UAG GUARANTY OF NOTE
In order to induce Lynda Jane Hickman, as Executrix under the Will of
James Franklin Hickman, Jr., Deceased ("Hickman"), to sell one hundred percent
(100%) of the issued and outstanding shares of common stock of Hickman Nissan,
Inc., a Georgia corporation ("Hickman Nissan"), to UAG Atlanta III, Inc., a
Delaware corporation and a wholly-owned subsidiary of the undersigned ("UAG
Atlanta III"), the undersigned hereby irrevocably, unconditionally and
absolutely guarantees the due performance and punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all obligations of UAG
Atlanta III now or hereafter existing under that certain Promissory Note (the
"Note") dated July 12, 1996 payable to the order of Estate in the original
principal amount of Two Million Dollars ($2,000,000), together with any
renewals, modifications, consolidations and extensions thereof (all such
obligations being sometimes hereinafter referred to as the "Obligations").
The undersigned further agrees to pay Estate all expenses (including,
without limitation, court costs and reasonable attorneys' fees) paid or incurred
by Estate in endeavoring to collect the indebtedness evidence by the Note, and
in enforcing the obligations of UAG Atlanta III guaranteed hereby, or any
portion thereof, and in enforcing this Guaranty.
The undersigned hereby waives presentment, protest, demand for
payment, notice of acceptance of this guaranty, notice of dishonor, notice of
non-payment when due of the Obligations guaranteed hereby and notices of every
other kind and hereby consents to any and all forebearances and extensions of
time of payment of the Obligations and to any and all of the changes in the
terms, covenants and conditions thereof hereafter made or guaranteed.
Whenever possible each provision of this Guaranty shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or be invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
This Guaranty shall inure to the benefit of Estate and its successors,
successors-in-title and assigns, and shall be binding upon the undersigned and
its successors, successors-in-title and assigns. This instrument constitutes
the entire agreement as to the subject matter contemplated hereby.
The undersigned agrees that, if at anytime all or any part of any
payment theretofore applied by Estate for any of the Obligations is rescinded or
returned by estate for any reason (whatsoever, including, without limitation,
the insolvency,
bankruptcy, liquidation or reorganization of any party), such Obligation shall,
for the purposes of this Guaranty, be deemed to have continued in existence to
the extent of such payment, notwithstanding such application by Estate, and this
Guaranty shall continue to be effective or be reinstated, as the case may be, as
to such Obligation, all as though such application by Estate had not been made.
The undersigned acknowledges and agrees that no change in the nature of terms of
the Note (including any novations), whether by operation of law or otherwise,
shall discharge all or any part of the liabilities of the undersigned pursuant
to this Guaranty.
(a) any defense based upon the failure of Estate to give notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or the failure of Estate to give notice of any action of non-action
on the part of any other person whomsoever, in connection with any obligation
hereby guaranteed;(b) any defense based upon election of remedies by Estate
which destroys or otherwise impairs any subrogation rights of the undersigned to
proceed against UAG Atlanta III for reimbursement, or both;(c) any defense based
upon failure of Estate to commence any action against UAG Atlanta III; (d)any
duty on the part of Estate to disclose to the undersigned any facts that it may
now or hereafter know regarding UAG Atlanta III;(e) acceptance or notice of
acceptance of this Guaranty by Estate;(f) notice of presentment and demand for
payment of any indebtedness or performance of any of the obligations hereby
guaranteed;(g) protest and notice of dishonor or of default to the undersigned
or any other party with respect to the indebtedness or performance of
obligations hereby guaranteed;(h) any and all other notices whatsoever to which
the undersigned might otherwise be entitled;(i) any defense based upon lack of
due diligence by Estate in collection, protection or realization upon any
collateral securing the obligations; and (j) the provisions of Section 10-7-24
of the Official Code of Georgia Annotated.
This is a guaranty of payment and not of collection. The liability of
the undersigned under this Guaranty shall be direct and immediate and not
conditional or contingent upon the pursuit of any remedies against UAG Atlanta
III or any other person (any rights, under Georgia law or any other applicable
law to require Estate to bring an action against UAG Atlanta III, being
expressly waived hereby), nor against collateral, securities or liens available
to Estate, its successors, successors-in-title, endorsees or assigns. The
undersigned hereby waives any right to require that an action be brought against
UAG Atlanta III or any other person or to require that resort be had to any
security. In the event of the occurrence of a default or an event of default
under the Note, Estate shall have the right to enforce its rights, powers and
remedies thereunder or hereunder or under any other instrument now or hereafter
evidencing, securing or otherwise relating to the obligations, in any order, and
all
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rights, powers and remedies available to Estate in such event shall be non-
exclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity.
This Guaranty is assignable by Estate, and any assignment hereof or
any transfer or assignment of the Note shall operate to vest in any such
assignee all rights and powers herein conferred upon and granted to Estate.
This Guaranty shall in no event be impaired by any change which may arise by
reason of the dissolution or liquidation of UAG Atlanta III.
No amendment or waiver of any provision of this Guaranty nor consent
to any departure by Estate therefrom shall in any event be effective unless the
same shall be in writing and signed by Estate and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. This Guaranty shall be irrevocable by the undersigned until
all indebtedness guaranteed hereby has been completely paid.
This Guaranty is subject to United Auto Group, Inc.'s ("UAG") and UAG
Atlanta III's right of offset against the Note pursuant to the provisions of
SECTION 9.5 of that certain Stock Purchase Agreement dated as of June 7, 1996,
by and among the undersigned, UAG Atlanta III, Hickman Nissan, Inc. and the
Estate.
This instrument has been made and delivered in the State of Georgia
and shall be governed by the laws of the State of Georgia.
IN WITNESS WHEREOF the undersigned has executed, sealed and delivered
this instrument as of the 12th day of July, 1996.
UNITED AUTO GROUP, INC.,
a Delaware corporation
By: George Lowrance
----------------------------
Its: Executive Vice President
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[Corporate Seal]
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