EXHIBIT 10.7
July 1, 2004
Xxxxxxxxx X. Xxxxxxxxx
President
Across America Real Estate Development
0000 Xxxxx Xxxxxx, Xxxx 000
Xxxxxx, XX 00000
Re: Letter of intent to develop express car washes
Dear Xx. Xxxxxxxxx:
This letter sets forth certain terms under which Carwash Management and
Development, Inc. ("CMD") is willing to work with Across America Real Estate
Development, Corp. ("AARD") to develop express car washes in North America. This
is not a binding agreement, and no such agreement shall exist (nor either party
be legally bound) unless and until a mutually acceptable contract is signed. The
terms are as follows:
1. CMD would give AARD the first right of refusal to build and fund 72 build
to suit express car washes in the next three years at an average cost of
approximately $1,850,000 per facility;
2. CMD would pay rental/lease payments for the developed facilities based upon
the 10 year government interest rate at the time of first occupancy plus
between 675 and 750 basis points ("Lease Rate");
3. The rental/lease payments would be premised upon 15 year triple net leases,
each with three five year extensions;
4. The Lease Rate would increase every five years by the cumulative change in
the Consumer Price Index for the prior five-year period;
5. AARD would agree to fund or secure funding for the development of a minimum
of 72 build to suit express car washes over the next three years;
6. AARD would agree to fund or secure funding for the land, site improvements,
facility, equipment and construction interest expense, in addition to
agreed upon soft costs and expenses; and
7. AARD would not require personal guarantees from CMD principals on any form
of funding provided to CMD.
If the foregoing is acceptable to AARD, please confirm by executing both
enclosed copies of this letter not later than July 2, 2004, and returning on
copy to the undersigned. This letter shall not be deemed to constitute an offer
and its terms will not be binding on either CMD or AARD unless and until
incorporated into a mutually acceptable agreement executed by CMD and AARD.
Acceptance of this Letter of Intent shall constitute AARD's agreement to
cooperate with CMD and to use its best efforts in good faith to negotiate, draft
and sign the contract referred to above.
Should you have any questions as you review this letter, please don't
hesitate to contact me.
Sincerely,
/signed/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President
Carwash Management and Development
Accepted on July 2, 2004 by:
/signed/ Xxxxxxxxx X. Xxxxxxxxx
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Xxxxxxxxx X. Xxxxxxxxx
President
Across America Real Estate Development
