Exhibit 10(m)
GUARANTY AND PURCHASE OPTION AGREEMENT
November 28, 1994
This is a GUARANTY AND PURCHASE OPTION AGREEMENT dated as of the date
first written above ("Agreement") by and between Asset Holdings III, L.P.
("Company"), an Ohio limited partnership, and ADESA Corporation ("Guarantor"),
an Indiana corporation.
The Company and PNC Bank, Kentucky, Inc. ("Trustee"), a Kentucky
banking corporation, are parties to a Collateral Trust Indenture dated as of
November 22, 1994 ("Indenture"). Except as otherwise specifically defined in
this Agreement, terms defined in the Collateral Trust Indenture shall have the
same definition when used in this Agreement.
The Company, the Guarantor and Principal Mutual Life Insurance Company
("Purchaser") are parties to a Note Purchase Agreement dated as November 22,
1994 ("Note Purchase Agreement"). Certain provisions of the Note Purchase
Agreement are specifically referred to in this Agreement and are incorporated
herein by such reference, subject in each case to any subsequent amendment or
modification thereto adopted as provided for in the Note Purchase Agreement.
PRELIMINARY STATEMENT
A. The Company will purchase the Land and Improvements comprising the
Charlotte Property, the Knoxville Property and the Framingham Property
(collectively, the "Leased Properties" and individually, a "Leased Property"),
and will lease such Properties to ADESA-Charlotte, Inc., A.D.E. of Knoxville,
Inc., and Auto Dealers Exchange of Concord, Inc., respectively (collectively,
the "Lessees" and individually, a "Lessee") pursuant to the Charlotte Lease,
Knoxville Lease and the Framingham Lease, respectively (collectively, the
"Leases" and individually, a "Lease"). Each of the Lessees is a wholly-owned
subsidiary of the Guarantor.
B. The purchase price for each Leased Property, together with certain
expenses to be incurred by the applicable Lessee with respect to the
construction and renovation of the Improvements thereon, will be funded by the
Company, as follows: 3% out of the contributed equity capital of the Company (an
aggregate of $795,000); and 97% out of the proceeds of the Notes to be purchased
by the Purchaser pursuant to the terms of the Note Purchase Agreement (an
aggregate of $25,705,000). The aggregate purchase price paid or to be paid by
the Company with respect to the Leased Properties, including the Construction
Funds to be advanced by the Company to the Guarantor and the Lessees in
connection with the Construction (as defined in each Lease as applicable), is
$26,500,000 ("Original Purchase Amount"), which Original Purchase Amount has and
will be funded $25,705,000 out of the proceeds of the Notes ("Original Principal
Amount") and $795,000 out of the contributed equity capital of the Company
("Original Capital Amount").
C. As provided for in the Note Purchase Agreement, the
Guarantor has unconditionally and absolutely guaranteed to the Purchaser the
payment of the Notes and performance of the other Guaranteed Obligations (as
defined in the Note Purchase Agreement).
D. Pursuant to the Indenture, the Trustee will hold the Mortgages and
the Lease Assignments with respect to the Leased Properties and the Leases in
trust as security for the payment and performance of the Guaranteed Obligations,
and all payments of Basic Rent (in an amount equal to the interest payments due
and payable with respect to the Notes) and Supplemental Rent (as defined and
provided for in the Leases) will be paid to the Trustee for application as
provided for therein. Additional Rent will be paid directly to the Company, as
Lessor under the Leases.
E. This Agreement provides for (i) the unconditional and absolute
guarantee by the Guarantor of the payment and performance by each Lessee of its
obligations under its Lease, and (ii) the option of the Guarantor or its
designee (including the Lessee) to purchase or remarket each of the Properties
at the end of the Lease Term (as defined and provided for in the applicable
Lease), and (iii) the obligation of the Guarantor to indemnify the Company with
respect to certain taxes and other obligations with respect to any of the Leased
Properties that are not purchased by the Guarantor or its designees pursuant to
such option, all upon the terms and subject to the conditions set forth in this
Agreement.
STATEMENT OF AGREEMENT
In consideration of the foregoing and their promises set forth in this
Agreement, the Note Purchase Agreement, the Indenture and the Leases, the
Company and the Guarantor hereby agree as follows.
SECTION 1. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.
1.1 Guaranteed Obligations.
In order to induce the Company to purchase the Properties, lease the
Properties to the Lessees, issue the Notes and enter into this Agreement, the
Note Purchase Agreement, the Indenture, each Lease, each Mortgage and each Lease
Assignment and in consideration thereof, the Guarantor hereby irrevocably,
unconditionally and absolutely guarantees to the Company and its successors and
assigns:
(a) the due and punctual payment by each Lessee of all
Basic Rent, Additional Rent and Supplemental Rent and
any and all other amounts due and payable under the
Lease of each such Lessee or any document or
instrument executed in connection therewith
("Relevant Instrument"), in each case, when and as
the same shall become due and payable, whether at
maturity or prior thereto, by acceleration or
otherwise, all in accordance with the terms and
provisions of this Agreement and each such Lease; it
being the intent of the Guarantor that the guaranty
set forth this Section 1 shall be a continuing
guaranty of payment and not a guaranty of collection;
and
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(b) the punctual and faithful performance, keeping,
observance and fulfillment by each Lessee of all
duties, agreements, covenants, indemnitees and
obligations of such Lessee contained in its Lease.
All of the obligations set forth in subsection (a) and subsection (b)
of this Section 1.1 are referred to as the "Guaranteed Lease Obligations."
1.2 Performance Under This Agreement.
In the event any Lessee fails to pay, perform, keep, observe, or
fulfill any Guaranteed Lease Obligation in the manner provided in its Lease, the
Guarantor shall cause forthwith to be paid the moneys, or to be performed, kept,
observed, or fulfilled each of such obligations, in respect of which such
failure has occurred in accordance with the terms and provisions of such Lease.
1.3 Primary Obligation.
The irrevocable, unconditional and absolute guaranty of the Guarantor
provided for in this Section 1 is a primary, original and immediate obligation
of the Guarantor and is an absolute, unconditional, continuing, and irrevocable
guaranty of payment and performance and shall remain in full force and effect
until the full, final and indefeasible payment of the Guaranteed Lease
Obligations and the Guaranteed Obligations (as defined and provided for in the
Note Purchase Agreement).
1.4 Waivers.
The guaranty obligations of the Guarantor under this Section 1 shall
not be affected, modified or impaired upon the happening from time to time of
any of the following, whether or not with notice to or the consent of the
Guarantor.
(a) The compromise, settlement, change, modification,
amendment (whether material or otherwise) or
termination of any or all of the obligations, duties,
covenants or agreements under any Relevant
Instrument.
(b) The failure to give notice to the Guarantor of the
occurrence of any event of default under the terms
and provisions of any Relevant Instrument.
(c) The assignment or pledging or the purported
assignment or pledging of all or any part of the
interest of the Company or any Lessee in any Lease or
any failure of title with respect to the Company's or
such Lessee's interest in the Leased Property.
(d) The waiver of the payment, performance or observance
of any of the obligations, conditions, covenants or
agreements contained in any Relevant Instrument.
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(e) The extension of the time for payment of any
Guaranteed Lease Obligation owed by any Lessee under
any Relevant Instrument or of the time for
performance of any other obligations, covenants or
agreements under or arising out of any Relevant
Instrument or the extension or the renewal of any
thereof.
(f) The taking or the omission of any of the actions
referred to in any Relevant Instrument.
(g) The exchange, surrender, substitution or modification
of any collateral security for any of the obligations
guaranteed hereby or the change, modification or
amendment to, or waiver in respect of, any agreement
relating to such collateral security.
(h) Any failure, omission or delay on the part of the
Company to enforce, assert or exercise any right,
power or remedy conferred on it in any Relevant
Instrument or any other indulgence or similar act on
the part of the Company in good faith and in
compliance with applicable law.
(i) The voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or
substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with
creditors or readjustment of, or other similar
proceedings which affect the Guarantor, any other
guarantor of any of the Guaranteed Lease Obligations
hereby or any Lessee or any of the assets of any of
them, or any allegation of invalidity or contest of
the validity of this Agreement in any such
proceeding.
(j) To the extent permitted by law, the release or
discharge of the undersigned from the performance or
observance of any obligation, covenant or agreement
contained in this guarantee by operation of law.
(k) The default or failure of the Guarantor fully to
perform any of its obligations set forth in this
Agreement.
(l) Any determination that any Guaranteed Lease
Obligation requires payment of interest which would
be contrary to any provisions of applicable law which
limit the maximum rate of interest which may be
charged or collected on any of such obligations,
provided nothing herein contained shall require the
undersigned to make any payment which is contrary to
law.
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1.5 Certain Waivers of Subrogation, Reimbursement and
Indemnity.
The Guarantor hereby acknowledges and agrees that, until such time as
the Guaranteed Lease Obligations and the Guaranteed Obligations (as defined and
provided for in the Note Purchase Agreement) have been finally and indefeasibly
paid, the Guarantor shall not have any right of subrogation, reimbursement, or
indemnity whatsoever in respect of the Guaranteed Lease Obligations, and no
right of recourse to or with respect to any of the Leased Properties or any
other assets of any Lessee. Nothing shall discharge or satisfy the obligations
of the Guarantor hereunder except the full and final performance and
indefeasible payment of the Guaranteed Lease Obligations and the Guaranteed
Obligations (as defined and provided for in the Note Purchase Agreement).
1.6 Invalid Payments.
The Guarantor further agrees that, to the extent any Lessee makes a
payment or payments with respect to any Lease, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required, for any of the foregoing reasons or for any
other reason, to be repaid or paid over to a custodian, trustee, receiver or any
other party or officer under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, state or federal law, or any common law or equitable cause, then
to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if said payment had not been made and the Guarantor shall be primarily liable
for such obligation.
SECTION 2. SALE, RETURN OR PURCHASE OF LEASED PROPERTY.
2.1 Purchase Option.
Subject to the terms, conditions and provisions set forth in this
Section, the Guarantor or any Person(s) designated by the Guarantor to the
Company in writing (including, without limitation, any Lessee(s)) ("Designated
Purchaser(s)") shall during the Option Period (defined below) have the option
(the "Purchase Option") to purchase from the Company all of the Company's
interest in each Leased Property at the Purchase Price provided for in Section
2.2 hereof, as adjusted to give effect to any deemed payment thereof as provided
for in Section 2.3 hereof provided, however, that no such designation shall
cause the Guarantor to be released from any obligation under this Agreement, or
any Lessee to be released from any obligation under its Lease.
Such option must be exercised by written notice to the Company at any
time during the Option Period, which exercise shall be irrevocable. Such
purchase shall be closed on April 1, 2000.
If the Purchase Option with respect to any Lease Property is exercised
pursuant to the foregoing, then, subject to the provisions set forth in this
Section, one such closing date, the Company shall convey to such Designated
Purchaser(s), and such Designated Purchaser(s) shall purchase from
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the Company, the Company's interest in such Leased Property. If Guarantor fails
to exercise the Purchase Option with respect to any Leased Property during the
applicable Option Period, then the Purchase Option with respect to all Leased
Property shall thereupon automatically terminate without any further action of
the Company, and the Purchase Option with respect to all Leased Property shall
thereafter be of no force or effect.
As used herein, the term "Option Period" means April 1, 1999 through
April 30, 1999 inclusive, with respect to each Leased Property; provided,
however, that in the event of any Complete Taking with respect to any Leased
Property (as defined in the applicable Lease) occurs prior to the final year of
the Lease Term (as defined in the applicable Lease), the Option Period shall be
deemed to commence upon the date of determination of such Complete Taking as
provided for in Section 11.3 of the applicable Lease and extend for a period of
thirty (30) days thereafter, provided further, that in event of a change of
control resulting in prepayment of the Notes pursuant to Section 7.2 of the
Indenture, the Option Period shall be deemed to commence upon the Control
Prepayment Date and extend for a period of ninety (90) days thereafter.
2.2 Determination of Purchase Price.
Upon the purchase by any Designated Purchaser(s) of the Company's
interest in each Leased Property pursuant to the exercise of the Purchase
Option, the purchase price ("Purchase Price") shall, subject to giving effect to
the deemed payments as provided for in Section 2.3 hereof, be:
(i) $6,700,000.00 with respect to the Charlotte
Property (representing $1,732,444.00 for
Land and $4,967,556.00 for Improvements);
(ii) $4,296,000.00 with respect to the Knoxville
Property (representing $796,000.00 for Land
and $3,500,000.00 for Improvements); and
(iii) $15,504,000.00 with respect to the
Framingham Property (representing
$8,964,000.00 for Land and $6,540,000.00 for
Improvements).
2.3 Guaranty Credit and Casualty Credit.
In the event of the purchase by any Designated Purchaser(s) of the
Company's interest in any Leased Property, the Purchase Price shall be deemed to
have been paid by such Designated Purchaser(s) to the Company, and in the event
of any purchase of any Leased Property pursuant to the exercise of the
Remarketing Option (as defined herein), the Guaranty Payment shall, as provided
for in Section 2.9 hereof, be deemed to have been paid to the Company, in each
case, to the extent of:
(i) the amount of any Casualty Credit, if any,
accrued with respect to such Leased Property
as provided for in the Lease; and
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(ii) the amount, if any, of the Guaranty Credit,
if any, that Guarantor elects in writing to
allocate to the Purchase Price of such
Leased Property.
2.4 Purchase Procedure.
In the event that any Designated Purchaser(s) shall purchase the
Company's interest in any Leased Property pursuant to the exercise of the
Purchase Option, (i) such Designated Purchaser(s) shall accept from the Company
and the Company shall convey such Leased Property by a duly executed and
acknowledged special warranty deed in recordable form and quitclaim bill of
sale, (ii) upon the date fixed for any purchase of the Company's interest in
such Leased Property hereunder, such Designated Purchaser(s) shall pay to the
order of the Company the Purchase Price, as adjusted to give effect to any
deemed payments as provided for in Section 2.3, hereof by wire transfer of
federal funds and (iii) the Company will execute and deliver to such Designated
Purchaser(s) such other documents as may be legally required in order to effect
such conveyance, and such other documents as may be required by the escrow agent
in order to close escrow and issue to such Designated Purchaser(s) an ALTA
owner's title policy subject only to (A) the exceptions set forth on Schedule B
of the Title Policy, (B) such exceptions created or caused by the Lessor or the
Designated Purchaser(s), or otherwise resulting from any act or failure to act
by the Lessor or the Designated Purchaser(s), or consented to by Designated
Purchaser(s), (C) taxes and assessments not yet due and payable, (D) such other
exceptions which do not materially adversely affect Designated Purchaser(s)'s
use of such Leased Property or the marketability of title to such Leased
Property and (E) such exceptions which are the result of any act or omission by
such Designated Purchaser(s); provided, however, that if any Event of Default
(as defined in the Indenture) shall have occurred at the time of notice of the
exercise of any Purchase Option or at any time thereafter, the Company may
convey the Leased Property to the Designated Purchaser(s) by quitclaim deed and
quitclaim bill of sale and without compliance with the foregoing requirements of
this clause (iii).
2.5 Required Approvals.
Designated Purchaser(s) shall, at such Designated Purchaser(s)'s sole
cost and expense, obtain all required governmental and regulatory approvals and
consents and shall make such filings as required by Applicable Law. In the event
that the Company is required by Applicable Law to take any action in connection
with such purchase and sale, such Designated Purchaser(s) shall pay all costs
incurred by the Company in connection therewith. In addition, all charges
incident to such conveyance, including, without limitation, such Designated
Purchaser(s)'s attorneys' fees, the Company's reasonable attorneys' fees, such
Designated Purchaser(s)'s and the Company's escrow fees, recording fees, title
insurance premiums and all applicable documentary transfer or other transfer
taxes and other taxes required to be paid in order to record the transfer
documents that might be imposed by reason of such conveyance and the delivery of
such deed shall be borne entirely and paid by such Designated Purchaser(s).
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2.6 Taxes.
In the event of any purchase of any Leased Property upon the exercise
of the Purchase Option, there shall be no apportionment of taxes, insurance,
utility charges or other charges payable with respect to the such Leased
Property, all of such taxes, insurance, utility or other charges due and payable
with respect to such Leased Property prior to termination being payable by
Designated Purchaser(s) hereunder and all due after such time being payable by
such Designated Purchaser(s) as the then owner of such Leased Property.
2.7 Remarketing Options.
Subject to the fulfillment of each of the conditions set forth below,
Guarantor shall have the option (the "Remarketing Option") exercisable at any
time during the applicable Option Period with respect to the Purchase Option
(and in lieu of the exercise of the Purchase Option), to market any Leased
Property for the Company and to procure a purchaser therefor. Guarantor's
effective exercise and consummation of the Remarketing Option shall be subject
to the due and timely fulfillment of each of the following provisions, the
failure of any of which shall render the Remarketing Option and Guarantor's
exercise thereof null and void.
(i) Once the Guarantor has exercised the
Remarketing Option as provided, Guarantor
shall, as exclusive agent for the Company,
use commercially reasonable efforts to sell
the Company's interest in such Leased
Property and will attempt to obtain the
highest purchase price therefor. Guarantor
will be responsible for hiring brokers and
making such Leased Property available for
inspection by prospective purchasers.
Guarantor shall promptly provide any
maintenance records relating to such Leased
Property to the Company and any potential
purchaser upon request, and shall otherwise
do all things necessary to sell and deliver
possession of such Leased Property to the
purchaser. All such marketing of such Leased
Property shall be at Guarantor's sole
expense. Guarantor shall allow the Company
and any potential qualified purchaser access
to such Leased Property for the purpose of
inspecting the same.
(ii) Guarantor shall submit all bids to the
Company, and the Guarantor will have the
right to review the same and the right to
submit any one or more bids. All bids shall
be on an "all-cash" basis. Guarantor shall
procure bids from one or more bona fide
prospective purchasers and shall deliver to
the Company not less than ninety (90) days
prior to the last day of such Lease Term a
binding written unconditional (except as set
forth below), irrevocable offer by such
purchaser offering the highest "all-cash"
bid to purchase such Leased Property. Such
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purchaser shall not be Guarantor or any
subsidiary or affiliate of Guarantor. The
written offer must specify the last day of
such Lease Term as the closing date.
(iii) On the last day of such Lease Term, Lessee
shall surrender such Leased Property as
provided for herein.
(iv) In connection with any such sale of such
Leased Property, Guarantor will provide to
the purchaser all customary "seller's"
indemnities, representations and warranties
regarding title, absence of Liens (except
the Company's Liens) and the condition of
such Leased Property, including, without
limitation, an environmental indemnity. As
to Company, any such sale shall be made on
an "as is, with all faults" basis without
representation or warranty by the Company.
(v) Guarantor shall pay directly, and not from
the sale proceeds, all prorations, credits,
costs and expenses of the sale of such
Leased Property, whether incurred by the
Company or Guarantor including, without
limitation, the cost of all title insurance,
surveys, environmental reports, appraisals,
transfer taxes, the Company's reasonable
attorneys' fees, Guarantor's attorneys'
fees, commissions, escrow fees, recording
fees, and all applicable documentary and
other transfer taxes, except those which are
paid by the purchaser of such property.
(vi) If the selling price of such Leased Property
does not exceed the Purchase Price for such
Leased Property as set forth in Section 2.2
hereof after giving effect to the
adjustments, if any, provided for in Section
2.3 hereof and after giving effect to the
Guaranty Payment, if any, provided for in
Section 2.9 herein, then the Company may, by
notice to Lessee and in Company's sole and
absolute discretion, reject such offer to
purchase, in which event the parties will
proceed according to the provisions of
Section 2.8 hereof.
(vii) If the Company does not reject such purchase
offer as provided above, the closing of such
purchase of such Leased Property by such
purchaser must occur on the last day of such
Lease Term, contemporaneously with Lessee's
surrender or such Leased Property as
provided for herein.
(viii) If the Company does not reject the purchase
offer as provided above, then the purchase
shall be consummated on the last day of such
Lease Term and the gross proceeds of the
sale (i.e., without deduction for
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any marketing, closing or other costs,
prorations or commissions) shall be paid
directly to the Trustee to be applied as
provided for in the Indenture.
If one or more of the foregoing provisions shall not be fulfilled as of
the last day of such Lease Term or if such Leased Property is not purchased as
aforesaid for any other reasons whatsoever other than solely due to rejection by
the Company of such sale pursuant to subsection (vii) above, then the Company
may, at Company's option and in the Company's sole discretion, (i) declare by
written notice to the Guarantor the Remarketing Option to be null and void
(whether or not it has been theretofore exercised by the Guarantor), in which
event all of the Guarantor's rights under this Section shall immediately
terminate, or (ii) permit and require the Guarantor on behalf of the Company to
consummate the sale of such Leased Property to such purchaser, in which event
the gross proceeds shall be paid as set forth in this Section and all of the
Company's rights and remedies set forth herein, in the other Operative
Documents, at law or in equity or otherwise shall be preserved. If the
prospective purchaser breaches its offer to purchase, then the Company may, in
the Company's sole discretion, declare the Remarketing Option to be null and
void, in which event all of Designated Purchaser(s)'s rights under this Section
shall immediately terminate. The Guarantor shall have no right, power or
authority to bind the Company in connection with any proposed sale of such
Leased Property.
2.8 Rejection of Sale.
Notwithstanding anything contained herein to the contrary, if the
Company rejects the purchase offer for such Leased Property as provided in
Section 2.7 hereof, then (i) the Company shall retain title to such Leased
Property, and (ii) in addition to the Guarantor's other obligations hereunder,
the Guarantor will reimburse the Company, within ten (10) Business Days after
written request, for all reasonable costs and expenses incurred by the Company
during the period ending on the first anniversary of the last day of such Lease
Term in connection with the marketing, sale, closing or transfer of such Leased
Property, which obligation shall survive the last day of such Lease Term and the
termination or expiration of the applicable Lease.
2.9 Guaranteed Payment.
With respect to the sale of any Leased Property pursuant to the
Remarketing Option, the Guarantor shall, subject to the limitation set forth in
this Section, pay to the Company an amount ("Guaranty Payment") equal to the
excess, if any, of (A) the Purchase Price of such Leased Property as set forth
in Section 2.2 hereof, (and without adjustment to give effect to any deemed
payments as provided for in Section 2.3 hereof) over (B) the net proceeds to be
received by the Trustee in connection with such sale; provided, however, that an
amount equal to any Casualty Credit with respect to such Leased Property, if
any, plus the amount of any Guaranty Credit, if any, allocated the Guarantor to
such Leased Property shall be deemed to have been paid to the Company as
Guaranty Payment for purposes of this Section.
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Notwithstanding the foregoing, the aggregate amount of Guaranty
Payments that the Guarantor shall be required to make pursuant to this Section
shall not exceed the Original Principal Amount reduced by the aggregate amount
of all Guaranty Credits (as defined and provided for in the Leases).
2.10 Return of Distributions.
Provided that the Notes and all other obligations due under the Notes
have been paid in full and all Rent and other obligations due under the Leases
have been paid in full, the Company shall pay and distribute to Guarantor, an
amount equal to the excess, if any, of (A) the sum of the Purchase Prices paid
to the Company with respect to the sales of the Properties pursuant to the
exercise of the Purchase Option and Remarketing Option (including all Casualty
Credits and Guaranty Credits deemed to have been paid and all Guaranty Payments
paid by Guarantor as provided for herein and in the Leases), over (B) the
Original Purchase Amount.
SECTION 3. WARRANTIES AND REPRESENTATIONS.
In order to induce the Company to purchase the Leased Properties, lease
the Leased Properties to the Lessees pursuant to the Leases, enter into this
Agreement, the Note Purchase Agreement, the Indenture, the Leases, the Mortgages
and the Lease Assignments and issue the Notes and perform its other obligations
under and in connection with the foregoing, the Guarantor represents to the
Company effective as of the date hereof and effective as of the date of each
Lease that each of the warranties and representations of the Guarantor set forth
in Section 3 of the Note Purchase Agreement is, and will be, true and correct as
of each such date. Such Section 3 is hereby incorporated herein by its
reference, subject to all subsequent amendments or modifications thereto adopted
as provided for in the Note Purchase Agreement.
SECTION 4. COVENANTS OF THE GUARANTOR.
The Guarantor covenants that so long as any amounts remain due and
payable under any Lease or this Agreement and so long as any of the Notes shall
be outstanding, the Guarantor shall comply with or cause the compliance with
each of its covenants set forth in Section 6 of the Note Purchase Agreement,
except for the covenants set forth in Sections 6.9, 6.10, 6.11 and 6.13 thereof.
Such Section 6 is hereby incorporated herein by this reference, subject to all
subsequent amendments or modifications thereto adopted as provided for in the
Note Purchase Agreement.
The Guarantor further warrants and covenants that so long as any of the
Notes remain outstanding, the Guarantor shall cause each of the covenants of the
Company, as grantor, set forth in Article One of each Mortgage to be performed
and complied with for and on behalf of the Company, shall indemnify and hold the
Company harmless with respect to all costs of performing and complying with such
covenants and any claims or damages arising out of our in connection with any
nonperformance or noncompliance with any such covenants, and shall assume and
pay any and all obligations of the Company with respect to expenses and
indemnification arising under such Article
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One. Each such Article One is hereby incorporated herein by this reference,
subject to all subsequent amendments or modifications thereto adopted as
provided for in the Note Purchase Agreement.
SECTION 5. INFORMATION AS TO GUARANTOR.
The Guarantor covenants that so long as any amounts remain due and
payable under any Lease or this Agreement and so long as any of the Notes shall
be outstanding, the Guarantor will deliver to the Company all of the financial
statements, reports, certificates and other information that the Guarantor is
required to deliver to the Holders of the Notes under Section 7 of the Note
Purchase Agreement. Such Section 7 is hereby incorporated herein by this
reference, subject to all subsequent amendments or modifications thereto adopted
as provided for in the Note Purchase Agreement.
SECTION 6. MISCELLANEOUS.
6.1 Communications.
All communications hereunder shall be made in the manner provided for
in Section 9.1 of the Note Purchase Agreement.
6.2 Reproduction of Documents.
This Agreement, the Leases and all documents relating hereto or thereto
may be reproduced by the Company or the Guarantor in the manner, with the same
effect and subject to the same stipulations and agreements provided for in
Section 9.2 of the Note Purchase Agreement.
6.3 Survival.
All warranties, representation, certifications and covenants made by
the Guarantor herein, or in any certificate or other instrument delivered by any
such Person or on behalf of any such Person hereunder shall be considered to
have been relied upon by the Company shall survive the purchase of each Leased
Property and the execution and delivery of this Agreement and each Lease
regardless of any investigation made by the Company or on its behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Guarantor.
6.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
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6.5 Amendment and Waiver.
This Agreement may be amended and the observance of any term hereof may
be waived only pursuant to an express writing signed by the Company and the
Guarantor, and consented to by the Trustee pursuant to the Lease Assignment. The
Limited Partnership Agreement of the Company dated as of November 18, 1994 may
not be amended and compliance with any material term thereof may not be waived
without the written consent of ADESA and the Trustee.
6.6 Expenses.
The Guarantor shall pay when billed:
(a) all expenses incurred by the Company in connection
with the enforcement of any rights under this
Agreement and any Lease (including, without
limitation, all fees and expenses of the Company's
counsel);
(b) all expenses relating to the consideration,
negotiation, preparation or execution of any
amendments, waivers or consents pursuant to Section
6.5 and the other terms and provisions hereof,
whether or not any such amendments, waivers or
consents are executed, including, without limitation
any amendments, waivers or consents resulting from
any work-out, restructuring or similar proceedings
relating to the performance by the Guarantor of its
obligations under this Agreement or of any Lessee
under its Lease; and
(c) all reasonable expenses relating to the review,
negotiation, preparation or execution of this
Agreement, each Lease and all other documents
relating to the transactions described in the
Preliminary Statement to this Agreement and the
organization of the Company and its general partner,
and including legal fees and expenses of legal
counsel for the general partner of the Company,
including fees and expenses of the Legal Department
of Banc One Capital Corporation acting on behalf of
the Company in an amount not to exceed $10,000,
including legal fees and expenses of legal counsel
for the general partner of the Company.
6.7 Jurisdiction; Service of Process.
THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
LEASE, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT
IN RESPECT OF ANY BREACH HEREUNDER OR UNDER ANY LEASE, BROUGHT BY THE COMPANY
AGAINST ANY LESSEE, THE
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GUARANTOR OR ANY OF THEIR RESPECTIVE LEASED PROPERTY, MAY BE BROUGHT BY SUCH
PERSON IN THE COURTS OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN OR
EASTERN DISTRICT OF NEW YORK OR ANY STATE COURT IN NEW YORK, AS THE COMPANY MAY
IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
NON-EXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND AGREES THAT
PROCESS SERVED EITHER PERSONALLY OR BY REGISTERED MAIL SHALL CONSTITUTE, TO THE
EXTENT PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUCH SUIT, AND THE
GUARANTOR IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE, ANY CLAIM THAT SUCH PERSON IS NOT SUBJECT TO THE IN
PERSONAM JURISDICTION OF ANY SUCH COURT. RECEIPT OF PROCESS SO SERVED SHALL BE
CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED
STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE. IN ADDITION, THE
GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT SUCH PERSON MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND/OR ANY LEASE, BROUGHT IN SUCH COURTS, AND HEREBY IRREVOCABLY WAIVE ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
LIMIT THE ABILITY OF THE COMPANY TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES
IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER ANY
LESSEE OR THE GUARANTOR IN SUCH OTHER JURISDICTION, AND IN SUCH MANNER, AS MAY
BE PERMITTED BY APPLICABLE LAW. THE COMPANY AND THE GUARANTOR AGREE THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
6.8 Duplicate Originals; Execution in Counterpart.
Two or more duplicate original hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and shall be effective when at least one counterpart shall have
been executed by each party hereto, and each set of counterparts that,
collectively, show execution by each party hereto shall constitute one duplicate
original.
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This Agreement was executed and delivered by the Company and the
Guaranty effective as of the date first written above.
ASSET HOLDINGS III, L.P. ADESA CORPORATION
By: Asset Holdings Corporation III,
General Partner
By: Lannhi Tran By: Warren W.Byrd
---------------------- -------------
Name: LANNHI TRAN Warren W Byrd
Title: VICE PRESIDENT Name:
Title:
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