Exhibit 10.44
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.
SUBLEASE AGREEMENT
THE SUBLEASE AGREEMENT, made and entered into as of the 11 day
of April, 2005 by and between MIDNIGHT AUTO FRANCHISE CORP., a Michigan
corporation (hereinafter called "MAFC") and ALL NIGHT AUTO OF PHOENIX, INC., an
Arizona corporation (hereinafter called "▇▇▇").
WITNESSETH
WHEREAS, on or about the date hereof, Midnight Auto Franchise
Corp, a Michigan limited liability company as Tenant, entered into a lease with
▇▇▇▇▇▇▇▇▇▇ Nostat Inc. as Landlord (the "Master Lease") with respect to the
premises located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, consisting of 4600 sq.
ft. of leaseable space (the "Premises"); and
WHEREAS, ▇▇▇▇▇▇▇▇▇▇ Nostat, Inc. has consented to sublease; and
WHEREAS, ▇▇▇ wishes to sublease the Premises; and
WHEREAS, MAFC is desirous of entering into this Sublease and
does hereby sublease unto ▇▇▇ and ▇▇▇ hereby subleases from MAFC, upon the terms
and conditions hereinafter set forth.
TERMS AND CONDITIONS
1. TERM. The term of this sublease Agreement ("Term") shall
commence on the date hereof and shall continue in force until the date of
termination or expiration of the Master Lease. Effective as of the date of such
termination, provided ▇▇▇ has fully performed all of its obligations under this
Sublease, ▇▇▇ shall have no further liability or obligation with respect to this
Sublease Agreement or the Master Lease.
2. RENT. ▇▇▇ shall pay Rent to MAFC during the Term as follows:
$[*] per week from the date hereof to March 31, 2005, and from April 1, 2005 to
March 31, 2006 (April 1, 2005 through March 31, 2006 is referred to herein as
"Year One", and the fiscal year beginning April 1st of each year and ending on
March 31st of each year is referred to herein as the "Fiscal Year"). Rent shall
increase for each Fiscal Year after Year One at Three and one half (3.5%)
percent per year. To the extent the amounts charged by the Landlord under the
Master Lease to MAFC for common area charges, taxes and insurance for any given
Fiscal Year exceed the amounts set forth in the Operating Pro Forma between the
parties in the column labeled "Estimated C/T/I/O Rate" for the applicable Fiscal
Year (which Pro Forma is attached to the Stockholders Agreement between the
parties of even date herewith), then ▇▇▇ shall also pay to MAFC as rent the
amount of such excess (such excess to be divided by fifty-two (52) to arrive at
the amount which shall be paid on a weekly basis) on the same day as rent is due
and in the same manner as rent is paid under this Lease. Rent shall be paid
weekly by ▇▇▇ to MAFC, at MAFC's option through automatic payment arrangements
as more fully described in the Preferred Business Management System Agreement
signed by the parties of even date herewith.
*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.
3. UTILITY CHARGES. ▇▇▇ shall be solely responsible for and pay
when due all charges for heat, light, water, sewer, gas, telephone, electricity
or any other utility services used or consumed in the Premises, including
payment for meters, submeters, meter installation, deposits, service connections
and service charges. In the event separate bills are not obtainable for any such
expense. ▇▇▇ shall pay MAFC, as additional rent, ANA's proportionate share of
such charges and expenses, subject to adjustment based on any extraordinary use
or consumption of any utility by ▇▇▇ on the Premises within ten (10) days after
billing therefor.
4. COMPLIANCE WITH MASTER LEASE. ▇▇▇ Hereby agrees to accept
And be bound by all terms and conditions imposed upon MAFC as lessee pursuant to
the Master Lease (to the extent applicable) during the Term under and pursuant
to the Master Lease, a true, correct and complete copy of such terms and
conditions Master Lease is attached hereto as Exhibit A and made a part hereof
as though fully set forth herein. MAFC hereby agrees, to the extent possible, to
perform the obligations of MAFC under the Master Lease as though MAFC has been
named therein as landlord, or, in the alternative, MAFC may permit ▇▇▇ to
exercise a direct action against MAFC under the Master Lease (MAFC hereby
passing through to ▇▇▇, MAFC's obligations under the Master Lease with respect
to the Subleased Premises). As between the parties hereto only, in the event of
a conflict between the terms of the Master Lease and the terms of this Sublease
Agreement, the terms of this Sublease Agreement will control.
5. DELIVERY OF POSSESSION. The Premises are hereby delivered in
their "as is", "where is" condition, vacant and broom clean and ▇▇▇ hereby
accepts the Premises in their existing condition and state of repair. ▇▇▇
acknowledges that no representations, statements or warranties, express or
implied, have been made by or on behalf of MAFC in respect to the Premises'
condition, compliance with laws, ordinances, statues or regulations, including,
but not limited to, the Americans with Disabilities Act of 1991, 42 USC ss. 1201
et seq. and all regulations applicable thereto promulgated as of the date hereof
(collectively, "ADA"), or the use or occupation that may be made thereof, and
that MAFC shall not be liable for any defects in the Premises. Acceptance of the
Premises by ▇▇▇ shall be construed as recognition that the Premises are in an
acceptable state of repair and in sanitary condition.
6. EXTENSION OF TERM. Provided that ▇▇▇ is not in default
hereunder, MAFC shall timely and properly exercise all existing options to
extend the term of the Master Lease.
7. SURVIVAL OF OBLIGATIONS. ▇▇▇ will indemnify, defend and save
MAFC harmless from and against any claims, demands, and actions arising in
connection with ANA's use of the Premises, or the use by any person occupying
said premises during the Term or by reason of any breach or nonperformance of
any covenant herein, or the violation of any law or regulation by ▇▇▇.
8. DEFAULT. In the event ▇▇▇ fails to perform or observe any of
the covenants contained herein or as contained in the Master Lease as applicable
to the Subleased Premises, and does not correct such failure within any notice
and/or cure period as set forth in the Master Lease (less three (3) days), then
MAFC may forthwith terminate or cancel this Sublease Agreement. In the event
MAFC fails to timely perform or observe any of its obligations hereunder,
including obligations to be performed by MAFC pursuant to the Master Lease, if
such failure is not cured within thirty (30) days after ▇▇▇ delivers written
notice to MAFC, then ▇▇▇ may forthwith (i) terminate this Sublease
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Agreement and all of ANA's obligations hereunder and with respect hereto shall
cease, or (ii) seek any available legal or equitable remedies.
9. QUIET ENJOYMENT. MAFC represents that it has full power and
authority to enter into this Sublease, subject to the consent of MAFC. So long
as ▇▇▇ is not in default in the performance of its covenants and agreements in
this Sublease, ANA's quiet and peaceable enjoyment of the Subleased Premises
shall not be disturbed or interfered with by MAFC, or by any person claiming by,
through, or under MAFC.
10. NON ASSIGNMENT. ▇▇▇ shall not directly or indirectly,
assign, convey, pledge, hypothecate or otherwise transfer its interest in this
Sublease, or sublet, license or otherwise grant to any person the right to
occupy all or any portion of the Premises (collectively, "Transfer") without (i)
the prior written consent of MAFC, and (ii) the prior written consent of MAFC to
the extent required by and in accordance with the terms and provisions of the
Lease. Any sale, assignment or other direct or indirect transfer of control of
▇▇▇ or a majority of the beneficial ownerhip interests in ▇▇▇ in a single
transaction or one or more related transactions shall constitute a "Transfer"
hereunder for which MAFC's prior written consent shall be required. ▇▇▇ shall
pay, within ten (10) days of written demand, any fees or costs payable to MAFC
under the Lease, and all attorneys' fees and costs incurred by MAFC, in
connection with the ANA's request for consent to a Transfer.
11. INSURANCE. ▇▇▇ shall comply with all of the insurance
requirements and obligations of MAFC, as tenant under the Lease, and shall name
MAFC as additional insureds, as their interests may appear, on all policies of
insurance required to be carried by ▇▇▇ hereunder or thereunder. The parties
mutually agree that, with respect to any property loss which is covered by
insurance then being carried by MAFC or ▇▇▇, respectively, the party carrying
such insurance and suffering such loss releases the other of and from any and
all claims with respect to such loss; and the parties further mutually agree
that their respective insurance companies shall have no right of subrogation
against the other on account thereof, even though extra premium may result
therefrom. If and to the extent such waiver can be obtained only upon payment of
an additional charge, the party benefiting from the waiver shall pay such
charge, upon demand, or shall be deemed to have agreed that the party obtaining
the insurance coverage in question shall be free of any further obligations
under the provisions hereof relating to such waiver.
12. LIMITATIONS ON MAFC.
12.1 ▇▇▇ acknowledges that MAFC has made no representations or
warranties with respect to the Building or the Premises except as expressly
provided in this Sublease.
12.2 MAFC shall not be required to perform any of the covenants
and obligations of MAFC under the Master Lease and, insofar as any of the
obligations of MAFC hereunder are required to be performed under the Lease by
MAFC, ▇▇▇ shall rely on and look solely to MAFC for the performance thereof.
12.3 Any repair and maintenance obligations with respect to the
Premises which are the responsibility of MAFC, as tenant under the Master Lease,
shall be performed by ▇▇▇, at ANA's sole cost and expense. ▇▇▇ shall promptly
notify MAFC of the need of any such repair, even though MAFC shall not be
responsible or liable therefor.
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12.4 In no event shall MAFC be liable to ▇▇▇ for consequential,
punitive or other special damages with respect to this Sublease or any matter
arising out of or in connection with this Sublease, the Master Lease or the
Premises.
IN WITNESS WHEREOF, the parties hereto have caused this Sublease
Agreement to be executed as of the day and year first set forth above.
MAFC:
MIDNIGHT AUTO FRANCHISE CORP.
a Michigan corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
▇▇▇:
ALL NIGHT AUTO OF PHOENIX, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
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GUARANTY
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Magma Enterprises, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, jointly and
severally, hereby unconditionally guarantee the timely payment and performance
by All Night Auto of Phoenix, Inc. ("▇▇▇") of all of its obligations under this
Sublease. Guarantors waive presentment, notice of dishonor, notice of
non-payment and diligence on behalf of MAFC. This is a guaranty of payment, and
not a guaranty of collection. Guarantors hereby acknowledge that MAFC may agree
with ▇▇▇ to forbear from enforcing MAFC rights, amend the Sublease, and/or
settle its claims against ▇▇▇ under the Sublease, all without limiting or
allowing Guarantors' obligations under this Guaranty.
DISCHARGE OF LIABILITY. Notwithstanding the foregoing, if MAFC declares
a default under this Sublease which is not cured within any applicable cure
period, and Magma Enterprises promptly surrenders possession of the premises to
MAFC without interposing any legal process to contest or delay MAFC's
repossession of the premises, then neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ nor ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
shall have any personal liability under this Guaranty. This Discharge of
Liability provision shall not be interpreted as requiring ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to surrender possession of any personal property owned by them,
and they may have the benefit of this discharge described herein even if they
retain and remove their own personal property from the premises.
MAGMA ENTERPRISES, INC. an Arizona corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, PRESIDENT
Dated: 4/11/05
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By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INDIVIDUALLY
Dated: 4/11/05
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By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INDIVIDUALLY
Dated: 4/11/05
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Exhibit A: Terms and Conditions of the Master Lease
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