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 Agen t”) 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 Guarant
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