<PAGE>
                                                                   EXHIBIT 10.35

                                 LEASE AGREEMENT


                                     BETWEEN


                          AUTOMOTIVE GROUP REALTY, LLC


                                       AND


                                 UAG REALTY, LLC


                            DATED: SEPTEMBER 29, 2000



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                                TABLE OF CONTENTS

 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..................................................     3
1.05        Surrender.....................................................     3
1.06        Deliveries at Commencement....................................     3
 II         RENT..........................................................     4
2.01        Base Rent.....................................................     4
2.02        Additional Rent...............................................     4
2.03        Base Annual Rent Adjustment...................................     4
2.04        Security Deposit; Guarantee Agreement.........................     5
2.05        Place of Payment of Rent; Direct Payment of Additional Rent...     5
2.06        Net Lease.....................................................     5
2.07        No Termination, Abatement, Etc................................     5
 III        IMPOSITIONS AND UTILITIES.....................................     6
3.01        Payment of Impositions........................................     6
3.02        Definition of Impositions.....................................     7
3.03        Utilities.....................................................     8
3.04        Escrow of Impositions.........................................     8
3.05        Discontinuance of Utilities...................................     9
3.06        Liens.........................................................     9
3.07        Impositions Statements........................................    10
 IV         INSURANCE.....................................................    10
4.01        Insurance.....................................................    10
4.02        Insurance Limits..............................................    11
4.03        Insurance Requirements........................................    12
4.04        Replacement Cost..............................................    13
4.05        Blanket Policy................................................    13
4.06        Separate Insurance............................................    13
4.07        Waiver of Subrogation.........................................    13
4.08        Mortgages.....................................................    14
4.09        Other Insurance Requirements..................................    14
 V          INDEMNITY: SUBSTANCES OF CONCERN..............................    14
5.01        Tenant's Indemnification......................................    14
5.02        Substances of Concern.........................................    15
5.03        Audits........................................................    17
5.04        Landlord's Option Re: Compliance..............................    17
5.05        Environmental Indemnification.................................    17
5.06        Tenant's Cleanup Obligation...................................    18
5.07        Existing Environmental Conditions.............................    18
5.08        Survival of Tenant's Obligations..............................    19
 VI         USE AND ACCEPTANCE OF PREMISES................................    19
6.01        Use of Leased Properties......................................    19
6.02        Acceptance of Leased Properties...............................    19
6.03        Conditions of Use and Occupancy...............................    20
6.04        Financial Statements and Other Information....................    20
 VII        REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS...........    21
7.01        Maintenance...................................................    21
7.02        Compliance with Laws..........................................    22
7.03        Required Alterations..........................................    22
7.04        Mechanics' Liens..............................................    23


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7.05        Replacements of Fixtures......................................    23
7.06        Encroachments; Restrictions...................................    24
 VIII       ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL ADDITIONS
               TO THE LEASED PROPERTIES...................................    24
8.01        Tenant's Right to Construct...................................    24
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        Financing 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.............................    34
9.05        Late Charge...................................................    35
9.06        Litigation: Attorneys' Fees...................................    35
9.07        Remedies Cumulative...........................................    36
9.08        Escrows and Application of Payments...........................    36
9.10        Power of Attorney.............................................    36
 X          DAMAGE AND DESTRUCTION........................................    37
10.01       General.......................................................    37
10.02       Landlord's Inspection.........................................    38
10.03       Landlord's Costs..............................................    38
10.04       Rent Abatement................................................    38
10.05       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............................................    41
11.06       Temporary Taking..............................................    41
  XII       ADDITIONAL REPRESENTATIONS WARRANTIES AND FINANCIAL
               COVENANTS..................................................    42
12.01       Organization and Qualification................................    42
12.02       Franchises Licenses etc.......................................    43
12.03       Litigation....................................................    44
12.04       Authorization and Enforceability..............................    44
12.05       No Legal Obstacle to Lease....................................    44
12.06       Certain Business Representations..............................    45
12.07       Certain Financial Covenants...................................    46
12.08       Disclosure....................................................    46
  XIII      ASSIGNMENT AND SUBLETTING; ATTORNMENT.........................    46
13.01       Prohibition Against Subletting and Assignment.................    46
13.02       Changes of Control............................................    47
13.03       Operating/Service Agreements..................................    47
13.04       Assignment....................................................    48
13.05       Attornment....................................................    49
  XIV       ARBITRATION...................................................    49
14.01       Arbitration...................................................    49
14.02       Appointment of Arbitrators....................................    49
14.03       Arbitration Procedure.........................................    49
14.04       Expenses......................................................    50


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14.05       Enforcement of the Arbitration Award..........................    50
  XV        QUIET ENJOYMENT; SUBORDINATION; ATTORNMENT; ESTOPPEL
               CERTIFICATES...............................................    50
15.01       Quiet Enjoyment...............................................    50
15.02       Landlord Mortgages: Subordination.............................    50
15.03       Attornment....................................................    51
15.04       Estoppel Certificates.........................................    51
15.05       Waiver of Landlord's Lien.....................................    53
  XVI       RIGHT OF FIRST OFFER; RIGHT TO PURCHASE; APPRAISAL METHOD.....    53
16.01       Right of First Offer During Lease Term or Extension Term......    53
16.02       Right to Purchase at End of Term and Extension Terms..........    53
16.03       Appraisal Method..............................................    54
  XVII      MISCELLANEOUS.................................................    55
17.01       Notices.......................................................    55
17.02       Advertisement of a Leased Property............................    56
17.03       Landlord's Access.............................................    57
17.04       Entire Agreement..............................................    57
17.05       Severability..................................................    57
17.06       Captions and Headings.........................................    57
17.07       Governing Law.................................................    57
17.08       Memorandum of Lease or Certain Rights Under the Lease.........    57
17.09       Waiver........................................................    58
17.10       Assignment; Binding Effect....................................    58
17.11       Consents and Approvals........................................    58
17.12       Single Property...............................................    58
17.13       Modification..................................................    59
17.14       Incorporation by Reference....................................    59
17.15       No Merger.....................................................    59
17.16       Force Majeure.................................................    59
17.17       Laches........................................................    59
17.18       Waiver of Jury Trial..........................................    59
17.19       Permitted Contests............................................    60
17.20       Construction of Lease.........................................    61
17.21       Counterparts..................................................    61
17.22       Relationship of Landlord and Tenant...........................    61
SCHEDULE A - LEASED PROPERTIES............................................    63
SCHEDULE B - PERMITTED EXCEPTIONS.........................................    64
EXHIBIT 2.05 - PAYMENT ACCOUNT INFORMATION................................    65
EXHIBIT 5.07 - INDENTIFICATION OF ENVIRONMENTAL REPORTS...................    66
EXHIBIT 15.02- SUBORDINATION AND NON-DISTURBANCE AGREEMENT................    67
EXHIBIT 15.04(a)..........................................................    77
EXHIBIT 15.04(b)..........................................................    80
SCHEDULE C - GUARANTY AGREEMENT...........................................    83




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<PAGE>

                                 LEASE AGREEMENT

         This Lease Agreement ("Lease") dated as of September 29, 2000, by and
between AUTOMOTIVE GROUP REALTY, LLC, a Delaware limited liability company
("Landlord"), and UAG REALTY, LLC, a Delaware limited liability company
("Tenant").

                                    RECITALS

A.       Landlord holds fee simple title to certain parcels of real estate and
         improvements thereon upon which Tenant or other subsidiaries of United
         Auto Group, Inc., a Delaware corporation ("UAG") engage 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 Schedules 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

B.       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,

C.       This Lease provides that additional real estate and improvements
         thereon may be subject to the operation and effect of this Lease, upon
         execution by Landlord and Tenant of a Lease supplement to this lease
         (the "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 acknowledge,
Landlord and Tenant agree as follows:


 I       LEASE AGREEMENT, LEASED PROPERTY AND TERM

                  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 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


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                                  defined), as more particularly described in
                                  Schedule A hereto 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 A.
Schedule B and in a Lease Supplement ("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 or its permitted sub-tenant
hereunder 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 (as
                  hereinafter defined), 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 later of the date hereof or the date of the
                  closing of such conveyance (the "COMMENCEMENT DATE").

         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
                  twenty (120) months, unless otherwise specifically and
                  expressly provided in a Lease Supplement to 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 twenty (120)
                  months, unless otherwise specifically and expressly provided
                  in a Lease Supplement to this Lease, after Tenant shall have
                  the right to extend this Lease and/or the Lease Supplement


                                       -6-

<PAGE>


                  for any or all of the Leased Properties, at Tenant's option,
                  for a 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 an additional extension term of sixty
                  (60) months from the end of the previous Extension Term (the
                  "Second 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 exercise its option for an Extension Term for a Leased
                  Property by providing written notice to Landlord, specifying
                  the Leased Property whose Term it elects to extend, no later
                  than twelve (12) months prior to the end of the previous Term
                  or Extension Term as to that Leased Property.

         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 as
                  adjusted (the "HOLDOVER RATE") and (ii) as applicable, one
                  hundred percent (100%) of the Additional Rent (as defined in
                  Section 2.02 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) 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 (b)
                  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 therefore, 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, evidencing
                                  the insurance coverage required by this Lease,
                                  stating that Landlord, and any mortgagee of
                                  Landlord is an additional named insured under
                                  the Tenant's insurance policy;

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<PAGE>

                             (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 sites of the Leased Property, a
                                  certificate of good standing and foreign
                                  qualification from the jurisdiction in which
                                  the Leased Property is located;

                             (d)  A consent or resolutions of the Tenant
                                  authorizing the Tenant to enter into this
                                  Lease.

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 the first Lease Year 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
                  Schedule A for such Leased Property attached hereto (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 Section 2.03 (b)
                                  (the "Base Annual Rent Adjustment"). Under no
                                  circumstances shall a Base Annual Rent
                                  Adjustment result in a Base Annual Rent that
                                  is less than the previous year's Base Annual
                                  Rent.

                             b)   For each Leased Property, upon each annual
                                  anniversary date of the Base Term Commencement
                                  Date for that Leased Property, (as set forth
                                  in its Schedule A) during the Term and any
                                  Extension Terms, the Base Annual Rent shall be
                                  adjusted to reflect the percentage change in
                                  CPI between the date one year prior to the
                                  adjustment date and the adjustment date.

                             c)   As used herein, "CPI" shall mean the CPI-U
                                  published by the United States Department of
                                  Labor, Bureau of Labor Statistics Consumer
                                  Price Index for All Urban Consumers, U.S. City
                                  Average available at the time of the rent
                                  adjustment calculation.

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<PAGE>


                  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; GUARANTEE AGREEMENT

                  Prior to the Commencement Date, Tenant shall deliver to
                  Landlord a guaranty agreement (attached hereto as Schedule C)
                  of United Auto Group Inc. ("UAG") and/or a deposit 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, 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 (as defined
                  in Section 3.02 hereinafter), 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, nor be entitled to any
                  abatement, deduction, deferment or reduction of Rent, or
                  set-off against the Rent as to any Leased Property



                                       -9-
<PAGE>

                  for any reason whatsoever. 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 right,
                  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 of 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 Landlord's federal, state
                  or local income taxes, and that Tenant shall pay all costs in
                  every respect of the ownership and operation of the Leased
                  Property except for Landlord's payment of the Landlord's
                  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, or in another manner agreed
                  to in writing by the Landlord and Tenant, 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 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



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<PAGE>

                  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
                  report. 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 posses 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 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
                  Landlord's net income), hereinafter levied, assessed, or
                  imposed by any federal, 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 or the
                  existence of 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
                  unforeseen, of every character in respect of each Leased
                  Property or any part thereof, the Business conducted by Tenant
                  or any of



                                      -11-
<PAGE>


                  its permitted sub-tenants 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 there from 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 Leased Property or 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 therefore.

         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.

                                      -12-

<PAGE>


         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 gross
                  negligence or willful 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 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) (1) 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.

         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


                                      -13-
<PAGE>

                  exercise its best efforts to promptly deliver copies of such
                  bills for Impositions 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 defined in
                                  Section 4.04 hereinafter). 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.

                             (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 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 Four
                                  Million Dollars ($4,000,000) in the aggregate,
                                  or (ii) if greater, 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.

                                      -14-
<PAGE>


                             (h)  Commercial comprehensive catastrophic
                                  liability insurance with limits of liability
                                  of not less than the greater of (i) Ten
                                  Million ($10,000,000) and, if greater,(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-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 (i), Twenty-Five
                  Thousand Dollars ($25,000) per occurrence. Notwithstanding
                  anything herein to the contrary deductible provisions related
                  to earthquake damage shall not exceed Five Hundred Thousand
                  Dollars ($500,000) and deductible provisions for windstorm
                  damage shall not exceed One Hundred Thousand Dollars
                  ($100,000).

         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.


                                      -15-
<PAGE>

                             (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.

                  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 re-determined 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     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.


                                      -16-

<PAGE>

         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 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 include a mortgagee policy of title
                  insurance); and (b) Tenant shall deliver evidence of insurance
                  to such mortgagee.

         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 gross
                  negligence or willful misconduct of Landlord or any of its
                  agents, or employees. 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 ownership, possession, use,
                  condition, operation or occupancy of the Leased Properties
                  during the Term; (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


                                      -17-
<PAGE>

                  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 occurring
                  on or about any Leased Property during the Term; and (g) any
                  Environmental Laws 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.

         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 SS. 101 of the Comprehensive
                                  Environmental Response Compensation and
                                  Liability Act (42 U.S.C. SS. 9601), or (4) any
                                  substance or material defined as a "hazardous
                                  chemical" pursuant to the federal Hazard
                                  Communication Standard (29
                                  C.F.R. ss. 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.

                  (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.



                                      -18-
<PAGE>


                  (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.

                  (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 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 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, as soon as reasonably practicable,
                  provide Tenant with the results of any audit or tests,
                  provided that Tenant agrees promptly to take any remedial
                  actions required or modify its operations if in Landlord's
                  reasonable judgment (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
                  premeditate 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
                  required 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.


                                      -19-

<PAGE>

                  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.

         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 cleanups
                  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.


                                      -20-
<PAGE>

5.07     EXISTING ENVIRONMENTAL CONDITIONS

         Tenant acknowledges that it has had the opportunity to review the
         Environmental Reports, if any, identified in Exhibit 5.07 hereto.
         Tenant hereby represents that it has reviewed and is aware of the
         matters disclosed in the Environmental Reports.

         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


                                     - 21 -
<PAGE>

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 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 five (5) 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.

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 Tenant, 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 of Tenant and UAG's Financial Statements
                  prepared in accordance with generally accepted accounting
                  principles ("GAAP") consistently applied and/or applicable
                  manufacturer accepted accounting principles; and (ii) as to
                  Tenant and UAG, Tenant shall provide Landlord no later than
                  ninety (90) 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 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. Additionally, upon
                  Landlord's request, Tenant shall



                                     - 22 -
<PAGE>

                  provide Landlord with copies of Tenant's and UAG's annual
                  capital expenditure budgets for each Leased Property and any
                  reports generated by Tenant and UAG 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 may
                  include 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 exercise its best efforts to keep all
                  Confidential Information provided to it in connection with
                  this Section 6.04 confidential to the same extent it treats
                  its own confidential information and shall not disclose the
                  Confidential Information to any third party. In the event that
                  Landlord is required to disclose certain Confidential
                  Information in connection with the disclosure required by
                  Section 6.04(b)(v), Landlord agrees to use all reasonable
                  efforts, at Tenant's expense, to make such required disclosure
                  in a manner so as to preserve as much as possible and lawful
                  the confidentiality of such Confidential 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 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
          possession, 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



                                     - 23 -
<PAGE>

         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
         or any permitted sub-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
         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. 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). In
                  the event that items are replaced by Landlord or at Landlord's
                  expense, recognizing that Landlord has no obligation to do so,
                  such replacement Fixtures shall be the sole and absolute
                  property of the Landlord. To the extent that such replacement




                                     - 24 -
<PAGE>

                  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 nondisturbance 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
                  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,
         Tenant having been deemed to consent to any restrictive covenant or
         other agreement in existence on the effective date of a Lease
         Supplement, 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,
         Tenant having been deemed to consent to any restrictive covenant or
         other agreement in existence on the effective date of a Lease
         Supplement, 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 at its
         sole expense 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,



                                     - 25 -
<PAGE>

         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's permitted sub-tenant has a franchise agreement or by
         a development agreement with a governmental authority or any other
         person applicable to the Leased Property which has been approved in
         writing by UAG or an Affiliate thereof ("DEVELOPMENT 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 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, not withstanding
         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 or could cause the Landlord to incur a
         Material Liability to a governmental authority 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
         or UAG'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, of the name of the
         appraiser and the terms under which the appraisal shall be made. Such
         appraiser shall, at a minimum, be either a MAT 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 MM 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



                                     - 26 -
<PAGE>

         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;

         (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 or violate the Development Agreement 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 thirty (30)
         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 or the Development
         Agreement, 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;



                                     - 27 -
<PAGE>

         (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 protect Landlord's interest
                  from mechanics' 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)      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 Properties 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 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



                                     - 28 -
<PAGE>

         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.

         (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 repair any damage to such
                  Leased Property resulting from the removal thereof to the
                  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,
                  at Landlord's option, 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.




                                     - 29 -
<PAGE>

8.08     FINANCING 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, at Landlord's option, the
         specific Leased Property or Leased Properties as to which the Event of
         Default exists or 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

                  (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
                           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 or UAG: (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 or UAG, 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 or, as applicable, UAG,
                           a receiver of Tenant, or as applicable UAG, of the
                           whole or substantially all of its property, or
                           approving a petition filed against it seeking
                           reorganization or arrangement of Tenant or, as
                           applicable, UAG, 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



                                     - 30 -
<PAGE>

                           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, 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 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, UAG, or an Affiliate of a crime
                           or offense constituting a felony in the jurisdiction
                           in which committed or under federal law.

                  (h)      Termination (except for reason specified in
                           subparagraph (g) hereof) 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 or UAG 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

                  (1)      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, at the option



                                     - 31 -
<PAGE>

         of Landlord, constitute an Event of Default as to any of the other
         Leased Properties and the remedies set forth 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, at
         the option of Landlord, 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)(u) 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 used
                           reasonable efforts to re-let 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



                                     - 32 -
<PAGE>

                           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
                           reletting 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.

                  (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.



                                     - 33 -
<PAGE>


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 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.

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



                                     - 34 -
<PAGE>

         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.

9.10     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.



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<PAGE>

X        DAMAGE AND DESTRUCTION

10.01    GENERAL

         Tenant shall promptly 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. Absent an Event of Default, 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
         reasonable 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 and appropriate lien releases. 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. Absent an Event of Default, 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 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 absent an Event of Default. 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 absent an Event of
         Default.

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



                                     - 36 -
<PAGE>

         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 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 and shall be
         inapplicable if an Event of Default has occurred and is continuing.

10.05    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,



                                     - 37 -
<PAGE>

         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.

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 in
         Section 11.05) 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, and an Event of
         Default is not continuing Tenant shall retain the amount of any Tenant
         Award (as hereafter defined in Section 11.05) 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



                                     - 38 -
<PAGE>

         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 (to the Landlord; if an
         Event of Default is continuing) (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.

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



                                     - 39 -
<PAGE>

         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 or is not entitled to receive 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 and UAG are each 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, as to UAG, its guaranty, 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 and UAG are each 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, 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 and UAG's charter, as in effect on the date
                  hereof, and Tenant's and UAG's bylaws, 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



                                             -40-
<PAGE>
                  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,
            as to UAG, UAG) or the operations, business, assets, properties,
            franchises, financial condition, income or prospects of any
            Affiliate (or, as to UAG, UAG), whether or not such event or
            occurrence is an Event of Default.

"AFFILIATE" means with respect to any Person, (1) any Person that holds direct
or indirect beneficial ownership (as defined in Rule 1 3d-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, 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     FRANCHISES LICENSES ETC.

          Tenant and its subsidiaries and Affiliates 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' and Affiliates' 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 or Affiliates in Tenants' Business or
          the businesses of its subsidiaries, or Affiliates 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 or Affiliates 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 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 its subsidiaries 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,




                                      -41-
<PAGE>
          where applicable, the extension or renewal, of any of the foregoing
          which has resulted, or could result, in any Material Adverse Change.

12.03     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 as to Tenant or UAG or
          which seeks to enjoin the execution and consummation of this Lease and
          the performance of Tenant's obligations hereunder and/or UAG's
          obligations under its guaranty. 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 as
          to Tenant or UAG.

12.04     AUTHORIZATION AND ENFORCEABILITY

          Tenant and UAG have each taken all corporate or other action required
          to execute, deliver and perform this Lease and the guaranty. This
          Lease constitutes the legal, valid and binding obligation of Tenant
          and is enforceable against Tenant in accordance with its terms. The
          guaranty constitutes the legal valid and binding obligation of, and is
          enforceable against, UAG in accordance with its terms.

12.05     NO LEGAL OBSTACLE TO LEASE

          Neither the execution and delivery of this Lease or the guaranty of
          UAG, nor the performance of any obligation hereunder or thereunder 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, UAG, 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, UAG, any Affiliate, any Improvements or
                   any Leased Property; or

           (c)     any violation of or conflict with Tenant's or any Affiliate's
                   or UAG's Charter or Bylaws 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 or UAG in connection with the execution, delivery
and performance of this Lease.

12.06     CERTAIN BUSINESS REPRESENTATIONS

           (a)     Labor Relations. No dispute or controversy between Tenant or
                   UAG OR any Affiliate and its or their employees has resulted
                   in, or is reasonably likely to result in, any



                                      -42-
<PAGE>
                   Material Adverse Change, and neither Tenant nor any Affiliate
                   anticipates that their relationships with its unions or
                   employees will result, or are reasonably likely to result, in
                   any Material Adverse Change. Tenant, UAG, 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, UAG, and each Affiliate is in compliance
                   in all material respects with all federal and state antitrust
                   laws relating to Tenant's or UAG's Business and the
                   subsidiaries' businesses and the geographic concentration
                   thereof.

           (c)     Consumer Protection. Neither Tenant, UAG, 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 4 14(b),
                   (c), (m), or (o) of the Code or Section 4001 of ERISA.

12.07     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.



                                      -43-
<PAGE>
12.08     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.

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 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 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. Notwithstanding anything else in this
          Lease, unless an Event of Default is continuing, Tenant shall have the
          right, without prior written consent of Landlord, but upon prior
          written notice to 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. No assignment shall in any way impair the
          continuing primary liability of the Tenant hereunder.

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 UAG or the sale by any
                   shareholder or equity holder of Tenant or UAG 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 or UAG to a
                   Person other than an Affiliate of Tenant, controlled by Roger
                   S. Penske or Penske Capital Partners, LLC, 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 entity owned solely
                   and Controlled by UAG;

          (c)      any transaction pursuant to which Tenant is merged with or
                   consolidated into another entity (other than an entity owned
                   solely and Controlled by UAG), and Tenant is not the
                   surviving entity.



                                      -44-
<PAGE>
13.03     OPERATING/SERVICE AGREEMENTS

          (a)      Permitted Agreements. Tenant's permitted subleasee(s) shall,
                   upon prior written notice to Landlord, without Landlord's
                   prior approval, unless an Event of Default is continuing, 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 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 sub-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 or UAG hereunder or under the guaranty,
                   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 permitted subleases and 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 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




                                      -45-
<PAGE>

          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 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     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 (and its lender) 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 therefore, in writing, specifying in detail the controversy
          and matter(s) to be submitted to arbitration in accordance with The
          rules of the American Arbitration Association in Detroit, Michigan
          ("AAA"). The party or parties giving notice shall request a listing of
          available arbitrators from the AAA, 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 AAA may make such selections as are necessary to
          complete the panel of three (3) arbitrators. All arbitrators shall be
          independent and neutral.





                                      -46-
<PAGE>
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 Detroit,
         Michigan, 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 AAA 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 Michigan 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 and from time to time upon demand by Landlord
         or any mortgagee or any holder of any mortgage or other instrument
         described in this




                                      -47-
<PAGE>
          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, 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) 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




                                      -48-
<PAGE>
                           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 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 waive 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 or its
         Affiliates "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.




                                      -49-
<PAGE>
XVI      RIGHT OF FIRST OFFER; RIGHT TO PURCHASE; APPRAISAL METHOD

16.01    RIGHT OF FIRST OFFER DURING LEASE TERM OR EXTENSION TERM

         As to a Leased Property, if and when during the Term or an Extension
         Term, as the case may be, as to that Leased Property, Landlord shall
         decide to sell that Leased Property to a third party who is not an
         Affiliate of Landlord (the "DECISION TO SELL"), provided that no
         default by Tenant exists under the Lease, Landlord shall notify Tenant
         in writing within ten (10) business days after Landlord makes a
         Decision to Sell the Leased Property. Such notification shall include
         all material terms of the sale, including, but not limited to, the
         purchase price, the portion of the Leased Properties or Leased Property
         subject to sale and the anticipated closing date of the sale (the "Sale
         Notification"). Tenant shall thereafter have ten (10) business days in
         which to notify Landlord in writing of its intent to purchase the
         Leased Property upon the terms set forth in the Sale Notification. If
         Tenant exercises this right, then the sale of the Leased Property to
         Tenant shall take place upon the terms set forth in the Sale
         Notification. If Tenant fails to exercise this right, then Landlord
         shall be free to sell the Leased Property to the third party upon the
         terms set forth in the Sale Notification. If no sale of the Leased
         Property is effected by the Landlord upon the terms of the Sale
         Notification, then Tenant's right under this Section 16.01 shall
         continue for each subsequent Decision to Sell during the Term or an
         Extension Term as to that Leased Property.

16.02    RIGHT TO PURCHASE AT END OF TERM AND EXTENSION TERMS

              (a) Landlord hereby grants the Tenant the right and option to
                  purchase the Leased Property (the "OPTION TO PURCHASE") at an
                  aggregate amount equal to such Leased Property's Property
                  Consideration (as hereafter defined) upon termination of the
                  Term or any Extension Term if applicable, of this Lease as to
                  the Leased Property. 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 or any other 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) plus any prepayment penalty and expenses
                  incurred by Landlord to its lender or otherwise in effecting
                  the sole. The cost of determining the Appraised Value shall be
                  borne by Tenant.

         (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 the Leased Property or
                  (ii) to decline to purchase such Leased Property ("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




                                      -50-
<PAGE>
                  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 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 seasonably
                  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 borne by the
                  Tenant. As promptly as possible but 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 Leased Property to Tenant
                  pursuant to Section 16.02 and that there may not be a lease on
                  the Leased Property after the sale.

         (b)      The "Appraised VALUE" of the Leased Property or 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.



                                      -51-
<PAGE>
XVII     MISCELLANEOUS

17.01    NOTICES

         Landlord and Tenant hereby agree that all notices, 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 Tenant, then to the address given in the Summary of Terms with a copy to:
                                    UAG Realty, LLC
                                    13400 Outer Drive West, Ste. B-36
                                    Detroit, MI 48239
                                    Attn: President

With a copy to:                     United Auto Group, Inc.
                                    13400 Outer Drive, West
                                    Suite B-36
                                    Detroit, MI 48239
                                    Attn: General Counsel

If to Landlord:
                                    Automotive Group Realty, LLC
                                    13400 Outer Drive West
                                    Detroit, MI 48239
                                    Attn: President

With a copy to:                     Penske Corporation
                                    13400 Outer Drive West
                                    Detroit, MI 48239
                                    Attn: General Counsel

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 herein below. 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 a further Extension Term, as to the Leased Property within
          twelve (12) months prior to the expiration of




                                      -52-
<PAGE>
         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
         other 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.

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.

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 a court of law or an
          authorized arbitration panel 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
          therefore, 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 shall bear all costs of such
          recording.


                                      -53-
<PAGE>
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.

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.

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 subtenants of such Leased Property known to Landlord.

                                      -54-
<PAGE>
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 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

          Unless an Event of Default shall be continuing, 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 there from 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





                                      -55-
<PAGE>
          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; (1) 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. 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.


















                                      -56-
<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.


WITNESS:                                        AUTOMOTIVE GROUP REALTY, LLC



/s/ M. Feher                                    /s/ Peter E. Mogk
---------------------------                     --------------------------

                                                Name: Peter E. Mogk

                                                Title:  Treasurer



WITNESS:                                        UAG REALTY, LLC




/s/ M. Feher                                    /s/    Roger S. Penske
----------------------------                    ----------------------

                                                Name: Roger S. Penske
                                                      ---------------

                                                Title:  Chairman of the Board
                                                        ---------------------







                                      -57-
<PAGE>
                          SCHEDULE A LEASED PROPERTIES








































                                      -58-
<PAGE>
                        SCHEDULE B PERMITTED EXCEPTIONS









































                                      -59-
<PAGE>
                   EXHIBIT 2.05 PAYMENT ACCOUNT INFORMATION

Wiring instruction for the Landlord's operating account are as follows:










































                                      -60-
<PAGE>


              EXHIBIT 5.07 INDENTIFICATION OF ENVIRONMENTAL REPORTS



                                      -61-
<PAGE>




           EXHIBIT 15.02 - SUBORDINATION AND NON-DISTURBANCE AGREEMENT


         THIS AGREEMENT is made as of this day of ______, 2000, among
____________, a _____________ organized under the laws of the State of
____________ ("Lender"), UAG REALTY, LLC, a Delaware limited liability company
("Tenant"), and AUTOMOTIVE GROUP REALTY, LLC, A Delaware limited liability
company ("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 $150,000,000 (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

         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 herby acknowledged, and
notwithstanding anything in the Lease to the contrary, it is herby 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 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, 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



                                      -62-
<PAGE>

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 determined in accordance with the Lease 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 herein below 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.

         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



                                      -63-
<PAGE>


closing and funding of the Loan, Tenant hereby makes the following
certifications:

         (a) The term of the Lease commenced on _____________, 2000, 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 _______,
2000. In addition to the 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 [not] 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



                                      -64-
<PAGE>


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.

         (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.

         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
herein below 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 herein below, 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:
                                 UAG REALTY, LLC
                                 13400 Outer Drive West, Ste. B-36
                                 Detroit, MI 48239
                                 Attn: President

with a copy to:                  United Auto Group, Inc.
                                 13400 Outer Drive West, Ste. B-36
                                 Detroit, MI 48239
                                 Attn: General Counsel


                                      -65-
<PAGE>



and, if given to Landlord, must be addressed as follows, subject to change as
provided hereinabove:

                                             Automotive Group Realty, LLC
                                             13400 Outer Drive West
                                             Detroit, MI 48239
                                             Attn: President

with a copy to:                              Penske Corporation
                                             13400 Outer Drive West
                                             Detroit, MI 48239
                                             Attn: General Counsel



         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]



                                      -66-
<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

_____________________________


                                        UAG REALTY, LLC

Signed, sealed and delivered
in the presence of:                     By:____________________________________
                                        Title:_________________________________


Witness

____________________________



                                        AUTOMOTIVE GROUP REALTY, LLC

Signed, sealed and delivered
in the presence of:                     By:____________________________________
                                        Title:_________________________________





Witness

____________________________






                                      -67-
<PAGE>





County of___________________

                             SS:

State of____________________


         This is to certify that on this ______day of ___________, 2000,
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:


                                      -68-
<PAGE>






County of___________________________

                                       SS:

State of____________________________


         This is to certify that on this day of ____________, 2000, 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.

                                      -69-
<PAGE>


                                        Notary Public

                                           My commission expires:


County of___________________________

                                        SS:
State of______________________________

         This is to certify that on this day of _________, 2000, 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:



                                      -70-
<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 ___________, 2000 [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
                           United Auto Group, Inc., a Delaware corporation.

                  (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 there from, 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 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.



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<PAGE>

                  (e)      The Tenant has paid the monthly rent described in
                           subparagraph 1(d)(i) above through and including the
                           month of_____________, 2000. The Tenant has paid the
                           charges described in subparagraphs l(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 $ ________________ ].

                  (1)      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 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.



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<PAGE>




                                        TENANT:
                                        ______________________________


                                        a ______________________







                                        By:___________________________
                                        Title:________________________




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<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 ___________________,2000 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 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____, 2000. The
Tenant has paid the charges described in subparagraphs 1 (d)(ii) through the
most recent billing period for such charges.



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<PAGE>

                  (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.


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<PAGE>

                                   SCHEDULE C


                                                        Date: September 29, 2000



                               CORPORATE GUARANTY


           To induce Automotive Group Realty, LLC ("AGR") to enter into a Lease
Agreement dated September 29, 2000, (the "LEASE AGREEMENT") and/or any other
documents or instruments evidencing, or relating to, any such lease including
Lease Supplements ("and the obligation evidenced thereby") as such term is
defined therein (collectively "LEASE DOCUMENTS" and each an "LEASE DOCUMENT")
with UAG Realty, LLC, a limited liability company organized and existing under
the laws of the State of Delaware ("UAG Realty"), but without in any way binding
AGR to do so, the undersigned, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, does hereby guarantee to AGR,
its successors and assigns, the due regular and punctual payment of any sum or
sums of money which UAG Realty may owe to AGR now or at any time hereafter,
whether evidenced by a Lease Document, or otherwise related to such Lease
Agreement, and whether it represents principal, interest, rent, late charges,
indemnities, an original balance, an accelerated balance, liquidated damages, a
balance reduced by partial payment, a deficiency after sale or other disposition
of any leased properties, collateral or security, or any other type of sum of
any kind whatsoever that UAG Realty may owe to AGR now or at any time hereafter
related to such Lease Agreement, and does hereby further guarantee to AGR, its
successors and assigns, the due, regular and punctual performance of any other
duty or obligation of any kind or character whatsoever that UAG Realty may owe
to AGR now or at any time hereafter related to such Lease Agreement (all such
payment and performance obligations being collectively referred to as
"Obligations"). Undersigned does hereby further guarantee to pay upon demand all
losses, costs, reasonable attorneys' fees and expenses which may be suffered by
AGR by reason of UAG Realty's default or default of the undersigned.

           This Guaranty is a guaranty of prompt payment and performance (and
not merely a guaranty of collection). Nothing herein shall require AGR to first
seek or exhaust any remedy against UAG Realty, its successors and assigns, or
any other person obligated with respect to the Obligations, or to first
foreclose, exhaust or otherwise proceed against any leased properties,
collateral or security which may be given in connection with the Obligations. It
is agreed that AGR may, upon any breach or default of UAG Realty, or at any time
thereafter, make demand upon the undersigned and receive payment and performance
of the Obligations, with or without notice or demand for payment or performance
by UAG Realty, its successors or assigns, or any other person. Suit may be
brought and maintained against the undersigned, at AGR's election, without
joiner of UAG Realty or any other person as parties thereto.

           The undersigned agrees that its obligations under this Guaranty shall
be primary, absolute, continuing and unconditional, irrespective of and
unaffected by any of the following actions or circumstances (regardless of any
notice to or consent of the undersigned): (a) the settlements, compromises,
accounts stated and agreed balances made in good faith between UAG Realty, its
successors or assigns, and AGR shall be binding upon and shall not affect the
liability of the undersigned.



                                      -76-
<PAGE>

         Payment of all amounts now or hereafter owed to the undersigned by UAG
Realty or any other obligor for any of the Obligations is hereby subordinated in
right of payment to the indefeasible payment in full to AGR of all Obligations.
Until all Obligations are fully satisfied, the undersigned hereby waives all
statutory, contractual, common law, equitable and all other claims against UAG
Realty, any other obligor for any of the Obligations, any collateral therefor,
or any other assets of UAG Realty or any such other obligor (other than its
insurance carrier), for subrogation, reimbursement, exoneration, contribution,
indemnification, setoff or other recourse in respect of sums paid or payable to
AGR by the undersigned hereunder, and until all Obligations are fully satisfied,
the undersigned hereby further waives any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive by reason of
any amounts paid by, or collected or due from, it, UAG Realty or any other
obligor for any of the Obligations, or realized from any of their respective
assets other than its insurance carrier.

         THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN AGR AND THE UNDERSIGNED RELATING TO THE SUBJECT
MATTER HEREOF OR THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN AGR AND THE UNDERSIGNED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY,
THE OBLIGATIONS GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

           As used in this Guaranty, the word "person" shall include any
   individual, corporation, partnership, limited liability company, joint
   venture, association, joint-stock company, trust, unincorporated
   organization, or any government or any political subdivision thereof.

           This Guaranty is intended by the parties as a final expression of the
   guaranty of the undersigned and is also intended as a complete and exclusive
   statement of the terms thereof. No course of dealing, course of performance
   or trade usage, nor any paid evidence of any kind, shall be used to
   supplement or modify any of the terms hereof. Nor are there any conditions to
   the full effectiveness of this Guaranty. This Guaranty and each of its
   provisions may only be waived, modified, varied, released, terminated or
   surrendered, in whole or in part, by a duly authorized written instrument
   signed by AGR. No failure by AGR to exercise its rights hereunder shall give
   rise to any estoppel against AGR, or excuse the undersigned from performing
   hereunder. Waiver by AGR of any right to demand performance hereunder shall
   not be a waiver of any subsequent or other right to demand performance
   hereunder.

         This Guaranty shall bind the undersigned's successors and assigns and
the benefits thereof shall extend to and include AGR's successors and assigns.
In the event of default hereunder, AGR may at any time inspect undersigned's
records, or at AGR's option, the undersigned shall furnish AGR with a current
independent audit report.

           If any provisions of this Guaranty are in conflict with any
   applicable statute, rule or law, then such provisions shall be deemed null
   and void to the extent that they may conflict therewith, but without
   invalidating any other provisions hereof.


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<PAGE>

         Each signatory on behalf of a corporate guarantor warrants that he had
authority to sign on behalf of such corporation and by so signing, to bind said
guarantor corporation hereunder.

         IN WITNESS WHEREOF, this Guaranty is executed the day and year above
written.


                                                 UNITED AUTO GROUP, INC.,
                                                 A DELAWARE CORPORATION


                                                 By: _________________________

                                                             (Signature)


                                                 Title: _______________________
                                                             (Officer's Title)


ATTEST: _____________________________
        Secretary/Assistant Secretary





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