number provided below and information provided with respect to Section
3406(a)(1)(C) of the Internal Revenue Code is true, correct and complete;
2. The answers to the above questions are complete and correct and may be
relied upon by the Partnership in determining whether the offering in connection
with which I have executed this Questionnaire is exempt from registration under
the Securities Act and applicable state securities laws; and hereby agree to
indemnify the Partnership and its partners, affiliates, agents, employees and
control persons, and hold each of them harmless against any and all loss,
damages, liability or expense, including reasonable attorney's fees, which they
or any of them may suffer, sustain or incur by reason of or in connection with
any misrepresentation or breach of warranty or agreement made by the undersigned
under this Investor Questionnaire or in connection with the sale or distribution
by the undersigned of the Units purchased by the undersigned pursuant hereto in
violation of the Securities Act or any other applicable law; and
3. The person signing this Questionnaire on behalf of the Investing
Entity has been duly authorized to sign the Questionnaire on behalf of the
Investing Entity.
7. Other Certifications.
a. If by a Corporation:
By signing the Signature Page, the undersigned certifies the
following:
(A) that the Corporation's name, address of principal office, place of
incorporation and taxpayer identification number as set forth in
this Questionnaire are true, correct and complete; and
(B) that one of the following is true and correct (check one):
[ ] (i) the Corporation is a corporation organized in or under
the laws of the United States or any political subdivision
thereof.
[ ] (ii) the Corporation is a corporation which is neither
created nor organized in or under the laws of the United
States or any political subdivision thereof, but which has
made an election under either
<PAGE>
Section 897(i) or 897(k) of the United States Internal
Revenue Code of 1986, as amended, to be treated as a
domestic corporation for certain purposes of United States
Federal income taxation (A COPY OF THE INTERNAL REVENUE
SERVICE ACKNOWLEDGMENT OF THE UNDERSIGNED'S ELECTION MUST BE
ATTACHED TO THIS QUESTIONNAIRE IF THIS PROVISION IS
APPLICABLE).
[ ] (iii) neither (i) nor (ii) above is true.
b. If by a Partnership:
By signing the Signature Page, the undersigned certifies on
behalf of such Partnership the following:
(A) that such Partnership's name, address of principal office,
place of formation and taxpayer identification number as set
forth in this Questionnaire are true, correct and complete;
and
(B) that one of the following is true and correct (check one).
[ ] (i) such Partnership is a partnership formed in or under
the laws of the United States or any political
subdivision thereof.
[ ] (ii) such Partnership is not a partnership formed in or
under the laws of the United States or any political
subdivision thereof.
c. If by a Trust (other than a retirement related trust) or Estate:
By signing the Signature Page, the undersigned certifies on
behalf of such Trust or Estate the following:
(A) that such Trust's or Estate's purchase of the Units in
within the investment powers and authority of such Trust of
Estate (as set forth in the declaration of trust or other
governing instruments) and that all necessary consents,
approvals and authorizations for such purchase have been
obtained and that each person who signs the Signature Page
has all requisite power and authority as trustee or executor
or administrator to execute this Questionnaire and the
Contribution Agreement on behalf of such Trust or Estate ;
<PAGE>
(B) that such Trust has not been established in connection with
either (i) an employee benefit plan (as defined in Section
3(3) of ERISA), whether or not subject to the provisions of
Title I of ERISA, or (ii) a plan described in Section
4975(e)(i) of the Internal Revenue Code;
(C) that such Trust's or Estate's name, address of principal
office, place of formation and taxpayer identification number
as set forth in this Questionnaire are true, correct and
complete; and
(D) that one of the following is true and correct (check one):
[ ] (i) such Trust is a trust whose income from sources
outside of the United States Federal tax purposes
regardless of its connection with a trade or business
carried on in the United States.
[ ] (ii) such Trust is an estate or trust whose income from
sources outside of the United States Federal income tax
purposes regardless of its connection with a trade or
business carried on in the United States.
d. If by a Retirement Plan:
By signing the Signature Page, the undersigned on behalf of such
Retirement Plan certifies the following:
(A) that such Retirement Plan's governing documents duly authorize
the type of investment contemplated herein, and the undersigned
is authorized and empowered to make such investment on behalf of
such Retirement Plan.
- -------------------------------------------------------------
(please print the exact name(s) and title in which
the Units should be issued)
(Investing Entity)
(Signature of Purchaser)
---------------------------------------
(Name and Title Typed or Printed)
---------------------------------------
<PAGE>
(Name of Trustee(s) (if Trust))
-----------------------------------------
-----------------------------------------
(Date)
-----------------------------------------
<PAGE>
SCHEDULE 1.2
<TABLE>
<CAPTION>
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Tenant Dealership Street Address Franchise Estimated Estimated Attachment Present
Approximate Approximate Containing Land Owner
Building S.F. Land S.F. Legal
Description
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kelley Kelley Chevrolet 500 East State Blvd. Chevrolet 85,103 480,467 A JEK
Chevrolet, Inc. Fort Wayne, IN
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Courtesy Courtesy Motors 1313 South 13th Multiple 33,412 371,567 B JEK
Motors, Inc. (includes adjacent Street
property under Decatur, IN
contract)
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Northside Northside Chevrolet 2400 N. Heidelbach Chevrolet 28,739 192,535 C JEK
Chevrolet, L.P. Evansville, IN
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Midwest Auto Midwest Auto Parts 1818 Research Drive N/A 67,000 239,580 D Midwest
Parts, Inc. Fort Wayne, IN Auto
Realty
Co., L.P.
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Kelley Buick Kelley Buick of 5900 Peachtree Buick 43,239 270,072 E TWK
of Atlanta, Atlanta Chamblee, GA
Inc.
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Kelley Buick Kelley Buick of 11458 Alpharetta Buick 70,960 395,525 F TWK
of Atlanta, Roswell Highway
Inc. Roswell, GA
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
Kelley Saturn Saturn of Chamblee 5764 Peachtree Saturn 12,040 77,972 G TWK
of Atlanta, (includes used car Chamblee, GA and
Inc. lot) 5784 Peachtree
Chamblee, GA
- ---------------- -------------------- --------------------- ----------- -------------- -------------- ------------ ------------
<CAPTION>
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Tenant Purchase Initial Form of Surveyor Title Co.
Price Annual Payment/1/
Rent
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C>
Kelley 6,600,000.00 660,000.00 Cash Richard K. Karst, RLS Margaret A. Sklenar,
Chevrolet, Inc. Karst Surveying Services, President
Inc. Columbia Land Title, Inc.
222 West Berry Street 124 Columbia Street
Fort Wayne, IN 46802 Fort Wayne, IN 46802
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Courtesy 2,940,000.00 294,000.00 Cash Richard K. Karst, RLS Margaret A. Sklenar,
Motors, Inc. Karst Surveying Services, President
Inc. Columbia Land Title, Inc.
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Northside 2,640,000.00 264,000.00 Cash Matthew E. Wannemuehler, Margaret A. Sklenar,
Chevrolet, L.P. R.L.S. President
BERNARDIN, LOCHMUELLER & Columbia Land Title, Inc.
ASSOCIATES, INC.
6200 Vogel Road
Evansville, IN 47715-4006
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Midwest Auto 1,800,000.00 180,000.00 Units Mr. Kerry Dickmeyer, R.L.S. Margaret A. Sklenar,
Parts, Inc. Dickmeyer & Associates President
6044 East State Boulevard Columbia Land Title, Inc.
Fort Wayne, IN 46815
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Kelley Buick 6,000,000.00 600,000.00 Cash Mr. Virgil T. Hammond, Mr. Richard J. Beam, Jr.
of Atlanta, R.L.S. Ramsay Title Group, LLC
Inc. Watts & Browning Engineers, 6400 Atlantic Blvd.,
Inc. Suite 170
1954 Airport Road, Suite Norcross, GA 30071-1214
120
Atlanta, GA 30341-4953
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Kelley Buick 6,000,000.00 600,000.00 Cash Mr. Virgil T. Hammond, Mr. Richard J. Beam, Jr.
of Atlanta, R.L.S. Ramsay Title Group, LLC
Inc. Watts & Browning Engineers,
Inc.
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
Kelley Saturn 3,120,000.00 312,000.00 Cash Mr. Virgil T. Hammond, Mr. Richard J. Beam, Jr.
of Atlanta, R.L.S. Ramsay Title Group, LLC
Inc. Watts & Browning Engineers,
Inc.
- ---------------- ------------ ---------- ----------- --------------------------- ---------------------------
</TABLE>
- ------------------
/1/ The total units available to Sellers/Contributors shall be allocated as
follows: (1) first on purchase of property no. 5; (2) next on purchase of
property no. 6; (3) next on purchase of property no. 7; (4) next on purchase of
property no. 8; (5) next on purchase of property no. 9; (6) next on purchase of
property no. 4; and (7) any remaining units shall be allocated to purchase of
property no. 1.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Tenant Dealership Street Address Franchise Estimated Estimated Attachment Present
Approximate Approximate Containing Land
Building S.F. Land S.F. Legal Owner
Description
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kelley Saturn Saturn of Gwinnett 2520 Pleasant Hill Saturn 19,243 385,070 H TWK
of Atlanta, Duluth, GA
Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Pontiac 633 Avenue of Autos Pontiac 47,998 282,704 I TWK
Pontiac, Inc. GMC Truck Fort Wayne, IN GMC
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Buick 811 Avenue of Autos Buick 33,700 300,128 J TWK
Buick GMC (includes present GMC Fort Wayne, IN and
Truck, Inc. Truck property) 818 Avenue of Autos
Fort Wayne, IN
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Cadillac 911 Avenue of Autos Cadillac 22,430 117,176 K TWK
Cadillac, Inc. Fort Wayne, IN
- -----------------------------------------------------------------------------------------------------------------------------------
Saturn of Fort Saturn of Fort Wayne 910 Avenue of Autos Saturn 10,675 71,003 L TWK
Wayne, Inc. Fort Wayne, IN
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Tenant Dealership Street Address Franchise Purchase Initial Form of Surveyor
Price Annual Payment
Rent
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kelley Saturn Saturn of Gwinnett 2520 Pleasant Hill Saturn 4,200,000.00 420,000.00 Cash Mr. Lee Jay Johnson, R.L.S.
of Atlanta, Duluth, GA Precision Planning, Inc.
Inc. 400 Pike Boulevard
P.O. Box 2210
Lawrenceville, Georgia
30246
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Pontiac 633 Avenue of Autos Pontiac 5,400,000.00 540,000.00 Cash Richard K. Karst, RLS
Pontiac, Inc. GMC Truck Fort Wayne, IN GMC Karst Surveying Services,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Buick 811 Avenue of Autos Buick 4,800,000.00 480,000.00 Cash Richard K. Karst, RLS
Buick GMC (includes present GMC Fort Wayne, IN and Karst Surveying Services,
Truck, Inc. Truck property) 818 Avenue of Autos Inc.
Fort Wayne, IN
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Cadillac 911 Avenue of Autos Cadillac 2,400,000.00 240,000.00 Cash Richard K. Karst, RLS
Cadillac, Inc. Fort Wayne, IN Karst Surveying Services,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Saturn of Fort Saturn of Fort Wayne 910 Avenue of Autos Saturn 1,200,000.00 120,000.00 Cash Richard K. Karst, RLS
Wayne, Inc. Fort Wayne, IN Karst Surveying Services,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------
Tenant Dealership Street Address Franchise Title Co.
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kelley Saturn Saturn of Gwinnett 2520 Pleasant Hill Saturn Mr. Richard J. Beam, Jr.
of Atlanta, Duluth, GA Ramsay Title Group, LLC
Inc.
- -------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Pontiac 633 Avenue of Autos Pontiac Margaret A. Sklenar,
Pontiac, Inc. GMC Truck Fort Wayne, IN GMC President
Columbia Land Title, Inc.
- -------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Buick 811 Avenue of Autos Buick Margaret A. Sklenar,
Buick GMC (includes present GMC Fort Wayne, IN and President
Truck, Inc. Truck property) 818 Avenue of Autos Columbia Land Title, Inc.
Fort Wayne, IN
- -------------------------------------------------------------------------------------------------
Tom Kelley Tom Kelley Cadillac 911 Avenue of Autos Cadillac Margaret A. Sklenar,
Cadillac, Inc. Fort Wayne, IN President
Columbia Land Title, Inc.
- -------------------------------------------------------------------------------------------------
Saturn of Fort Saturn of Fort Wayne 910 Avenue of Autos Saturn Margaret A. Sklenar,
Wayne, Inc. Fort Wayne, IN President
Columbia Land Title, Inc.
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 1.2
Property Descriptions
A
Property No. 1
--------------
South Parcel
A 5.838 acre parcel in of the Southeast Quarter of Section 35 and the Southwest
Quarter of Section 36, Township 31 North, Range 12 East of the Second Principal
Meridian in Allen County, Indiana, being a combination of the following
described tracts:
The 1.175 acre parcel described in Document Number 90-1035 together with Tracts
9, 10, 11, 12, 13, 14, 15 and 16 described in Document Number 85-18646, both in
the Office of the Recorder of Allen County, Indiana, more particularly described
as follows:
Commencing at the Northwest corner of said Southwest Quarter, thence South 01
degrees 09 minutes 06 seconds West (assumed bearing based on north 90 degrees 00
minutes 00 seconds East for the centerline of State Boulevard, being also the
East-West centerline of said section 36), a distance of 30.00 feet along the
West line of said Southwest Quarter to the Southerly right-of-way line of State
Boulevard as established by Declaratory Resolution Number 284-1914, recorded in
Plat Book 7, page 97 in the Office of the Recorder of Allen County, Indiana,
said point being the Point of Beginning of the herein described tract; thence
North 89 degrees 50 minutes 12 seconds East, a distance of 334.27 feet along
said southerly right-of-way line to a chiseled ''+" set, thence South 1 degree
09 minutes 06 seconds West, a distance of 602.96 feet parallel with the West
line of said Southwest Quarter to the North right-of-way line of Forest Avenue;
thence North 90 degrees 00 minutes 00 seconds West, a distance of 17.50 feet
along the westerly extension of said north right-of-way line to a 5/8 inch steel
rebar with Karst ID cap set at the point of curvature of a non-tangent curve,
concave to the northeast, being also a point on the easterly line of a public
thoroughfare known as Saint Joseph River Parkway; thence along said curve an arc
distance of 69.39 feet (69.11 feet - recorded) through a central angle of 26
degrees 06 minutes 02 seconds with a chord bearing of North 29 degrees 15
minutes 33 seconds West, and a chord distance of 68.79 feet to a 5/8 inch steel
rebar with Karst ID cap set on said Easterly line; thence North 17 degrees 38
minutes 23 seconds West, a distance of 84.30 feet along said easterly line to a
5/8 inch steel rebar with Karst ID cap set at the point of curvature of a
tangent curve, concave to the southwest; thence along said curve an arc distance
of 281.96 feet, through a central angle of 46 degrees 47 minutes 59 seconds with
a chord bearing of North 41 degrees 02 minutes 23 seconds West and a chord
distance of 274.19 feet to a 5/8 inch steel rebar with Karst ID cap set on said
easterly line; thence North 64 degrees 26 minutes 23 seconds West,
<PAGE>
a distance of 77.80 feet along said easterly line to a 5/8 inch steel rebar with
Karst ID cap set at the point of curvature of a tangent curve, concave to the
Northeast; thence along said curve an arc distance of 185.15 feet, through a
central angle of 68 degrees 00 minutes 03 seconds with a chord bearing of North
30 degrees 26 minutes 23 seconds West and a chord distance of 174.47 feet to a
5/8 inch steel rebar with Karst ID cap set on said easterly line; thence North
03 degrees 33 minutes 37 seconds East, a distance of 45.00 feet along said
easterly line to a 5/8 inch steel rebar set with Karst ID cap; thence North 22
degrees 26 minutes 37 seconds East, a distance of 27.70 feet along said easterly
line to a chiseled "+" set on said southerly right-of-way line of State
Boulevard; thence North 89 degrees 50 minutes 14 seconds East, a distance of
79.75 feet along said southerly right-of-way line to the Point of Beginning,
containing 3.174 acres, more or less.
Together With:
Lots 1, 2, and 3 in John Riedel's Addition to the City of Fort Wayne as recorded
in Plat Book 3, Page 15 in the Office of the Recorder of Allen County, Indiana.
That part of Reidel Place (Victor Avenue) contiguous to the South line of Lot 1
and North line of Lot 2 in said John Riedel's Addition to the City of Fort
Wayne, vacated by General Ordinance G-13-87;
Lots 2, 4, 6, 8, 10, 12, 14, 16, and 18 in John M.E. Riedel's Addition as
recorded in Plat Book 3, page 15 in the Office of the Recorder of Allen County,
Indiana.
That part of Reidel Place (Victor Avenue) contiguous to the South line of Lot 6
and the North Line of Lot 8 in said John M.E. Riedel's Addition to the City of
Fort Wayne, vacated by General Ordinance G-13-87.
All that part of a 10 foot wide alley lying east of Lots 1, 2, and 3 in John
Riedel's Addition to the City of Fort Wayne and west of lots 2, 4, 6, 8, 10, 12,
14, 16 and 18 in John M.E. Riedel's Addition to the City of Fort Wayne, vacated
by General Ordinance G-13-87.
Northwest Parcel:
A 1.260 acre parcel being part of the Northwest Quarter of Section 36, Township
31 North, Range 12 East of the Second Principal Meridian in Allen County,
Indiana, being the combination of the following described tracts:
A 0.455 acre parcel being part of Tract 3 together with Tract 4 described in
Document Number 85-18646, both in the Office of the Recorder of Allen County,
Indiana, more particularly described as follows:
Commencing at the Southwest corner of said Northwest Quarter: thence north 00
degrees 16 minutes 52 seconds West (assumed bearing based on North 90 degrees 00
minutes 00 seconds
<PAGE>
East for the centerline of State Boulevard, being also the East-West centerline
of said Section 36) a distance of 27.5 feet along the West line of said
Northwest Quarter to a point on the North right-of-way line of State Boulevard
referenced by a 6 inch by 4 inch by 2 foot high concrete and steel post found
0.26 feet South and 0.97 feet East, said point being the Point of Beginning of
the herein described tract; thence continuing North 00 degrees 16 minutes 52
seconds West, a distance of 150.00 feet along the West line of said Northwest
Quarter to a 5/8 inch steel rebar with Karst ID cap set at the Southwest corner
of an alley in Eade's Addition to the City of Fort Wayne, recorded in Plat Book
7, page 94 in the Office of the Recorder of Allen County, Indiana; thence North
90 degrees 00 minutes 00 seconds East, a distance of 82.33 feet along the South
line of said alley to a 5/8 inch steel rebar with Karst ID cap set at the
Northwest corner of said Tract 4; thence continuing North 90 degrees 00 minutes
00 seconds East, a distance of 50.00 feet along the North line of said Tract 4;
thence South 00 degrees 09 minutes 16 seconds East, a distance of 150.00 feet
along the East line of said Tract 4 to the North right-of-way line of State
Boulevard; thence North 90 degrees 00 minutes 00 seconds West, a distance of
132.00 feet along the North right-of-way line of State Boulevard to the Point of
Beginning, containing 0.455 acres, more or less.
Together with:
A 0.280 acre parcel being part of Tract 3 described in Document Number 85-18646
in the Office of the Recorder of Allen County, Indiana, more particularly
described as follows:
Commencing at the Southwest corner of said Northwest Quarter; thence North 00
degrees 16 minutes 52 seconds West, (assumed bearing based on North 90 degrees
00 minutes 00 seconds East for the centerline of State Boulevard, being also the
East-West centerline of said Section 36, a distance of 308.00 feet along the
West line of said Northwest Quarter to a 5/8 inch steel rebar with Karst ID cap
set on the South right-of-way line of Fricke Avenue and the Northwest corner of
Lot A in Eade's Addition to the City of Fort Wayne, recorded in Plat Book 7,
page 94 in the Office of the Recorder of Allen County, Indiana; thence North 90
degrees 00 minutes 00 seconds East, a distance of 82.68 feet (83 feet -Plat)
along said South right-of-way line to the Northeast corner of said Lot A and
Northwest corner of Lot 31 in said Eade's Addition to the City of Fort Wayne;
thence South 00 degrees 05 minutes 10 seconds East, a distance of 148.00 feet
along the Westerly line of said Lot 31 to a 5/8 inch steel rebar with Karst ID
cap set on the North line of an alley in said Eade's Addition to the City of
Fort Wayne; thence North 90 degrees 00 minutes 00 seconds West, a distance of
82.35 feet along the North line of said alley to a 5/8 inch steel rebar with
Karst ID cap set on the West line of said Northwest quarter; thence North 00
degrees 16 minutes 52 seconds West, a distance of 148.00 feet along the West
line of said Northwest Quarter to the Point of Beginning, containing 0.280
acres, more or less.
Together with: Lots 30, 31, and 32 in Eade's Addition to the City of Fort Wayne
as recorded in Plat Book 7, page 94, in the Office of the Recorder of Allen
County, Indiana.
Also Together With:
<PAGE>
The East-West alley from the East right-of-way line of Eade Avenue to the West
boundary line of Lot 31 in said Eade's Addition to the City of Fort Wayne, lying
between Lots 30 and 31 and Lot 32 in said Eade's Addition as vacated by Civil
Suit CC-78-576, by decree entered in Circuit Order Book 206, page 385.
North Parcel:
Lots 37 and 38 in Eade's Addition to the City of Fort Wayne as recorded in Plat
Book 7, page 94, in the Office of the Recorder of Allen County, Indiana.
Northeast Parcel:
Lots 25, 26, 27, and 28 and the East 15 feet of Lot Number 24 in Fricke's
Amended Addition to the City of Fort Wayne, as recorded in Plat Book 7, page 56,
in the Office of the Recorder of Allen County, Indiana.
Excepting for Street Dedication:
Part of Lot 28 Fricke's Amended Addition as recorded in Plat Book 7, page 56 in
the Office of the Allen County Recorder, more particularly described as follows:
Beginning at the Southeast corner of said Lot 28; thence North a distance of 13
feet along the East line of said Lot 28; thence Southwesterly to a point on the
South line of said Lot 28, 13 feet West of said Southeast corner; thence East,
13 feet along the South line of said Lot 28 to the Point of Beginning.
Part of Lot 28 Fricke's Amended Addition as recorded in Plat Book 7, page 56 in
the Office of the Allen County Recorder, more particularly described as follows:
Beginning on the East line of said Lot 28 at a point located 137 feet South of
the Northeast corner of said Lot 28; thence Southwesterly a distance of 18.38
feet to the North right-of-way line of State Boulevard; thence West along said
North right-of-way line a distance of 10 feet; thence Northeasterly a distance
of 32.53 feet to the West right-of-way line of Parnell Avenue; thence South
along said West right-of-way line a distance of 10 feet to the Point of
Beginning containing 180 square feet more or less.
<PAGE>
B
Property No. 2
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PARCEL I:
A portion of the Northwest quarter of Section 10, Township 27 North, Range 14
East, Decatur, Adams County, Indiana, more particularly described as follows:
Commencing at a point on the west line of the Northwest quarter of Section 10,
Township 27 North, Range 14 East, Decatur, Adams County, Indiana, said point
being located 1000 feet northerly of the southwest corner of said quarter;
thence northerly along said west line 393.28 feet to the southwest corner of
that real estate as described in Deed Record 163 on page 239 in the records of
the Adams County Recorder, said corner being located 1260 feet southerly of the
northwest corner of said quarter; thence easterly at right angles to said west
line and along the south line of said real estate 519.3 feet to the southeast
corner thereof; thence southerly deflecting 89 degrees 54 minutes right 389.12
feet to the northeast corner of that real estate as described in Deed Record 181
on page 509; thence westerly parallel to the south line of said quarter 520 feet
to the place of commencement.
ALSO:
Real Estate in the Northwest Quarter of Section 10, Township 27 North, Range 14
East in Adams County, Indiana, specifically described as follows:
Commencing at a point on the West line of Section 10-27-14 located a distance of
860 feet South of the Northwest corner of said Section 10-27-14, thence East a
distance of 519.3 feet to a point; thence South a distance of 400 feet to a
point, thence West a distance of 519.3 feet to a point on the West line of said
Section 10-27-14, thence North along said West section line a distance of 400
feet to the point of beginning.
PARCEL II:
A portion of the northwest quarter of section 10, T 27 N, R 14 E, Adams County,
Indiana; more particularly described as follows:
Commencing at a point on the west line of the northwest quarter of section 10, T
27 N, R 14 E, Adams County, Indiana; said point being located 860.00 feet
(868.00 deed) southerly of the northwest corner of said quarter; thence easterly
on and upon the north line of deed record 186 pages 5 & 6 (D.R. 163 page 239)
519.99 feet (519.00 feet deed) thence northerly parallel to said west line
126.13 feet to a 5/8 inch iron rebar found; thence westerly parallel to the
north line of said quarter, deflecting 90 degrees 27 minutes left, 300.00 feet
to a point; thence northerly parallel to the west line of said quarter 20.00
feet to a point; thence westerly parallel to the north
<PAGE>
line of said quarter 220.00 feet to a point; thence southerly on and upon the
west line or said quarter 142.00 feet to the point of beginning. Containing 1.58
acres more or less.
Being also described as:
Part of the Northwest Quarter of Section 10 Township 27 North, Range 14 East of
the Second Principal Meridian in Adams County, Indiana, more particularly
described as follows: Commencing at a Harrison Marker on the centerline of U.S.
Highway #27 at the Northwest corner of said Northwest Quarter; thence South 00
degrees 00 minutes 00 seconds East, (assumed bearing and basis of bearings to
follow), a distance of 718.00 feet along the West line of said Northwest Quarter
and said centerline to the POINT OF BEGINNING of the herein described tract;
thence North 89 degrees 33 minutes 42 seconds East, a distance of 220.00 feet
parallel with the North line of said Northwest Quarter; thence South 00 degrees
00 minutes 00 seconds West, a distance of 19.85 feet parallel with the West line
of said Northwest Quarter; thence North 89 degrees 33 minutes 42 seconds East, a
distance of 300.00 feet parallel with the North line of said Northwest Quarter:
thence South 00 degrees 00 minutes 00 seconds West, a distance of 126.13 feet
parallel with the West line of said Northwest Quarter; thence South 90 degrees
00 minutes 00 seconds West, a distance of 0.69 feet to a ?" steel rebar thence
South 00 degrees 00 minutes 00 seconds West, a distance of 400.00 feet, parallel
with the West line of said Northwest Quarter; thence South 00 degrees 06 minutes
02 seconds East, a distance of 388.80 feet to the North line of an existing
tract, recorded in Deed Record 190, page 394 in the Office of the Recorder of
Adams County, Indiana; thence South 89 degrees 31 minutes 58 seconds West, a
distance of 520.00 feet parallel with the South line of said Northwest Quarter
and the North line of said tract described in Deed Record 190, page 394 to the
West line of said Northwest Quarter and the centerline of said U.S. Highway #27;
thence North 00 degrees 00 minutes 00 seconds East, a distance of 935.04 feet
along said West line and said centerline to the Point of Beginning. Containing
11.014 acres, more or less.
<PAGE>
C
Property No. 3
--------------
TRACT A
PARCEL I
Lot Six (6) in Block Eight (8) in Parkland, an Addition to the City of
Evansville, as per plat thereof, recorded in Plat Book F, pages 168 and 169 in
the office of the Recorder of Vanderburgh County, Indiana.
PARCEL II
Beginning at the intersection of a twelve-foot alley with the west line of North
Lafayette Avenue at a distance of 12 feet south of the southeast corner of Lot
Six (6) of Block Eight (8) in said Parkland; thence along the west line of North
Lafayette Avenue South 00 degrees 09 minutes 43 seconds East 198.95 feet to the
north right of way line of S.R. 66 and Diamond Avenue (formerly U.S. Highway
460); thence along said right of way line the following three (3) courses:
South 44 degrees 56 minutes 29 seconds West 28.39 feet; thence South 89 degrees
44 minutes 02 seconds West 227.00 feet, thence North 45 degrees 04 minutes 18
seconds West 35.24 feet to a point on the east line of North Heidelbach Avenue;
thence along said east line of North Heidelbach Avenue North 00 degrees 09
minutes 43 seconds West 323.57 feet to the northwest corner of Lot Ten (10) of
said Block Eight (8); thence along the north line of said Lot Ten (10) North 89
degrees 14 minutes 00 seconds East 130.00 feet to the Northeast corner thereof;
thence along the east line of Lots Ten (10), Nine (9), Eight (8) and Seven (7)
of said Block Eight (8) South 00 degrees 09 minutes 43 seconds East 160.00 feet
to the southeast corner of said Lot Seven (7); thence along the south line of a
12 foot alley North 89 degrees 14 minutes 00 seconds East 12.00 feet, thence
along the east line of said 12 foot alley North 00 degrees 09 minutes 43 seconds
West 28.00 feet; thence along the south line of a 12 foot alley coincident with
the south line of Lot Six (6) of said Block Eight (8) in Parkland North 89
degrees 14 minutes 00 seconds East 130.00 feet to the point of beginning.
EXCEPT:
Lot Ten (10) in Block Eight (8) in Parkland, an Addition to the City of
Evansville, as per plat thereof, recorded in Plat Book F, pages 168 and 169 in
the office of the Recorder of Vanderburgh county, Indiana.
<PAGE>
TRACT B
Part of Block One (1) in Parkland Annex, an Addition to the City of Evansville,
as per plat thereof, recorded in Plat Book G, Pages 238 and 239 in the office of
the Recorder of Vanderburgh County, Indiana, more particularly described as
follows:
Beginning at the northeast corner of said Block One (1); thence along the north
line of said Block One (1) and the south line of Negley Avenue South 89 degrees
14 minutes 00 seconds West One Hundred (100.00) feet to the Northeast corner of
the land described in a certain deed to Curley's Auto Painting and Body Repair,
Inc. recorded in Deed Record 567, Page 175 in the office of the Recorder of
Vanderburgh County; thence along the east line of said Curley's Auto Painting
South 00 degrees 46 minutes 00 seconds East Fifty (50.00) feet to the Southeast
corner thereof; thence along the South line of said Curley's Auto Painting South
89 degrees 14 minutes 00 seconds West One Hundred Twenty and Fifty-five
Hundredths (120.55) feet to the East line of the land described in a certain
deed to Curley's Auto Painting and Body Repair, Inc. recorded in Deed Record
591, Page 70 in the office of said Recorder; thence along said East line South
00 degrees 08 minutes 29 seconds East One Hundred Twelve and Ninety-Two
Hundredths (112.92) feet to the Southeast corner of said Curley's Auto Painting
land described in Deed Record 591, page 70; thence along the South line of said
Curley's Auto Painting land described in Deed Record 591, page 70 South 89
degrees 14 minutes 00 seconds West One Hundred (100.00) feet to the Southwest
corner thereof; thence South 00 degrees 08 minutes 29 seconds East Two Hundred
Fifty-seven and Twenty-five Hundredths (257.25) feet to the North limited access
right of way line of S.R. 66 and Diamond Avenue (formerly U.S. Highway 460);
thence along said North right of way line the following three courses: North 89
degrees 44 minutes 02 seconds East Eighty-one and Sixty-four Hundredths (81.64)
feet thence South 82 degrees 36 minutes 15 seconds East Two Hundred Twenty-five
and One Hundredths (225.01) feet; thence North 44 degrees 44 minutes 02 seconds
East Twenty-one and Eighty-seven Hundredths (21.87) feet to a point on the East
line of Block One (1) in Parkland Annex and the West line of North Heidelbach
Avenue; thence along said East line of Block One (1) and the West line of North
Heidelbach Avenue North 00 degrees 09 minutes 43 seconds West Four Hundred
Thirty-seven and Fifty Hundredths (437.50) feet to the point of beginning.
<PAGE>
D
Property No. 4
--------------
A parcel of land located in the Northwest One-quarter of Section 22, and part of
Block 36, Section I of Interstate Industrial Park, Allen County, Indiana and
more particularly described as follows:
Commencing at the intersection of the South line of Block 36 in Section I of
Interstate Industrial Park, being the North right-of-way line of Research Drive
and the East right-of-way line of Executive Drive as marked by a 5/8 inch iron
pin found with cap stamped Karst; thence North 90 degrees 00 minutes West
(bearing basis for description) along said South line of Block 36, a distance of
49.55 feet to a P.K. nail set in the drive pavement at the point of beginning.
Beginning at the above described point; thence continuing North 90 degrees 00
minutes West along the last described line, a distance of 594.0 feet to a 5/8
inch iron pin set with cap stamped PC 50920011; thence North 0 degrees 55
minutes 47 seconds East, a distance of 405.81 feet to a 5/8 inch iron pin found
with cap stamped Karst on the South right-of-way line of Interstate Highway #69;
thence North 89 degrees 59 minutes East along said South right-of-way line, a
distance of 587.14 feet to a 5/8 inch iron pin set with cap stamped PC 50920011;
thence South 0 degrees 02 minutes 19 seconds East, a distance of 405.93 feet to
the point of beginning, containing 5.503 acres of land, more or less.
TOGETHER WITH:
Ingress-Egress easement over a portion of Block 36 in Interstate Industrial Par,
Section I and more particularly described as follows:
Commencing at the intersection of the South line of Block 36, in Section I of
Interstate Industrial Park, being the North right-of-way line of Research Drive
and the East right-of-way line of Executive Drive; thence North 90 degrees 00
minutes West (bearing basis for description) along said South line of Block 36,
a distance of 24.55 feet to the point of beginning.
Beginning at the above described point; thence North 90 degrees 00 minutes West,
a distance of 25.0 feet; thence North 0 degrees 02 minutes 19 seconds West, a
distance of 115.0 feet; thence South 90 degrees 00 minutes East, a distance of
25.0 feet; thence South 0 degrees 02 minutes 19 seconds East, a distance of
115.0 feet to the point of beginning.
<PAGE>
E
Property No. 5
--------------
All that tract or parcel of land lying and being in land Lot 323 of the
18th District of DeKalb County, Georgia and being more particularly described as
follows:
Beginning at the intersection of the northwestern right of way line of
Peachtree Industrial Boulevard (200 foot right of way) and the southern right of
way of North Shallowford Road (60 foot right of way) and running thence along
the northwestern right of way line of Peachtree Industrial Boulevard South 40
degrees 42 minutes 42 seconds West a distance of 125.20 feet to an iron pin
found; continuing thence along said right of way line South 38 degrees 42
minutes 42 seconds West a distance of 474.63 feet to an iron pin found; thence
leaving said right of way line and running North 51 degrees 19 minutes 07
seconds West a distance of 182.07 feet to an iron pin found; running thence
South 89 degrees 04 minutes 01 seconds West a distance of 180.62 feet to a nail
found; running thence North 00 degrees 58 minutes 40 seconds West a distance of
69.96 feet to a nail found; running thence south 89 degrees 09 minutes 00
seconds West a distance of 199.98 feet to an iron pin found; running thence
North 00 degrees 56 minutes 45 seconds West a distance of 354.76 feet to an iron
pin found on the southern right of way line of North Shallowford Road; running
thence along said right of way line the following courses and distances: South
83 degrees 05 minutes 46 seconds East a distance of 51.51 feet to an iron pin
found; South 79 degrees 08 minutes 25 seconds East a distance of 99.38 feet to
an iron pin found; South 77 degrees 36 minutes 47 seconds East a distance of
53.22 feet to an iron pin found; South 77 degrees 21 minutes 12 seconds East a
distance of 47.09 feet to a point; South 78 degrees 13 minutes 46 seconds East a
distance of 101.52 feet to an iron pin found; South 81 degrees 13 minutes 49
seconds East a distance of 102.29 feet to a point; South 85 degrees 20 minutes
50 seconds East a distance of 102.08 feet to an iron pin found; e South 89
degrees 21 minutes 04 seconds East a distance of 123.37 feet to an iron pin
found; North 84 degrees 32 minutes 33 seconds East a distance of 166.62 feet to
an iron pin found; and North 82 degrees 17 minutes 42 seconds East a distance of
70.76 feet to the POINT OF BEGINNING; said tract being shown on and described
according to an ALTA/ACSM Land Title Survey for Thomas W. Kelley, Capital
Automotive, L.P., a Delaware limited partnership, its successors in interest and
assigns and Chicago Title Insurance Company, dated April 13, 1998, revised May
28, 1998 prepared by Watts & Browning Engineers, Inc., bearing the seal and
certification of V.T. Hammond, Georgia Registered Land Surveyor No. 2554,
containing 6.20686 acres (270,371 square feet) according to said survey, which
said survey is by this reference incorporated herein and made a part hereof.
TOGETHER WITH the non-exclusive, permanent and perpetual easements appurtenant
to the above-described tract of land described in and reserved by that certain
Limited Warranty Deed by and between Hix H. Green, Jr. and Tuxedo Partners,
Inc., dated July 21, 1989, recorded in Deed Book 6480, Page 739, Records of
DeKalb County, Georgia.
<PAGE>
F
Property No. 6
--------------
All that tract or parcel of land lying and being in Land Lots 517 and 548 of the
1st District and the 2nd Section of Fulton County, Georgia and being more
particularly described as follows:
To reach the point of beginning: commence at the intersection formed by the
------------------
northwesterly right-of-way of Georgia State Highway No. 9 (AKA Alpharetta
Hwy/Road) (variable right-of-way) and the southerly right-of-way of Hembree Road
(variable right-of-way) and proceed thence southwesterly along the northwesterly
right-of-way of Georgia State Highway No. 9 (variable right-of-way) for the
following courses and distances: South 35 degrees 13 minutes 52 seconds West,
334.51 feet; thence South 74 degrees 21 minutes 57 seconds East, 9.25 feet;
thence South 35 degrees 14 minutes 10 seconds West, 341.57 feet; thence North 54
degrees 45 minutes 50 seconds West, 10.00 feet; thence South 35 degrees 14
minutes 10 seconds West, 13.92 feet; thence South 79 degrees 05 minutes 12
seconds East, 10.97 feet; thence South 35 degrees 14 minutes 10 seconds West,
151.76 feet; thence North 78 degrees 12 minutes 35 seconds West, 10.49 feet to
the point of beginning; from the point of beginning thus established running
------------------ ------------------
thence southwesterly along the northwesterly right-of-way of Georgia State
Highway No. 9 (variable right-of-way) the following courses and distances: South
35 degrees 14 minutes 10 seconds West, 205.80 feet; thence along the arc of a
curve to the left 192.75 feet (said arc having a chord distance of 192.74 on a
bearing of South 34 degrees 31 minutes 06 seconds West and a radius of 7691.437
feet); running thence North 81 degrees 43 minutes 05 seconds West, and departing
the northwesterly right-of-way of Georgia State Highway No. 9, a distance of
1056 feet, more or less, to a point on the centerline of Foe Killer Creek;
running thence northeasterly along the center line of Foe Killer Creek, and
following the meanderings thereof, a distance of 359 feet, more or less, to a
point; running thence South 80 degrees 29 minutes 04 seconds East and departing
the center line of Foe Killer Creek, a distance of 881 feet, more or less, to a
point; running thence North 33 degrees 46 minutes 56 seconds East a distance of
40.34 feet to a point; running thence South 78 degrees 38 minutes 27 seconds
East a distance of 282.60 feet to the northwesterly right-of-way of Georgia
State Highway No. 9 (variable right-of-way) and the point of beginning; said
property containing 8.93011 acres or 388,996 square feet according to "ALTA/ACSM
Land Title Survey for Thomas W. Kelley, Capital Automotive, L.P., a Delaware
limited partnership, Capital Automotive REIT, a Maryland Real Estate Investment
Trust and Chicago Title Insurance Company", dated March 18, 1997, last revised
May 8, 1998, prepared by Watts and Browning Engineers, Inc., bearing the seal
and certification of V.T. Hammond, Georgia Registered Land Surveyor No. 2554,
which said survey is by this reference incorporated herein and made a part
hereof.
<PAGE>
G
Property No. 7
--------------
TRACT I
All that tract or parcel of land lying and being in Land Lot 323 of the 18th
District of DeKalb County, Georgia, and being more particularly described as
follows:
BEGINNING at an iron pin found (1/2 inch reinforcing rod) on the northwestern
right of way line of Peachtree Industrial Boulevard (One Hundred Fifty (150')
foot right of way), a distance of 200.00 feet northeasterly as measured along
said right of way line from the point of intersection of the northwestern right
of way line of Peachtree Industrial Boulevard and the northeastern right of way
line of North Peachtree Road (Forty (40') foot right of way), and running thence
north 50 degrees 05 minutes 57 seconds west a distance of 175.00 feet to a
point; running thence south 39 degrees 46 minutes 00 seconds west a distance of
61.48 feet to an iron pin found (1/2 inch reinforcing rod) on the northeastern
right of way line of North Peachtree Road (Eighty (80') foot right of way at
this point), said iron pin found being hereinafter referred to as Point "A"
[said Point A can be further located by commencing at the point of intersection
of the northeastern right of way line of North Peachtree Road (Forty (40') foot
right of way) and the northwestern right of way line of Peachtree Industrial
Boulevard One Hundred Fifty (150') foot right of way) and running thence in a
northwesterly direction along the northeastern right of way line of North
Peachtree Road a distance of 207.3 feet to an iron pin found (5/8 inch open top
pipe); running thence north 39 degrees 46 minutes 00 seconds east along an
offset in said right of way line a distance 26.95 feet to an iron pin found on
the northeastern right of way line of the eighty (80') foot right of way of
North Peachtree Road, which said iron pin found is Point A]; running thence
north 08 degrees 14 minutes 08 seconds west along said right of way line a
distance of 132.67 feet to an iron pin found (1/2 inch reinforcing rod); running
thence north 06 degrees 01 minutes 19 seconds west along said right of way line
a distance of 62.42 feet to a point; thence leaving said right of way line and
running south 88 degrees 17 minutes 38 seconds east a distance of 172.43 feet to
a point; running thence north 80 degrees 22 minutes 46 seconds east a distance
of 31.78 feet to an iron pin found (1/2 inch reinforcing rod); running thence
south 49 degrees 35 minutes 08 seconds east a distance of 162.55 feet to an iron
pin found (1 inch open top pipe-bent, on the northwestern right of way line of
Peachtree Industrial Boulevard; running thence south 39 degrees 57 minutes 12
seconds west along said right of way line a distance of 199.81 feet to the iron
pin found at the POINT OF BEGINNING; said tract of land being described
according to ALTA/ACSM Land Title Survey for Thomas W. Kelley, Capital
Automotive, L.P., a Delaware limited partnership, its successors in interests
and assigns and Chicago Title Insurance Company, dated February 11, 1997, last
revised May 28, 1998, prepared by Watts & Browning Engineers, Inc., bearing the
seal and certification of V.T. Hammond, Georgia Registered Land Surveyor No.
2554; said property containing 1.21132 acres or 52,765 square feet according to
said survey, which said survey by this reference is incorporated herein and made
a part hereof.
<PAGE>
TRACT II
ALL THAT TRACT or parcel of land lying and being in Land Lot 323 of the 18th
District of DeKalb County, Georgia, and being more particularly described as
follows:
Beginning at an iron pin found at the intersection formed by the northeasterly
right-of-way of North Peachtree Road (40 foot right-of-way) and the
northwesterly right-of-way of Peachtree Industrial Boulevard (150 foot right-of-
way) and running thence North 17 degrees 29 minutes 32 seconds West along the
northeasterly right-of-way of North Peachtree Road (40 foot right-of-way) a
distance of 207.04 feet to a point; running thence North 39 degrees 46 minutes
00 seconds East, and departing the 40 foot right-of-way of North Peachtree Road,
a distance of 88.43 feet to an iron pin found; running thence South 50 degrees
05 minutes 57 seconds East a distance of 175.00 feet to an iron pin found on the
northwesterly right-of-way of Peachtree Industrial Boulevard (150 foot right-of-
way); running thence South 40 degrees 00 minutes 42 seconds West along the
northwesterly right-of-way of Peachtree Industrial Boulevard (150 foot right-of-
way) a distance of 200.00 feet to the northeasterly right-of-way of North
Peachtree Road (40 foot right-of-way) and the point of beginning; said property
containing 0.57851 of an acre or 25,200 square feet.
As shown on ALTA/ACSM Land Title Survey for Capital Automotive, L.P., a Delaware
limited partnership, its successors in interests and assigns and Chicago Title
Insurance Company, dated August 19, 1997, revised November 12, 1997, last
revised May 28, 1998, prepared by Watts & Browning Engineers, Inc., bearing the
seal and certification of V.T. Hammond, Georgia Registered Land Surveyor No.
2554, which said survey is by this reference incorporated herein and made a part
hereof.
<PAGE>
H
Property No. 8
--------------
All that tract or parcel of land lying and being in Land Lot 236 of the 6th
Land District of Gwinnett County, Georgia, being more particularly described as
follows:
TO FIND THE TRUE POINT OF BEGINNING, BEGIN at the corner common to Land
Lots 231, 232, 235, and 236, aforesaid district and county, and run along the
land lot line common to Land Lots 235 and 236 North 31 degrees 22 minutes 00
seconds West 612.32 feet to an iron pin found at the TRUE POINT OF BEGINNING;
from the TRUE POINT OF BEGINNING as thus established, leave said land lot line
and run THENCE North 87 degrees 21 minutes 18 seconds West 599.93 feet to an
iron pin found, thence South 83 degrees 21 minutes 55 seconds West 253.92 feet
to an iron pin set on the northeastern right of way line of Pleasant Hill Road
(120 foot right of way); thence run along said right of way line North 42
degrees 26 minutes 19 seconds West 277.90 feet to an iron pin set; thence leave
said right of way and run North 52 degrees 54 minutes 16 seconds East 785.22
feet to a one inch open top pipe found on the land lot line common to Land Lots
235 and 236; thence run along said land lot line South 31 degrees 22 minutes 00
seconds East 792.92 feet to the iron pin found at the TRUE POINT OF BEGINNING;
said tract containing 8.837 acres and described according to ALTA/ACSM AS Built
Survey for Capital Automotive L.P., a Delaware limited partnership, Chicago
Title Insurance Company and Kelley Saturn of Atlanta, Inc., dated May 6, 1998,
prepared by Precision Planning, Inc., bearing the seal and certification of
Randall W. Dixon, Georgia Registered Land Surveyor No. 1678, said survey being
incorporated herein and made a part hereof by this reference.
<PAGE>
I
Property No. 9
--------------
Blocks 5 and 6, except the South 20 feet of Block 5, 14/69 Auto Mall, Section I,
according to the plat thereof, recorded in Plat Cabinet A, page 18 and as
Document Number 87-38637 in the office of the Recorder of Allen County, Indiana.
<PAGE>
J
Property No. 10
---------------
Block 4 and the South 20 feet of Block 5, 14/69 Auto Mall, Section I, according
to the plat thereof, recorded in Plat Cabinet A, page 18 and as Document Number
87-38637 in the office of the Recorder of Allen County, Indiana.
AND
Block 8, except the North 27.5 feet, 14/69 Auto Mall, Section I, according to
the plat thereof, recorded in Plat Cabinet A, page 18 and as Document Number 87-
38637 in the office of the Recorder of Allen County, Indiana.
<PAGE>
K
Property No. 11
---------------
Block 9, except the North 140 feet of Block 9, 14/69 Auto Mall, Section I,
according to the plat thereof, recorded in Plat Cabinet A, page 18 and as
Document Number 87-38637 in the office of the Recorder of Allen County, Indiana.
<PAGE>
L
Property No. 12
---------------
The North 140 feet of Block 9, 14/69 Auto Mall, Section I, according to the plat
thereof, recorded in Plat Cabinet A, page 18 and as Document Number 87-38637 in
the office of the Recorder of Allen County, Indiana.
<PAGE>
Schedule 1.2(a) -POSSIBLY EXCLUDED PROPERTY
--------------------------
To be provided withing 10 days of the Commencement Date
<PAGE>
SCHEDULE 1.3(a) - UNITS AND CASH FOR TRANSFERRED PROPERTIES
-----------------------------------------------------------
See Schedule 1.2
<PAGE>
SCHEDULE 1.3(b) - MORTGAGE DEBT
-------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 2.1 - PRIOR OCCUPANTS
------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 3.1 - SCHEDULED EXCEPTIONS
-----------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.3 - LIMITATIONS ON SELLERS'/CONTRIBUTORS' OWNERSHIP
--------------------------------------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.13.6(a) - THE TREATMENT, STORAGE AND DISPOSAL LOCATIONS FOR
----------------------------------------------------------------------
SUBSTANCES OF CONCERN
---------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.13.6(b) - STORAGE TANKS
----------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.13.6(f) - ENVIRONMENTAL PERMITS AND AUTHORIZATIONS
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.14 - INSURANCE
-------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 7.17 - SERVICE CONTRACTS AND MANAGEMENT CONTRACTS
----------------------------------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
SCHEDULE 10.3 - CERTAIN PROPERTIES IN CONNECTION WITH ENVIRONMENTAL REPORTS
---------------------------------------------------------------------------
To be provided within 10 days of the Commencement Date
<PAGE>
AMENDMENT TO
REAL PROPERTY PURCHASE AND CONTRIBUTION AGREEMENT
THIS AMENDMENT (the "Amendment") is made effective as of April 14, 1998, to
the Real Property Purchase and Contribution Agreement (the "Agreement") by and
between Capital Automotive L.P., a Delaware limited partnership (the
"Partnership"), Capital Automotive REIT, a Maryland real estate investment trust
(the "Company"), and Thomas W. Kelley and James E. Kelley (the "Kelleys") and
Midwest Auto Realty Co., L.P. ("Midwest" and together with the Kelleys the
"Sellers/Contributors").
RECITALS
A. The Partnership, the Company and Sellers/Contributors entered into
the Agreement on April 14, 1998, by which the Sellers/Contributors agreed to
sell and contribute certain Properties identified on Schedule 1.2 of the
Agreement to the Partnership.
B. The parties hereto have agreed to adjust the number of and
computation of value of Units to be issued to the Sellers/Contributors pursuant
to the Agreement as well as certain other terms and conditions of the Agreement.
D. The parties desire to amend the Agreement and to undertake certain
other obligations as provided in this Amendment.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Summary of Terms The "Closing Dates" set forth in the Summary of
----------------
Terms shall be deleted and replaced by the following provision:
INITIAL CLOSING DATE June 17, 1998
ADDITIONAL CLOSING DATES To Be Determined but no later
than October 5, 1998
2. Definitions. Sections 1.1.8 and 1.1.9 of the Agreement shall be
-----------
deleted in their entirety and replaced by the following provisions:
<PAGE>
1.1.8 "Contributed Properties" means Property Number 4 on Schedule
--------
1.2 with a street address of 1818 Research Drive, Fort Wayne,
---
Indiana which the parties have determined will be transferred
and conveyed by the Sellers/Contributors to the Partnership in
exchange for Units in the Partnership. "Purchased Properties"
means all those Properties on Schedule 1.2 other than the
------------
Contributed Properties which the parties have determined will
be transferred and conveyed by the Sellers/Contributors to the
Partnership for cash.
1.1.9 "Contribution Amount" means the amount of the acquisition cost
of the Contributed Properties, for which the Sellers shall
receive Units, as identified on Schedule 1.3(a) which
---------------
Contribution Amount shall be used in the calculation of the
number of Units to be issued to the Contributors at Closing in
exchange for their contribution of the Contributed Properties
to the Partnership. "Aggregate Contribution Amount" means the
total amount of the acquisition cost of each Contributed
Property for which the Sellers shall receive Units.
3. Unit Price Adjustment. Section 1.3.2 of the Agreement shall be
---------------------
deleted in its entirety and replaced by the following provision:
1.3.2 The number of Units to be issued in consideration for each
Contributed Property (the "Contribution Value") shall be
calculated as follows. The Sellers shall determine the
quotient of the Contribution Amount for such Property minus
the Mortgage Debt (as hereafter defined) encumbering such
Property divided by the value of the Shares calculated and
limited as follows: The fair market value of the Shares shall
equal the lesser of the average of the closing price of the
Shares during the thirty days ending the second to last
business day prior to the Closing for the Properties to be
transferred at that Closing or the closing price of the Shares
on the second to last business day prior to the Closing for
the Properties to be transferred at that Closing.
4. Closing Date. Section 5.1.1 of the Agreement shall be deleted in its
------------
entirety and replaced by the following provision:
5.1.1 The Closing on the Properties indicated on Schedule 1.2 as
------------
included in the first closing ("Initial Closing") shall occur
no later than June 17, 1998 at the location and time
identified in the Summary of Terms, or such other time as the
Sellers/Contributors and the Company shall agree in writing,
provided that all conditions to Closing have been satisfied or
waived.
2
<PAGE>
5. Transaction Costs. The first sentence of Section 5.5.1 of the
-----------------
Agreement shall be deleted in its entirety and replaced by the following
sentence:
Except for the costs of appraisals ordered by the Company and
Partnership, the Sellers/Contributors shall pay all costs
(including, but not limited to, any recordation and transfer
taxes, current ALTA surveys, title insurance (including all
special endorsements), environmental reports the
Sellers/Contributors have agreed hereunder to pay including
"Phase I" environmental assessments, searches made pursuant to
Section 3.2.2 hereof, and fees and expenses of going to record
in connection with the transfer by the Sellers/Contributors of
the Properties (collectively referred to as the "Closing
Costs"), provided that the Partnership shall pay Three Hundred
--------
Eighty Five Thousand Seven Hundred Twenty One Dollars
($385,721) of the Closing Costs in connection with the
Properties ("Partnership Closing Cost Amount") closed in the
Initial Closing, allocated among such Properties as determined
by the Sellers/Contributors, by paying the Partnership Closing
Cost Amount to the Sellers/Contributors in connection with the
Initial Closing.
6. Due Diligence Period. Section 10.1 of the Agreement shall be deleted
--------------------
in its entirety and replaced by the following provision:
10.1 Due Diligence Period. The "Due Diligence Period" shall
--------------------
be the period beginning with the Effective Date and ending
June 11, 1998. The Due Diligence Period may be extended by
mutual consent of the parties.
7. Schedules and Exhibits. All schedules and exhibits to the Agreement
----------------------
shall be deleted in their entirety and replaced by the schedules and exhibits
attached hereto.
8. Reaffirmation; Intention to be Bound. The parties hereto reaffirm
------------------------------------
that the representations and warranties made by each of the parties in the
Agreement are true and accurate as of the date hereof. The parties executing
this Amendment, on behalf of themselves, their assigns and successors, hereby
acknowledge and reaffirm their intention to be bound by the terms and conditions
of the Agreement.
9. Counterparts. This Amendment may be executed in any number of
------------
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
[SIGNATURES ON FOLLOWING PAGE]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
WITNESS CAPITAL AUTOMOTIVE REIT
By: /s/ By: /s/ David S. Kay (SEAL)
----------------------------- ----------------------------
Name: Name: David S. Kay
----------------------------- Title: Vice President, CFO and Secretary
Title:
-----------------------------
CAPITAL AUTOMOTIVE L.P.
WITNESS By: Capital Automotive REIT, as General
Partner
By: /s/ By: /s/ David S. Kay (SEAL)
----------------------------- ----------------------------
Name: Name: David S. Kay
----------------------------- Title: Vice President, CFO and Secretary
Title:
-----------------------------
WITNESS JAMES E. KELLEY:
By: /s/ By: /s/ James E. Kelley (SEAL)
----------------------------- ----------------------------
Name: James E. Kelley
----------------------------- Social Security # or TIN:
Title: ---------------
-----------------------------
WITNESS THOMAS W. KELLEY:
By: /s/ By: /s/ Thomas W. Kelley (SEAL)
----------------------------- ----------------------------
Name: Thomas W. Kelley
----------------------------- Social Security # or TIN:
Title: ---------------
-----------------------------
WITNESS MIDWEST AUTO REALTY CO., L.P.:
Social Security # or TIN: (SEAL)
----------
By: /s/ By: /s/ James E. Kelley (SEAL)
----------------------------- ----------------------------
Name: Name: James E. Kelley
----------------------------- Title: A General Partner
Title:
-----------------------------
WITNESS
By: /s/ By: /s/ Thomas W. Kelley (SEAL)
----------------------------- ----------------------------
Name: Name: Thomas W. Kelley
----------------------------- Title: A General Partner
Title:
-----------------------------
<PAGE>
Exhibit A
Partnership Agreement
Incorporated by reference to Exhibit 10.3 filed with Form S-11 Registration
Statement 33-41183.
5
<PAGE>
Exhibit 2.4(a)
Company Lease
Incorporated by reference to Exhibit 99.1 filed herewith.
6
<PAGE>
Exhibit 2.4(c)
Guaranty and Subordination Agreement
Incorporated by reference to Exhibit 99.1 filed herewith.
7
<PAGE>
Exhibit 5.2.1(e)
Prior Occupant Termination Letter
Incorporated by reference to Exhibit 99.1 filed herewith.
8
<PAGE>
Exhibit 5.2.1(i)
Investors Questionnaire
Incorporated by reference to Exhibit 99.1 filed herewith.
9
<PAGE>
Schedule 1.2
Schedule of Property, Ownership Interests in Properties and Purchase Price
Incorporated by reference to Exhibit 99.1 filed herewith
10
<PAGE>
Schedule 1.2(a)
Possibly Excluded Property
--------------------------
A portion of the northwest quarter of Section 10, Township 27 North, Range
14 East, Adams County, Indiana, more particularly described as follows:
Commencing at a point on the west line of the northwest quarter of Section 10,
Township 27 North, Range 14 East, Adams County, Indiana, said point being
located 528.00 feet southerly of the northwest corner of said quarter; thence
southerly along said west line 340.00 feet to the northwest corner of that real
estate described in Deed Record 163 on page 239 of the Adams County, Indiana,
Record; thence easterly along the north line of said real estate 519.00 feet;
thence northerly parallel to said west line 863.82 feet to a point on the north
line of said quarter; said point being located 520.00 feet easterly of the
northwest corner of said quarter; thence westerly along said north line 50.00
feet; thence southerly parallel to said west line 195.00 feet; thence westerly
parallel to said north line 224.00 feet; thence southerly parallel to said west
line 333.00 feet; thence westerly parallel to said north line 246.00 feet to the
place of commencement.
CONTAINING: 6.30 acres, more or less;
SUBJECT TO: The right of way of U.S. Highway #27 & #33 and all
legal easements.
11
<PAGE>
Exhibit 2.11(a)
CONSTRUCTION CONTRACTS for
KELLEY PONTIAC GMC TRUCK
1. Standard Form Agreement AIA Document A101-1997 between Thomas W. Kelley and
Witwer Construction, Inc. dated January 20, 1998 to consruct new Pontiac GMC
Truck facility with NBBJ Architects
12
<PAGE>
SCHEDULE 1.3(a) - UNITS AND CASH FOR TRANSFERRED PROPERTIES
-----------------------------------------------------------
See Schedule 1.2
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1.3(b)
- ---------------------------------------------------------------------------------------------------------
Dealership Street Address Approximate Mortgage
Mortgage @ 12-31-97 Holder
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kelley Chevrolet 500 East State Blvd. 2,000,000.00 Fort Wayne National Bank
Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
Courtesy Motors 1313 South 13th Street 1,500,000.00 NBD Bank, N.A.
(includes adjacent Decatur, IN
property under contract)
- ---------------------------------------------------------------------------------------------------------
Northside Chevrolet 2400 N. Heidelbach 2,375,000.00 Fort Wayne National Bank
Evansville, IN
- ---------------------------------------------------------------------------------------------------------
Midwest Auto Parts 1818 Research Drive 535,000.00 Fort Wayne National Bank
Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
Kelley Buick of Atlanta 5900 Peachtree 4,050,000.00 Wachovia
Chamblee, GA
- ---------------------------------------------------------------------------------------------------------
Kelley Buick of Roswell 11458 Alpharetta Highway 3,220,000.00 Wachovia
Roswell, GA
- ---------------------------------------------------------------------------------------------------------
Saturn of Chamblee 5764 Peachtree 2,160,000.00 Wachovia
(includes used car lot) Chamblee, GA and
5784 Peachtree
Chamblee, GA
- ---------------------------------------------------------------------------------------------------------
Saturn of Gwinnett 2520 Pleasant Hill 2,420,000.00 Wachovia
Duluth, GA
- ---------------------------------------------------------------------------------------------------------
Tom Kelley Pontiac GMC 633 Avenue of Autos 4,500,000.00 Fort Wayne National Bank
Truck Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
Tom Kelley Buick (includes 811 Avenue of Autos* NBD Bank, N.A.
present GMC Truck Fort Wayne, IN and
property) 818 Avenue of Autos
Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
Tom Kelley Cadillac 911 Avenue of Autos* 3,395,500.00 NBD Bank, N.A.
Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
Saturn of Fort Wayne 910 Avenue of Autos* NBD Bank, N.A.
Fort Wayne, IN
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*One Mortgage for the three (3) properties. Does not include undeveloped land.
<PAGE>
SCHEDULE 3.1
PROPERTY NO. 1
--------------
. The lien of all taxes for the year 1998 and thereafter, not yet due and
payable.
. Taxes for the second installment of 1997, due and payable in November of
1998 and taxes for all subsequent years.
. Easement over the West 10 feet of Lot 4 J.M.E. Riedel's Addition to
Indiana and Michigan Electric Company, recorded in Deed Record 421, page
283, with appurtenant rights, for lines and poles.
. Easement of 10 feet to Indiana and Michigan Electric Company, within
Riedel Place lying 10 feet West of a 45 foot line stretching from the
Northwest corner of Lot 8 John M.E. Riedel's Addition to the Southwest
corner of Lot 6 in said Addition, as recorded in Deed Record 730, page
399, with appurtenant rights which is encroached upon by a commercial
building as depicted in survey prepared by Richard K. Karst, dated May 29,
1998 as Job Number 98WS850.
. Easement to Indiana and Michigan Electric Company, lying in the Southwest
corner of Lot 8 in John M.E. Riedel's Addition, as described in Document
Number 74-20087, with appurtenant rights.
. Encroachment on State Boulevard Right of Way as evidenced by Encroachment
Report recorded on Document Number 82-17450.
. Street Dedication to the City of Fort Wayne, recorded as Document Number
82-17872, commencing at the Southeast corner of Lot Number 28, Fricke's
Amended Addition, thence North along the East line, 13 feet; thence
Southwesterly to a point on the South line of said lot being 13 feet West
of the Southeast corner; thence East 13 feet to the point of beginning.
. Easement recorded as Document Number 78-39378 to Indiana and Michigan
Electric Company, in, over, across and through an 8 foot strip across West
8 feet of South 180 feet of Tract 3. NOTE: Above description includes 10
foot alley not insured herein as shown by survey by John R. Donovan,
recorded in Plat Record 30, page 57, also South 5 feet of East 11 feet of
West 19 feet of Tract 3, with appurtenant rights.
. Easement recorded as Document Number 82-17307 to the City of Fort Wayne,
for sidewalk purposes across the South 7 feet to Tracts 3 and 4, and South
7 feet of Lot 32 Eade's Addition.
<PAGE>
. Easement recorded as Document 78-23828, to Indiana & Michigan Electric
Company, in 10 foot wide strip, formerly used for alley purposes, lying
South of and adjacent to the South lines of Lots 30 and 31 in Eade's
Addition, as affirmed in vacation of said alley in Civil Suit CC-78-576 by
decree entered in Circuit Order Book 206, page 385, with appurtenant
rights.
. Restrictions recorded in Deed Record 265, page 67, provide that no
dwelling shall be built upon Lot 32 of Eade's Addition which costs less
than $3,000.00.
. Restrictions recorded in Deed Record 265, page 97, provide that no
dwelling shall be built upon Lots 37 and 38 of Eade's Addition which costs
less than $3,000.00.
. Terms and conditions of the Agreement and Disclaimer, recorded as Document
Number 86-030154.
. Declaration of Restrictive Covenants recorded as Document Number 87-10588.
. Easements of public utilities, if any, located in that portion of street
and alleys vacated by G-13-87.
. Exception is made to a fence encroachment onto Forest Avenue as shown in
survey prepared by Richard K. Karst, dated May 29, 1998 as Job Number
98WS850.
<PAGE>
PROPERTY NO. 2
--------------
. The lien of all taxes for the year 1998 and thereafter, not yet
due and payable.
. Taxes for the second installment of 1997, due and payable in
November of 1998 and taxes for all subsequent years.
. Subject to a utility easement along the east twenty feet thereof
as shown by an easement from B.S.B. Realty, Inc., to the City of
Decatur, dated April 18, 1973, recorded October 19, 1973, in Deed
Record 154 pages 333-336. (Parcels I and II).
. Subject to the right-of-way of U.S. Highway #27 along the west
side thereof as shown by a Right of Way Grant from The Krick
Tyndall Company (predecessor in title) to the State of Indiana,
dated May 18, 1939, recorded April 26, 1974, in Deed Record 156,
pages 15-16. (Parcels I and II).
. Subject to a Distribution Easement from B.S.B. Realty, Inc., to
Indiana & Michigan Electric Company, dated July 24, 1973,
recorded August 28, 1973, in Deed Record 154 Pages 97-98. (Parcel
I).
. Subject to an electric easement from B.S.B. Realty, Inc., to
Indiana & Michigan Electric Company, dated July 24, 1973,
recorded August 28, 1973, in Deed Record 154 Pages 97-98. (Parcel
I).
. Subject to an electric easement from B.S.B. Realty Corp. to
Indiana & Michigan Electric Company, dated April 23, 1971,
recorded May 26, 1971, in Deed Record. 148, pages 142-143.
. Rights of entry pursuant to I.C. 36-9-27-33 over and upon the
insured premises within 75 feet of the BSB Legal Tile Drain as
shown on a survey by William E. Wemhoff, P.L.S. and as shown on a
Survey prepared by Richard K. Kurst, dated May 13, 1998 as Job
Number 98WH865.
. Subject to an easement for sewer purposes from B.S.B. Realty,
Inc. and Oakwood Community Associates, Inc. dated August 5, 1983,
recorded September 9, 1993 in Deed Record 179, pages 227-230.
. Terms and conditions of easement for ingress and egress recorded
in Deed Record 189, page 224.
. Terms and conditions of right of way grant recorded in Deed
Record 156, page 15.
<PAGE>
. Subject to an agreement between the City of Decatur, Indiana
through the Board of Public Works and Safety and B.S.B. Realty,
Inc., dated October 1, 1973 and recorded October 19, 1973 in Deed
Record 154, pages 337-339.
. Terms and conditions of corporate deed recorded in Deed Record
205, page 353.
. Rights of the public and others entitled thereto, in and to the
use of that portion of the insured real estate lying within the
bounds of U.S. 27.
<PAGE>
PROPERTY NO. 3
--------------
. The lien of all taxes for the year 1997 and thereafter not yet
due and payable.
. Taxes for the second installment of 1997, due and payable in
November of 1998 and taxes for all subsequent years.
. Easement Grant dated December 13, 1968, recorded March 4, 1969,
in Deed Record 529, at page 523, in favor of Southern Indiana Gas
and Electric Company. (Tract A, Parcels I and II).
. The following Right of Way Grant and terms thereof:
(a) Dated July 29, 1960, recorded November 17, 1969 in Deed
Record 429, page 239 in favor of the State of Indiana.
(b) Dated June 2, 1964 recorded August 11, 1964 in Right of
Way Grant Record 1, page 339 in favor of the State of
Indiana; and
(Tract A, Parcels I and II).
. The permanent extinguishment of all rights of ingress and egress
to, from and across the limited access facility known as Stated
Road 66-Diamond Avenue (formerly U.S. 460) to and from the Real
Estate. (Tract A, Parcels I and II).
. The following easement grants and rights of ways:
(a) dated February 12, 1970, recorded February 13, 1970, in
Deed Record 541, page 547, reserving a five foot (5') wide
sewer easement in favor of landowners abutting the
easement described herein;
(b) dated April 20, 1960, recorded June 6, 1960, in Deed
Record 424, page 557, granting a right of way in favor of
the State of Indiana for development of State Road 66
(Project No. 881 Sec. 5)
(c) dated May 12,1970, recorded June 1, 1970, in Deed Record
545, page 279, granting a right of way in favor of
Southern Indiana Gas and Electric Company;
(d) dated April 6, 1988, recorded may 17, 1988, in Deed Drawer
4, Card 3592, granting Electric Distribution Line Easement
in favor of Southern Indiana Gas and Electric Company; and
(e) acknowledged July 13, 1973, recorded July 17, 1973 in Deed
Record 591, page 70, in a conveyance of property adjoining
the northern and western boundaries of Tract III granting
a ten foot (10') wide sanitary sewer easement over the
Real Estate in favor of the grantees and the property as
described therein, together with the right of ingress,
egress and regress over the easement for lying,
maintaining and repairing a lateral sanitary sewer line
with right of reversion to the Grantor, and his heirs or
assigns, upon the cessation of its use as a sanitary
sewer.
(Tract B Only)
<PAGE>
. The permanent extinguishment of all rights of ingress and egress
to, from and across the limited access facility known as State
Road 66-Diamond Avenue (formerly U.S. 460) to and form the Real
Estate. (Tract B Only).
. Exception is made to an encroachment of the Office Building on to
a 5 foot Sanitary Sewer Easement recorded in Deed Record 541,
page 547. Also exception is made to an Asphalt encroachment onto
North Heidelbach Avenue, the 1 story Curley Auto Painting metal
building encroaches on the Trace 3 or Parcell III remainder 0.3'
at the southwest corner and 0.2' at the southeast corner, the
chainlink fence on the east side encroaches on the right-of-way
of Heidelbach Avenue, and Negley Avenue, the Service Department
Sign encroaches on the right-of-way of Heidelbach Avenue, Tract
B, and the Northside Sign with the right-of-way of Diamond
Avenue, Tract A and all being depicted on a survey prepared by
Matthew E. Wannemeuhler dated May 22, 1998 as Job Number
198-0069. (Tract B)
<PAGE>
PROPERTY NO. 4
--------------
. The lien of all taxes for the year 1998 and thereafter, not yet
due and payable.
. Taxes for the second installment of 1997, due and payable in
November of 1998 and taxes for all subsequent years.
. Plat and restrictions recorded in Plat Record 32, page 145, but
this policy will insure that a violation thereof will not cause a
forfeiture or reversion of title.
. Terms and conditions of an easement granted to Indiana Michigan
Power Company recorded as Document Number 89-8238.
. Terms and conditions of an easement granted to Indiana & Michigan
Electric Company along with General Telephone of Indiana, Inc.
recorded a Document Number 71-18398.
. Terms and conditions of an easement granted to Indiana Michigan
Power Company over the west 10 feet of the insured premises,
recorded May 28, 1998 as Document Number 980035259.
. Right of way for drainage, flow and maintenance of Spy Run Creek
as set forth in IC 36-9-27-33, as shown on the survey dated April
20, 1998 by Kerry D. Dickmeyer, registered land survey as Job
Number S-0243.
. Easement over a portion of insured real estate for Spy Run
Interceptor Sewer as condemned by Declaratory Resolution No.
31-1968 recorded in Miscellaneous Record 330, page 354.
. I-69 is a limited access highway and no rights of access for
ingress and egress are insured with respect to said highway.
<PAGE>
PROPERTY NO. 5
--------------
(a) All taxes for the year 1998 and subsequent years, and any additional
taxes resulting from reassessment of subject property, which are now
liens but not yet due and payable.
(b) This policy of title insurance affords assurance as to the location of
the boundary lines of subject property, but does not insure the
engineering calculations in computing the exact amount of acreage
contained therein.
(c) Easement and right-of-way from Bertha Jones and Henry D. Graham to
Southeastern Pipe Line Company, dated August 6, 1957, recorded in Deed
Book 1358, Page 573, Records of DeKalb County, Georgia; transferred to
Colonial Pipeline Company by instrument dated November 15, 1963,
recorded in Deed Book 1839, Page 222, aforesaid Records.
(d) Right-of-Way Easement from Henry D. Graham to Plantation Pipe Line
Company, dated September 15, 1954, recorded in Deed Book 1060, Page
406, aforesaid Records.
(e) Easement from Roberta Graham to Plantation Pipeline Company, dated
December 29, 1951, recorded in Deed Book 899, Page 509, aforesaid
Records.
(f) Right-of-Way Easement from Bertha Jones to Plantation Pipeline Company,
dated August 15, 1951, recorded in Deed Book 894, Page 51, aforesaid
Records.
(g) Easement from Roberta Graham and Mary Graham to Plantation Pipeline
Company, dated August 14, 1941, recorded in Deed Book 893, Page 174,
aforesaid Records.
(h) General Utility Easement from Roberta Graham and Bertha Jones to
Georgia Power Company, dated September 3, 1947, recorded in Deed Book
717, Page 191, aforesaid Records.
(i) General Utility Easement from Roberta Graham to Georgia Power Company,
dated December 22, 1949, recorded in Deed Book 872, Page 380, aforesaid
Records.
NOTE: By letter dated May 20, 1997, Georgia Power Company states that
it claims no further interest in the easements identified in (h) and
(i) above except the right to operate, maintain, rebuild and renew its
existing facilities within its presently maintained right-of-way.
(j) Drainage rights contained in Right of Way Deed between Hix Green
Corporation and DeKalb County, dated June 11, 1975, recorded in Deed
Book 3350, Page 496, aforesaid Records.
<PAGE>
(i) Drainage rights contained in Right of Way Deed between Hix Green
Corporation and DeKalb County, dated June 11, 1975, recorded in Deed
Book 3350, Page 497, aforesaid Records.
(l) The following matters as shown on ALTA/ACSM Land Title Survey for
Thomas W. Kelley, Capital Automotive, L.P., a Delaware limited
partnership, Capital Automotive REIT, a Maryland Real Estate Investment
Trust and Chicago Title Insurance Company, dated April 13, 1998,
prepared by Watts & Browning Engineers, Inc., bearing the seal and
certification of V.T. Hammond, Georgia Registered Land Surveyor No.
2554:
(i) Plantation Pipe Line Easement 30 foot in width crossing the
northwestern portion of subject property [same easement
identified in Items (d), (e), (f) and (g) hereinabove];
(ii) Colonial Pipe Line Easement 30 foot in width crossing the
northwestern portion of subject property [same easement
identified in Item (c) hereinabove];
(iii) Building lines as shown on said survey with portions of the
improvements extending over the front and side building lines;
(iv) Buffer 50 feet in width along the western portion of subject
property;
(v) Drainage pipes extending from subject property onto the
property adjoining on the south;
(vi) Part of a 30 foot sanitary sewer easement located in the
southern portion of subject property.
(m) Lease between Capital Automotive, L.P., Lessor, and Kelley Buick of
Atlanta, Inc., Lessee, dated April 14, 1998, as evidenced by Memorandum
of Lease between the same parties, filed for record June ___, 1998 at
___: __ __.m., recorded in Deed Book _____, page _____, aforesaid
Records.
<PAGE>
PROPERTY NO. 6
--------------
(a) All taxes for the year 1998 and subsequent years, and any additional
taxes resulting from reassessment of subject property, which are now
liens but not yet due and payable.
(b) This policy of title insurance affords assurance as to the location of
the boundary lines of subject property, but does not insure the
engineering calculations in computing the exact amount of acreage
contained therein.
(c) Easement from Mrs. Katherine C. Mabb to Georgia Power Company, dated
April 12, 1951, filed for record May 1, 1951, recorded in Deed Book
2632, Page 226, Records of Fulton County, Georgia.
(d) Sewer Easement from Martin Isenberg and Barry Hyman to Fulton County,
Georgia, dated ____________, 1971, filed for record October 14, 1971 at
8:43 a.m., recorded in Deed Book 5472, Page 395, aforesaid Records.
(e) Sewer Easement from W.G. Davidson to Fulton County, Georgia, dated
August 22, 1984, filed for record September 26, 1984 at 9:56 p.m.,
recorded in Deed Book 9184, Page 5, aforesaid Records.
(f) Easement from Bill Davidson Buick, Inc. to Georgia Power Company, dated
October 27, 1984, filed for record August 8, 1985 at 2:36 p.m.,
recorded in Deed Book 9652, Page 352, aforesaid Records.
NOTE: By letter dated May 22, 1997, Georgia Power Company states that
it claims no further interest in the easements identified in Items (c)
and (f) above, except the right to operate, maintain, rebuild and renew
its existing facilities and equipment within its presently maintained
right-of-way.
(g) Sewer Easement from Bill Davidson to Fulton County, Georgia, dated
January 16, 1987, filed for record April 1, 1987 at 11:07 a.m.,
recorded in Deed Book 10709, Page 55, aforesaid Records.
(h) Declaration of Use Restriction, Right of First Refusal and Option to
Purchase and Lease by William G. Davidson, dated April 1, 1997, filed
for record April 3, 1997 at 12:13 p.m., recorded in Deed Book 22406,
Page 173, aforesaid Records.
(i) Assumption and Agreement by and between General Motors Corporation, Tom
Kelley, and Kelley Buick of Atlanta, Inc., dated April 1, 1997.
<PAGE>
(j) The following matters as shown on "ALTA/ACSM Land Title Survey for
Thomas W. Kelley, Capital Automotive, L.P., a Delaware limited
partnership, Capital Automotive REIT, a Maryland Real Estate Investment
Trust and Chicago Title Insurance Company," dated March 18, 1997, last
revised May 8, 1998, prepared by Watts & Browning Engineers, Inc.,
bearing the seal and certification of V.T. Hammond, Georgia Registered
Land Surveyor No. 2554:
(i) Front building line of 30 feet and side building lines of 10
feet;
(ii) Flood Zone and location (approximate) of 100 year flood line
located in the western portion of subject property;
(iii) Natural buffer 50 feet in width along the western boundary
line of subject property;
(iv) Sanitary sewer easement 20 feet in width crossing the
southwestern portion of subject property [same easement
identified in Item (d) hereinabove];
(v) Sanitary sewer easement 20 feet in width crossing the
northwestern, northern and northeastern portions of subject
property [same easement identified in Item (g) hereinabove];
(vi) 125 foot buffer measured from centerline of creek located in
western portion of subject property;
(vii) Detention pond located in the western portion of subject
property with drainage pipes leading thereto;
(viii) Drainage pipes crossing the southeastern portion of subject
property;
(ix) Wire fence (down in places) located slightly inside a portion
of the northern boundary line of subject property;
(x) Power line extending onto the northeastern portion of subject
property with a pole, guy wire and anchor located therein; and
(xi) Metal steps located partly on the southern portion of subject
property and partly on the property adjoining on the south.
(l) Lease Agreement between Capital Automotive, L.P., as Lessor, and Kelley
Buick of Atlanta, Inc., as Lessee, as evidenced by Memorandum of Lease
by and between the same parties, dated _____ ___, 1998, filed for
record ______ ____, 1998 at ____: ___ ___.m., recorded in Deed Book
_______, page ______, aforesaid Records.
<PAGE>
PROPERTY NO. 7
--------------
(a) All taxes for the year 1998 and subsequent years, and any additional
taxes resulting from reassessment of subject property, which are now
liens but not yet due and payable.
(b) This policy of title insurance affords assurance as to the location of
the boundary lines of subject property, but does not insure the
engineering calculations in computing the exact amount of acreage
contained therein.
(c) Right-of-Way Easement from W.O. Pierce to Georgia Power Company, dated
August 13, 1951, filed for record September 17, 1951 at 10:00 a.m.,
recorded in Deed Book 896, Page 104, Records of DeKalb County, Georgia.
(d) Easements to Georgia Power Company, as follows:
(i) dated May 3, 1977, recorded in Deed Book 3678, Page 492,
aforesaid Records.
(ii) from W.O. Pierce, dated January 21, 1948, recorded in Deed
Book 710, Page 594, aforesaid Records.
(e) Drainage easement contained in Right-of-Way Deed from Neal Q. Pope, Jr.
to DeKalb County, dated September 27, 1976, recorded in Deed Book 3564,
Page 433, aforesaid Records.
(f) Drainage Easements contained in those certain Right-of-Way Deeds to
DeKalb County, Georgia, as follows:
(i) from W.O. Pierce, dated July 10, 1947, recorded in Deed Book
734, Page 441, aforesaid Records.
(ii) from Southern Bell Telephone and Telegraph Company, dated
December 3, 1974, recorded in Deed Book 3282, Page 373,
aforesaid Records.
(g) Easement from Hix H. Green, Jr. to Georgia Power Company, dated October
15, 1990, filed for record December 19, 1990 at 9:22 a.m., recorded in
Deed Book 6856, Page 180, aforesaid Records.
NOTE: By letter dated May 20, 1997, Georgia Power Company states that
it claims no further interest in the easements identified in (c) and
(d)(i) and (ii) and (g), except the right to operate, maintain, rebuild
and renew its existing facilities within its presently maintained
right-of-way.
<PAGE>
(h) Indemnity Agreement with respect to the installation of a sprinkler
system by and between Hix H. Green, Jr. and Georgia Department of
Transportation, an agency of the State of Georgia, dated January 28,
1991, filed for record November 5, 1991 at 1:56 p.m., recorded in Deed
Book 7094, Page 594, aforesaid Records.
(i) Conveyance of Access Rights from Hix Green to the Department of
Transportation, dated September 11, 1990, filed for record September
12, 1990, recorded in Deed Book 6786, Page 267, aforesaid Records.
(j) The following matters as shown on ALTA/ACSM Land Title Survey of Tract
I for Thomas W. Kelley, Capital Automotive, L.P., a Delaware limited
partnership, Capital Automotive REIT, a Maryland Real Estate Investment
Trust and Chicago Title Insurance Company, dated February 11, 1997,
last revised May 18, 1998, prepared by Watts & Browning Engineers,
Inc., bearing the seal and certification of V.T. Hammond, Georgia
Registered Land Surveyor No. 2554:
(i) Drainage pipes crossing various portions of subject property
with related drainage apparatus located therein; and
(ii) Georgia Power box located in the northeastern portion of
subject property.
(k) Lease between Capital Automotive, L.P., Lessor, and Kelley Saturn of
Atlanta, Inc., Lessee, dated April 14, 1998, as evidenced by Memorandum
of Lease between the same parties, filed for record June __, 1998 at
__: __ __.m., recorded in Deed Book ___________, page _____, aforesaid
Records.
<PAGE>
PROPERTY NO. 8
--------------
(a) All taxes for the year 1998 and subsequent years, and any additional
taxes resulting from reassessment of subject property, which are now
liens but not yet due and payable.
(b) This policy of title insurance affords assurance as to the location of
the boundary lines of subject property, but does not insure the
engineering calculations in computing the exact amount of acreage
contained therein.
(c) Right-of-Way Easement from James R. DeBauche to Southern Bell Telephone
and Telegraph Company, dated January 9, 1985, recorded in Deed Book
3002, Page 610, Records of Gwinnett County, Georgia.
Note: By letter dated May 21, 1997, BellSouth Telecommunications, Inc.,
f/k/a Southern Bell Telephone and Telegraph Company, states that it
claims no further interest in the above identified easement, or
otherwise by operation of law, limited to the right to operate,
maintain, replace and/or remove its existing facilities under the terms
and conditions of the easement and the right to operate, replace and to
remove facilities within 15 feet of the public right of way and that it
further retains the right to place, install and maintain any facilities
necessary to provide service to any buildings located on the subject
tract.
(d) Right-of-Way Easement from James R. DeBauche to Jackson Electric
Membership Corporation, dated January 22, 1986, recorded in Deed Book
3508, Page 214, aforesaid Records.
Note: By letter dated May 7, 1997, Jackson Electric Membership
Corporation states that it claims no further interest in the above
mentioned easement except the right to operate, maintain, rebuild and
renew its existing facilities under the terms and conditions of said
easement.
(e) Easement from Hix H. Green, Jr. to Gwinnett County Public Utilities,
dated May 11, 1993, filed for record January 12, 1994 at 2:38 p.m.,
recorded in Deed Book 9846, Page 47, aforesaid Records.
(f) The following matters as shown on ALTA/ACSM As Built Survey for Capital
Automotive LP, a Delaware limited partnership, of Chicago Title
Insurance Company and Kelley Saturn of Atlanta, Inc., dated May 6,
1998, prepared by Precision Planning, Inc., bearing the seal and
certification of Randall W. Dixon, Georgia Registered Land Surveyor No.
1678:
(i) Southern Bell Right of Way Easement 10 feet in width crossing
the southwestern portion of subject property [same easement
identified in Item (c) hereinabove];
<PAGE>
(ii) Jackson EMC Right of Way Easement crossing the southwestern
portion of subject property [same easement identified in Item
(d) hereinabove];
(iii) Permanent sanitary sewer easement 20 feet in width crossing
the southeastern portion of subject property [same easement
identified in Item (e) hereinabove];
(iv) Concrete pad for car display located in the southwestern
portion of subject property extends onto the property
adjoining on the south;
(v) Building setback line of 50 feet from the southwestern
boundary line of subject property and 20 feet from the
southern boundary line thereof;
(vi) 200 feet by 50 feet Enhanced Landscape Strip located in the
northwestern portion of subject property;
(vii) 35 foot Undisturbed Buffer along the northwestern boundary
line of subject property and a 15 foot Enhanced Buffer on the
southeast side of and adjoining said 35 foot buffer;
(viii) 85 foot Undisturbed Buffer along the northeastern boundary
line of subject property and a 15 foot Enhanced Buffer on the
southwest side of and adjoining said 85 foot buffer; and
(ix) 10 foot Landscape Strip along the southern boundary line of
subject property.
(g) Lease between Capital Automotive, L.P., Lessor, and Kelley Saturn of
Atlanta, Inc., Lessee, as evidenced by Memorandum of Lease between the
same parties, filed for record June __, 1998 at __: __ __.m., recorded
in Deed Book ___________, page _____, aforesaid Records.
<PAGE>
PROPERTY NO. 9
--------------
. The lien of all taxes for the year 1998 and thereafter.
. Taxes for the second installment of 1997, due and payable
in November of 1998 and taxes for all subsequent years.
. Plat and restrictions recorded in Plat Cabinet A, page 18
and as Document Number 87-38637, restrictions recorded as
Document Number 87-40952, Appointment of Architectural
Control Committee recorded as Document Number 93-34086,
Consent and Release recorded as Document Number 93-14270,
and affidavits recorded as Documents Numbered 90-11271
through 90-11276 inclusive, but this policy will insure
that a violation thereof will not cause a forfeiture or
reversion of title.
. Terms and conditions of agreement for sewer extension
recorded as Document Number 87-54459.
. Terms and conditions of Commitment to Contribute to the
cost of installation of traffic signal dated June 30, 1987
and recorded July 13, 1987 as Document Number 87-35632.
. Terms and provisions of easement grant dated July 22, 1987 by
and between Robert A. Adams and PFP Partnership recorded July
23, 1987 as Document Number 87-37695.
. Terms and conditions of General Ordinance G-13-97 for vacation
of 25 foot easement.
. Exception is made to an existing encroaching building located
on the East line and also a 25 foot Utility and Surface
Drainage Easement as depicted through the center of a new
building as shown on Survey prepared by Kant Surveying
Services, Inc. dated May 11, 1998 as Job Number 98WA883.
. Short form of Prime Lease between Thomas W. Kelley and
Argonaut Holdings, Inc., recorded December 11, 1996 as
Document Number 96068483.
<PAGE>
PROPERTY NO. 10
---------------
. The lien of all assessments and taxes for the year 1998 and
thereafter.
. Taxes for the second installment of 1997, due and payable
in November of 1998 and taxes for all subsequent years.
. Plat and restrictions recorded in Plat Record A, page 18
and as Document Number 87-38637, restrictions recorded as
Document Number 87-40952, Appointment of Architectural
Control Committee recorded as Document Number 92-34086,
Consent and Release recorded as Document Number 93-14270,
and Affidavits recorded as Documents Numbered 90-11271
through 90-11276 inclusive, but this policy will insure
that a violation thereof will not cause a forfeiture or
reversion of title.
. Terms and conditions of agreement for sewer extension
recorded as Document Number 87-54459.
. Terms and conditions of a Commitment to Contribute to the
cost of installation of traffic signal dated June 30, 1987
and recorded July 13, 1987 as Document Number 87-35632.
. Terms and provision of grant of easement dated July 22, 1987
by and between Robert A. Adams and PFP Partnership recorded
July 23, 1987 as Document Number 87-37695.
. Terms and conditions of a grant of easement recorded as
Document Number 88-22760.
. Short Form of Prime Lease between Thomas W. Kelley and
Argonaut Holdings, Inc., recorded December 11, 1996 as
Document Number 960068482.
. Encroachment of Information Center and part of the main
building and canopy into the front building line as depicted
on a survey prepared by Richard Karst dated May 11, 1998 under
Project Number 98WA883.
<PAGE>
PROPERTY NO. 11
---------------
. The lien of all taxes for the year 1998 and thereafter, not
yet due and owing.
. Taxes for the second installment of 1997, due and payable
in November of 1998 and taxes for all subsequent years.
. Dedication of an access easement for the use by Saturn
Dealership across the insured premises.
. Plat and restrictions recorded in Plat Cabinet A, page 18
and as Document Number 87-38637, restrictions recorded as
Document Number 87-40952, Appointment of Architectural
Control Committee recorded as Document Number 93-34086,
Consent and Release recorded as Document Number 93-14270,
and affidavits recorded as Documents Numbered 90-11271
through 90-11276 inclusive, but this policy will insure
that a violation thereof will not cause a forfeiture or
reversion of title.
. Terms and conditions of agreement for sewer extension
recorded as Document Number 87-54459.
. Terms and conditions of Commitment to Contribute to the
cost of installation of traffic signal dated June 30, 1987
and recorded July 13, 1987 as Document Number 87-35632.
. Terms and provisions of easement grant dated July 22, 1987
by and between Robert A. Adams and PFP Partnership
recorded July 23, 1987 as Document Number 87-37695.
. Exception is made to an encroachment of a canopy on to the
insured premises as is depicted on a survey prepared by
Richard K. Karst, dated May 11, 1998 as Job Number 98WA883.
<PAGE>
PROPERTY NO. 12
---------------
. The lien of all assessments and taxes for the year 1998 and
all subsequent years, not yet due and owing.
. Taxes for the second installment of 1997, due and payable
in November of 1998 and taxes for all subsequent years.
. Plat and restrictions recorded in Plat Cabinet A, page 18
and as Document Number 87-38637, restrictions recorded as
Document Number 87-40952, Appointment of Architectural
Control Committee recorded as Document Number 93-34086,
Consent and Release recorded as Document Number 93-14270,
and affidavits recorded as Documents Numbered 90-11271
through 90-11276 inclusive, but this policy will insure
that a violation thereof will not cause a forfeiture or
reversion of title.
. Terms and conditions of agreement for sewer extension
recorded as Document Number 87-54459.
. Terms and conditions of Commitment to Contribute to the
cost of installation of traffic signal dated June 30, 1987
and recorded July 13, 1987 as Document Number 87-35632.
. Terms and provisions of easement grant dated July 22, 1987
by and between Robert A. Adams and PFP Partnership
recorded July 23, 1987 as Document Number 87-37695.
. Exception is made to a canopy encroachment onto the Cadillac
Dealership as depicted on a survey prepared by Richard K.
Karst, dated May 11, 1998 as Job Number 98WA883.
<PAGE>
SCHEDULE 7.3
LIMITATIONS ON SELLERS/CONTRIBUTORS OWNERSHIP
1. Prime Lease between Thomas W. Kelley as Landlord and Argonaut Holdings,
Inc, as Tenant dated December 10, 1996
2. Dealership Sublease between Argonaut Holdings, Inc. as Landlord and Tom
Kelley Pontiac, Inc. as Tenant dated December 10, 1996
3. Prime Lease between Thomas W. Kelley as Landlord and Argonaut Holdings,
Inc, as Tenant dated December 10, 1996
4. Dealership Sublease between Argonaut Holdings, Inc. as Landlord and Tom
Kelley Buick GMC Truck, Inc. as Tenant dated December 10, 1996
5. Declaration of Use Restriction, Right of First Refusal, and Option to
Purchase and Lease made April 1, 1997 and recorded in the land records of Fulton
County, Georgia
<PAGE>
SCHEDULE 7.14
INSURANCE
PROPERTY NO. 1
--------------
KELLEY CHEVROLET, INC.
P.O. Box 5015
Fort Wayne, IN 46895
INSURANCE SUMMARY
-----------------
1998-1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ----- ----------
PACKAGE
- -------
<S> <C> <C> <C> <C> <C>
Citizens Ins. 01CMS031230301 1 Yr. 1/1/99
Co.
$ 5,141,000 Blanket Buildings, 90% Coinsurance, $250 Deductible, Agreed Amount
1,628,100 Blanket Contents, 90% Coinsurance, $250 Deductible, Agreed Amount
1,749,000 Business Income, 1/4 Monthly Limitation, Locations 1-4-11
660,000 Loss of Rents, 100% Coinsurance - State Street
180,000 Loss of Rents, 100% Coinsurance - Research Drive
50,000 Employee Dishonesty
10,000 Money On Premise
10,000 Money Off Premise
10,000 Depositors Forgery
175,000 Accounts Receivable
1,000 Tractor, $100 Deductible
Glass As Per Schedule
3,000 Cargo Coverage, $100 Deductible
Commercial General Liability
----------------------------
$ 1,000,000 General Aggregate (Other Than Products & Completed Operations)
1,000,000 Products & Completed Operations Aggregate
500,000 Personal & Advertising Injury Limit
500,000 Each Occurrence Limit
100,000 Fire Damage Limit
5,000 Medical Expense Limit
GARAGE
- ------
Citizens GPS0325994 1 Yr. 1/1/99
Ins. Co.
$ 1,000,000 Liability - Auto Only - Each Accident
1,000,000 Other Than Auto - Each Accident
3,000,000 Aggregate - Other Than Auto
5,000 Medical Payments - Premise and Auto
1,000,000 Uninsured & Underinsured Motorists
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Coverages Included:
Drive Other Car - Full Coverage - Mr. & Mrs. James Kelley
Hired & Non-Owned Vehicles (Including $50,000 Hired Car Physical Damage)
Broad Form Liability
a. Host Liquor Liability
b. Incidental Medical Malpractice
c. Non-Owned Watercraft
d. Limited Worldwide Liability
Contractual Liability
Odometer Errors & Omissions
Truth In Lending Errors & Omissions
False Pretense Coverage
Drive Away Collision
Garagekeepers Legal Liability Coverage - Direct Primary
-------------------------------------------------------
$ 1,000,000 Blanket
$ 100 Deductible Comprehensive
$ 1,000 Deductible Collision
GARAGE - Dealers Physical Damage
- --------------------------------
Citizens Ins. GPS0325995 1 Yr. 1/1/99
Co.
$11,000,000 Limit
$ 500 Deductible Comprehensive
$ 1,000 Deductible Collision
WORKERS COMPENSATION
- --------------------
Citizens Ins. WK0329890 Statutory 1 Yr. 1/1/99
Co. $ 500,000
Employer's
Liability
UMBRELLA
- --------
Citizens Ins. CU0323622 $5,000,000 1 Yr. 1/1/99
Co.
</TABLE>
2
<PAGE>
PROPERTY NO. 2
--------------
COURTESY MOTORS, INC.
P.O. BOX 418
DECATUR, IN 46733
INSURANCE SUMMARY
-----------------
1998-1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
PACKAGE
- -------
<S> <C> <C> <C> <C> <C>
Hoosier CCI0266344 1 Yr. 6/1/99
Insurance
Co.
Blanket Buildings & Contents, Including Fence - Special Form - $500 Deductible
------------------------------------------------------------------------------
Replacement Cost - 90% Co-Insurance - Agreed Amount
---------------------------------------------------
Limit Location
----- --------
$1,508,900 1313 S. 13th St., Decatur, Indiana
Personal Property of Others - Special Form - 90% Co-Insurance - $500 Deductible
-------------------------------------------------------------------------------
Limit Location
----- --------
$ 40,000 1313 S. 13th St., Decatur, Indiana
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
Limit Location
----- --------
$ 264,000 1313 S. 13th St., Decatur, Indiana
Glass
-----
Limit
-----
Per Schedule No Deductible
Commercial General Liability
----------------------------
Limit Coverage
----- --------
$1,000,000 General Aggregate
1,000,000 Products & Completed Operations Aggregate
500,000 Each Occurrence
500,000 Personal & Advertising Injury
50,000 Fire Damage (Any One Fire)
5,000 Medical Expense (Any One Person)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Crime Coverage - $100 Deductible
--------------------------------
Limit Coverage
----- --------
$ 100,000 Employee Dishonesty
5,000 Money On & Off Premises
Employee Benefits Errors & Omissions - $1,000 Deductible
--------------------------------------------------------
Limit Coverage
----- --------
$1,000,000 Each Claim
3,000,000 Annual Aggregate
Electronic Data Processing Coverage - $250 Deductible
-----------------------------------------------------
Limit Coverage
----- --------
$ 114,940 Equipment
15,000 Equipment In Transit & Temporary Locations
15,000 Software
15,000 Software In Transit & Temporary Locations
15,000 Extra Expense
Sign Coverage - Nil Deductible - All-Risk
-----------------------------------------
Limit Coverage
----- --------
$ 20,000 Blanket
Garage
- ------
Hoosier CGP0266344 1 Yr. 6/1/99
Insurance
Co.
Limit Coverage
----- --------
$1,000,000 Liability - Auto Only - Each Accident
1,000,000 Other Than Auto - Each Accident
3,000,000 Aggregate - Other Than Auto
5,000 Medical Payments - Premise & Auto
1,000,000 Uninsured/Underinsured Motorists
Coverage Includes:
Broad Form Liability Endorsement
Truth-In-Lending Errors & Omissions - $300,000
Odometer Coverage - $300,000
Title Errors & Omissions
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Garagekeepers Legal Liability - Direct Primary
----------------------------------------------
Limit
-----
$ 120,000
$100/$500 Deductible - Comprehensive
$250 Deductible Collision
Automobile Physical Damage - Monthly Reporting
----------------------------------------------
Limit
-----
$ 4,000,000
$100/$500 Deductible - Comprehensive
$250 Deductible Collision
Coverage Includes: False Pretense Coverage
Drive Away Collision Coverage
WORKERS COMPENSATION
- --------------------
Casualty W-150332-05 Statutory 1 Yr. 6/1/99
Insurance $500,000
Co. Employers
Liability
UMBRELLA
- --------
Hoosier CCU0266344 $5,000,000 1 Yr. 6/1/99
</TABLE>
5
<PAGE>
PROPERTY NO. 3
--------------
NORTHSIDE CHEVROLET, L.P.
2400 Heidelbach Avenue
Evansville, IN 47711
Insurance Summary
-----------------
1998-1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Hoosier CCI0265605 1 Year 5/1/99
Ins. Co.
Blanket Buildings & Personal Property - Special Form - Including Earthquake - Replacement Cost -
------------------------------------------------------------------------------------------------
$500 Deductible - 90% Coinsurance - Agreed Amount - 10% Earthquake Deductible
-----------------------------------------------------------------------------
Limits Location
------ --------
$1,486,000 Per Statement of Values
Blanket Fence and Light Poles - Special Form - Including Earthquake - Replacement Cost -
----------------------------------------------------------------------------------------
$500 Deductible - 90% Coinsurance - Agreed Amount - 5 % Earthquake Deductible
-----------------------------------------------------------------------------
Limits Location
------- --------
$ 90,000 2400 Heidelbach Ave, Evansville, IN
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
Limits Location
------ --------
$ 264,000 2400 Heidelbach Ave, Evansville, IN
Glass - No Deductible
---------------------
Limits
------
Per Schedule
Electronic Data Processing - $250 Deductible - $1,000 Deductible Mechanical Breakdown
-------------------------------------------------------------------------------------
Limit Coverages
----- ------------
$ 60,000 Electronic Data Processing Equipment
$ 10,000 Electronic Data Processing Media
Employee Benefit Liability
--------------------------
Limit Coverages
----- ---------
$1,000,000 Each Claim
3,000,000 Aggregate
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Crime Coverage
--------------
Limits Coverage
------ --------
$ 100,000 Employee Dishonesty
GARAGE
- ------
Hoosier CGP0265605 1 Year 5/1/99
Ins. Co.
Limits Coverages
------ ---------
$1,000,000 Liability - Auto Only
$1,000,000 Liability - Other Than Auto
$3,000,000 Aggregate - Other Than Auto
$ 5,000 Medical Payments - Premise & Auto
$1,000,000 Uninsured & Underinsured Motorists
Coverages Include:
Hired & Non-Owned Auto Liability
Broad Form Liability
a) Host Liquor Liability
b) Incidental Medical Malpractice
c) Non-Owned Watercraft
d) Limited Worldwide Liability
e) Contractual Liability
f) Employees as Additional Insureds
Odometer Errors & Omissions
Truth-in-Lending Errors & Omissions
Dealers Physical Damage
-----------------------
Limits Coverage
------ --------
$5,000,000 Limit
$ 250/1000 Deductible
$ 500 Comprehensive
Deductible Collision
Coverage Includes:
False Pretense - $50,000
Drive Away Collision
Garagekeepers Coverage
----------------------
Limits Coverage
------------- ------------
$ 225,000 Limit
$ 100/500 Deductible Comprehensive
$ 500 Deductible Collision
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Workers Compensation
- --------------------
Hoosier CWC0265605 Statutory 1 Year 5/1/99
Ins. Co. $ 500,000
Employers
Liability
Umbrella
- --------
Hoosier CCU0265605 $5,000,000 1 Year 5/1/99
Ins. Co.
</TABLE>
8
<PAGE>
PROPERTIES NO. 5, 6, 7 AND 8
----------------------------
KELLEY SATURN OF ATLANTA, INC. & KELLEY BUICK OF ATLANTA, INC.
dba SATURN OF GWINNETT
SATURN OF CHAMBLEE
KELLEY BUICK/SAAB - CHAMBLEE
KELLEY BUICK - ROSWELL
c/o KELLEY MANAGEMENT
P.O. BOX 5015
FORT WAYNE, IN 46801
INSURANCE SUMMARY
-----------------
1998 - 1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------------ -------------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
PACKAGE
- --------------------------
Hanover ZD15260589 1 Yr. 3/3/99
Ins. Co.
PROPERTY
------------
Special Form, Agreed Value, $1,000 Deductible, 90% Coinsurance, Replacement Cost
--------------------------------------------------------------------------------
Location #1 5900 Peach Tree Industrial Blvd. (Buick - Saab Dealership)
------------ Chamblee, GA
Location #2 2157 American Industrial Blvd. (Body Shop)
------------ Chamblee, GA
LIMIT Building
-------------- ----------
$ 309,000 Saab Showroom & Service Dept.
$ 1,310,000 Office & Showroom
$ 500,000 Body Shop
LIMIT Blanket Business Personal Property
-------------- ----------
$ 1,620,000 5900 Peach Tree Industrial Blvd., Chamblee, GA
2157 American Industrial Blvd., Chamblee, GA
Location #3 5764 Peach Tree Industrial Blvd., Chamblee, GA (Saturn Dealership)
------------
LIMIT
-------------- Building
$ 1,000,000 Business Personal Property
$ 520,000
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------------ -------------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Location #4 3940 N. Peach Tree Industrial Blvd., Chamblee, GA
----------- (Saturn Clean-up & Storage Lot)
LIMIT
--------------
$ 50,000 Business Personal Property
Location #5 2520 Pleasant Hill Rd., Duluth, GA (Saturn Dealership)
-----------
LIMIT
--------------
$ 1,200,000 Building
$ 570,000 Business Personal Property
Location #6 11458 Alphareta Hwy., Roswell, GA (Buick Dealership)
-----------
LIMIT
--------------
$ 3,950,000 Blanket Building Office/Showroom
$ 755,000 Blanket Business Personal Property
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
$600,000 5900 Peach Tree Industrial Blvd.,
Chamblee, GA
$312,000 5764 Peach Tree Industrial Blvd.,
Chamblee, GA
$420,000 2520 Pleasant Hill Road,
Duluth, GA
$600,000 11458 Alpharetta Hwy.,
Roswell, GA
Employee Benefit Liability
---------------------------
Limit Coverage
-------------- --------------
$ 1,000,000 Each Claim
3,000,000 Annual Aggregate
1,000 Deductible
General Liability
------------------
Limit Coverage
-------------- --------------
$ 2,000,000 General Aggregate
2,000,000 Products/Completed Operations Aggregate
1,000,000 Personal & Advertising Injury
1,000,000 Each Occurrence
100,000 Fire Damage
5,000 Medical Expense
</TABLE>
Location: Mansell Road, Fulton County, GA (Vacant Land)
10
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------------ -------------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Crime Coverage
--------------
Limit Coverage
-------------- --------------
$ 500,000 Blanket Employee Dishonesty
GARAGE
- ------------
Hanover JHI5260746 1 Yr. 3/3/99
Ins. Co.
Limit Coverage
-------------- --------------
$ 1,000,000 Liability - Auto Only - Each Accident
1,000,000 Liability - Other Than Auto - Each Accident
3,000,000 Aggregate - Other Than Auto
1,000,000 Uninsured & Underinsured Motorists
Coverage Includes:
Driveway Collision
Odometer Errors & Omissions
Truth-In-Lending Errors & Omissions
Broad Form Liability Endorsement
Title Errors & Omissions
Garagekeepers Legal Liability - Primary Insurance
--------------------------------------------------
Blanket $ 500,000 5900 Peach Tree Industrial Blvd.
2157 American Industrial Blvd.
Blanket 100,000 5674 Peach Tree Industrial Blvd.
3940 N. Peach Tree Industrial Blvd.
100,000 2520 Pleasant Hill Rd.
500,000 11458 Alphareta Hwy.
$ 100/$500 Deductible Comprehensive
$ 500 Deductible Collision
DEALERS PHYSICAL DAMAGE
- -----------------------
Hanover JHI5260590 1 Yr. 3/3/99
Ins. Co.
Blanket 6,980,000 5900 Peach Tree Industrial Blvd.
2157 American Industrial Blvd.
Blanket 4,000,000 5674 Peach Tree Industrial Blvd.
3940 N. Peach Tree Industrial Blvd.
5,000,000 2520 Pleasant Hill Rd.
5,000,000 11458 Alphareta Hwy.
$500/$2,500 Deductible Comprehensive
$ 500 Deductible Collision
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------------ -------------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Coverage Includes: False Pretense Coverage
WORKERS COMPENSATION
- --------------------
Hanover WMI5260591 $ 500,000 1 Yr. 3/3/99
Ins. Co.
UMBRELLA
- --------
Federal 9979731349 $5,000,000 1 Yr. 3/3/99
Ins. Co.
</TABLE>
12
<PAGE>
PROPERTY NO. 9
--------------
TOM KELLEY PONTIAC, INC. dba
TOM KELLEY PONTIAC - GMC
633 Avenue of Autos
Fort Wayne, IN 46804
INSURANCE SUMMARY
-----------------
1997 - 1998
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ----------------- ------------- ------------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
PACKAGE
- -----------------
Citizens Ins. O1CMP033347000 1 Yr. 10/30/98
Co.
Building - Special Form - Agreed Value - $250 Deductible - 90% Co-Insurance - Replacement Cost
-----------------------------------------------------------------------------------------------
Limit Location
------------- -----------
$ 1,406,000 4200 Illinois Rd., Fort Wayne, IN
4,500,000 633 Avenue of Autos, Fort Wayne, IN
17,500 Fence, 633 Ave. of Autos, Ft.
Wayne,
IN
Business Personal Property - Agreed Value - $250 Deductible - 90% Co-Insurance - Replacement Cost
--------------------------------------------------------------------------------------------------
Limit Location
------------- -----------
$ 200,000 4200 Illinois Rd., Fort Wayne, IN
1,000,000 633 Avenue of Autos, Fort Wayne, IN
Loss of Rents - Special Form - 100% Coinsurance
------------------------------------------------
Limit Location
------------- -----------
$ 540,000 633 Avenue of Autos, Fort Wayne, IN
Crime Coverage
---------------
Limit Coverage
------------- ----------
$ 100,000 Employee Dishonesty
5,000 Money - On & Off Premises
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ----------------- ------------- ------------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
General Liability
-------------------
Limit Coverage
------------- ----------
$ 2,000,000 General Aggregate
2,000,000 Products/Completed Operations Aggregate
1,000,000 Personal & Advertising Injury
1,000,000 Each Occurrence
50,000 Fire Damage
5,000 Medical Expense
Location: 4200 Illinois Road, Fort Wayne, IN
GARAGE
- ------
Citizens Ins. GPP0331207 1 Yr. 10/30/98
Co.
Garage Coverages
------------------
Limit Coverage
------------- ----------
$ 1,000,000 Liability - Auto Only - Each Accident
1,000,000 Liability - Other Than Auto - Each Accident
3,000,000 Aggregate - Other Than Auto
5,000 Medical Payments - Premises & Auto
1,000,000 Uninsured/Underinsured Motorists
Coverage Includes:
Broad Form Liability Endorsement
Truth-In-Lending Errors & Omissions
Odometer Coverage
Title Errors & Omissions
Garagekeepers Legal Liability - Direct Primary
----------------------------------------------
Limit
-------------
$ 1,000,000 Blanket
500 Deductible Comprehensive
500 Deductible Collision
Employee Benefit Errors & Omissions
-----------------------------------
Limit Coverage
------------- -----------
$ 1,000,000 Per Occurrence
1,000,000 Annual Aggregate
1,000 Deductible
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ----------------- ------------- ------------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
DEALERS PHYSICAL DAMAGE
- -----------------------
Citizens Ins. GPP0331208 1 Yr. 10/30/98
Co.
Limit
-------------
$10,000,000
500 Deductible Comprehensive
500 Deductible Collision
Coverage Includes:
False Pretense Coverage
Drive Away Collision
WORKERS COMPENSATION
- --------------------
Citizens Ins. WK0335324 Statutory 1 Yr. 10/30/98
Co. $ 100,000
Employers
Liability
UMBRELLA
- ---------
Citizens Ins. CU0331123 $5,000,000 1 Yr. 10/30/98
Co.
</TABLE>
15
<PAGE>
PROPERTY NO. 10
---------------
TOM KELLEY BUICK, INC. ETAL
P.O. Box 11369
Fort Wayne, IN 46857
INSURANCE SUMMARY
-----------------
1998 - 1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
PACKAGE
- -------
Hoosier CPP0100384 1 Yr. 7/1/99
Ins. Co.
Blanket Building & Contents, Including Lights, Signs & Fences -
---------------------------------------------------------------
Special Form - Agreed Value - $500 Deductible - 90% Co-Insurance -
------------------------------------------------------------------
Replacement Cost
----------------
Limit Location
----- --------
$8,161,100 Per Statement of Values
Blanket Loss of Rents - Special Form - 50% Co-Insurance - Agreed Value
----------------------------------------------------------------------
Limit Location
----- --------
$ 274,247 Per Statement of Values (Retail Bldg.)
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
Limit Location
----- --------
$ 480,000 811 Avenue of Autos
Employee Hand Tools - $275 Deductible
-------------------------------------
Limit
-----
$ 100,000
Commercial General Liability
----------------------------
Limit Coverage
----- --------
$2,000,000 General Aggregate
2,000,000 Products - Completed Operations
1,000,000 Each Occurrence
1,000,000 Personal & Advertising Injury
50,000 Fire Damage (Any One Fire)
5,000 Medical Expense (Any One Person)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Glass-Nil Deductible
--------------------
Location
--------
Per Schedule
Crime Coverage
--------------
Limit Coverage
----- --------
$ 500,000 ($1,000 Ded.) Employee
*50,000 ($1,000 Ded.) Forgery or Alteration
5,000 ($ 500 Ded.) Money On & Off Premise
* Includes $5,000 for the personal account of Tom Kelley
NOTE: Additional Named Insured - Tom Kelly Buick GMC Truck Inc. 401 K Profit Sharing
Plan & Trust Kelley Group 401K Plan Trust
Employee Benefit Liability - $1,000 Deductible
----------------------------------------------
Limit Coverage
----- --------
$ 1,000,000 Each Claim
3,000,000 Annual Aggregate
GARAGE
- ------
Hoosier CGP0100384 1 Yr. 7/1/99
Ins. Co.
Limit Coverage
----- --------
$ 1,000,000 Liability - Auto Only - Each Accident
1,000,000 Liability - Other Than Auto - Each Accident
3,000,000 Aggregate - Other Than Auto
5,000 Medical Payments - Premise & Auto
1,000,000 Uninsured & Underinsured Motorists
Coverage Includes:
Odometer Errors & Omissions
Truth-In-Lending Errors & Omissions
Broad Form Liability Endorsement
False Pretense Coverage
Title Errors & Omissions
Drive Other Car Coverage for Mr. & Mrs. Thomas Kelley, James E. Kelley II,
and Anne M. Kelley
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Garagekeepers Legal Liability - Direct Primary
----------------------------------------------
Limit
-----
$ 450,000 Blanket
500/2,500 Deductible Comprehensive
500 Deductible Collision
Dealers Physical Damage
-----------------------
Limit
-----
$12,000,000 Blanket
500/2,500 Deductible Comprehensive
500 Deductible Collision
UMBRELLA
- --------
Hoosier UMC0100385 $5,000,000 1 Yr. 7/1/99
Ins. Co.
WORKERS COMPENSATION
- --------------------
Fremont WC01090201 Statutory 1 Yr. 10/15/98
Comp. Ins. $ 500,000
Employers
Liability
</TABLE>
18
<PAGE>
PROPERTY NO. 11
---------------
TOM KELLEY CADILLAC, INC.
DBA TOM KELLEY CADILLAC/SAAB
910 AVENUE OF AUTOS
FORT WAYNE, IN 46804
INSURANCE SUMMARY
-----------------
1998-1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
PACKAGE
- -------
Hoosier Ins. Co. CCI0239708 1 Yr. 3/23/99
Blanket Building & Business Personal Property - 90% Coinsurance -
-----------------------------------------------------------------
Special Form Replacement Cost - Agreed Amount - $250 Deductible
---------------------------------------------------------------
Limit Location
----- --------
$1,492,500 910 Avenue of Autos, Fort Wayne,
IN
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
Limit Location
----- --------
$ 240,000 910 Avenue of Autos, Fort Wayne,
IN
Glass Coverage - No Deductible
------------------------------
Limit
-----
Per Schedule
Employee Benefit Errors & Omissions - $1,000 Deductible
-------------------------------------------------------
Limit
-----
$ 1,000,000 Each Claim
3,000,000 Annual Aggregate
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Crime Coverage - $1,000 Deductible
----------------------------------
Limit Coverage
----- --------
$ 100,000 Employee Dishonesty
20,000 Money - Inside & Outside
20,000 Robbery - Inside & Outside
Sign Coverage - No Deductible
-----------------------------
Limit Description
-----
$ 2,500 "Tom Kelley Cadillac/SAAB"
16,430 "SAAB"
Transportation Coverage - $100 Deductible
-----------------------------------------
Limit
-----
$ 2,500
Miscellaneous Property - $100 Deductible
----------------------------------------
Limit
-----
$ 1,800 2 - Cellular Phones @ $900 Each
GARAGE
- ------
Hoosier Ins. Co. CGP0239708 1 Yr. 3/23/99
Limit Coverage
----- --------
$1,000,000 Liability - Auto Only - Each
1,000,000 Accident
3,000,000 Other Than Auto - Each Accident
5,000 Aggregate - Other Than Auto
1,000,000 Medical Payments - Premise & Auto
Uninsured/Underinsured Motorists
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
Coverages Included:
Drive Other Car - Full Coverage - Mr. & Mrs. Tom Kelley
Hired & Non-Owned Auto Liability
Broad Form Liability
a) Host Liquor Liability
b) Incidental Medical Malpractice
c) Non-Owned Watercraft
d) Limited Worldwide Liability
e) Contractual Liability
Odometer Errors & Omissions
Truth-in-Lending Errors & Omissions
Title Errors & Omissions
Dealers Physical Damage
-----------------------
Limit
-----
$ 4,500,000
500/2,500 Deductible Comprehensive
1,000 Deductible Collision
Coverage Includes: False Pretense - $50,000 - Per Occurrence
Drive Away Collision
Garagekeepers Legal Liability Coverage - Direct Primary
-------------------------------------------------------
$ 225,000
250/1,000 Deductible Comprehensive
500 Deductible Collision
WORKERS COMPENSATION
- --------------------
Casualty Ins. Co. WC150298-05 Statutory 1 Yr. 3/23/99
$ 500,000
Employers
Liability
UMBRELLA
- --------
Hoosier Ins. Co. CCU0239708 $5,000,000 1 Yr. 3/23/99
</TABLE>
21
<PAGE>
PROPERTY NO. 12
---------------
SATURN OF FORT WAYNE, INC.
912 Avenue of Autos
Fort Wayne, IN 46804
INSURANCE SUMMARY
-----------------
1998 - 1999
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
PACKAGE
- -------
Citizens Ins. Co. CMP0333802 1 Yr. 4/15/99
Blanket Building & Business Personal Property - Special Form - Replacement Cost -
---------------------------------------------------------------------------------
90% Coinsurance - $250 Deductible - Agreed Amount
-------------------------------------------------
Limit
-----
$ 664,000
Loss of Rents - Special Form - 100% Coinsurance
-----------------------------------------------
Limit
-----
$ 549,000
Glass - Nil Deductible
----------------------
Limit
-----
Per Schedule
Crime Coverage - $500 Deductible
--------------------------------
Limit Coverage
----- --------
$ 100,000 Employee Dishonesty
25,000 Forgery or Alteration
5,000 Money On & Off Premise
Employee Benefits Errors & Omission - $1,000 Deductible
-------------------------------------------------------
Limit Coverage
----- --------
$ 500,000 Each Claim
1,500,000 Annual Aggregate
Electronic Data Processing Coverage - $250 Deductible
-----------------------------------------------------
Limit Coverage
----- --------
$ 76,387 Hardware
5,000 Media
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
General Liability
-----------------
Limit Coverage
----- --------
$ 2,000,000 General Aggregate
2,000,000 Products/Completed Operations Aggregate
2,000,000 Personal & Advertising Injury
1,000,000 Each Occurrence
50,000 Fire Damage
5,000 Medical Expense
Location: space J442, 5519 Illinois Rd., Fort Wayne Indiana
GARAGE
- ------
Citizens GPP0334473 1 Yr. 4/15/99
Ins. Co.
Limit Coverage
----- --------
$1,000,000 Liability - Auto Only - Each Accident
1,000,000 Liability - Other Than Auto Only - Each Accident
3,000,000 Liability - Other Than Auto - Aggregate
1,000,000 Uninsured & Underinsured Motorists
5,000 Medical Payments - Premise & Auto
Coverage Includes:
Broad Form Liability Endorsement
Odometer Errors & Omissions
Truth-In-Lending Errors & Omissions
Garagekeepers Legal Liability - Direct Primary
----------------------------------------------
Limit
-----
$ 100,000 $500/2,500 Comprehensive Deductible
500 Collision Deductible
Dealers Physical Damage
- -----------------------
Citizens GPP0334474 1 Yr. 4/15/99
Ins. Co.
Limit
-----
$ 2,800,000 $500/2,500 Comprehensive Deductible
500 Collision Deductible
Coverage Includes:
False Pretense Coverage
Drive Away Collision
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Company Number Amount Premium Term Expiration
- ------- ------ ------ ------- ---- ----------
<S> <C> <C> <C> <C> <C>
WORKERS COMPENSATION
- --------------------
Casualty WI50974-03 Statutory 1 Yr. 4/15/99
Ins. Co. $ 500,000
Employer
Liability
UMBRELLA 1 Yr. 4/15/99
- --------
Citizens CU0334099 $5,000,000
Ins. Co.
</TABLE>
24
<PAGE>
PAGE>
SCHEDULE 7.17
SERVICE CONTRACTS AND MANAGEMENT CONTRACTS
1. Exclusive Sponsorship and Promotional Acknowledgement Agreement dated
December 1, 1996
<PAGE>
SCHEDULE 10.3
- --------------------------------------------------------------------------------
Dealership Street Address
- --------------------------------------------------------------------------------
Northside Chevrolet 2400 N. Heidelbach
Evansville, IN
- --------------------------------------------------------------------------------
Kelley Buick of Atlanta 5900 Peachtree
Chamblee, GA
- --------------------------------------------------------------------------------
Kelley Buick of Roswell 11458 Alpharetta Highway
Roswell, GA
- --------------------------------------------------------------------------------
Saturn of Chamblee 5764 Peachtree
(includes used car lot) Chamblee, GA and
5784 Peachtree
Chamblee, GA
- --------------------------------------------------------------------------------
Saturn of Gwinnett 2520 Pleasant Hill
Duluth, GA
- --------------------------------------------------------------------------------
