GUARANTEE
EXHIBIT 10.3
EXECUTION VERSION
GUARANTEE, dated as of June 26, 2009 (this “Guarantee”), is by Apollo Investment Fund
VI, L.P., Apollo Overseas Partners VI, L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo
Overseas Partners (Delaware892) VI, L.P. and Apollo Overseas Partners (Germany) VI, L.P. (together,
the “Guarantors”, and each a “Guarantor”), in favor of Xxxxxx Express Corporation,
a Delaware corporation (the “Company”).
1. GUARANTEE. To induce the Company to enter into that certain Tax Receivable
Prepayment Agreement, dated as of June 26, 2009 (as amended, supplemented or otherwise modified
from time to time, the “Agreement”), by and between the Company and Realogy Corporation, a
Delaware corporation (“Realogy”), the Guarantors each guarantee to the Company on the terms
and subject to the conditions hereinafter set forth the due and punctual payment by Realogy of any
amounts due to the Company under clauses (a), (b), (c) and (d) of Section 7.1 of the Agreement, in
accordance with the terms of the Agreement (the “Realogy Obligations”). Solely to the
extent that the underlying Realogy Obligation in respect of which a claim is made hereunder arises
under Section 7.1(c) of the Agreement and such underlying Realogy Obligation is invalidated in
connection with the related challenge to the validity of the transactions contemplated by the
Agreement, this guarantee shall be construed, without duplication, as an indemnity in respect of,
and hold-harmless of the Company and its Affiliates (as defined in the Agreement) against, any
Damages (as defined in the Agreement) rather than a guarantee to the extent necessary to preserve
the Company’s ability to seek recovery from each Guarantor hereunder in respect of such underlying
Realogy Obligation notwithstanding the invalidity of the underlying Realogy Obligation.
2. CONDITIONS TO ENFORCEMENT RIGHT.
(a) The Company may not seek to enforce this Guarantee and shall have no rights hereunder
unless:
(i) with respect to Realogy Obligations arising under Section 7.1 of the
Agreement in respect of the matters described in clause (a) of that Section, the
Company shall have obtained a trial court judgment against Realogy in respect of
such claim on or before June 26, 2011 (or Realogy shall have admitted in writing
its liability in respect of such claim, with the express written consent of each
Guarantor, on or before June 26, 2011) and Realogy shall have failed for any reason
to make payment in full of such judgment or settlement liability within ten (10)
days after written demand by the Company to Realogy therefor (a copy of which
written demand shall have been provided to each Guarantor, it
being understood that no such notice shall be required if the giving of such
notice is barred or stayed by law);
(ii) with respect to Realogy Obligations arising under Section 7.1 of the
Agreement in respect of the matters described in clause (b) of that Section, the
Company shall have received a Final Determination establishing that the Company is
liable for taxes resulting from any cancellation of indebtedness income recognized
by the Company for federal, state or local income tax purposes as a result of the
transactions contemplated by the Agreement on or before June 26, 2011 and Realogy
shall have failed for any reason to meet its payment obligations under Section
7.1(b) of the Agreement within ten (10) days after written demand by the Company to
Realogy therefor (a copy of which written demand shall have been provided to each
Guarantor, it being understood that no such demand shall be required if the giving
of such demand is barred or stayed by law);
(iii) subject to clause (b) of this Section 2, with respect to Realogy
Obligations arising under Section 7.1 of the Agreement in respect of the matters
described in clause (c) of that Section, the Company shall have been named as a
defendant in an action in respect of such claim on or before June 26, 2011 and
shall have promptly (and in any event within ten (10) days of receiving notice
thereof) given notice of such suit to Realogy in accordance with the Agreement and
to each Guarantor at the same time (it being understood that no such notice shall
be required if the giving of such notice is barred or stayed by law); and
(iv) subject to clause (c) of this Section 2, with respect to Realogy
Obligations arising under Section 7.1 of the Agreement in respect of the matters
described in clause (d) of that Section, the Company shall have been named as a
defendant in an action in respect of such claim on or before June 26, 2011 and
shall have promptly (and in any event within ten (10) days of receiving notice
thereof) given notice of such suit to Realogy in accordance with the Agreement and
to each Guarantor at the same time (it being understood that no such notice shall
be required if the giving of such notice is barred or stayed by law).
(b) With respect to Realogy Obligations arising under Section 7.1 of the Agreement in respect
of the matters described in clause (c) of that Section after the occurrence and during the
continuance of a Bankruptcy Event (as defined below) with respect to Realogy, the date set forth in
clause (a)(iii) of this Section 2 shall be extended until the latest date provided in section
546(a) of the Bankruptcy Code for the commencement of avoidance actions in or with respect to such
Bankruptcy Event (including any extensions thereto or tolling thereof, other than extensions or
tolling requested by or at the motion of the Company or any of its affiliates).
(c) With respect to Realogy Obligations arising under Section 7.1 of the Agreement in respect
of the matters described in clause (d) of that Section after the occurrence and during the
continuance of a Bankruptcy Event (as defined below) with respect to Avis Budget Group, Inc.
(“ABG”), the date set forth in clause (a)(iv) of this
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Section 2 shall be extended until the
latest date provided in section 546(a) and section 550(f) of the Bankruptcy Code for the
commencement of avoidance actions in or with respect to such Bankruptcy Event (including any
extensions thereto or tolling thereof, other than extensions or tolling requested by or at the
motion of the Company or any of its affiliates).
(d) The terms:
(i) “Bankruptcy Event” as used herein means a voluntary or involuntary
case under Title 11 of the United States Code (the “Bankruptcy Code”) filed on or
before June 26, 2011 by or against Realogy or ABG; and
(ii) “Final Determination” as used herein shall have the meaning
ascribed to Determination in Section 1313(a) of the Internal Revenue Code of 1986,
as amended, or similar provision of state, local or foreign law, as applicable, or
any other event that finally and conclusively establishes the amount of any
liability for tax.
(e) Notwithstanding anything to the contrary in this Agreement, each Guarantor’s obligations
with respect to Section 7.1 of the Agreement in respect of matters described in clause (d) of that
Section shall terminate at such time as any Guarantor delivers to the Company written documentation
demonstrating that Realogy has been rated BB (or any higher rating) by Standard & Poor’s Rating
Services, a division of the McGraw Hill Companies, Inc.
3. CAP ON OBLIGATIONS. Notwithstanding anything else in this Agreement to the
contrary, the maximum obligations of the Guarantors collectively under this Guarantee shall not
exceed $51,000,000.00, it being understood that the Company shall not be entitled to recover more
than $51,000,000.00 in total under this Guarantee.
4. CHANGES IN REALOGY OBLIGATIONS, CERTAIN WAIVERS. Each Guarantor agrees that the
obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by the following, all of which are waived: (a) except as provided in Section
2 of this Guarantee, the failure of the Company to assert any claim or demand or to enforce any
right or remedy against Realogy or any other entity or person interested in the transactions
contemplated by the Agreement; (b) any amendment or modification of any of the terms or provisions
of the Agreement or any other agreement evidencing, securing or otherwise executed in connection
with the Agreement, that does not affect the Realogy Obligations or the Guarantors’ liability with
respect thereto; (c) any change in the corporate existence, structure or ownership of Realogy or
any other entity or person interested in the transactions contemplated by the Agreement; (d) any
insolvency, bankruptcy,
reorganization or other similar proceeding (a “Bankruptcy”) affecting Realogy or any
other entity or person interested in the transactions contemplated in the Agreement; (e) the
existence of any claim, set-off or other rights which such Guarantor may have at any time against
Realogy, whether in connection with the Realogy Obligations or otherwise;
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(f) the adequacy of any
other means the Company may have of obtaining payment or performance of the Realogy Obligations;
(g) any Realogy Obligations being illegal, invalid or unenforceable for any non-contractual reason
(other than fraud or willful misconduct by the Company or any of its subsidiaries), including,
without limitation, by reason of any stay or claim arising or resulting from or asserted in a
Bankruptcy of Realogy, or any avoidance of such Realogy Obligations in such a Bankruptcy, or any
Realogy Obligations being limited, modified, voided, released or discharged as a result of any
Bankruptcy; or (h) the failure to file any proof of claim relating to the Realogy Obligations in
the event that Realogy becomes subject to a Bankruptcy. To the fullest extent permitted by law,
each Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law
which would otherwise require any election of remedies by the Company. Except to the extent such
waiver would be inconsistent with Section 2 of this Guarantee, each Guarantor waives promptness,
diligence, notice of the acceptance of this Guarantee and of the Realogy Obligations, presentment,
demand for payment, notice of non-performance, default, dishonor and protest, notice of any
obligations incurred and all other notices of any kind, any right to require the marshalling of
assets of Realogy or any other entity or other person interested in the transactions contemplated
by the Agreement, and all suretyship defenses generally (other than (x) fraud or willful misconduct
by the Company or any of its subsidiaries or (y) defenses to the payment or performance of the
Realogy Obligations that are available to Realogy under the Agreement (but not defenses that are of
the kind described in clause 4(g) above), none of which is waived). Each Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the transactions contemplated by
the Agreement and that the waivers set forth in this Guarantee are knowingly made in contemplation
of such benefits. For the avoidance of doubt, each Guarantor expressly reserves the right to
assert defenses which Realogy may have to payment or performance of any Realogy Obligations other
than defenses arising from the bankruptcy or insolvency of Realogy and those expressly waived in
this Guarantee (including, without limitation, in clause 4(g) above).
5. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Company to exercise,
and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise by the Company of any right, remedy or power hereunder
preclude any other or future exercise of any right, remedy or power hereunder. Each and every
right, remedy and power hereby granted to the Company or allowed it by law or other agreement shall
be cumulative and not exclusive of any other, and may be exercised by the Company at any time or
from time to time.
6. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents and warrants:
(a) the execution, delivery and performance of this Guarantee have been duly authorized by all
necessary action and do not contravene any provision of such Guarantor’s partnership agreement,
operating agreement or similar organizational documents or any law, regulation, rule, decree,
order, judgment or contractual restriction binding on such Guarantor or its assets;
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(b) all consents, approvals, authorizations and permits of, filings with and notifications to,
any governmental authority necessary for the due execution, delivery and performance of this
Guarantee by such Guarantor have been obtained or made and all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with, any governmental authority
or regulatory body is required in connection with the execution, delivery or performance of this
Guarantee;
(c) this Guarantee constitutes a valid and legally binding obligation of such Guarantor
enforceable against such Guarantor in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in
a proceeding in equity or at law).
7. GUARANTOR FINANCIAL CAPACITY.
(a) Each Guarantor (i) represents that, taken together, the Guarantors have the financial
capacity to pay and perform their obligations under this Guarantee and that all funds necessary for
the Guarantors collectively to fulfill their obligations under this Guarantee shall be available to
the Guarantors collectively for so long as this Guarantee shall remain in effect, and (ii) agrees
that (A) collectively, the Guarantors have and will maintain, directly or indirectly, unencumbered
cash, other liquid assets or prompt (which in no event shall be more than ten business days)
access to liquidity in an aggregate amount not less than the amount of the Guarantors’ obligations
hereunder (subject to the applicable cap in Section 3), unless the Guarantors, not fewer than
fifteen business days prior to the first date on which the Guarantors fail to maintain, directly or
indirectly, such amount of unencumbered cash, other liquid assets or prompt (which in no event
shall be more than ten business days) access to liquidity, post a letter of credit (or make
alternative financial arrangements) in form reasonably acceptable to the Company securing the
payment of such obligations, and (B) if at any time the preceding clause (A) is not satisfied, if a
claim is made under the Guarantee, the Guarantors will promptly call capital from their investors
in accordance with the terms of their applicable partnership agreements to the extent that, between
them, the Guarantors do not have sufficient unencumbered cash, other liquid assets or prompt (which
in no event shall be more than ten business days) access to liquidity (or have posted a letter of
credit or made other financial arrangements referred to in the preceding clause (A)) to cover the
amount claimed (subject to the applicable cap in Section 3), and will exercise available remedies
available under the applicable partnership agreements as necessary to obtain such capital.
(b) While the Guarantee remains in effect, if a Guarantor terminates before October 25, 2015,
such Guarantor shall first post a letter of credit in
form acceptable to the Company securing, or otherwise make reasonable provision for, in form
acceptable to the Company, payment of its obligations (subject to the applicable cap in Section 3)
unless the remaining Guarantors are in compliance with Section 7(a) above.
8. SPECIAL PROVISION FOR DEFENSE. Each Guarantor agrees that if under Section 7.3 of
the Agreement Realogy is obligated to assume, or pay or
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reimburse the cost of, the defense of a
claim and fails to do so, and such claim is one which if determined adversely to Realogy or the
Company, as applicable, would give rise to a claim against the Guarantor hereunder, (subject to the
applicable cap in Section 3) such Guarantor will pay or cause to be paid the payment obligations of
Realogy in respect of such defense.
9. JOINT AND SEVERAL LIABILITY. The Guarantors’ obligations to the Company under this
Guarantee are joint and several; provided, however, that the Company shall give all
of the Guarantors at least ten (10) days notice of the amount claimed under this Guarantee before
seeking to enforce its rights under this Guarantee against fewer than all of the Guarantors (it
being understood that no such notice shall be required if the giving of such notice is barred or
stayed by law).
10. ASSIGNMENT AND DELEGATION. Neither the Guarantors nor the Company may assign any
of their rights hereunder to any other person.
11. NOTICES. All notices and other communications hereunder shall be in writing and
shall be deemed duly delivered (i) four (4) business days (as defined in the Agreement) after being
sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one (1)
business day after being sent for next business day delivery, fees prepaid, via a reputable
nationwide overnight courier service, or (iii) on the date of confirmation of receipt (or, the
first (1st) business day following such receipt if the date of such receipt is not a business day)
of transmission by facsimile, in each case to the intended recipient as set forth below. All
notices to a Guarantor hereunder shall be delivered as set forth below:
As applicable, Apollo Investment Fund VI, L.P., Apollo
Overseas Partners VI, L.P., Apollo Overseas Partners
(Delaware) VI, L.P., Apollo Overseas Partners
(Delaware 892) VI, L.P. or Apollo Overseas Partners
(Germany) VI, L.P.
c/o Apollo Capital Management VI, LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Fax: x0 000 000 0000
Overseas Partners VI, L.P., Apollo Overseas Partners
(Delaware) VI, L.P., Apollo Overseas Partners
(Delaware 892) VI, L.P. or Apollo Overseas Partners
(Germany) VI, L.P.
c/o Apollo Capital Management VI, LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Fax: x0 000 000 0000
or to such other address or facsimile number as such Guarantor shall have notified the Company in a
written notice delivered to the Company in accordance with the Agreement. All notices to the
Company hereunder shall be delivered as set forth in the Agreement.
12. GOVERNING LAW. This Guarantee shall be governed and construed in accordance with
the laws of the State of New York applicable to contracts executed in and to be performed in that
State. All actions arising out of or relating to this Guarantee shall be heard and determined
exclusively in the state or federal courts of the United States of America located in New York, New
York.
The parties hereto hereby
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(a) submit to the exclusive jurisdiction of the state or federal
courts of the United States of America located in New York, New York for the purpose of any action
arising out of or relating to this Guarantee brought by any party hereto, and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any
claim that it is not subject personally to the jurisdiction of the above-named court, that its
property is exempt or immune from attachment or execution, that the action is brought in an
inconvenient forum, that the venue of the action is improper, or that this Guarantee or the
transactions contemplated hereby may not be enforced in or by the above-named court.
13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
14. COUNTERPARTS. This Guarantee may be executed and delivered (including by
facsimile and other electronic transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same instrument.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the Guarantors and the Company have caused this Guarantee to be executed
and delivered as of the date first written above by its officer thereunto duly authorized.
APOLLO INVESTMENT FUND VI, L.P. |
||||
By: | Apollo Advisors VI, L.P., | |||
its general partner | ||||
By: | Apollo Capital Management VI, LLC, | |||
its general partner | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | Vice President | |||
APOLLO OVERSEAS PARTNERS (DELAWARE) VI, L.P. |
||||
By: | Apollo Advisors VI, L.P., | |||
its general partner | ||||
By: | Apollo Capital Management VI, LLC, | |||
its general partner | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | Vice President | |||
APOLLO OVERSEAS PARTNERS (DELAWARE 892) VI, L.P. |
||||
By: | Apollo Advisors VI, L.P., | |||
its general partner | ||||
By: | Apollo Capital Management VI, LLC, | |||
its general partner | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | Vice President |
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APOLLO OVERSEAS PARTNERS VI, L.P. |
||||
By: | Apollo Advisors VI, L.P., | |||
its managing general partner | ||||
By: | Apollo Capital Management VI, LLC, | |||
its managing partner | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | Vice President | |||
APOLLO OVERSEAS PARTNERS (GERMANY) VI, L.P. |
||||
By: | Apollo Advisors VI, L.P., | |||
its managing general partner | ||||
By: | Apollo Capital Management VI, LLC, | |||
its managing partner | ||||
By: | /s/ Xxxx X. Xxxxxx | |||
Name: | Xxxx X. Xxxxxx | |||
Title: | Vice President | |||
Accepted and Agreed to:
XXXXXX EXPRESS CORPORATION |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: Xxxxxxx X. Xxxxx | ||||
Title: CFO | ||||
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