EXHIBIT 10.31
(Form of Good News Guaranty Agreement)
GUARANTY AND SUBORDINATION AGREEMENT
THIS GUARANTY AND SUBORDINATION AGREEMENT (this "Agreement"), effective as
of the [10th] day of [January], 1998, by Good News Salisbury, Inc., a Maryland
corporation ("Guarantor"), in favor of Capital Automotive, L.P., a Delaware
limited partnership ("Landlord").
WITNESSETH:
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WHEREAS, Landlord has this day accepted the assignment of and has assumed a
lease (the "Lease") of certain Properties identified on Schedule A hereto
(individually a "Property" and collectively the "Properties") with Price Buick-
Pontiac, Inc. and The Price Organization ("Tenant"), this Agreement being
attached to the Lease;
WHEREAS, in a related transaction Landlord is leasing certain other real
estate to Guarantor; and
WHEREAS, Landlord has required, as a condition to its leasing certain other
real estate to Guarantor and to its accepting the assignment and assumption of
the Lease, Guarantor to be a guarantor of each and every obligation imposed upon
Tenant by the Lease.
NOW, THEREFORE, to induce Landlord to accept the assignment and to assume
the Lease and in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor, for itself, its successors and assigns, hereby
covenants and agrees for the benefit of Landlord, as follows:
1. Guaranty. Guarantor does hereby unconditionally and irrevocably
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guarantee to Landlord the full, complete and timely performance of all
obligations imposed on Tenant by the terms of the Lease, including, but not
limited to, the full, complete and timely payment of rent and all other sums due
by Tenant under the Lease, and the payment as required by the Lease of all
damages to Landlord which may result from Tenant's breach of any provision of
the Lease, including, but not limited to, those relating to damage to any
Property or the leased premises.
2. Guaranty of Payment and Performance. Guarantor acknowledges and agrees
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that this is a guaranty of payment and performance and not mere collection. The
liability of Guarantor under this Agreement shall be direct and immediate and
not conditional or contingent upon the pursuit of any remedies against Tenant or
any other person or entity. Guarantor waives any right to require that an action
be brought against Tenant or any other person or entity. In the event, on
account of the Bankruptcy Reform Act of 1978, as amended, or
any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may
be or become applicable, Tenant shall be relieved of the Lease or any debt,
obligation or liability as provided in the Lease, Guarantor shall nevertheless
be fully liable for the complete and timely performance of all obligations
imposed on Tenant by the Lease throughout the entire term of the Lease, all to
the same extent as if Guarantor had been the original tenant thereunder and the
Lease shall be deemed unaffected by any such relief granted to Tenant. In the
event of a default under the Lease which is not cured within any applicable
grace or cure period, Landlord shall have the right to enforce its rights,
powers and remedies thereunder or hereunder, in any order to the maximum extent
permitted by law, and all rights, powers and remedies provided thereunder or
hereunder or by law or in equity. If the obligations guaranteed hereby are
partially performed, paid or discharged by reason of the exercise of any of the
remedies available to Landlord, this Agreement shall nevertheless remain in full
force and effect, and Guarantor shall continue to be liable for all remaining
obligations guaranteed hereby, even though any rights which Guarantor may have
against Tenant may be destroyed or dismissed by the exercise of any such remedy.
3. Waivers by Guarantor. To the extent permitted by law, Guarantor hereby
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waives and agrees not to assert or take advantage of:
(a) Any right to require Landlord to proceed against Tenant or any
other person or entity or to proceed against or exhaust any security held by
Landlord at any time or to pursue any other remedy in Landlord's power or under
any other agreement before proceeding against Guarantor;
(b) Any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other person or persons or the failure of
Landlord to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person or persons:
(c) Any defense based upon an election of remedies by Landlord;
(d) Any right or claim or right to cause a marshaling of the assets
of Tenant or Guarantor;
(e) Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more provisions of the Lease;
(f) Any modification of the Lease or of any obligation of Tenant
thereunder by amendments to the Lease, by waivers granted by Landlord or by
operation of law or by action of any court, whether pursuant to the Bankruptcy
Reform Act of 1978, as amended, or any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, or otherwise, except for modifications of the
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Lease made by Landlord relating to an extension of the Lease term (including
permitting the Tenant to holdover), the increase of the Minimum Rent or an
assignment of the Lease.
4. Subordination. Guarantor and those parties signing below for the
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purpose of being bound by this Section 4 (collectively, "Section 4 Signers")
hereby unconditionally and irrevocably subordinate (i) all payments due or to
become due by Tenant to the Section 4 Signers, or any of them, by reason of any
and all debts or other obligations, including the obligation to pay salaries or
other compensation (collectively "Debt Payments") and (ii) the receipt of all
dividends or other distributions of any kind or nature (collectively,
"Distributions") to the payment of all sums due or to become due by Tenant to
Landlord under the Lease, including the payment of Rent and all damages due by
reason of Tenant's breach of the Lease; provided, however, that for so long as
there shall be no existing Event of Default under the Lease, after the payment
of each monthly installment of Rent, the Section 4 Signers shall be entitled to
receive Debt Payments due for such month.
5. Default by Tenant. Landlord agrees to delive to Guarantor any notice
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of default delivered to Tenant. Guarantor shall have the rights given to Tenant
under the Lease to cure such default. In the event Guarantor so cures,
Guarantor shall have the right to proceed against Tenant to collect for any such
cure. Landlord agrees that if it is entitled to trigger the commencement of
that certain lease by and between Capital Automotive, L.P. and Good News
Salisbury, Inc. dated January 10, 1998 referred to in Section 1.02 of such lease
as a standby lease, Landlord will take such actions as will permit Guarantor to
pursue Tenant for any liability that Tenant would have to Guarantor if Guarantor
were the landlord under the Lease, provided that no such actions to be
undertaken by Landlord will impair Landlord's rights under the Lease to pursue
such remedies against the Tenant as Landlord may have under the Lease.
6. Covenants of Landlord. Landlord hereby covenants that it shall not
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(a) increase the Minimum Rent under the Lease;
(b) agree to an extension of the Lease term (including permitting the
Tenant to holdover); or
(c) permit Tenant to assign its rights and obligations under the
Lease.
7. General Provisions.
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(a) Survival. This Agreement shall be deemed to be continuing in
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nature and shall remain in full force and effect and shall survive the exercise
of any remedy by Landlord under the Lease;
(b) No Subrogation; No Recourse Against Landlord. Notwithstanding the
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satisfaction by Guarantor of any liability hereunder, Guarantor's rights of
subrogation,
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contribution, reimbursement or indemnity, if any, or any right of recourse to or
with respect to the assets or property of Tenant, shall be subject and
subordinate to the rights of Landlord. Guarantor expressly agrees not to
exercise any and all rights of subrogation against Landlord.
(c) Entire Agreement; Amendment; Severability. This Agreement
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contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements, whether written or oral, between
the parties respecting such matters. Any amendments or modifications hereto, in
order to be effective, shall be in writing and executed by Landlord and
Guarantor. A determination that any provision of this Agreement is unenforceable
or invalid shall not affect the enforceability or validity of any other
provision, and any determination that the application of any provision of this
Agreement to any person or circumstance is illegal or unenforceable shall not
affect the enforceability or validity of such provision as it may apply to any
other persons or circumstances.
(d) Governing Law: Binding Effect; Waiver of Acceptance. This
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Agreement shall be governed by and construed in accordance with the laws of the
State of Virginia without regard to conflicts of laws principles thereof. This
Agreement shall bind Guarantor, it successors and assigns (but in the event of
an assignment, Guarantor shall not be relieved of its obligations hereunder),
and shall inure to the benefit of Landlord, its successors and assigns.
Guarantor hereby waives any acceptance of this Agreement by Landlord and this
Agreement shall immediately be binding upon Guarantor.
(e) Notice. All notices, demands, requests or other communications to
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be sent by one party to the other hereunder or required by law shall be in
writing and shall be deemed to have been validly given or served by delivery of
the same in person to the intended addressee, or certified mail or by depositing
the same with Federal Express or another reputable private courier service for
next business day delivery to the intended addressee at its address set forth in
the last section of this Agreement or at such other address as may be designated
by such party as herein provided. All notices, demands and requests shall be
effective upon such personal delivery, or one (1) business day after being
deposited with the private courier service, or two (2) business days after being
deposited in the United States mail as required above. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given as herein required shall be deemed to be receipt of
the notice, demand or request sent. By giving to the other party hereto at least
seven (7) days' prior written notice thereof in accordance with the provisions
hereof, each party shall have the right from time to time to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America.
(f) No Waiver; Time of Essence. The failure of either party to
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enforce any of the respective rights or remedies hereunder, or to promptly
enforce any such rights or remedies, shall not constitute a waiver thereof nor
give rise to any estoppel against such party nor excuse any of the parties
hereto from their respective obligations hereunder. Any waiver of such right or
remedy must be in writing and signed by the party to be bound and must expressly
state
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that such right or remedy has been or thereby is waived. This Agreement is
subject to enforcement at law or in equity, including actions for damages or
specific performance. Time is of the essence hereof.
(g) Captions for Convenience. The captions and headings of the
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section and paragraphs of this Agreement are for convenience of reference only
and shall not be construed in interpreting the provisions hereof.
(h) Attorney's Fees. In the event it is necessary for Landlord to
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retain the services of an attorney or any other consultants in order to enforce
this Agreement, or any portion hereof, Guarantor shall promptly pay to Landlord
any and all costs and expenses, including, without limitation, attorney's fees,
incurred by Landlord as a result thereof and such costs, fees and expenses shall
be included in the costs of the case to the extent the Landlord wins the issue
under contest.
(i) Successive Actions. Separate and successive actions may be
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brought hereunder to enforce any of the provisions hereof at any time and from
time to time. No action hereunder shall preclude any subsequent action, and
Guarantor hereby waives any covenants to the maximum extent permitted by law not
to assert any defense in the nature of splitting of causes of action or merger
of judgments.
(j) Reliance. Landlord would not enter into the Lease without this
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Agreement. Accordingly, Guarantor intentionally, irrevocably and unconditionally
enters into the covenants and agreements as set forth above and understand that,
in reliance upon and in consideration of such covenants and agreements, the
Lease has been made.
IN WITNESS WHEREOF, Guarantor has executed this Agreement under seal as of
the day and year first above written.
GUARANTOR:
ATTEST/WITNESS: GOOD NEWS SALISBURY, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxx X. Xxxxxx, Xx.
Name: Xxxxx X. Xxxxxx Name: Xxx X. Xxxxxx, Xx.
Title: President
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