Exhibit 10.18
COMPANY GUARANTY
AGREEMENT
THIS COMPANY GUARANTY
AGREEMENT (this “
Guaranty Agreement ”), dated as of February 17,
2006, is made by SONIC AUTOMOTIVE, INC. (the “
Guarantor ”) to BANK OF AMERICA, N.A ., a
national banking association organized and existing under the laws
of the United States, as administrative agent (in such capacity,
the “ Administrative Agent ”) for each of the
lenders (the “ Lenders ” now or hereafter party
to the Credit Agreement defined below (collectively with the
Administrative Agent, and certain other Persons parties to Related
Swap Contracts as more particularly described in
Section 19 hereof, the “ Secured Parties
”). All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit
Agreement.
W I T N E S S E T H
:
WHEREAS , the Secured Parties have agreed to provide to
the Guarantor and certain Subsidiaries of the Guarantor (each a
“ New Vehicle Borrower ”, and collectively with
the Company, the “ Borrower’s ” and each
individually, a “ Borrower ”) certain credit
facilities, as applicable, including a revolving credit facility
with a letter of credit and swing line sublimit, a new vehicle
floorplan facility with a swing line sublimit, and a used vehicle
floorplan facility with a swing line sublimit, in each case
pursuant to the terms of that certain Credit Agreement dated as of
the date hereof among the Borrowers, the Administrative Agent and
the Lenders (as from time to time amended, restated, supplemented
or otherwise modified, the “ Credit Agreement
”); and
WHEREAS , each New Vehicle Borrower is a Subsidiary of
the Guarantor and the Guarantor will materially benefit from the
New Vehicle Floorplan Loans made and to be made under the Credit
Agreement; and
WHEREAS , the Guarantor is required to enter into this
Guaranty Agreement pursuant to the terms of the Credit Agreement;
and
WHEREAS , a material part of the consideration given in
connection with and as an inducement to the execution and delivery
of the Credit Agreement by the Secured Parties was the obligation
of the Guarantor to enter into this Guaranty Agreement, and the
Secured Parties are unwilling to extend and maintain the credit
facilities provided under the Loan Documents unless the Guarantor
enters into this Guaranty Agreement;
NOW, THEREFORE
, in consideration of the premises
and mutual covenants contained herein, the parties hereto agree as
follows:
1. Guaranty
. The Guarantor hereby
unconditionally, absolutely, continually and irrevocably guarantees
to the Administrative Agent for the benefit of the Secured Parties
the payment and performance in full of the Guaranteed Liabilities
(as defined below). For all purposes of this Guaranty Agreement,
“ Guaranteed Liabilities ” means: (a) each
New Vehicle Borrower’s prompt payment in full, when due or
declared due and at all such times, of all Obligations and all
other amounts pursuant to the terms of the Credit Agreement, the
Notes, and
all other Loan Documents heretofore, now or at
any time or times hereafter owing, arising, due or payable from
such New Vehicle Borrower to any one or more of the Secured
Parties, including principal, interest, premiums and fees
(including, but not limited to, loan fees and reasonable fees,
charges and disbursements of counsel (“ Attorney Costs
”)); (b) each New Vehicle Borrower’s prompt, full
and faithful performance, observance and discharge of each and
every agreement, undertaking, covenant and provision to be
performed, observed or discharged by such New Vehicle Borrower
under the Credit Agreement, the Notes and all other Loan Documents;
and (c) the prompt payment in full by each Loan Party, when
due or declared due and at all such times, of obligations and
liabilities now or hereafter arising under Related Swap Contracts
. The Guarantor’s obligations to the Secured Parties
under this Guaranty Agreement are hereinafter collectively referred
to as the “ Guarantor’s Obligations
”.
The Guarantor agrees that it is
directly and primarily liable for the Guaranteed
Liabilities.
The Guarantor’s Obligations
are secured by various Security Instruments referred to in the
Credit Agreement, including without limitation, the Security
Agreement and the Pledge Agreement.
2. Payment
. If any New Vehicle Borrower shall
default in payment or performance of any of the Guaranteed
Liabilities, whether principal, interest, premium, fee (including,
but not limited to, loan fees and Attorney Costs), or otherwise,
when and as the same shall become due, and after expiration of any
applicable grace period, whether according to the terms of the
Credit Agreement, by acceleration, or otherwise, or upon the
occurrence and during the continuance of any Event of Default under
the Credit Agreement, then the Guarantor will, upon demand thereof
by the Administrative Agent, fully pay to the Administrative Agent,
for the benefit of the Secured Parties, subject to any restriction
on the Guarantor’s Obligations set forth in
Section 1 hereof, an amount equal to all the Guaranteed
Liabilities then due and owing.
3. Absolute Rights and
Obligations . This is
a guaranty of payment and not of collection. The Guarantor’s
Obligations under this Guaranty Agreement shall be absolute and
unconditional irrespective of, and the Guarantor hereby expressly
waives, to the extent permitted by law, any defense to its
obligations under this Guaranty Agreement and all Security
Instruments to which it is a party by reason of:
(a) any lack of legality, validity
or enforceability of the Credit Agreement, of any of the Notes, of
any other Loan Document, or of any other agreement or instrument
creating, providing security for, or otherwise relating to the
Guarantor’s Obligations, any of the Guaranteed Liabilities,
or any other guaranty of any of the Guaranteed Liabilities (the
Loan Documents and all such other agreements and instruments being
collectively referred to as the “ Related Agreements
”);
(b) any action taken under any of
the Related Agreements, any exercise of any right or power therein
conferred, any failure or omission to enforce any right conferred
thereby, or any waiver of any covenant or condition therein
provided;
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(c) any acceleration of the maturity
of any of the Guaranteed Liabilities or of any other obligations or
liabilities of any Person under any of the Related
Agreements;
(d) any release, exchange,
non-perfection, lapse in perfection, disposal, deterioration in
value, or impairment of any security for any of the Guaranteed
Liabilities, or for any other obligations or liabilities of any
Person under any of the Related Agreements;
(e) any dissolution of any Borrower,
the Guarantor, any other Loan Party or any other party to a Related
Agreement, or the combination or consolidation of any New Vehicle
Borrower, the Guarantor, any other Loan Party or any other party to
a Related Agreement into or with another entity, or any transfer or
disposition of any assets of any New Vehicle Borrower, the
Guarantor, any other Loan Party or any other party to a Related
Agreement;
(f) any extension (including without
limitation extensions of time for payment), renewal, amendment,
restructuring or restatement of, any acceptance of late or partial
payments under, or any change in the amount of any borrowings or
any credit facilities available under, the Credit Agreement, any of
the Notes or any other Loan Document or any other Related
Agreement, in whole or in part;
(g) the existence, addition,
modification, termination, reduction or impairment of value, or
release of any other guaranty (or security therefor) of the
Guaranteed Liabilities (including without limitation obligations
arising under any other Guaranty now or hereafter in
effect);
(h) any waiver of, forbearance or
indulgence under, or other consent to any change in or departure
from any term or provision contained in the Credit Agreement, any
other Loan Document or any other Related Agreement, including
without limitation any term pertaining to the payment or
performance of any of the Guaranteed Liabilities, or any of the
obligations or liabilities of any party to any other Related
Agreement;
(i) any other circumstance
whatsoever (with or without notice to or knowledge of the
Guarantor) which may or might in any manner or to any extent vary
the risks of the Guarantor, or might otherwise constitute a legal
or equitable defense available to, or discharge of, a surety or a
guarantor, including without limitation any right to require or
claim that resort be had to any New Vehicle Borrower or any other
Loan Party or to any collateral in respect of the Guaranteed
Liabilities or Guarantor’s Obligations, whether arising under
North Carolina General Statutes Sections 26-7 and 26-9 or
otherwise.
It is the express purpose and intent
of the parties hereto that this Guaranty Agreement and the
Guarantor’s Obligations hereunder shall be absolute and
unconditional under any and all circumstances and shall not be
discharged except by payment as herein provided.
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4. Currency and Funds of
Payment . All
Guarantor’s Obligations will be paid in lawful currency of
the United States of America and in immediately available funds,
regardless of any law, regulation or decree now or hereafter in
effect that might in any manner affect the Guaranteed Liabilities,
or the rights of any Secured Party with respect thereto as against
any Borrower, or cause or permit to be invoked any alteration in
the time, amount or manner of payment by any Borrower of any or all
of the Guaranteed Liabilities.
5. Events of
Default . Without
limiting the provisions of Section 2 hereof, in the
event that there shall occur and be continuing an Event of Default,
then notwithstanding any collateral or other security or credit
support for the Guaranteed Liabilities, at the Administrative
Agent’s election and without notice thereof or demand
therefor, the Guarantor’s Obligations shall immediately be
and become due and payable.
6.
Subordination .
Until this Guaranty Agreement is terminated in accordance with
Section 22 hereof, the Guarantor hereby unconditionally
subordinates all present and future debts, liabilities or
obligations now or hereafter owing to the Guarantor (i) of any
New Vehicle Borrower, to the payment in full of the Guaranteed
Liabilities and (ii) of each other Person now or hereafter
constituting a Loan Party, to the payment in full of the
obligations of such Loan Party owing to any Secured Party and
arising under the Loan Documents or the Related Swap Contracts. All
amounts due under such subordinated debts, liabilities, or
obligations shall, upon the occurrence and during the continuance
of an Event of Default, be collected and, upon request by the
Administrative Agent, paid over forthwith to the Administrative
Agent for the benefit of the Secured Parties on account of the
Guaranteed Liabilities, the Guarantor’s Obligations, or such
other obligations, as applicable, and, after such request and
pending such payment, shall be held by the Guarantor as agent and
bailee of the Secured Parties separate and apart from all other
funds, property and accounts of the Guarantor.
7. Suits
. The Guarantor from time to time
shall pay to the Administrative Agent for the benefit of the
Secured Parties, on demand, at the Administrative Agent’s
Office or such other address as the Administrative Agent shall give
notice of to the Guarantor, the Guarantor’s Obligations as
they become or are declared due, and in the event such payment is
not made forthwith, the Administrative Agent may proceed to suit
against the Guarantor. At the Administrative Agent’s
election, one or more and successive or concurrent suits may be
brought hereon by the Administrative Agent against the Guarantor,
whether or not suit has been commenced against any New Vehicle
Borrower, any Loan Party or any other Person and whether or not the
Secured Parties have taken or failed to take any other action to
collect all or any portion of the Guaranteed Liabilities or have
taken or failed to take any actions against any collateral securing
payment or performance of all or any portion of the Guaranteed
Liabilities, and irrespective of any event, occurrence, or
condition described in Section 3 hereof.
8. Set-Off and
Waiver . The
Guarantor waives any right to assert against any Secured Party as a
defense, counterclaim, set-off, recoupment or cross claim in
respect of its Guarantor’s Obligations, any defense (legal or
equitable) or other claim which the Guarantor may now or at any
time hereafter have against any New Vehicle Borrower or any or all
of the Secured Parties without waiving any additional defenses,
set-offs, counterclaims or other claims otherwise available to the
Guarantor. The Guarantor agrees that each Secured Party shall have
a
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lien for all the Guarantor’s Obligations
upon all deposits or deposit accounts, of any kind, or any interest
in any deposits or deposit accounts, now or hereafter pledged,
mortgaged, transferred or assigned to such Secured Party or
otherwise in the possession or control of such Secured Party for
any purpose (other than solely for safekeeping) for the account or
benefit of the Guarantor, including any balance of any deposit
account or of any credit of the Guarantor with the Secured Party,
whether now existing or hereafter established, and hereby
authorizes each Secured Party from and after the occurrence of an
Event of Default at any time or times with or without prior notice
to apply such balances or any part thereof to such of the
Guarantor’s Obligations to the Secured Parties the
