Exhibit 10.10
EQUIPMENT LEASE AGREEMENT
THIS
EQUIPMENT LEASE AGREEMENT (the "Lease") dated as of March 30,
2007,
is entered into by and between ELITE AUTOMOTIVE GROUP, LLC (the
"Lessor"),
having its mailing address 12800 SW 58th Street, Mustang, OK 73064,
and MIDNIGHT
AUTO FRANCHISE CORP., a Michigan corporation (the "Lessee"), having
a place of
business at 1121 RAMBLING OAKS DRIVE, NORMAN, OK 73072 and its
mailing address
at 22600 Hall Road, Suite 205, Clinton Township, Michigan 48036.
MIDNIGHT
HOLDINGS GROUP, INC., ALL NIGHT AUTO OF NORMAN, INC., ALL NIGHT
AUTO OF
OKLAHOMA, INC. AND ALL NIGHT AUTO STORES, INC. have joined in this
Lease as
joint and several Guarantors (collectively, the "Guarantors").
WHEREAS,
All Night Auto of Oklahoma, Inc., the Lessor, and others are
concurrently entering into that Asset Purchase Agreement (the
"Asset Purchase
Agreement"); and
WHEREAS,
Lessor has an outstanding SBA Loan agreement with Bank of
Oklahoma, N.A., loan number 66428020001 (Norman), (the "SBA Loan"),
the terms of
which will determine the amount of monthly payments due under this
Lease.
NOW,
THEREFORE, in consideration of the mutual promises, covenants
and
agreement herein contained, the receipt and sufficiency of which is
hereby
acknowledged, the Lessor and the Lessee hereby agree as
follows:
1. LEASE;
TERM; RENTAL. The Lessor hereby Leases to the Lessee and the
Lessee hereby rents from the Lessor the equipment described in
Exhibit A
(hereinafter, with all replacement parts, repairs, additions and
accessories
incorporated therein and/or affixed thereto, referred to as the
"Equipment"), on
terms and conditions set forth in this Lease and the Exhibits
attached hereto;
for the term indicated above, commencing on March 30, 2007 (the
"Commencement
Date") and continuing thereafter until July 3, 2009 (Norman),
unless earlier
terminated as provided for in this Lease. The first monthly
payments of $[*]
(Norman) shall be payable on the date of this Agreement and shall
continue on
the corresponding day of each month thereafter, in the amount
stated above,
until the total rent (as determined in accordance with the SBA
Loan) and all
other obligations of the Lessee have been paid in full. All
payments of rent
shall be made to the Lessor at its address, or at the option of
Lessee at any
time hereafter, may be made by payment directly to the Bank of
Oklahoma, N.A.
for application to amounts outstanding under the SBA Loan. If at
anytime during
the term of this Lease the Lessor's monthly payment under SBA Loan
is increased
(or decreases) due to an increase (or decrease) in the applicable
interest rate,
the monthly payment hereunder shall increase (or decrease)
correspondingly upon
fifteen (15) days written notice by the Lessor to the Lessee. THIS
IS A
NON-CANCELABLE LEASE FOR THE TERM INDICATED ABOVE.
2.
PURCHASE AND ACCEPTANCE; NO WARRANTIES. THE LESSEE REPRESENTS THAT
THE
LESSEE HAS SELECTED THE EQUIPMENT LEASED HEREUNDER AND LESSEE
AGREES THAT,
EXCEPT AS SET FORTH IN THE ASSET PURCHASE AGREEMENT, THE LESSOR HAS
NOT MADE AND
MAKES NO
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REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, DIRECTLY
OR
INDIRECTLY, EXPRESSED OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING THE
SUITABILITY OF SUCH EQUIPMENT FOR ANY PURPOSE, ITS DURABILITY, ITS
FITNESS FOR
ANY PARTICULAR PURPOSE, ITS MERCHANTABILITY, ITS CONDITION, AND/OR
ITS QUALITY
AND AS BETWEEN LESSEE AND LESSOR, AND ANY ASSIGNEES, LESSEE LEASES
THE EQUIPMENT
"AS IS." LESSOR AND LESSOR'S ASSIGNEE SHALL NOT BE LIABLE TO LESSEE
FOR ANY
LOSS, DAMAGE OR EXPENSE OF ANY KIND OR NATURE CAUSED DIRECTLY OR
INDIRECTLY BY
ANY EQUIPMENT LEASED HEREUNDER OR THE USE, MAINTENANCE, FAILURE OF
OPERATION,
REPAIRS, SERVICE ADJUSTMENTS, OR ANY DELAY OR FAILURE OF OR TO THE
EQUIPMENT, OR
BY ANY INTERRUPTION OF SERVICE OR LOSS OF USE OF THE EQUIPMENT, OR
THE USE OF
THE EQUIPMENT IN VIOLATION OF THE RIGHTS OF ANY PARTY WHOMSOEVER,
OR FOR ANY
LOSS OF BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED. LESSOR
AND LESSOR'S
ASSIGNS DISCLAIM AND SHALL NOT BE RESPONSIBLE FOR ANY LOSS, DAMAGE
OR INJURY TO
PERSONS OR PROPERTY CAUSED BY THE EQUIPMENT WHETHER ARISING THROUGH
ANY
INTENTIONAL ACT OF LESSOR, THE NEGLIGENCE OF THE LESSOR, OR IMPOSED
BY LAW.
3. TITLE.
Lessor represents and warrants to Lessee that Lessor owns the
Equipment free and clear of all liens, claims or encumbrances,
except for a lien
securing the SBA Loan. Lessor covenants with Lessee that, so long
as Lessee
performs all of its obligations under this Lease Agreement, Lessor
shall perform
all of its obligations as borrower under the SBA Loan. The Lessor
shall at all
times retain title to the Equipment. The Lessee shall not change or
remove any
insignia or lettering which is on the Equipment at the time of
delivery thereof,
or which is thereafter placed thereon, indicating the Lessor's
ownership
thereof; and at any time during the Lease term, upon request of the
Lessor, the
Lessee shall affix to the Equipment in prominent place, labels,
plates or other
markings supplied by the the Lessor stating that the Equipment is
owned by the
Lessor. The Lessor is hereby authorized by the Lessee, at the
Lessee's expense,
to cause this Lease, or any statement or other instrument in
respect of this
Lease showing the interest of the Lessor in the Equipment,
including Uniform
Commercial Code Financing Statements, to be filed or recredited and
refiled and
re-recorded. The Lessee agrees to execute and deliver any statement
or
instrument requested by the Lessor for such purpose, and agrees to
pay or
reimburse the Lessor for any filing, recording or stamp fees or
taxes arising
from the filing or recording of any such instrument or statement.
The Lessee
shall, at its expense, protect and defend the Lessor's title at all
times
keeping the Equipment free from all liens and claims whatsoever
except for those
created by or arising through the Lessor, and shall give the Lessor
immediate
written notice thereof and shall indemnity the Lessor from any loss
caused
thereby. The Lessee shall execute and deliver to the Lessor, upon
the Lessor's
request, such further instruments and assurances as the Lessor
deems necessary
or advisable for the confirmation or perfection of the Lessor's
rights hereunder
and the Lessee authorizes the Lessor to file any such instrument,
including, but
not limited to, any Uniform Commercial Code Financing Statement(s),
without the
Lessee's signature and, if the signature of the Lessee is required
thereon, the
Lessee irrevocably appoints the Lessor as the Lessee's
attorney-in-fact to
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execute and file any such statement or other instrument in the name
and on
behalf of the Lessee. Except for the Purchase Option attached as
Exhibit B, the
Lessee shall have no right to purchase or otherwise acquire title
to or
ownership of the Equipment. Without modifying or limiting the
foregoing, or
derogating from the intention of the parties that the transactions
herein shall
constitute a Lease and not a financing of the Equipment by the
Lessor, if any
court of competent jurisdiction shall hold that the transactions
contemplated
herein do constitute a financing and not a Lease of the Equipment
by the Lessor,
then the Lessor has a first lien security interest in the Equipment
as of the
date hereof to secure the obligations of the Lessee, its successors
and assigns,
hereunder and the Lessor shall have all rights and remedies of a
secured party
under the Uniform Commercial Code as adopted in Oklahoma and any
other
applicable jurisdiction.
4. CARE
AND USE OF EQUIPMENT. The Lessee shall maintain the Equipment
in
good operating condition, repair and appearance, and protect the
same from
deterioration, other than normal wear and tear; shall use the
Equipment in the
regular course of business only, within its normal capacity,
without abuse and
in a manner contemplated by the Vendor, shall comply with the laws,
ordinances,
regulations, requirements and rules with respect to the use,
maintenance and
other operation of the Equipment, shall not make any modification,
alteration,
or addition to the Equipment (other than normal operating
accessories or
controls which shall, when added to the Equipment, become the
property of the
Lessor) without the prior written consent of the Lessor, which
shall not be
unreasonably withheld, shall not so affix the Equipment to realty
as to change
its nature to real property or fixture, and agrees that the
Equipment shall
remain personal property at all times regardless of how attached or
installed;
shall keep the Equipment at the location shown above, and shall not
remove the
Equipment without the consent of the Lessor, which shall not be
unreasonably
withheld. The Lessor shall have the right during normal hours, upon
reasonable
prior notice to the Lessee and subject to applicable laws and
regulations, to
enter upon the premises where the Equipment is located in order to
inspect,
observe or remove the Equipment, or otherwise protect the Lessor's
interest. The
Lessee specifically acknowledges that the Equipment is Leased to
the Lessee
solely for commercial or business purposes and not for personal,
family or
household purposes.
5. NET
LEASE: TAXES. The Lessee intends the rental payments hereunder
to
be net to the Lessor, and the Lessee shall pay all sales, excise,
personal
property, stamp, documentary, ad valorem and other taxes, license
and
registration fees, assessments, fines, penalties and other charges
imposed on
the ownership, possession or use of the Equipment during the term
of this Lease;
shall pay all taxes (except federal and State net income taxes
imposed on the
Lessor) with respect to this Lease and the rental payments
hereunder, and shall
reimburse the Lessor upon demand for any taxes paid by or advanced
by the
Lessor. An administration fee will be charged by the Lessor or
Lessor's assigns
for the filing of personal property taxes. The Lessee shall file
all returns
required by law or by the Lessor and furnish copies to the
Lessor.
6.
INDEMNITY. The Lessee shall and does hereby agree to indemnify and
save
the Lessor, its agents, servants, successors, and assigns harmless
against and
from any and all liability, damages, or loss, including reasonable
counsel fees,
arising out of the ownership, selection, possession, leasing,
renting, operation
(regardless of where, how and by whom
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operated), control, use, condition (including but not limited to
latent and
other defects, whether or not discoverable by the Lessee),
maintenance, delivery
and return of the Equipment or arising out of the Lessor's late or
nonpayment of
any amounts owed by Lessor to Bank of Oklahoma, N.A. under the SBA
Loan
Agreement that is caused by Lessee's late or nonpayment of any
amounts owed by
Lessee to Lessor under this Lease. The indemnities and obligations
herein
provided shall continue in full force and effect notwithstanding
termination of
this Lease.
7.
INSURANCE. The Lessee shall keep the Equipment insured against
all
risks of loss or damage from every cause whatsoever, in amounts
determined by
the Lessor. The amount of such insurance shall be sufficient so
that neither the
Lessor nor the Lessee will be considered a co-insurer. The Lessee
also shall
carry public liability insurance, personal injury and property
damage, covering
the Equipment. All such insurance shall provide that losses, if
any, shall be
payable to the Lessor, and all such liability insurance shall
include the Lessor
as named insured and require that
