Exhibit 10.42
Confidential Treatment Request
[*] indicates
information
that has been
omitted pursuant to a confidential
treatment request and
this information has been filed under separate cover with
the Commission.
ORIGINAL
JEB/CB
T-13042
02/04/05
03/04/05
03/08/05
L E A S E C O N
T R A C T
THIS LEASE CONTRACT entered into by and between "Landlord" and
"Tenant" 14th day
of March, 2005, in accordance with the terms and hereinafter set
forth.
W I T N E S S E T H
ARTICLE I
Summary of Basic Lease Provisions
and Certain Defined Terms
When used herein, the following terms shall have the indicated
meanings:
1. "LANDLORD": Weingarten Nostat, Inc.
"NOTICE
ADDRESS": P.O. Box
924133, Houston,
TX 77292-4133,
Attn: General
Counsel
2. "TENANT":
Midnight Auto
Franchise Corp.
State
Where Incorporated:
Michigan Corporate I.D.#: 383370288
"TENANT'S
TRADE NAME"/ (d/b/a): Midnight Auto
"NOTICE
ADDRESS":
Primary
Address": 1835 E. Guadalupe, E-116, Tempe, AZ 85283
"Secondary
Address": 3872 Rochester Rd, Troy, MI 78083, Attn: Dennis
Spencer
So long as
Tenant is occupying
the Leased
Premises, the Primary Address
shall to
be the Notice Address. At any time when Tenant is not occupying
the
Lease the
Secondary Address shall be deemed to be the Notice Address.
3. "GUARANTOR":
None
4. "LEASED PREMISES":
Approximately 4,600
square feet constituting part of the
Center as
shown on Exhibit "A".
5. LEASE TERM:
"COMMENCEMENT DATE":
Earlier of: (i) 60
days after tender of possession of
Premises
to Tenant, or (ii) the date upon which Tenant opens for business
in
Premises.
"TERMINATION DATE":
Last day of the 60th
full calendar month after the
Commencement Date.
6. "MINIMUM RENT":
Lease Year 1: [*]
Lease Year
2: [*]
Lease Year
3: [*]
Lease Year
4: [*]
Lease Year
5: [*]
7. "PERCENTAGE RENT":
N/A
8. "PERMITTED
USE": For the operation of an
automotive
repair center
office
automotive
repair services such as oil changes, tune ups, tire changes,
engine
transmission service and related services; provided, however, in no
event
shall
be permitted to engage in automotive body repair.
Notwithstanding the
forgoing Permitted
Use shall be subject
to conditions
and
restrictions set forth in sections 6.01.B., 6.06. and 7.01.B
hereof.
9. "SECURITY DEPOSIT":
[*] of [*] shall be
applied to month's Minimum Rent and
additional
charges.
10. "ADDITIONAL
CHARGES": (to
commence on
"Commencement
Date" as defined
in
above):
"COMMON
AREA PAYMENT": [*] per month
"TAX PAYMENT": [*] per month
"INSURANCE
PAYMENT": [*]
per month
"WATER COSTS": [*] per month
THE SUBMISSION OF THIS LEASE FOR EXAMINATION BY TENANT AND/OR
EXECUTION THEREOF
DOES NOT CONSTITUTE A RESERVATION OF OR OPTION FOR THE LEASED
PREMISES AND THIS
SHALL BECOME EFFECTIVE ONLY UPON EXECUTION BY ALL PARTIES HERETO
AND DELIVERY OF
A FULL COUNTERPART HEREOF BY LANDLORD TO TENANT.
*Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
ARTICLE II - PREMISES
SECTION 2.01. Landlord
hereby leases to
Tenant, and Tenant
hereby leases from
Landlord the Leased Premises which shall be a portion of a building
situated or
to be situated
substantially in the location which is shown outlined or
hatched
on the plot designated
Exhibit "A", which is annexed hereto and incorporated by
reference herein and
made a part hereof for all purposes, such building now
existing or to be
constructed
or being constructed on part of the tract of
property described in
Exhibit "B", which is annexed hereto and incorporated by
reference herein and made a part hereof for all purposes.
The land described
in
Exhibit "B" (as may be reduced or increased from time to time as designated by
Landlord) and any
existing and future buildings, parking area, sidewalks,
service area and other
improvements now
existing or hereafter
erected thereon
are sometimes herein referred to as the "Shopping Center". Landlord
reserves the
right to place in,
under, over or through
the Leased Premises
pipes, wires,
lines, and facilities
serving other areas of
the Shopping Center provided such
right is exercised
in a manner
which does not unreasonably interfere with
Tenant's conduct of its business at the Leased Premises.
SECTION 2.02. In determining the floor area of the Leased
Premises, distances
shall be measured from the exterior face of all exterior walls and
the center of
all partition walls
which separate the Leased Premises from any interior
area.
Walls separating
the Leased
Premises from a wall
and corridor walls
shall be
deemed to be exterior walls of the Leased Premises.
SECTION 2.03. The Leased Premises shall be constructed in accordance
with the
Construction Rider
attached hereto and incorporated by reference herein for all
purposes.
ARTICLE III - TERM
SECTION 3.01. The term of this Lease shall commence on the
Commencement Date and
shall terminate on the Termination Date, unless sooner terminated in
accordance
with the terms and conditions hereinafter set forth. At the
request of Landlord
from time to time made, Tenant will execute one or more memoranda or letters
stating the commencement and termination dates of the Lease.
SECTION 3.02.
Notwithstanding
the fact that the
lease will commence at a date
subsequent to the
execution of this
instrument
by Landlord and
Tenant, such
parties intend that each shall have vested rights immediately upon the signing
of this instrument and that this instrument shall be fully binding and in
full
force and effect from and after execution hereof by Landlord and
Tenant.
ARTICLE IV - RENTAL
SECTION 4.01. Tenant covenants and agrees to pay to Landlord the
Minimum Rent in
Houston, Harris County, Texas, at P. O. Box 201692, Houston, Texas
77216-1692 or
at such other address
as Landlord may from
time to time designate
in writing.
All such Minimum Rent
payments shall be made
on the first day of each calendar
month, monthly in
advance, for each and
every month in the term of this Lease.
Upon commencement of
the term of this Lease, Tenant will pay Landlord
Minimum
Rent for the first full calendar month of the lease term; but if
the lease term
does not commence on the first of a calendar month, Tenant will, in lieu of a
full month's Minimum Rent, pay in advance a pro rata part of such
sum as Minimum
Rent for such partial month.
SECTION 4.02.
The term "Gross
Sales" includes all moneys or things of value
received or receivable, including lease or rental revenue
(without deductions
for uncollectibles),
by Tenant, its sublessees, licensees or concessionaires or
others, for
merchandise sold or services performed or equipment,
or inventory
items leased or rented or business conducted (including interest, time-price
differential, finance
charges and service charges on time-payment sales, credit
sales or lay-a-way
sales) in,
about or from the
Leased Premises
(including,
without limitation,
orders received in person or by mail, telephone or
electronically,
orders placed
at the Leased Premises by telephone, or
electronically,
inclusive of any
e-commerce or kiosk type sales, and services
performed by Tenant away from the Leased Premises), including transactions in
which delivery is made
to the customer at the Leased Premises but the order is
taken elsewhere and
transactions in which
the delivery is made from the Leased
Premises regardless of
where the order is taken, receipts from mechanical and
other vending machines, deposits not refunded to purchasers, and
revenues, fees,
and/or commissions
received from the sale
of lottery tickets.
The term "Gross
Sales" shall not include (1) excise or sales taxes added to the
selling price of
the item and paid by the tenant directly to the Government, or (2) refunds to
customers not in
excess of the
original selling price of the item, or (3)
transfers or exchanges of merchandise to another of Tenant's
stores made in the
regular course
of Tenant's business and not for the purpose of avoiding
consummation of a sale
in the Leased
Premises, or (4)
returns to shippers
of
manufacturers,
or (5) sales of Tenant's "Removable Trade Fixtures" (as
hereinafter defined)
after use by Tenant in the Leased Premises. Under no
circumstances shall
there be any
deduction from Gross Sales by reason of
Tenant's being liable to pay any franchise tax, capital stock tax,
income tax or
similar or dissimilar
tax based upon Tenant's income, capital structure, or
profits.
2
<PAGE>
All Gross Sales will be recorded through modern methods in a manner
approved in
writing by Landlord.
Complete records shall be accurately maintained by Tenant
on all operations conducted at the Leased Premises. Such records,
together with
cash register total slips, sales slips and tax returns
relating to the business
at the Leased Premises
will be retained by Tenant for three (3) years
after
preparation, and will be open to inspection by Landlord at all
reasonable times.
The term "Lease Year",
as used herein,
shall, in the case of the first Lease
Year, mean the period which commences with the Commencement
Date and
terminates
on the last day of the twelfth (12th) full calendar month after the
Commencement
Date or alternatively,
the period which
commences on the Commencement Date and
terminates on the last day of the twelfth (12th) full calendar month after the
Minimum Rent Commencement Date, if a Minimum Rent
Commencement Date is provided
herein. Such first
Lease Year shall include the partial month, if any, at the
beginning of the lease term if the Commencement Date is not the first day of a
calendar month.
Each subsequent
"Lease Year" shall
mean a period of twelve (12) full calendar
months commencing with
the date following the last day of the first Lease Year,
and commencing with each subsequent annual anniversary of such
day.
The last Lease Year of the lease term shall be the period which
commences on the
day immediately
following the last day of the preceding Lease Year and
terminates on the last day of the lease term. Accordingly,
such last Lease
Year
may be less than twelve (12) full calendar months, depending upon the date of
termination of the lease term.
Within fifteen
(15) days after the
end of each three month period in the lease
term, Tenant will deliver to Landlord a statement signed by Tenant
(if Tenant is
an individual), or a general partner of Tenant (if Tenant is a
partnership) or a
responsible corporate officer of Tenant (if Tenant is a
corporation)
accurately
setting forth the
amount of Gross Sales made during such three month period,
itemized in reasonable detail.
SECTION 4.03. All rent
and other sums
hereunder provided to
be paid by Tenant
shall be due and
payable by Tenant
without demand,
deduction,
abatement or
off-set except as expressly provided herein. Past due rent and other past
due
payments shall bear
interest from maturity at the rate of twelve percent (12%)
per annum (or, at Landlord's option, a monthly variable rate
equal to 400 basis
points greater than the "prime rate" at Bank One, Arizona, N.A.) from the date
due until paid.
All other sums and charges of whatsoever nature required to be paid
by Tenant to
Landlord pursuant to the terms of this Lease (including, without
limitation, all
payments set forth in Article XXII, below entitled "Additional
Rent") constitute
additional rent
(whether or not same be designated "Additional Rent") and
failure by Tenant to timely pay such other sums or charges may be treated by
Landlord as a failure by Tenant to pay Minimum Rent.
ARTICLE V - UTILITIES
SECTION 5.01.
Tenant will at its own cost and expense pay for all water,
sanitary sewer, gas, electricity and other utilities used in the
Leased Premises
and will save and hold Landlord harmless from any charge or
liability for same.
Except for water and
sanitary sewer
service, all utilities are separately
metered to the Leased
Premises and Tenant shall make payments directly to the
suppliers of such
utilities.
Water and sanitary
sewer service is metered in
common with other occupants of the Shopping Center. Tenant shall pay the Water
Costs (as set forth in Article I.10 hereof) for each and every
month during the
term of this Lease, and Landlord shall have the right, exercisable by notice to
Tenant at any time during the term of this Lease, to adjust the monthly amount
Tenant shall pay for Water Costs to more accurately reflect
Landlord's
estimate
of Tenant's actual water usage, and additionally, Landlord may
submit an invoice
to Tenant for the difference between the actual cost of
supplying water to
the
Leased Premises and
the amount theretofore
paid by Tenant during
any calendar
year. Tenant may, at its option, install a flow meter at the Leased
Premises in
order to measure the amount of water flowing into the Leased
Premises. In such
event, "Water Costs"
shall be adjusted
based on Tenant's
actual usage,
which
shall be calculated by
multiplying
the cost of the water
flowing through
the
common meter by a
fraction, the numerator of which is the amount of water
actually flowing
through the flow meter
and the denominator of
which shall be
the amount of water flowing through the common meter.
SECTION 5.02. No
interruption or
malfunction
of any utility
services shall
constitute an eviction
or disturbance
of Tenant's use and
possession
of the
Leased Premises or a breach by Landlord of any of its obligations hereunder or
render Landlord liable for any damages or entitle Tenant to be
relieved from any
of its obligations hereunder or grant Tenant any right of off-set
or recoupment.
In the event of any such interruption of any such services,
Landlord shall use
reasonable diligence
to restore such service in any circumstances in which such
interruption is
caused by Landlord's fault. Notwithstanding any term or
provision to the
contrary contained herein, in the event that such
utility
services are
interrupted due to the
negligence of Landlord for a period longer
than twenty-four (24) hours, and provided that Tenant shall have
given notice of
such interruption
to Landlord,
then to the extent
that Tenant cannot and does
not conduct
its business in the Leased Premises due to such interruption,
Minimum Rent and additional charges shall abate until such
interrupted
utility
services have been restored.
3
<PAGE>
ARTICLE VI - USE
SECTION 6.01.A.
Tenant will use the
Leased Premises
solely for the
Permitted
Use. Tenant
will not use or permit
use of the Leased
Premises for any other
purpose without the written consent of Landlord. Such store will be advertised
as and operated under the Tenant's Trade Name. Tenant, at its own
expense: will
comply with all federal, state, municipal and other laws,
codes, ordinances,
rules and regulations
applicable
to the Leased Premises and the business
conducted therein by
Tenant; will comply
with such regulations as Landlord may
promulgate regarding
sanitation,
cleanliness
and other matters at
the Leased
Premises or within the Shopping Center, including without limitation
removal of
garbage, trash
and other waste. Tenant will not conduct any auction or
bankruptcy or fire or
"lost-our-lease" or
"going-out-of-business" or similar
sale or make any unlawful use of the Leased Premises or permit any unlawful
use
thereof.
SECTION 6.01.B.
Tenant covenants and agrees that any noise created in the
conduct of Tenant's
business will be kept to a sufficiently low level so as not
to disturb other tenants and customers in the Shopping Center. In
no event shall
Tenant (or Tenant's
customers and invitees) accelerate vehicle engines to
such
RPM levels which would
be a nuisance to other
tenants and customers in the
Shopping Center.
SECTION 6.02. Tenant
will join and
participate in any association of merchants
in the Shopping
Center and will in good faith cooperate in any reasonable
advertising or promotional programs of such association.
SECTION 6.03.A. Tenant
binds and obligates
itself to occupy and use the entire
Leased Premises
continuously during
the entire term of this Lease at least six
(6) days per week during reasonable business hours for the purpose provided
above and will operate
such business during such period with
diligence,
in
accordance with the
best standards
of operation of such business. Nothing
contained herein
shall be deemed to
prohibit Tenant from
remaining open for
business until 12:00 midnight.
SECTION 6.03.B.
So long as Tenant is
open and operating
its business in the
Leased Premises for the Permitted Use described in Article I.8
hereof, and there
has not occurred
an "Event of Default"
(as defined in Article XVI hereof),
Landlord agrees that it will not, after the date hereof, directly
lease space in
the Shopping
Center to any other tenant whose primary business will be
automotive repair
center offering oil changes, tune ups, tire changes,
engine
repairs, transmission
service and related
services (hereinafter a "Competing
Business"), or amend or modify and existing lease so as to permit
operation of a
Competing Business. This limitation shall not apply to present
tenants (or their
assignees or sublessees) whose leases may not prohibit such use.
If, at any time
during the term of the Lease, Tenant should cease operating its
business at the
Leased Premises (except for cessation of operations caused and
continuing solely
by reasons of Force Majeure, as hereinafter defined) then the
provisions of this
Section 6.03.B.
limiting Landlord's right to lease space in the Shopping Center
for the purpose set forth above shall be immediately rendered null and void.
Further, in the event
any third party shall commence any action or lawsuit as a
result of this
agreement, this
provision shall be rendered null and void
and
Tenant shall indemnify
and hold Landlord harmless for all costs and
expenses
incurred, including attorneys' fees, in defending such action.
If Tenant determines
that Landlord has
violated the provisions of this Section
6.03.B., Tenant
shall give
Landlord written notice of such violation, and
Landlord shall have
thirty (30) days from receipt of the notice within which to
cure the violation. If
such violation is not cured timely, then Tenant, as its
exclusive remedy,
shall have the right to pay,
in lieu of the
Minimum Rent
stated in the Lease,
an amount equal to fifty percent (50%) of the Minimum Rent
otherwise payable
under the terms of the Lease (hereinafter "Alternate Rent")
until the violation
has been cured; provided, however, the payment of such
Alternate Rent shall not continue in effect for longer than six (6)
months, and
after six (6) months of the payment of Alternate Rent, Tenant must elect to
either (i) terminate
this Lease upon thirty (30) days prior written notice to
Landlord, or (ii) keep
this Lease in effect
and to again commence
payment of
Minimum Rent, and all additional rent at the rates provided in this
Lease. Time
is of the essence. If Tenant fails to give Landlord written notice of
termination within ten (10) days after expiration of the six (6)
month Alternate
Rent period, Tenant
will be deemed to have elected to keep this Lease in effect
and recommence the payment of Minimum Rent and all additional
rent at the rates
provided in the Lease.
Nothing contained
herein shall be deemed
to reduce the
amounts payable by
Tenant as additional
rent during any period that Tenant has
the right to pay Alternate Rent.
SECTION 6.04.
Landlord hereby agrees to contract for the supplying of a
"dumpster" for Tenant's use. Tenant shall place all of its trash
from the normal
operation of
its business activities at the Leased Premises (excluding
construction) into the
dumpster container provided by Landlord, and Tenant
agrees that no other
trash container
may be utilized by Tenant outside the
Leased Premises. Landlord hereby agrees to contract for a dumpster
service which
will empty the dumpster on a regular basis.
In consideration
for Landlord's
supplying a dumpster
and contracting for
the
service to said dumpster, Tenant shall reimburse
Landlord for the cost
of such
service, which such cost shall be included in Tenant's "Common Area
Payment" (as
hereinafter defined). In Landlord's sole judgment, should Tenant's
usage of said
dumpster service
exceed the usage of other tenants in the Shopping Center
(calculated on a per
square foot basis), Landlord shall have the right to
4
<PAGE>
increase the amount paid by tenant in its Common Area Payment to
more accurately
reflect Tenant's actual usage.
Alternatively, at any time upon ten (10) days written notice to
Tenant, Landlord
may terminate Tenant's
right to use
Landlord's dumpster
service program and
require that Tenant contract separately for trash disposal
services. Thereafter,
Tenant shall be
responsible, at its
sole cost and expense,
for the removal of
its trash and rubbish,
and Tenant's Common
Area Payment shall not include fees
for such services.
SECTION 6.05. Tenant
shall install and maintain a locking system for the Leased
Premises in accordance with Landlord's standard requirements.
SECTION 6.06.
Tenant shall not use (or allow the use of) any of the
Leased
Premises or any portion of the Shopping Center for any activities
involving the
use, generation,
handling, release,
threatened release,
treatment,
storage,
discharge,
disposal or
transportation
of any "Hazardous Materials" (as
hereinafter defined),
in particular,
asbestos or asbestos containing material,
urea formaldehyde foam insulation, transformers or other equipment
that contain
dielectric fluid containing polychlorinated biphenyls, except in such quantity
or concentration that
is customarily used,
stored or disposed in
the ordinary
course of the business
conducted on the Leased Premises pursuant to Article
I.8., "Permitted Use" so long as (i) such activity duly complies
with applicable
"Environmental Laws"
(as hereinafter defined) and good and safe business
practice, (ii)
waste oil and other
automotive
waste products are stored in
above-ground
containers (Tenant
being specifically
prohibited from
utilizing
under ground storage tanks for storage of waste products); (iii)
any storage and
disposal takes
place in accordance with applicable Environmental Laws at
disposal facilities
and at locations other than the Leased Premises and the
Shopping Center which are duly permitted in accordance with
Environmental
Laws,
and (iv) such use,
storage or disposal
does not require
Tenant, any agent
or
employee of Tenant or any operator of the Leased Premises to have a hazardous
waste generator
identification
number or any other authorization from or
registration with any
governmental
authority based primarily on or related
primarily to the
Hazardous Material in question. If Tenant violates the
foregoing covenant
resulting in an "Environmental Claim" (as hereinafter
defined) or if any
Environmental Claim
arises against Tenant and/or the Leased
Premises, then Tenant
agrees to (a) notify
Landlord immediately of any such
Environmental Claim
and (b) after consultation and approval by Landlord, clean
up any contamination in full compliance with all applicable
Environmental
Laws
and/or take such other action as may be required by any
governmental
authority
or applicable
Environmental Laws. No
consent or approval of Landlord shall in
any way be construed as imposing upon Landlord any liability for the means,
methods or manner of removal, containment or other compliance with applicable
law for and with respect to the foregoing.
Mutual Environmental
Indemnity.
Tenant agrees to indemnify and hold
harmless
Landlord from and against any and all Environmental Claims arising during the
Lease Term in
connection with the
presence or suspected
presence of Hazardous
Materials in or on the Leased Premises or Shopping Center which are
present as a
result of negligence,
willful misconduct or
other acts or omissions of Tenant,
Tenant's agents, employees, contractors, invitees, vandals, burglars or other
unauthorized entrants. Without limitation of the foregoing, this
indemnification
shall include any and all costs incurred due to any investigation
of the site or
any cleanup, removal or restoration mandated by a federal, state or
local agency
or political subdivision, which is performed as a result of
negligence, willful
misconduct or other
acts or omissions of Tenant, Tenant's agents, employees,
contractors, invitees, vandals, burglars or other unauthorized
entrants.
Landlord agrees to indemnify, defend, and hold Tenant harmless
from and against
any and all
Environmental Claims
arising out of or in connection with any
environmental
condition or
contamination
existing in, on or
under the Leased
Premises or Shopping
Center which existed prior to the date upon which Landlord
tendered possession
of the Leased
Premises to Tenant, or due to any act or
omission of Landlord and/or prior tenants/occupants of the Leased
Premises.
The following terms shall the following meaning:
"HAZARDOUS
MATERIALS" means (a)
any substance included within the statutory
or regulatory
definition
of (i) "hazardous waste" pursuant to the Resource
Conservation and
Recovery Act of 1976 (42 U.S.C.
Section 6901 ET SEQ.), as
amended from time to time ("RCRA"), (ii) "hazardous substance" pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42
U.S.C. Section 9601 ET
SEQ.) as amended from time to time ("CERCLA") and (iii)
"hazardous materials" pursuant to the Hazardous Materials
Transportation Act, 49
U.S.C. App. Section 1980 ET SEQ., as amended from time to time
("HMTA"), (b) any
material, waste or
substance which is or
contains (i) oil,
petroleum, or any
fraction thereof, (ii) formaldehyde, (iii) radioactive materials, (iv)
asbestos
or (v) polychlorinated
bipheyls, (c) any material, waste or substance the
presence of which on any part of the Leased Premises or the Shopping
Center is
prohibited by any
governmental authority
and (d) any other material, waste or
substance that,
pursuant to any
governmental
requirement,
requires special
handling in its collection, storage, treatment, transportation or
disposal.
"ENVIRONMENTAL CLAIM"
means any claim,
demand, action, cause of action,
suit, loss, cost, damage, punitive damage, fine, penalty,
expense, liability,
criminal liability, judgment, governmental or private
investigation relating to
remediation or compliance with requirements of Environmental Laws. The term
"Environmental Claim" also includes any costs
5
<PAGE>
incurred in responding to efforts to require remediation and/or compliance and
any claim based upon any asserted or actual breach or violation of any
requirements of any Environmental Laws.
"ENVIRONMENTAL LAWS"
means CERCLA, RCRA, the Toxic Substances Control Act,
15 U.S.C. ss. 2601 ET
SEQ., the Clean Water Act, 33 U.S.C. ss. 1251 ET SEQ., as
amended by the Oil Pollution Act of 1990, Pub. L. No. 101-380, 104 Stat. 484
(1990) ("OPA"), the
Safe Drinking Water Act, 42 U.S.C. ss. ss. 300f-300j, the
Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ., HMTA, the Williams-Steiger
Occupational Safety
and Health Act, the Texas Water Code, the Texas Health and
Safety Code, the Texas
Natural Resources
Code, any amendments to any of the
foregoing and regulations promulgated under them from time
to time, and any and
all other laws, rules, regulations, ordinances, orders or guidance
documents now
or hereafter in effect of any federal, state or local executive, legislative,
judicial, regulatory
or administrative agency, board or authority or any
judicial or administrative decision relating thereto that relate to
(i) improper
use or treatment of
wetlands, pinelands or
other protected
land or wildlife,
(ii) pollution, contamination, preservation, protection,
remediation or clean-up
of the air, surface water, ground water, soil or wetlands,
(iii) solid,
gaseous
or liquid waste generation, handling, discharge, release, threatened release,
recycling, treatment, storage, disposal or transportation,
(iv) exposure of,
or
damage or injury to persons or property relating to Hazardous
Materials and (v)
maintaining,
disclosing or reporting information to governmental authorities
or
any other persons under any Environmental Laws.
ARTICLE VII - COMMON AREA
SECTION 7.01.
A. Landlord will provide and maintain a "Common Area" (as
hereinafter defined)
in the Shopping Center and make necessary repairs thereto
and, except when prevented from doing so by causes beyond its
control, Landlord
will also provide
lighting in the parking area in the Shopping Center from dusk
until dawn.
Tenant, its employees, customers and invitees shall have the
non-exclusive use,
along with others, of
the Common Area.
Landlord shall have
the right, from time
to time, to change the arrangement, layout and/or size of
the Common Area, and designate employee parking spaces and tenant
truck loading
zones, and to do and
perform such other acts in the Common
Area as Landlord
shall, in its good
faith judgment,
determine to be
advisable. Landlord
shall
have the right, from
time to time, to
establish, modify and
enforce rules and
regulations with respect to the Common Area and to police same.
B.
For purposes of this Lease, the phrase "Common Area" includes the
aforesaid customer's
parking area,
employees' parking area, service drives and
service roads, traffic
islands, landscaped
areas, loading and service areas,
sidewalks, roofs,
gutters and
downspouts, sprinkler
risers serving all or any
buildings located in the Shopping Center, electrical gutters serving all or any
buildings located in the Shopping Center, and such other portion or portions
of
the Shopping
Center (not leased or
rented or held by Landlord for the purposes
of being leased
or rented to other tenants) as may from time to time be
designated or
treated by Landlord as part of the Common Area, as well as
drainage facilities
and lighting
facilities
servicing any one or
more of the
aforesaid areas.
SECTION 7.02.A.
Tenant will at all times keep all
merchandise
and displays
within the Leased
Premises and will not at any time display any merchandise or
offer it for sale or permit it to be on adjacent sidewalks or any other point
outside the Leased
Premises, nor will Tenant in any other way
use or obstruct
such sidewalks or other area outside the Leased Premises.
SECTION 7.02.B.
Tenant shall be permitted to utilize a portion of
the Common
Area immediately adjacent to the Leased Premises (the exact
location of which is
designated on
Exhibit "A" attached hereto and made a part
hereof) for the
purpose of parking and staging vehicles for service ("Staging Area") subject to
the following
conditions
and restrictions: (i) Tenant will not obstruct
pedestrian or vehicular traffic in the Staging Area or
Common Area; (ii) Tenant
will be responsible for cleaning and removing debris generated by Tenant's use
of the Staging Area;
(iii) In no event
shall Tenant be
permitted to perform
repairs in the Staging
Area or in any
portion of the
Common Area (however,
Tenant shall be permitted to perform diagnostic tests using
hand-held
computers
in the Staging Area),
or place equipment and tools in the Common
Area, and
repairs and service shall be performed only within the Leased
Premises; (iv) at
such times when the Leased Premises is closed for business,
Tenant shall not
be
permitted to park
vehicles in the
Staging Area or in any portion of the Common
Area, and (v) Tenant
hereby assumes all liability for injury
to any person or
damage to any property
arising out of its use of the Staging Area, and Tenant
agrees to hold Landlord harmless for and against any such loss.
SECTION 7.03.
Nothing in this
Article or elsewhere in this Lease shall be
construed as constituting the Common Area, or any part
thereof, as part of
the
Leased Premises.
ARTICLE VIII - ASSIGNMENT AND SUBLETTING
SECTION 8.01.
Except for a
"Permitted
Sublease" (as hereinafter defined),
neither Tenant nor Tenant's legal representatives or successors in interest by
operation of law or
otherwise shall assign
this Lease or sublease the premises
or any part thereof or mortgage, pledge or hypothecate its
leasehold interest or
grant any concession
or license
within the Leased
Premises or
sublease any
operating department
therein without the
prior express written
permission of
Landlord (which consent shall not be "unreasonably" withheld as
such term is
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defined in Section 8.01.B), and any attempt to do any of the
foregoing without
the prior express written permission of Landlord shall be void and
of no effect.
This prohibition
against assignment or subletting shall be construed to include
a prohibition against any assignment or subletting by operation of
law.
SECTION 8.01.B.
Without intending to limit landlord's right to be "reasonable",
in the event Tenant
should request
Landlord's
written consent to a proposed
assignment or subletting and Tenant's proposed assignee or sublessee does not
satisfy all of the three (3) conditions set forth below,
then, should Landlord
withhold consent to such proposed assignment or subletting,
such withholding
of
consent shall be deemed "reasonable" and not "unreasonable".
Condition 1: That the
proposed assignee or
sublessee will
continue to
use the
premises for that use
as set forth in Article VI,
hereof.
Condition 2. That the
proposed assignee or
sublessee has at least five
(5) years experience in managing and operating the type of
business as is described in Article VI, hereof.
Condition 3. That the
proposed assignee has a net worth (based upon
generally accepted
accounting
principles)
equal to or
greater than $500,000.00.
SECTION 8.01.C.
In the event of a
proposed assignment or
subletting,
Tenant
shall notify
Landlord in writing of its desire to assign
or sublet the Leased
Premises. Along with
such notice, Tenant shall supply Landlord with the name of
the proposed
assignee or
sublessee,
a financial
statement of the proposed
assignee or sublessee
(including both an
income statement and
balance sheet),
and a resume covering
the business experience of the proposed assignee or
sublessee. Within
ninety (90) days after
receipt of said
written notice
from
Tenant, Landlord shall
exercise one of the
following options on
ten (10) days
prior written notice to Tenant:
Option 1: Landlord may
accept the proposed assignee or sublessee and
Tenant may proceed with its assignment or subletting.
Option 2. Landlord
may reject the
proposed assignee or sublessee
based upon the
criteria set forth in Section 8.01.B.,
above. In the event
Tenant believes that Landlord is
unreasonably
withholding the granting of its consent, the
exclusive remedy of
Tenant shall be to seek a declaratory
judgment relating
solely to this issue
and said judgment
shall be binding on both Landlord and Tenant. Following a
decision in favor of Tenant, if Landlord fails to exercise
Option 3 within ten (10) days thereafter, Landlord shall
be deemed to have
exercised Option 1.
Tenant shall not
have the right
in any event to terminate this Lease,
recover damages,
abate or withhold
rent, or exercise any
other remedy.
Option 3: Landlord may
exercise a right of
first refusal to
retake
the Leased
Premises
and terminate this Lease,
notwithstanding that
the qualifications
of the proposed
assignee or sublessee might conform to the reasonableness
criteria set forth in
Section 8.01.B., above. In such
event, the parties
would have no further
obligations to
one another except for monetary obligations which accrued
prior to
the effective date of termination.
Notwithstanding the
foregoing,
in the event Landlord
elects to terminate
this Lease pursuant to this Option 3,
Tenant shall
have a period
of ten (10)
days following
receipt of such notice of termination in which to notify
Landlord in
writing that Tenant elects to rescind its
request for
Landlord's
approval of the contemplated
assignment. In
such event, Tenant shall continue to
operate the Leased
Premises for
business and this
Lease
shall remain in full force and effect.
SECTION 8.01.D. Notwithstanding that the prior express written
permission to any
of the aforesaid transactions may have been obtained, the following
shall apply:
(1) in the event
of an assignment, contemporaneously with the granting of
Landlord's aforesaid
consent, Tenant shall cause the assignee to expressly
assume in writing
and agree to perform all of the covenants, duties, and
obligations of
Tenant hereunder, and such assignee shall be jointly and
severally liable
therefore along with
Tenant; (2) a signed
counterpart of all
such instruments
relative thereto executed by all parties to
such transaction
(with the exception of Landlord) shall be submitted by Tenant to
Landlord within
ten (10) days of execution of the same (it being understood that no such
instrument shall be effective without the written consent of
Landlord); and (3)
in any case
where Landlord consents to an assignment or subletting, the
undersigned Tenant
will nevertheless
remain directly and
primarily liable for
the performance
of all of the
covenants,
duties, and obligations of Tenant
hereunder (including,
without limitation, the obligation to pay all rent
and
other sums herein
provided to be paid),
and Landlord
shall be permitted to
enforce the provisions of this instrument against the undersigned Tenant
and/or
any assignee
without demand upon or proceeding in any way against any other
person.
SECTION 8.02. If Tenant is a corporation, then any transfer of this Lease
from
Tenant by merger,
consolidation or
dissolution
or any change in
ownership or
power to vote a majority of the voting stock in Tenant outstanding at the time
of execution of this instrument (or at
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any future time) shall
constitute an assignment for the purpose of this Lease.
Any change in ownership occurring as a result of the
purchase or acquisition of
a majority of the voting stock in Tenant shall not constitute an assignment for
purposes hereof so
long as the net worth of Tenant following such purchase or
acquisition (according to generally accepted accounting practices)
is at least a
great as the net worth of Tenant as of the date of this Lease..
For purposes of
this Section
8.02, the term "voting stock" shall refer to shares of stock
regularly entitled to
vote for the election
of directors
of the corporation
involved. Norwithstanding the foregoing, if the "Tenant" hereunder
should become
an entity whose
shares are publicly trade on the New York Stock Exchange,
American Stock Exchange or NASDAQ National Market, nothing contained herein
shall be deemed to limit or restrict the sale, trade or exchange of
such shares.
SECTION 8.03. If this
Lease be assigned or if the Leased Premises be subleased
(whether in
whole or in part) or in the event of the mortgage, pledge or
hypothecation of the
leasehold interest or
grant of any
concession or license
within the Leased
Premises or if the Leased Premises be occupied in whole or in
part by anyone other than Tenant, Landlord may nevertheless collect rent from
the assignee,
sublessee,
mortgagee,
pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other
occupant and apply
the net amount collected to the rent payable hereunder,
but no such
transaction
or collection
of rent or
application
thereof by
Landlord shall be deemed a
waiver of these
provisions or a release of Tenant from the further performance
by Tenant of its covenants, duties and obligations hereunder.
SECTION 8.04. Tenant
may, without the prior
consent of Landlord,
sublease the
Leased Premises,
to "All Night Auto of
Phoenix, Inc." for the
Permitted Use
described in Article I.8. hereof (hereinafter a "Permitted
Sublease").
On or
before the effective
date of any
Permitted Sublease, Tenant shall provide
Landlord with written notice thereof. Nothing contained herein shall be
deemed
to release Tenant from the performance of its obligations
under the Lease,
and
Tenant shall remain
directly and primarily
liable for the
performance of its
covenants, duties and obligations hereunder.
ARTICLE IX - REPAIR AND MAINTENANCE
SECTION 9.01 Landlord
will repair and maintain only the following portions of
the Leased
Premises: roof (exclusive of flashing around the rooftop air
conditioning unit);
structural portions of the Leased Premises (consisting only
of the foundation
and members
supporting
the roof);
and any utility lines
(sewer, water, gas or
electrical) located
outside the boundaries of the Leased
Premises that serve
other premises in common with the Leased Premises. If,
however, damage to any
of the foregoing
is caused by the acts
or omissions of
Tenant, its agents,
contractors,
employees,
customers or invitees, or any
burglar, vandal, or unauthorized entrant, then notwithstanding the
provisions of
Article XI, Tenant shall bear the cost of such repairs.
SECTION 9.02. All maintenance, repair and replacements other than
those required
to be made by Landlord
in Section
9.01 or Articles XI or XIX will be made
by
Tenant at Tenant's cost and expense, including without limitation,
heating and
air conditioning
equipment (whether
roof mounted or otherwise affixed outside
the Leased Premises);
electrical
and plumbing
equipment;
all fixtures;
all
wiring and plumbing lines (whether exposed or concealed);
doors, door frames,
molding, trim, windows, window frames, closure devices,
hardware, plate glass
and floor covering.
Tenant shall not make or permit any penetration in the roof
above the Leased
Premises and shall be
responsible
for all rooftop
flashing
around the rooftop
air conditioning unit. If any such roof penetration is
required in connection
with Tenant's repair
responsibilities,
Landlord shall
perform such roof penetration at Tenant's cost, which shall be paid
upon demand.
If Landlord
considers necessary any repairs, maintenance or replacements
required to be performed by Tenant, under this Lease, and if Tenant refuses or
neglects to perform
same after
reasonable
notice (except in the event of an
emergency, when no
prior notice shall be
required),
Landlord shall have the
right (but shall not be obligated), to perform such repair, maintenance or
replacement and Tenant will pay the cost thereof on demand.
SECTION 9.03. Tenant will not commit waste but will maintain the
Leased Premises
in a clean, attractive
condition and in good repair, and shall also keep
adjacent sidewalks clean. Upon termination of this Lease,
Tenant will
surrender
the Leased Premises to
Landlord broom-clean
and in the same condition in which
they existed at the commencement of this Lease, excepting only
ordinary wear and
tear, damage arising from acts of God, and any damages required
hereunder to be
repaired by Landlord.
Upon termination,
Tenant will also surrender to Landlord
all keys to the Leased
Premises.
SECTION 9.04.
Landlord will have a right to enter the
Leased Premises at
any
reasonable time
(including
during Tenant's business hours) to inspect the
condition thereof,
to make necessary
repairs or to repair
or maintain pipes,
wires, and other facilities serving other premises in the Shopping
Center.
SECTION 9.05. Should
any mechanic's liens or other liens or affidavits claiming
liens be filed against the Leased Premises or the Shopping Center
for any reason
whatsoever incident
to the acts or omissions of Tenant, its agents or
contractors, Tenant
shall cause the same
to be cancelled
and discharged of
record by payment,
bonding in accordance with the requirements of A.R.S.,
Section 33-1004,
or otherwise, within fifteen (15) days after notice by
Landlord.
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ARTICLE X - ADDITIONS AND FIXTURES
SECTION 10.01.
Tenant will make no exterior or structural alterations or
additions to the Leased Premises without the prior written consent
of Landlord.
Except for Tenant's initial construction, if any, which shall be
governed by the
Construction Rider attached hereto, Tenant shall be permitted to make
interior,
non-structural
alterations or
additions to the Leased Premises without
Landlord's prior approval provided that such alterations cost
$10,000.00 or less
per occurrence.
At such time as Tenant requests such written consent of
Landlord, Tenant shall
submit plans and
specifications for such alterations or
additions to Landlord.
Tenant is solely
responsible for
compliance
with all
municipal, State and Federal rules, regulations, and laws which govern Tenant's
construction and
occupancy of the Leased Premises. Landlord's approval of
Tenant's plans and
specifications
is to satisfy a
condition precedent to
the
commencement of Tenant's construction, and should not be relied upon by
Tenant
as a representation or warranty by Landlord of any kind or nature,
expressed or
implied, all of which are hereby disclaimed. Landlord makes no
representation or
warranty that Tenant's
proposed construction is structurally sound, is in
compliance with
the above-mentioned rules, regulations, or laws, or is
sufficient to obtain all required permits.
SECTION 10.02.
Subject to the rights
of Landlord
referred to in Article XV,
Tenant shall remove only "Removable Trade Fixtures", as hereinafter defined,
(excluding all
components
of the HVAC system,
pipes, paneling or other wall
covering or floor covering), and, in addition to other
applicable provisions of
this Lease regarding such removal, the following shall apply:
(1) such removal
must be made on or before the Termination Date; and (2) such removal must be
effected without
permanent damage to the Leased Premises or the building of
which the Leased
Premises are a part and Tenant must promptly repair all damage
caused by such removal. For the purposes hereof, the phrase "Removable Trade
Fixtures" means the
following:
all of Tenant's
signage and any trademarked
items, furniture, tools and equipment, including safety and metering
equipment,
computer equipment,
telephone and communications equipment, and other business
machines, documentation, process and operational materials.
All plumbing or electrical wiring connections exposed as a result
of the removal
of Tenant's Removable Trade Fixtures, or other alterations,
additions, fixtures,
equipment and property installed or placed by it in the Leased
Premises (if such
removal is so
requested by
Landlord) shall be capped by Tenant in a
safe and
workmanlike manner.
SECTION 10.03.
Tenant shall pay the full amount of all taxes, assessments,
impositions, levies,
charges, excises, fees, licenses and other sums
levied,
assessed, charged or
imposed by any
governmental
authority or other taxing
authority upon Tenant's leasehold interest under this Lease and all
alterations,
additions, fixtures
(including Removable
Trade Fixtures),
inventory and other
property installed
or placed or
permitted at the Leased Premises by Tenant.
Within thirty
(30) days after
notice from Landlord, Tenant shall furnish
Landlord a true copy of receipts evidencing such payment received
by Tenant from
the governmental
authority or other
taxing authority
assessing such
charges.
ARTICLE XI
- FIRE AND DESTRUCTION OF PREMISES
SECTION 11.01. If (a) the Leased
Premises are destroyed or damaged to any
extent by fire or other casualty and, as of the date of loss,
at least thirty
six (36) full
calendar months remain in the term of this
Lease, or (b) the
Leased Premises are
damaged to an extent of less than thirty percent (30%) of
replacement cost above the foundation at any time when less than
thirty six (36)
but at least twenty four (24) full calendar months remain in the term of this
Lease, or (c) the
Leased Premises are
damaged to an extent of less than twenty
percent (20%) of
replacement
cost above the
foundation at any time
when less
than twenty four (24) but at least twelve (12) full calendar months remain in
the term of this Lease, then Landlord shall be obligated to repair and
restore
the Leased Premises,
at Landlord's sole cost and expense, to the condition that
existed upon the date
Landlord originally
tendered possession of the Leased
Premises to Tenant. If
the Leased Premises
should be destroyed or damaged by
fire or other risk other than as provided in the immediately
preceding sentence,
then Landlord shall
have the election to terminate thi
