EXHIBIT 10.34
(Form of Guaranty Agreement with Xxxxx Imports Chesapeake, Inc.)
Guaranty and Subordination Agreement
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement"), made as of
the __ day of January, 1998, by Xxxxx Imports Chesapeake, Inc., a Virginia
corporation ("Guarantor"), in favor of Capital Automotive, L.P., a Delaware
limited partnership ("Landlord").
WITNESSETH:
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WHEREAS, Landlord has this day entered into a lease (the "Lease") of
certain Properties identified on Schedule A hereto (individually a "Property"
and collectively the "Properties") with Xxxxx Chevrolet Sales Corporation, a
Virginia corporation ("Tenant"), this Agreement being attached to the Lease;
WHEREAS, Tenant is an affilate of Guarantor; and
WHEREAS, Landlord has required, as a condition to entering into the Lease,
Guarantor to be a guarantor of each and every obligation imposed upon Tenant by
the Lease.
NOW, THEREFORE, to induce Landlord to enter into the Lease and in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor, for itself, its successors and assigns, hereby covenants and agrees
for the benefit of Landlord, as follows:
1. Guaranty. Guarantor does hereby unconditionally and irrevocably
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guarantee to Landlord the full, complete and timely performance of all
obligations imposed on Tenant by the terms of the Lease, including, but not
limited to, the full, complete and timely payment of rent and all other sums due
by Tenant under the Lease, and the payment as required by the Lease of all
damages to Landlord which may result from Tenant's breach of any provision of
the Lease, including, but not limited to, those relating to damage to any
Property or the leased premises.
2. Guaranty of Payment and Performance. Guarantor acknowledges and
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agrees that this is a guaranty of payment and performance and not mere
collection. The liability of Guarantor under this Agreement shall be direct and
immediate and not conditional or contingent upon the pursuit of any remedies
against Tenant or any other person or entity. Guarantor waives any right to
require that an action be brought against Tenant or any other person or entity.
In the event, on account of the Bankruptcy Reform Act of 1978, as amended, or
any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may
be or become applicable, Tenant shall be relieved of the Lease or any debt,
obligation or liability as provided in the Lease, Guarantor shall nevertheless
be fully liable for the complete and timely performance of all obligations
imposed on Tenant by the Lease throughout the entire term of the Lease, all to
the same extent as if Guarantor had been the original tenant thereunder and the
Lease shall be deemed unaffected by any such relief granted to Tenant. In the
event of a default under the Lease which is not cured within any applicable
grace or cure period, Landlord shall have the right to enforce its rights,
powers and remedies thereunder or hereunder, in any order to the maximum extent
permitted by law, and all rights, powers and remedies provided thereunder or
hereunder or by law or in equity. If the obligations guaranteed hereby are
partially performed, paid or discharged by reason of the exercise of any of the
remedies available to Landlord, this Agreement shall nevertheless remain in full
force and effect, and Guarantor shall continue to be liable for all remaining
obligations guaranteed hereby, even though any rights which Guarantor may have
against Tenant may be destroyed or dismissed by the exercise of any such remedy.
3. Waivers by Guarantor. To the extent permitted by law, Guarantor
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hereby waives and agrees not to assert or take advantage of:
(a) Any right to require Landlord to proceed against Tenant or any
other person or entity or to proceed against or exhaust any security held by
Landlord at any time or to pursue any other remedy in Landlord's power or under
any other agreement before proceeding against Guarantor;
(b) Any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other person or persons or the failure of
Landlord to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person or persons:
(c) Any defense based upon an election of remedies by Landlord;
(d) Any right or claim or right to cause a marshaling of the assets of
Tenant or Guarantor;
(e) Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more provisions of the Lease;
(f) Any modification of the Lease or of any obligation of Tenant
thereunder by amendments to the Lease, by waivers granted by Landlord or by
operation of law or by action of any court, whether pursuant to the Bankruptcy
Reform Act of 1978, as amended, or any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, or otherwise.
4. Subordination. Guarantor and those parties signing below for the
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purpose of being bound by this Section 4 (collectively, "Section 4 Signers)
hereby unconditionally and irrevocably subordinate (i) all payments due or to
become due by Tenant to the Section 4 Signers, or any of them, by reason of any
and all debts or other obligations, including the obligation to pay salaries or
other compensation (collectively "Debt Payments") and (ii) the receipt of all
dividends or other distributions of any kind or nature (collectively,
"Distributions") to the payment of all sums due or
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to become due by Tenant to Landlord under the Lease, including the payment of
Rent and all damages due by reason of Tenant's breach of the Lease; provided,
however, that for so long as there shall be no existing Event of Default under
the Lease, after the payment of each monthly installment of Rent, the Section 4
Signers shall be entitled to receive Debt Payments due for such month.
5. Termination of Guaranty. This Guaranty shall terminate if at any time
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during the term or any extension term of the Lease, Guarantor (having entered
into a sub-lease with Tenant under the Lease) shall assign its sub-lease under
the Lease to an unaffiliated third party (and such assignment shall be consented
to by Landlord). This termination clause shall not be effective if Guarantor
does not enter into a sub-lease under the Lease. The termination of this
Guaranty by reason of Guarantor's assignment of its sub-lease under the Lease
shall in no manner effect, nor be construed to effect, Guarantor's obligations
hereunder against any default under the Lease by Tenant that shall have occured
prior to the termination of this Guaranty.
6. General Provisions.
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(a) Survival. This Agreement shall be deemed to be continuing in
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nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under the Lease;
(b) No Subrogation; No Recourse Against Landlord. Notwithstanding the
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satisfaction by Guarantor of any liability hereunder, Guarantor's rights of
subrogation, contribution, reimbursement or indemnity, if any, or any right of
recourse to or with respect to the assets or property of Tenant, shall be
subject and subordinate to the rights of Landlord.
(c) Entire Agreement; Amendment; Severability. This Agreement
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contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements, whether written or oral, between
the parties respecting such matters. Any amendments or modifications hereto, in
order to be effective, shall be in writing and executed by Landlord and
Guarantor. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other persons or circumstances.
(d) Governing Law: Binding Effect; Waiver of Acceptance. This
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Agreement shall be governed by and construed in accordance with the laws of the
State of Virginia without regard to conflicts of laws principles thereof. This
Agreement shall bind Guarantor, it successors and assigns (but in the event of
an assignment, Guarantor shall not be relieved of its obligations hereunder),
and shall inure to the benefit of Landlord, its successors and assigns.
Guarantor hereby waives any acceptance of this Agreement by Landlord and this
Agreement shall immediately be binding upon Guarantor.
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(e) Notice. All notices, demands, requests or other communications to
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be sent by one party to the other hereunder or required by law shall be in
writing and shall be deemed to have been validly given or served by delivery of
the same in person to the intended addressee, or certified mail or by depositing
the same with Federal Express or another reputable private courier service for
next business day delivery to the intended addressee at its address set forth in
the last section of this Agreement or at such other address as may be designated
by such party as herein provided. All notices, demands and requests shall be
effective upon such personal delivery, or one (1) business day after being
deposited with the private courier service, or two (2) business days after being
deposited in the United States mail as required above. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given as herein required shall be deemed to be receipt of
the notice, demand or request sent. By giving to the other party hereto at
least seven (7) days' prior written notice thereof in accordance with the
provisions hereof, each party shall have the right from time to time to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States of America.
(f) No Waiver; Time of Essence. The failure of either party to
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enforce any of the respective rights or remedies hereunder, or to promptly
enforce any such rights or remedies, shall not constitute a waiver thereof nor
give rise to any estoppel against such party nor excuse any of the parties
hereto from their respective obligations hereunder. Any waiver of such right or
remedy must be in writing and signed by the party to be bound and must expressly
state that such right or remedy has been or thereby is waived. This Agreement
is subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof.
(g) Captions for Convenience. The captions and headings of the
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section and paragraphs of this Agreement are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
(h) Attorney's Fees. In the event it is necessary for Landlord to
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retain the services of an attorney or any other consultants in order to enforce
this Agreement, or any portion hereof, Guarantor shall promptly pay to Landlord
any and all costs and expenses, including, without limitation, attorney's fees,
incurred by Landlord as a result thereof and such costs, fees and expenses shall
be included in the costs of the case to the extent the Landlord wins the issue
under contest.
(i) Successive Actions. Separate and successive actions may be
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brought hereunder to enforce any of the provisions hereof at any time and from
time to time. No action hereunder shall preclude any subsequent action, and
Guarantor hereby waives any covenants to the maximum extent permitted by law not
to assert any defense in the nature of splitting of causes of action or merger
of judgments.
(j) Reliance. Landlord would not enter into the Lease without this
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Agreement. Accordingly, Guarantor intentionally, irrevocably and unconditionally
enters into the covenants and agreements as set forth above and understand that,
in reliance upon and in consideration of such covenants and agreements, the
Lease has been made.
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4. Notices: The following addresses shall be used for notice purposes:
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If to Guarantor:
Xxxxx Imports Chesapeake, Inc.
c/o The Magnus Group Ltd.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
with a copy to:
Xxxxxxx & Xxxxxxx, A Professional Corporation
2000 Nations Bank Center
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx, 00000
Attention: Xxxxxxx X. Xxx Xxxxx, III, Esq.
If to Landlord:
Capital Automotive L.P.
0000Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
With copies to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxx
IN WITNESS WHEREOF, Guarantor has executed this Agreement under seal as of
the day and year first above written:
GUARANTOR:
ATTEST/WITNESS:
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------------------------------- By: Xxxxx X. Xxxxx
Name: Title: Chairman of the Board
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