GUARANTY (this “ Guaranty ”),
dated as of January 15, 2009, by each of the Persons listed on
Schedule I hereto (each such Person, individually, a
“ Guarantor ” and, collectively, the “
Guarantors ”) in favor of (a) Wells Fargo Retail
Finance, LLC, a Delaware limited liability company, as
administrative agent (in such capacity, the “
Administrative Agent ”) and collateral agent (in such
capacity, the “ Collateral Agent ” and,
collectively with the Administrative Agent, the “
Agents ”) for its own benefit and the benefit of the
other Credit Parties (as defined in the Credit Agreement referred
to below), and (b) the Credit Parties.
WHEREAS, reference is made to that certain
Credit Agreement, dated as of January 15, 2009 (as amended,
modified, supplemented or restated and in effect from time to time,
the “ Credit Agreement ”), by and among
(i) A.C. Moore Incorporated, a Virginia corporation (the
“ Lead Borrower ”), as agent for the Borrowers
from time to time party thereto (individually, a “
Borrower ” and, collectively with the Lead Borrower,
the “ Borrowers ”), (ii) the Borrowers,
(iii) the Guarantors, (iv) the Lenders from time to time
party thereto (individually, a “ Lender ” and,
collectively, the “ Lenders ”), and
(v) Wells Fargo Retail Finance, LLC, as Administrative Agent,
Collateral Agent and Swing Line Lender, pursuant to which the
Lenders have agreed to make Loans to the Borrowers upon the terms
and subject to the conditions specified in the Credit Agreement.
Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
WHEREAS, each Guarantor acknowledges that it
will receive direct and indirect benefits from the availability of
the credit facility provided for in the Credit Agreement, from the
making of the Loans by the Lenders.
WHEREAS, the obligations of the Lenders to make
Loans is conditioned upon, among other things, the execution and
delivery by the Guarantors of a guaranty in the form hereof. As
consideration therefor, and in order to induce the Lenders to make
Loans, the Guarantors are willing to execute this
Guaranty.
Accordingly,
the parties hereto agree as follows:
SECTION 1. Guaranty . Each Guarantor
irrevocably and unconditionally guarantees, jointly with the other
Guarantors and severally, as a primary obligor and not merely as a
surety, the due and punctual payment when due (whether at the
stated maturity, by required prepayment, by acceleration or
otherwise) and performance by each of the Borrowers of all
Obligations (collectively, the “ Guaranteed
Obligations ”), including all such Guaranteed Obligations
which shall become due but for the operation of the Debtor Relief
Laws. The Guarantor further agrees that the Guaranteed Obligations
may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon this
Guaranty notwithstanding any extension or renewal of any Guaranteed
Obligation.
SECTION 2. Guaranteed Obligations Not
Affected . To the fullest extent permitted by applicable Law,
each Guarantor waives presentment to, demand of payment from, and
protest to, any Loan Party of any of the Guaranteed Obligations,
and also waives notice of acceptance of this Guaranty, notice of
protest for nonpayment and all other notices of any kind. To the
fullest extent permitted by applicable Law, the obligations of each
Guarantor hereunder shall not be affected by (a) the failure
of any Agent or any other Credit Party to assert any claim or
demand or to enforce or exercise any right or remedy against any
Loan Party under the provisions of the Credit Agreement, any other
Loan Document or otherwise or against any other party with respect
to any of the Guaranteed Obligations, (b) any rescission,
waiver, amendment or modification of, or any release from, any of
the terms or provisions of this Guaranty, or of any other Loan
Document or any other agreement, with respect to any Loan Party or
with respect to the Guaranteed Obligations (except as expressly set
forth in such recission, waiver, amendment or modification),
(c) the failure to perfect any security interest in, or the
release of, any of the Collateral held by or on behalf of the
Collateral Agent or any other Credit Party, or (d) the lack of
legal existence of any Loan Party or legal obligation to discharge
any of the Guaranteed Obligations by any Loan Party for any reason
whatsoever, including, without limitation, in any insolvency,
bankruptcy or reorganization of any Loan Party.
SECTION 3. Security . Each Guarantor
hereby acknowledges and agrees that the Collateral Agent and each
of the other Credit Parties may (a) take and hold security for
the payment of this Guaranty and the Guaranteed Obligations and
exchange, enforce, waive and release any such security,
(b) apply such security and direct the order or manner of sale
thereof as they in their sole discretion may determine, and
(c) release or substitute any one or more endorsees,
Borrowers, other Loan Parties or other obligors, in each case
without affecting or impairing in any way the liability of any
Guarantor hereunder.
SECTION 4. Guaranty of Payment . Each
Guarantor further agrees that this Guaranty constitutes a guarantee
of payment and performance when due of all Guaranteed Obligations
and not of collection and, to the fullest extent permitted by
applicable Law, waives any right to require that any resort be had
by the Collateral Agent or any other Credit Party to any of the
Collateral or other security held for payment of the Guaranteed
Obligations or to any balance of any deposit account or credit on
the books of any Agent or any other Credit Party in favor of any
Loan Party or any other Person or to any other Guarantor of all or
part of the Guaranteed Obligations. Any payment required to be made
by any Guarantor hereunder may be required by any Agent or any
other Credit Party on any number of occasions and shall be payable
to the Administrative Agent, for the benefit of the Agents and the
other Credit Parties, in the manner provided in the Credit
Agreement.
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SECTION 5.
Indemnification .
(a) Without limiting or duplicating any of
their indemnification obligations under the Credit Agreement or the
other Loan Documents, each of the Guarantors shall jointly and
severally indemnify the Agents (and any sub-agent thereof), each
other Credit Party, and each Related Party of any of the foregoing
Persons (each such Person being called an “ Indemnitee
”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities, settlement payments,
costs and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee) incurred,
suffered, sustained or required to be paid by any Indemnitee or
asserted against any Indemnitee by any third party or by any
Guarantor arising out of, in connection with, or as a result of,
(i) the execution or delivery of this Guaranty, the Credit
Agreement, any other Loan Document or any other agreement or
instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or
thereunder, or the consummation of the transactions contemplated
hereby or thereby, or, in the case of the Agents (and any sub-agent
thereof) and their Related Parties only, the administration of this
Guaranty, the Credit Agreement and the other Loan Documents, or
(ii) any actual or prospective claim, litigation,
investigation or proceeding relating to or arising from any of the
foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by any Guarantor, or any of the
Guarantors’ directors, shareholders or creditors, and
regardless of whether any Indemnitee is a party thereto, in all
cases, whether or not caused by or arising, in whole or in part,
out of the comparative, contributory or sole negligence of the
Indemnitee; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee or (y) result from a
claim brought by a Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the
Borrowers or such Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of
competent jurisdiction. In connection with any indemnified claim
hereunder, the Indemnitee shall be entitled to select its own
counsel and the Guarantors shall promptly pay the reasonable fees
and expenses of such counsel.
(b) To the fullest extent permitted by
applicable Law, the Guarantors shall not assert, and hereby waive,
any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as
a result of, this Guaranty, the Credit Agreement, any other Loan
Document or any agreement or instrument contemplated hereby, or the
transactions contemplated hereby or thereby. No Indemnitee referred
to in subsection (a) above shall be liable for any damages
arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Guaranty,
the Credit Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct
or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent
jurisdiction.
(c) The agreements in this Section 5
shall survive the resignation of any Agent, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge
of all the other Guaranteed Obligations.
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SECTION 6. No Discharge or Diminishment of
Guaranty . The obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or
termination for any reason (other than upon (i) termination of
the Aggregate Commitments, (ii) the indefeasible payment in
full in cash of the Guaranteed Obligations (other than contingent
indemnification obligations for which no claim has been asserted
and any Other Liabilities which are not by their terms then due and
payable provided that the Agents shall have received such
indemnities and collateral security as they shall have required in
accordance with the terms of Section 10.11 of the Credit
Agreement), (iii) the expiration or termination of all Letters
of Credit, except to the extent fully Cash Collateralized or
supported by another letter of credit in a manner reasonably
satisfactory to the L/C Issuer and the Administrative Agent, and
(iv) termination of the Administrative Agent’s
obligation to endeavor to cause the L/C Issuer to issue Letters of
Credit under the Credit Agreement), including any claim of waiver,
release, surrender, alteration or compromise of any of the
Guaranteed Obligations, and shall not be subject to any defense or
set-off, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the
generality of the foregoing, the Guaranteed Obligations of each
Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of any Agent or any other Credit
Party to assert any claim or demand or to enforce any remedy under
this Guaranty, 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, willful or
otherwise, in the performance of the Guaranteed Obligations, or by
any other act or omission that may or might in any manner or to any
extent vary the risk of any Guarantor or that would otherwise
operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).
SECTION 7. Defenses of Loan Parties
Waived . To the fullest extent permitted by applicable Law,
each Guarantor waives any defense based on or arising out of any
defense of any other Loan Party or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Loan Party,
other than the indefeasible payment in full in cash of the
Guaranteed Obligations. Each Guarantor hereby acknowledges that the
Agents and the other Credit Parties may, at their election,
foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part
of the Guaranteed Obligations, make any other accommodation with
any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting
or impairing in any way the liability of each such
Guaran
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