SUBSIDIARY GUARANTEE
CompUSA PC Operating Company, a Delaware business trust ("Guarantor"),
hereby executes this Subsidiary Guarantee (this "Subsidiary Guarantee") on
behalf of its ultimate parent entity, CompUSA Inc., a Delaware corporation, in
connection with that certain Indenture (the "Indenture") dated as of June 17,
1993, among CompUSA Inc., a Delaware corporation (the "Company"), certain of its
subsidiaries (collectively, with the Guarantor, the "Guarantors") and U.S. Trust
Company of Texas, N.A. (the "Trustee"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Securities and the obligations of the Company thereunder, that:
(a) the principal of and interest on the Securities will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Securities, if any,
if lawful, and all other obligations of the Company to the Securityholders or
the Trustee under the Indenture and the Securities will be promptly paid in full
or performed, all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantor will be jointly and severally obligated (together with the other
Guarantors) to pay the same immediately. The Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or the Indenture, the absence of
any action to enforce the same, any waiver or consent by any Securityholder with
respect to any provisions thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance that might
otherwise constitute a legal or equitable discharge or defense of the Guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Subsidiary Guarantee will not be
discharged except by complete performance of the obligations contained in the
Securities and the Indenture. If any Securityholder or the Trustee is required
by any court or otherwise to return to the Company or any Guarantor, or any
Custodian, Trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the Trustee
or such Securityholder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Securityholders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby. The Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Securityholders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed thereunder, and (y) in the event of any declaration of acceleration
of such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee. The Guarantor shall
have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Securityholders under this Subsidiary
Guarantee.
The Guarantor agrees to pay any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing
any rights under this Subsidiary Guarantee; PROVIDED, HOWEVER, that the maximum
liability of the Guarantor pursuant to this Subsidiary Guarantee shall be
limited by the following paragraph.
The Guarantor hereby confirms that it is the intention of all parties
that the guarantee by the Guarantor pursuant to this Subsidiary Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Guarantor hereby irrevocably agrees that the obligations of such Guarantor under
this Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of the Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Subsidiary Guarantee, result in the obligations of the Guarantor under this
Subsidiary Guarantee not constituting such fraudulent transfer or conveyance.
No stockholder, officer or trustee, as such, past, present or future,
of the Guarantor shall have any personal liability under this Subsidiary
Guarantee by reason of his or its status as such stockholder, officer or
trustee.
This Subsidiary Guarantee shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Securityholders and, in the event of any transfer
or assignment of rights by any Securityholder or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof.
The obligations of the Guarantor to the Securityholders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
subordinated to the extent set forth in Article 11 of the Indenture and
reference is hereby made to such Indenture for the precise terms of such
subordination.
Concurrently with a sale or other disposition of assets or all of the
capital stock of the Guarantor in compliance with the terms and conditions set
forth in the Indenture, including Sections 4.10 and 11.04 thereof, such assets
shall automatically be released from any Liens in favor of the Trustee and, if
the assets sold or otherwise disposed of include all or substantially all of the
assets of the Guarantor or all of the capital stock of the Guarantor, then the
Guarantor (in the event of a sale or other disposition of all of the capital
stock of such Guarantor) or the purchaser of the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) shall automatically be released from and relieved of any obligations
under the Subsidiary Guarantee without any action required on the part of the
Trustee or any Securityholder.
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EXECUTED as of the 28th day of June, 1999.
CompUSA PC Operating Company
By: /s/ Xxxx X. Xxxxxx
----------------------------
Name:
Title: Sr. Vice President, General Counsel &
Secretary
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