GUARANTY
IN CONSIDERATION of and in order to induce Bloomington Center
Associates, LLC, a Michigan limited liability company ("BCA"), to enter into an
Operating Agreement (the "Operating Agreement") regarding the formation and
operation of All Night Auto of Bloomington/Normal, LLC, a Michigan limited
liability company (the "Company"), and to make certain capital contributions to
the Company, Midnight Holdings Group, Inc. ("MHG"), Xxxxxxxx Xxxxx ("Xxxxx") and
Xxxxxxx Xxxxxxx ("Xxxxxxx") (each MHG, Xxxxx and Xxxxxxx are hereinafter
collectively referred to as the "Guarantors"), hereby covenant and agree with
BCA as follows:
1. Guarantors, jointly and severally, unconditionally guaranty to BCA
the full and prompt payment when due of the entire "Put Purchase Price" (as
hereinafter defined) to be paid by the Class B Member (as defined in the
Company's Operating Agreement) of the Company to BCA pursuant to Sections 6.5
through 6.8 of the Company's Operating Agreement. BCA may have immediate
recourse against Guarantors for the full and immediate payment of the Put
Purchase Price, or any part thereof, which has not been paid in full when due in
accordance with Section 6.8 of the Company's Operating Agreement; provided,
however, that the Guarantors acknowledge and agree that MHG shall be primarily
liable on this Guaranty and that BCA shall be entitled to first seek collection
against MHG under this Guaranty without first or ever pursuing collection
against Xxxxx or Xxxxxxx.
2. The term "Put Purchase Price" shall have the meaning set forth in
Section 6.7 of the Company's Operating Agreement.
3. This is a guarantee of payment and not of collection, and Guarantors
agree that BCA shall not be obligated prior to seeking recourse against or
receiving payment from Guarantors, to do any of the following (although the
Investor may do so, in whole or in part, at its sole option), the performance of
which are hereby unconditionally waived by Guarantor.
a. Take any steps to collect the Put Purchase Price from the
Class B Member or to file any claim of any kind against
Guarantors or the Class B Member; or
b. Take any steps to enforce, accept, or perfect BCA's interest
in, foreclose upon, or realize on any collateral security for
the payment of the Put Purchase Price or any other guaranty of
the Put Purchase Price; or
c. In any other respect exercise any diligence whatever in
collecting or attempting to collect the Put Purchase Price by
any means.
4. Guarantors' liability for payment of the Put Purchase Price shall be
absolute and unconditional, and nothing except final and full payment to BCA of
the entire Put Purchase Price shall operate to discharge Guarantors' liability
under this Guaranty. Accordingly, Guarantors unconditionally and irrevocably
waive each and every defense which under principles of guaranty or suretyship
law would otherwise operate to impair or diminish the liability of Guarantors
for the Put Purchase Price. Without limiting the generality of the foregoing
waiver,
Guarantors agree that none of the following acts, omissions, or occurrences
shall diminish or impair the liability of Guarantors in any respect (all of
which acts, omissions or occurrences may be done without notice to Guarantors):
a. Any extension, modification, indulgence, compromise,
settlement, or variation of any of the terms of the payment of
the Put Purchase Price; or
b. The discharge or release of any obligations of the Class B
Member or of any other person now or hereafter liable for the
payment of the Put Purchase Price by reason of bankruptcy or
insolvency laws or otherwise; or
c. The acceptance or release by BCA of any collateral security or
any other Guaranty, or any settlement, compromise or extension
with respect to any collateral security or other Guaranty; or
d. The making of demand, or absence of demand, for payment of the
Put Purchase Price, or giving, or failing to give, any notice
of dishonor or protest, or any other notice.
5. Guarantors further unconditionally and irrevocably waive:
a. All rights Guarantors may have, at law or in equity, to seek
or claim subrogation, contribution, indemnification, or any
other form of reimbursements from the Class B Member by virtue
of any payment(s) made to BCA under this Guaranty or otherwise
until the Put Purchase Price shall have been fully and finally
paid;
b. Any acceptance of this Guaranty;
c. Any notice of the disposition of any collateral security and
any right to object to the commercial reasonableness of the
disposition of any such collateral security; and
d. Any defenses related to the validity or enforceability of any
documentation executed by the Class B Member or by Guarantors
in connection with payment of the Put Purchase Price.
6. Guarantors acknowledge and agree with BCA that if BCA shall at any
time be required to return or restore to the Class B Member or to any trustee in
bankruptcy, any payment(s) made of the Put Purchase Price, this guaranty shall
continue in full force and effect or shall be fully reinstated as the case may
be, and Guarantors' obligation to BCA under this guaranty shall be increased by
the amount of any such payment(s) of the Put Purchase Price as BCA shall be
obliged to return or restore.
7. This Guaranty shall inure to the benefit of BCA and its successors
and assigns, including any member of BCA upon the liquidation of BCA.
8. This Guaranty shall be binding upon Guarantors and their successors
and assigns. This Guaranty may not be terminated by any act of the Guarantor,
and shall continue in full force and effect for so long as any obligation for
the payment of the Put Purchase Price remains outstanding.
9. This Guaranty and all rights and obligations hereunder, including
matters of construction, validity and performance, shall be governed by the laws
of the State of Michigan, and Guarantors consent to both jurisdiction and venue
in Michigan courts.
10. This Guaranty constitutes Guarantors' entire agreement with BCA,
and there are no other agreements, either written or oral, which modify or
supplement Guarantors' said agreement(s) with BCA. Guarantors acknowledge and
agree with BCA that this Guaranty cannot be modified or amended in any respect
except by an additional writing signed by the Guarantors and BCA.
11. Guarantors acknowledge and agree that in the event either Xxxxx or
Xxxxxxx shall be obligated to pay any portion of the Put Purchase Price
hereunder, MHG shall be required to contribute and reimburse to Xxxxx or Xxxxxxx
one hundred percent (100%) of the amount paid by Xxxxx or Xxxxxxx. In such event
neither Xxxxx nor Xxxxxxx shall be entitled to or obligated for any contribution
or reimbursement to the other for any amount of the Purchase Price paid by Xxxxx
or Xxxxxxx. In the event MHG is obligated to pay all or any portion of the Put
Purchase Price, neither Xxxxx nor Xxxxxxx shall be obligated to contribute
towards or reimburse MHG for any portion of the Put Purchase Price paid by MHG
and MHG will not seek such contribution or reimbursement from Xxxxx or Xxxxxxx.
12. This Guaranty may be executed in any number of counterparts and/or
telefacsimile each of which shall be deemed a valid original, but which together
shall constitute a single instrument.
Dated: October 20, 2006 GUARANTORS:
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx
Midnight Holdings Group, Inc.
a Delaware corporation
By: /s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
Its: CEO and Chairman
