EXHIBIT 10.13
AMENDED AND RESTATED RESIDUAL GUARANTY
(this "GUARANTY")
As of March 19, 2003
The Chase Manhattan Bank, as Agent for
the Banks described below (the "AGENT")
One Chase Square, Tower 9
Rochester, New York 14643
Re: Credit Agreement dated effective as of September 15, 1998 (as
amended, modified, restated, or supplemented, the "AGREEMENT")
by and among Brazos Automotive Properties, L.P. as the
Borrower (the "BORROWER"), the several banks party thereto
from time to time (the "BANKS"), and the Agent.
Ladies and Gentlemen:
1. Guaranty. For value received, and in consideration of Borrower
entering into the Agreement, but subject in any event to the immediately
following sentence in this SECTION 1, the undersigned corporation (the
"GUARANTOR"), does hereby irrevocably, absolutely, and unconditionally guarantee
(a) payment, when due, of any and all indebtedness and other amounts of every
kind, howsoever created, arising, or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing or owing to the Banks or the
Agent, by Borrower under the Note as defined in the Agreement (all such
obligations being hereinafter collectively referred to as the "LIABILITIES") and
(b) the performance by Borrower of its obligations under the Credit Documents
pursuant to the terms thereof; provided that the Liabilities shall be limited to
an amount up to and including the total of (i) the maximum amount (without
deduction for any proceeds of sale) that would be determined as due and payable
if Lessee were to exercise its right of sale to a third party pursuant to
Section 11.3(b) of the Ground Lease; (ii) the maximum amount (without deduction
for any proceeds of sale) that would be determined as due and payable if Lessee
were to exercise its right of sale to a third party pursuant to Section 11.3(b)
of the Facilities Lease; (iii) all interest due and payable on the Note pursuant
to the terms thereof; (iv) any and all other sums which are or may become due
pursuant to the Agreement (including, without limitation, indemnities, legal
fees, and amounts payable pursuant to Section 9.4 of the Agreement) and (v) to
the extent permitted by applicable law, all other amounts which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due
under the Agreement (the foregoing obligations and undertakings are collectively
referred to as the "OBLIGATIONS"). Notwithstanding anything contained herein or
elsewhere to the contrary, the maximum amount for which Guarantor shall be
liable or responsible under this Guaranty, including both with respect to
payment of Liabilities and performance of Obligations, shall in no event exceed
an amount (the "MAXIMUM AMOUNT") equal to eighty-one and one-half percent
(81.5%) of the principal balance outstanding from time to time under the "NOTE"
(as said term is defined in the Agreement), and Guarantor shall in no event have
any liability to pay, or otherwise be responsible for, any amount pursuant to
this Guaranty or by operation of law, in equity or otherwise, in excess of the
Maximum Amount as determined at the relevant time of determination. The
Guarantor has a substantial, direct or indirect, financial interest in the
benefits and advantages that will result from the Agreement. The Guarantor
hereby agrees that, upon any Default, the Guarantor will forthwith pay the
Liabilities as limited by this paragraph immediately upon written demand or
perform the Obligations.
Amended and Restated Residual Guaranty - Page 1
2. Guaranty Continuing, Absolute, Unlimited. This Guaranty is a
continuing, absolute, and unlimited Guaranty of payment and the Guarantor is a
primary obligor and not a surety. The Liabilities and Obligations shall be
conclusively presumed to have been created in reliance on this Guaranty. The
Agent shall not be required to proceed first against Borrower or any other
person, firm or corporation or against any property securing any of the
Liabilities or Obligations before resorting to the Guarantor for payment or
performance. To the extent permitted by applicable law, this Guaranty shall be
construed as a guarantee of payment without regard to the enforceability of any
of the Liabilities or Obligations or the rejection of the Agreement in
bankruptcy, and notwithstanding any claim, defense (other than payment or
performance by Borrower or the Guarantor) or right of set-off which Borrower or
the Guarantor may have against any Bank or the Agent, including any such claim,
defense, or right of set-off based on any present or future law or order of any
government (de jure or de facto), or of any agency thereof or court of law
purporting to reduce, amend, or otherwise affect any of the Liabilities or
Obligations of Borrower or any other obligor, or to vary any terms of payment
thereof, and without regard to any other circumstances which might otherwise
constitute a legal or equitable discharge of a surety or a guarantor. The
Guarantor agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment to the Banks or the Agent
of the Liabilities or any part thereof is rescinded or must otherwise be
returned by any Bank or the Agent upon the insolvency, bankruptcy, or
reorganization of Borrower, or otherwise, as though such payment to such Bank or
the Agent had not been made. To the extent permitted by applicable law, the
Guarantor's obligation to fully pay or perform the Liabilities and any remedy
for the enforcement thereof shall not be impaired, modified, released, or
limited in any way by any impairment, modification, release, or limitation of
the liability of Borrower or its bankruptcy estate, resulting from the operation
of any present or future provision of the Bankruptcy Code or any Debtor Relief
Law or from the decision of any court interpreting the same.
3. Guaranty Not Affected by Change in Security or Other Actions. The
Agent and the Banks may, from time to time, without the consent of or notice to
the Guarantor, take any or all of the following actions without impairing or
affecting (except insofar as the Liabilities are reduced or modified thereby),
the Guarantor's obligations under this Guaranty or releasing or exonerating the
Guarantor from any of its liabilities hereunder:
a. retain or obtain a security interest in any property to
secure any of the Liabilities or any obligation hereunder;
b. retain or obtain the primary or secondary liability of any
party or parties, in addition to the Guarantor, with respect to any of
the Liabilities;
c. extend the time or change the manner, place or terms of
payment of, or renew or amend any note or other instrument evidencing
the Liabilities or any part thereof, or amend in any manner any
agreement relating thereto, in each case in accordance with the terms
of each such agreement;
d. release or compromise, in whole or in part, or accept full
or partial payment for, any of the Liabilities hereby guaranteed, or
any liability of any nature of any other party or parties with respect
to the Liabilities or any security therefor;
e. enforce the Agent's or the Banks' security interest, if
any, in all or any properties securing any of the Liabilities or any
obligations hereunder in order to obtain full or partial payment of the
Liabilities then outstanding; or
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f. release or fail to perfect, protect, or enforce the Agent's
or the Banks' security interest, if any, in all or any properties
securing any of the Liabilities or any obligation hereunder, or permit
any substitution or exchange for any such property.
4. Waivers. The Guarantor hereby expressly waives to the extent
permitted by law:
a. notice of acceptance of this Guaranty;
b. notice of the existence or incurrence of any or all of the
Liabilities in accordance with the Credit Documents;
c. presentment, demand, notice of dishonor, protest, and all
other notices whatsoever (except the written demand referred to in
SECTION 1 hereinabove);
d. any requirement that proceedings first be instituted by the
Agent or any Lender against the Borrower;
e. all diligence in collection or protection of or realization
upon the Liabilities or any part thereof, or any obligation hereunder,
or any collateral for any of the foregoing;
f. any rights or defenses based on the Agent's or a Bank's
election of remedies, including any defense to the Agent's or Lender's
action to recover any deficiency after a non-judicial sale; and
g. the occurrence of every other condition precedent to which
the Guarantor might otherwise be entitled.
5. Definitions. As used in this Guaranty, the following terms will have
the following meanings, unless the context otherwise requires:
ACCOUNTANTS mean Pricewaterhouse Coopers, LLP or other firm of
independent public accountants of nationally recognized standing retained by
Guarantor or any other firm acceptable to the Banks.
ACQUISITION means the acquisition or purchase of assets by Guarantor
(whether in one or more separate transactions contemplated as part of the same
transaction); of assets, including without limitation, stock, partnership,
securities, or other interest in any other Person; excluding however, assets
purchased in the ordinary course of business which are budgeted as part of the
Guarantor's annual capital expenditure budget.
ADJUSTED DEBT means Funded Debt, plus the product of eight (8) times
Rental Payments.
AFFILIATE means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether as
general partner, through ownership of a Control Percentage of such Person or the
general partner of such Person, by contract or otherwise.
AGENT means JPMorgan Chase and its successor or successors as
administrative agent for Lenders under the Credit Agreement.
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ARRANGER means JPMorgan Chase, as Arranger and book manager under the
Credit Agreement.
BRAZOS FACILITY means the facility provided pursuant to the Agreement,
the Facilities Lease and the Ground Lease.
BUSINESS DAY means, for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by Law to be
closed in New York, New York.
CAPEX means, for any Four Quarter Period, capital expenditures for
fixed or capital assets that are required to be capitalized on a balance sheet
prepared in accordance with GAAP minus any net proceeds of allowable
sale/leasebacks permitted by SECTIONS 8n or 8o minus (without duplication) any
capital expenditures incurred for equipment purchased and then sold within one
year of acquisition to Citizens Bank of Massachusetts pursuant to the
sale/leaseback facility described and permitted pursuant to SECTION 8o minus the
properties purchased by Guarantor from the Brazos Facility on the Effective
Date.
CAPITALIZED LEASE means any lease the obligation for Rental Payments
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
CASH EQUIVALENTS means (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States Government of any agency thereof; (b) certificates of deposit,
time deposits, overnight bank deposits, bankers acceptances and repurchase
agreements of any commercial bank which has capital and surplus in excess of
$100,000,000 having maturities of one year or less from the date of acquisition;
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Group or P-2 by Moody's Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments; (d) money market
accounts or funds with or issued by "QUALIFIED ISSUERS"; (e) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in CLAUSE (a) above entered into with any bank meeting the
qualifications specified in CLAUSE (b) above; (f) demand deposit accounts
maintained in the ordinary course of business with any bank, or with any bank
that is not a bank, not in excess of $100,000 in the aggregate on deposit with
any such bank; and (g) marketable securities of the same or similar type as
owned by the Guarantor as of December 31, 2002, the aggregate actual purchase
price of which shall not exceed $100,000 at any time.
CHANGE OF CONTROL shall mean the occurrence of one or more of the
following: (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any person or group, other than the Ownership
Group, of (i) shares representing more than thirty-five percent (35%) of the
Common Stock, issued and outstanding at any time or (ii) more than sixty percent
(60%) of the Preferred Stock, issued and outstanding at any time; or (b) the
occupancy of a majority of the seats (other than vacant seats) on the board of
directors of Guarantor or any Subsidiary of the Guarantor by persons who were
neither (i) nominated by the board of directors of Guarantor nor (ii) appointed
by directors so nominated. As used in this definition of "CHANGE OF CONTROL,"
terms defined in the Securities Exchange Act of 1934 or the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof,
shall have the respective meanings ascribed to them therein.
CLOSING DATE means September 15, 1998.
CODE means the Internal Revenue Code of 1986, as amended from time to
time, and related rules and regulations promulgated thereunder by the Internal
Revenue Service.
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COMMON STOCK means the common stock of the Guarantor, $.01 par value
per share.
COMPANY or COMPANIES means, at any time, Guarantor and each of its
Subsidiaries.
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
the attached EXHIBIT "A" and signed by a Responsible Officer.
CONTROL PERCENTAGE means, with respect to any Person (a) in the case of
a corporation, the percentage of the outstanding capital stock of such Person
having ordinary voting power which gives the direct or indirect holder of such
stock the power to elect a majority of the Board of Directors of such Person and
(b) in the case of a limited partnership, the percentage of the outstanding
limited partnership interests of such Person which gives the direct or indirect
holder of such limited partnership interests the power to remove the general
partner or partners of such Person or to take actions reserved for the limited
partners under the applicable limited partnership act.
CREDIT AGREEMENT means the Amended and Restated Credit Agreement among
the Guarantor, the Agent, the Syndication Agent named therein and the Lenders
named therein, as amended, supplemented or restated from time to time.
CREDIT DOCUMENTS is defined in the Agreement.
CURRENT FINANCIALS means, at any time, the consolidated Financial
Statements of Guarantor and its Subsidiaries most recently delivered to Agent
under SECTIONS 7a(i) or 7a(ii), as the case may be.
DEBT means (without duplication), for any Person, (a) indebtedness of
such Person for borrowed money; (b) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) obligations of such
Person to pay the deferred purchase price of property or services; (d)
obligations of such Person as lessee under Capitalized Leases required to be
capitalized under GAAP; (e) reimbursement obligations in respect of bonds or
letters of credit; (f) obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) of such
Person to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness of others of the kinds referred to in
clauses (a) through (e) above; and (g) indebtedness of others of the kinds
referred to in clauses (a) through (f) secured by any Lien on or in respect of
any property of such Person whether or not assumed by such Person; provided,
however, that all trade accounts payable and accrued expenses incurred in the
ordinary course of business of such Person and not overdue shall be excluded
from the foregoing.
DEBTOR RELIEF LAWS means Title 11 of the United States Code and all
other applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar Laws affecting creditors' Rights in effect from time to
time.
DEFAULT is defined in SECTION 10.
DISTRIBUTION means, with respect to any shares of any capital stock or
other equity securities or other interests issued by a Person, (a) the
retirement, redemption, purchase or other acquisition for value of those
securities by such Person, (b) the declaration or payment of any dividend on or
with respect to those securities by such Person (except distributions in the
form of such securities), (c) any loan or advance by that Person to, or other
investment by that Person in, the holder of any of those securities, and (d) any
other payment by that Person with respect to those securities.
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DOLLARS and $ means lawful money of the United States of America.
EBITDAR means, as determined, on a rolling twelve month basis and in
respect of any Person the sum of (i) the Net Income of such Person, plus (ii)
the Interest Expense of such Person for such period as determined in accordance
with GAAP and as such item is reported on such Person's financial statements,
(iii) the income tax expense of such Person for such period, (iv) the amount
reported as the depreciation of the assets of such Person for such period,
computed in accordance with GAAP, and as such item is used in the computation of
such Person's Net Income for such period, (v) the amount reported as the
amortization of intangibles for such Person for such period, computed in
accordance with GAAP, and as such item is used in the computation of such
Person's Net Income for such period, and (vi) Rental Payments.
EFFECTIVE DATE means March 19, 2003.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by any Company.
ENVIRONMENTAL LAW means any Law that relates to the pollution or
protection of the environment or to Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and related rules and regulations.
FACILITIES means the credit facilities set forth in the Credit
Agreement.
FACILITIES LEASE has the meaning given that term in the Agreement.
FINANCIAL STATEMENTS of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash flow
prepared (a) according to GAAP, (b) except as stated in SECTION 1.3 of the
Credit Agreement, in comparative form to prior year-end figures or corresponding
periods of the preceding fiscal year, as applicable, and (c) on a consolidated
basis if that Person had any consolidated Subsidiaries during the applicable
period.
FOUR QUARTER PERIOD means a period of four full consecutive fiscal
quarter-annual periods, taken together as one accounting period.
FUNDED DEBT means, when determined, on a rolling twelve-month basis,
calculated using the month-end balance for each month on a consolidated basis
for the Companies in accordance with GAAP: (a) indebtedness of such Person for
borrowed money; (b) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, and (c) obligations of such Person as lessee
under Capitalized Leases; excluding notes generated in the ordinary course of
business payable within one year not to exceed $1,000,000 and trade payables and
accrued expenses.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time,
applied on a basis consistent with those used in preparation of the audited
consolidated financial statements referred to in SECTION 7a(i) (except for
changes to which Guarantor's Accountants concur).
GROUND LEASE has the meaning given that term in the Agreement.
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HAZARDOUS SUBSTANCE means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant or toxic or hazardous substance under any Environmental
Law.
INTEREST EXPENSE means, in respect of a Person, for any Four Quarter
Period, all interest paid or accrued and amortization of debt discount with
respect to all Funded Debt of such Person for such period (after giving effect
to the net cost associated with all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements, or other financial arrangements
designed to protect such Person against fluctuations in interest rates) and
after giving credit for interest income and construction period interest income.
JPMORGAN means JPMorgan Chase, formerly known as The Chase Manhattan
Bank.
LAWS means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions and
interpretations of any Tribunal, as in effect from time to time.
LENDER LIENS means Liens in favor of Lenders, or Agent on behalf of
Lenders, securing any of the Obligation (as that term is defined in the Credit
Agreement).
LESSEE means Monro Leasing, LLC, a Delaware limited liability company.
LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
LITIGATION means any action by or before any Tribunal.
LOAN PAPERS is defined in the Credit Agreement.
MAJORITY BANKS is defined in the Agreement.
MATERIAL ADVERSE EVENT means any circumstance or event that,
individually or collectively with other circumstances or events, reasonably is
expected to result in any (a) impairment of the ability of Borrower to perform
any of its payment or other material obligations under any Credit Document or of
the Guarantor to perform any of its payment or other material obligations under
this Guaranty, (b) impairment of the ability of Agent or Banks to enforce (i)
any of the material obligations of the Guarantor under this Guaranty or (ii) any
of their respective Rights under the Credit Documents, or (c) material and
adverse effect on the business, assets, property or condition (financial or
otherwise) of the Companies as a whole as represented to Banks in the Current
Financials.
MATERIAL AGREEMENT means, for any Person, any agreement (excluding
purchase orders for material or inventory in the ordinary course of business) to
which that Person is a party, by which that Person is bound, or to which any
assets of that Person may be subject, and that is not cancelable by that Person
upon thirty (30) or fewer days' notice without liability for further payment
other than nominal penalty, and that requires that Person to pay more than
$2,000,000 during any 12-month period.
MINIMUM TANGIBLE NET WORTH means a minimum Tangible Net Worth of
$115,000,000 on the Effective Date which minimum Tangible Net Worth shall
increase by the greater of $8,500,000 or 75% of Net Income on each succeeding
December 31 thereafter.
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MINORITY INTERESTS means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that are
not owned by the Guarantor and/or one or more of its Wholly-Owned Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in Preferred Stock.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company
(or any Person that, for purposes of Title IV of ERISA, is a member of
Guarantor's controlled group or is under common control with Guarantor within
the meaning of Section 414 of the Code) is making, or has made, or is accruing,
or has accrued, an obligation to make contributions.
NET INCOME means, in respect of a Person, the net income of such Person
computed in accordance with GAAP and as such item is reported from time to time
on such Person's statement of income and retained earnings (or similar
statement) (after deduction for payment of all taxes); provided however, certain
costs that in the past were capitalized in the cost of an acquisition, but will
be required to be expensed under Statement of Financial Accounting Standards
146, as well as other similar accounting requirements that are issued in the
future and require expense treatment of costs that are currently capitalized in
the cost of an acquisition, shall be included as if capitalized under prior
accounting guidelines.
OBLIGATION has the meaning set forth in paragraph 1 hereof.
OWNERSHIP GROUP means Peter J. Solomon and Donald Glickman and their
spouses or lineal descendants, or any estate of such parties or any trust of
which any of the foregoing are the exclusive beneficiaries.
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
PERMITTED DEBT means Debt described on the attached SCHEDULE 6n.
PERMITTED LIENS means Liens described on the attached SCHEDULE 6j.
PERSON means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian or similar official.
POTENTIAL DEFAULT means the occurrence of any event or the existence of
any circumstance that would, upon notice or lapse of time or both, become a
Default.
PREFERRED STOCK means the Guarantor's Class C Convertible Preferred
Stock, $1.50 par value per share.
QUALIFIED ISSUER means any commercial bank (a) which has capital and
surplus in excess of $100,000,000 and (b) the outstanding long term debt
securities of which are rated at least A-2 by Standard & Poors Ratings Group or
at least P-2 by Moody's Investors Service, Inc., or carry an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.
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RENTAL PAYMENTS means, as determined, on a rolling twelve-month basis
ending on the last day of the accounting period covered by the consolidated
financial statements of Guarantor and its Subsidiaries, and delivered pursuant
to this Guaranty, the dollar amount of the fixed payments which Guarantor or its
Subsidiaries are required to make by the terms of any lease to its landlords
during such period; (a) excluding, however (i) rentals under Capitalized Leases,
(ii) maintenance, repairs, taxes and other similar charges included in such
payments, (iii) amounts constituting step rent in accordance with GAAP, and (iv)
(without duplication) rentals under equipment leases whether operating leases or
Capitalized Leases, and (b) less (x) rental income and (y) amortization of
deferred gains on sale-leasebacks, such amortization not to exceed $1,000,000
for purposes hereto.
REPORTABLE EVENT means an event described in Section 4043 of ERISA
excluding any such event for which the notice requirement is waived under
applicable regulations of the PBGC.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys, and agents.
RESPONSIBLE OFFICER means the chairman, president, senior
vice-president, executive vice-president, chief executive officer, treasurer, or
chief financial officer of Guarantor.
RIGHTS means rights, remedies, powers, privileges, and benefits.
SOLVENT means, as to a Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
SUBSIDIARY of any Person means any entity of which at least 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person.
TANGIBLE ASSETS of any Person means, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion and other properly deductible valuation reserves) after
deducting the following: good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred assets (other than prepaid insurance and
deferred taxes), any write up in the book value of any asset resulting from a
revaluation thereof subsequent to December 31, 2002, and such other assets as
are properly classified as "intangible assets" in accordance with GAAP.
TANGIBLE NET WORTH means as of the date of any determination thereof,
the sum of the capital stock of all classes, paid-in-capital and surplus
accounts (net of treasury shares) plus (or minus in the case of a deficit) the
retained earnings of the Guarantor and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, after elimination of (i) Minority
Interests, less all assets which are not Tangible Assets, (ii) the effect, if
any, of the Guarantor's interest rate hedging agreements, as determined by the
Accountants, (iii) commencing on December 31, 1999, the effect of any repurchase
by the Guarantor of stock of the Guarantor, and (iv) intangible assets acquired
after January 31, 2003.
TAXES means, for any Person, taxes, assessments or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
TRIBUNAL means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel having
binding authority with respect to any party to be bound thereby pursuant to a
written agreement entered into by such party, or (c) central bank.
WHOLLY-OWNED SUBSIDIARY means a Subsidiary owned 100% by Guarantor.
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6. Representations, Warranties and Agreements of Guarantor. The
Guarantor represents and warrants to the Agent and the Banks that:
a. Corporate Existence, Good Standing, Authority and
Compliance. Each Company is duly organized, validly existing and in
good standing under the Laws of the jurisdiction in which it is
incorporated or organized as identified on the attached SCHEDULE 6a or
on the most recently amended SCHEDULE 6a. Except where failure is not a
Material Adverse Event, each Company (a) is duly qualified to transact
business and is in good standing as a foreign corporation or other
entity in each jurisdiction where the nature and extent of its business
and properties require due qualification and good standing (those
jurisdictions being identified on the attached SCHEDULE 6a or on the
most recently amended SCHEDULE 6a, (b) possesses all requisite
authority, permits and power to conduct its business as is now being,
or is contemplated by this Guaranty to be, conducted, and (c) is in
compliance with all applicable Laws, except in each case where the
failure to so qualify, to possess such authority, permits or power or
to comply with such Law would not cause a Material Adverse Event.
b. Subsidiaries. As of the date of this Guaranty, Guarantor
has no Subsidiaries except as disclosed on the attached SCHEDULE 6b or
on the most recently amended SCHEDULE 6b reflecting changes to the
schedule as a result of transactions permitted by this Guaranty. All of
the outstanding shares of capital stock (or similar voting interests)
of those Subsidiaries are duly authorized, validly issued, fully paid
and nonassessable and are owned of record and beneficially as set forth
thereon, free and clear of any Liens, restrictions, claims or Rights of
another Person, other than Permitted Liens, and are not subject to any
warrant, option or other acquisition Right of any Person or subject to
any transfer restriction except for restrictions imposed by securities
Laws and general corporate Laws.
c. Authorization and Contravention. The execution and delivery
by the Guarantor of this Guaranty or related document to which it is a
party and the performance by it of its obligations thereunder (a) are
within its corporate or limited liability company power, as the case
may be, (b) have been duly authorized by all necessary corporate or
limited liability company action, as the case may be, (c) require no
action by or filing with any Tribunal (other than any action or filing
that has been taken or made on or before the date of this Guaranty or
which would not cause a Material Adverse Event), (d) do not violate any
provision of its charter or bylaws, (e) do not violate any provision of
Law or order of any Tribunal applicable to it, other than violations
that individually or collectively are not a Material Adverse Event, (f)
do not violate any Material Agreements to which it is a party, other
than a violation which would not cause a Material Adverse Event, (g) do
not result in the creation or imposition of any Lien (other than the
Lender Liens) on any asset of the Companies, (h) are in furtherance of
the corporate purposes of the Guarantor and (i) do not require the
consent or approval of the shareholders of the Guarantor.
d. Binding Effect. Upon execution and delivery by all parties
thereto, this Guaranty will constitute a legal and binding obligation
of the Guarantor, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable Debtor Relief
Laws and general principles of equity.
e. Financial Statements; Fiscal Year. The Current Financials
were prepared in accordance with GAAP and present fairly, in all
material respects, the consolidated financial condition, results of
operations, and cash flows of the Companies as of, and for the portion
of the fiscal year ending on the date or dates thereof (subject only to
normal year-end adjustments). All material liabilities of the Companies
as of the date or dates of the Current Financials are reflected therein
or in the notes thereto. Except for transactions directly related to,
or specifically
Amended and Restated Residual Guaranty - Page 10
contemplated by, the Credit Documents or disclosed to the Agent, no
subsequent material adverse changes have occurred in the consolidated
financial condition of the Companies from that shown in the Current
Financials, nor has any Company incurred any subsequent material
liability. The fiscal year of each Company ends on the last Saturday in
March.
f. Litigation. Except as disclosed on the attached SCHEDULE 6f
or the most recently amended SCHEDULE 6f, no Company is subject to, or
aware of the threat of, any Litigation that is reasonably likely to be
determined adversely to any Company or, if so adversely determined, is
a Material Adverse Event. Except as permitted under SECTION 10d, no
outstanding and unpaid judgments against any Company exist.
g. Taxes. All Tax returns each Company required to be filed
have been filed (or extensions have been granted) before delinquency,
except for returns for which the failure to file is not a Material
Adverse Event, and all Taxes imposed upon each Company that are due and
payable have been paid before delinquency, other than Taxes for which
the criteria for Permitted Liens have been satisfied or for which
nonpayment is not a Material Adverse Event.
h. Environmental Matters. Except as disclosed on SCHEDULE 6h
or on the most recently amended SCHEDULE 6h, (a) no Company knows of
any environmental condition or circumstance materially adversely
affecting any Company's properties taken as a whole or operations, (b)
no Company has received any report of any Company's material violation
of any Environmental Law, (c) no Company knows that any Company is
under any obligation to remedy any material violation of any
Environmental Law, or (d) no facility of any Company is used for, or to
the knowledge of any Company has been used for, storage, treatment or
disposal of any Hazardous Substance, excluding the storage of Hazardous
Substances in amounts commonly and lawfully used in automotive repair
shops which have been handled in compliance with applicable
Environmental Law. Except as disclosed in SCHEDULE 6h, each Company has
taken prudent steps to determine that its properties and operations do
not violate any Environmental Law, other than violations that are not,
individually or in the aggregate, a Material Adverse Event, except
where such condition, circumstance, violation or non-compliance would
not reasonably be expected to have a monetary impact or cost to the
Guarantor equal to or in excess of five percent (5%) of the Guarantor's
pre-tax income during the preceding Four Quarter Period, such amount
not to exceed $1,000,000.
i. Employee Plans. Except where occurrence or existence is not
a Material Adverse Event, (a) no Employee Plan has incurred an
"accumulated funding deficiency" (as defined in section 302 of ERISA or
section 412 of the Code), (b) no Company has incurred liability under
ERISA to the PBGC in connection with any Employee Plan (other than
required insurance premiums, all of which have been paid), (c) no
Company has withdrawn in whole or in part from participation in a
Multiemployer Plan, (d) no Company has engaged in any "prohibited
transaction" (as defined in section 406 of ERISA or section 4975 of the
Code), and (e) no "Reportable Event" has occurred, excluding events for
which the notice requirement is waived under applicable PBGC
regulations.
j. Properties; Liens. Each Company has good and marketable
title to all its property reflected on the Current Financials (except
for property that is obsolete or that has been disposed in the ordinary
course of business or, after the date of this Guaranty, as otherwise
permitted by SECTION 8h or SECTION 8i). Except for Permitted Liens, no
Lien exists on any property of any Company, and the execution,
delivery, performance or observance of the Credit Documents will not
require or result in the creation of any Lien (other than Lender Liens)
on any Company's property.
Amended and Restated Residual Guaranty - Page 11
k. Location; Real Estate Interests. Each Company's chief
executive office is located at the address on the attached SCHEDULE 6k
or on the most recently amended SCHEDULE 6k. Each Company's books and
records concerning accounts and accounts receivable are located at its
chief executive office, and all of its inventory (other than inventory
on consignment, in transit or in the possession of a subcontractor of
any Company) is in its possession and, together with the Company's
other material assets, are located, until sold in the ordinary course
of business, at one or more of the locations on the attached SCHEDULE
6k or on the most recently amended SCHEDULE 6k. Except as described on
the attached SCHEDULE 6k, or on the most recently amended SCHEDULE 6k,
no Company has any ownership, leasehold, or other interest in real
estate.
l. Government Regulations. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, or the Public
Utility Holding Company Act of 1935, as amended.
m. Transactions with Affiliates. Except as disclosed on the
attached SCHEDULE 6m other than the most recently amended SCHEDULE 6m
(if the disclosures are approved by the Majority Banks), no Company is
a party to a material transaction with any of its Affiliates (excluding
other Companies), other than transactions in the ordinary course of
business and upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an
arm's-length transaction with a Person that was not its Affiliate. For
purposes of this SECTION 6m, a transaction is "material" if it requires
a Company to pay more than $1,000,000 during the term of the governing
agreement.
n. Debt. No Company is an obligor on any Funded Debt, other
than Permitted Debt.
o. Material Agreements. No Company is a party to any Material
Agreement other than the Credit Agreement and the Material Agreements
described on the attached SCHEDULE 6o. All described Material
Agreements are in full force and effect, and no default or potential
default exists on the part of any Company thereunder that is a Material
Adverse Event.
p. Insurance. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as
to workers' compensation or similar insurance, with an insurance fund
or by self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and businesses against
casualties and contingencies and of types and in amounts (and with
co-insurance and deductibles) as is customary in the case of similar
businesses.
q. Labor Matters. No actual or threatened strikes, labor
disputes, slow downs, walkouts, or other concerted interruptions of
operations by the employees of the Company that are a Material Adverse
Event exist. Hours worked by and payment made to employees of the
Companies have not been in violation of the Fair Labor Standards Act or
any other applicable Law dealing with labor matters, other than any
violations, individually or collectively, that are not a Material
Adverse Event. All payments due from any Company for employee health
and welfare insurance have been paid or accrued as a liability on its
books, other than any nonpayments that are not, individually or
collectively, a Material Adverse Event.
r. Solvency. As of the date of this Guaranty, the Guarantor
is, and after giving effect to this Guaranty, will be, Solvent.
Amended and Restated Residual Guaranty - Page 12
s. Trade Names. The Guarantor has not used or transacted
business under any other corporate or trade name in the five-year
period preceding the date of this Guaranty, except as disclosed on the
attached SCHEDULE 6r.
t. Intellectual Property. Each Company owns or has the right
to use all material licenses, patents, patent applications, copyrights,
service marks, trademarks, trademark applications and trade names
necessary to continue to conduct its businesses as presently conducted
by it and proposed to be conducted by it immediately after the date of
this Guaranty. Each Company is conducting its business without
infringement or claim of infringement of any license, patent,
copyright, service mark, trademark, trade name, trade secret or other
intellectual property right of others, other than any infringements or
claims that, if successfully asserted against or determined adversely
to a Company, would not, individually or collectively, constitute a
Material Adverse Event. To the knowledge of the Guarantor, no
infringement or claim of infringement by others of any material
license, patent, copyright, service mark, trademark, trade name, trade
secret or other intellectual property of any Company exists. Except as
disclosed on the attached SCHEDULE 6t, or on the most recently amended
SCHEDULE 6t, no Company has any ownership or other interest in any
United States or foreign trademark applications or registrations
thereof, patent applications or issued patents, or copyright
applications or registrations thereof.
u. Full Disclosure. All information previously furnished,
furnished on the date of this Guaranty, and furnished in the future, by
the Guarantor to Agent in connection with the Credit Documents (a) was,
is, and will be, true and accurate in all material respects or based on
reasonable estimates on the date the information is stated or
certified, and (b) did not, does not, and will not, fail to state any
fact the omission of which would otherwise make any such information
materially misleading.
7. Affirmative Covenants. So long as any Credit Document remains in
effect:
a. Items to be Furnished. Guarantor shall cause the following
to be furnished to Agent:
i. Promptly after preparation, and no later than one
hundred (100) days after the last day of each fiscal year of
Guarantor, Financial Statements showing the consolidated
financial condition and results of operations of the Companies
as of, and for the year ended on, that last day, accompanied
by:
(1) the unqualified opinion of Guarantor's
Accountants, based on an audit using generally
accepted auditing standards, that the Financial
Statements were prepared in accordance with GAAP and
present fairly, in all material respects, the
consolidated financial condition and results of
operations of the Companies,
(2) a certificate from the accounting firm
to the Banks indicating that during its audit it
obtained no knowledge of any Default or Potential
Default or, if it obtained knowledge, the nature and
period of existence thereof, and
(3) a Compliance Certificate with respect to
the Financial Statements.
ii. Promptly after preparation, and no later than
fifty (50) days after the last day of the first three fiscal
quarters of Guarantor, Financial Statements showing the
Amended and Restated Residual Guaranty - Page 13
consolidated financial condition and results of operations of
the Companies for the fiscal quarter and for the period from
the beginning of the current fiscal year to the last day of
the fiscal quarter, subject to ordinary year-end adjustments,
accompanied by a Compliance Certificate with respect to the
Financial Statements.
iii. Within thirty (30) days after the end of each
fiscal year of Guarantor (commencing with the fiscal year
ending March 31, 2003, in the case of financial projections,
and commencing with the fiscal year ending March 31, 2003, in
the case of financial budgets), financial projections for the
succeeding three (3) fiscal years and the financial budget for
the next succeeding fiscal year, accompanied by a certificate
executed by a Responsible Officer certifying that the
projections and budget were prepared by Guarantor based on
assumptions that, in light of the historical performance of
the Companies and their prospects for the future, are
reasonable as of the date prepared.
iv. Promptly after receipt, a copy of each interim or
special audit report and management letter issued by
Guarantor's Accountants with respect to any Company or its
financial records.
v. Notice, promptly after Guarantor knows or has
reason to know, of (i) the existence and status of any
Litigation that, if determined adversely to any Company, would
be a Material Adverse Event, (ii) any change in any material
fact or circumstance represented or warranted by any Company
in any Credit Document, (iii) the receipt by any Company of
notice of any violation or alleged violation of ERISA or any
Environmental Law (which individually or collectively with
other violations or allegations could constitute a Material
Adverse Event), or (iv) a Default or Potential Default,
specifying the nature thereof and what action the Companies
have taken, are taking, or propose to take.
vi. Promptly after filing, copies of all material
reports or filings filed by or on behalf of any Company with
any Tribunal.
vii. Promptly upon reasonable request by Agent or
Majority Banks (through Agent), information (not otherwise
required to be furnished under the Credit Documents)
respecting the business affairs, assets and liabilities of the
Companies and opinions, projections, certifications and
documents in addition to those mentioned in this Guaranty.
b. Books and Records. Guarantor will, and will cause each
other Company, to maintain books, records and accounts necessary to
prepare financial statements in accordance with GAAP.
c. Inspections. Upon reasonable request and reasonable prior
notice, Guarantor will, and will cause each Company to, allow Agent or
any Bank (or their Representatives) to inspect any of its properties,
to review reports, files and other records and to make and take away
copies, to conduct tests or investigations, and to discuss any of its
affairs, conditions and finances with its other creditors, directors,
officers, employees or representatives from time to time, during
reasonable business hours.
d. Taxes. Guarantor will, and will cause each Company to,
promptly pay when due any and all Taxes, other than Taxes which are
being contested in good faith by lawful proceedings diligently
conducted, against which reserve or other provision required by GAAP
has
Amended and Restated Residual Guaranty - Page 14
been made, and in respect of which levy and execution of any Lien have
been and continue to be stayed.
e. Payment of Obligations. Guarantor will, and will cause each
Company to, promptly pay (or renew and extend) all of its material
obligations as they become due (unless the obligations are being
contested in good faith by appropriate proceedings).
f. Expenses. Guarantor shall, or shall cause Lessee to,
promptly pay, within five (5) days following the receipt of an invoice
therefor setting forth the amount thereof (a) all costs, fees and
expenses paid or incurred by Agent and Banks in connection with the
arrangement, syndication and negotiation of the Facilities and the
negotiation, preparation, delivery and execution of the Credit
Documents and any related amendment, waiver or consent (including in
each case, without limitation, the reasonable fees and expenses of
Agent's and Banks' counsel) and (b) all costs, fees and expenses of
Agent, Banks and Arranger incurred by Agent, Arranger, or any Bank in
connection with the enforcement of the obligations of the Borrower
arising under the Credit Documents or of the Guarantor arising
hereunder or the exercise of any Rights arising under this Guaranty or
the Credit Documents (including, but not limited to, reasonable
attorneys' fees, expenses and costs paid or incurred in connection with
any workout or restructure and any action taken in connection with any
Debtor Relief Laws), all of which shall be a part of the Obligation and
shall bear interest, if not paid upon demand, at the Default Rate (as
defined in the Agreement) until repaid.
g. Maintenance of Existence, Assets, and Business. Except as
otherwise permitted by SECTION 8i, Guarantor will, and will cause each
Company to, (a) maintain its corporate or limited liability company, as
the case may be, existence and good standing in its state of
incorporation and its authority to transact business in all other
states where failure to maintain its authority to transact business is
a Material Adverse Event; (b) maintain all licenses, permits and
franchises necessary for its business where failure to do so is a
Material Adverse Event; (c) keep all of its assets that are useful in
and necessary to its business in good working order and condition
(ordinary wear and tear excepted) and make all necessary repairs and
replacements.
h. Insurance. Guarantor will, and will cause each Company to,
maintain with financially sound, responsible and reputable insurance
companies or associations (or, as to workers' compensation or similar
insurance, with an insurance fund or by self-insurance authorized by
the jurisdictions in which it operates) insurance concerning its
properties and businesses against casualties and contingencies and of
types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses similarly situated, which
insurance may provide for reasonable deductibility from coverage
thereof, Guarantor shall, and shall cause each Company to, deliver to
Agent certificates of insurance for each policy of insurance and
evidence of payment of all premiums which certificates of insurance
shall name Agent as an additional insured, secured party, mortgagee and
loss payee and which provide Agent with at least thirty (30) days
notice of cancellation or reduction in coverage. If any insurance
policy covered by an insurance certificate previously delivered to
Agent is altered or canceled, then Guarantor shall cause to be promptly
delivered to Agent a replacement certificate (in form and substance
satisfactory to the Majority Banks).
i. Preservation and Protection of Rights. Guarantor will, and
will cause each Company to, perform the acts and duly authorize,
execute, acknowledge, deliver, file and record any additional writings
as Agent or Majority Banks may reasonably deem necessary or appropriate
to protect the Rights of Agent and the Banks under this Guaranty or any
Credit Document.
Amended and Restated Residual Guaranty - Page 15
j. Environmental Laws. Guarantor will, and will cause each
Company to, (a) conduct its business so as to comply with all
applicable Environmental Laws and shall promptly take corrective action
to remedy any non-compliance with any Environmental Law, except where
failure to comply or take action would not have a monetary impact or
cost to the Guarantor equal to or in excess of five percent (5%) of the
Guarantor's pre-tax income during the preceding Four Quarter Period, or
would otherwise be a Material Adverse Event, such amount in no event to
exceed $1,000,000, and (b) establish and maintain a management system
designed to ensure compliance with applicable Environmental Laws and
minimize financial and other risks to each Company arising under
applicable Environmental Laws or as the result of environmentally
related injuries to Persons or property. Guarantor shall deliver
reasonable evidence of compliance with the foregoing covenant to Agent
within thirty (30) days after any request from Majority Banks.
k. Indemnification. GUARANTOR WILL, AND WILL CAUSE EACH
COMPANY TO, JOINTLY AND SEVERALLY, INDEMNIFY, PROTECT AND HOLD AGENT,
ARRANGER, AND THE BANKS AND THEIR RESPECTIVE PARENTS, SUBSIDIARIES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS (INCLUDING ALL OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS)(COLLECTIVELY, THE "INDEMNIFIED
PARTIES") HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
CLAIMS AND PROCEEDINGS AND ALL COSTS, EXPENSES (INCLUDING, WITHOUT
LIMITATION, ALL ATTORNEYS' FEES AND LEGAL EXPENSES WHETHER OR NOT SUIT
IS BROUGHT) AND DISBURSEMENTS OF ANY KIND OR NATURE (THE "INDEMNIFIED
LIABILITIES") THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR
ARISING OUT OF (A) THE DIRECT OR INDIRECT RESULT OF THE VIOLATION BY
ANY COMPANY OF ANY ENVIRONMENTAL LAW, (B) ANY COMPANY'S GENERATION,
MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE,
DISCHARGE, DISPOSAL OR PRESENCE IN CONNECTION WITH ITS PROPERTIES OF A
HAZARDOUS SUBSTANCE (INCLUDING, WITHOUT LIMITATION, (I) ALL DAMAGES OF
ANY USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE,
THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE, OR (II) THE COSTS
OF ANY ENVIRONMENTAL INVESTIGATION, MONITORING, REPAIR, CLEANUP OR
DETOXIFICATION AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE,
REMEDIAL OR OTHER PLANS), OR (C) THE CREDIT DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN. HOWEVER, ALTHOUGH EACH INDEMNIFIED
PARTY HAS THE RIGHT TO BE INDEMNIFIED UNDER THE CREDIT DOCUMENTS FOR
ITS OWN ORDINARY NEGLIGENCE, NO INDEMNIFIED PARTY HAS THE RIGHT TO BE
INDEMNIFIED UNDER THE CREDIT DOCUMENTS FOR ITS OWN FRAUD, GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. THE PROVISIONS OF AND UNDERTAKINGS
AND INDEMNIFICATION SET FORTH IN THIS PARAGRAPH SHALL SURVIVE THE
SATISFACTION AND PAYMENT OF THE LIABILITIES AND TERMINATION OF THIS
GUARANTY. GUARANTOR'S INDEMNITY OBLIGATIONS SHALL BE JOINT AND SEVERAL
WITH ANY SIMILAR SUCH INDEMNITY PROVIDED BY ANY AFFILIATE OF GUARANTOR
TO AGENT AND THE BANKS.
l. Further Assurances. The Guarantor shall, and shall cause
each Guarantor to, do such further things and execute such additional
documents (including, without limitation, the perfection of security
interest, in after-acquired property) as are reasonably requested by
Agent or the Banks.
m. Change of Control. Guarantor shall promptly, but in any
event within five (5) Business Days, give written notice to Agent upon
obtaining knowledge of the occurrence of a Change of Control.
Amended and Restated Residual Guaranty - Page 16
8. Negative Covenants. So long as any of the Credit Documents remains
in effect:
a. Payment of Obligations. Guarantor may not and may not
permit any Company to voluntarily prepay principal of, or interest on,
any Debt other than the Obligation, if a Default or Potential Default
exists.
b. Employee Plans. Except where a Material Adverse Event would
not result, Guarantor may not and may not permit any Company to permit
any of the events or circumstances described in SECTION 6i to exist or
occur.
c. Debt and Debt Instruments. Guarantor may not and may not
permit any Company to create, incur or suffer to exist any Funded Debt,
other than Permitted Debt, nor materially modify any Debt that is
subordinate to the Obligations or any document or instrument evidencing
such Debt.
d. Liens. Guarantor may not and may not permit any Company to
(a) create, incur or suffer or permit to be created or incurred or to
exist any Lien upon any of its assets other than Permitted Liens or (b)
enter into or permit to exist any arrangement or agreement that
directly or indirectly prohibits any Company from creating or incurring
any Lien on any of its assets, other than the Credit Documents, the
Loan Papers and leases that place a Lien prohibition on only the leased
property.
e. Transactions with Affiliates. Except as disclosed on the
attached SCHEDULE 6m., or on the most recently amended SCHEDULE 6m.,
(if the disclosures are approved by the Majority Banks), Guarantor may
not and may not permit any Company to enter into any material
transaction with any of its Affiliates (excluding other Companies),
other than transactions in the ordinary course of business and upon
fair and reasonable terms not materially less favorable than it could
obtain or could become entitled to in an arm's-length transaction with
a Person that was not its Affiliate. For purposes of this SECTION 8d.,
a transaction is "material" if it requires any Company to pay more than
$1,000,000 during the term of the agreement governing such transaction.
f. Compliance with Laws and Documents. Guarantor may not and
may not permit any Company to (a) violate the provisions of any Laws
applicable to it or of any Material Agreement to which it is a party if
that violation alone, or when aggregated with all other violations,
would be a Material Adverse Event, (b) violate the provisions of its
charter or bylaws, or (c) repeal, replace or amend any provision of its
charter or bylaws if that action would be a Material Adverse Event.
g. Loans, Advances and Investments. Except as permitted by
SECTION 8g. or SECTION 8i., Guarantor may not and may not permit any
Company to make any loan, advance, extension of credit or capital
contribution to, make any investment in, or purchase or commit to
purchase any stock or other securities or evidences of Debt of, or
interests in, any other Person; provided, however, that any Company may
make an advance to, investment in or purchase from another Person if
(1) (a) such action results in the acquisition of such Person by such
Company, (b) such action results in the Guarantor's direct or indirect
ownership of new stores, (c) the Person being acquired is in a line of
business which is substantially the same as or complimentary to the
Guarantor's principal line of business, (d) the Person being acquired
is located in either the United States or Canada east of the Rocky
Mountains, (e) the Person being acquired will not exceed twenty percent
(20%) growth in the total number of service bays owned or leased by
Guarantor immediately prior to the date of the proposed acquisition,
and (f) immediately after
Amended and Restated Residual Guaranty - Page 17
giving effect to such acquisition, the Companies shall be in compliance
with all covenants under SECTIONS 8 AND 9 and shall not be in Default
or Potential Default under this Guaranty, or (2) such action is used to
provide financial assistance to third parties that may be purchasing or
subleasing certain facilities owned or leased by Guarantor and the
cumulative principal amount of such financing is not greater than
$5,000,000; provided, further, that if any acquisition is in excess of
an aggregate cost to the Guarantor or such Company of more than
$5,000,000, the Guarantor shall provide to the Banks evidence of
compliance with all covenants in this Guaranty prior to the
consummation of such acquisition, or (3) such action is for investments
in Cash Equivalents.
h. Dividends and Distributions. Guarantor may not and may not
permit any Company to declare, make or pay any Distribution other than
Distributions declared, made or paid by (a) Guarantor wholly in the
form of its capital stock, or (b) any other Company to Guarantor may
not and may not permit any Company to enter into or permit to exist any
arrangement or agreement (other than this Guaranty, the Credit
Documents and the Loan Papers) that prohibits it from paying dividends
or other distributions to its shareholders.
i. Sale of Assets. Guarantor may not and may not permit any
Company to sell, assign, lease, transfer or otherwise dispose of any of
its assets, other than (a) sales of inventory in the ordinary course of
business, (b) the sale, discount or transfer of delinquent accounts
receivable in the ordinary course of business for purposes of
collection, (c) occasional sales, leases or other dispositions of
immaterial assets for consideration not less than fair market value,
(d) sales, leases or other dispositions of assets that are obsolete or
have negligible fair market value, (e) sales of equipment for a fair
and adequate consideration (but if replacement equipment is necessary
for the proper operation of the business of the seller, the seller must
promptly replace the sold equipment), (f) sale and leasebacks of real
property that do not in the aggregate exceed forty percent (40%) of the
Guarantor's capital expenditures in the prior fiscal year, (g) sale,
lease or other disposition by a Company of its assets to the Guarantor
(subject to the terms of the Credit Documents), (h) sale and leasebacks
of equipment that are acquired and sold within twelve (12) months of
acquisition of such equipment, (i) sales of assets having an aggregate
fair market value not exceeding $4,000,000 during any fiscal year of
Guarantor and sold for a price which is within a fair market value for
such assets, excluding from such aggregate fair market value under this
clause (i) the value of any asset purchased from the Brazos Facility on
the Effective Date and then sold within two (2) years from the
Effective Date for a price which is within the fair market value for
such assets, or (j) as disclosed on the attached SCHEDULE 8h.
j. Mergers and Dissolutions. Guarantor may not and may not
permit any Company to merge or consolidate with any other Person or
liquidate, wind up or dissolve (or suffer any liquidation or
dissolution); provided, however, if after giving effect thereto, no
Default shall have occurred and be continuing (a) any Person (other
than Lessee) may merge into the Guarantor in a transaction in which the
Guarantor is the surviving corporation, (b) any Person other than the
Guarantor may merge into any Subsidiary of the Guarantor (other than
Lessee) in a transaction in which the surviving entity is such
Subsidiary and (c) any Subsidiary of the Guarantor (other than Lessee)
may liquidate or dissolve so long as the Guarantor determines in good
faith that such liquidation or dissolution is in the best interest of
the Guarantor.
k. Assignment. Guarantor may not and may not permit any
Company to assign or transfer any of its Rights, duties, or obligations
under any of the Credit Documents.
l. Fiscal Year and Accounting Methods. Guarantor may not and
may not permit any Company to change its fiscal year or its method of
accounting (other than immaterial changes in methods or as required or
permitted by GAAP).
Amended and Restated Residual Guaranty - Page 18
m. New Businesses. Guarantor may not and may not permit any
Company to engage in any business except the businesses in which they
are presently engaged and any other reasonably related business.
n. Government Regulations. Guarantor may not and may not
permit any Company to conduct its business in a way that it becomes
regulated under the Investment Company Act of 1940, as amended, or the
Public Utility Holding Company Act of 1935, as amended.
o. Leases; Sale-Leasebacks. Except as otherwise provided
herein the Guarantor will not, and will not permit any Company to,
enter into any arrangement whereby the Guarantor or such Company shall
sell or transfer property owned by the Guarantor or such Company and
then or thereafter as Lessee rent or lease such property (any such
arrangement being herein referred to as a "sale-leaseback") other than
(i) a sale-leaseback solely with the Guarantor or a Wholly-Owned
Subsidiary, (ii) sale-leasebacks of equipment (and extensions and
renewals of such transaction) with Citizens Bank of Massachusetts,
(iii) the existing balances under the leases as of the Effective Date
pursuant to that certain $7,000,000.00 off-balance sheet transaction
with Fleet National Bank existing on September 15, 1998, or (iv) a
lease for temporary period, not in excess of three (3) months, to
permit the orderly relocation of operations carried on in or at a
facility subsequent to the sale thereof and prior to the surrender of
possession thereof, unless (x) such sale-leaseback transaction is
completed within one hundred eighty (180) days of the date of
acquisition of the property involved, and (y) such sale-leaseback is
entered into in compliance with any applicable limitations hereof and
(z) at the time of consummation thereof and after giving effect thereto
no Default or Potential Default exists.
p. Subsidiaries. Permit any Person other than a Company to
acquire, directly or indirectly, beneficially or of record, shares
representing more than twenty percent (20%) of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
any Subsidiary of the Guarantor.
9. Financial Covenants. So long as any Credit Document is in force and
effect, Guarantor covenants and agrees to comply with the following financial
covenants as calculated on the last day of each fiscal quarter period and
certified by Guarantor in the most recent Compliance Certificate delivered to
Agent, on behalf of the Banks, from time to time in accordance with the terms of
this Guaranty:
<Table>
<Caption>
Minimum EBITDAR less
CAPEX to Interest
Expense plus Rental
Payments
At Closing through Not less than 1.95 to
9/30/03 1.0
Through 12/31/03 Not less than 1.95 to
1.0
Through 12/31/04 Not less than 1.95 to
1.0
Through 12/31/05 Not less than 1.95 to
1.0
</Table>
Amended and Restated Residual Guaranty - Page 19
a. Adjusted Debt to EBITDAR.
i. Prior to the first Acquisition after January 31,
2003, the Adjusted Debt to EBITDAR shall not increase above
3.50 to 1.00;
ii. Following any Acquisition after January 31, 2003,
the Adjusted Debt to EBITDAR must not be greater than 4.00 to
1.00 prior to closing any additional Acquisitions; and
iii. At no time shall Adjusted Debt to EBITDAR exceed
4.25 to 1.00.
b. Minimum Tangible Net Worth. At all times, Borrower shall
meet or exceed the Minimum Tangible Net Worth for such period.
c. Recharacterization of Brazos Facility. The Guarantor and
the Agent on its behalf and on behalf of the Banks, agree to the extent
that accounting rules are changed to require the recording of assets
and debt for the Brazos Facility on the Guarantor's books (through the
consolidation of the synthetic lease counterparty or any other method
or in any other manner), the financial covenants set forth herein shall
be re-set at levels that are inclusive of the change in such covenants
resulting solely from the change in accounting treatment of the Brazos
Facility.
10. Events of Default.
a. Credit Documents. The failure of Borrower to pay any part
of the Liabilities within five (5) Business Days after it becomes due
and payable under the Credit Documents or the occurrence and
continuation of a Default under any Credit Document.
b. Covenants. The failure of Guarantor (and, if applicable,
any other Company) to punctually and properly perform, observe and
comply with:
i. Any covenant or agreement contained in SECTIONS
8a, 8h, 8i, 8j, 8k, or 8n;
ii. Any covenant or agreement contained in SECTIONS
7a.(i) and (ii), 7b, 7c, 7g, 8b, 8c, 8g, 8l, 8m, 8n, 8o, or
8p, and failure continues for ten (10) days after the first to
occur of (i) Guarantor knows of or (ii) Guarantor receives
notice from Agent of, such failure; or
iii. Any other covenant or agreement contained in any
Credit Document (other than the covenants to pay the
Liabilities and the covenants in CLAUSES (a) and (b)
preceding), and failure continues for thirty (30) days after
the first to occur of (i) Guarantor knows of or (ii) Guarantor
receives notice from Agent of, such failure.
c. Debtor Relief. A Company (a) is not Solvent, (b) fails to
pay its Debts generally as they become due, (c) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Relief Law, or
(d) becomes a party to or is made the subject of any proceeding
provided for by any Debtor Relief Law, other than as a creditor or
claimant, that could suspend or otherwise adversely affect the Rights
of Agent or any Bank granted in the Credit Documents (unless, if the
proceeding is involuntary, the applicable petition is dismissed within
sixty (60) days after its filing).
Amended and Restated Residual Guaranty - Page 20
d. Judgments and Attachments. Any Company fails, within sixty
(60) days after entry, to pay, bond or otherwise discharge any judgment
or order for the payment of money in excess of $1,000,000 (individually
or collectively) or any warrant of attachment, sequestration or similar
proceeding against any Company's assets having a value (individually or
collectively) of $1,000,000, which is neither (a) stayed on appeal nor
(b) diligently contested in good faith by appropriate proceedings and
adequate reserves have been set aside on its books in accordance with
GAAP.
e. Government Action. (a) A final non-appealable order is
issued by any Tribunal (including, but not limited to, the United
States Justice Department) seeking to cause a Company to divest a
significant portion of its assets under any antitrust, restraint of
trade, unfair competition, industry regulation or similar Laws, or (b)
any Tribunal condemns, seizes or otherwise appropriates, or takes
custody or control of all or any substantial portion of the assets of a
Company.
f. Misrepresentation. Any material representation or warranty
made by Guarantor contained herein or in any Credit Document at any
time proves to have been materially incorrect when made.
g. [Intentionally Omitted]
h. Material Adverse Event. A Material Adverse Event occurs.
i. Default Under Other Agreements. (a) Any Company fails to
pay when due (after lapse of any applicable grace period) any Debt in
excess (individually or collectively) of $1,000,000; (b) any default
exists under any agreement to which a Company is a party, the effect of
which is to cause, or to permit any Person (other than a Company) to
cause, an amount in excess (individually or collectively) of $1,000,000
to become due and payable by a Company before its stated maturity; (c)
any Debt in excess (individually or collectively) of $1,000,000 is
declared to be due and payable or required to be prepaid by a Company
before its stated maturity; or (d) a default occurs under the Credit
Agreement.
j. Validity and Enforceability of Credit Documents. Except in
accordance with its terms or as otherwise expressly permitted by this
Guaranty, any Credit Document at any time after its execution and
delivery ceases to be in full force and effect in any material respect
or is declared by a Tribunal to be null and void or its validity or
enforceability is contested in writing by Guarantor or Guarantor denies
in writing that it has any further liability or obligations under any
Credit Document.
k. Employee Benefit Plans. Any of the following exists with
respect to any Employee Plan of any Company: (a) a Reportable Event;
(b) disqualification or involuntary termination proceedings; (c)
voluntary termination proceedings are initiated while a funding
deficiency (as determined under section 412 of the Code) exists; (d)
withdrawal liability exists with respect to a Multiemployer Plan; (e) a
trustee is appointed by any federal district court or the PBGC to
administer an Employee Plan; (f) termination proceedings are initiated
by the PBGC; (g) failure by any Company to promptly notify Agent upon
its receipt of notice of any proceeding or other actions that may
result in termination of an Employee Plan if the proceeding or
termination would constitute a Material Adverse Event.
Amended and Restated Residual Guaranty - Page 21
11. Remedies Upon Default. Without limiting any other rights or
remedies of the Agent or the Banks provided for elsewhere in this Guaranty or
the Credit Documents, or by any requirement of Law, or in equity, or otherwise:
a. Upon the occurrence of any Default, the Banks may without
any notice to (except as expressly provided herein or in and during the
continuance of any Credit Document) or demand upon Guarantor, which are
expressly waived by Guarantor (except as to notices expressly provided
for herein or in any Credit Document), proceed to protect, exercise and
enforce the rights and remedies of the Banks against Guarantor
hereunder or under the Credit Documents and such other rights and
remedies as are provided by requirement of Law or equity.
b. The rights provided for in this Guaranty and the Credit
Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter
arising.
c. The order and manner in which the Banks' rights and
remedies upon the occurrence and during the continuance of a Default
are to be exercised shall be determined by the Agent or the Banks, as
the case may be, in its sole discretion, and all payments received by
the Agent shall be applied first to the costs and expenses (including
reasonable attorney's fees incurred by the Agent, Banks and Arranger)
of the Agent, Banks and Arranger, then to the payment of all accrued
and unpaid amounts due under any Credit Documents to and including the
date of such application. To the extent permitted by applicable law, no
application of payments will cure any Default, or prevent acceleration,
or continued acceleration, of amounts payable under the Credit
Documents, or prevent the exercise, or continued exercise, of rights or
remedies of the Agent and Banks hereunder or thereunder or under any
requirement of Law or in equity.
12. Payments. Each payment by the Guarantor to the Agent under this
Guaranty shall be made by transferring the amount thereof in immediately
available funds without set-off or counterclaim.
13. Costs, Expenses and Taxes. The Guarantor agrees to pay on demand
(except to the extent paid by Lessee): (i) all reasonable out-of-pocket costs
and expenses of the Agent in connection with the preparation, execution and
delivery of this Guaranty and any other documents to be delivered hereunder,
including the reasonable fees and out-of-pocket expenses of counsel for the
Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Guaranty, and any modification,
supplement or waiver of any of the terms of this Guaranty, (ii) all reasonable
costs and expenses of the Agent hereunder, including reasonable legal fees and
expenses of counsel to the Agent, in connection with a default or the
enforcement of this Guaranty and (iii) reasonable costs and expenses incurred in
connection with third party professional services reasonably required by the
Agent pursuant to the Credit Documents such as appraisers, environmental
consultants, accountants or similar Persons; provided that except during the
continuance of any Default hereunder, the Agent will first obtain the consent of
the Guarantor to such expense, which consent shall not be unreasonably withheld.
Without prejudice to the survival of any other obligations of the Guarantor
hereunder, the obligations of the Guarantor under this Section shall survive the
termination of this Guaranty.
14. Subrogation. The Guarantor shall not be subrogated to, in whole or
in part, and agrees not to exercise any rights of subrogation with respect to,
the rights of the Agent or any Bank or those of any subsequent assignee or
transferee of any of the Liabilities until all the Liabilities to the Agent and
the Banks and every such subsequent assignee or transferee shall have been paid
in full. The provisions of this SECTION 14 shall survive the termination of this
Guaranty and any satisfaction and discharge of Borrower by virtue of any
payment, court order, or law.
Amended and Restated Residual Guaranty - Page 22
15. No Waiver; Remedies. No failure on the part of the Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right, or
any abandonment or discontinuance of any steps to enforce such right, preclude
any other or further exercise thereof or the exercise of any other right. No
notice to or demand on the Guarantor in any case shall entitle the Guarantor to
any other or further notice or demand in similar or other circumstances. The
remedies herein are cumulative and not exclusive of any other remedies provided
by law, at equity or in any other agreement.
16. Survival of Representations and Warranties. All representations,
warranties and covenants contained herein or made in writing by the Guarantor in
connection herewith shall survive the execution and delivery of this Guaranty,
and the termination of the Credit Documents and will bind and inure to the
benefit of the respective successors and assigns of the parties hereto, whether
so expressed or not.
17. Confidentiality. The Agent and each Bank agree to keep any
information delivered or made available by the Guarantor to it which is clearly
indicated to be confidential information, confidential from anyone other than
Persons employed or retained by the Agent who are or are expected to become
engaged in evaluating, approving, structuring or administering the Credit
Documents; provided that nothing herein shall prevent the Agent or any Bank from
disclosing such information (a) to any Bank, (b) pursuant to subpoena or upon
the order of any court or administrative agency, (c) upon the request or demand
of any regulatory agency or authority having jurisdiction over Agent or any
Bank, (d) which has been publicly disclosed, (e) to the extent reasonably
required in connection with any litigation to which the Agent, any Bank, the
Borrower, the Guarantor or their respective Affiliates may be a party, (f) to
the extent reasonably required in connection with the exercise of any remedy
hereunder, (g) to any Bank's legal counsel and independent auditors. The Agent
will promptly notify the Guarantor of any information that it is required or
requested to deliver pursuant to clause (b) or (c) of this SECTION 17 and, if
the Guarantor is a party to any such litigation, CLAUSE (e) of this SECTION 17.
18. Separability. Should any clause, sentence, paragraph or Section of
this Guaranty be judicially declared to be invalid, unenforceable or void, such
decision will not have the effect of invalidating or voiding the remainder of
this Guaranty, and the parties hereto agree that the part or parts of this
Guaranty so held to be invalid, unenforceable or void will be deemed to have
been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
19. Execution in Counterparts. This Guaranty may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
20. Interpretation.
a. In this Guaranty, unless a clear contrary intention
appears:
i. the singular number includes the plural number and
vice versa;
ii. reference to any gender includes each other
gender;
iii. the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Guaranty as a
whole and not to any particular Article, Section or other
subdivision;
Amended and Restated Residual Guaranty - Page 23
iv. reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are not prohibited by this Guaranty,
and reference to a Person in a particular capacity excludes
such Person in any other capacity or individually; provided
that nothing in this clause is intended to authorize any
assignment not otherwise permitted by this Guaranty;
v. except as expressly provided to the contrary
herein, reference to any agreement, document or instrument
(including this Guaranty) means such agreement, document or
instrument as amended, supplemented or modified and in effect
from time to time in accordance with the terms thereof and, if
applicable, the terms hereof;
vi. unless the context indicates otherwise, reference
to any Article, Section, Schedule or Exhibit means such
Article or Section hereof or such Schedule or Exhibit hereto;
vii. the word "including" (and with correlative
meaning "include") means including, without limiting the
generality of any description preceding such term;
viii. with respect to the determination of any period
of time, except as expressly provided to the contrary, the
word "from" means "from and including" and the word "to" means
"to but excluding"; and
ix. reference to any law, rule or regulation means
such as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time.
b. The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
c. No provision of this Guaranty shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
21. Submission to Jurisdiction. The Guarantor, to the extent permitted
by applicable law, hereby agrees as follows:
a. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY MAY BE BROUGHT IN THE DISTRICT COURTS OF NEW YORK, NEW YORK OR
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT
TO ANY SUCH ACTION OR PROCEEDING. THE GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS
ADDRESS PROVIDED IN SECTION 24, SUCH SERVICE ---------- TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
Amended and Restated Residual Guaranty - Page 24
b. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS GUARANTY BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
22. Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND AGREES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
23. Parties. This Guaranty shall inure to the benefit of the Agent and
the Banks and their respective successors, assigns or transferees, and shall be
binding upon the Guarantor and its successors and assigns. The Guarantor may not
assign any of its duties under this Guaranty without the prior written consent
of the Agent. The Agent and the Banks may assign their respective rights and
benefits under this Guaranty to any Eligible Assignee.
24. Notices. All notices, consents, requests, approvals, demands and
other communications provided for herein shall be in writing (including telecopy
communications) and mailed, telecopied, sent by overnight courier or delivered:
a. If to the Guarantor:
Monro Muffler Brake, Inc.
200 Holleder Parkway
Rochester, New York 14615
Attention: Catherine D'Amico, Senior Vice President and
Chief Financial officer
telephone: (716) 647-6400
telecopy: (716) 627-0941
with a copy to
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Rob Kiesel
telephone: (212) 756-2008
telecopy: (212) 593-5955
Amended and Restated Residual Guaranty - Page 25
b. If to the Agent:
JPMorgan Chase
One Chase Square, Tower 9
Rochester, New York 14643
Attention: Hollie E. Calderon
telecopy: (716) 258-7604
telephone: (716) 258-5437
with a copy to
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Street, Suite 800
Houston, Texas 77002
Attention: Carol M. Burke
telecopy: (713) 308-5555
telephone: (713) 308-5561
c. or, in the case of any party hereto, such other address or
telecopy number as such party may hereafter specify for such purpose by
notice to the other parties given in accordance with the provisions of
this SECTION 24.
Other than the service of process set forth in SECTION 21(a) above, all
communications shall be effective three (3) Business Days after the date when
mailed by certified mail, return receipt requested postage prepaid to any party
at its address specified above, or upon receipt if telecopied to any party to
the telecopy number set forth above, or upon receipt if delivered personally to
any party at its address specified above.
25. Term. This Guaranty is not limited to any particular period of
time, but shall continue in full force and effect until all of the Liabilities
have been fully and finally paid or have been otherwise discharged by the Agent
and the Banks, and the Guarantor shall not be released from any obligation or
liability hereunder until such full payment or discharge shall have occurred.
26. Governing Law. This Guaranty and all other documents executed in
connection herewith shall be deemed to be contracts and agreements executed by
the Guarantor and Agent under the laws of the State of New York and of the
United States of America and for all purposes shall be construed in accordance
with, and governed by, the laws of said state and of the United States of
America.
27. Indemnity.
a. The Guarantor shall indemnify the Agent, each Bank and each
Affiliate thereof and their respective directors, officers, employees
and agents (each, an "INDEMNIFIED PERSON") from, and hold each of them
harmless against, any and all losses, liabilities, claims or damages
(including reasonable legal fees and expenses) to which any of them may
become subject, insofar as such losses, liabilities, claims or damages
arise out of or result from any actual or proposed use by the Borrower
of the proceeds of any extension of credit or any investigation,
litigation or other proceeding (including any threatened investigation
or proceeding) relating to the foregoing or any of the Credit
Documents, and the Guarantor shall assume the defense thereof,
including the employment of counsel at Guarantor's expense; provided
that Guarantor shall not have such right, to the extent that such
Indemnified Person shall deliver to Guarantor a written notice waiving
the benefits of the indemnification of such Indemnified Person provided
by this SECTION 27(a) in
Amended and Restated Residual Guaranty - Page 26
connection with such claim, action, proceeding or suit. Notwithstanding
the foregoing, if independent counsel to such Indemnified Person shall
conclude that there may be defenses available to such Indemnified
Person which may conflict with those available to Guarantor, Guarantor
shall not have the right to assume the defense of any such claim,
action, proceeding or suit on behalf of such Indemnified Person if such
Indemnified Person chooses to defend such claim, action, proceeding or
suit (with counsel reasonably acceptable to Guarantor), and all
reasonable costs, expenses and attorneys' fees incurred by the
Indemnified Person in defending such claim, action, proceeding or suit
shall be borne by Guarantor; provided however, if there is more than
one (1) Indemnified Person having a right to defend such claim, action,
proceeding or suit as aforesaid, the obligation of Guarantor to pay the
fees and expenses of such Indemnified Person shall be limited to one
(1) firm of attorneys. Any Indemnified Person shall also have the right
to employ separate counsel and to participate in its defense, but the
fees and expenses of such counsel shall be borne by such Indemnified
Person. Any decision by an Indemnified Person to employ its own counsel
(whether or not at Guarantor's expense) shall in no way affect any
rights of such Indemnified Person otherwise arising under this SECTION
27(a). In addition, Guarantor will not be liable for any settlement of
any claim, action, proceeding or suit unless Guarantor has consented
thereto in writing. The foregoing indemnity and agreement to hold
harmless shall not in any event apply to any losses, liabilities,
claims, damages or expenses incurred by reason of (i) the gross
negligence or willful misconduct of the Person to be indemnified, or
(ii) any Material default by the Agent or any Bank that is not cured
within any applicable cure period, if any, under any of the Credit
Documents.
b. Without limiting any provision of this Guaranty, it is the
express intention of the parties hereto that each Person to be
indemnified hereunder or thereunder shall be indemnified and held
harmless against any and all losses, liabilities, claims or damages:
(i) arising out of or resulting from the ordinary sole or contributory
negligence of such Person or (ii) imposed upon said party under any
theory or strict liability. Without prejudice to the survival of any
other obligations of the Guarantor hereunder and under the Credit
Documents, the obligations of the Guarantor under this Section shall
survive the termination of this Guaranty and the Credit Documents and
the payment of the Liabilities.
28. New Guaranty. In the event that (i) any Credit Document is rejected
by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding
involving the Borrower or the Lessee or (ii) any Credit Document or this
Guaranty is terminated as a result of any bankruptcy or insolvency proceeding
involving the Borrower or the Lessee and, if within sixty (60) days after such
rejection or termination, the Agent or its designee shall so request and shall
certify in writing to the Guarantor that it intends to perform the obligations
of the Borrower as and to the extent required under such Credit Document or this
Guaranty, as applicable, the Guarantor will, unless prohibited by bankruptcy or
other applicable law, execute and deliver to the Agent or such designee,
concurrently with the delivery by the Lessor or such designee of a new Lease
Document that contains the same conditions, agreements, terms, provisions and
limitations as such original Lease Document, a new Guaranty that shall contain
the same conditions, agreements, terms, provisions and limitations as such
original Guaranty (except for any requirements which have been fulfilled by the
Borrower and the Guarantor prior to such rejection or termination).
29. Certain Amendments to this Guaranty.
a. If at any time on or after the date hereof, (i) Guarantor
(either acting alone or together with any one or more Subsidiaries or
affiliates) enters into any Loan or other credit agreement in
replacement of the Agreement (a "REPLACEMENT CREDIT AGREEMENT") and
(ii) Chase (A) is, or at any time, becomes, a party to such Replacement
Credit Agreement or (B) has,
Amended and Restated Residual Guaranty - Page 27
or at any time acquires, a participation in any of the facilities
governed thereby, then, upon written notice by Guarantor to Agent,
Agent agrees to enter into an amendment or an amendment and restatement
of this Guaranty so that, to the extent elected by Guarantor, the
provisions hereof will be the same (to the extent permitted by
accounting rules for operating leases) as the provisions applicable to
Guarantor and set forth in the Replacement Credit Agreement or any
guarantee agreement executed by Guarantor pursuant thereto, such
amendment or amendment and restatement of this Guaranty to be effective
on the earlier to occur of (x) the effective date of the Replacement
Credit Agreement (without regard to when such amendment or amendment or
restatement is actually executed), and (y) the acquisition of a
participation in such Replacement Credit Agreement by Chase, and Agent
hereby agrees to cooperate fully with Guarantor in the preparation and
execution of the appropriate amendment or amendment and restatement, as
the case may be, and all other appropriate documentation, as Guarantor
may request and at Guarantor's expense to effect the foregoing; and
b. if at any time on or after the date hereof, (i) any waiver
of any provision under the Agreement or any Replacement Credit
Agreement, which provision or the substantial equivalent thereof (the
"CORRESPONDING PROVISION") is also included in this Guaranty, is
granted, and (ii) at such time or at any time thereafter, Chase (A) is
or becomes a party to the Agreement or any Replacement Credit Facility,
or (B) has or acquires a participation in any of the facilities
governed by the Agreement or any Replacement Credit Agreement, as the
case may be, then such Corresponding Provision, ipso facto upon the
granting of the waiver referred to in the immediately foregoing CLAUSE
(i) and without the necessity of any further action of any kind by
Guarantor or any other Person, shall be deemed, for all purposes, to
have been immediately thereupon waived by Agent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Amended and Restated Residual Guaranty - Page 28
Sincerely yours,
MONRO MUFFLER BRAKE, INC.,
a New York corporation
By: /s/ Catherine D'Amico
-----------------------------------------
Catherine D'Amico, Executive Vice President,
Chief Financial Officer, and Treasurer
ACCEPTED AND AGREED as of the date first above written:
JPMORGAN CHASE BANK (FORMERLY
KNOWN AS THE CHASE MANHATTAN BANK),
as Agent
By: /s/ Hollie E. Calderon
---------------------------------------
Hollie E. Calderon, Vice President
Amended and Restated Residual Guaranty - SIGNATURE PAGE
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ________, __
To: JPMorgan Chase, as Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Residual
Guaranty dated as of March 19, 2003 (as amended or restated from time to time,
with terms herein as therein defined, the "GUARANTY") by Monro Muffler Brake,
Inc., a New York corporation (the "GUARANTOR") in favor of JPMorgan Chase, as
Agent (the "AGENT").
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the ____________________ of Guarantor, and that, as such,
he/she is authorized to execute and deliver this Certificate to the Agent on
behalf of the Banks, and that:
The financial covenant analysis and information set forth on SCHEDULE 1
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
___________, ___.
MONRO MUFFLER BRAKE, INC.,
a New York corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Amended and Restated Residual Guaranty - Exhibit A
SCHEDULE 1
to the Compliance Certificate
($ in 000's)
(all calculations are for Guarantor and its Subsidiaries
on a consolidated basis)
Amended and Restated Residual Guaranty - Exhibit A
SCHEDULE 6a
JURISDICTIONS OF INCORPORATION AND BUSINESS
<Table>
<Caption>
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
- ------------------------- --------------- ---------------------
Monro Muffler Brake, Inc. NY
CT
DE
District of Columbia*
IN
MA
MD
MI
NH
NJ
NY** ***
NC
OH
PA
RI
SC
VA
VT
WV
Monro Service Corporation DE
NY** ***
Monro Leasing, LLC DE
NY** ***
Kimmel Automotive, Inc. MD MD
VA
</Table>
- ----------------------------
* The Company is qualified to do business in the District of Columbia but
does not presently conduct business in that jurisdiction. The Company
may choose to withdraw its qualification in that jurisdiction at a
future date.
** Indicates state in which principal place of business is located.
*** Indicates state in which chief executive office is located.
Amended and Restated Residual Guaranty - Schedule 6a
SCHEDULE 6b
CORPORATE STRUCTURE
<Table>
<Caption>
PARENT SUBSIDIARY % Ownership
- ------ ---------- -----------
Monro Muffler Brake, Inc. Monro Service Corporation 100%
Monro Muffler Brake, Inc. Monro Leasing, LLC 100%
Monro Muffler Brake, Inc. Kimmel Automotive, Inc. 100%
</Table>
Amended and Restated Residual Guaranty - Schedule 6b
SCHEDULE 6f
LITIGATION
NONE
Amended and Restated Residual Guaranty - Schedule 6f
SCHEDULE 6h
ENVIRONMENTAL MATTERS
NONE
Amended and Restated Residual Guaranty - Schedule 6h
SCHEDULE 6j
PERMITTED LIENS
1. Liens now or hereafter securing the Obligation.
2. Any Lien securing Debt permitted in ITEMS 3 OR 5 of SCHEDULE 6n
incurred for the purchase or capital lease of one or more fixed or
capital assets if such Lien encumbers only the assets so purchased or
leased.
3. Pledges or deposits made to secure payment of workers' compensation,
unemployment insurance, or other forms of governmental insurance or
benefits or to participate in any fund in connection with workers'
compensation, unemployment insurance, pensions, or other social
security programs.
4. Good-faith pledges or deposits made to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed money), or
leases, or to secure statutory obligations, surety or appeal bonds, or
indemnity, performance, or other similar bonds in the ordinary course
of business.
5. The following, if (a) no amounts are due and payable and no Lien has
been filed (or agreed to), (b) (i) the validity or amount secured
thereby is being contested in good faith by lawful proceedings
diligently conducted, (ii) reserve or other provision required by GAAP
has been made, and (iii) levy and execution thereon have been (and
continue to be) stayed or payment thereof is covered in full (subject
to the customary deductible) by insurance, or (c) with respect to
CLAUSES a., b. AND c. below, such Liens secure amounts which, in the
aggregate, do not exceed $1,000,000 at any time, and neither the value
nor use of the property in the Company's business in question are
materially affected:
a. Liens for Taxes;
b. Liens upon property, including any attachment of property or
other legal process prior to adjudication of a dispute on the
merits; and
c. Liens imposed by operation of law (including, without
limitation, Liens of mechanics, materialmen, warehousemen,
carriers and landlords and similar Liens).
6. Any interest or title of a lessor in assets being leased to a Company.
7. Liens arising from UCC-1 financing statements in respect of leases
permitted under the Credit Agreement.
8. Easements, zoning restrictions and rights-of-way on real property that
do not secure any obligations for borrowed money.
9. The Financing Statements listed on attached EXHIBIT A.
10. Liens in favor of Borrower securing obligations under the Amended and
Restated Guaranty dated as of March 19, 2003 of Guarantor in favor of
Lessor and Liens in favor of the Lenders as defined in and securing
obligations under this Guaranty.
Amended and Restated Residual Guaranty - Schedule 6j
EXHIBIT A
MONRO MUFFLER BRAKE, INC.
UCC FILINGS
<Table>
<Caption>
STATE FILING DATE FILE NUMBER SECURED PARTY
----- ----------- -------------- -------------
Connecticut 3/24/93 1002886 The Chase Manhattan Bank
Connecticut 4/12/94 1053129 The Chase Manhattan Bank
Connecticut 4/12/94 1053132 The Chase Manhattan Bank
Connecticut 10/2/95 1648425 The Chase Manhattan Bank
Connecticut 10/10/95 1653901 The Chase Manhattan Bank
Connecticut 10/23/95 1653394 The Chase Manhattan Bank
Connecticut 10/23/95 1653399 The Chase Manhattan Bank
Maryland 4/12/94 94-04-12-7705 The Chase Manhattan Bank
New Hampshire 08/21/98 518658 Fleet Capital Corporation, for itself and/or as Agent
New Hampshire 08/21/98 518659 General Electric Capital Corporation
New Hampshire 08/21/98 518660 Fleet Capital Corporation, for itself and/or as Agent
New Hampshire 01/21/99 529094 General Electric Capital Corporation
New Hampshire 04/26/99 535046 General Electric Capital Corporation
New Hampshire 05/03/99 535692 General Electric Capital Corporation
New Jersey 9/11/98 1859727 General Electric Capital Corporation
New Jersey 9/11/98 1859729 General Electric Capital Corporation
New Jersey 9/14/98 1859886 Fleet Capital Corporation
New Jersey 9/14/98 1859887 Fleet Capital Corporation
New Jersey 4/26/99 1903057 General Electric Capital Corporation
New Jersey 4/29/99 1905969 General Electric Capital Corporation
New York 1/29/93 020976 The Chase Manhattan Bank
New York 3/30/93 066592 Chase Equipment Leasing, Inc.
New York 4/8/93 075797 The Chase Manhattan Bank
</Table>
Amended and Restated Residual Guaranty - Schedule 6j
Exhibit "A"
<Table>
New York 4/9/93 076671 The Chase Manhattan Bank
New York 4/13/93 079233 The Chase Manhattan Bank
New York 8/17/98 177075 Fleet Capital Corporation
New York 8/17/98 177080 Fleet Capital Corporation
New York 8/28/98 186037 General Electric Capital Corporation
New York 8/28/98 186043 General Electric Capital Corporation
New York 10/14/98 218415 The Chase Manhattan Bank
New York 10/22/98 224837 Brazos Automotive Properties, L.P.
New York 4/1/02 074328 The Chase Manhattan Bank
New York 4/29/02 099082 JPMorgan Chase Bank
New York 4/29/02 099862 JPMorgan Chase Bank
New York 4/29/02 099869 JPMorgan Chase Bank
New York 5/6/02 104345 JPMorgan Chase Bank
New York 5/6/02 104624 JPMorgan Chase Bank
New York 5/20/02 117735 JPMorgan Chase Bank
New York 9/23/02 217224 The Chase Manhattan Bank
New York 9/23/02 217447 JPMorgan Chase Bank
New York 10/15/02 234149 The Chase Manhattan Bank
New York 10/15/02 234152 The Chase Manhattan Bank
New York 10/15/02 234157 JPMorgan Chase Bank
New York 10/15/02 234162 JPMorgan Chase Bank
New York 10/16/02 235134 JPMorgan Chase Bank
New York 11/22/02 200211222629100 The Chase Manhattan Bank
New York 11/22/02 200211222629237 The Chase Manhattan Bank
New York 11/22/02 200211222629263 The Chase Manhattan Bank
Ohio 1/29/99 AP0116702 General Electric Capital Corporation
Pennsylvania 10/14/87 15670762 The Chase Manhattan Bank
Pennsylvania 10/14/87 15670766 The Chase Manhattan Bank
Pennsylvania 10/14/87 15670770 The Chase Manhattan Bank
Pennsylvania 1/4/88 15871945 The Chase Manhattan Bank
Pennsylvania 8/31/92 21150244 The Chase Manhattan Bank
</Table>
Amended and Restated Residual Guaranty - Schedule 6j
Exhibit "A"
SCHEDULE 6k
CHIEF EXECUTIVE OFFICE, LOCATION OF MATERIAL ASSETS AND REAL ESTATE INTERESTS
CHIEF EXECUTIVE OFFICE OF EACH
COMPANY LISTED ON SCHEDULE 7.2: 200 Holleder Parkway
Rochester, New York 14615
MATERIAL ASSETS OF EACH
COMPANY LISTED ON SCHEDULE 7.2: 200 Holleder Parkway
Rochester, New York 14615
REAL ESTATE INTERESTS OF EACH
COMPANY LISTED ON SCHEDULE 7.2: 200 Holleder Parkway
Rochester, New York 14615
2350 Brighton - Henrietta Town Line Road
Rochester, New York 14263
<Table>
<Caption>
Shop Address City State County Zip
- ---- ------- ---- ----- ------ ----
6 791 W. Main Street Rochester NY Monroe 14611
13 5710 S. Transit Road Lockport NY Niagara 14094
19 602 W. State Street Olean NY Cattaraugus 14760
20 1010 Fairmount Avenue Jamestown NY Chautauqua 14701
32 4944 Commercial Drive Yorkville NY Oneida 13495
50 10380 Bennett Road Fredonia NY Chautauqua 14063
62 225 N. Genesee Street Utica NY Oneida 13502
64 1653 State Street at Eastern Blvd. Watertown NY Jefferson 13601
67 Route 8 & 62 Franklin Oil City Road Franklin PA Venango 16323
68 4460 Dewey Avenue Greece NY Monroe 14612
71 1971 Boston Road Wilbraham MA Hampden 01095
75 300 E. State Street (corner King St) Herkimer NY Herkimer 13350
76 Route 6 @ Betty Street Archibald PA Lackawanna 18403
78 2719-2723 Library Road Pittsburgh PA Allegheny 15234
80 245 Groton Avenue Cortland NY Cortland 13045
82 1816 Berlin Turnpike Wethersfield CT Hartford 06109
86 1753 Golden Mile Hwy (Rte 286) Monroeville PA Allegheny 15146
90 Route 93W Hazleton PA Luzerne 18201
92 656 Farmington Avenue Bristol CT Hartford 06010
</Table>
Amended and Restated Residual Guaranty - Schedule 6k
<Table>
100 1350 Main Street Buffalo NY Erie 14209
101 575 Erie Avenue N. Tonawanda NY Niagara 14120
102 169 E. Bridge Street Oswego NY Oswego 13126
103 257 S. Second Street Fulton NY Oswego 13069
120 2745 North Elm Road Warren OH Trumbull 44483
124 520-524 N. Main Street @ Hillcrest N. Canton OH Stark 44720
125 1205 Market Avenue at 12th Street Canton OH Stark 44714
137 110 Susquehanna Trail (Rte 11 & 15) Selinsgrove PA Snydea 17870
140 1700 W. Cumberland Street Lebanon PA Lebanon 17042
143 151 Quaker Road E. Aurora NY Erie 14052
146 1511 Route 9 Clifton Park NY Saratoga 12065
160 41 Lake Avenue Extension Danbury CT Fairfield 06811
162 5501 Allentown Blvd. Harrisburg PA Dauphin 17112
164 2344 Lincoln Way East Massilon OH Stark 44646
168 2008 S. Pleasant Valley Road Winchester VA Fredrick 22601
169 20972 Timberlake Road, Route 460 Lynchburg VA Campbell 24502
172 3201 Old Forest Road Lynchburg VA Campbell 24501
177 2781 Cleveland Road Wooster OH Wayne 44691
179 1861 W. Main Street Salem VA Roanoke 24153
183 554 Albany Post Road (Route 9) Hyde Park NY Dutchess 12538
184 360 Russell Street Hadley MA Hampshire 01035
185 1177 Orange Avenue (Route 1) West Haven CT New Haven 06516
186 2400 W. Main Street Waynesboro VA Augusta 22980
190 2870 Market Street Christiansburg VA Montgomery 24073
191 508 Winchester Street Keene NH Cheshire 03431
192 548 Talcottville Road Vernon CT Tolland 06066
193 2151 E. Market Street Harrisonburg VA Rockingham 22801
204 4731 Onondaga Blvd. Syracuse NY Onondaga 13219
205 1043 Bridgeport Avenue Milford CT Fairfield 06460
207 557 W. Main Street Norwich CT New London 06360
210 1201 Fairmont Avenue Fairmont WV Marlon 26554
213 901 Boston Post Road Old Saybrook CT Middlesex 06475
216 935 Clinton Avenue Defiance OH Defiance 43512
219 6 Cheshire Road Pittsfield MA Berkshire 01201
221 451 Main Street Monroe CT Fairfield 06468
226 94 Route 9 North Rhinebeck NY Dutchess 12572
229 191 Rohrerstown Road Lancaster PA Lancaster 17603
230 60 Freshwater Blvd. Enfield CT Hartford 06082
236 1870 Columbus Avenue (Route 62) Washington Ct. OH Fayette 43160
</Table>
Amended and Restated Residual Guaranty - Schedule 6k
<Table>
House
242 7426 Williamson Road Roanoke VA Roanoke 24019
246 114 Pearl Street Essex Junction VT Franklin 05452
247 1385 S. Main Street Bryan OH Williams 43506
248 56 Division Street Derby CT New Haven 06418
255 108 Merchant Place Cobleskill NY Schoharie 12043
261 116 River Street Saranac Lake NY Essex 12983
272 308 Lafayette Road Hampton NH Rockingham 03842
274 3057 Washington Pike Bridgeville PA Allegheny 15017
281 230 Hauenstein Road Huntington IN Huntington 46750
282 1111 East US Route 36 Urbana OH Champaign 43078
284 348 Daniel Webster Highway Merrimack NH Hillsborough 03054
288 1060 Wayne Avenue Chambersburg PA Franklin 17201
294 4868 Ledgewood Drive Medina OH Medina 44256
295 2009 Silas Deane Highway Rocky Hill CT Hartford 06067
298 845 Park Road (Worthington Park) Columbus OH Franklin 43085
299 2015 Cherry Street Noblesville IN Hamilton 46060
300 434 High Street Somersworth NH Strafford 03878
302 202 East McClarnon Drive Greenfield IN Hancock 46140
303 3707 Fishinger Blvd. (Mill Run) Columbus OH Franklin 43026
305 173 Dolson Avenue Middletown NY Orange 10940
306 5607 State Highway 12 Norwich NY Chenango 13815
308 200 New Hartford Road Winsted CT Litchfield 06098
309 33605 Solon Road Solon OH Cuyahoga 44139
311 909 Hanover Street Manchester NH Hillsborough 03103
312 850 Refugee Road Pickerington OH Fairfield 43147
313 107 Route 101A Amherst NH Hillsborough 03031
322 1409 South Main Street Mansfield PA Tioga 16933
323 64 North Plank Road Newburgh NY Orange 12550
324 4115 McKinley Parkway Blasdell NY Erie 14219
328 5454 Westchester Woods Blvd. Hilliard OH Franklin 43026
329 257 York Road Warminster PA Bucks 18974
331 5053 Highway 70 Morehead City NC Carteret 28557
333 7611 East 96th Street Indianapolis IN Hamilton 46240
334 963 West Main Street New Britian CT Hartford 06052
336 250 Lowell Road Hudson NH Hillsborough 03051
340 1105 Columbus Pike Delaware OH Delaware 43015
341 11334 Maple Ridge Road Medina NY Orleans 14103
344 1155 Memorial Blvd. Martinsville VA Henry 24112
</Table>
Amended and Restated Residual Guaranty - Schedule 6k
<Table>
345 2095 North Black Horse Pike Williamstown NJ Gloucester 08094
350 1194 Main Street Haverhill MA Essex 01830
354 311 Eliot Street Ashland MA Middlesex 01721
363 6580 Perimeter Loop Road Dublin OH Franklin 43017
369 133 W. Main Street Leroy NY Genesee 14482
371 616 Rt. 29 South Tunhannock PA Wyoming 18657
380 RR 6 Box 6172 Towanda PA Bradford 18848
383 4872 Transit Road Depew NY Erie 14043
384 501 West Central Avenue Titusville PA Crawford 16354
388 2444 State Route 414 Waterloo NY Seneca 13165
393 454 Route 9W Glenmont NY Albany 12077
395 5805 Rome-Taberg Road Rome NY Oneida 13440
397 57 Dutilh Road Cranberry, TWP PA Butler 16066
399 7275 Pittsford Palmyra Road Fairport NY Monroe 14450
459 2995 Ridge Road West W. Seneca NY Erie 14224
562 5525 Penn Avenue Pittsburgh PA Allegheny 15206
601 1390 North Hamilton Road Gahanna OH Franklin 43230
604 108 Tolley Drive Bridgeport WV Harrison 26330
609 4706 North Keystone Avenue Indianapolis IN Marion 46205
705 2707 W. Mercury Blvd. Hampton VA N/A 23666
734 7316 Ritchie Hwy. Glen Burnie MD Anne Arundel 21061
</Table>
Amended and Restated Residual Guaranty - Schedule 6k
SCHEDULE 6m
TRANSACTIONS WITH AFFILIATES
In December 1998, the Borrower loaned $523,000 to its newly-appointed Chief
Executive Officer (the "EXECUTIVE") to purchase 75,000 shares of the Borrower's
common stock at then fair market value. (This loan was made subsequent to the
Executive's purchase of 25,000 shares using his funds.) The loan, which bears an
interest rate of 5.5% per annum, matures on December 1, 2003, and requires five
equal annual installments of principal beginning on the first anniversary of the
loan. If the Executive is employed with the Borrower when a principal payment is
due, that installment will be forgiven by the Borrower. All interest is due on
the fifth anniversary of the loan, and shall also be forgiven if the Executive
is employed with the Borrower at that time. The loan is secured by the common
stock.
Certain (a) principal shareholders/directors of the Borrower, (b) partnerships
in which such persons have interests or (c) trusts of which members of their
families are beneficiaries are lessors of certain facilities to the Borrower.
Payments under such operating and capital leases amounted to $1,643,000,
$1,694,000 and $1,713,000 for the years ended March 2002, 2001, and 2000,
respectively. Amounts payable under these lease agreements totaled $34,000 and
$39,000, respectively, at March 30, 2002 and March 31, 2001.
No related party leases, other than renewals or modifications of leases on
existing stores, have been entered into since May 1989, and no new leases are
contemplated.
The Borrower has a management agreement with an investment banking firm
associated with a principal shareholder/director of the Borrower to provide
financial advice. The agreement provides for an annual fee of $160,000, plus
reimbursement of out-of-pocket expenses. During fiscal 2002, 2001 and 2000, the
Borrower incurred fees of $160,000 annually under this agreement. In addition,
this investment banking firm, from time to time, provides additional investment
banking services to the Borrower for customary fees.
Approximately half of the all payments made to the investment banking firm are
paid to another principal shareholder/director of the Borrower.
Amended and Restated Residual Guaranty - Schedule 6m
SCHEDULE 6n
PERMITTED DEBT
1 The Obligation under the Loan Papers.
2 Debt arising from endorsing negotiable instruments for collection in
the ordinary course of business.
3 Capitalized Leases.
4 Current liabilities incurred in the ordinary course of business.
5 Purchase money Debt limited to fixed or capital assets.
6 Trade payables that are for goods furnished or services rendered in the
ordinary course of business and that are payable in accordance with
customary trade terms.
7 Debt of the Borrower issued after the Closing Date and made subordinate
to the Obligation in terms reasonably satisfactory to the Agent;
provided however, that at the time of and after giving effect to the
issuance thereof, no Default or Potential Default shall have occurred
and be continuing and the proceeds will be applied to the Facilities to
the extent required under SECTION 3.2.
8 Debt listed below:
<Table>
<Caption>
AMOUNT INTEREST
3/1/03 % MATURITY
----------- ----------- --------
TERM NOTE R MORTLAND 82,684 0 Mar-08
CITY OF ROCHESTER 660,000 0 Oct-14
CHASE MTG HQ 1,877,833 LIBOR+100BP Sep-05
CHASE TERM LOAN-HQ 61,749 LIBOR+100BP Sep-03
</Table>
Amended and Restated Residual Guaranty - Schedule 6n
SCHEDULE 6o
MATERIAL AGREEMENTS
1. $7,000,000 Master Equipment Lease Agreement No. 32466 (with four leases
totaling approximately $568,288.43 outstanding) dated as of March 30,
1998, between Borrower and Fleet Capital Corporation, and the security
agreements entered into pursuant thereto, providing for an equipment
leasing facility where no further leases can be incurred after the
Effective Date.
2. $10,000,000 equipment lease evidenced by that certain Tax Lease Letter
dated December 19, 2002 from Citizens Leasing Corporation to Borrower
and that certain Off-Balance Sheet Lease Letter dated December 19, 2002
from Citizens Leasing Corporation to Borrower.
Amended and Restated Residual Guaranty - Schedule 6o
SCHEDULE 6t
INTELLECTUAL PROPERTY
<Table>
<Caption>
FILING REG.
TRADEMARK DATE SERIAL NO. DATE REG. NO. OWNER
- ------------------------- ------ ---------- -------- --------- -------------
SPEEDY BRAKE AND MUFFLER 11/18/97 2,113,696 Monro Muffler
Brake, Inc.
SPEEDY 6/3/97 2,066,069 Monro Muffler
Brake, Inc.
THE FUTURE OF UNDERCAR 6/2/92 1,690,526 Monro Muffler
CARE Brake, Inc.
SPEEDY MUFFLER KING 12/14/71 925,480 Monro Muffler
Brake, Inc.
SPEEDY MUFFLER KING 11/9/71 923,648 Monro Muffler
Brake, Inc.
TREAD QUARTERS 2/25/03 76/492,575 Monro Muffler
Brake, Inc.
</Table>
Amended and Restated Residual Guaranty - Schedule 6t
SCHEDULE 8h
EXISTING SALE\LEASEBACK PROPERTIES
NONE
Amended and Restated Residual Guaranty - Schedule 8h