aap10-31.htm


    Exhibit
      10.31

     

    GUARANTEE
      AGREEMENT dated as of December 4, 2007, between ADVANCE AUTO PARTS, INC., a
      Delaware corporation (“Holdings” and the “Guarantor”), and
      JPMORGAN CHASE BANK, N.A., a New York banking corporation (“JPMCB”), as
      administrative agent (in such capacity, the “Administration Agent”) for
      the Lenders (as defined in the Credit Agreement referred to below).

     

    Reference
      is made to the Term Loan Credit Agreement dated as of December 4, 2007 (as
      amended, supplemented or otherwise modified from time to time, the “Credit
      Agreement”), among Holdings, Advance Stores Company, Incorporated, a
      Virginia corporation (the “Borrower”), the lenders from time to time
      party thereto (the “Lenders”) and JPMCB, as administrative agent (in such
      capacity, the “Administrative Agent”) for the
      Lenders.  Capitalized terms used herein and not defined herein shall
      have the meanings assigned to such terms in the Credit Agreement.

     

    The
      Lenders have agreed to make Loans to the Borrower pursuant to, and upon the
      terms and subject to the conditions specified in, the Credit
      Agreement.  The Borrower has elected that the Guarantor guarantee the
      Obligations (as defined below) by entering into this Guarantee
      Agreement.  Holdings acknowledges that it will derive substantial
      benefit from the making of the Loans by the Lenders.  The obligations
      of the Lenders to make Loans are conditioned on, among other things, the
      execution and delivery by the Guarantor of a Guarantee Agreement in the form
      hereof.  As consideration therefor and in order to induce the Lenders
      to make Loans, the Guarantor is willing to execute this Guarantee
      Agreement.

     

    Accordingly,
      the parties hereto agree as follows:

     

    SECTION
      1.  Guarantee.  The
      Guarantor unconditionally guarantees, as a primary obligor and not merely as
      a
      surety, (a) the due and punctual payment of (i) the principal of and premium,
      if
      any, and interest (including interest accruing during the pendency of any
      bankruptcy, insolvency, receivership or other similar proceeding, regardless
      of
      whether allowed or allowable in such proceeding) on the Loans, when and as
      due,
      whether at maturity, by acceleration, upon one or more dates set for prepayment
      or otherwise and (ii) all other monetary obligations, including fees,
      costs, expenses and indemnities, whether primary, secondary, direct, contingent,
      fixed or otherwise (including monetary obligations incurred during the pendency
      of any bankruptcy, insolvency, receivership or other similar proceeding,
      regardless of whether allowed or allowable in such proceeding), of the Loan
      Parties to the Lenders under the Credit Agreement and the other Loan Documents
      and (b) the due and punctual performance of all covenants, agreements,
      obligations and liabilities of the Borrower under or pursuant to the Credit
      Agreement and the other Loan Documents (all the monetary obligations described
      in the preceding clauses (a) and (b) being collectively called the
“Obligations”).  The Guarantor further agrees that the
      Obligations may be extended or renewed, in whole or in part, without notice
      to
      or further assent from it, and that the security interest granted hereunder
      and
      the obligations of the Guarantor will survive any extension or renewal of any
      Obligation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2

     

    SECTION
      2.  Obligations
      Not Waived.  To the fullest extent permitted by applicable law,
      the Guarantor waives presentment to, demand of payment from and protest to
      the
      Borrower of any of the Obligations, and also waives notice of acceptance of
      its
      guarantee and notice of protest for nonpayment.  To the fullest extent
      permitted by applicable law, the obligations of the Guarantor hereunder shall
      not be affected by (a) the failure of the Administrative Agent or any other
      Lender to assert any claim or demand or to enforce or exercise any right or
      remedy against the Borrower or the Guarantor under the provisions of the Credit
      Agreement, any other Loan Document or otherwise or (b) any rescission,
      waiver, amendment or modification of, or any release from, any of the terms
      or
      provisions of this Guarantee Agreement, any other Loan Document, any Guarantee
      or any other agreement.

     

    SECTION
      3.  Guarantee
      of Payment.  The Guarantor further agrees that its guarantee
      constitutes a guarantee of payment when due and not of collection, and waives
      any right to require that any resort be had by the Administrative Agent or
      any
      other Lender to any of the security held for payment of the Obligations or
      to
      any balance of any deposit account or credit on the books of the Administrative
      Agent or any other Lender in favor of the Borrower or any other
      Person.

     

    SECTION
      4.  No
      Discharge or Diminishment of Guarantee.  The obligations of the
      Guarantor hereunder shall not be subject to any reduction, limitation,
      impairment or termination for any reason (other than the indefeasible payment
      in
      full in cash of the Obligations and inchoate indemnification and reimbursement
      obligations), including any claim of waiver, release, surrender, alteration
      or
      compromise of any of the Obligations, and shall not be subject to any defense
      or
      setoff, counterclaim, recoupment or termination whatsoever by reason of the
      invalidity, illegality or unenforceability of the Obligations or
      otherwise.  Without limiting the generality of the foregoing, the
      obligations of the Guarantor hereunder shall not be discharged or impaired
      or
      otherwise affected by the failure of the Administrative Agent or any other
      Lender to assert any claim or demand or to enforce any remedy under the Credit
      Agreement, any other Loan Document or any other agreement, by any waiver or
      modification of any provision of any thereof, by any default, failure or delay,
      wilful or otherwise, in the performance of the Obligations, or by any other
      act
      or omission that may or might in any manner or to any extent vary the risk
      of
      the Guarantor or that would otherwise operate as a discharge of the Guarantor
      as
      a matter of law or equity (other than the indefeasible payment in full in cash
      of all the Obligations and inchoate indemnification and reimbursement
      obligations).

     

    SECTION
      5.  Defenses
      of Borrower Waived.  To the fullest extent permitted by applicable
      law, the Guarantor waives any defense based on or arising out of any defense
      of
      the Borrower or the unenforceability of the Obligations or any part thereof
      from
      any cause, or the cessation from any cause of the liability of the Borrower,
      other than the final and indefeasible payment in full in cash of the Obligations
      and inchoate indemnification and reimbursement obligations.  The
      Administrative Agent and the other Lenders may, at their election, compromise
      or
      adjust any part of the Obligations, make any other accommodation with the
      Borrower or any other guarantor or exercise any other right or remedy available
      to them against the Borrower or any other guarantor, without affecting or
      impairing in any way the liability of the Guarantor hereunder except to the
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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    extent
      the Obligations have been fully, finally and indefeasibly paid in
      cash.  Pursuant to applicable law, the Guarantor waives any defense
      arising out of any such election even though such election operates, pursuant
      to
      applicable law, to impair or to extinguish any right of reimbursement or
      subrogation or other right or remedy of the Guarantor against the
      Borrower.

     

    SECTION
      6.  Agreement
      to Pay; Subordination.  In furtherance of the foregoing and not in
      limitation of any other right that the Administrative Agent or any other Lender
      has at law or in equity against the Guarantor by virtue hereof, upon the failure
      of the Borrower or any other Loan Party to pay any Obligation when and as the
      same shall become due, whether at maturity, by acceleration, after notice of
      prepayment or otherwise, the Guarantor hereby promises to and will forthwith
      pay, or cause to be paid, to or as directed by the Administrative Agent in
      cash
      the amount of such unpaid Obligations.  Upon payment by the Guarantor
      of any sums to or as directed by the Administrative Agent as provided above,
      all
      rights of the Guarantor against the Borrower arising as a result thereof by
      way
      of right of subrogation, contribution, reimbursement, indemnity or otherwise
      shall in all respects be subordinate and junior in right of payment to the
      prior
      indefeasible payment in full in cash of all the Obligations.  In
      addition, any indebtedness of any Loan Party now or hereafter owed to the
      Guarantor is hereby subordinated in right of payment to the prior payment in
      full of the Obligations.  If, at any time that a Default has occurred
      and is continuing, any amount shall be paid to the Guarantor on account of
      (a) such subrogation, contribution, reimbursement, indemnity or similar
      right or (b) any such indebtedness of any Loan Party, such amount shall be
      held in trust for the benefit of the Lenders and shall forthwith be paid to
      the
      Administrative Agent to be credited against the payment of the Obligations,
      whether matured or unmatured, in accordance with the terms of the Loan
      Documents.

     

    SECTION
      7.  Information.  The
      Guarantor assumes all responsibility for being and keeping itself informed
      of
      the Borrower’s financial condition and assets, and of all other circumstances
      bearing upon the risk of nonpayment of the Obligations and the nature, scope
      and
      extent of the risks that the Guarantor assumes and incurs hereunder, and agrees
      that none of the Administrative Agent or the other Lenders will have any duty
      to
      advise the Guarantor of information known to it or any of them regarding such
      circumstances or risks.

     

    SECTION
      8.  Representations
      and Warranties.  The Guarantor represents and warrants that all
      representations and warranties relating to it contained in the Credit Agreement
      are true and correct.

     

    SECTION
      9.  Termination.  The
      guarantee made hereunder (a) shall terminate when all the Obligations (other
      than inchoate indemnification and reimbursement obligations) have been
      indefeasibly paid in full and the Lenders have no further commitment to lend
      under the Credit Agreement and (b) shall continue to be effective or be
      reinstated, as the case may be, if at any time payment, or any part thereof,
      of
      any Obligation is rescinded or must otherwise be restored by any Lender or
      the
      Guarantor upon the bankruptcy or reorganization of the Borrower, the Guarantor
      or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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    SECTION
      10.  Binding
      Effect; Assignments.  Whenever in this Guarantee Agreement any of
      the parties hereto is referred to, such reference shall be deemed to include
      the
      successors and assigns of such party; and all covenants, promises and agreements
      by or on behalf of the Guarantor that are contained in this Guarantee Agreement
      shall bind and inure to the benefit of each party hereto and their respective
      successors and assigns.  This Guarantee Agreement shall become
      effective as to the Guarantor when a counterpart hereof executed on behalf
      of
      the Guarantor shall have been delivered to the Administrative Agent, and a
      counterpart hereof shall have been executed on behalf of the Administrative
      Agent, and thereafter shall be binding upon the Guarantor and the Administrative
      Agent and their respective successors and assigns, and shall inure to the
      benefit of the Guarantor, the Administrative Agent and the other Lenders, and
      their respective successors and assigns, except that the Guarantor shall not
      have the right to assign its rights or obligations hereunder or any interest
      herein (and any such attempted assignment shall be void).

     

    SECTION
      11.  Waivers;
      Amendment.  (a)  No failure or delay of the
      Administrative Agent in exercising any power or right hereunder shall operate
      as
      a waiver thereof, nor shall any single or partial exercise of any such right
      or
      power, or any abandonment or discontinuance of steps to enforce such a right
      or
      power, preclude any other or further exercise thereof or the exercise of any
      other right or power.  The rights and remedies of the Administrative
      Agent hereunder and of the other Lenders under the other Loan Documents are
      cumulative and are not exclusive of any rights or remedies that they would
      otherwise have.  No waiver of any provision of this Guarantee
      Agreement or consent to any departure by the Guarantor therefrom shall in any
      event be effective unless the same shall be permitted by paragraph (b)
      below, and then such waiver or consent shall be effective only in the specific
      instance and for the purpose for which given.  No notice 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.

     

    (b)  Neither
      this Guarantee Agreement nor any provision hereof may be waived, amended or
      modified except pursuant to a written agreement entered into between the
      Guarantor and the Administrative Agent, subject to any consent required in
      accordance with Section 9.02 of the Credit Agreement.

     

    SECTION
      12.  Governing
      Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     

    SECTION
      13.  Notices.  All
      communications and notices hereunder shall be in writing and given as provided
      in Section 9.01 of the Credit Agreement.

     

    SECTION
      14.  Survival
      of Agreement; Severability.  (a)  All covenants,
      agreements, representations and warranties made by the Guarantor herein and
      in
      the certificates or other instruments prepared or delivered in connection with
      or pursuant to this Guarantee Agreement or any other Loan Document shall be
      considered to have been relied upon by the Administrative Agent and the other
      Lenders and shall survive the making by the Lenders of the Loans regardless
      of
      any investigation made by the Lenders 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5

     

    or
      on
      their behalf, and shall continue in full force and effect until all the
      Obligations have been indefeasibly paid in full and the Lenders have no further
      commitment to lend under the Credit Agreement.

     

    (b)  In
      the
      event any one or more of the provisions contained in this Guarantee Agreement
      or
      in any other Loan Document should be held invalid, illegal or unenforceable
      in
      any respect, the validity, legality and enforceability of the remaining
      provisions contained herein and therein shall not in any way be affected or
      impaired thereby (it being understood that the invalidity of a particular
      provision in a particular jurisdiction shall not in and of itself affect the
      validity of such provision in any other jurisdiction).  The parties
      shall endeavor in good-faith negotiations to replace the invalid, illegal or
      unenforceable provisions with valid provisions the economic effect of which
      comes as close as possible to that of the invalid, illegal or unenforceable
      provisions.

     

    SECTION
      15.  Counterparts.  This
      Guarantee Agreement may be executed in counterparts, each of which shall
      constitute an original, but all of which when taken together shall constitute
      a
      single contract, and shall become effective as provided in
      Section 10.  Delivery of an executed signature page to this
      Guarantee Agreement by electronic transmission shall be as effective as delivery
      of a manually executed counterpart of this Guarantee Agreement.

     

    SECTION
      16.  Rules
      of Interpretation.  The rules of interpretation specified in
      Section 1.03 of the Credit Agreement shall be applicable to this Guarantee
      Agreement.

     

    SECTION
      17.  Jurisdiction;
      Consent to Service of Process.  (a)  The Guarantor
      hereby irrevocably and unconditionally submits, for itself and its property,
      to
      the nonexclusive jurisdiction of any New York State court or Federal court
      of
      the United States of America sitting in New York City, and any appellate court
      from any thereof, in any action or proceeding arising out of or relating to
      this
      Guarantee Agreement or the other Loan Documents, or for recognition or
      enforcement of any judgment, and each of the parties hereto hereby irrevocably
      and unconditionally agrees that all claims in respect of any such action or
      proceeding may be heard and determined in such New York State or, to the extent
      permitted by law, in such Federal court.  Each of the parties hereto
      agrees that a final judgment in any such action or proceeding shall be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any other manner provided by law.  Nothing in this Guarantee
      Agreement shall affect any right that the Administrative Agent or any other
      Lender may otherwise have to bring any action or proceeding relating to this
      Guarantee Agreement or the other Loan Documents against the Guarantor or its
      properties in the courts of any jurisdiction.

     

    (b)  The
      Guarantor hereby irrevocably and unconditionally waives, to the fullest extent
      it may legally and effectively do so, any objection that it may now or hereafter
      have to the laying of venue of any suit, action or proceeding arising out of
      or
      relating to this Guarantee Agreement or the other Loan Documents in any New
      York
      State or Federal court.  Each of the parties hereto hereby irrevocably
      waives, to the fullest 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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    extent
      permitted by law, the defense of an inconvenient forum to the maintenance of
      such action or proceeding in any such court.

     

    (c)  Each
      party to this Guarantee Agreement irrevocably consents to service of process
      in
      the manner provided for notices in Section 13.  Nothing in this
      Guarantee Agreement will affect the right of any party to this Guarantee
      Agreement to serve process in any other manner permitted by law.

     

    SECTION
      18.  Waiver
      of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
      IN
      RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
      CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO
      (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
      HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
      THE
      EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
      (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
      ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
      AMONG
      OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
      18.

     

    SECTION
      19.  Right
      of Setoff.  If an Event of Default shall have occurred and be
      continuing, each Lender is hereby authorized at any time and from time to time,
      to the fullest extent permitted by law, to set off and apply any and all
      deposits (general or special, time or demand, provisional or final) at any
      time
      held and other Indebtedness at any time owing by such Lender to or for the
      credit or the account of the Guarantor against any or all the obligations of
      the
      Guarantor now or hereafter existing under this Guarantee Agreement and the
      other
      Loan Documents held by such Lender, irrespective of whether or not such Lender
      shall have made any demand under this Guarantee Agreement or any other Loan
      Document and although such obligations may be unmatured.  The rights
      of each Lender under this Section 19 are in addition to other rights and
      remedies (including other rights of setoff) which such Lender may
      have.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Guarantee Agreement
      as of the day and year first above written.

     

     

     

     

    
      	 	
              ADVANCE
                AUTO PARTS, INC.,

              as
                Guarantor,

            
	 	 	By:	 
	 	 	 	/s/
              Michael O. Moore 
	 	 	 	Name: Michael
              O. Moore
	 	 	 	
              Title:
                Executive Vice President, Chief Financial
                Officer

            


    

    


    
       

      
        	 	
                
                  JPMORGAN
                    CHASE BANK, N.A.,

                  as
                    Administrative Agent,

                

              
	 	 	By:	 
	 	 	 	/s/
                Barry Bergman 
	 	 	 	Name: Barry
                Bergman
	 	 	 	Title:
                Managing Director