Sub-sublease—Franchisor-franchisee.

This sub-sublease agreement (the "Sub-Sublease") is made and entered into this _________[year], between _________ a _________ Corporation, ("Landlord") and _________, a _________ Corporation, ("Tenant").

Landlord, in consideration of the rents, covenants, agreements and conditions contained in this agreement on the part of Tenant to be paid, kept, observed and performed, subleases to Tenant, and Tenant takes and subleases from Landlord, subject to the terms and conditions of this Sub-Sublease, the Leased Premises.

1. Definitions.

As used in this Sub-Sublease, the following words and phrases shall have the meanings indicated:

(a). Leased Premises: The land and building leased by Landlord from the Prime Landlord pursuant to the Prime Lease. For reference purposes, the Premises are known as _________.

(b). Lease Commencement Date: The Lease commencement date is same as the commencement date under the Prime Lease.

(c). Term: The period specified in Section 2 of this Sub-Sublease, including any extension of the term of the Prime Lease resulting from Landlord's exercise of a renewal option pursuant to Section 11 of this Sub-Sublease.

(d). Prime Lease: The Leases, including amendments, if any, attached as Exhibit A and Exhibit A-1 to this Sub-Sublease pursuant to which the Landlord leases the Leased Premises.

The Tenant acknowledges that the Landlord is the Sublessee described in the Sublease Agreement entered into on _________[year], between _________ as Sublessor and _________ as Sublessee.

The Tenant further acknowledges that _________ is the Tenant in the Prime Lease dated _________[year], by and between _________, a _________ as Landlord and _________ as Tenant.

(e). Prime Landlord: The landlords from time to time under the Prime Lease.

(f). License Agreement: The License Agreement between _________, and Tenant pursuant to which tenant is granted a _________ franchise for the Leased Premises, which License Agreement is attached Exhibit B, and specifically made a part of this agreement.

2. Term of Sub-Sublease.

The term of this Sub-Sublease shall commence on the Lease Commencement Date and shall expire at midnight on the day before the last day of the term of the Prime Lease or on the earlier termination of the License Agreement, between _________ and Tenant, pursuant to which Tenant is being granted a _________ franchise for the Leased Premises (the "License Agreement"). Upon termination for any reason of either the Prime Lease, the License Agreement or this Sub-Sublease Agreement, then there shall be a simultaneous termination of each of the Prime Lease, the License Agreement and this Sub-Sublease Agreement.

3. Rent and Other Charges.

(a). Commencing on the rent commencement date under the Prime Lease and continuing until the expiration or termination of this Sub-Sublease, Tenant shall pay as rent an amount equal to such sums as noted on the Rent Rider, attached to and specifically made a part of this agreement.

(b). Tenant shall also pay to Landlord any other charges to be paid by Landlord as tenant under the Prime Lease including, but not limited to, any assessments, taxes, common area charges and any amount due pursuant to the Prime Lease. Landlord shall promptly send to Tenant copies of all rent notices received by Landlord from the Prime Landlord.

4. Use of Leased Premises.

(a). Tenant shall use and occupy the Leased Premises solely for the purposes permitted by the License Agreement. Tenant shall not use or permit or suffer the use of the Leased Premises for any other purpose.

(b). Throughout the Term, Tenant covenants and agrees, at its cost and expense, to perform, observe and comply with all of the terms, covenants and conditions to be performed, observed or complied with by the Tenant under the Prime Lease with respect to the use, maintenance and repair of the Leased Premises. Notwithstanding the provisions of this paragraph 4(a) and 4(b), in the event there is an inconsistency with the terms of the Prime Lease and the License Agreement, the terms of the License Agreement shall control unless compliance with the terms of the License Agreement would cause a default or a termination of the Prime Lease.

(c). Tenant shall pay directly to the utility companies or governmental units promptly as and when due all charges for electricity, gas, refuse collection and telephone used or consumed on or in connection with the Leased Premises, except for any such charges to be paid in whole or in part by the Prime Landlord under the Prime Lease. It shall be a default if charges are not paid, when due, by the Tenant. In such event, the Landlord shall have the option, but not the obligation, to terminate this Sub-Sublease Agreement or to pay such charges. In the event the Landlord pays the charges, such amount shall be deemed additional rent and immediately due and payable from the Tenant to the Landlord.

5. Alterations.

Tenant may not make any alterations or additions to the Leased Premises unless Tenant complies with the terms of the Prime Lease, including, if so required, obtaining the prior written consent of the Prime Landlord and Tenant complies with the terms of the License Agreement. All such alterations and additions shall be made in accordance with the terms of the Prime Lease and the terms of the License Agreement.

6. Insurance.

(a). Tenant, at Tenant's sole cost and expense, shall obtain and maintain in effect at all times during the Term, policies providing the insurance coverages required to be maintained by the Tenant under the Prime Lease and Tenant shall comply with all provisions relating to insurance contained in the Prime Lease. Copies of all insurance policies shall be delivered to Landlord.

(b). All insurance policies required to be procured by Tenant under this Sub-Sublease shall comply with the applicable requirements of the Prime Lease and, in the case of public liability insurance policies, shall name the Prime Landlord and the Landlord as an additional named insured, as their interest shall appear.

(c). Notwithstanding the above, Landlord reserves the right to require additional insurance coverage when Landlord, in its sole discretion, deems such additional coverage necessary.

7. Damage by Fire or Other Casualty.

(a). Tenant shall give prompt notice to Landlord and the Prime Landlord in case of any fire or other damage to the Leased Premises. If the Leased Premises are damaged by fire or other casualty to such an extent that the Prime Landlord is entitled to, and does, terminate the Prime Lease, this Sub-Sublease shall terminate on the same date on which the Prime Lease is terminated. If the Leased Premises, or any portion of it, are damaged by fire or other casualty and if, under the terms of the Prime Lease, the Tenant would have the right to terminate the Prime Lease, then, in that event, Tenant shall have the right to terminate this Sub-Sublease by written notice to the Landlord given at least five days prior to the expiration of the period of time in which the Tenant under the Prime Lease must notify the Prime Landlord to terminate the Prime Lease.

(b). If any damage by fire or other casualty shall render the Leased Premises untenantable, in whole or in part, a proportionate abatement of the Rent based upon the area rendered untenantable shall be allowed to the extent such abatement is allowed by the Prime Lease (and the same proportionate abatement of the Additional Rent shall be allowed) until substantial completion of the repair or restoration work to be done by the Prime Landlord in the Leased Premises, or, in the event the Prime Landlord elects to terminate the Prime Lease or the Tenant elects to terminate this Sub-Sublease, until the date of termination. If this Sub-Sublease is not terminated after damage by fire or other casualty, the provisions of the Prime Lease shall govern the restoration and repair of the damage, except that Tenant shall, at its cost and expense, perform any restoration and repair to be performed by the Tenant under the Prime Lease.

8. Condemnation.

(a). If all or substantially all of the Leased Premises shall be taken in condemnation proceedings or by exercise of any right of eminent domain, or by a private purchase in lieu of it, then this Sub-Sublease shall terminate and expire on the date of such taking or purchase and Tenant shall, in all other respects, keep, observe and perform all other terms, covenants and conditions of this Sub-Sublease up to the date of such taking. The net proceeds of any award or other compensation payable in connection with such taking or purchase shall be paid in the manner specified in the Prime Lease. However, Tenant shall have the right to claim, prove and receive in the condemnation proceeding such awards as may be allowed for Tenant's separate property, such as fixtures and other equipment installed in the Leased Premises which, under the terms of this Sub-Sublease, will not become the property of the Landlord or the Prime Landlord upon the termination of this Sub-Sublease.

(b). If less than all or substantially all of any of the Leased Premises shall be taken in condemnation proceedings or by exercise of any right of eminent domain, or by a private purchase in lieu of it, the following provisions shall apply: (i) if the taking is of such a nature that the Prime Landlord is entitled to, and does, terminate the Prime Lease, this Sub-Sublease shall terminate on the same date on which the Prime Lease is terminated and subsection (a) shall apply; (ii) if the taking is of such a nature that the Tenant under the Prime Lease would be entitled to terminate the Prime Lease and if, within 15 days after receiving written notice of the proposed taking, the Tenant requests Landlord as Tenant under the Prime Lease, to terminate the Prime Lease, Landlord will, promptly after being requested by Tenant to do so, terminate such Prime Lease, this Sub-Sublease shall terminate and subsection (a) shall apply; and (iii) if the taking is of such a nature that neither the Prime Landlord nor the Tenant under the Prime Lease would be entitled to terminate the Prime Lease, or if the taking is of such a nature that the Prime Landlord is entitled to terminate the Prime Lease, but it does not do so, or if the taking is of such a nature that the Tenant under the Prime Lease would be entitled to terminate the Prime Lease, but the Tenant does not request Landlord to terminate the Prime Lease pursuant to clause (ii) above within fifteen (15) days after receiving written notice of the taking, then, in any such event, this Sub-Sublease shall continue with respect to the portion of the Leased Premises not so taken, the Rent shall be adjusted in the manner provided in the Prime Lease, the Additional Rent shall be adjusted in the same proportions as the Rent, and the provisions of the Prime Lease shall govern the restoration and repair of the Leased Premises, except that Tenant shall, at its cost and expense, perform any restoration and repair to be performed by the Tenant under the Prime Lease.

9. Assignment and Sublease.

(a). Tenant may not, without the prior written consent of Landlord, transfer, assign or sublease this Sub-Sublease or its rights under it. In such event that such consent is granted, Tenant shall remain liable for the payment of all rent required to be paid and the performance of all terms, covenants and conditions undertaken by Tenant.

(b). Landlord shall promptly send to Tenant copies of all notices received by Landlord from the Prime Landlord.

(c). In the event the Prime Landlord does not comply with the terms of the Prime Lease or a request made by Tenant, Tenant shall have the right to take such action in the name of Landlord as Tenant deems appropriate, provided that such action shall be undertaken at no expense or cost to Landlord and Landlord is held harmless and indemnified in connection with it.

10. Surrender of Leased Premises.

(a). Tenant shall, on or before the last day of the Term, (i) peaceably and quietly leave, surrender and yield up to the Landlord the Leased Premises, free of subtenancies, broom clean and, subject to the provisions of Section 7, in good order and condition except for reasonable wear and tear, and (ii) at its expense, remove from the Leased Premises its sign and all moveable trade fixtures, furniture, equipment and other personal property (all of such property being referred to as "Tenant's Property"), provided that Tenant shall promptly repair any damage caused by such removal. Any of Tenant's Property not so removed may, at the Landlord's election and without limiting Landlord's right to compel removal, be deemed abandoned and either may be retained by Landlord as its property or be disposed of, without accountability, in such manner as Landlord may see fit. In addition, Tenant shall have the right to remove all leasehold improvements (if any) originally installed in the Leased Premises by Landlord, as Tenant under the Prime Lease, to the extent Landlord would be entitled to remove such leasehold improvements under the terms of the Prime Lease, and shall be obligated to remove such leasehold improvements to the extent Landlord would be obligated to remove them under the terms of the Prime Lease.

(b). The provisions of this Section shall survive any expiration or termination of this Sub-Sublease.

11. Renewal Options in Prime Lease.

Provided Tenant is not in default of the License Agreement or this Sub-Sublease, Landlord grants to Tenant the right, privilege and option to extend this Sub-Sublease as per the terms and conditions relative to lease extensions contained in the Prime Lease.

12. Compliance with Prime Lease.

In addition to the other provisions of this Sub-Sublease which impose upon the Tenant the obligation to perform and comply with certain specified provisions contained in the Prime Lease, throughout the Term the Tenant covenants and agrees that it will perform, observe and comply with all of the terms, covenants and conditions to be performed, observed or complied with by the Tenant under the Prime Lease except for those provisions, if any, in the Prime Lease inherently incapable of being performed by Tenant. If Tenant shall fail to pay any installments of rent promptly on the day when the same shall become due and payable, and the default continues for a period of 15 days after written notice is given by Landlord, then and in any event, and as often as any such event shall occur, Landlord may (a) declare the term ended, and enter into the Demised Premises, or any part of them, with process of law, and expel Tenant or any person occupying the same in or upon the Demised Premises, and so to repossess and enjoy the Demised Premises as in Landlord's former estate; and/or (b) relet the Demised Premises, applying the rent from the new tenant on this Sub-Sublease, and Tenant shall be responsible for no more than the balance that may be due, should a balance exist.

13. Time Limits.

In every instance where the Prime Lease provides for a time limit for (a) notice to Landlord from Prime Landlord or (b) performance by Landlord, the time limit under this Sub-Sublease for the corresponding (x) notice to Tenant from Landlord or (y) performance by Tenant shall be 5 days less than the time limit in the Prime Lease.

In every instance where the Prime Lease provides for a time limit for (a) notice to Prime Landlord from Landlord or (b) performance by Prime Landlord, the time limit under this Sub-Sublease for the corresponding (x) notice to Landlord from Tenant or (y) performance by Landlord shall be 5 days longer than the time limit in the Prime Lease.

14. Tenant's Termination or Default of License Agreement.

If Tenant, as Licensee under the License Agreement, has voluntarily terminated the License Agreement in accordance with its terms, this Sub-Sublease shall also terminate at such time as the License Agreement terminates provided that Tenant has fulfilled all its obligations under this Sub-Sublease through the date of such termination.

In addition to the default provisions in the Prime Lease, which are incorporated in this agreement, a default by Tenant of the License Agreement or this Sub-Sublease shall constitute a simultaneous default under each of the License Agreement and the Sub-Sublease.

15. Security Deposit and Prepaid Rental.

(a). Tenant shall pay to Landlord a sum equal to one month's rental to be held by Landlord as security for performance by Tenant of all obligations imposed on Tenant. If Tenant shall perform all such obligations, the sum shall be refunded to Tenant at the termination of this Sub-Sublease, without interest. If Tenant shall default in any such obligation, Landlord, in addition to any other remedies it may have, shall be entitled to apply such sum toward Landlord's damages.

(b). Tenant shall pay to Landlord a sum equal to one month's rental as rent for the initial month of the Sub-Sublease term.

16. Tenant's Improvements.

Upon acceptance of the Improvements, as provided above, Tenant shall promptly install, at Tenant's sole cost and expense, the structures, fixtures, equipment and other property necessary to complete the Premises for the operation of a _________ Service Center pursuant to the terms of this agreement and to the terms and provisions of the License Agreement. Tenant accepts all risk of loss for Tenant's improvements and understands and acknowledges that Landlord has no liability. All such work may be inspected by Landlord and Tenant agrees to make, at its sole expense, any changes, additions or alterations requested by Landlord. Tenant shall promptly and diligently perform its work under this agreement in accordance with all applicable federal, state and local statutes, codes and regulations, and Tenant shall do all that is reasonably necessary to promptly open the _________ Service Center as soon as possible after acceptance of the Improvements. In no event will Tenant be allowed to operate as a _________ Service Center until Landlord has approved of all of Tenant's improvements in accordance with this paragraph. Furthermore, during the period within which such improvements shall be made, the Tenant's obligation to pay rent shall not abate.

17. General Provisions.

(a). The covenants, conditions, agreements, terms and provisions contained in this agreement shall be binding upon, and shall inure to the benefit of, the parties and each of their respective successors and assigns.

(b). It is the intention of the parties that this Sub-Sublease (and its terms and provisions) shall be construed and enforced in accordance with the laws of the jurisdiction in which the Leased Premises are located.

(c). No notice, request, consent, approval, waiver or other communication which may be or is required or permitted to be given under this Sub-Sublease shall be effective unless the same is in writing and is delivered in person or sent by registered or certified mail, return receipt requested, first-class postage prepaid, (1) if to Landlord, at _________, or (2) if to Tenant, at the Premises, or _________, or at any other address that may be given by one party to the other by notice pursuant to this subsection. Such notices, if sent by registered or certified mail, shall be deemed to have been given at the time of mailing.

(d). It is understood and agreed between the parties that this Sub-Sublease contains the final and entire agreement between them, and that they shall not be bound by any terms, statements, conditions or representations, oral or written, express or implied, not contained in this agreement.

(e). Wherever appropriate, the singular includes the plural and the plural includes the singular.

(f). This Sub-Sublease may be executed in several counterparts, but all counterparts shall constitute one and the same instrument.

(g). If the Prime Landlord commences a voluntary case under the federal bankruptcy laws, or if a decree or order for relief is entered by the court having jurisdiction in the premises in respect to the Prime Landlord in an involuntary case under the federal bankruptcy laws, and if such Prime Landlord or its trustee in bankruptcy rejects the Prime Lease, Landlord, to the extent it is lawfully entitled to do so, agrees that it will not treat the Prime Lease as terminated by such rejection.

In witness, Landlord and Tenant have executed this Sub-Sublease on the date first written above.

Tenant:

_________

By: _________

Its: _________ President

Attest: _________

Its: _________ Secretary

Landlord:

_________

By: _________

Its: _________ President

Attest: _________

Its: _________ Secretary



______________________________________________________________________________________

 

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