GUARANTY
WHEREAS, X'XXXXXX AUTOMOTIVE, INC., a Delaware corporation ("Borrower") has
entered into that certain Credit Agreement dated January 27, 1998, among
Borrower, the lenders party thereto (individually a "Lender" and collectively,
the "Lenders"), NATIONSBANK, N.A., as administrative agent for itself and the
other Lenders ("Administrative Agent") and NationsBanc Xxxxxxxxxx Securities,
LLC, as syndication agent (such Credit Agreement, as it may hereafter be amended
or otherwise modified from time to time, being hereinafter referred to as the
"Credit Agreement" and capitalized terms not otherwise defined herein shall have
the same meaning as set forth in the Credit Agreement);
WHEREAS, the execution of this Guaranty is a condition to each Lender's
obligations under the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each of the undersigned and any party hereafter
added as a "Guarantor" hereto pursuant to a Joinder Agreement (individually a
"Guarantor" and collectively the "Guarantors"), hereby irrevocably,
unconditionally and jointly and severally guarantees to the Administrative Agent
and the Lenders the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty being upon the following
terms:
1. The term "Guaranteed Indebtedness", as used herein means all of the
"Obligations", as defined in the Credit Agreement and shall include
any and all post-petition interest and expenses (including attorneys'
fees) whether or not allowed under any bankruptcy, insolvency, or
other similar law; provided that the Guaranteed Indebtedness shall be
limited, with respect to each Guarantor, to an aggregate amount equal
to the largest amount that would not render such Guarantor's
obligations hereunder subject to avoidance under Section 544 or 548 of
the United States Bankruptcy Code or under any applicable state law
relating to fraudulent transfers or conveyances.
2. Each Guarantor under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Credit Agreement (the "Related
Guaranties") which contain a contribution provision similar to that
set forth in this paragraph 2, together desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair
and equitable manner, their obligations arising under this Guaranty
and the Related Guaranties. Accordingly, in the event any payment or
distribution is made by a Guarantor under this Guaranty or a guarantor
under a Related Guaranty (a "Funding Guarantor") that exceeds its Fair
Share (as defined below), that Funding Guarantor shall be entitled to
a contribution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor's Fair Share Shortfall (as
defined below), with the result that all such contributions will cause
each Contributing Guarantor's Aggregate Payments (as defined below) to
equal its Fair Share. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount
equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Contributing Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all
Contributing Guarantors, multiplied by (ii) the aggregate amount paid
or distributed on or before such date by all Funding Guarantors under
this Guaranty and the Related Guaranties in respect of the obligations
guarantied. "Fair Share Shortfall" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if
any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "Adjusted Maximum
Amount" means, with respect to a Contributing Guarantor as of any date
of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty and the Related
Guaranties, in each case determined in accordance with the provisions
hereof and thereof; provided that, solely for purposes of calculating
the "Adjusted Maximum Amount" with respect to any Contributing
Guarantor for purposes of this paragraph 2, the assets or liabilities
arising by virtue of any rights to or obligations of contribution
hereunder or under any similar provision contained in a Related
Guaranty shall not be considered as assets or liabilities of such
Contributing Guarantor. "Aggregate Payments" means, with respect to a
Contributing Guarantor as of any date of determination, the aggregate
amount of all payments and distributions made on or before such date
by such Contributing Guarantor in respect of this Guaranty and the
Related Guaranties (including, without limitation, in respect of this
paragraph 2 or any similar provision contained in a Related Guaranty).
The amounts payable as contributions hereunder and under similar
provisions in the Related Guaranties shall be determined as of the
date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this paragraph 2 or
any similar provision contained in a Related Guaranty shall not be
construed in any way to limit the liability of any Contributing
Guarantor hereunder or under a Related Guaranty. Each Contributing
Guarantor under a Related Guaranty is a third party beneficiary to the
contribution agreement set forth in this paragraph 2.
3. This instrument shall be an absolute, continuing, irrevocable and
unconditional guaranty of payment and performance, and not a guaranty
of collection, and each Guarantor shall remain liable on its
obligations hereunder until the payment and performance in full of the
Guaranteed Indebtedness. No set-off, counterclaim, recoupment,
reduction, or diminution of any obligation, or any defense of any kind
or nature which Borrower may have against Administrative Agent, any
Lender or any other party, or which any Guarantor may have against
Borrower, Administrative Agent, any Lender or any other party, shall
be available to, or shall be asserted by, any Guarantor against
Administrative Agent, any Lender or any subsequent holder of the
Guaranteed Indebtedness or any part thereof or against payment of the
Guaranteed Indebtedness or any part thereof.
4. If a Guarantor becomes liable for any indebtedness owing by Borrower
to Administrative Agent or any Lender by endorsement or otherwise,
other than under this Guaranty Agreement, such liability shall not be
in any manner impaired or affected hereby, and the rights of
Administrative Agent and Lenders hereunder shall be cumulative of any
and all other rights that Administrative Agent and Lenders may ever
have against such Guarantor. The exercise by Administrative Agent and
Lenders of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or
otherwise, the Guarantors shall, jointly and severally, promptly pay
the amount due thereon to Administrative Agent and Lenders without
notice or demand in lawful currency of the United States of America
and it shall not be necessary for Administrative Agent or any Lender,
in order to enforce such payment by any Guarantor, first to institute
suit or exhaust its remedies against Borrower or others liable on such
Guaranteed Indebtedness, or to enforce any rights against any
collateral which shall ever have been given to secure such Guaranteed
Indebtedness. In the event such payment is made by a Guarantor, then
such Guarantor shall be subrogated to the rights then held by
Administrative Agent and any Lender with respect to the Guaranteed
Indebtedness to the extent to which the Guaranteed Indebtedness was
discharged by such Guarantor and, in addition, upon payment by such
Guarantor of any sums to Administrative Agent and any Lender
hereunder, all rights of such Guarantor against Borrower, any other
guarantor or any Collateral arising as a result therefrom by way of
right of subrogation, reimbursement, or otherwise shall in all
respects be subordinate and junior in right of payment to the prior
indefeasible payment in full of the Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such
amounts otherwise subject to acceleration under the terms of the
Guaranteed Indebtedness shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by Administrative Agent or any Lender.
7. Each Guarantor hereby agrees that its obligations under this Guaranty
shall not be released, discharged, diminished, impaired, reduced, or
affected for any reason or by the occurrence of any event, including,
without limitation, one or more of the following events, whether or
not with notice to or the consent of any Guarantor: (a) the taking or
accepting of collateral as security for any or all of the Guaranteed
Indebtedness or the release, surrender, exchange, or subordination of
any collateral now or hereafter securing any or all of the Guaranteed
Indebtedness; (b) any partial release of the liability of any
Guarantor hereunder, or the full or partial release of any other
guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of Borrower, or the dissolution,
insolvency, or bankruptcy of Borrower, any Guarantor, or any other
party at any time liable for the payment of any or all of the
Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed
Indebtedness or any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or
compromise that may be granted or given by Administrative Agent or any
Lender to Borrower, any Guarantor, or any other party ever liable for
any or all of the Guaranteed Indebtedness; (f) any neglect, delay,
omission, failure, or refusal of Administrative Agent or any Lender to
take or prosecute any action for the collection of any of the
Guaranteed Indebtedness or to foreclose or take or prosecute any
action in connection with any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the
Guaranteed Indebtedness; (g) the unenforceability or invalidity of any
or all of the Guaranteed Indebtedness or of any instrument, document,
or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (h) any payment by Borrower or any
other party to Administrative Agent or any Lender is held to
constitute a preference under applicable bankruptcy or insolvency law
or if for any other reason Administrative Agent or any Lender is
required to refund any payment or pay the amount thereof to someone
else; (i) the settlement or compromise of any of the Guaranteed
Indebtedness; (j) the non-perfection of any security interest or lien
securing any or all of the Guaranteed Indebtedness; (k) any impairment
of any collateral securing any or all of the Guaranteed Indebtedness;
(l) the failure of Administrative Agent or any Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a
commercially reasonable manner or as otherwise required by law; (m)
any change in the corporate existence, structure, or ownership of
Borrower; or (n) any other circumstance which might otherwise
constitute a defense available to, or discharge of, Borrower or any
Guarantor.
8. Each Guarantor represents and warrants to Administrative Agent and
Lenders as follows:
(1) All representations and warranties in the Credit Agreement
relating to it are true and correct as of the date hereof and on
each date the representations and warranties hereunder are
restated pursuant to any of the Loan Documents with the same
force and effect as if such representations and warranties had
been made on and as of such date except to the extent that such
representations and warranties relate specifically to another
date or to the extent that a fact, event or circumstance has
occurred that makes such representation or warranty untrue but
which is not prohibited to occur or exist (or which does not
cause an Event of Default) under the Loan Documents.
(2) The value of the consideration received and to be received by it
as a result of Borrower, Administrative Agent and Lenders
entering into the Credit Agreement and its executing and
delivering this Guaranty Agreement and the other Loan Documents
to which it is a party is reasonably worth at least as much as
its liability and obligation hereunder and thereunder, and such
liability and obligation and the Credit Agreement have benefitted
and may reasonably be expected to benefit it directly or
indirectly.
(3) It has, independently and without reliance upon Administrative
Agent or any Lender and based upon such documents and information
as it has deemed appropriate, made its own analysis and decision
to enter into the Loan Documents to which it is a party.
(4) It has adequate means to obtain from Borrower on a continuing
basis information concerning the financial condition and assets
of Borrower and it is not relying upon Administrative Agent or
the Lenders to provide (and neither the Administrative Agent nor
any Lender shall have any duty to provide) any such information
to it either now or in the future.
(5) Each Guarantor covenants and agrees that, as long as the
Guaranteed Indebtedness or any part thereof is outstanding or any
Lender has any commitment under the Credit Agreement, it will
comply with all covenants set forth in the Credit Agreement
specifically applicable to it.
(6) When an Event of Default exists, Administrative Agent and Lenders
shall have the right to set-off and apply against this Guaranty
Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to any Guarantor, any and all deposits (general or
special, time or demand, provisional or final, but excluding any
account established by a Guarantor as a fiduciary for another
party) or other sums at any time credited by or owing from
Administrative Agent and Lenders to any Guarantor whether or not
the Guaranteed Indebtedness is then due and irrespective of
whether or not Administrative Agent or any Lender shall have made
any demand under this Guaranty Agreement. Each Lender agrees
promptly to notify the Borrower (with a copy to the
Administrative Agent) after any such setoff and application,
provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights and
remedies of Administrative Agent and the Lenders hereunder are in
addition to other rights and remedies (including, without
limitation, other rights of set-off) which Administrative Agent
or any Lender may have.
(7) Each Guarantor hereby agrees that the Subordinated Indebtedness
(as defined below) shall be subordinate and junior in right of
payment to the prior payment in full of all Guaranteed
Indebtedness as herein provided. The Subordinated Indebtedness
shall not be payable, and no payment of principal, interest or
other amounts on account thereof, and no property or guarantee of
any nature to secure or pay the Subordinated Indebtedness shall
be made or given, directly or indirectly by or on behalf of any
Debtor (hereafter defined) or received, accepted, retained or
applied by any Guarantor unless and until the Guaranteed
Indebtedness shall have been paid in full in cash; except that
prior to occurrence of an Event of Default, a Guarantor shall
have the right to receive payments on the Subordinated
Indebtedness made in the ordinary course of business. After the
occurrence and during the continuance of an Event of Default, no
payments of principal or interest may be made or given, directly
or indirectly, by or on behalf of any Debtor or received,
accepted, retained or applied by any Guarantor unless and until
the Guaranteed Indebtedness shall have been paid in full in cash.
If any sums shall be paid to a Guarantor by any Debtor or any
other Person on account of the Subordinated Indebtedness when
such payment is not permitted hereunder, such sums shall be held
in trust by such Guarantor for the benefit of Administrative
Agent and the Lenders and shall forthwith be paid to
Administrative Agent without affecting the liability of any
Guarantor under this Guaranty Agreement and may be applied by
Administrative Agent against the Guaranteed Indebtedness in
accordance with the Credit Agreement. Upon the request of
Administrative Agent, a Guarantor shall execute, deliver, and
endorse to Administrative Agent such documentation as
Administrative Agent may request to perfect, preserve, and
enforce its rights hereunder. For purposes of this Guaranty
Agreement and with respect to a Guarantor, the term "Subordinated
Indebtedness" means all indebtedness, liabilities, and
obligations of Borrower or any other Obligated Party other than
such Guarantor (Borrower and such Obligated Parties herein the
"Debtors") to such Guarantor, whether such indebtedness,
liabilities, and obligations now exist or are hereafter incurred
or arise, or are direct, indirect, contingent, primary,
secondary, several, joint and several, or otherwise, and
irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose
favor such indebtedness, obligations, or liabilities may, at
their inception, have been, or may hereafter be created, or the
manner in which they have been or may hereafter be acquired by
such Guarantor.
(8) Each Guarantor agrees that any and all Liens (including any
judgment liens), upon any Debtor's assets securing payment of any
Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all Liens upon any Debtor's assets
securing payment of the Guaranteed Indebtedness or any part
thereof, regardless of whether such Liens in favor of a
Guarantor, Administrative Agent or any Lender presently exist or
are hereafter created or attached. Without the prior written
consent of Administrative Agent, no Guarantor shall (i) file suit
against any Debtor or exercise or enforce any other creditor's
right it may have against any Debtor, or (ii) foreclose,
repossess, sequester, or otherwise take steps or institute any
action or proceedings (judicial or otherwise, including without
limitation the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any obligations of any Debtor to such
Guarantor or any Liens held by such Guarantor on assets of any
Debtor.
(9) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding
involving any Debtor as debtor, Administrative Agent shall have
the right to prove and vote any claim under the Subordinated
Indebtedness and to receive directly from the receiver, trustee
or other court custodian all dividends, distributions, and
payments made in respect of the Subordinated Indebtedness until
the Guaranteed Indebtedness has been paid in full in cash.
Administrative Agent may apply any such dividends, distributions,
and payments against the Guaranteed Indebtedness in accordance
with the Credit Agreement.
(10) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of
Subordinated Indebtedness shall contain a specific written notice
thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Guaranty Agreement.
(11) Except for modifications made pursuant to the execution and
delivery of a Joinder Agreement (which only needs to be signed by
the Subsidiary party thereto), no amendment or waiver of any
provision of this Guaranty or consent to any departure by the any
Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by Administrative Agent and
Required Lenders except as otherwise provided in the Credit
Agreement. No failure on the part of Administrative Agent or any
Lender to exercise, and no delay in exercising, any right, power,
or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
(12) Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by Borrower or
others (including any Guarantor), with respect to any of the
Guaranteed Indebtedness shall, if the statute of limitations in
favor of a Guarantor against Administrative Agent or any Lender
shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations
shall have expired, prevent the operation of such statute of
limitations.
(13) This Guaranty is for the benefit of Administrative Agent and the
Lenders and their successors and assigns, and in the event of an
assignment of the Guaranteed Indebtedness, or any part thereof,
the rights and benefits hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty is binding not only on each
Guarantor, but on each Guarantor's successors and assigns.
(14) Each Guarantor recognizes that Administrative Agent and the
Lenders are relying upon this Guaranty and the undertakings of
each Guarantor hereunder and under the other Loan Documents to
which each is a party in making extensions of credit to Borrower
under the Credit Agreement and further recognizes that the
execution and delivery of this Guaranty and the other Loan
Documents to which each Guarantor is a party is a material
inducement to Administrative Agent and the Lenders in entering
into the Credit Agreement and continuing to extend credit
thereunder. Each Guarantor hereby acknowledges that there are no
conditions to the full effectiveness of this Guaranty or any
other Loan Document to which it is a party.
(15) Any notice or demand to any Guarantor under or in connection with
this Guaranty or any other Loan Document to which it is a party
shall be deemed effective if given to the Guarantor, care of
Borrower in accordance with the notice provisions in the Credit
Agreement.
(16) The Guarantors shall, jointly and severally, pay on demand all
reasonable attorneys' fees and all other reasonable costs and
expenses incurred by Administrative Agent and Lenders in
connection with the administration, enforcement, or collection of
this Guaranty.
(17) Each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment,
notice of acceptance of this Guaranty, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower
of additional indebtedness, and all other notices and demands
with respect to the Guaranteed Indebtedness and this Guaranty.
(18) The Credit Agreement, and all of the terms thereof, are
incorporated herein by reference, the same as if stated verbatim
herein, and each Guarantor agrees that Administrative Agent and
the Lenders may exercise any and all rights granted to any of
them under the Credit Agreement and the other Loan Documents
without affecting the validity or enforceability of this
Guaranty.
(19) THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF EACH
GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS WITH RESPECT TO EACH
GUARANTOR'S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED
BY EACH GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS AS A FINAL
AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO
COURSE OF DEALING AMONG ANY GUARANTOR, ADMINISTRATIVE AGENT AND
THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY. THERE ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR,
ADMINISTRATIVE AGENT AND THE LENDERS.
(20) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
EXECUTED as of the 27th day of January 1998.
GUARANTORS:
FIRST CALL AUTO SUPPLY, L.P.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
FIRST CALL MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
GREEN COUNTY REALTY CO.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Secretary
HI-LO AUTOMOTIVE, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
HI-LO AUTO SUPPLY, L.P.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
HI-LO INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
HI-LO MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
OZARK AUTOMOTIVE DISTRIBUTORS, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Secretary
O'REILLY II AVIATION, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Secretary
SHAMROCK ACQUISITION, INC.
By: /s/ Xxxxx X'Xxxxxx
Name: Xxxxx X'Xxxxxx
Title: President
