RESIDUAL GUARANTY
As of September 10, 1998
Chase Bank of Texas, National Association, as Agent for
the Banks described below (the "AGENT")
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Re: Credit Agreement (the "AGREEMENT") dated effective as of September 10,
1998 by and among Brazos Markets Development, L.P. as the Borrower
(the "BORROWER"), the several banks a party thereto from time to time
(the "BANKS"), and the Agent.
Ladies and Gentlemen:
1. GUARANTY. For value received, and in consideration of Borrower
entering into the Agreement, the undersigned (the "GUARANTOR") does hereby
irrevocably, absolutely, and unconditionally guarantee (a) the full payment,
when due, of any and all indebtedness and other amounts of every kind,
howsoever created, arising, or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing or owing to the Banks or
the Agent, by Borrower under the Note as defined in and evidenced by the
Agreement (all such obligations being hereinafter collectively referred to as
the "LIABILITIES") and (b) the performance by Borrower of its obligations
under the Operative Documents pursuant to the terms thereof; PROVIDED THAT
the Liabilities shall be limited to an amount up to and including the
aggregate of (i) the maximum amount (without deduction for any proceeds of
sale) that would be determined as due and payable if Lessee were to exercise
its right of sale to a third party pursuant to Section 11.4(a)(ii) of the
Ground Lease; (ii) the maximum amount (without deduction for any proceeds of
sale) that would be determined as due and payable if Lessee were to exercise
its right of sale to a third party pursuant to Section 11.4(a)(iii) of the
Facilities Lease; (iii) all interest on such amounts; (iv) any and all other
sums which are or may become due pursuant to the Agreement with respect to
such amounts (including, without limitation, indemnities, legal fees, and
amounts payable pursuant to Section 9.7 of the Agreement) and (v) to the
extent permitted by applicable law, all other amounts which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due
under the Ground Lease and Facilities Lease (the foregoing obligations and
undertakings are collectively referred to as the "OBLIGATIONS"). The
Guarantor has a substantial, direct or indirect, financial interest in the
benefits and advantages which will result from the Agreement. The Guarantor
hereby agrees that, upon any Event of Default under (and as defined in) the
Operative Documents, the Guarantor will forthwith pay the Liabilities as
limited by this paragraph immediately upon written demand or perform the
Obligations. Notwithstanding anything to the contrary contained in this
Guaranty, and regardless of whether an Event of Default under (and as
described in) any Operative Document has occurred and is continuing,
Guarantor shall have no liability under this Guaranty unless (A) an Event of
Default has occurred and is continuing beyond any applicable grace or
curative period under (and as defined in) any Lease Document or (B) any Lease
Document is rejected by a trustee or debtor-in-possession in any bankruptcy
proceeding involving the Lessee. This Guaranty is in addition to, and not in
lieu of, the Guaranty dated concurrently herewith executed by Guarantor in
favor of Lessor relating to the Lease Documents; provided, however, that in
no event shall the Agent or any of the Banks be entitled to recover an
aggregate amount (through the collateral assignment of the Lease Documents or
through this Guaranty or otherwise) in excess of the Liabilities.
2. GUARANTY CONTINUING, ABSOLUTE, UNLIMITED. This Guaranty is a
continuing, absolute, and unlimited Guaranty of payment and the Guarantor is
a primary obligor and not a surety. The Liabilities and Obligations shall be
conclusively presumed to have been created in reliance on this Guaranty. The
Agent shall not be required to proceed first against Borrower or any other
person, firm or corporation or against any property securing any of the
Liabilities or Obligations before resorting to the Guarantor for payment or
performance. To the extent permitted by applicable law,
FORM OF RESIDUAL GUARANTY - Page 1
this Guaranty shall be construed as a guarantee of payment without regard to
the enforceability of any of the Liabilities or Obligations or the rejection
of the Agreement in bankruptcy, and notwithstanding any claim, defense (other
than payment or performance by Borrower or the Guarantor) or right of set-off
which Borrower or the Guarantor may have against any Bank or the Agent,
including any such claim, defense, or right of set-off based on any present
or future law or order of any government (DE JURE or DE FACTO), or of any
agency thereof or court of law purporting to reduce, amend, or otherwise
affect any of the Liabilities or Obligations of Borrower or any other
obligor, or to vary any terms of payment thereof, and without regard to any
other circumstances which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. The Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time payment to the Banks or the Agent of the Liabilities or any
part thereof is rescinded or must otherwise be returned by any Bank or the
Agent upon the insolvency, bankruptcy, or reorganization of Borrower, or
otherwise, as though such payment to such Bank or the Agent had not been
made. To the extent permitted by applicable law, the Guarantor's obligation
to fully pay or perform the Liabilities and any remedy for the enforcement
thereof shall not be impaired, modified, released, or limited in any way by
any impairment, modification, release, or limitation of the liability of
Borrower or its bankruptcy estate, resulting from the operation of any
present or future provision of the Bankruptcy Code or any Debtor Relief Law
or from the decision of any court interpreting the same.
3. GUARANTY NOT AFFECTED BY CHANGE IN SECURITY OR OTHER ACTIONS. The
Agent and the Banks may, from time to time, without the consent of or notice
to the Guarantor, take any or all of the following actions without impairing
or affecting the Guarantor's obligations under this Guaranty or releasing or
exonerating the Guarantor from any of its liabilities hereunder:
(a) retain or obtain a security interest in any property to secure
any of the Liabilities or any obligation hereunder;
(b) retain or obtain the primary or secondary liability of any
party or parties, in addition to the Guarantor, with respect to any of the
Liabilities;
(c) extend the time or change the manner, place or terms of
payment of, or renew or amend any note or other instrument evidencing the
Liabilities or any part thereof, or amend in any manner any agreement
relating thereto;
(d) release or compromise, in whole or in part, or accept full or
partial payment for, any of the Liabilities hereby guaranteed, or any
liability of any nature of any other party or parties with respect to the
Liabilities or any security therefor;
(e) subordinate the payment of all or any part of the Liabilities
to the payment of any liability of the Borrower to creditors of the Borrower
other than the Agent or the Banks;
(f) enforce the Agent's or the Banks' security interest, if any,
in all or any properties securing any of the Liabilities or any obligations
hereunder in order to obtain full or partial payment of the Liabilities then
outstanding; or
(g) release or fail to perfect, protect, or enforce the Agent's or
the Banks' security interest, if any, in all or any properties securing any
of the Liabilities or any obligation hereunder, or permit any substitution or
exchange for any such property.
4. WAIVERS. The Guarantor hereby expressly waives to the extent
permitted by law:
(a) notice of acceptance of this Guaranty;
(b) notice of the existence or incurrence of any or all of the
Liabilities;
FORM OF RESIDUAL GUARANTY - Page 2
(c) presentment, demand, notice of dishonor, protest, and all
other notices whatsoever (except the written demand referred to in SECTION 1
hereinabove);
(d) any requirement that proceedings first be instituted by the
Agent or any Bank against the Borrower;
(e) all diligence in collection or protection of or realization
upon the Liabilities or any part thereof, or any obligation hereunder, or any
collateral for any of the foregoing;
(f) any rights or defenses based on the Agent's or a Bank's
election of remedies, including any defense to the Agent's or Bank's action
to recover any deficiency after a non-judicial sale; and
(g) the occurrence of every other condition precedent to which the
Guarantor might otherwise be entitled.
5. DEFINITIONS. As used in this Guaranty, the following terms will
have the following meanings, unless the context otherwise requires:
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such corporation or (b) to direct or cause
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"AGENT" means Chase Bank of Texas, National Association, a national
banking association, in its capacity as agent pursuant to ARTICLE 8 of the
Agreement and any successor agent pursuant to SECTION 8.6 of the Agreement.
"AGREEMENT" has the meaning given such term in the introductory
paragraph.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto.
"BANKS" means the lenders listed on the signature pages of the Agreement
and each Eligible Assignee (as defined in the Agreement) that shall become a
party to the Agreement pursuant to SECTION 9.6 thereof.
"BUSINESS DAY" means any day of the year other than a Saturday or Sunday
or any other day on which banks are not required or authorized to close in
Houston, Texas.
"CHASE" means Chase Bank of Texas, National Association, or its
successors or assigns.
"DEBTOR RELIEF LAW" means the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments or similar
laws from time to time in effect affecting the rights of creditors generally.
"FACILITIES LEASE" has the meaning set forth in the Agreement.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision
FORM OF RESIDUAL GUARANTY - Page 3
thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"GROUND LEASE" has the meaning set forth in the Agreement.
"GUARANTOR" has the meaning given such term in SECTION 1 hereof.
"INDEMNIFIED PERSON" has the meaning given such term in SECTION 22(a) of
this Guaranty.
"LEASE DOCUMENTS" has the meaning set forth in the Agreement.
"LESSEE" collectively means XXXXXXX'X FOOD & DRUGS, INC., a Delaware
corporation and XXXXXXX'X FOOD MARKETS, INC., a Texas corporation.
"LIABILITIES" has the meaning given such term in SECTION 1 of this
Guaranty.
"MATERIAL" means a circumstance, standard or event that is deemed
"material" by Guarantor in its sole, but reasonable, determination.
"OPERATIVE DOCUMENTS" means the Note (as defined in the Agreement) and
the Agreement.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise or any Governmental Authority.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or assets or
to which such Person or any of its property or assets is subject.
6. RIGHTS CUMULATIVE. The rights provided for in this Guaranty and
the Operative Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter
arising. The order and manner in which the Agent's and the Banks' rights and
remedies are to be exercised shall be determined by the Agent or the Banks in
their sole discretion. To the extent permitted by applicable law, no
application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable, or prevent the
exercise, or continued exercise, of rights or remedies of the Agent and the
Banks hereunder or under any Requirement of Law or in equity.
7. PAYMENTS. Each payment by the Guarantor to the Agent under this
Guaranty shall be made by transferring the amount thereof in immediately
available funds without set-off or counterclaim.
8. COSTS, EXPENSES AND TAXES. The Guarantor agrees to pay on demand:
(i) all reasonable out-of-pocket costs and expenses of the Agent in
connection with the preparation, execution and delivery of this Guaranty and
any other documents to be delivered hereunder, including the reasonable fees
and out-of-pocket expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and responsibilities
under this Guaranty, and any modification, supplement or waiver of any of the
terms of this Guaranty, (ii) all reasonable costs and expenses of the Agent
hereunder, including reasonable legal fees and expenses of counsel to the
Agent, in connection with a default or the enforcement of this Guaranty and
(iii) reasonable costs and expenses incurred in connection with third party
professional services reasonably required by the Agent pursuant to the Lease
Documents such as appraisers, environmental consultants, accountants or
similar Persons; PROVIDED that except during the continuance of any Event of
Default under the Lease Documents, the Agent will first obtain the consent of
the Guarantor to such expense, which consent shall not be unreasonably
withheld. Without prejudice to the survival of any other obligations of the
Guarantor hereunder, the obligations of the Guarantor under this Section
shall survive the termination of this Guaranty.
FORM OF RESIDUAL GUARANTY - Page 4
9. SUBROGATION. The Guarantor shall not be subrogated, in whole or in
part, to the rights of the Agent or any Bank or those of any subsequent
assignee or transferee of any of the Liabilities until all the Liabilities to
the Agent and the Banks and every such subsequent assignee or transferee
shall have been paid in full, and Guarantor hereby waives any and all such
rights. The provisions of this SECTION 9 shall survive the termination of
this Guaranty and any satisfaction and discharge of Borrower by virtue of any
payment, court order, or law.
10. NO WAIVER; REMEDIES. No failure on the part of the Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
or any abandonment or discontinuance of any steps to enforce such right,
preclude any other or further exercise thereof or the exercise of any other
right. No notice to or demand on the Guarantor in any case shall entitle the
Guarantor to any other or further notice or demand in similar or other
circumstances. The remedies herein are cumulative and not exclusive of any
other remedies provided by law, at equity or in any other agreement.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and covenants contained herein or made in writing by the Guarantor
in connection herewith shall survive the execution and delivery of this
Guaranty, and the termination of the Operative Documents and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not.
12. CONFIDENTIALITY. The Agent and each Bank agree to keep any
information delivered or made available by the Guarantor to it which is
clearly indicated to be confidential information, confidential from anyone
other than Persons employed or retained by the Agent who are or are expected
to become engaged in evaluating, approving, structuring or administering the
Operative Documents; PROVIDED that nothing herein shall prevent the Agent or
any Bank from disclosing such information (a) to any Bank, (b) pursuant to
subpoena or upon the order of any court or administrative agency, (c) upon
the request or demand of any regulatory agency or authority having
jurisdiction over Agent or any Bank, (d) which has been publicly disclosed,
(e) to the extent reasonably required in connection with any litigation to
which the Agent, any Bank, the Borrower, the Guarantor or its respective
Affiliates may be a party, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to any Bank's legal
counsel and independent auditors. The Agent will promptly notify the
Guarantor of any information that it is required or requested to deliver
pursuant to clause (b) or (c) of this SECTION 12 and, if the Guarantor is a
party to any such litigation, clause (e) of this SECTION 12.
13. SEPARABILITY. Should any clause, sentence, paragraph or Section of
this Guaranty be judicially declared to be invalid, unenforceable or void,
such decision will not have the effect of invalidating or voiding the
remainder of this Guaranty, and the parties hereto agree that the part or
parts of this Guaranty so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom and the remainder will have the same
force and effectiveness as if such part or parts had never been included
herein.
14. EXECUTION IN COUNTERPARTS. This Guaranty may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
15. INTERPRETATION.
(a) In this Guaranty, unless a clear contrary intention appears:
(i) the singular number includes the plural number and VICE
VERSA;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Guaranty as a whole and not to any
particular Article, Section or other subdivision;
FORM OF RESIDUAL GUARANTY - Page 5
(iv) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are not
prohibited by this Guaranty, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
PROVIDED that nothing in this clause is intended to authorize any
assignment not otherwise permitted by this Guaranty;
(v) except as expressly provided to the contrary herein,
reference to any agreement, document or instrument (including this
Guaranty) means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or Section hereof
or such Schedule or Exhibit hereto;
(vii) the word "including" (and with correlative meaning
"include") means including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any period of time,
except as expressly provided to the contrary, the word "from" means "from
and including" and the word "to" means "to but excluding"; and
(ix) reference to any law, rule or regulation means such as
amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time.
(b) The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
(c) No provision of this Guaranty shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
16. SUBMISSION TO JURISDICTION. The Guarantor, to the extent permitted
by applicable law, hereby agrees as follows:
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, IN XXXXXX COUNTY OR
ELSEWHERE IN THE XXXXX XX XXXXX XX XX XXX XXXXXX XXXXXX FOR THE SOUTHERN
DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION
19, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
(b) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING
FORM OF RESIDUAL GUARANTY - Page 6
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
17. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND AGREES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
18. PARTIES. This Guaranty shall inure to the benefit of the Agent and
the Banks and their respective successors, assigns or transferees, and shall
be binding upon the Guarantor and its successors and assigns. The Guarantor
may not assign any of its duties under this Guaranty without the prior
written consent of the Agent. The Agent and the Banks may assign their
respective rights and benefits under this Guaranty to any Eligible Assignee.
19. NOTICES. All notices, consents, requests, approvals, demands and
other communications provided for herein shall be in writing (including
telecopy communications) and mailed, telecopied, sent by overnight courier or
delivered:
(a) If to the Guarantor:
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to
Randall's Properties, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Xxxxxx & Xxxxxx LLP
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FORM OF RESIDUAL GUARANTY - Page 7
(b) If to the Agent:
Chase Bank of Texas, National Association
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
or, in the case of any party hereto, such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the other
parties given in accordance with the provisions of this SECTION 19.
Other than the service of process set forth in SECTION 16(a) above, all
communications shall be effective three (3) Business Days after the date when
mailed by certified mail, return receipt requested postage prepaid to any
party at its address specified above, or upon receipt if telecopied to any
party to the telecopy number set forth above, or upon receipt if delivered
personally to any party at its address specified above.
20. TERM. This Guaranty is not limited to any particular period of
time, but shall continue in full force and effect until all of the
Liabilities have been fully and finally paid or have been otherwise
discharged by the Agent and the Banks, and the Guarantor shall not be
released from any obligation or liability hereunder until such full payment
or discharge shall have occurred.
21. GOVERNING LAW. This Guaranty and all other documents executed in
connection herewith shall be deemed to be contracts and agreements executed
by the Guarantor and Agent under the laws of the State of Texas and of the
United States of America and for all purposes shall be construed in
accordance with, and governed by, the laws of said state and of the United
States of America.
22. INDEMNITY.
(a) The Guarantor shall indemnify the Agent, each Bank and each
Affiliate thereof and their respective directors, officers, employees and
agents (each, an "INDEMNIFIED PERSON") from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages (including
reasonable legal fees and expenses) to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by the Borrower of the proceeds of any
extension of credit or any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the
foregoing, and the Guarantor shall assume the defense thereof, including the
employment of counsel at Guarantor's expense; PROVIDED that Guarantor shall
not have such right, to the extent that such Indemnified Person shall deliver
to Guarantor a written notice waiving the benefits of the indemnification of
such Indemnified Person provided by this SECTION 22(a) in connection with
such claim, action, proceeding or suit. Notwithstanding the foregoing, if (i)
any claim, action, proceeding or suit is brought against an Indemnified
Person who is an individual, (ii) the claim, action, proceeding or suit seeks
damages of more than $500,000, or (iii) independent counsel to an Indemnified
Person shall conclude that there may be defenses available to
FORM OF RESIDUAL GUARANTY - Page 8
the Indemnified Person which may conflict with those available to Guarantor,
Guarantor shall not have the right to assume the defense of any such claim,
action, proceeding or suit on behalf of the Indemnified Person if such
Indemnified Person chooses to defend such claim, action, proceeding or suit
(with counsel reasonably acceptable to Guarantor), and all reasonable costs,
expenses and attorneys' fees incurred by the Indemnified Person in defending
such claim, action, proceeding or suit shall be borne by Guarantor; PROVIDED
HOWEVER, if there is more than one (1) Indemnified Person having a right to
defend such claim, action, proceeding or suit as aforesaid, the obligation of
Guarantor to pay the fees and expenses of such Indemnified Person shall be
limited to one (1) firm of attorneys. Any Indemnified Person shall also have
the right to employ separate counsel and to participate in its defense, but
the fees and expenses of such counsel shall be borne by such Indemnified
Person. Any decision by an Indemnified Person to employ its own counsel
(whether or not at Guarantor's expense) shall in no way affect any rights of
such Indemnified Person otherwise arising under this SECTION 22(a). In
addition, Guarantor will not be liable for any settlement of any claim,
action, proceeding or suit unless Guarantor has consented thereto in writing.
The foregoing indemnity and agreement to hold harmless shall not in any event
apply to any losses, liabilities, claims, damages or expenses incurred by
reason of (i) the gross negligence or willful misconduct of the Person to be
indemnified, or (ii) any Material default by the Agent or any Bank or any
other Indemnified Person that is not cured within any applicable cure period,
if any, under any of the Operative Documents or to any consequential damages
or loss of profit.
(b) WITHOUT LIMITING ANY PROVISION OF THIS GUARANTY, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
HEREUNDER OR THEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY
AND ALL LOSSES, LIABILITIES, CLAIMS OR DAMAGES: (i) ARISING OUT OF OR
RESULTING FROM THE ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON OR
(ii) IMPOSED UPON SAID PARTY UNDER ANY THEORY OR STRICT LIABILITY. Without
prejudice to the survival of any other obligations of the Guarantor hereunder
and under the Operative Documents, the obligations of the Guarantor under
this Section shall survive the termination of this Guaranty and the Operative
Documents and the payment of the Liabilities.
Sincerely yours,
XXXXXXX'X FOOD MARKETS, INC.,
a Texas corporation
By: /s/ Xxx Xxxxxx
-------------------------------------------
Xxx Xxxxxx, Senior Vice President-Finance,
Secretary and Treasurer
FORM OF RESIDUAL GUARANTY - Page 9
ACCEPTED AND AGREED as of the date first above written:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Agent
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxx, Vice President
FORM OF RESIDUAL GUARANTY - Page 10
