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EXHIBIT 10.3
RESIDUAL GUARANTY
(this "GUARANTY")
As of September 15, 1998
The Chase Manhattan Bank, as Agent for
the Lenders described below (the "AGENT")
Xxx Xxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, Xxx Xxxx 00000
Re: Credit Agreement (the "AGREEMENT") dated effective as of
September 15, 1998 (the "CLOSING Date") by and among Brazos
Automotive Properties, L.P. as the Borrower (the "BORROWER"),
the several banks party thereto from time to time (the
"LENDERS"), and the Agent.
Ladies and Gentlemen:
1. GUARANTY.For value received, and in consideration of Borrower entering
into the Agreement, but subject in any event to the immediately
following sentence in this SECTION 1, the undersigned corporation (the
"GUARANTOR"), does hereby irrevocably, absolutely, and unconditionally
guarantee (a) 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 Lenders or the Agent, by Borrower under the
Note as defined in the Agreement (all such obligations being
hereinafter collectively referred to as the "LIABILITIES") and (b) the
performance by Borrower of its obligations under the Credit Documents
pursuant to the terms thereof; provided that the Liabilities shall be
limited to an amount up to and including the total 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 11.3(b) 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 11.3(b) of the
Facilities Lease; (iii) all interest due and payable on the Note
pursuant to the terms thereof; (iv) any and all other sums which are or
may become due pursuant to the Agreement (including, without
limitation, indemnities, legal fees, and amounts payable pursuant to
Section 9.4 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
Agreement (the foregoing obligations and undertakings are collectively
referred to as the "OBLIGATIONS"). Notwithstanding anything contained
herein or elsewhere to the contrary, the maximum amount for which
Guarantor shall be liable or responsible under this Guaranty, including
both with respect to payment of Liabilities and performance of
Obligations, shall in no event exceed an amount (the "MAXIMUM AMOUNT")
equal to eighty-one and one-half percent (81.5%) of the principal
balance outstanding from time to time under the "NOTE" (as said term is
defined in the Agreement), and Guarantor shall in no event have any
liability to pay, or otherwise be responsible for, any amount pursuant
to this Guaranty or by operation of law, in equity or otherwise, in
excess of the Maximum Amount as determined at the relevant time of
determination. 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 Default,
the Guarantor will forthwith pay the Liabilities as limited by this
paragraph immediately upon written demand or perform the Obligations.
RESIDUAL GUARANTY-Page 1
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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, 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 Lender 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
Lenders or the Agent of the Liabilities or any part thereof is
rescinded or must otherwise be returned by any Lender or the Agent upon
the insolvency, bankruptcy, or reorganization of Borrower, or
otherwise, as though such payment to such Lender 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 Lenders 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 (except insofar as the Liabilities are
reduced or modified thereby), the Guarantor's obligations under this
Guaranty or releasing or exonerating the Guarantor from any of its
liabilities hereunder:
1. retain or obtain a security interest in any property to secure
any of the Liabilities or any obligation hereunder;
2. 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;
3. 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, in each case in
accordance with the terms of each such agreement;
4. 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;
5. enforce the Agent's or the Lenders' 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
RESIDUAL GUARANTY-Page 2
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6. release or fail to perfect, protect, or enforce the Agent's or
the Lenders' 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:
1. notice of acceptance of this Guaranty;
2. notice of the existence or incurrence of any or all of the
Liabilities in accordance with the Credit Documents;
3. presentment, demand, notice of dishonor, protest, and all
other notices whatsoever (except the written demand referred
to in SECTION 1 hereinabove);
4. any requirement that proceedings first be instituted by the
Agent or any Lender against the Borrower;
5. 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;
6. any rights or defenses based on the Agent's or a Lender's
election of remedies, including any defense to the Agent's or
Lender's action to recover any deficiency after a non-judicial
sale; and
7. 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:
ACCOUNTANTS mean Pricewaterhouse Coopers, LLP or other firm of
independent public accountants of nationally recognized standing retained by
Guarantor or any other firm acceptable to the Lenders.
ADJUSTED DEBT means Funded Debt, plus the product of eight (8) times
Rental Payments.
AFFILIATE means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether as
general partner, through ownership of a Control Percentage of such Person or the
general partner of such Person, by contract or otherwise.
AGENT means The Chase Manhattan Bank, a national banking association,
and its successor or successors as administrative agent for Lenders under the
Credit Agreement.
BUSINESS DAY means for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by Law to be
closed in New York, New York.
CAPEX means, for any Four Quarter Period, capital expenditures for
fixed or capital assets that are required to be capitalized on a balance sheet
prepared in accordance with GAAP minus any net proceeds of allowable
sale/leasebacks permitted by SECTION 8N.
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CAPITALIZED LEASE means any lease the obligation for Rental Payments
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
CASH EQUIVALENTS means (a)securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States Government of any agency thereof, (b) certificates of deposit,
time deposits, overnight bank deposits, bankers acceptances and repurchase
agreements of any commercial bank which has capital and surplus in excess of
$100,000,000 having maturities of one year or less from the date of acquisition,
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Group or P-2 by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments, (d) money market
accounts or funds with or issued by "Qualified Issuers", (e) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, (f) demand deposit accounts
maintained in the ordinary course of business with any bank, or with any bank
that is not a bank, not in excess of $100,000 in the aggregate on deposit with
any such bank, and (g) marketable securities of the same or similar type as
owned by the Guarantor as of July 31, 1998, the aggregate actual purchase price
of which shall not exceed $100,000 at any one time.
CHANGE OF CONTROL shall mean the occurrence of one or more of the
following: (a) until Guarantor hires a Chief Executive Officer, members of the
Ownership Group ceasing to own in the aggregate, directly or indirectly,
beneficially or of record, at least (i) sixty percent (60%) of the Preferred
Stock, issued and outstanding at any time or (ii) fifteen percent (15%) of the
Common Stock, issued and outstanding at any time, or (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any person or
group, other than the Ownership Group, of (i) shares representing more than
thirty-five percent (35%) of the Common Stock, issued and outstanding at any
time or (ii) more than sixty percent (60%) of the Preferred Stock, issued and
outstanding at any time, or (c) the occupation of a majority of the seats (other
than vacant seats) on the board of directors of Guarantor or any Subsidiary of
the Guarantor by Persons who were neither (i) nominated by the board of
directors of Guarantor nor (ii) appointed by directors so nominated. As used in
this definition of "Change of Control," terms defined in the Securities Exchange
Act of 1934 or the rules of the Securities and Exchange Commission thereunder as
in effect on the date hereof, shall have the respective meanings ascribed to
them therein.
CHASE means The Chase Manhattan Bank.
CLOSING DATE has the meaning given to that term in the Credit
Agreement.
CODE means the Internal Revenue Code of 1986, as amended from time to
time, and related rules and regulations promulgated thereunder by the Internal
Revenue Service.
COMPANY OR COMPANIES means, at any time, Guarantor and each of its
Subsidiaries.
COMMON STOCK means the common stock of the Guarantor, $.01 par value
per share.
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
the attached EXHIBIT A and signed by a Responsible Officer.
CONTROL PERCENTAGE means, with respect to any Person (a) in the case of
a corporation, the percentage of the outstanding capital stock of such Person
having ordinary voting power which gives the direct or indirect holder of such
stock the power to elect a majority of the Board of Directors of such Person and
(b) in the case of a limited partnership, the percentage of the outstanding
limited partnership interests of such Person which gives the direct or indirect
holder of such limited partnership interests the power to remove the general
partner or partners of such Person or to take actions reserved for the limited
partners under the applicable limited partnership act.
RESIDUAL GUARANTY-Page 4
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CREDIT AGREEMENT means the Senior Secured Credit Agreement among the
Guarantor, the Agent, the Syndication Agent named therein and the Lenders named
therein, as amended, supplemented or restated from time to time.
CURRENT FINANCIALS means, at any time, the consolidated Financial
Statements of Guarantor and its Subsidiaries most recently delivered to Agent
under SECTIONS 7a.(i) or 7a.(ii), as the case may be.
DEBT means (without duplication), for any Person, (a) indebtedness of
such Person for borrowed money; (b) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) obligations of such
Person to pay the deferred purchase price of property or services; (d)
obligations of such Person as lessee under Capitalized Leases required to be
capitalized under GAAP; (e) reimbursement obligations in respect of bonds or
letters of credit; (f) obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) of such
Person to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness of others of the kinds referred to in
clauses (a) through (e) above; and (g) indebtedness of others of the kinds
referred to in clauses (a) through (f) secured by any Lien on or in respect of
any property of such Person whether or not assumed by such Person; provided,
however, that all trade accounts payable and accrued expenses incurred in the
ordinary course of business of such Person and not overdue shall be excluded
from the foregoing.
DEBTOR RELIEF LAWS means Title 11 of the United States Code and all
other applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Laws affecting creditors' Rights in effect from time to
time.
DEFAULT is defined in SECTION 10.
DISTRIBUTION means, with respect to any shares of any capital stock or
other equity securities or other interests issued by a Person, (a) the
retirement, redemption, purchase or other acquisition for value of those
securities by such Person, (b) the declaration or payment of any dividend on or
with respect to those securities by such Person (except distributions in the
form of such securities, (c) any loan or advance by that Person to, or other
investment by that Person in, the holder of any of those securities, and (d) any
other payment by that Person with respect to those securities.
DOLLARS and $ means lawful money of the United States of America.
EBITDAR means, as determined, on a rolling twelve month basis and in
respect of any Person the sum of (i) the Net Income of such Person, plus (ii)
the Interest Expense of such Person for such period as determined in accordance
with GAAP and as such item is reported on such Person's financial statements,
(iii) the income tax expense of such Person for such period, (iv) the amount
reported as the depreciation of the assets of such Person for such period,
computed in accordance with GAAP, and as such item is used in the computation of
such Person's Net Income for such period, (v) the amount reported as the
amortization of intangibles for such Person for such period, computed in
accordance with GAAP, and as such item is used in the computation of such
Person's Net Income for such period, and (vi) Rental Payments.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by any Company.
ENVIRONMENTAL LAW means any Law that relates to the pollution or
protection of the environment or to Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and related rules and regulations.
FACILITIES LEASE has the meaning given that term in the Agreement.
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FINANCIAL STATEMENTS of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP, (b) in comparative form to prior year-end
figures or corresponding periods of the preceding fiscal year, as applicable,
and (c) on a consolidated basis if that Person had any consolidated Subsidiaries
during the applicable period.
FIXED COVERAGE RATIO means, as determined, on a rolling twelve month
basis the ratio of (a) EBITDAR minus CAPEX for such period, to (b) (i) Rental
Payments, plus (ii) Interest Expense due in respect of Debt for such period of
Guarantor and its Subsidiaries on a consolidated basis determined in accordance
with GAAP.
FOUR QUARTER PERIOD means a period of four full consecutive fiscal
quarter-annual periods, taken together as one accounting period; provided,
however, for the (a) first fiscal quarter period following the Closing Date and
ending on December 31, 1998, the income statement times four (4) annualized
shall be utilized; (b) second fiscal quarter period following the Closing Date
and ending March 31, 1999, the six (6) months income statement times two (2)
annualized shall be utilized; and (c) third fiscal quarter period following the
Closing Date and ending June 30, 1999, the nine (9) months income statement
divided by three (3) then multiplied times four (4) annualized shall be
utilized.
FUNDED DEBT means, when determined, on a rolling twelve (12) month
basis, calculated using the month-end balance for each month on a consolidated
basis for the Companies in accordance with GAAP: (a) indebtedness of such Person
for borrowed money; (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, and (c) obligations of such
Person as lessee under Capitalized Leases; excluding notes generated in the
ordinary course of payable within one year not to exceed $1,000,000 and trade
payables and accrued expenses PROVIDED HOWEVER, the calculation for the period
commencing with the Closing Date and ending twelve months thereafter, shall be
based on the average of the month-end balance for the months elapsed since the
Closing Date.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time,
applied on a basis consistent with those used in preparation of the audited
consolidated financial statements referred to in SECTION 7a.(i) (except for
changes concurred in by Guarantor's Accountants).
GROUND LEASE has the meaning given that term in the Agreement.
HAZARDOUS SUBSTANCE means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant or toxic or hazardous substance under any Environmental
Law.
INTEREST EXPENSE means, in respect of a Person, for any Four Quarter
Period, all interest paid or accrued and amortization of debt discount with
respect to all Funded Debt of such Person for such period (after giving effect
to the net cost associated with all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements, or other financial arrangements
designed to protect such Person against fluctuations in interest rates) and
after giving credit for interest income and construction period interest income.
LAWS means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions and
interpretations of any Tribunal, as in effect from time to time.
LENDER LIENS means Liens in favor of Lenders, or Agent on behalf of
Lenders, securing any of the Obligations (as that term is defined in the Credit
Agreement).
LESSEE means Monro Muffler Realty LLC, a Delaware limited liability
company.
LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
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LITIGATION means any action by or before any Tribunal.
MATERIAL ADVERSE EVENT means any circumstance or event that,
individually or collectively with other circumstances or events, reasonably is
expected to result in any (a) impairment of the ability of Borrower to perform
any of its payment or other material obligations under any Credit Document or of
the Guarantor to perform any of its payment or other material obligations under
this Guaranty, (b) impairment of the ability of Agent or Lenders to enforce (i)
any of the material obligations of the Guarantor under this Guaranty or (ii) any
of their respective Rights under the Credit Documents, or (c) material and
adverse effect on the business, assets, property or condition (financial or
otherwise) of the Companies as a whole as represented to Lenders in the Current
Financials.
MATERIAL AGREEMENT means, for any Person, any agreement (excluding
purchase orders for material or inventory in the ordinary course of business) to
which that Person is a party, by which that Person is bound, or to which any
assets of that Person may be subject, and that is not cancelable by that Person
upon thirty (30) or fewer days' notice without liability for further payment
other than nominal penalty, and that requires that Person to pay more than
$1,000,000 during any 12-month period.
MINORITY INTERESTS means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that are
not owned by the Guarantor and/or one or more of its Wholly-Owned Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in Preferred Stock.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company
(or any Person that, for purposes of Title IV of ERISA, is a member of
Guarantor's controlled group or is under common control with Guarantor within
the meaning of Section 414 of the Code) is making, or has made, or is accruing,
or has accrued, an obligation to make contributions.
NET INCOME means, in respect of a Person, the net income of such Person
computed in accordance with GAAP and as such item is reported from time to time
on such Person's statement of income and retained earnings (or similar
statement) (after deduction for payment of all taxes).
OWNERSHIP GROUP means Xxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxxx
Xxxxxxx and their spouses or lineal descendants, or any estate of such parties
or any trust of which any of the foregoing are the exclusive beneficiaries.
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
PERMITTED DEBT means Debt described on the attached SCHEDULE 6n.
PERMITTED LIENS means Liens described on the attached SCHEDULE 6j.
PERSON means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian or similar official.
POTENTIAL DEFAULT means the occurrence of any event or the existence of
any circumstance that would, upon notice or lapse of time or both, become a
Default.
PREFERRED STOCK means the Guarantor's Class C Convertible Preferred
Stock, $1.50 par value per share.
QUALIFIED ISSUER means any commercial bank (a) which has capital and
surplus in excess of $100,000,000 and (b) the outstanding long term debt
securities of which are rates at least A-2 by Standard & Poors Ratings Group or
at
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least P-2 by Xxxxx'x Investors Service, Inc., or carry an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.
RENTAL PAYMENTS means, as determined, on a rolling twelve (12) month
basis ending on the last day of the accounting period covered by the
consolidated financial statements of Guarantor and its Subsidiaries, and
delivered pursuant to this Guaranty, the dollar amount of the fixed payments
which Guarantor or its Subsidiaries are required to make by the terms of any
lease to its landlords during such period; (a) excluding, however (i) rentals
under Capitalized Leases, (ii) maintenance, repairs, taxes and other similar
changes included in such payments, and (iii) amounts constituting step rent in
accordance with GAAP, and (b) less (x) rental income and (y) amortization of
deferred gains on sale-leasebacks; PROVIDED, HOWEVER, the calculation for the
period commencing with the Closing Date and ending twelve months thereafter,
shall be based on (1) the Four Quarter Period for all lease or ground lease
payments which Guarantor or its Subsidiaries are required to make to Brazos
Automotive Properties, L.P., as lessor under an operating lease with Monro
Leasing, LLC, and (2) the average of all lease or ground lease payments which
Guarantor or its Subsidiaries are required to make in connection with properties
acquired under the APA.
REPORTABLE EVENT means an event described in Section 4043 of ERISA
excluding any such event for which the notice requirement is waived under
applicable regulations of the PBGC.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys and agents.
RESPONSIBLE OFFICER means the chairman, president, senior
vice-president, executive vice-president, chief executive officer or chief
financial officer of Guarantor.
RIGHTS means rights, remedies, powers, privileges and benefits.
SOLVENT means, as to a Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
SUBSIDIARY of any Person means any entity of which at least 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person.
TANGIBLE ASSETS of any Person means, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion and other properly deductible valuation reserves) after
deducting the following: good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets (other than prepaid insurance and
deferred taxes), any write up in the book value of any asset resulting from a
revaluation thereof subsequent to December 31, 1998, and such other assets as
are properly classified as "intangible assets" in accordance with GAAP.
TANGIBLE NET WORTH means as of the date of any determination thereof,
the sum of the capital stock of all classes, paid-in-capital and surplus
accounts (net of treasury shares) plus (or minus in the case of a deficit) the
retained earnings of the Guarantor and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, after elimination of Minority
Interests, less all assets which are not Tangible Assets.
TAXES means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises or assets.
TRIBUNAL means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel having
binding authority with respect to any party to be bound thereby pursuant to a
written agreement entered into by such party, or (c) central bank.
UCP means the Uniform Customs and Practices for Documentary Credit
(1993 version), International Chamber of Commerce Publication No. 500 (as
amended or modified from time to time).
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WHOLLY-OWNED SUBSIDIARY means a Subsidiary owned 100% by Guarantor.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GUARANTOR. The Guarantor
represents and warrants to the Agent and the Lenders that:
1. CORPORATE EXISTENCE, GOOD STANDING, AUTHORITY AND COMPLIANCE.
Each of the Companies is duly organized, validly existing and
in good standing under the Laws of the jurisdiction in which
it is incorporated or organized as identified on the attached
SCHEDULE 6a. or on the most recently amended SCHEDULE 6a.
Except where failure is not a Material Adverse Event, each of
the Companies (a) is duly qualified to transact business and
is in good standing as a foreign corporation or other entity
in each jurisdiction where the nature and extent of its
business and properties require due qualification and good
standing (those jurisdictions being identified on the attached
SCHEDULE 6a. or on the most recently amended SCHEDULE 6a., (b)
possesses all requisite authority, permits and power to
conduct its business as is now being, or is contemplated by
this Guaranty to be, conducted, and (c) is in compliance with
all applicable Laws, except in each case where the failure to
so qualify, to possess such authority, permits or power or to
comply with such Law would not cause a Material Adverse Event.
2. SUBSIDIARIES. As of the date of this Guaranty, Guarantor has
no Subsidiaries except as disclosed on the attached SCHEDULE
6b. or on the most recently amended SCHEDULE 6b. reflecting
changes to the schedule as a result of transactions permitted
by this Guaranty. All of the outstanding shares of capital
stock (or similar voting interests) of those Subsidiaries are
duly authorized, validly issued, fully paid and nonassessable
and are owned of record and beneficially as set forth thereon,
free and clear of any Liens, restrictions, claims or Rights of
another Person, other than Permitted Liens, and are not
subject to any warrant, option or other acquisition Right of
any Person or subject to any transfer restriction except for
restrictions imposed by securities Laws and general corporate
Laws.
3. AUTHORIZATION AND CONTRAVENTION. The execution and delivery by
the Guarantor of this Guaranty or related document to which it
is a party and the performance by it of its obligations
thereunder (a) are within its corporate or limited liability
company power, as the case may be, (b) have been duly
authorized by all necessary corporate or limited liability
company action, as the case may be, (c) require no action by
or filing with any Tribunal (other than any action or filing
that has been taken or made on or before the date of this
Guaranty or which would not cause a Material Adverse Event),
(d) do not violate any provision of its charter or bylaws, (e)
do not violate any provision of Law or order of any Tribunal
applicable to it, other than violations that individually or
collectively are not a Material Adverse Event, (f) do not
violate any Material Agreements to which it is a party, other
than a violation which would not cause a Material Adverse
Event, (g) do not result in the creation or imposition of any
Lien (other than the Lender Liens) on any asset of the
Companies, (h) are in furtherance of the corporate purposes of
the Guarantor and (i) do not require the consent or approval
of the shareholders of the Guarantor.
4. BINDING EFFECT. Upon execution and delivery by all parties
thereto, this Guaranty will constitute a legal and binding
obligation of the Guarantor, enforceable against it in
accordance with its terms, except as enforceability may be
limited by applicable Debtor Relief Laws and general
principles of equity.
5. FINANCIAL STATEMENTS; FISCAL YEAR. The Current Financials were
prepared in accordance with GAAP and present fairly, in all
material respects, the consolidated financial condition,
results of operations,
RESIDUAL GUARANTY-Page 9
10
and cash flows of the Companies as of, and for the portion of
the fiscal year ending on the date or dates thereof (subject
only to normal year-end adjustments). All material liabilities
of the Companies as of the date or dates of the Current
Financials are reflected therein or in the notes thereto.
Except for transactions directly related to, or specifically
contemplated by, the Credit Documents or disclosed to the
Agent, no subsequent material adverse changes have occurred in
the consolidated financial condition of the Companies from
that shown in the Current Financials, nor has any Company
incurred any subsequent material liability.
6. LITIGATION. Except as disclosed on the attached SCHEDULE 6F.
or the most recently amended SCHEDULE 6f., no Company is
subject to, or aware of the threat of, any Litigation that is
reasonably likely to be determined adversely to any Company
or, if so adversely determined, is a Material Adverse Event.
Except as permitted under SECTION 10d., no outstanding and
unpaid judgments against any Company exist.
7. TAXES. All Tax returns of the Companies required to be filed
have been filed (or extensions have been granted) before
delinquency, except for returns for which the failure to file
is not a Material Adverse Event, and all Taxes imposed upon
the Companies that are due and payable have been paid before
delinquency, other than Taxes for which the criteria for
Permitted Liens have been satisfied or for which nonpayment is
not a Material Adverse Event.
8. ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE 6h. or
on the most recently amended SCHEDULE 6h., (a) no Company
knows of any environmental condition or circumstance
materially adversely affecting any Company's properties taken
as a whole or operations, (b) no Company has received any
report of any Company's material violation of any
Environmental Law, (c) no Company knows that any Company is
under any obligation to remedy any material violation of any
Environmental Law, or (d) no facility of any Company is used
for, or to the knowledge of any Company has been used for,
storage, treatment or disposal of any Hazardous Substance,
excluding the storage of Hazardous Substances in amounts
commonly and lawfully used in automotive repair shops which
have been handled in compliance with applicable Environmental
Law. Except as disclosed in SCHEDULE 6h., each Company has
taken prudent steps to determine that its properties and
operations do not violate any Environmental Law, other than
violations that are not, individually or in the aggregate, a
Material Adverse Event, except where such condition,
circumstance, violation or non-compliance would not reasonably
be expected to have a monetary impact or cost to the Guarantor
equal to or in excess of five percent (5%) of the Guarantor's
pre-tax income during the preceding Four Quarter Period, such
amount not to exceed $1,000,000.
9. EMPLOYEE PLANS. Except where occurrence or existence is not a
Material Adverse Event, (a) no Employee Plan has incurred an
"accumulated funding deficiency" (as defined in section 302 of
ERISA or section 412 of the Code), (b) no Company has incurred
liability under ERISA to the PBGC in connection with any
Employee Plan (other than required insurance premiums, all of
which have been paid), (c) no Company has withdrawn in whole
or in part from participation in a Multiemployer Plan, (d) no
Company has engaged in any "prohibited transaction" (as
defined in section 406 of ERISA or section 4975 of the Code),
and (e) no "Reportable Event" has occurred, excluding events
for which the notice requirement is waived under applicable
PBGC regulations.
10. PROPERTIES; LIENS. Each of the Companies has good and
marketable title to all its property reflected on the Current
Financials (except for property that is obsolete or that has
been disposed in the ordinary course of business or, after the
date of this Guaranty, as otherwise permitted by SECTION
RESIDUAL GUARANTY-Page 10
11
8h. or SECTION 8i.). Except for Permitted Liens, no Lien
exists on any property of the Companies, and the execution,
delivery, performance or observance of the Credit Documents
will not require or result in the creation of any Lien (other
than Lender Liens) on the Companies property.
11. GOVERNMENT REGULATIONS. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, or the
Public Utility Holding Company Act of 1935, as amended.
12. TRANSACTIONS WITH AFFILIATES. Except as disclosed on the
attached SCHEDULE 6l. other than the most recently amended
SCHEDULE 6l. (if the disclosures are approved by the Majority
Lenders), no Company is a party to a material transaction with
any of its Affiliates (excluding other Companies), other than
transactions in the ordinary course of business and upon fair
and reasonable terms not materially less favorable than it
could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate. For
purposes of this SECTION 6l., a transaction is "material" if
it requires a Company to pay more than $1,000,000 during the
term of the governing agreement.
13. DEBT. No Company is an obligor on any Funded Debt, other than
Permitted Debt.
14. MATERIAL AGREEMENTS. No default or potential default exists on
the part of any Company under any Material Agreement that is a
Material Adverse Event.
15. INSURANCE. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations
(or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the
jurisdictions in which it operates) insurance concerning its
properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and
deductibles) as is customary in the case of similar
businesses.
16. LABOR MATTERS. No actual or threatened strikes, labor
disputes, slow downs, walkouts, or other concerted
interruptions of operations by the employees of the Company
that are a Material Adverse Event exist. Hours worked by and
payment made to employees of the Companies have not been in
violation of the Fair Labor Standards Act or any other
applicable Law dealing with labor matters, other than any
violations, individually or collectively, that are not a
Material Adverse Event. All payments due from the Companies
for employee health and welfare insurance have been paid or
accrued as a liability on its books, other than any
nonpayments that are not, individually or collectively, a
Material Adverse Event.
17. SOLVENCY. As of the date of this Guaranty, the Guarantor is,
and after giving effect to this Guaranty, will be, Solvent.
18. TRADE NAMES. The Guarantor has not used or transacted business
under any other corporate or trade name in the five-year
period preceding the date of this Guaranty, except as
disclosed on the attached SCHEDULE 6r..
19. INTELLECTUAL PROPERTY. Each Company owns or has the right to
use all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications
and trade names necessary to continue to conduct its
businesses as presently conducted by it and proposed to be
conducted by it immediately after the date of this Guaranty.
Each Company is conducting its business without infringement
or claim of infringement of any license, patent, copyright,
service
RESIDUAL GUARANTY-Page 11
12
xxxx, trademark, trade name, trade secret or other
intellectual property right of others, other than any
infringements or claims that, if successfully asserted against
or determined adversely to a Company, would not, individually
or collectively, constitute a Material Adverse Event. To the
knowledge of the Guarantor, no infringement or claim of
infringement by others of any material license, patent,
copyright, service xxxx, trademark, trade name, trade secret
or other intellectual property of any Company exists.
20. FULL DISCLOSURE. All information previously furnished,
furnished on the date of this Guaranty, and furnished in the
future, by the Guarantor to Agent and the Lenders in
connection with the Credit Documents (a) was, is, and will be,
true and accurate in all material respects or based on
reasonable estimates on the date the information is stated or
certified, and (b) did not, does not, and will not, fail to
state any fact the omission of which would otherwise make any
such information materially misleading.
21. YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the
Guarantor's and its Subsidiaries' computer systems and (b)
equipment containing embedded microchips (including systems
and equipment supplied by others or with which Guarantor's or
its Subsidiaries' systems interface) and the testing of all
such systems and equipment, as so reprogrammed, will be
completed by October 1, 1999; provided, however, that
Guarantor shall provide to Agent a status report on the
efforts of Guarantor and its Subsidiaries to complete the
foregoing programming by July 1, 1999. The cost to the
Guarantor and its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of year
2000 to the Guarantor and its Subsidiaries (including, without
limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a
Material Adverse Event.
7. AFFIRMATIVE COVENANTS. So long as any Credit Document remains in
effect:
1. ITEMS TO BE FURNISHED. Guarantor shall cause the following to
be furnished to Agent for the benefit of the Lenders:
1. Promptly after preparation, and no later than one
hundred (100) days after the last day of each fiscal
year of Guarantor, Financial Statements showing the
consolidated financial condition and results of
operations of the Companies as of, and for the year
ended on, that last day, accompanied by:
(i) the unqualified opinion of Guarantor's
Accountants, based on an audit using generally accepted auditing
standards, that the Financial Statements were prepared in accordance
with GAAP and present fairly, in all material respects, the
consolidated financial condition and results of operations of the
Companies,
(ii) a certificate from the accounting firm to the
Lenders indicating that during its audit it obtained no knowledge of
any Default or Potential Default or, if it obtained knowledge, the
nature and period of existence thereof, and
(iii) a Compliance Certificate with respect to the
Financial Statements.
2. Promptly after preparation, and no later than fifty (50) days
after the last day of the first three fiscal quarters of
Guarantor, Financial Statements showing the consolidated
financial condition and results of operations of the Companies
for the fiscal quarter and for the period from the beginning
of the current fiscal year to the last day of the
fiscal quarter,
RESIDUAL GUARANTY-Page 12
13
subject to ordinary year-end adjustments, accompanied by a Compliance
Certificate with respect to the Financial Statements.
3. Within thirty (30) days after the end of each fiscal year of
Guarantor (commencing with the fiscal year ending March 31,
1999, in the case of financial projections, and commencing
with the fiscal year ending March 31, 1999, in the case of
financial budgets), financial projections for the succeeding
three (3) fiscal years and the financial budget for the next
succeeding fiscal year, accompanied by a certificate executed
by a Responsible Officer certifying that the projections and
budget were prepared by Guarantor based on assumptions that,
in light of the historical performance of the Companies and
their prospects for the future, are reasonable as of the date
prepared.
4. Promptly after receipt, a copy of each interim or special
audit report and management letter issued by Guarantor's
Accountants with respect to any Company or its financial
records.
5. Notice, promptly after Guarantor knows or has reason to know,
of (i) the existence and status of any Litigation that, if
determined adversely to any Company, would be a Material
Adverse Event, (ii) any change in any material fact or
circumstance represented or warranted by the Guarantor or the
Lessee in any Credit Document, (iii) the receipt by any
Company of notice of any violation or alleged violation of
ERISA or any Environmental Law (which individually or
collectively with other violations or allegations could
constitute a Material Adverse Event), or (iv) a Default or
Potential Default, specifying the nature thereof and what
action the Companies have taken, are taking, or propose to
take.
6. Promptly after filing, copies of all material reports or
filings filed by or on behalf of any Company with any
Tribunal.
7. Promptly upon reasonable request by Agent information (not
otherwise required to be furnished under the Credit Documents)
respecting the business affairs, assets and liabilities of the
Companies and opinions, projections, certifications and
documents in addition to those mentioned in this Guaranty.
2. BOOKS AND RECORDS. Guarantor will, and will cause the Lessee to
maintain books, records and accounts necessary to prepare financial
statements in accordance with GAAP.
3. INSPECTIONS. Upon reasonable request and reasonable prior notice,
Guarantor will, and will cause each Company to, allow Agent and Lenders
(or their Representatives) to inspect any of its properties, to review
reports, files and other records and to make and take away copies, to
conduct tests or investigations, and to discuss any of its affairs,
conditions and finances with its other creditors, directors, officers,
employees or representatives from time to time, during reasonable
business hours.
4. TAXES. Guarantor will, and will cause each Company to, promptly pay
when due any and all Taxes, other than Taxes which are being contested
in good faith by lawful proceedings diligently conducted, against which
reserve or other provision required by GAAP has been made, and in
respect of which levy and execution of any Lien have been and continue
to be stayed.
RESIDUAL GUARANTY-Page 13
14
5. PAYMENT OF OBLIGATIONS. Guarantor will, and will cause each
Company to, promptly pay (or renew and extend) all of its
material obligations as they become due (unless the
obligations are being contested in good faith by appropriate
proceedings).
6. EXPENSES. Guarantor shall, or shall cause Lessee to, promptly
pay, within five (5) days following the receipt of an invoice
therefor setting forth the amount thereof (a) all costs, fees
and expenses paid or incurred by Agent and Lenders in
connection with the arrangement, syndication and negotiation
of the Agreement and the negotiation, preparation, delivery
and execution of the Credit Documents and any related
amendment, waiver or consent (including in each case, without
limitation, the reasonable fees and expenses of Agent's and
Lenders' counsel ) and (b) all costs, fees and expenses of
Agent, Lenders and Arranger incurred by Agent, Lenders or
Arranger in connection with the enforcement of the obligations
of the Borrower arising under the Credit Documents or of the
Guarantor arising hereunder or the exercise of any Rights
arising under this Guaranty or the Credit Documents
(including, but not limited to, reasonable attorneys' fees,
expenses and costs paid or incurred in connection with any
workout or restructure and any action taken in connection with
any Debtor Relief Laws), all of which shall be a part of the
Obligation and shall bear interest, if not paid upon demand,
at the Default Rate (as defined in the Agreement) until
repaid.
7. MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as
otherwise permitted by SECTION 8i., Guarantor will, and will
cause each Company to, (a) maintain its corporate or limited
liability company, as the case may be, existence and good
standing in its state of organization and its authority to
transact business in all other states where failure to
maintain its authority to transact business is a Material
Adverse Event; (b) maintain all licenses, permits and
franchises necessary for its business where failure to do so
is a Material Adverse Event; (c) keep all of its assets that
are useful in and necessary to its business in good working
order and condition (ordinary wear and tear excepted) and make
all necessary repairs and replacements.
8. INSURANCE. Guarantor will, and will cause each Company to,
maintain with financially sound, responsible and reputable
insurance companies or associations (or, as to workers'
compensation or similar insurance, with an insurance fund or
by self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and businesses
against casualties and contingencies and of types and in
amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses similarly
situated, which insurance may provide for reasonable
deductibility from coverage thereof, Guarantor shall, and
shall cause each Company to, deliver to Agent certificates of
insurance for each policy of insurance and evidence of payment
of all premiums which certificates of insurance shall name
Agent as an additional insured, secured party, mortgagee and
loss payee and which provide Agent with at least thirty (30)
days notice of cancellation or reduction in coverage. If any
insurance policy covered by an insurance certificate
previously delivered to Agent is altered or canceled, then
Guarantor shall cause to be promptly delivered to Agent a
replacement certificate (in form and substance satisfactory to
the Majority Lenders).
9. PRESERVATION AND PROTECTION OF RIGHTS. Guarantor will, and
will cause each Company to, perform the acts and duly
authorize, execute, acknowledge, deliver, file and record any
additional writings as Agent may reasonably deem necessary or
appropriate to protect the Rights of Agent or Lenders under
this Guaranty or any Credit Document.
10. ENVIRONMENTAL LAWS. Guarantor will, and will cause each
Company to, (a) conduct its business so as to comply with all
applicable Environmental Laws and shall promptly take
corrective action to remedy any non-compliance with any
Environmental Law, except where failure to comply or take
RESIDUAL GUARANTY-Page 14
15
action would not have a monetary impact or cost to the
Guarantor equal to or in excess of five percent (5%) of the
Guarantor's pre-tax income during the preceding Four Quarter
Period, or would otherwise be a Material Adverse Event, such
amount in no event to exceed $1,000,000, and (b) establish and
maintain a management system designed to ensure compliance
with applicable Environmental Laws and minimize financial and
other risks to the Companies arising under applicable
Environmental Laws or as the result of environmentally related
injuries to Persons or property. Guarantor shall deliver
reasonable evidence of compliance with the foregoing covenant
to Lenders within thirty (30) days after any request from
Agent.
11. INDEMNIFICATION. GUARANTOR WILL, AND WILL CAUSE EACH COMPANY
TO, JOINTLY AND SEVERALLY, INDEMNIFY, PROTECT AND HOLD AGENT,
LENDERS AND ARRANGER AND ITS PARENTS, SUBSIDIARIES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS (INCLUDING ALL
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS)(COLLECTIVELY, THE
"INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, CLAIMS AND PROCEEDINGS AND ALL COSTS,
EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL ATTORNEYS' FEES
AND LEGAL EXPENSES WHETHER OR NOT SUIT IS BROUGHT) AND
DISBURSEMENTS OF ANY KIND OR NATURE (THE "INDEMNIFIED
LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY
RELATING TO OR ARISING OUT OF (A) THE DIRECT OR INDIRECT
RESULT OF THE VIOLATION BY ANY COMPANY OF ANY ENVIRONMENTAL
LAW, (B) ANY COMPANY'S GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR
PRESENCE IN CONNECTION WITH ITS PROPERTIES OF A HAZARDOUS
SUBSTANCE (INCLUDING, WITHOUT LIMITATION, (I) ALL DAMAGES OF
ANY USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE,
RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE,
OR (II) THE COSTS OF ANY ENVIRONMENTAL INVESTIGATION,
MONITORING, REPAIR, CLEANUP OR DETOXIFICATION AND THE
PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL OR
OTHER PLANS), OR (C) THE CREDIT DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN. HOWEVER, ALTHOUGH EACH
INDEMNIFIED PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE
CREDIT DOCUMENTS FOR ITS OWN ORDINARY NEGLIGENCE, NO
INDEMNIFIED PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE
CREDIT DOCUMENTS FOR ITS OWN FRAUD, GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. THE PROVISIONS OF AND UNDERTAKINGS AND
INDEMNIFICATION SET FORTH IN THIS PARAGRAPH SHALL SURVIVE THE
SATISFACTION AND PAYMENT OF THE LIABILITIES AND TERMINATION OF
THIS GUARANTY. GUARANTOR'S INDEMNITY OBLIGATIONS SHALL BE
JOINT AND SEVERAL WITH ANY SIMILAR SUCH INDEMNITY PROVIDED BY
ANY AFFILIATE OF GUARANTOR TO AGENT AND LENDERS.
12. FURTHER ASSURANCES. The Guarantor shall, and shall cause each
Guarantor to, do such further things and execute such
additional documents (including, without limitation, the
perfection of security interest, in after-acquired property)
as are reasonably requested by Agent or Lenders.
13. CHANGE OF CONTROL. Guarantor shall promptly, but in any event
within five (5) Business Days, give written notice to Agent
upon obtaining knowledge of the occurrence of a Change of
Control.
8. NEGATIVE COVENANTS. So long as any of the Credit Documents remains in
effect:
RESIDUAL GUARANTY-Page 15
16
1. EMPLOYEE PLANS. Except where a Material Adverse Event would
not result, Guarantor may not and may not permit any Company
to permit any of the events or circumstances described in
SECTION 6i. to exist or occur.
2. DEBT AND DEBT INSTRUMENTS. Guarantor may not and may not
permit any Company to create, incur or suffer to exist any
Funded Debt, other than Permitted Debt.
3. LIENS. Guarantor may not and may not permit any Company to (a)
create, incur or suffer or permit to be created or incurred or
to exist any Lien upon any of its assets other than Permitted
Liens or (b) enter into or permit to exist any arrangement or
agreement that directly or indirectly prohibits any Company
from creating or incurring any Lien on any of its assets,
other than the Credit Documents and leases that place a Lien
prohibition on only the leased property.
4. TRANSACTIONS WITH AFFILIATES. Except as disclosed on the
attached SCHEDULE 6l., or on the most recently amended
SCHEDULE 6l., (if the disclosures are approved by the Majority
Lenders), Guarantor may not and may not permit any Company to
enter into any material transaction with any of its Affiliates
(excluding other Companies), other than transactions in the
ordinary course of business and upon fair and reasonable terms
not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a
Person that was not its Affiliate. For purposes of this
SECTION 8d., a transaction is "material" if it requires any
Company to pay more than $1,000,000 during the term of the
agreement governing such transaction.
5. COMPLIANCE WITH LAWS AND DOCUMENTS. Guarantor may not and may
not permit any Company to (a) violate the provisions of any
Laws applicable to it or of any Material Agreement to which it
is a party if that violation alone, or when aggregated with
all other violations, would be a Material Adverse Event, (b)
violate the provisions of its charter or bylaws, or (c)
repeal, replace or amend any provision of its charter or
bylaws if that action would be a Material Adverse Event.
6. LOANS, ADVANCES AND INVESTMENTS. Except for investments
permitted by SECTION 8g. or SECTION 8i., Guarantor may not and
may not permit any Company to make any loan, advance,
extension of credit or capital contribution to, make any
investment in, or purchase or commit to purchase any stock or
other securities or evidences of Debt of, or interests in, any
other Person; provided, however, that any Company may make an
advance to, investment in or purchase from another Person if
(1) (a) such action results in the acquisition of such Person
by such Company, (b) such action results in the Guarantor's
direct or indirect ownership of new stores, (c) the Person
being acquired is in a line of business which is substantially
the same as or complimentary to the Guarantor's principal line
of business, and (d) immediately after giving effect to such
acquisition, the Companies shall be in compliance with all
covenants under ARTICLE 9 and shall not be in Default or
Potential Default under this Guaranty; provided, further, that
if any acquisition is in excess of an aggregate cost to any
Company of more than $5,000,000, the Guarantor shall provide
to the Agent evidence of compliance with all covenants in this
Guaranty prior to the consummation of such acquisition, or (2)
such action is for investments in Cash Equivalents.
7. DIVIDENDS AND DISTRIBUTIONS. Guarantor may not and may not
permit any Company to declare, make or pay any Distribution
other than Distributions declared, made or paid by (a)
Guarantor wholly in the form of its capital stock, (b) such
Company to Guarantor, or (c) Guarantor on its planned issuance
of $25,000,000 in convertible preferred shares; provided that
such shares are issued at the market rate for similar such
securities, Guarantor may not and may not permit any Company
to enter into or permit to exist any arrangement or agreement
(other than this Guaranty or the Credit Agreement) that
prohibits it from paying dividends or other distributions to
its shareholders.
RESIDUAL GUARANTY-Page 16
17
8. SALE OF ASSETS. Guarantor may not and may not permit any
Company to sell, assign, lease, transfer or otherwise dispose
of any of its assets, other than (a) sales of inventory in the
ordinary course of business, (b) the sale, discount or
transfer of delinquent accounts receivable in the ordinary
course of business for purposes of collection, (c) occasional
sales, leases or other dispositions of immaterial assets for
consideration not less than fair market value, (d) sales,
leases or other dispositions of assets that are obsolete or
have negligible fair market value, (e) sales of equipment for
a fair and adequate consideration (but if replacement
equipment is necessary for the proper operation of the
business of the seller, the seller must promptly replace the
sold equipment), (f) sale and leasebacks of real property
which do not in the aggregate exceed forty percent (40%) of
the Guarantor's capital expenditures in the applicable fiscal
year, (g) sale, lease or other disposition by any Company of
its assets to the Guarantor (subject to the terms of the
Credit Documents), or (h) sales of assets having an aggregate
fair market value not exceeding $2,000,000 during any fiscal
year of Guarantor and sold for a price which is within a fair
market value for such assets, or (i) as disclosed on the
attached Schedule 8.h.
9. MERGERS AND DISSOLUTIONS. Guarantor may not and may not permit
any Company to merge or consolidate with any other Person or
liquidate, wind up or dissolve (or suffer any liquidation or
dissolution); provided, however, if after giving effect
thereto, no Default shall have occurred and be continuing (a)
any Person (other than Lessee) may merge into the Guarantor in
a transaction in which the Guarantor is the surviving
corporation, (b) any Person other than the Guarantor may merge
into any Subsidiary of the Guarantor (other than Lessee) in a
transaction in which the surviving entity is such Subsidiary
and (c) any Subsidiary of the Guarantor (other than Lessee)
may liquidate or dissolve so long as the Guarantor determines
in good faith that such liquidation or dissolution is in the
best interests of the Guarantor.
10. ASSIGNMENT. Guarantor may not and may not permit any Company
to assign or transfer any of its Rights, duties, or
obligations under any of the Credit Documents.
11. FISCAL YEAR AND ACCOUNTING METHODS. Guarantor may not and may
not permit any Company to change its fiscal year or its method
of accounting (other than immaterial changes in methods or as
required or permitted by GAAP).
12. NEW BUSINESSES. Guarantor may not and may not permit any
Company to engage in any business except the businesses in
which they are presently engaged and any other reasonably
related business.
13. GOVERNMENT REGULATIONS. Guarantor may not and may not permit
any Company to conduct its business in a way that it becomes
regulated under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as
amended.
14. LEASES; SALE-LEASEBACKS. Except as otherwise provided herein
the Guarantor will not, and will not permit any Company to,
enter into any arrangement whereby the Guarantor or such
Company shall sell or transfer property owned by the Guarantor
or such Company and then or thereafter as Lessee rent or lease
such property (any such arrangement being herein referred to
as a "sale-leaseback") other than (i) a sale-leaseback solely
with the Guarantor or a Wholly-Owned Subsidiary, (ii)
sale-leasebacks of equipment pursuant to an off-balance sheet
transaction with Fleet National Bank existing on the date
hereof (and extensions and renewals thereof), or (iii) a lease
for temporary period, not in excess of three (3) months, to
permit the orderly relocation of operations carried on
RESIDUAL GUARANTY-Page 17
18
in or at a facility subsequent to the sale thereof and prior
to the surrender of possession thereof, unless (x) such
sale-leaseback transaction is completed within one hundred
eighty (180) days of the date of acquisition of the property
involved, and (y) such sale-leaseback is entered into in
compliance with any applicable limitations hereof and (z) at
the time of consummation thereof and after giving effect
thereto no Default or Potential Default exists.
15. SUBSIDIARIES. Permit any Person other than a Company to
acquire, directly or indirectly, beneficially or of record,
shares representing more than twenty percent (20%) of the
aggregate ordinary voting power represented by the issued and
outstanding capital stock of any Subsidiary of the Guarantor.
9. FINANCIAL COVENANTS. So long as any Credit Document is on force and
effect, Guarantor covenants and agrees to comply with the following
financial covenants as calculated on the last day of each fiscal
quarter period and certified by Guarantor in the most recent Compliance
Certificate delivered to Agent, on behalf of the Lenders, from time to
time in accordance with the terms of this Guaranty:
Maximum Minimum EBITDAR less
Adjusted Debt/EBITDAR CAPEX to Interest Minimum Tangible
Expense plus Rental Net Worth
Payments
========================= ======================== ========================== =======================
At 12/31/98 Not greater than 5.30 Not less than .85 to 1.0 $70,000,000 at
to 1.0 12/31/98
------------------------- ------------------------ -------------------------- -----------------------
At 3/31/99 thru 06/30/99 Not greater than 5.30 Not less than .85 to 1.0 $70,000,000 at 3/31/99
to 1.0
------------------------- ------------------------ -------------------------- -----------------------
At 9/30/99 thru Not greater than 4.70 Not less than .85 to 1.0 $70,000,000 at 9/30/99
12/31/99 to 1.0
------------------------- ------------------------ -------------------------- -----------------------
At 3/31/00 thru 12/31/00 Not greater than 4.25 Not less than 1.30 to 1.0 $80,000,000 at 3/31/00
to 1.0
------------------------- ------------------------ -------------------------- -----------------------
At 3/31/01 thru 12/31/01 Not greater than 3.85 Not less than 1.50 to 1.0 $92,600,000 at 3/31/01
to 1.0
------------------------- ------------------------ -------------------------- -----------------------
At 3/31/02 and Not greater than 3.55 Not less than 1.70 to 1.0 $110,000,000 at
thereafter to 1.0 3/31/02
========================= ======================== ========================== =======================
Notwithstanding the foregoing covenants, upon receipt of the proceeds
from the issuance of at least $25,000,000 of equity or equity related securities
to the Guarantor, the following covenants shall apply:
========================= ======================== ============================ =======================
Maximum Minimum EBITDAR less
Adjusted Debt/EBITDAR CAPEX to Interest Minimum Tangible
Expense plus Rental Payments Net Worth
========================= ======================== ============================ =======================
At 12/31/98 Not greater than 4.60 to Not less than 1.00 to 1.0 $95,000,000 at
1.0 12/31//98
------------------------- ------------------------ ----------------------------- -----------------------
At 3/31/99 thru 06/30/99 Not greater than 4.60 Not less than 1.00 to 1.0 $95,000,000 at 3/31/99
to 1.0
------------------------- ------------------------ ----------------------------- -----------------------
At 9/30/99 thru 12/31/99 Not greater than 4.10 Not less than 1.00 to 1.0 $95,000,000 at 9/30/99
to 1.0
------------------------- ------------------------ ----------------------------- -----------------------
At 3/31/00 thru 12/31/00 Not greater than 3.70 Not less than 1.40 to 1.0 $105,000,000 at
to 1.0 3/31/00
------------------------- ------------------------ ----------------------------- -----------------------
RESIDUAL GUARANTY-Page 18
19
--------------------------------------------------------------------------------------------------------
At 3/31/01 thru 12/31/01 Not greater than 3.35 Not less than 1.70 to 1.0 $117,600,000 at
to 1.0 3/31/01
------------------------- ------------------------ ----------------------------- -----------------------
At 3/31/02 and Not greater than 3.05 Not less than 1.90 to 1.0 $135,000,000 at
thereafter to 1.0 3/31/02
========================= ======================== ============================ =======================
10. EVENTS OF DEFAULT.
1. CREDIT DOCUMENTS. The failure of Borrower to pay any part of
the Liabilities within five (5) Business Days after it becomes
due and payable under the Credit Documents or the occurrence
and continuation of a Default under any Credit Document.
2. COVENANTS. The failure of Guarantor (and, if applicable, any
other Company) to punctually and properly perform, observe and
comply with:
1. Any covenant or agreement contained in SECTIONS 8g.,
8h., 8i., 8j., OR 8n.;
2. Any covenant or agreement contained in SECTION 7a.(i)
AND (ii), 7b., 7c., 7g., 8a., 8b., 8f., 8k., 8l.,
8m., OR 8o., and failure continues for ten (10) days
after the first to occur of (i) Guarantor knows of or
(ii) Guarantor receives notice from Agent of, such
failure; or
3. Any other covenant or agreement contained in any
Credit Document (other than the covenants to pay the
Liabilities and the covenants in CLAUSES (a) AND (b)
preceding), and failure continues for thirty (30)
days after the first to occur of (i) Guarantor knows
of or (ii) Guarantor receives notice from Agent of,
such failure.
3. DEBTOR RELIEF. A Company (a) is not Solvent, (b) fails to pay
its Debts generally as they become due, (c) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Relief
Law, or (d) becomes a party to or is made the subject of any
proceeding provided for by any Debtor Relief Law, other than
as a creditor or claimant, that could suspend or otherwise
adversely affect the Rights of Agent or Lenders granted in the
Credit Documents (unless, if the proceeding is involuntary,
the applicable petition is dismissed within sixty (60) days
after its filing).
4. JUDGMENTS AND ATTACHMENTS. A Company fails, within sixty (60)
days after entry, to pay, bond or otherwise discharge any
judgment or order for the payment of money in excess of
$1,000,000 (individually or collectively) or any warrant of
attachment, sequestration or similar proceeding against any
Company's assets having a value (individually or collectively)
of $1,000,000, which is neither (a) stayed on appeal nor (b)
diligently contested in good faith by appropriate proceedings
and adequate reserves have been set aside on its books in
accordance with GAAP.
5. GOVERNMENT ACTION. (a) A final non-appealable order is issued
by any Tribunal (including, but not limited to, the United
States Justice Department) seeking to cause a Company to
divest a significant portion of its assets under any
antitrust, restraint of trade, unfair competition, industry
regulation or similar Laws, or (b) any Tribunal condemns,
seizes or otherwise appropriates, or takes custody or control
of all or any substantial portion of the assets of a Company.
6. MISREPRESENTATION. Any material representation or warranty
made by Guarantor contained herein or in any Credit Document
at any time proves to have been materially incorrect when
made.
RESIDUAL GUARANTY-Page 19
20
7. CHANGE OF CONTROL. A Change of Control occurs and the
Guarantor's obligations under the Senior Secured Credit
Facility dated as of September 15, 1998 among Guarantor as
Borrower, the lenders named therein and Chase as Agent for the
lenders, shall have been accelerated as a result of such
Change of Control.
8. MATERIAL ADVERSE EVENT. A Material Adverse Event occurs.
9. DEFAULT UNDER OTHER AGREEMENTS. (a) a Company fails to pay
when due (after lapse of any applicable grace period) any Debt
in excess (individually or collectively) of $1,000,000; (b)
any default exists under any agreement to which a Company is a
party, the effect of which is to cause, or to permit any
Person (other than a Company) to cause, an amount in excess
(individually or collectively) of $1,000,000 to become due and
payable by a Company before its stated maturity; or (c) any
Debt in excess (individually or collectively) of $1,000,000 is
declared to be due and payable or required to be prepaid by a
Company before its stated maturity.
10. VALIDITY AND ENFORCEABILITY OF CREDIT DOCUMENTS. Except in
accordance with its terms or as otherwise expressly permitted
by this Guaranty, any Credit Document at any time after its
execution and delivery ceases to be in full force and effect
in any material respect or is declared by a Tribunal to be
null and void or its validity or enforceability is contested
in writing by Guarantor or Guarantor denies in writing that it
has any further liability or obligations under any Credit
Document.
11. EMPLOYEE BENEFIT PLANS. Any of the following exists with
respect to any Employee Plan of any Company: (a) a Reportable
Event; (b) disqualification or involuntary termination
proceedings; (c) voluntary termination proceedings are
initiated while a funding deficiency (as determined under
section 412 of the Code) exists; (d) withdrawal liability
exists with respect to a Multiemployer Plan; (e) a trustee is
appointed by any federal district court or the PBGC to
administer an Employee Plan; (f) termination proceedings are
initiated by the PBGC; (g) failure by any Company to promptly
notify Agent upon its receipt of notice of any proceeding or
other actions that may result in termination of an Employee
Plan if the proceeding or termination would constitute a
Material Adverse Event.
11. REMEDIES UPON DEFAULT. Without limiting any other rights or remedies of
the Agent or the Lenders provided for elsewhere in this Guaranty or the
Credit Documents, or by any requirement of Law, or in equity, or
otherwise:
1. Upon the occurrence of any Default, the Lenders may without
any notice to (except as expressly provided herein or in and
during the continuance of any Credit Document) or demand upon
Guarantor, which are expressly waived by Guarantor (except as
to notices expressly provided for herein or in any Credit
Document), proceed to protect, exercise and enforce the rights
and remedies of the Lenders against Guarantor hereunder or
under the Credit Documents and such other rights and remedies
as are provided by requirement of Law or equity.
2. The rights provided for in this Guaranty and the Credit
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.
RESIDUAL GUARANTY-Page 20
21
3. The order and manner in which the Lenders' rights and remedies
upon the occurrence and during the continuance of a Default
are to be exercised shall be determined by the Agent or the
Lenders, as the case may be, in its sole discretion, and all
payments received by the Agent shall be applied first to the
costs and expenses (including reasonable attorney's fees
incurred by the Agent, Lenders and Arranger) of the Agent,
Lenders and Arranger, then to the payment of all accrued and
unpaid amounts due under any Credit Documents to and including
the date of such application. To the extent permitted by
applicable law, no application of payments will cure any
Default, or prevent acceleration, or continued acceleration,
of amounts payable under the Credit Documents, or prevent the
exercise, or continued exercise, of rights or remedies of the
Agent and Lenders hereunder or thereunder or under any
requirement of Law or in equity.
12. 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.
13. COSTS, EXPENSES AND TAXES. The Guarantor agrees to pay on demand
(except to the extent paid by Lessee): (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 Credit Documents such as appraisers,
environmental consultants, accountants or similar Persons; provided
that except during the continuance of any Default hereunder, 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.
14. SUBROGATION. The Guarantor shall not be subrogated to, in whole or in
part, and agrees not to exercise any rights of subrogation with respect
to, the rights of the Agent or any Lender or those of any subsequent
assignee or transferee of any of the Liabilities until all the
Liabilities to the Agent and the Lenders and every such subsequent
assignee or transferee shall have been paid in full. The provisions of
this SECTION 14 shall survive the termination of this Guaranty and any
satisfaction and discharge of Borrower by virtue of any payment, court
order, or law.
15. 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.
16. 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 Credit Documents
and will bind and inure to the benefit of the respective successors and
assigns of the parties hereto, whether so expressed or not.
RESIDUAL GUARANTY-Page 21
22
17. CONFIDENTIALITY. The Agent and each Lender 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 Credit Documents; provided that nothing herein shall
prevent the Agent or any Lender from disclosing such information (a) to
any Lender, (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 Lender, (d)
which has been publicly disclosed, (e) to the extent reasonably
required in connection with any litigation to which the Agent, any
Lender, the Borrower, the Guarantor or their respective Affiliates may
be a party, (f) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (g) to any Lender'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 17 and, if the Guarantor is a
party to any such litigation, clause (e) of this SECTION 17.
18. 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.
19. 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.
20. INTERPRETATION.
1. In this Guaranty, unless a clear contrary intention appears:
1. the singular number includes the plural number and
vice versa;
2. reference to any gender includes each other gender;
3. 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;
4. 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;
5. 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;
RESIDUAL GUARANTY-Page 22
23
6. 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;
7. the word "including" (and with correlative meaning
"include") means including, without limiting the
generality of any description preceding such term;
8. 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
9. 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.
2. The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
3. No provision of this Guaranty shall be interpreted or
construed against any Person solely because that Person or its
legal representative drafted such provision.
21. SUBMISSION TO JURISDICTION. The Guarantor, to the extent permitted by
applicable law, hereby agrees as follows:
1. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
MAY BE BROUGHT IN XXX XXXXXXXX XXXXXX XX XXX XXXX, XXX XXXX OR
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK 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 24, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER 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.
2. 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 BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
RESIDUAL GUARANTY-Page 23
24
22. 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.
23. PARTIES. This Guaranty shall inure to the benefit of the Agent and the
Lenders 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 Lenders may
assign their respective rights and benefits under this Guaranty to any
Eligible Assignee.
24. 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:
1. If to the Guarantor:
Monro Muffler Brake, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X'Xxxxx, Senior Vice President
and Chief Financial officer
telephone: (000) 000-0000
telecopy: (000) 000-0000
2. If to the Agent:
The Chase Manhattan Bank
Xxx Xxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
telecopy: (000) 000-0000
telephone: (000) 000-0000
with a copy to
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
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 24.
RESIDUAL GUARANTY-Page 24
25
Other than the service of process set forth in SECTION 21(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.
25. 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 Lenders, and the Guarantor shall not be
released from any obligation or liability hereunder until such full
payment or discharge shall have occurred.
26. 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 New
York 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.
27. INDEMNITY.
1. The Guarantor shall indemnify the Agent, each Lender 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 or any of the Credit Documents, 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 27(a) in connection with such claim,
action, proceeding or suit. Notwithstanding the foregoing, if
independent counsel to such Indemnified Person shall conclude
that there may be defenses available to such 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 such
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 27(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
RESIDUAL GUARANTY-Page 25
26
indemnified, or (ii) any Material default by the Agent or any
Lender that is not cured within any applicable cure period, if
any, under any of the Credit Documents.
2. 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 Credit Documents, the
obligations of the Guarantor under this Section shall survive
the termination of this Guaranty and the Credit Documents and
the payment of the Liabilities.
28. NEW GUARANTY. In the event that (i) any Credit Document is rejected by
a trustee or debtor-in-possession in any bankruptcy or insolvency
proceeding involving the Borrower or the Lessee or (ii) any Credit
Document or this Guaranty is terminated as a result of any bankruptcy
or insolvency proceeding involving the Borrower or the Lessee and, if
within sixty (60) days after such rejection or termination, the Agent
or its designee shall so request and shall certify in writing to the
Guarantor that it intends to perform the obligations of the Borrower as
and to the extent required under such Credit Document or this Guaranty,
as applicable, the Guarantor will, unless prohibited by bankruptcy or
other applicable law, execute and deliver to the Agent or such
designee, concurrently with the delivery by the Lessor or such designee
of a new Lease Document that contains the same conditions, agreements,
terms, provisions and limitations as such original Lease Document, a
new Guaranty that shall contain the same conditions, agreements, terms,
provisions and limitations as such original Guaranty (except for any
requirements which have been fulfilled by the Borrower and the
Guarantor prior to such rejection or termination).
29. CERTAIN AMENDMENTS TO THIS GUARANTY.
1. If at any time on or after the date hereof, (i) Guarantor
(either acting alone or together with any one or more
Subsidiaries or affiliates) enters into any Loan or other
credit agreement in replacement of the Agreement (a
"REPLACEMENT CREDIT AGREEMENT") and (ii) Chase (A) is, or at
any time, becomes, a party to such Replacement Credit
Agreement or (B) has, or at any time acquires, a participation
in any of the facilities governed thereby, then, upon written
notice by Guarantor to Agent, Agent agrees to enter into an
amendment or an amendment and restatement of this Guaranty so
that, to the extent elected by Guarantor, the provisions
hereof will be the same (to the extent permitted by accounting
rules for operating leases) as the provisions applicable to
Guarantor and set forth in the Replacement Credit Agreement or
any guarantee agreement executed by Guarantor pursuant
thereto, such amendment or amendment and restatement of this
Guaranty to be effective on the earlier to occur of (x) the
effective date of the Replacement Credit Agreement (without
regard to when such amendment or amendment or restatement is
actually executed), and (y) the acquisition of a participation
in such Replacement Credit Agreement by Chase, and Agent
hereby agrees to cooperate fully with Guarantor in the
preparation and execution of the appropriate amendment or
amendment and restatement, as the case may be, and all other
appropriate documentation, as Guarantor may request and at
Guarantor's expense to effect the foregoing; and
RESIDUAL GUARANTY-Page 26
27
2. if at any time on or after the date hereof, (i) any waiver of
any provision under the Agreement or any Replacement Credit
Agreement, which provision or the substantial equivalent
thereof (the "CORRESPONDING PROVISION") is also included in
this Guaranty, is granted, and (ii) at such time or at any
time thereafter, Chase (A) is or becomes a party to the
Agreement or any Replacement Credit Facility, or (B) has or
acquires a participation in any of the facilities governed by
the Agreement or any Replacement Credit Agreement, as the case
may be, then such Corresponding Provision, ipso facto upon the
granting of the waiver referred to in the immediately
foregoing CLAUSE (I) and without the necessity of any further
action of any kind by Guarantor or any other Person, shall be
deemed, for all purposes, to have been immediately thereupon
waived by Agent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
RESIDUAL GUARANTY-Page 27
28
Sincerely yours,
MONRO MUFFLER BRAKE, INC.,
a New York corporation
By: /s/ Xxxxxxxxx X'Xxxxx
----------------------------------------------
Xxxxxxxxx X'Xxxxx, Senior Vice President
and Chief Financial Officer
ACCEPTED AND AGREED as of the date first above written:
THE CHASE MANHATTAN BANK,
as Agent
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
RESIDUAL GUARANTY-Page 28
29
EXHIBIT A TO RESIDUAL GUARANTY
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:_____________ ,____
To: The Chase Manhattan Bank, as Agent
Ladies and Gentlemen:
Reference is made to that certain Residual Guaranty dated as of
September *, 1998 (as amended or restated from time to time, with terms herein
as therein defined, the "GUARANTY") by Monro Muffler Brake, Inc., a New York
corporation (the "GUARANTOR") in favor of The Chase Manhattan Bank, as Agent
(the "AGENT").
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the ____________________ of Guarantor, and that, as such,
he/she is authorized to execute and deliver this Certificate to the Agent on
behalf of the Lenders, and that:
The financial covenant analysis and information set forth on SCHEDULE 1
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________________,_______.
MONRO MUFFLER BRAKE, INC.,
a New York corporation
By:_______________________________
Name:_____________________________
Title:____________________________
RESIDUAL GUARANTY-Page 29
30
ANNEX I
FINANCIAL COVENANTS CALCULATION WORKSHEET
RESIDUAL GUARANTY-Page 30
31
Date:____________________,__
For the Fiscal Quarter/Year
ended __________,___
SCHEDULE 1
to the Compliance Certificate
($ in 000's)
(all calculations are for Guarantor and its Subsidiaries
on a consolidated basis)
RESIDUAL GUARANTY-Page 31
32
SCHEDULE 6(a)
JURISDICTIONS OF INCORPORATION AND BUSINESS
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
------- ---------------- -----------------
Monro Muffler Brake, Inc. NY CT
DE
District of Columbia*
IN
MA
MD
MI
NH
NJ
NY** ***
NC
OH
PA
RI
SC
VA
VT
WV
Monro Service Corporation DE
NY** ***
Speedy Holding Corp. DE
NY** ***
Monro Leasing, LLC DE
NY** ***
----------------------------
* The Company is qualified to do business in the District of Columbia but
does not presently conduct business in that jurisdiction. The Company
may choose to withdraw its qualification in that jurisdiction at a
future date.
** Indicates state in which principal place of business is located.
*** Indicates state in which chief executive office is located.
**** Speedy Holding Corp. will be merged into the Guarantor on or prior to
the Closing Date.
RESIDUAL GUARANTY-Page 32
33
SCHEDULE 6(b)
CORPORATE STRUCTURE
PARENT SUBSIDIARY % OWNERSHIP
--------------------------------------------------------------------------------
Monro Muffler Brake, Inc. Monro Service Corporation 100%
Monro Leasing, LLC 100%
RESIDUAL GUARANTY-Page 33
34
SCHEDULE 6(f)
LITIGATION
[NONE]
RESIDUAL GUARANTY-Page 34
35
SCHEDULE 6(h)
ENVIRONMENTAL MATTERS
[NONE]
RESIDUAL GUARANTY-Page 35
36
SCHEDULE 6(j)
PERMITTED LIENS
1. Liens now or hereafter securing the Obligation.
2. Any Lien securing Debt permitted in ITEMS 3 OR 5 of SCHEDULE 6(n)
incurred for the purchase or capital lease of one or more fixed or
capital assets if such Lien encumbers only the assets so purchased or
leased.
3. Pledges or deposits made to secure payment of workers' compensation,
unemployment insurance, or other forms of governmental insurance or
benefits or to participate in any fund in connection with workers'
compensation, unemployment insurance, pensions, or other social
security programs.
4. Good-faith pledges or deposits made to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed money), or
leases, or to secure statutory obligations, surety or appeal bonds, or
indemnity, performance, or other similar bonds in the ordinary course
of business.
5. The following, if (a) no amounts are due and payable and no Lien has
been filed (or agreed to), (b) (i) the validity or amount secured
thereby is being contested in good faith by lawful proceedings
diligently conducted, (ii) reserve or other provision required by GAAP
has been made, and (iii) levy and execution thereon have been (and
continue to be) stayed or payment thereof is covered in full (subject
to the customary deductible) by insurance, or (c) with respect to
CLAUSES a., b. AND c. below, such Liens secure amounts which, in the
aggregate, do not exceed $1,000,000 at any time, and neither the value
nor use of the property in the Company's business in question are
materially affected:
a. Liens for Taxes;
b. Liens upon property, including any attachment of property or
other legal process prior to adjudication of a dispute on the
merits; and
c. Liens imposed by operation of law (including, without
limitation, Liens of mechanics, materialmen, warehousemen,
carriers and landlords and similar Liens).
6. Any interest or title of a lessor in assets being leased to a Company.
7. Liens arising from UCC-1 financing statements in respect of leases
permitted under this Agreement.
8. Easements, zoning restrictions and rights-of-way on real property that
do not secure any obligations for borrowed money.
9. The Financing Statements listed on attached EXHIBIT A.
10. Liens in favor of Brazos Automotive Properties, L.P. ("Lessor")
securing obligations under the Guaranty dated as of September 15, 1998
of Borrower in favor of Lessor.
RESIDUAL GUARANTY-Page 36
37
EXHIBIT A
MONRO MUFFLER BRAKE, INC.
UCC FILINGS
=================== ================== ============================ ==================================
STATE FILING DATE FILE NUMBER SECURED PARTY
New York 10/6/93 211239 Central Trust Company
------------------- ------------------ ---------------------------- ----------------------------------
New York 1/29/93 020976 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/30/93 066592 Chase Equipment Leasing, Inc.
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/8/93 075797 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/9/93 076671 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/13/93 079233 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/12/94 070847 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/2/95 198583 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/17/98 177075 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/17/98 177080 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/28/98 186037 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/28/98 186043 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
New York 1/3/84 1559 Central Trust Company
------------------- ------------------ ---------------------------- ----------------------------------
New York 1/29/93 020976 The Chase Manhattan
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/30/93 066592 Chase Equipment Leasing Inc.
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/8/93 075797 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/9/93 076671 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/13/93 079233 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/12/94 070847 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/2/95 198583 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/17/98 177075 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/17/98 177080 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
RESIDUAL GUARANTY-Page 37
38
Rhode Island 8/28/98 186037 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/28/98 186043 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/14/87 15670762 Chase Lincoln First Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/14/87 1567066 Chase Lincoln First Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/14/87 1567066 Chase Lincoln First Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 8/31/92 21150244 Chase Lincoln First Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/24/93 21771365 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/24/93 21771369 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/24/93 21771373 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/23/95 24790120 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 3/24/93 1002886 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/12/94 1053129 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/2/95 1648425 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/10/95 1653901 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/23/95 1653394 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 10/23/95 1653399 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 1/29/93 139360 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
New York 4/14/93 139360 The Chase Manhattan Bank
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/21/98 518658 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/21/98 518659 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
Rhode Island 8/21/98 518660 Fleet Capital Corporation
------------------- ------------------ ---------------------------- ----------------------------------
RESIDUAL GUARANTY-Page 38
39
SCHEDULE 6(l)
TRANSACTIONS WITH AFFILIATES
Certain (a) principal shareholders/directors of the Guarantor, (b) partnerships
in which such persons have interests or (c) trusts of which members of their
facilities are beneficiaries are lessors of certain facilities to the Guarantor.
Payments under such operating and capital leases amounted to $1,786,000,
$1,828,000 and $1,688,000 for the years ended March 31, 1998, 1997 and 1996,
respectively. Amounts payable under these lease agreements totaled $82,000 and
$88,000, respectively, at March 31, 1998 and 1997.
No related party leases, other than renewals or modifications of leases on
existing stores, have been entered into since May 1989 and no new leases are
contemplated.
In June 1991, the Guarantor entered into a management agreement effective July
1, 1991, with Xxxxx X. Xxxxxxx Company Limited ("PJSC") pursuant to which PJSC
provides to the Guarantor strategic and financial advice relating to financing,
capital structure, mergers and acquisitions and offensive/defensive positioning
for a fee of $160,000 per year (plus reimbursement of out-of-pocket expenses).
Pursuant to such agreement, the Guarantor has agreed to indemnify PJSC against
certain liabilities. In addition, PJSC, from time to time, provides additional
investment banking services to the Guarantor for customary fees. The firm is
providing financial advisory services to the Guarantor in connection with the
acquisition of and financing for the Speedy Stores. Xxxxx X. Xxxxxxx, Chairman
of the Board and principal shareholder of the Guarantor, is Chairman of PJSC.
RESIDUAL GUARANTY-Page 39
40
SCHEDULE 6(n)
PERMITTED DEBT
30. The Obligation under the Chase Credit Agreement.
31. Debt arising from endorsing negotiable instruments for collection in
the ordinary course of business.
32. Capital Leases.
33. Current liabilities incurred in the ordinary course of business.
34. Purchase money Debt limited to fixed or capital assets.
35. Trade payables that are for goods furnished or services rendered in the
ordinary course of business and that are payable in accordance with
customary trade terms.
36. Debt of the Guarantor issued after the Closing Date and made
subordinate to the Obligation in terms reasonably satisfactory to the
Agent; provided however, that at the time of and after giving effect to
the issuance thereof, no Default or Potential Default shall have
occurred and be continuing and the proceeds will be applied to the
Facilities to the extent required under SECTION 3.2.
37. Debt listed below:
-------------------------------------- ------------------------- ------------------------ --------------------------
AMOUNT INTEREST
Q/3 % MATURITY
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 120 154,282 LIBOR+100BP Sep-98
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 124 154,733 LIBOR+100BP Sep-98
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 126 160,125 LIBOR+100BP Sep-98
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 137 229,547 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 140 200,380 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 143 273,797 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 146 246,116 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 160 531,563 LIBOR+100BP Apr-01
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 162 278,593 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 164 287,969 LIBOR+100BP Feb-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 168 237,890 LIBOR+100BP Feb-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 168 240,906 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
RESIDUAL GUARANTY-Page 40
41
-------------------------------------- ------------------------ ------------------------ ---------------------------
AMOUNT INTEREST
Q/3 % MATURITY
-------------------------------------- ------------------------ ------------------------ ---------------------------
CHASE MTG-STORE 172 243,375 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 177 234,140 LIBOR+100BP Feb-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 179 251,582 LIBOR+100BP Feb-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 183 339,809 LIBOR+100BP Apr-01
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 184 314,453 LIBOR+100BP Feb-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 185 318,047 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 186 221,250 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 190 253,969 LIBOR+100BP Apr-01
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 191 198,125 LIBOR+100BP Apr-00
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 192 285,313 LIBOR+100BP Apr-01
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 193 313,031 LIBOR+100BP Apr-01
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 205 310,500 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 207 352,547 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 210 323,438 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 212 371,053 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 216 316,080 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 226 404,297 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 229 388,125 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 230 462,808 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG-STORE 236 323,438 LIBOR+100BP Sep-02
-------------------------------------- ------------------------- ------------------------ --------------------------
TERM NOTE R XXXXXXXX 138,107 0 Mar-08
-------------------------------------- ------------------------- ------------------------ --------------------------
D'XXXXXX TIRE 228,376 8.00 FIXED Feb-03
-------------------------------------- ------------------------- ------------------------ --------------------------
MASS MUTUAL 1,833,334 10.55 FIXED Apr-99
-------------------------------------- ------------------------- ------------------------ --------------------------
CITY OF ROCHESTER 660,000 0 Oct-14
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE MTG HQ 2,557,312 LIBOR+100BP Sep-05
-------------------------------------- ------------------------- ------------------------ --------------------------
CHASE TERM LOAN-HQ 486,281 LIBOR+100BP Sep-03
-------------------------------------- ------------------------- ------------------------ --------------------------
RESIDUAL GUARANTY-Page 41
42
SCHEDULE 8(h)
EXISTING SALE\LEASEBACK PROPERTIES
XXXX XXXXXXX XXXX XXXXXX XXXXX XXX
000 0000 X. Xxxxx Xxxx. Xxxxxxxxx Xxxxxxxxxxxx XX 00000
208 0000 Xxxxxxxx Xxxx XX Xxxxx Xxxxxxx Xxxxxxxxx XX 00000
214 0000 Xxxxx Xxxxxx Xxxx Xxxx XX 00000
238 0000 Xxxxxxxxx Xxxxxx Xxxxx Xxxxxx Xxxx XX 00000
244 0000 Xxxxxxx Xxxx (Xxxxx 00) Xxxxxx Xxxx Xxxxxxxxx XX 00000
249 000 Xxxxx Xxxxxx Xxxxxxx Xxxxx XX 00000
259 0000 Xxxxxx Xxxxxx Xxxxxxxxx Xxxxxxxxxxxx XX 00000
108 0000 Xxxxxx Xxxx. Xxxxxxxxxxxx Xxxxxxxxx XX 00000
278 0000 Xxxxx Xxxx Xxxxxxxx Xxxx XX 00000
283 0000 Xxxxxxxxxxxx Xxxx Xxxxxxxx Xxxxxxx XX 00000
107 000 Xxxxxxxx Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxxx XX 00000
109 000 Xxxxxx Xxxxxx Xxxxxxx Xx. Xxxxxxxx XX 00000
112 000 0xx Xxxxxx/xxxxxx 00xx Xx. Xxxxxx Xxxxx Xxxxxx XX 00000
113 00000 Xxxxx Xxxxx 000 X. Xxxxxxxxx Xxxxxxxxxx XX 00000
114 000 Xxxxxx Xxxxxx Xxxxxxxxxx Xx. Xxxxxxxx XX 00000
116 00 Xxxxxxxxxx Xxxx. Xxxxxxxxxxx Xxxxxxx XX 00000
117 0000 Xxxxxxx Xxxxxxx, Xxxxx 00 Xxxxx Xxxxxxxxxxxx XX 00000
RESIDUAL GUARANTY-Page 42
