BANK OF AMERICA
Borrowers: Shannon Automotive, Ltd.
Guarantors: UAG Texas, Inc.
==============================================================================
(1) For valuable consideration, the undersigned ("Guarantors") jointly and
severally unconditionally guarantee and promise to pay to Bank of America
National Trust and Savings Association and any other subsidiary or
affiliate of BankAmerica Corporation which has extended or may hereafter
extend credit to Borrowers (each a "Bank"), or order, on demand, in
lawful money of the United States, any and all indebtedness of Shannon
Automotive, Ltd. ("Borrowers") to Bank. The word "indebtedness" is used
herein in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of Borrowers or any one or more of
them, heretofore, now, or hereafter made, incurred or created, whether
voluntary or involuntary and however arising, whether direct or acquired
by Bank by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and
whether Borrowers may be liable individually or jointly with others, or
whether recovery upon such indebtedness may be or hereafter become barred
by any statute of limitations, or whether such indebtedness may be or
hereafter become otherwise unenforceable.
(2) The liability of Guarantors under this Guaranty (exclusive of liability
under any other guaranties executed by Guarantors) shall not exceed at
any one time the total of (a) Twenty Million and No/100 Dollars
($20,000,000.00), for the principal amount of the indebtedness and (b)
all interest, fees, and other costs and expenses relating to or arising
out of the indebtedness or such part of the indebtedness as shall not
exceed the foregoing limitation. Bank may permit the indebtedness of
Borrowers to exceed Guarantors' liability, and may apply any amounts
received from any source, other than from Guarantors, to the unguaranteed
portion of Borrowers' indebtedness. This is a Continuing Guaranty
relating to any indebtedness, including that arising under successive
transactions which shall either continue the indebtedness or from time to
time renew it after it has been satisfied. Any payment by Guarantors
shall not reduce their maximum obligation hereunder, unless written
notice to that effect be actually received by Bank at or prior to the
time of such payment.
(3) The obligations hereunder are joint and several, and independent of the
obligations of Borrowers, and a separate action or actions may be brought
and prosecuted against Guarantors whether action is brought against
Borrowers or whether Borrowers be joined in any such action or actions
and regardless of whether a trustee's sale is held under any deed of
trust securing the indebtedness or regardless of whether a judicial
foreclosure sale is held if any deed of trust securing the indebtedness
is judicially foreclosed as a mortgage. Guarantors waive the benefit of
any statute of limitations affecting their liability hereunder.
(4) Guarantors authorize Bank, without notice or demand and without affecting
their liability hereunder, from time to time, either before or after
revocation hereof, to (a) renew, compromise, extend, accelerate or
otherwise change the time for payment of, or otherwise change the terms
of the indebtedness or any part thereof, including increase or decrease
of the rate of interest thereon; (b) receive and hold security for the
payment of this Guaranty or the indebtedness guaranteed, and exchange,
enforce, waive, release, fail to perfect, sell, or otherwise dispose of
any such security; (c) apply such security and direct the order or manner
of sale thereof as Bank in its discretion may determine, except to the
extent specifically prohibited by law; and (d) release or substitute any
one or more of the endorsers or guarantors.
(5) Guarantors waive any right to require Bank to (a) proceed against
Borrowers; (b) proceed against or exhaust any security held from
Borrowers; or (c) pursue any other remedy in Bank's power whatsoever.
Guarantors waive any defense arising by reason of any disability or other
defense of Borrowers, or the cessation from any cause whatsoever of the
liability of Borrowers, or any claim that Guarantors' obligations exceed
or are more burdensome than those of Borrowers. Guarantors waive any
benefit of the provisions of Arizona Revised Statutes Sections 12-1641
and 12-1642 et seq., and Rule 17(f) of the Arizona Rules of Civil
Procedures, which set forth certain rights and obligations among
guarantors, debtors and creditors, to the extent applicable. Guarantors
waive any right of subrogation, reimbursement, indemnification, and
contribution (contractual, statutory or otherwise), including without
limitation, any claim or right of subrogation under the Bankruptcy Code
(Title 11 of the U.S. Code) or any successor statute, arising from the
existence or performance of this Guaranty and Guarantors waive any right
to enforce any remedy which Bank now has or may hereafter have against
Borrowers, and waive any benefit of, and any right to participate in, any
security now or hereafter held by Bank. Bank may foreclose, either by
judicial foreclosure or by exercise of power of sale, any deed of trust
securing the indebtedness, and, even though the foreclosure may destroy
or diminish Guarantors' rights against Borrowers, Guarantors shall be
liable to Bank for any part of the indebtedness remaining unpaid after
the foreclosure. Guarantors waive any benefit of any statutory provision
limiting the right of Bank to recover a deficiency judgment, or to
otherwise proceed, against any person or entity obligated for payment
-2-
of the indebtedness, after any judicial foreclosure sale or trustee's
sale of any collateral securing the indebtedness including, without
limitation, the benefits, if any, of Arizona Revised Statutes Section
33-814, except to the extent otherwise required by law. Guarantors waive
any homestead or exemption rights. Guarantors waive all presentments,
demands for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, and notices of acceptance of this Guaranty
and of the existence, creation, or incurring of new or additional
indebtedness.
(6) Guarantors acknowledge and agree that they shall have the sole
responsibility for obtaining from Borrowers such information concerning
Borrowers' financial conditions or business operations as Guarantors may
require, and that Bank has no duty at any time to disclose to Guarantors
any information relating to the business operations or financial
conditions of Borrowers.
(7) In addition to Bank's rights of setoff, to secure all of Guarantors'
obligations hereunder, Guarantors assign and grant to Bank a security
interest in all moneys, securities and other property of Guarantors now
or hereafter in the possession of Bank, and all deposit accounts of
Guarantors maintained with Bank, and all proceeds thereof. Upon default
or breach of any of Guarantors' obligations to Bank, Bank may apply any
deposit account to reduce the indebtedness, and may foreclose any
collateral as provided in the Uniform Commercial Code and in any security
agreements between Bank and Guarantors.
(8) Any obligations of Borrowers to Guarantors, now or hereafter existing,
including but not limited to any obligations to Guarantors as subrogees
of Bank or resulting from Guarantors' performance under this Guaranty,
are hereby subordinated to the indebtedness. Such obligations of
Borrowers to Guarantors if Bank so requests shall be enforced and
performance received by Guarantors as trustees for Bank and the proceeds
thereof shall be paid over to Bank on account of the indebtedness of
Borrowers to Bank, but without reducing or affecting in any manner the
liability of Guarantors under the provisions of this Guaranty.
(9) This Guaranty may be revoked at any time by Guarantors in respect to
future transactions, unless there is a continuing consideration as to
such transactions which Guarantors do not renounce. Such revocation shall
be effective upon actual receipt by Bank at the address shown below of
written notice of revocation. Revocation shall not affect any of
Guarantors' obligations or Bank's rights with respect to transactions
which precede Bank's receipt of such notice, regardless of whether or not
the indebtedness related to such transactions, before or after
revocation, has been renewed, compromised, extended, accelerated, or
otherwise
-3-
changed as to any of its terms, including time for payment or increase or
decrease of the rate of interest thereon, and regardless of any other act
or omission of Bank authorized hereunder. Revocation by any one or more
of Guarantors shall not affect any obligations of any nonrevoking
Guarantors. If this Guaranty is revoked, returned, or canceled, and
subsequently any payment or transfer of any interest in property by
Borrowers to Bank is rescinded or must be returned by Bank to Borrowers,
this Guaranty shall be reinstated with respect to any such payment or
transfer, regardless of any such prior revocation, return, or
cancellation.
(10) Where any one or more of Borrowers are corporations or partnerships it is
not necessary for Bank to inquire into the powers of Borrowers or of the
officers, directors, partners or agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
(11) Bank may, without notice to Guarantors and without affecting Guarantors'
obligations hereunder, assign the indebtedness and this Guaranty, in
whole or in part. Guarantors agree that Bank may disclose to any
prospective purchaser and any purchaser of all or part of the
indebtedness any and all information in Bank's possession concerning
Guarantors, this Guaranty and any security for this Guaranty.
(12) Guarantors agree to pay all attorneys' fees, the allocated costs of
Bank's in-house counsel, and all other costs and expenses which may be
incurred by Bank in the enforcement of this Guaranty, including without
limitation all costs and necessary disbursements in any legal action or
arbitration proceeding.
(13) Any married person who signs this Guaranty hereby expressly agrees that
recourse may be had against such person's separate property and community
property to the extent permitted by law for all obligations under this
Guaranty.
(14) Where there is but a single Borrower, or where a single Guarantor
executes this Guaranty, then all words used herein in the plural shall be
deemed to have been used in the singular where the context and
construction so require; and when there is more than one Borrower named
herein, or when this Guaranty is executed by more than one Guarantor, the
words "Borrowers" and "Guarantors" respectively shall mean all and any
one or more of them.
(15) This Guaranty shall be governed by and construed according to the laws of
the State of Arizona, to the jurisdiction of which the parties hereto
submit.
-4-
(16) (a) Any controversy or claim between or among the parties, including but
not limited to those arising out of or relating to this Guaranty or any
agreements or instruments relating hereto or delivered in connection
herewith and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Guaranty, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrator(s) shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether
an issue is arbitrable shall be determined by the arbitrator(s). Judgment
upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(b) No provision of this paragraph shall limit the right of any party to
this Guaranty to exercise self-help remedies such as setoff, to foreclose
against or sell any real or personal property collateral or security, or
to obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or
other proceeding. The exercise of a remedy does not waive the right of
either party to resort to arbitration. At Bank's option, foreclosure
under a deed of trust or mortgage may be accomplished either by exercise
of power of sale under the deed of trust or mortgage or by judicial
foreclosure.
Executed this 6th day of March 1997.
----- -------
UAG TEXAS, INC.
By: /s/ Kevin J. Coffey
-----------------------------------
Kevin J. Coffey, President
BY: /s/ George G. Lowrance
-----------------------------------
George G. Lowrance, Vice President & Secretary
325 Park Avenue
New York, NY 10152
Tax I.D. No.:________
President & Secretary
Address for notices to Bank:
Bank of America National Trust and Savings Association
Dealer Corporate Services #55030
2727 South 48th Street
Tempe, Arizona 85282