Contract
Exhibit
10.3
EXECUTION
COPY
GUARANTEE
AGREEMENT dated as of October 5, 2006, among ADVANCE AUTO PARTS, INC., a
Delaware corporation (“Holdings”
and
the
“Guarantor”),
and
JPMORGAN CHASE BANK, N.A., a New York banking corporation (“JPMCB”),
as
administrative agent (in such capacity, the “Administration
Agent”)
for
the Lenders (as defined in the Credit Agreement referred to below).
Reference
is made to the Credit Agreement dated as of October 5, 2006 (as amended,
supplemented or otherwise modified from time to time, the “Credit
Agreement”),
among
Holdings, Advance Stores Company, Incorporated, a Virginia corporation (the
“Borrower”),
the
lenders from time to time party thereto (the “Lenders”)
and
JPMCB, as administrative agent (in such capacity, the “Administrative
Agent”)
for
the Lenders and as issuing bank (in such capacity, the “Issuing
Bank”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The
Lenders have agreed to make Loans to the Borrower, and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Borrower, pursuant
to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Borrower has elected that the Guarantor guarantee the Obligations
(as defined below) by entering into this Guarantee Agreement. Holdings
acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders and the issuance of the Letters of Credit by the Issuing
Bank. The obligations of the Lenders to make Loans and of the Issuing Bank
to
issue Letters of Credit are conditioned on, among other things, the execution
and delivery by the Guarantor of a Guarantee Agreement in the form hereof.
As
consideration therefor and in order to induce the Lenders to make Loans and
the
Issuing Bank to issue Letters of Credit, the Guarantor is willing to execute
this Guarantee Agreement.
Accordingly,
the parties hereto agree as follows:
SECTION
1. Guarantee.
The
Guarantor unconditionally guarantees, as a primary obligor and not merely
as a
surety, (a) the due and punctual payment of (i) the principal of and premium,
if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless
of
whether allowed or allowable in such proceeding) on the Loans, when and as
due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrower under
the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements made by the Issuing
Bank
with respect thereto, interest thereon and obligations to provide, under
certain
circumstances, cash collateral in connection therewith, and (iii) all other
monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Lenders under
the
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Credit
Agreement and the other Loan Documents and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of
the
Borrower under or pursuant to the Credit Agreement and the other Loan Documents
(all the monetary obligations described in the preceding clauses (a) and
(b) being collectively called the “Obligations”).
The
Guarantor further agrees that the Obligations may be extended or renewed,
in
whole or in part, without notice to or further assent from it, and that the
security interest granted hereunder and the obligations of the Guarantor
will
survive any extension or renewal of any Obligation.
SECTION
2. Obligations
Not Waived.
To the
fullest extent permitted by applicable law, the Guarantor waives presentment
to,
demand of payment from and protest to the Borrower of any of the Obligations,
and also waives notice of acceptance of its guarantee and notice of protest
for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of the Guarantor hereunder shall not be affected by (a) the failure of the
Administrative Agent or any other Lender to assert any claim or demand or
to
enforce or exercise any right or remedy against the Borrower or the Guarantor
under the provisions of the Credit Agreement, any other Loan Document or
otherwise or (b) any rescission, waiver, amendment or modification of, or
any release from, any of the terms or provisions of this Guarantee Agreement,
any other Loan Document, any Guarantee or any other agreement.
SECTION
3. Guarantee
of Payment.
The
Guarantor further agrees that its guarantee constitutes a guarantee of payment
when due and not of collection, and waives any right to require that any
resort
be had by the Administrative Agent or any other Lender to any of the security
held for payment of the Obligations or to any balance of any deposit account
or
credit on the books of the Administrative Agent or any other Lender in favor
of
the Borrower or any other Person.
SECTION
4. No
Discharge or Diminishment of Guarantee.
The
obligations of the Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations and inchoate
indemnification and reimbursement obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Obligations, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any other Lender to assert any claim or demand or
to
enforce any remedy under the Credit Agreement, any other Loan Document or
any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance
of the
Obligations, or by any other act or omission that may or might in any manner
or
to any extent vary the risk of the Guarantor or that would otherwise operate
as
a discharge of the Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations and inchoate
indemnification and reimbursement obligations).
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SECTION
5. Defenses
of Borrower Waived.
To the
fullest extent permitted by applicable law, the Guarantor waives any defense
based on or arising out of any defense of the Borrower or the unenforceability
of the Obligations or any part thereof from any cause, or the cessation from
any
cause of the liability of the Borrower, other than the final and indefeasible
payment in full in cash of the Obligations and inchoate indemnification and
reimbursement obligations. The Administrative Agent and the other Lenders
may,
at their election, compromise or adjust any part of the Obligations, make
any
other accommodation with the Borrower or any other guarantor or exercise
any
other right or remedy available to them against the Borrower or any other
guarantor, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, the Guarantor
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right
of
reimbursement or subrogation or other right or remedy of the Guarantor against
the Borrower.
SECTION
6. Agreement
to Pay; Subordination.
In
furtherance of the foregoing and not in limitation of any other right that
the
Administrative Agent or any other Lender has at law or in equity against
the
Guarantor by virtue hereof, upon the failure of the Borrower or any other
Loan
Party to pay any Obligation when and as the same shall become due, whether
at
maturity, by acceleration, after notice of prepayment or otherwise, the
Guarantor hereby promises to and will forthwith pay, or cause to be paid,
to or
as directed by the Administrative Agent in cash the amount of such unpaid
Obligations. Upon payment by the Guarantor of any sums to or as directed
by the
Administrative Agent as provided above, all rights of the Guarantor against
the
Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects
be
subordinate and junior in right of payment to the prior indefeasible payment
in
full in cash of all the Obligations. In addition, any indebtedness of any
Loan
Party now or hereafter owed to the Guarantor is hereby subordinated in right
of
payment to the prior payment in full of the Obligations. If, at any time
that a
Default has occurred and is continuing, any amount shall be paid to the
Guarantor on account of (a) such subrogation, contribution, reimbursement,
indemnity or similar right or (b) any such indebtedness of any Loan Party,
such amount shall be held in trust for the benefit of the Lenders and shall
forthwith be paid to the Administrative Agent to be credited against the
payment
of the Obligations, whether matured or unmatured, in accordance with the
terms
of the Loan Documents.
SECTION
7. Information.
The
Guarantor assumes all responsibility for being and keeping itself informed
of
the Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and
extent of the risks that the Guarantor assumes and incurs hereunder, and
agrees
that none of the Administrative Agent or the other Lenders will have any
duty to
advise the Guarantor of information known to it or any of them regarding
such
circumstances or risks.
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SECTION
8. Representations
and Warranties.
The
Guarantor represents and warrants that all representations and warranties
relating to it contained in the Credit Agreement are true and
correct.
SECTION
9. Termination.
The
guarantee made hereunder (a) shall terminate when all the Obligations (other
than inchoate indemnification and reimbursement obligations) have been
indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement, the LC Exposure has been reduced to zero and
the
Issuing Bank has no further obligation to issue Letters of Credit under the
Credit Agreement and (b) shall continue to be effective or be reinstated,
as the
case may be, if at any time payment, or any part thereof, of any Obligation
is
rescinded or must otherwise be restored by any Lender or the Guarantor upon
the
bankruptcy or reorganization of the Borrower, the Guarantor or
otherwise.
SECTION
10. Binding
Effect; Assignments.
Whenever
in this Guarantee Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantor
that
are contained in this Guarantee Agreement shall bind and inure to the benefit
of
each party hereto and their respective successors and assigns. This Guarantee
Agreement shall become effective as to the Guarantor when a counterpart hereof
executed on behalf of the Guarantor shall have been delivered to the
Administrative Agent, and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon
the
Guarantor and the Administrative Agent and their respective successors and
assigns, and shall inure to the benefit of the Guarantor, the Administrative
Agent and the other Lenders, and their respective successors and assigns,
except
that the Guarantor shall not have the right to assign its rights or obligations
hereunder or any interest herein (and any such attempted assignment shall
be
void).
SECTION
11. Waivers;
Amendment. (a)
No
failure or delay of the Administrative Agent in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance
of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies
of
the Administrative Agent hereunder and of the other Lenders under the other
Loan
Documents are cumulative and are not exclusive of any rights or remedies
that
they would otherwise have. No waiver of any provision of this Guarantee
Agreement or consent to any departure by the Guarantor therefrom shall in
any
event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice 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.
(b)
Neither
this Guarantee Agreement nor any provision hereof may be waived, amended
or
modified except pursuant to a written agreement entered into between the
Guarantor with respect to which such waiver, amendment or
modification
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relates
and the Administrative Agent, subject to any consent required in accordance
with
Section 9.02 of the Credit Agreement.
SECTION
12. Governing
Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS
OF THE STATE OF NEW YORK.
SECTION
13. Notices.
All
communications and notices hereunder shall be in writing and given as provided
in Section 9.01 of the Credit Agreement.
SECTION
14. Survival
of Agreement; Severability. (a)
All
covenants, agreements, representations and warranties made by the Guarantor
herein and in the certificates or other instruments prepared or delivered
in
connection with or pursuant to this Guarantee Agreement or any other Loan
Document shall be considered to have been relied upon by the Administrative
Agent and the other Lenders and shall survive the making by the Lenders of
the
Loans and the issuance of the Letters of Credit by the Issuing Bank regardless
of any investigation made by the Lenders or on their behalf, and shall continue
in full force and effect until all the Obligations have been indefeasibly
paid
in full, the Lenders have no further commitment to lend, the LC Exposure
has
been reduced to zero and the Issuing Bank has no further commitment to issue
Letters of Credit under the Credit Agreement.
(b)
In
the
event any one or more of the provisions contained in this Guarantee Agreement
or
in any other Loan Document should be held invalid, illegal or unenforceable
in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected
or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect
the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION
15. Counterparts.
This
Guarantee Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
a
single contract, and shall become effective as provided in Section 10.
Delivery of an executed signature page to this Guarantee Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Guarantee Agreement.
SECTION
16. Rules
of Interpretation.
The
rules of interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Guarantee Agreement.
SECTION
17. Jurisdiction;
Consent to Service of Process. (a)
The
Guarantor hereby irrevocably and unconditionally submits, for itself and
its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any
appellate court from any thereof, in
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any
action or proceeding arising out of or relating to this Guarantee Agreement
or
the other Loan Documents, or for recognition or enforcement of any judgment,
and
each of the parties hereto hereby irrevocably and unconditionally agrees
that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in
such
Federal court. Each of the parties hereto agrees that a final judgment in
any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.
Nothing in this Guarantee Agreement shall affect any right that the
Administrative Agent or any other Lender may otherwise have to bring any
action
or proceeding relating to this Guarantee Agreement or the other Loan Documents
against the Guarantor or its properties in the courts of any
jurisdiction.
(b)
The
Guarantor hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out
of or
relating to this Guarantee Agreement or the other Loan Documents in any New
York
State or Federal court. Each of the parties hereto hereby irrevocably waives,
to
the fullest extent permitted by law, the defense of an inconvenient forum
to the
maintenance of such action or proceeding in any such court.
(c)
Each
party to this Guarantee Agreement irrevocably consents to service of process
in
the manner provided for notices in Section 13. Nothing in this Guarantee
Agreement will affect the right of any party to this Guarantee Agreement
to
serve process in any other manner permitted by law.
SECTION
18. Waiver
of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
SECTION
19. Right
of Setoff.
If an
Event of Default shall have occurred and be continuing, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by
law, to set off and apply any and all deposits (general or special, time
or
demand, provisional or final) at any time held and other Indebtedness at
any
time owing by such Lender to or for the credit or the account of any Guarantor
against any or all the obligations of such Guarantor now or hereafter existing
under this Guarantee Agreement and the other Loan Documents held by such
Lender,
irrespective
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of
whether or not such Lender shall have made any demand under this Guarantee
Agreement or any other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 19 are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Guarantee Agreement
as of the day and year first above written.
| ADVANCE AUTO PARTS, INC. | ||
| as Guarantor, | ||
| By: | ||
|
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President, Chief Financial
Officer
|
||
|
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
|
||
| By: | ||
|
Name: Xxxxx Xxxxxxx
Title: Managing Director
|
||
