CORPORATE GUARANTY
This GUARANTY is made and entered as of March 21, 1997 ( the "Effective
Date") from SMART CHOICE AUTOMOTIVE GROUP, INC., a FLORIDA corporation, (the
"Guarantor") to MANHEIM AUTOMOTIVE FINANCIAL SERVICES, INC. (together with such
party's successors and assigns, referred to as "Secured Party").
WITNESSETH:
In consideration of any loan or other financial accommodation
heretofore or hereafter at any time made or granted to Dealer (as defined
below), the Guarantor agrees as follows:
1. DEFINITIONS
a. "Dealer" shall mean the entity listed below, including any
subsidiaries or affiliated of such entity, whether now in
existence or hereinafter established or acquired:
FIRST CHOICE AUTO FINANCE, INC., FLORIDA corporation
b. "Indebtedness" shall mean any obligation or indebtedness of any
kind of Dealer to Secured Party, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent,
renewed or extended, or now or hereafter existing or become due.
2. GUARANTY
a. Guaranty Obligations. The Guarantor hereby unconditionally and
absolutely guarantees (i) the full and prompt payment when due,
whether by acceleration or otherwise, and at all times hereafter,
of all Indebtedness and (ii) the full and prompt performance of
all the terms, covenants, conditions and agreements related to
the Indebtedness, The Guarantor further agrees to pay all
expenses, including without limitation, attorneys' fees and court
costs, paid or incurred by Secured Party in endeavoring to
collect the Indebtedness, or any part thereof, and in enforcing
the Guaranty, plus interest on such amounts at the lesser of 12%
per annum or the maximum rate permitted by law. Interest on such
amounts paid or incurred by Secured Party shall be computed from
the date of payment made by Secured Party and shall be payable on
demand.
b. Absolute and Unconditional Nature of the Guaranty. The Guarantor
acknowledges that this Guaranty is a guaranty of payment and not
of collection, and that its obligations hereunder shall be
absolute, unconditional and unaffected by:
(i) the waiver of the performance or observance by Dealer of any
agreement, covenant, term or condition to be performed or
observed by Dealer;
(ii) the extension of time for the payment of any sums owing or
payable with respect to the Indebtedness or the time for
performance of any other obligation arising out of the
Indebtedness;
(iii)the modification, alteration or amendment of any obligation
arising out of the Indebtedness;
(iv) the failure, delay or omission by Secured Party to enforce ,
assert or exercise any right, power or remedy in connection
with the Indebtedness;
(v) the genuineness, validity, or enforceability of the
Indebtedness or any document related thereto;
(vi) the existence, value or condition of, or failure of Secured
Party to perfect its lien against, any security pledged in
connection with the Indebtedness;
(vii)the release of any security pledged in connection with
the Indebtedness or the release, modification, waiver
or failure to enforce any other guaranty, pledge or
security agreement;
(viii)the voluntary or involuntary liquidation,
dissolution, sale of all or substantially all of the
property, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement,
composition or readjustment or other similar
application or proceeding affecting Dealer or any
assets of Dealer; or
(ix) the release or discharge of Dealer from the performance
or observance of any agreements, covenants, terms or
conditions in connection with the Indebtedness by
operation of law or otherwise.
c. Continuing and Unlimited Nature of the Guaranty. The obligation of the
Guarantor under this Guaranty shall be continuing and shall cover all
Indebtedness existing as of the Effective Date of this Guaranty and
Indebtedness existing at the time of termination of this Guaranty.
This Guaranty shall be unlimited in amount and shall continue in
effect until the Guaranty is terminated pursuant to Section 3 hereof.
d. Waivers by Guarantor. The Guarantor hereby expressly waives: (i)
notice of the acceptance by Secured Party of this Guaranty; (ii)
notice of the existence or creation or non-payment of all or any of
the Indebtedness; (iii) presentment, demand, notice of dishonor,
protest, and all other notices whatsoever, and (iv) diligence in
collection or protection of or realization upon the Indebtedness, or
any part thereof, any obligation under this Guaranty or any security
for or guaranty or any of the foregoing.
e. Authorization. This Guaranty has been expressly authorized by
Guarantor's Board of Directors pursuant to a Board of Director's
resolution in form and substance satisfactory to Secured Party.
f. Enforcement. In no event shall Secured Party have any obligation to
proceed against Dealer, any other entity or any security pledged in
connection with the Indebtedness before seeking satisfaction from the
Guarantor. Secured Party may, at its option, proceed, prior or
subsequent to, or simultaneously with, the enforcement of its rights
hereunder, to exercise any right or remedy it may have against Dealer,
any other entity or any security pledged in connection with the
Indebtedness.
g. Reinstatement. The Guarantor agrees that if at any time all or any
part of any payment theretofore applied by Secured Party to any of the
Indebtedness is or must be rescinded or returned, by Secured Party for
any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Dealer), such Indebtedness shall, for
purposes of this Guaranty, to the extent that such payment is or must
be rescinded on returned, be deemed to have continued in existence,
not withstanding such application by Secured Party, and this Guaranty
shall continue to be effective or reinstated, as applicable, as to
such Indebtedness, all as though such application by Secured Party had
not been made.
3. TERMINATION
a. Payment of Indebtedness. This Guaranty shall be terminated upon:
(i) the payment by Dealer or the Guarantor, either jointly or
severally, of the aggregate amount of Indebtedness outstanding,
and (ii) the payment of all obligations by the Guarantor which may
be due to Secured Party under this Guaranty.
b. Revocation. This Guaranty may be revoked by the Guarantor upon
ninety (90) days' written notice to Secured Party, by certified
mail, to the address set forth below in Section 5 (c) or at such
other address as Secured party may from time to time specify. Such
revocation shall in no way terminate or otherwise affect: (i) any
obligations of the Guarantor existing on or prior to the effective
date of such revocation or (ii) any obligations of the Guarantor
arising after the effective date of such revocation with respect
to any Indebtedness incurred by Dealer to Secured Party on or
before the effective date of such revocation.
4. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default hereunder:
a. If Guarantor fails to make any payment hereunder and such failure
shall continue for five (5) days after written notice from
Secured Party;
b. If Guarantor fails to perform or observe any agreement, covenant,
term or condition contained in this Guaranty (other than the
monetary obligations described in Section 4(a) above) and such
failure shall continue for thirty (30) days after written notice
from Secured Party;
c. If Guarantor makes an assignment for the benefit of creditors or
fails to pay its debts as the same become due and payable;
d. If Guarantor petitions or applies to any tribunal for the
appointment of a trustee or receiver of the business, estate or
assets or of any substantial portion of the business, estate or
assets of Guarantor or commences any proceedings relating to
Guarantor under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law
of any jurisdiction, whether now or hereafter in effect;
e. If any such petition or application is filed or any such
proceedings are commenced against Guarantor and Guarantor by any
act indicates its approval thereof, consent thereto or
acquiescence therein, or any order is entered appointing any such
trustee or receiver, or declaring Guarantor bankrupt or
insolvent, or approving the petition in any such proceedings; or
f. Any suit or proceeding shall be filed against Dealer or
Guarantor, which if adversely determined could, substantially
impair the ability of the Guarantor or Dealer to perform any of
their obligations with respect to this Guaranty or the
Indebtedness, as determined by Secured Party in its sole and
absolute discretion.
If an Event of Default under this Guaranty shall have
occurred, in addition to pursuing any remedies which may be
available to Secured Party with respect to the Indebtedness,
Secured Party, at its option, may take whatever action at law
or in equity Secured Party may deem necessary, regardless of
whether Secured Party shall have exercised any of its rights
or remedies with respect to any of the Indebtedness, and
Secured Party may demand, at its option, that the Guarantor
pay forthwith the full amount which would be due and payable
hereunder as if all Indebtedness were then due and payable.
5. GENERAL
a. Entire Agreement. This Guaranty contains the entire and only
agreement between the Guarantor and Secured Party with respect to
the guaranty of Indebtedness and any representation, promise,
condition or understanding in connection therewith which is not
expressed in this Guaranty shall not be binding upon the Guarantor
or Secured Party. All prior understandings and agreements related
to the guaranty of the Indebtedness shall be superseded by this
Guaranty as of the Effective Date.
b. Application of Payments; Subrogation. Any amounts received by
Secured Party from any source on account of the Indebtedness may
be applied by it toward the payment of such of the Indebtedness,
and in such order of application, as Secured Party may from time
to time elect, Notwithstanding any payments made by or for the
account of the Guarantor, the Guarantor shall not be subrogated to
any rights of Secured Party until such time as this Guaranty has
been terminated in accordance with Section 3(a) above.
c. Notices. All notices to the Guarantor shall be forwarded by
express mail for overnight delivery to the address set forth below
the Guarantor's signature, or such other address as the Guarantor
may from time to time specify in writing to Secured Party. All
notices to Secured Party shall be forwarded by express mail for
overnight delivery ( except for the notice given pursuant to
Section 3(b) to the following address: Manheim Automotive
Financial Services, Inc., 1400 Lake Hearn Drive, N.E., Atlanta,
Georgia 30319, Attention: Leon L. Lyon, or such other address as
Secured Party may specify to the Guarantor in writing.
d. Governing Law; Severability. This Guaranty shall be governed by
the laws of the state of the principal place of business of
Dealer. Wherever possible, each provision of this Guaranty shall
be prohibited by or invalid under such law, the remaining
provisions of this Guaranty shall remain in full force and effect.
e. Successors and Assigns. All guaranties and agreements contained in
this Guaranty shall bind the successors and assigns of the
Guarantors.
f. References to Guarantor. Each reference to Guarantor herein shall
be deemed to include the officers, employees and agents of the
Guarantor and their respective successors and assigns.
g. Rights and Remedies of Secured Party. No delays on the part of
Secured Party in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any power or right hereunder or the failure to
exercise same in any instance preclude other or further exercise
of any other power or right, nor shall Secured Party be liable for
exercising or failing to exercise any such power or right. The
rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies which Secured Party may or will otherwise
have
h. Financial Statements. Upon Lender's request, Guarantor will
provide lender with Guarantor's audited financial statements as
certified by Guarantor's independent certified public accountant
or such other financial statements and information as Lender may
request from time to time.
i. Amendments. This Guaranty may not be modified or amended except by
a writing duly executed by the Guarantor. Any such modification or
amendment must be expressly consented to in writing by Secured
Party.
WHEREAS, this Guaranty has been executed by the Guarantor as of the
Effective Date.
Guarantor: SMART CHOICE AUTOMOTIVE GROUP, INC.
A FLORIDA corporation
By: /s/ JM Barnes