SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 12, 1997
(Date of earliest event reported)
________________________________
ECKLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
________________________________
Florida 1-14082 59-1469577
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
5200 South Washington Avenue, Titusville, Florida 32780
(Address of principal executive offices, zip code)
(407) 269-9680
(Registrant's telephone number, including area code)
Item 5. Other Events.
On February 12, 1997, the Registrant closed the acquisition of the
assets of Wholesale Acquisitions, Inc. and Team Automobile Sales & Finance,
Inc., Florida corporations, and the stock acquisition of Liberty Finance
Company, a Florida corporation, all of which were owned and controlled by
R.C. Hill, and which companies operate seven used car lots in Florida and a
finance company (the "R.C. Hill Group"). The acquired businesses are being
operated as subsidiaries of the Registrant. On February 13 and February
14, 1997, First Choice Auto Finance, Inc., a subsudiary of Registrant,
closed on the acquisition of the assets of Palm Beach Finance and Mortgage
Company, a Florida corporation, and Two Two Five North Military Corp. d/b/a
Miracle Mile Motors, Inc., a Florida corporation. David Bumgardner is the
principal shareholder, officer and director of the acquired businesses.
Consolidated financial statements will be filed as an amendment to the
Company's Report on Form 8-K (filed in connection with Registrant's merger
with Smart Choice Holdings, Inc.) on or before April 14, 1997, which
financial statements will reflect the merger of the Registrant and Smart
Choice Holdings, Inc. which occurred on January 29, 1997, as well as the
acquisition of the R.C. Hill companies and the Bumgardner companies.
Item 7. Exhibits.
4.1 Registration Rights Agreements between Registrant and R.C.
Hill, II dated February 12, 1997.
10.1 Merger Agreement dated February 12, 1997 by and among the
Registrant, R.C. Acquisition, Inc., and R.C. Hill, II.
10.2 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Registrant in favor of Mr. & Mrs. R.C. Hill,
III.
10.3 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance as maker in favor of Nate
Weaver, Inc.
10.4 Consolidated, Amended and Restated Renewal Promissory Note
dated February 12, 1997 by Liberty Finance Company as maker
in favor of John Jeyaseelan.
10.5 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance Company as maker in favor of
Nate Weaver, Inc.
10.6 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance Company as maker in favor of
Nate Weaver, Inc.
10.7 Lease dated February 12, 1997 between R.C. Hill, II as
Landlord and First Choice Auto Finance, Inc. as tenant.
10.8 Employment Agreement dated February 12, 1997 between Liberty
Finance Company and Leonard Vihtelic.
10.9 Employment Agreement dated February 12, 1997 between Liberty
Finance Company and C. Lawrence Schuler.
10.10 Stock Purchase Agreement by and among the Registrant, First
Choice Auto Finance, Inc. and R.C. Hill, II dated February
12, 1997.
10.11 Promissory Note dated February 12, 1997 by Eckler
Industries, Inc. as maker in favor of R.C. Hill, II.
10.12 Corporate Guaranty by Registrant in favor of R.C. Hill, II.
10.13 Stock Pledge and Security Agreement dated February 12, 1997
by and among Registrant R.C. Hill, II and First Choice Auto
Finance, Inc.
10.14 Indemnification Agreement dated February 12, 1997 by
Registrant in favor of R.C. Hill, II.
10.15 Employment Agreement dated February 12, 1997 between First
Choice Auto Finance, Inc. and R.C. Hill, II.
10.16 Employment Agreement dated February 12, 1997 between First
Choice Auto Finance, Inc. and R.C. Hill, III.
10.17 Asset Purchase Agreement dated between First Choice Auto
Finance, Inc., Palm Beach Finance and Mortgage Company, Two
Two Five North Military Corp. d/b/a Miracle Mile Motors, and
David Bumgardner, and Amendment thereto.
10.18 Loan and Security Agreement between Two Two Five North
Military Corp. d/b/a Miracle Mile Motors and First Choice
Auto Finance, Inc.
10.19 Promissory Note in favor of Two Two Five North Military
Corporation and Palm Beach Finance and Mortgage Company.
10.20 9% Secured Convertible Note of First Choice Auto Finance,
Inc. in favor of Two Two Five North Military Corporation and
Palm Beach Finance and Mortgage Company.
10.21 9% Convertible Debenture of Smart Choice Holdings, Inc. in
favor of Palm Beach Finance and Mortgage Company.
10.22 Lease between David Bumgardner as Lessor and First Choice
Auto Finance, Inc. as Lessee.
10.23 Indemnification Agreement between First Choice Auto Finance,
Inc. and Two Two Five North Military Corp. and Palm Beach
Finance and Mortgage Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ECKLER INDUSTRIES, INC.
By: /S/ Gary R. Smith
February 26, 1997 Gary R. Smith, President
Exhibit Index
Index No. Item
4.1 Registration Rights Agreements between Registrant and R.C.
Hill, II dated February 12, 1997.
10.1 Merger Agreement dated February 12, 1997 by and among the
Registrant, R.C. Acquisition, Inc., and R.C. Hill, II.
10.2 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Registrant in favor of Mr. & Mrs. R.C. Hill,
III.
10.3 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance as maker in favor of Nate
Weaver, Inc.
10.4 Consolidated, Amended and Restated Renewal Promissory Note
dated February 12, 1997 by Liberty Finance Company as maker
in favor of John Jeyaseelan.
10.5 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance Company as maker in favor of
Nate Weaver, Inc.
10.6 Amended and Restated Renewal Promissory Note dated February
12, 1997 by Liberty Finance Company as maker in favor of
Nate Weaver, Inc.
10.7 Lease dated February 12, 1997 between R.C. Hill, II as
Landlord and First Choice Auto Finance, Inc. as tenant.
10.8 Employment Agreement dated February 12, 1997 between Liberty
Finance Company and Leonard Vihtelic.
10.9 Employment Agreement dated February 12, 1997 between Liberty
Finance Company and C. Lawrence Schuler.
10.10 Stock Purchase Agreement by and among the Registrant, First
Choice Auto Finance, Inc. and R.C. Hill, II dated February
12, 1997.
10.11 Promissory Note dated February 12, 1997 by Eckler
Industries, Inc. as maker in favor of R.C. Hill, II.
10.12 Corporate Guaranty by Registrant in favor of R.C. Hill, II.
10.13 Stock Pledge and Security Agreement dated February 12, 1997
by and among Registrant R.C. Hill, II and First Choice Auto
Finance, Inc.
10.14 Indemnification Agreement dated February 12, 1997 by
Registrant in favor of R.C. Hill, II.
10.15 Employment Agreement dated February 12, 1997 between First
Choice Auto Finance, Inc. and R.C. Hill, II.
10.16 Employment Agreement dated February 12, 1997 between First
Choice Auto Finance, Inc. and R.C. Hill, III.
10.17 Asset Purchase Agreement dated between First Choice Auto
Finance, Inc., Palm Beach Finance and Mortgage Company, Two
Two Five North Military Corp. d/b/a Miracle Mile Motors, and
David Bumgardner, and Amendment thereto.
10.18 Loan and Security Agreement between Two Two Five North
Military Corp. d/b/a Miracle Mile Motors and First Choice
Auto Finance, Inc.
10.19 Promissory Note in favor of Two Two Five North Military
Corporation and Palm Beach Finance and Mortgage Company.
10.20 9% Secured Convertible Note of First Choice Auto Finance,
Inc. in favor of Two Two Five North Military Corporation and
Palm Beach Finance and Mortgage Company.
10.21 9% Convertible Debenture of Smart Choice Holdings, Inc. in
favor of Palm Beach Finance and Mortgage Company.
10.22 Lease between David Bumgardner as Lessor and First Choice
Auto Finance, Inc. as Lessee.
10.23 Indemnification Agreement between First Choice Auto Finance,
Inc. and Two Two Five North Military Corp. and Palm Beach
Finance and Mortgage Company.
Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of February 11, 1997 by and among ECKLER INDUSTRIES, INC.,
a Florida corporation (the "Company"), and R.C. HILL, II (the "Holder").
R E C I T A L S:
WHEREAS, the Holder is the beneficial owner of 176,078 shares of the
Company's Class B $.01 par value Common Stock ("Common Stock"); and
WHEREAS, the Holder acquired the Common Stock as part of the sale of
his company, Liberty Finance Company, to a subsidiary of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Holder agree as follows:
1. Certain Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Registrable Stock" shall mean 176,078 shares of Common Stock
beneficially owned by the Holder.
"Secondary Offering" shall mean a public offering subsequent to
the date hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and underwriter expense reimbursement allowances applicable to
the sale of Registrable Stock, as well as all fees and expenses of counsel
for the Holder.
2. "Piggyback" Registration.
(a) If the Company at any time after the date of this Agreement
proposes to register any of its securities under the Securities Act (other
than in connection with (i) a merger or pursuant to Form S-8 or other
comparable form not available for registering the Registrable Stock for
sale to the public), or (ii) a registration statement filed on the exercise
of demand registration rights held by a holder of securities of the
Company, the Company shall request that the managing underwriter (if any)
of such Secondary Offering include the Registrable Stock in the
registration statement for the public offering in such registration. If
such managing underwriter agrees to include the Registrable Stock in the
registration statement relating to the Secondary Offering, the Company
shall at such time give prompt written notice to the Holder of its
intention to effect such registration and of the Holder's right under such
proposed registration, and upon the request of the Holder delivered to the
Company within twenty (20) days after giving such notice (which request
shall specify the Registrable Securities intended to be disposed of by the
Holder), the Company shall include such Registrable Securities held by the
Holder requested to be included in such registration; provided, however,
that:
(i) If, at any time after giving such written notice of the
Company's intention to register any of the Holder's Registrable Stock and
prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any
reason not to file the registration statement wherein the Registrable Stock
would be registered or to delay the registration of such Registrable Stock,
at its sole election, the Company may give written notice of such
determination to the Holder and thereupon shall be relieved of its
obligation to register any Registrable Stock issued or issuable in
connection with such registration (but not from its obligation to pay
registration expenses in connection therewith or to register the
Registrable Stock in a subsequent registration); and in the case of a
determination to delay a registration, the Company shall thereupon be
permitted to delay registering any Registrable Stock for the same period as
the delay in respect of securities being registered for the Company's own
account.
(ii) If the managing underwriter in such Secondary Offering
shall advise the Company that it declines to include a portion or all of
the Common Stock which holders of Common Stock with piggyback registration
rights have requested be included in such Secondary Offering, then
registration of all or a portion of the Common Stock of all such holders
shall be excluded from such registration, as appropriate, on a proportional
basis determined by comparing the number of shares of Common Stock which
each such holder requested be registered against the total of all shares of
Common Stock that all such holders requested be registered. In such event
the Company shall give the Holder prompt written notice of the number of
shares of Registrable Stock excluded from such registration at the request
of the managing underwriter. No such exclusion shall reduce the securities
being offered by the Company for its own account to be included in such
registration statement.
(iii) The Company shall not be required to include any
of the Holder's Registrable Stock in the registration statement relating to
an underwritten offering of the Company's securities unless the Holder
accepts the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it (provided such terms are usual and
customary for selling stockholders) and the Holder agrees to execute and/or
deliver such documents in connection with such registration as the Company
or the managing underwriter may reasonably request.
(iv) If the managing underwriter shall restrict the amount
of the Holder's Registrable Shares which can be included in a Secondary
Offering, then the balance of such Registrable Shares shall continue to be
fully subject to the terms and rights of this Agreement, which specifically
includes piggyback rights in any subsequent Secondary Offering, until all
such Registrable Shares have been registered.
(b) The Company may, in its sole discretion and without the
consent of the Holder, withdraw such registration statement and abandon the
proposed offering in which the Holder had requested to participate, but
such abandonment shall not preclude subsequent request for registration
pursuant to Section 2.
(c) In the event that the Company shall not have undertaken a
Secondary Offering on or before the expiration of one (1) year from the
date hereof, then, at the written demand of Holder, the Company shall cause
the Registrable Shares to be registered for public sale under the
Securities Act. If there is a Secondary Offering and not all of Holder's
Registrable Shares are included in the Secondary Offering, then the balance
of those Registrable Shares will be registered at the latest of: (i) one
(1) year from the date of the Secondary Offering, or (ii) the earliest date
permitted by the managing underwriter in the Underwriting Agreement
executed as part of the Secondary Offering.
(d) In all events, if all of the Registrable Shares of Holder
have not been registered on or before June 1, 1998, the Company shall cause
the balance of the Registrable Shares to be registered for public sale.
3. Cooperation with Company. The Holder will cooperate with the
Company in all respects in connection with this Agreement, including,
without limitation, timely supplying all information reasonably requested
by the Company and executing and returning all documents reasonably
requested in connection with the registration and sale of the Registrable
Stock.
4. Expenses. All expenses incurred by the Company in complying with
the provisions of this Agreement, including, without limitation, all
restrictions and filing fees, printing expenses, fees and disbursements of
Company counsel and independent public accountants for the Company, fees
and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and costs of insurance, but excluding any Selling Expenses, are
called "Registration Expenses."
The Company will pay all Registration Expenses in connection with each
registration of Registrable Stock pursuant to the provisions of this
Agreement. All Selling Expenses in connection with each such registration
statement shall be borne by the participating sellers in proportion to the
number of shares sold by each, or by such participating sellers other than
the Company (except to the extent the Company shall be a seller) as they
may agree.
5. Indemnification and Contribution.
(a) Company Indemnity. In the event of a registration of any of
the Holder's Registrable Stock under the Securities Act pursuant to the
provisions of this Agreement, the Company shall indemnify and hold
harmless, to the extent permitted by law, the Holder, each underwriter of
such Registrable Stock thereunder and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several,
to which such seller, underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such Registrable
Stock was registered under the Securities Act pursuant to the provisions of
this Agreement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such seller, each such
underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided that
the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such
seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus; or (ii)
the Holder's failure to deliver a copy of the final prospectus as then
amended or supplemented after the Company has furnished the Holder with a
sufficient number of copies of the same, but only if delivery of same is
required by law and the same would have cured the defect giving rise to any
such loss, claim, damage, liability or expense.
(b) Holder Indemnity. In the event of a registration of any of
the Registrable Stock under the Securities Act pursuant to the provisions
of this Agreement, the Holder will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of the
Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person
who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to
which the Company or such officer, director, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of the Holder under which such Registrable Stock was registered
under the Securities Act pursuant to the provisions of this Agreement, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damages, liability or action; provided that the
Holder will be liable hereunder in an amount not to exceed the net proceeds
received by the Holder in the sale of its Registrable Stock pursuant to
such registration statement and, in any such case, if and only to the
extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
information pertaining to the Holder furnished in writing to the Company by
the Holder specifically for use in such registration statement or
prospectus.
(c) Notice; Right to Defend. Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the indemnifying party, in
writing thereof, but the omission so to notify the indemnifying party shall
not relieve it from any such liability other than under this Section 6 and
shall only relieve it from any liability which it may have to such
indemnified party if such indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to
the extent it shall wish, to assume and undertake the defense thereof with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party under this Section 6 to such
effect, the indemnifying party shall not be liable for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected; provided that if the defendants in any such
action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional
to those available to the indemnifying party, the indemnified party shall
have the right to select a separate counsel and to assume such legal
defenses and otherwise participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to
such participation to be reimbursed by the indemnifying party as incurred.
(d) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in
which either (i) the Holder of Registrable Stock exercising rights under
this Agreement, or any controlling person of the Holder, makes a claim for
indemnification pursuant to this Section 6 but it is judicially determined
(by entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 6 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required
on the part of the Holder or any such controlling person in circumstances
for which indemnification is provided under this Section 6, then, and in
each such case, the Company and the Holder will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
contribution from others) in such proportion so that the Holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Stock offered by the registration
statement bears to the public offering price of all securities offered by
such registration statement (in an amount in any case not to exceed the net
proceeds received by the Holder in the sale of its Registrable Stock
pursuant to such registration statement), and the Company is responsible
for the remaining portion; provided that, in any such case, no person or
entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent
misrepresentation.
6. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time
permit the sale of the Registrable Stock to the public without
registration, at all times after 90 days after any registration statement
covering a public offering of securities of the Company under the
Securities Act shall have become effective, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to the Holder of Registrable Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any Registrable
Stock without registration.
7. Successors and Assigns. The rights of the Holder granted under
this Agreement, including the rights to cause the Company to register the
Registrable Stock, may not be assigned without the prior written consent of
the Company, which shall not be unreasonably withheld. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors and permitted assigns of the
Company and of the Holder.
8. Entire Agreement. This Agreement expresses the entire
understanding of the Company and of the Holder of Registrable Stock and
contemporaneous agreements and undertakings of the Company and the Holder
with respect to the subject matter of this Agreement.
9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed by
certified or registered mail, return receipt requested, postage prepaid, or
telexed with confirmation of receipt, or delivered by hand or by a
nationally recognized overnight delivery service, addressed as follows:
(a) If to the Company, at:
ECKLER INDUSTRIES, INC.
101 Phillippee Parkway
Suite 300
Safety Harbor, Florida 34695
Attention: Thomas E. Conlan
Telecopier: (813) 726-5885
or at such other address or addresses as shall have been furnished in
writing to the Holder, or
(b) If to the Holder, as follows:
R.C. Hill, II
1211 Salerno Court
Orlando, Florida 32806
With a copy to: David A. Webster, Esquire
Milam, Otero, Larsen, Dawson & Taylor, P.A.
1301 Riverplace Boulevard, Suite 1301
Jacksonville, Florida 32207
(c) Any notice so addressed, when mailed by registered or
certified mail shall be deemed to be given three days after so mailed, when
telexed shall be deemed to be given when transmitted, or when delivered by
hand or overnight shall be deemed to be given when delivered.
10. Amendment and Waiver. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and persons holding not less than 51% of all
outstanding Registrable Stock.
11. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal, substantive laws of the State of
Florida, without giving effect to the conflicts of law principles thereof.
12. Invalidity of Provisions. If any provisions of this Agreement
shall be determined by a court of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
13. Headings. The headings in this Agreement are for purposes of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any of the provisions of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
15. Time of the Essence. Time shall be of the essence for all
performances hereunder.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the 12th day of February, 1997.
ECKLER INDUSTRIES, INC.,
a Florida corporation
By: /S/ J. Neal Hutchinson, Jr.
Name:
Title: Asst. V.P.
HOLDER
/S/ R.C. Hill, II
R.C. Hill, II
4
MERGER AGREEMENT
MERGER AGREEMENT (this "Agreement"), entered into this ____ day of
February, 1997, by and among ECKLER INDUSTRIES, INC., a Florida corporation
(the "Buyer") through its wholly-owned, newly-formed Florida corporate
subsidiary, R. C. ACQUISITION, INC., which for purposes herein shall be
deemed to be included in the term "Buyer" unless the context shall be
inconsistent, in which case it shall be referred to as "NewCo"), and R. C.
HILL, II, an individual (the "Stockholder").
W I T N E S S E T H:
WHEREAS, Liberty Finance Co., a Florida corporation (the "Company"),
is engaged in a business consisting primarily of finance and leasing
activities in connection with the sale of used automobiles and other
consumer vehicles (the "Business"); and
WHEREAS, the Stockholder is the record and beneficial owner of all of
the issued and outstanding capital stock of the Company (the "Stock"); and
WHEREAS, the Buyer desires to acquire from the Stockholder, and the
Stockholder desires to transfer to the Buyer, all upon the terms and
subject to the conditions set forth in this Agreement, all (and not less
than all) of the Stock, and the business of the Company as a going concern;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree, as of the Effective
Date, as follows:
1. THE MERGER.
1.1 The Merger. At the time of the closing of the transactions
contemplated hereby and in accordance with the provisions of this Agreement
and the applicable provisions of the corporation laws of Florida (in such
instance, "Applicable Law"), NewCo shall be merged with and into the
Company, in accordance with the terms and conditions of this Agreement and
articles of merger as may be required by Florida law, hereinafter referred
to as the "Articles of Merger". The Company shall be the surviving
corporation of the Merger (the Company, in such capacity, being hereinafter
sometimes referred to as the "Surviving Corporation"). Thereupon, the
separate existence of NewCo shall cease, and the Company, as the Surviving
Corporation, shall continue its corporate existence under Applicable Law
under its current name, as a wholly-owned subsidiary of Buyer.
1.2 Effectiveness of the Merger. As soon as practicable upon or
after the execution of this Agreement, NewCo and the Company will execute
appropriate Articles of Merger, and shall file or cause to be filed such
Articles of Merger with the Secretary of State of Florida; and the subject
Merger shall become effective as of the date (the "Effective Date") set
forth in the Articles of Merger.
1.3 Effect of Merger. Upon the effectiveness of the Merger, (a)
the Surviving Corporation shall own and possess all assets and property of
every kind and description, and every interest therein, wherever located,
and all rights, privileges, immunities, power, franchises and authority of
a public as well as of a private nature, of NewCo and Company (the
"Constituent Corporations"), and all obligations owed to, belonging to or
due to each of the Constituent Corporations, all of which shall be vested
in the Surviving Corporation pursuant to Applicable Law without further act
or deed, and (b) the Surviving Corporation shall be liable for all claims,
liabilities and obligations of the Constituent Corporations, all of which
shall become and remain the obligations of the Surviving Corporation
pursuant to Applicable Law without further act or deed.
1.4 Surviving Corporation. Upon the effectiveness of the
Merger, the Articles of Incorporation and By-Laws of the Surviving
Corporation shall be identical to those of the Company as in effect
immediately prior to the effectiveness of such Merger. The directors and
officers of the Surviving Corporation shall be modified and shall be
determined by Buyer in its sole discretion.
1.5 Status and Conversion of Shares. Upon the effectiveness of
the Merger:
(a) Each share of capital stock held by the Company as
treasury stock immediately prior to the effectiveness of the Merger shall
be canceled and extinguished, and no payment or issuance of any
consideration shall be payable or shall be made in respect thereof;
(b) Each share of common stock of NewCo outstanding
immediately prior to the effectiveness of the Merger shall be converted
into and shall become one (1) share of common stock of the Surviving
Corporation; and
(c) Each share of $1.00 par value common stock of the
Company (the "Company Stock") issued and outstanding immediately prior to
the effectiveness of the Merger (excluding any shares as to which
dissenters' appraisal rights have been validly exercised and perfected and
for which cash is payable in accordance with applicable law) shall be
canceled and extinguished and converted into the right to receive 176,078
shares (the "Shares") of the Class B Common Stock, $.01 par value, of
Eckler ("Eckler Common Stock") for each share of Company Stock. For
purposes hereof the number of Shares multiplied by $17.50 shall be the
"Stock Valuation" hereunder.
1.6 Books and Records. On the date hereof, in addition to the
delivery and transfer of the Stock to the Buyer, the Stockholder is
delivering, and causing the Company to deliver, to the Buyer all of the
stock books, records and minute books of the Company, all financial and
accounting books and records of the Company, and all referral, client,
customer and sales records of the Company.
2. INTENTIONALLY OMITTED.
3. REORGANIZATION.
3.1 Tax-Free Reorganization. The parties intend that the
transactions pursuant to this Agreement qualify as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended, and the
parties shall report these transactions and take such actions and otherwise
conduct their affairs so as to give effect to such intention.
Specifically, the parties anticipate that NewCo will be merged into the
Company, with the Company as the survivor, as a wholly-owned subsidiary of
the Buyer, in a statutory merger, qualifying under Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended. Eckler agrees for a period
of two (2) years from the Effective Date to not take further actions
regarding the corporate structure of the ownership of the Company without
Stockholder's prior written approval, which approval shall be given upon
receipt of an opinion of counsel, in form acceptable to Stockholder, that
such restructuring will not cause the disqualification of this transaction
for tax-free reorganization treatment to the Stockholder. Eckler agrees to
indemnify and hold Stockholder harmless from any loss, including taxes,
interest and penalties (to the extent not mitigated) which arise as a
result of the Buyer's violation of this Section 3.1
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER.
In connection with the sale and transfer of the Stock to the Buyer,
the Stockholder hereby represents and warrants to the Buyer as set forth
below. For purposes hereof "Material Adverse Effect" shall mean any event,
occurrence or circumstance which (a) has or is reasonably likely to have a
material adverse effect on the financial condition, results of operations,
business or prospects of the Company taken as a whole, or the Buyer and its
affiliates taken as a whole, as applicable, (b) would materially impair
such party's ability to perform its obligations under this Agreement or the
consummation of any of the transactions contemplated hereby, or (c) results
in an adverse effect that is Two Thousand and 00/100ths Dollars ($2,000.00)
or greater on any particular item related to the Buyer's purchase of the
Business hereunder.
4.1 Title to the Stock. The Stockholder is the valid and lawful
record and beneficial owner of all of the Stock. All of the Stock has been
duly authorized and validly issued and is fully paid and non-assessable,
and is free and clear of all pledges, liens, claims, charges, options,
calls, encumbrances, restrictions and assessments whatsoever (except any
restrictions which may be created by operation of state or federal
securities laws). The Buyer is receiving from the Stockholder good, valid
and marketable title to all of the Stock, free and clear of all pledges,
liens, claims, charges, options, calls, encumbrances, restrictions and
assessments whatsoever (except any restrictions which may be created by
operation of state or federal securities laws).
4.2 Valid and Binding Agreement; No Breach.
(a) The Stockholder has full legal right, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, and except that the
remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought.
(b) Except as disclosed in Schedule 4.2 annexed hereto,
neither the execution and delivery of this Agreement by the Stockholder,
nor compliance with the terms and provisions of this Agreement on the part
of the Stockholder, will, under circumstances that would result in a
Material Adverse Effect: (i) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting the Company or the
Stockholder; (ii) require the issuance of any authorization, license,
consent or approval of any federal or state governmental agency; or (iii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, note, indenture,
loan agreement or other agreement or instrument to which the Company or the
Stockholder is a party, or by which the Company or the Stockholder is
bound, or constitute a default thereunder, or require the consent of any
other party to any of the foregoing.
(c) Possible Acceleration of GE Debt. The Buyer
acknowledges that the consummation of this transaction, without the prior
written consent of General Electric Capital Corporation ("GE") under that
certain Motor Vehicle Installment Contract Loan and Security Agreement
between GE and the predecessor to the Company, dated June 3, 1993, as
amended, and as modified by that certain Forbearance Agreement among GE,
the Company, the Stockholder and others dated January 21, 1997 (the
obligations of the Company under such agreements and the other agreements
related thereto are hereinafter referred to as the "GE Debt"), will be a
condition which, under the loan agreements for the GE Debt, will permit GE
to accelerate the GE Debt and cause it to be immediately due and payable.
As such, the Stockholder shall have no responsibility for or liability
arising from such occurrence.
4.3 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida, with full corporate power and
authority to own its assets and conduct its business as owned and conducted
on the date hereof. The Company is not required to be qualified as a
foreign corporation under the laws of any jurisdiction. True and complete
copies of the Articles of Incorporation and Bylaws of the Company
(including all amendments thereto), and a correct and complete list of the
officers and directors of the Company, are annexed hereto as Schedule 4.3.
4.4 Capital Structure; Equity Ownership.
(a) The authorized capital stock of the Company is as set
forth in its Articles of Incorporation as included in Schedule 4.3, and the
Stock constitutes and represents all of the outstanding capital stock of
the Company.
(b) There are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements or calls,
demands or commitments obligating the Company to issue, transfer or
purchase any shares of its capital stock, or obligating the Stockholder to
transfer any shares of the Stock. No shares of capital stock of the
Company are reserved for issuance pursuant to stock options, warrants,
agreements or other rights to purchase capital stock.
4.5 Subsidiaries and Investments. The Company does not own,
directly or indirectly, any stock or other equity securities of any
corporation or entity, or have any direct or indirect equity or ownership
interest in any person, firm, partnership, corporation, venture or business
other than the business conducted by the Company.
4.6 Financial Information.
(a) Annexed hereto as Schedule 4.6(a) are the audited
financial statements (including balance sheet, income statement, statement
of stockholders' equity, statement of cash flows, and notes thereto) for
the Company as of December 31, 1994 and December 31, 1995 and for each of
the years then ended, and the unaudited financial statements for the
Company as of December 31, 1996 for the twelve (12) months then ended, and
as of January 31, 1997 and for the month then ended (collectively, the
"Financial Statements"), all of which fairly reflect, in all material
respects, the financial condition and results of operations of the Company
in accordance with generally accepted accounting principles consistently
applied, as of the dates thereof and for the periods then ended; and,
without limitation of the foregoing, the Company does not have any material
liabilities, fixed or contingent, known or unknown, except to the extent
reflected in the most recent of such Financial Statements or thereafter
incurred in the normal course of the Company's business. The Financial
Statements (as of the dates thereof and for the periods covered thereby)
are in accordance with the books and records of the Company, which are
complete and accurate in all material respects.
(b) The Buyer has been provided the payment histories of
each of the credit agreements, finance leases and other agreements
underlying the Receivables (defined below), all of which fairly present the
dates and amounts of all receipts and disbursements under or in respect of
such credit agreements, finance leases and other agreements. Except as and
to the extent reflected in such payment histories, (i) all payments under
such credit agreements, finance leases and other agreements have been made
in a full and timely manner, and (ii) there have been no prepayments made
in respect of any such credit agreements, finance leases or other
agreements.
(c) Annexed hereto as Schedule 4.6(c) is a listing of all
debts and obligations and guarantees to which the Company is a party and
all obligations of others which are secured by property of the Company, and
the current principal amount of, accrued interest on, and any amount
guaranteed under all such debts, obligations, or guarantees. Schedule
4.6(c) contains a separate listing of all debt obligations of the Company
to the Stockholder and members of the Stockholder's family. Except as set
forth on Schedule 4.6(c), the Company is not in default under any such debt
obligations or guarantees, and the consummation of the transactions
contemplated hereby will not result in any default on or acceleration of,
or any consent being required as to, any debt, obligation, or guarantee
described on Schedule 4.6(c).
4.7 No Material Changes. Except as disclosed in Schedule 4.7
annexed hereto, since the date of the most recent of the Financial
Statements, (a) the business of the Company has been operated solely in the
normal course, (b) there have been no changes which in the aggregate would
have a Material Adverse Effect in the financial condition, operations or
business of the Company from that reflected in such Financial Statements,
(c) the Company has not incurred any material obligation or liability
except in the normal course of business, (d) the Company has not effected
or suffered any material modification in its collection practices, or with
respect to the timing and manner of payment of its accounts payable, and
(e) there has not been any (i) sale, assignment or transfer by the Company
of any assets or other part of its business, excluding the sale or
disposition of inventory, and/or the sale of loans, in the ordinary course
of business, (ii) acquisitions or commitments to acquire (whether by
purchase, lease or otherwise) any capital assets by the Company wherein the
aggregate payments will exceed $10,000, (iii) increase or commitment to
increase the compensation or benefits of any employees of the Company, (iv)
implementation or institution of any bonus, benefit, profit-sharing,
pension, retirement or other plan or similar arrangement which was not in
existence on December 31, 1996, or (v) new employment agreement, or
modification of any existing employment agreement, by the Company.
4.8 Tax Matters.
(a) The Company has, to the date hereof, timely filed all
tax reports and tax returns required to be filed by the Company, and the
Company has paid all taxes, assessments and other impositions as and to the
extent required by applicable law. All federal, state and local income,
franchise, sales, use, property, employment, excise and other taxes
(including interest and penalties and including estimated tax installments
where required to be filed and paid) due from or with respect to the
Company as of the date hereof have been fully paid, and all taxes and other
assessments and levies which the Company is required by law to withhold or
to collect have been duly withheld and collected and have been paid over to
the proper governmental authorities to the extent due and payable. There
are no outstanding or pending claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of the
Company.
(b) Except as disclosed in Schedule 4.8 (b) annexed hereto,
there are no audits pending with respect to any federal, state or local tax
reports or tax returns of the Company, and no waiver of statutes of
limitations have been given or requested with respect to any tax years or
tax filings of the Company.
(c) The Company has, since November 1, 1987 to the date
hereof, been an electing small business corporation under Subchapter S of
the Internal Revenue Code of 1986, as amended (the "Code"), and the
corresponding tax provisions of Florida law, and has filed all tax reports
required to be filed by the Company on or prior to the date hereof. The
Company has further, to the date hereof, filed all other tax reports and
tax returns required to be filed by the Company, and the Company and the
Stockholder (as applicable) have paid all taxes, assessments and other
impositions as and to the extent required by applicable law. Without
limitation of the foregoing, the Company has made all required filings and
payments to the date hereof in respect of franchise, sales, use, property,
excise and other taxes (including interest and penalties and including
estimated tax installments as required), and there are no outstanding or
pending claims, deficiencies or assessments with respect to any taxes,
interest or penalties of the Company. The Company has previously
distributed to the Stockholder (and any former stockholder) all amounts
which have been, are, or will be distributable to such persons in respect
of all completed tax years of the Company and the 1997 tax year to date.
The amounts distributed in respect of the 1996 tax year were not (on a
proportionate basis) in excess of the distribution for prior years, and the
1997 distributions are not in excess of 40% of 1997 net income of the
Company.
4.9 Title and Condition of the Assets. Except for liens arising
under the instruments described on Schedule 4.9, the Company has and owns
good and marketable title to all of its assets, free and clear of all
liens, pledges, claims, security interests and encumbrances of every kind
and nature, except for liens, pledges, claims, security interests or
encumbrances which in the aggregate would not have a Material Adverse
Effect. The Company has delivered to the Buyer all material documents
pertaining to the liens referred to in the preceding sentence. All of the
Company's fixed assets (to the extent that a failure would have a Material
Adverse Affect) are in good operating condition and repair (reasonable wear
and tear excepted), are adequate for its use in the Business as presently
conducted, and are sufficient for the continued conduct of such Business,
except for circumstances that would not have a Material Adverse Effect.
All buildings, and all fixtures, equipment and other property and assets
which are material to the Company's Business on a consolidated basis, held
under leases or subleases by the Company are held under valid instruments
enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, and similar laws of general applicability affecting creditors
rights generally and by general principles of equity (whether applied in a
proceeding at law or in equity).
4.10 Receivables. All of the Receivables (whether reflected in
the Financial Statements or thereafter created or acquired by the Company
prior to the Effective Date), (a) have arisen in the normal course of the
Company's business, (b) to the Stockholder's actual knowledge are not
subject to any counterclaims, set-offs, allowances or discounts of any
kind, except for counter claims, set-offs, allowances, or discounts which
would not result in a Material Adverse Effect on a per item basis, and (c)
have been, are and will be valid and generally collectible in the ordinary
course of the Business; and the Stockholder has no knowledge of any
material or unusual risk of non-payment for any of the Receivables. Except
as set forth on Schedule 4.10, the Company has possession of all documents
that represent the Receivables. Except for circumstances which would not
result in a Material Adverse Effect on a per item basis, all the
Receivables are genuine, valid, and legally binding obligations of the
borrowers thereunder, have been duly executed by a borrower of legal
capacity and are enforceable in accordance with their terms, except as
enforcement thereof may be limited by (i) bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity (whether applied in a proceeding, in equity
or at law), (ii) state laws requiring creditors to proceed against the
collateral before pursuing the borrower, and (iii) state laws on
deficiencies, except where the invalidity or unenforceability of
Receivables would not have a Material Adverse Effect on a per item basis.
Neither the operation of any of the terms of the Receivables, nor the
exercise of any right thereunder has rendered the related security interest
or note unenforceable, in whole or in part, or subjected it to any right of
rescission, setoff, counterclaim or defense, and no such right of
rescission, setoff, counterclaim or defense has been asserted with respect
thereto. The instruments representing the Receivables are in compliance
with applicable laws and regulations and accurately represent the
principal, interest, payment and other terms of the Receivables, except for
circumstances which would not result in a Material Adverse Effect on a per
item basis. For purposes hereof, the "Receivables" shall mean all finance
receivables, accounts receivable, notes receivable and other rights to
receive payment (including any related guaranties, security deposits or
other collateral therefor) under credit agreements, finance leases and
other such agreements entered into in the Business, including but not
limited to those credit agreements, finance leases and other agreements
listed or described on Schedule 4.10 annexed hereto.
4.11 Inventory. All of the Company's inventory (the "Inventory")
(whether reflected in the Financial Statements or thereafter acquired by
the Company prior to the Effective Date) is of a quality, age and quantity
consistent with the historical practices of the Company, and is valued on
the Company's books at cost. Schedule 4.11 sets forth a true and complete
listing of the Inventory as of the date set forth on such schedule and
includes a listing of the make, model, year, and vehicle identification
number for each item of Inventory listed on such schedule. None of the
Inventory is subject to any lien, charge, or encumbrance, except as set
forth on Schedule 4.11.
4.12 Legal Compliance.
(a) To the actual knowledge of the Shareholder the Company
is, and for the past three (3) years has been, in compliance in all
material respects with all laws, statutes, regulations, rules and
ordinances applicable to the conduct of its Business (including, without
limitation, all applicable environmental laws, statutes, regulations, rules
and ordinances), and has in full force and effect all licenses, permits and
other authorizations required for the conduct of its Business as presently
constituted; and the Company is not in default or violation in respect of
or under any of the foregoing. The Stockholder is not aware of any past or
present condition or circumstance in the Company's Business (including,
without limitation, with respect to any real property now or previously
occupied by the Company) which could give rise to any material liability
under any such law, statute, regulation, rule or ordinance.
(b) Except as set forth on Schedule 4.12(b) attached hereto
the Company has not generated, operated, processed, distributed,
transported, used, treated, stored, handled, emitted, discharged, released
or disposed of (or caused any person or entity to do any of the foregoing
or assisted any person or entity in doing any of the foregoing) any oil,
gasoline, petroleum-related products, hazardous substances, hazardous
waste, or pollutants or contaminants (as defined by CERCLA), including,
without limitation, asbestos or asbestos containing materials, PCB's or
urea formaldehyde, except in accordance with applicable laws or any product
which may give ride to Hazardous Materials Liabilities. For purposes
hereof, the following terms shall have the following meanings:
(i) The term "Hazardous Materials" shall mean (a)
hazardous materials, contaminants, constituents, medical wastes, hazardous
or infectious wastes and hazardous substances as those terms are now
defined in any Environmental Laws, including without limitation the
following statutes and their implementing regulations: the Hazardous
Materials Transportation Act, 49 U.S.C. 9601 et seq. (the "HMTA"), the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. et
seq. (as so amended, "CERCLA"), THE Clean Water Act, 33 U.S.C. 1251 et
seq. (the "CWA"), and the Clean Air Act, 42 U.S.C. 7401 et seq. (the
"CAA"); (b) petroleum, including crude oil and any fractions thereof; (c)
natural gas, synthetic gas and any mixtures thereof; (d) asbestos and/or
asbestos-containing materials; and (e) polychlorinated biphenyl ("PCBs") or
materials or fluids containing PCBs in excess of 50 parts per million;
(ii) The term "Hazardous Materials Liabilities" shall
mean any and all damages, losses, liabilities, disabilities, fines,
penalties, costs or expenses (including reasonable attorneys' fees)
incurred or to be incurred, whether absolute, fixed or contingent, civil or
criminal, and whether arising under federal law or state law, incurred or
to be incurred in connection with the handling, storage, transportation, or
disposal of any Hazardous Materials; and
(iii) The term "Environmental Laws" shall mean any
statute, law, ordinance, code, rule, regulation, policy, guideline, permit,
consent, approval, license, judgment, order, writ, decree or authorization,
including the requirement to register storage tanks, established or enacted
for, or relating to, the protection of the environment or the health and
safety of any person (including, without limitation, those relating to 9a)
the HMTA, CERCLA, the CWA, the CAA or the Resource Conservation and
Recovery Act, 42 U.S.C. 6903 et seq.; (b) emissions, discharges, releases
or threatened releases of Hazardous Materials into the environment,
including, without limitation, into ambient air, soil, sediments, land
surface or subsurface, buildings or facilities, surface water, ground
water, publicly-owned treatment works, septic systems or land; or (c) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Materials.
(c) Neither the Company nor the Stockholder has received
any written notice of default or violation, nor, to the best of the
Stockholder's knowledge, is the Company or any of its directors, officers
or employees in default or violation, with respect to any judgment, order,
writ, injunction, decree, demand or assessment issued by any court or any
federal, state, local, municipal or other governmental agency, board,
commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Company's business, affairs, properties or
assets. Neither the Company nor the Stockholder has received written
notice of, been charged with, or is, to the best of the Stockholder's
knowledge, under investigation with respect to, any violation of any
provision of any federal, state, local, municipal or other law or
administrative rule or regulation, domestic or foreign, relating to any
aspect of the Company's business, affairs, properties or assets, which
violation would have a material adverse effect on the Company, its business
or any material portion of its assets.
4.13 Real Property.
(a) Schedule 4.13 annexed hereto lists and describes all
real property owned, held or leased by the Company. The Company holds good
and marketable title to the real property and leasehold interests listed in
Schedule 4.13, subject only to those liens and mortgages set forth in
Schedule 4.13, except for liens, pledges, claims, security interests or
encumbrances which in the aggregate would not have a Material Adverse
Effect. Neither the Company nor the Stockholder has received notice that
any such real property or any buildings or improvements thereon
(collectively, the "Facilities") or the use thereof by the Company is in
violation of any applicable building, zoning or other law, ordinance or
regulation affecting such real property, and no covenants, easements,
rights-of-way or conditions of record impair such use, except as set forth
in Schedule 4.13. The Company does not own or lease any real property
which is not listed in Schedule 4.13, nor does the Company have any
interest in any other real property, including partnerships, joint
ventures, trust deeds or land sale contracts.
(b) Each of the leases described in Schedule 4.13 is in
full force and effect and constitutes a valid and binding obligation of the
Company and, to the best knowledge of the Stockholder, the other parties
thereto. Neither the Company nor the Stockholder has received any notice
of default with respect to any term or condition of any of the leases
identified in Schedule 4.13, nor is the Company in default or arrears in
the performance or satisfaction of any material agreement or condition on
its part to be performed or satisfied thereunder. Except as disclosed in
Schedule 4.13, no waiver of default or indulgence has been granted by any
of the lessors under said leases, and no event has occurred which, after
notice or lapse of time or both, would constitute a default thereunder, or
would permit the acceleration of any obligation of any party thereto.
(c) Except as set forth in Schedule 4.13, all of the
buildings, fixtures and other improvements located on the Facilities are
accessible by public roads, and are adequate for use in the Company's
business as presently conducted; and the operation of the Facilities as
presently conducted is not in violation of any applicable building code,
zoning ordinance or other law or regulation.
4.14 Insurance. The Company maintains, has in full force and
effect, and has paid all premiums in respect of insurance covering its
business and assets against such hazards and in such amounts as are set
forth on the attached Schedule 4.14.
4.15 Employees. Except as disclosed in Schedule 4.15 annexed
hereto, the Company is not a party to or bound by any collective bargaining
agreement, employment agreement, consulting agreement or other commitment
for the employment or retention of any person, and no union is now
certified or has claimed the right to be certified as a collective
bargaining agent to represent any employees of the Company. The Company
has not had any material labor difficulty in the past two (2) years, and
neither the Company nor the Stockholder has received notice of any unfair
labor practice charges against the Company or any actual or alleged
violation by the Company of any law, regulation, or order affecting the
collective bargaining rights of employees, equal opportunity in employment,
or employee health, safety, welfare, or wages and hours.
4.16 Employee Benefits. The Company does not maintain and is not
required to make any contributions to any pension, profit-sharing,
retirement, deferred compensation or other such plan or arrangement for the
benefit of any employee, former employee or other person, and the Company
does not have any obligations with respect to deferred compensation or
future benefits to any past or present employee. Schedule 4.16 annexed
hereto fairly summarizes the employee benefits currently granted by the
Company to its employees.
4.17 Contracts and Commitments. The Company has previously
provided reasonable access to the Buyer and its representatives to permit
such persons to inspect and copy all of the credit agreements, finance
leases and other agreements underlying the Receivables. Other than (a)
such credit agreements, finance leases and other agreements underlying the
Receivables, and (b) those contracts and commitments listed on Schedule
4.17 annexed hereto, there is no other contract, agreement, commitment or
understanding which is material to the ongoing operation of the Business.
To the best of the Stockholder's knowledge, all of such agreements and
contracts are in full force and effect, and there is no material default or
non-performance outstanding thereunder.
4.18 Litigation. Except as set forth on Schedule 4.18, there is
no pending or, to the actual knowledge of the Stockholder, threatened
litigation, arbitration, administrative proceeding or other legal action or
proceeding against the Company or relating to its business. The
Stockholder is not aware of any state of facts, events, conditions or
occurrences which the Stockholder reasonably believes would properly
constitute grounds for or the basis of any suit, action, arbitration,
proceeding or investigation against or with respect to the Company.
4.19 Intellectual Property. To the Stockholder's actual
knowledge the Company has the valid right to utilize all trade names and
other intellectual property utilized in its business, and has not received
notice of any claimed infringement of any of such intellectual property
with the rights or property of any other person. The Buyer acknowledges
that the trade name/trademark/service mark, "R.C. Hills," will not be
usable by the Company or the Buyer and on the ninetieth (90th) day after
the date of Closing all use by the Company will cease.
4.20 Bank Accounts. Annexed hereto as Schedule 4.20 is a correct
and complete list of all bank accounts and safe deposit boxes maintained by
or on behalf of the Company, with indication of all persons having
signatory, access or other authority with respect thereto.
4.21 Going Concern. The Stockholder has no knowledge of any
fact, event, circumstance or condition (including but not limited to any
announced or anticipated changes in the policies of any material supplier,
referral source, client or customer) that would materially impair the
ability of the Company to continue the Business in substantially the manner
heretofore conducted (other than general, industry-wide conditions).
4.22 The Shares. The Stockholder hereby confirms that the Shares
constitute "restricted securities" under applicable federal and state
securities laws, and that the Shares may not be resold in the absence of an
effective registration thereof under federal and state securities laws or
an available exemption from such registration requirements. The
Stockholder further confirms that he has received no assurance whatsoever
as to whether or when any of the Shares will be registered under federal or
state securities laws (except as provided herein), and that, accordingly,
the Stockholder may be required to hold the Shares indefinitely. The
Stockholder and Buyer are entering into a separate Registration Rights
Agreement that provides the Stockholder registration rights on the Shares
being issued to the Stockholder hereunder.
4.23 Disclosure and Duty of Inquiry. The Buyer is not and will
not be required to undertake any independent investigation to determine the
truth, accuracy and completeness of the representations and warranties made
by the Stockholder in this Agreement.
4.24 Allowance for Uncollectible Accounts. The Buyer accepts the
amount of the allowance for uncollectible accounts shown in the Financial
Statements as adequate in each case as of the dates thereof. Stockholder
shall have no responsibility related to such allowance and makes no
representation or warranty in regard thereto.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's acquisition of the Stock, the Buyer
hereby represents and warrants to the Stockholder as follows:
5.1 Organization, Good Standing and Qualification. The Buyer is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Florida, with all necessary power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The Buyer is qualified to do business in each foreign
jurisdiction in which its business requires it to be qualified.
5.2 Authorization of Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by
the Board of Directors of the Buyer. No further corporate authorization is
required on the part of the Buyer to consummate the transactions
contemplated hereby.
5.3 Valid and Binding Agreement; No Breach.
(a) The Buyer has full legal right, power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement constitutes the legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except to the extent that such enforceability
may be limited by bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally, and except that the remedy of
specific performance or similar equitable relief is available only at the
discretion of the court before which enforcement is sought.
(b) Except as disclosed in Schedule 5.3 annexed hereto,
neither the execution and delivery of this Agreement by the Buyer, nor
compliance with the terms and provisions of this Agreement on the part of
the Buyer, will, under circumstances that would result in a Material
Adverse Effect: (i) violate any statute or regulation of any governmental
authority, domestic or foreign, affecting the Buyer or any of its
subsidiaries; (ii) require the issuance of any authorization, license,
consent or approval of any federal or state governmental agency; or (iii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, note, indenture,
loan agreement or other agreement or instrument to which the Buyer or any
of its subsidiaries is a party, or by which the Buyer or any of its
subsidiaries is bound, or constitute a default thereunder, or require the
consent of any other party to any of the foregoing.
5.4 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer, nor compliance with the terms and
provisions of this Agreement on the part of the Buyer, will: (a) violate
any statute or regulation of any governmental authority, domestic or
foreign, affecting the Buyer; (b) require the issuance of any
authorization, license, consent or approval of any federal or state
governmental agency; (c) conflict with or result in a breach of any of the
terms, conditions or provisions of any judgment, order, injunction, decree,
note, indenture, loan agreement or other agreement or instrument to which
the Buyer is a party, or by which the Buyer is bound, or constitute a
default thereunder; or (d) require the consent of any third party under any
outstanding statute, regulation, judgment, order, injunction, decree,
agreement or instrument to which the Buyer is a party, or by which the
Buyer is bound.
5.5 Issuance of Shares. The issuance of the Shares hereunder
has been duly authorized by all necessary corporate action on the part of
the Buyer, and the Shares are validly issued, fully paid and non-
assessable. The Stockholder will receive from Buyer good, valid, and
marketable title to all of the Shares, free and clear of all pledges,
liens, claims, charges, options, calls, encumbrances, restrictions and
assessments whatsoever, (except any restrictions which may be created by
operation of state or federal securities laws).
5.6 Investment. The Buyer is purchasing the Stock for its own
account for investment, and not with a view to the resale or distribution
thereof in violation of any applicable securities laws.
5.7 Disclosure and Duty of Inquiry. The Stockholder is not and
will not be required to undertake any independent investigation to
determine the truth, accuracy and completeness of the representations and
warranties made by the Buyer in this Agreement.
5.8 Buyer's Information. The financial information and reports
(the "Buyer's Information") which have been delivered or made available to
Stockholder, including the items specifically listed on the attached
Schedule 5.8, fairly present in all material respects the financial status
of Eckler, and its subsidiaries (jointly referred to as "Eckler") as of the
date of such information and do not contain a materially misleading
statement or omit information or statements reasonably necessary to make
such information reasonably illustrative of the financial condition,
assets, liabilities, and other material matters as would be reasonably
necessary to a prudent investor to reach an informed decision regarding an
investment in the Shares.
5.9 Contingent Liabilities. There are no contingent
liabilities, whether or not asserted, known to Buyer or the principal
shareholders of Buyer, which are not reflected in the Buyer's Information
which, if such contingent liabilities become actual liabilities, would or
could have a material and adverse impact on Buyer and/or its subsidiaries
or their prospects.
5.10 No Litigation. Neither the Buyer nor any of its affiliates
or subsidiaries, is subject to or involved in any material litigation,
arbitration, administrative proceedings, or other controversy.
5.11 No Tax Controversies. Neither the Buyer nor any of its
subsidiaries have failed to file when due all of their respective income,
franchise, sales and use, employment, property, excise and other federal,
state and local tax returns or have failed to pay when due any tax
liability shown to be due on such return. Neither the Buyer nor any of its
subsidiaries have been notified of any audit of any of their respective
activities by any governmental authority.
5.12 Title and Condition of Assets. All of the Buyer's assets,
and all of its subsidiaries' assets, as shown in the Buyer's Information as
provided to the Stockholder, are owned by the entity which is shown to own
such asset, subject only to such liabilities as are disclosed in the
Buyer's Information, and all of such assets are in good operating condition
and repair (ordinary wear and tear excepted) and are adequate for their use
in the respective businesses as conducted by the Buyer and its subsidiaries
and are sufficient for the continued conduct of such businesses
5.13 Legal Compliance.
(a) To the actual knowledge of the Buyer and its principal
shareholders, the Buyer (and its subsidiaries) are, and for the past three
(3) years have been, except for circumstances which in the aggregate would
not result in a Material Adverse Effect, in compliance in all material
respects with all laws, statutes, regulations, rules and ordinances
applicable to the conduct of its business (including, without limitation,
all applicable environmental laws, statutes, regulations, rules and
ordinances), and has in full force and effect all licenses, permits and
other authorizations required for the conduct of its business as presently
constituted; and the Buyer and its subsidiaries are not in default or
violation in respect of or under any of the foregoing. Neither the Buyer
nor its principal shareholders, are aware of any past or present condition
or circumstance in the Buyer's (or its subsidiaries) business (including,
without limitation, with respect to any real property now or previously
occupied by any of them) which could give rise to any material liability
under any such law, statute, regulation, rule or ordinance.
(b) Except as set forth on Schedule 5.13 attached hereto,
the Buyer has not generated, operated, processed, distributed, transported,
used, treated, stored, handled, emitted, discharged, released or disposed
of (or caused any person or entity to do any of the foregoing or assisted
any person or entity in doing any of the foregoing) any oil, gasoline,
petroleum-related products, hazardous substances, hazardous waste, or
pollutants or contaminants (as defined by CERCLA), including, without
limitation, asbestos or asbestos containing materials, PCB's or urea
formaldehyde, except in accordance with applicable laws or any product
which may give rise to Hazardous Materials Liabilities.
(c) Neither the Buyer nor any of its principal shareholders
has received any written notice of default or violation, nor, to the best
of their knowledge, is the Buyer, its subsidiaries, or any of their
respective directors, officers or employees in default or violation with
respect to any judgment, order, writ, injunction, decree, demand or
assessment issued by any court or any federal, state, local, municipal or
other governmental agency, board, commission, bureau, instrumentality or
department, domestic or foreign, relating to any aspect of the Buyer's or
its subsidiaries' business, affairs, properties or assets. Neither the
Buyer nor its principal shareholders has received written notice of, been
charged with, or is, to the best of their knowledge, under investigation
with respect to, any violation of any provision of any federal, state,
local, municipal or other law or administrative rule or regulation,
domestic or foreign, relating to any aspect of the Buyer's or its
subsidiaries' business, affairs, properties or assets, which violation
would have a Material Adverse Effect.
5.14 Intellectual Property. The Buyer and its subsidiaries have
the valid right to utilize all trade names and other intellectual property
utilized in their business, and have not received notice of any claimed
infringement of any of such intellectual property with the rights or
property of any other person.
5.15 Transactions with Related Parties. There are no agreements
or contracts between the Buyer, and/or its subsidiaries, with any party who
owns, directly or indirectly, or has the right to acquire more than ten
percent (10%) of the common stock of the Buyer, or any affiliate of such
person, other than as disclosed on the attached Schedule 5.15.
5.16 Status of NewCo. NewCo is a newly formed Florida
corporation and has no assets, or liabilities.
5.17 No Material Changes. Except as disclosed in Schedule 5.17
annexed hereto, since the delivery of the Buyer's Information to the
Stockholder, and except as set forth in the Buyer's Information (a) the
business of the Buyer has been operated solely in the normal course, (b)
there has been no changes in the financial condition, operations or
business of the Company from that reflected in the Buyer's Information
which in the aggregate would have a Material Adverse Effect, (c) the Buyer
has not incurred any material obligation or liability except in the normal
course of business, (d) the Buyer has not effected or suffered any material
modification in its collection practices, or with respect to the timing and
manner of payment of its accounts payable, and (e) there has not been any
sale, assignment or transfer by the Buyer of any assets or other part of
its business, excluding the sale or disposition of inventory, and/or the
sale of loans, in the ordinary course of business.
6. ADDITIONAL AGREEMENTS.
6.1 Resignations. In addition to the other deliveries being
made pursuant to this Agreement on the date hereof, the Stockholder is
causing to be executed and delivered to the Company the resignations of all
officers and directors of the Company (except to the extent that such
resignations are not being required by the Buyer).
6.2 Audit of Financial Statements. The Stockholder shall, from
time to time as and when requested by the Buyer from and after the date
hereof, cooperate with and assist the Buyer in all reasonable respects in
dealing with the accountants heretofore retained by the Company, in order
that the Buyer and its accountants may obtain copies of all work papers
utilized or prepared by the Company's accountants in connection with their
review of the Financial Statements, and consult with the Company's
accountants as and to the extent necessary or appropriate in connection
with the preparation of audited financial statements of the Company for all
periods from and after January 1, 1993 in accordance with Regulation S-X
promulgated under the Securities Act of 1933, as amended. Any reasonable
out-of-pocket expenses incurred or paid to third parties by Stockholder in
complying with this Section 6.2 shall be reimbursed by Buyer, except that
any such expenses exceeding $500 shall be approved by Buyer prior to such
expenses being incurred.
6.3 1997 Tax Treatment. The parties hereby confirm and consent
that the Company's income in respect of 1997 shall not be prorated as
between the Stockholder (on the one hand) and the Buyer (on the other
hand), but shall be determined based on actual income for that portion of
1997 through the date hereof and for that portion of 1997 subsequent to the
date hereof, with the Company having been deemed to have closed its books
for these purposes on and as of the date hereof. The "closing of the
books" shall be accomplished in a manner that is consistent with accounting
conventions and procedures used in closing the books in prior years for
year end closings. All allocations or determinations of accounting
questions will be handled in cooperation with the Shareholder. It is
agreed that the intent shall be to minimize, to the extent possible, the
income to be allocated to the Stockholder for the short period.
6.4 Intentionally Omitted.
6.5 Assumption of GE Debt; Hold Harmless. The Buyer will assume
the obligation of the Company to GE, and to the extent that the GE Debt is
the obligation of the Stockholder, or any other entity owned by the
Stockholder, including Orange Acceptance Corporation, Motorcycle Insurance
Agency, Inc., R.C. Hill Enterprises, Inc., Deltona House Rentals, Inc.,
Affordable Leasing, Inc., and Polaris of Orlando, Inc. (herein referred to
as the "GE Guarantors"), whether as co-obligors or guarantors, the Buyer
shall cause the release of the Stockholder, the GE Guarantors, and R.C.
Hill, Sr. (as to his collateral assignment of mortgage provided to GE as
part of the Forbearance Agreement arrangements entered into on January 21,
1997) (the "Indemnitees") from any obligation for the GE Debt, however
arising, on or before the expiration of ninety (90) days from the date of
this Agreement. The Buyer hereby agrees to indemnify and hold the
Indemnitees harmless from and against the GE Debt, including principal,
interest, defaults, default interest, penalties, and liens and security
interests against the property of the Indemnitees, in accordance with the
terms of the separate Indemnification Agreement attached hereto as Schedule
6.5. The dollar amount owed to GE by the Stockholder, R.C. Hill, Sr., and
the GE Guarantors is set forth on Schedule 6.5.
6.6 Lease of West Colonial Property. As a precondition of the
Stockholder's obligations to close hereunder, Buyer shall execute and
deliver to Stockholder a commercial lease agreement in the form of that
attached as Schedule 6.6, providing for a net lease of the Stockholder's
property at 3411 West Colonial Drive, Orlando, Florida.
6.7 Access to Records of Company. Subsequent to the
consummation of the acquisition and merger contemplated by this Agreement,
the Buyer agrees to reasonably cooperate with the Stockholder in permitting
Stockholder and his agents reasonable access to the records of the Company
for periods prior to the Effective Date for Stockholder's reasonable needs,
including, but not limited to, responding to inquiries from tax
authorities, determining information related to transactions occurring in
such prior periods, and the other reasonable business and personal needs of
the Stockholder.
6.8 Conversion of Stockholder Capital Debt. The Stockholder
shall cause the debt of the Company to the Stockholder, referenced as the
"Notes Payable AmSouth $347,574.08" on the compiled Balance Sheet for the
Company as of February 1997 to be converted to a capital contribution of
the Stockholder, effective immediately prior to the consummation of this
Merger, and there shall be no further liability of the Company to the
Stockholder regarding such debt.
6.9 Conversion of Stockholder Finance Debt. As of the Effective
Date, $281,367 in debt owed to the Stockholder by the Company, including
accrued interest through February 12, 1997 (the "Finance Debt") shall be
converted into a capital contribution by the Stockholder to the Company,
and there shall be no further liability of the Company to the Stockholder
regarding the Finance Debt.
6.10 Release/Indemnification From Specified Loans. The Buyer
indemnifies and agrees to hold the Stockholder harmless, from and after
closing, from the following loans made to the Company, which loans were co-
signed or guaranteed personally by the Stockholder:
(i) Nat Weaver, Inc.-dated January 1, 1993, for $70,000,
due on December 31, 1997, plus interest at 16% per annum.
(ii) Nat Weaver, Inc.-dated April 17, 1992, for $50,000,
due on April 17, 1997, plus interest at 16% per annum.
(iii) Nat Weaver, Inc.-dated August 1, 1992, for $60,000,
due on July 31, 1997, plus interest at 16% per annum.
(iv) Jeremy Hill-dated June 1, 1992, for $1,500, due on
demand, plus interest at 15% per annum.
(v) John Jeyaseelan-undated in 1994, for $10,000, due on
demand, with interest at 15% per annum.
(vi) John Jeyaseelan-dated December 30, 1994, for $5,000,
due on demand, plus interest at 15% per annum.
(vii) John Jeyaseelan-date December 27, 1994, for $5,000,
due on demand, plus interest at 15% per annum.
(viii) Lucy Lee Burton-dated January 1, 1995, for $100,000,
due on October 30, 2001, plus interest at 10% per annum.
(ix) Mark F. Burton-dated February 17, 1995, for
$101,006.68, due on October 30, 2001, with interest at 10% per annum.
(x) R.C. Hill, Sr.-dated August 1, 1993, for $200,000, due
on December 31, 2001, with interest at 10% per annum.
(xi) R.C. Hill III - $190,468.41, dated July 12, 1996,
payable November 15, 2001, with interest at 15% per annum.
(xii) Barnett Bank, N.A. - current balance $32,548.75,
dated October 8, 1996.
The Buyer shall cause the Stockholder to be released as a co-obligor
or guarantor on or before the expiration of one hundred and eighty (180)
days after the Effective Date.
7. [INTENTIONALLY OMITTED].
8. INDEMNIFICATION.
8.1 General.
(a) The Stockholder shall defend, indemnify and hold
harmless the Buyer from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees,
that the Buyer may incur, sustain or suffer ("Buyer Losses") as a result of
any breach of, or failure by the Stockholder to perform, any of the
representations, warranties, covenants or agreements of the Stockholder
contained in this Agreement or in any Schedule(s) furnished by or on behalf
of the Company or the Stockholder under this Agreement.
(b) The Buyer shall defend, indemnify and hold harmless the
Stockholder from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees,
that the Stockholder may incur, sustain or suffer ("Stockholder Losses") as
a result of any breach of, or failure by the Buyer to perform, any of the
representations, warranties, covenants or agreements of the Buyer contained
in this Agreement.
(c) Subject to the limitations of Section 8.2, the
representations, warranties and covenants contained herein shall survive
the closing hereunder to the extent any party hereto is entitled to
indemnification hereunder for any breach of any representation, warranty or
covenant contained herein.
(d) The Stockholder's indemnification obligations hereunder
are secured by a Stock Pledge and Security Agreement of even date herewith
among the Stockholder, the Buyer, and First Choice Auto Finance, Inc.
8.2 Limitations on Indemnity.
(a) Notwithstanding any other provision of this Agreement
to the contrary, (i) the Stockholder shall not be liable to the Buyer with
respect to Buyer Losses unless and until the aggregate amount of all Buyer
Losses shall exceed the sum of Fifty Thousand Dollars ($50,000) (the
"Stockholder Basket"), and (ii) the Stockholder shall thereafter be liable
for all Buyer Losses in excess of the Stockholder Basket, provided that the
Stockholder's maximum aggregate liability in respect of all Buyer Losses
shall not, in the absence of proven fraud by the Stockholder in respect of
any particular Buyer Losses, in any event exceed the limitations set forth
in Section 8.2(c) below; provided, however, that the Stockholder Basket and
such limitation on liability shall not be available with respect to, and
there shall not be counted against the Stockholder Basket or such
limitation of liability, any Buyer Losses arising by reason of any proven
fraud by the Stockholder.
(b) Notwithstanding any other provision of this Agreement
to the contrary, (i) the Buyer shall not be liable to the Stockholder with
respect to Stockholder Losses unless and until the aggregate amount of all
Stockholder Losses shall exceed the sum of Fifty Thousand Dollars ($50,000)
(the "Buyer Basket"), and (ii) the Buyer shall thereafter be liable for all
Stockholder Losses in excess of the Buyer Basket; provided, however that
the Buyer Basket shall not be available with respect to, and there shall
not be counted against the Buyer Basket any Stockholder Losses arising by
reason of any Stockholder Losses involving proven fraud by the Buyer, its
principal shareholders, officers, employees or directors.
(c) Except with respect to any Buyer Losses involving
proven fraud by the Stockholder, the Stockholder shall not be required to
pay indemnification hereunder in an aggregate amount in excess of the Stock
Valuation received by the Stockholder under the terms of this Agreement.
The Stockholder shall have the option of satisfying all or any portion of
any claim in respect of Buyer Losses by tendering to the Buyer for
cancellation a number of Shares having an aggregate value (determined as
provided below, subject to appropriate arithmetic adjustment to account for
any stock split, stock dividend, combination of shares or other such event
which may occur at any time or from time to time subsequent to the date
hereof in respect of the outstanding Common Stock) equal to the amount of
the subject claim which is to be satisfied in such manner.
(d) The Buyer shall be entitled to indemnification by the
Stockholder for Buyer Losses only in respect of claims for which notice of
claim shall have been given to the Stockholder on or before March 31, 1998.
The Stockholder shall be entitled to indemnification by the Buyer for
Stockholder Losses only in respect of claims for which notice of claim
shall have been given to the Buyer on or before March 31, 1998.
(e) For purposes of Section 8.2(b) above, the Shares shall
be deemed to have a value of $17.50 per Share.
8.3 Claims for Indemnity. Whenever a claim shall arise for which
any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party or parties in writing within
sixty (60) days of the indemnified party's first receipt of notice of, or
the indemnified party's obtaining actual knowledge of, such claim, and in
any event within such shorter period as may be necessary for the
indemnifying party or parties to take appropriate action to resist such
claim. Such notice shall specify all facts known to the indemnified party
giving rise to such indemnity rights and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom.
If an indemnifying party shall be duly notified of such dispute, the
parties shall attempt to settle and compromise the same or may agree to
submit the same to arbitration or, if unable or unwilling to do any of the
foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement,
compromise, arbitration or litigation shall promptly thereafter be paid and
satisfied by those indemnifying parties obligated to make indemnification
hereunder.
8.4 Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by
any third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel
of its own choosing), at their expense and through a single counsel of
their own choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name
of the indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
indemnifying party shall be required to undertake, conduct and control,
through counsel of its own choosing and at its sole expense, the settlement
or defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
9. POST-CLOSING EVENTS.
9.1 Announcements. With respect to the initial announcement of
the consummation of the transactions pursuant to this Agreement and of any
of the terms thereof, neither party shall make such an announcement without
the prior review and approval thereof by the Buyer (in the case of any
proposed disclosure or public announcement by the Stockholder) or the
Stockholder (in the case of any proposed disclosure or public announcement
by the Buyer), such approval not to be unreasonably withheld or delayed.
9.2 Bank Accounts. Upon the consummation of the transactions
pursuant to this Agreement, the Stockholder shall cooperate with the Buyer
to promptly modify to the Buyer's satisfaction the signatory and access
arrangements for all bank accounts and safe deposit boxes maintained by or
in the name of the Company.
9.3 Further Assurances. From time to time from and after the
date hereof, the parties will execute and deliver to one another any and
all further agreements, instruments, certificates and other documents as
may reasonably be requested by any other party in order more fully to
consummate the transactions contemplated hereby, and to effect an orderly
transition of the ownership and operations of the Business.
10. COSTS.
10.1 Finder's or Broker's Fees. Each of the Buyer and the
Stockholder represents and warrants that neither they or any of their
respective affiliates have dealt with any broker or finder in connection
with any of the transactions contemplated by this Agreement, or that any
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
10.2 Expenses. The parties (except as provided in Section 10.3)
shall each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement.
10.3 Stockholder's Costs. The Buyer shall pay the reasonable
attorneys' and accountants' fees and costs associated with the negotiation
and consummation of this transaction. Such fees and costs shall be paid
immediately upon receipt of an invoice from the Stockholder's attorneys or
accountants. The attorneys and accountants shall have the rights of
enforcement provided in this Agreement and are intended beneficiaries of
this provision.
11. FORM OF AGREEMENT.
11.1 Effect of Headings. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes
of convenience only, and shall not affect the construction or
interpretation of any of the provisions hereof or of the information set
forth in such Schedules.
11.2 Entire Agreement; Waivers. This Agreement and the other
agreements and instruments referred to herein constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all prior agreements or understandings as to such subject matter.
No party hereto has made any representation or warranty or given any
covenant to the other except as set forth in this Agreement, the Schedules
hereto, and the other agreements and instruments referred to herein. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
11.3 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12. PARTIES.
12.1 Parties in Interest. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties to it and
their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligations or liability of
any third persons to any party to this Agreement, nor shall any provision
give any third persons any right of subrogation or action over or against
any party to this Agreement.
12.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
to have been duly given (a) on the date of service if served personally on
the party to whom notice is to be given, (b) on the day after the date sent
by recognized overnight courier service, properly addressed and with all
charges prepaid or billed to the account of the sender, or (c) on the third
day after mailing if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid, and properly
addressed as follows:
(i) If to the Stockholder:
R. C. Hill, II
1211 Salerno Court
Orlando, FL 32806
(ii) With a copy to:
David A. Webster, Esquire
Milam, Otero, Larsen, Dawson & Taylor, P.A.
1301 Riverplace Boulevard, Suite 1301
Jacksonville, Florida 32207
(iii) If to the Buyer:
Eckler Industries, Inc.
5200 South Washington Avenue
Titusville, FL 32780
Attn.: James Neal Hutchinson, Jr.
General Counsel
or to such other address as any party shall have specified by notice in
writing given to the other party.
13. MISCELLANEOUS.
13.1 Amendments and Modifications. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in
writing and signed by the party to be charged therewith.
13.2 Non-Assignability; Binding Effect. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all
other parties hereto. Otherwise, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors and
permitted assigns.
13.3 Governing Law; Jurisdiction. This Agreement shall be
construed and interpreted and the rights granted herein governed in
accordance with the laws of the State of Florida applicable to contracts
made and to be performed wholly within such State.
13.4 Costs of Enforcement. In the event that any party is
required to bring an action to enforce its rights hereunder, the
substantially prevailing party shall recover from the substantially non-
prevailing party all of the substantially prevailing party's attorneys'
fees and costs (the "Expenses") incurred in such action. For purposes
herein, the Expenses shall include investigatory, trial, appeal,
bankruptcy, mediation and arbitration expenses, and all costs of collection
and shall cover fees and costs for the lawyers, experts, paralegals and
clerks, and all other persons reasonably necessary as part of the
enforcement process. All such Expenses shall bear interest from the date
incurred until the date paid at the highest rate of interest permitted in
Florida. The parties request that a court award the actual Expenses
incurred by the substantially prevailing party, recognizing that it is the
parties intention that the substantially prevailing party should be made
completely whole. Costs incurred in enforcing this Section shall be
included in Expenses.
13.5 Time of Essence. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
The Buyer:
ECKLER INDUSTRIES, INC.,
a Florida corporation
By: /s/ J. Neal Hutchinson, Jr.
Name:
Its: Asst. V.P.
The Stockholder:
/s/R.C. Hill,II
R. C. HILL, II
Exhibit 10.2
AMENDED AND RESTATED RENEWAL PROMISSORY NOTE
$190,468.41 February 12, 1997
Orlando, Florida
FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY and
ECKLER INDUSTRIES, INC. (jointly and severally the "Maker"), promise to pay
to Mr. & Mrs. R.C. HILL, III ( collectively the "Holder") the principal sum
of ONE HUNDRED NINETY THOUSAND FOUR HUNDRED SIXTY EIGHT AND 41/100 DOLLARS
($190,468.41) on or before June 30, 1997, and promises to pay interest
thereon at the rate of Fifteen Percent (15%) per annum on the principle
balance from July 12, 1996, commencing August 1, 1996 and monthly
thereafter on the first of each month. The said principal sum and interest
shall be payable in lawful money of the United States of America at 3407
West Colonial Drive, Orlando, Florida 32808, or at such place as may
hereafter be designated by written notice from the Holder to the Maker.
This Promissory Note shall not be transferable by the Holder hereof.
Each person liable hereon, whether maker, endorser or guarantor,
hereby waives presentment, protest, notice, notice of protest and notice of
dishonor and agrees to pay any and all costs, including actual attorney's
fees, whether suit be brought or not, if, after maturity of this Promissory
Note, or default hereunder, counsel shall be employed to collect on this
Promissory Note.
Whenever used herein the terms "holder" and "maker" shall be construed
in the singular or plural as the context may require or admit.
This Promissory Note amends, restates and renews in its entirety that
certain promissory note made by Maker in favor of and currently owned and
held by Holder, dated July 12, 1996, in the original principal sum of One
Hundred Ninety Thousand Four Hundred Sixty Eight and 41/100 dollars
($190,468.41).
In witness whereof, the undersigned Maker has executed and delivered
this Promissory Note this 12th day of February 1997.
ECKLER INDUSTRIES, INC. LIBERTY FINANCE COMPANY
By: /S/ J. Neal Hutchinson, Jr. By: /S/ R.C. Hill, III
J. Neal Hutchinson, Jr. Ass't Vice-Pres R.C. Hill, III, President
Exhibit 10.3
AMENDED AND RESTATED RENEWAL PROMISSORY NOTE
$60,000 February 12, 1997
Orlando, Florida
FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the
"Maker"), promises to pay to NATE WEAVER, INC. (the "Holder") the principal
sum of SIXTY THOUSAND AND NO/100 DOLLARS ($60,000) on or before July 31,
1997, and promises to pay interest thereon at the rate of Sixteen Percent
(16%) per annum on the principle balance from August 1, 1992 commencing
October 31, 1992 and quarterly thereafter on January 31, April 30, and July
31. The said principal sum and interest shall be payable in lawful money of
the United States of America at 2519 Pershing Oaks Place, Orlando, Florida
32806, or at such place as may hereafter be designated by written notice
from the Holder to the Maker. Until the principal is fully repaid, the
undersigned agrees to pay a late charge of Six (6%) on any interest or
principal payment received after Fifteen (15) calendar days from the due
date.
This Promissory Note shall not be transferable by the Holder hereof.
Each person liable hereon, whether maker, endorser or guarantor,
hereby waives presentment, protest, notice, notice of protest and notice of
dishonor and agrees to pay any and all costs, including actual attorney's
fees, whether suit be brought or not, if, after maturity of this Promissory
Note, or default hereunder, counsel shall be employed to collect on this
Promissory Note.
Whenever used herein the terms "holder" and "maker" shall be construed
in the singular or plural as the context may require or admit.
This Promissory Note amends, restates and renews in its entirety that
certain promissory note made by R.C. Hill's World of Wheels, Inc. in favor
of and currently owned and held by Holder, dated August 1, 1992, in the
original principal sum of Sixty Thousand and no/100 dollars ($60,000).
Liberty Finance Company is the successor in interest, by merger, to R.C.
Hill's World of Wheels, Inc.
In witness whereof, the undersigned Maker has executed and delivered
this Promissory Note this 12th day of February 1997.
LIBERTY FINANCE COMPANY
By: /S/ R.C. Hill, III
R.C. Hill, III, President
Exhibit 10.4
CONSOLIDATED, AMENDED AND RESTATED
RENEWAL PROMISSORY NOTE
$20,000 February 12, 1997
Orlando, Florida
FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the
"Maker"), promises to pay to JOHN JEYASEELAN (the "Holder") the principal
sum of TWENTY THOUSAND AND NO/100 DOLLARS ($20,000) on or before June 30,
1997, and promises to pay interest thereon at the rate of Fifteen Percent
(15%) per annum on the principle balance from December 31, 1996 commencing
on June 30, 1997 and annually thereafter.
This Promissory Note shall not be transferable by the Holder hereof.
Each person liable hereon, whether maker, endorser or guarantor,
hereby waives presentment, protest, notice, notice of protest and notice of
dishonor and agrees to pay any and all costs, including actual attorney's
fees, whether suit be brought or not, if, after maturity of this Promissory
Note, or default hereunder, counsel shall be employed to collect on this
Promissory Note.
Whenever used herein the terms "holder" and "maker" shall be construed
in the singular or plural as the context may require or admit.
This Promissory Note consolidates, amends, restates and renews in
their entirety the following promissory notes made by Maker in favor of and
currently owned and held by Holder: (1) that certain promissory note
undated in 1994, in the original principal sum of Ten Thousand and No/100
Dollars ($10,000); (2) that certain promissory note dated December 30,
1994, in the original principal sum of Five Thousand and No/100 Dollars
($5,000); and (3) that certain promissory note dated December 27, 1995, in
the original principal sum of Five Thousand and No/100 Dollars ($5,000).
In witness whereof, the undersigned Maker has executed and delivered
this Promissory Note this 12th day of February 1997.
LIBERTY FINANCE COMPANY
By: /S/ R.C. Hill
R.C. Hill, III, President
Exhibit 10.5
AMENDED AND RESTATED RENEWAL PROMISSORY NOTE
$70,000 February 12, 1997
Orlando, Florida
FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the
"Maker"), promises to pay to NATE WEAVER, INC. (the "Holder") the principal
sum of SEVENTY THOUSAND AND NO/100 DOLLARS ($70,000) on or before December
31, 1997, and promises to pay interest thereon at the rate of Sixteen
Percent (16%) per annum on the principle balance from January 31, 1993 and
commencing on February 28, 1993 and quarterly thereafter on May 31, August
31, and November 30. The said principal sum and interest shall be payable
in lawful money of the United States of America at 2519 Pershing Oaks
Place, Orlando, Florida 32806, or at such place as may hereafter be
designated by written notice from the Holder to the Maker. Until the
principal is fully repaid, the undersigned agrees to pay a late charge of
Six (6%) on any interest or principal payment received after Fifteen (15)
calendar days from the due date.
This Promissory Note shall not be transferable by the Holder hereof.
Each person liable hereon, whether maker, endorser or guarantor,
hereby waives presentment, protest, notice, notice of protest and notice of
dishonor and agrees to pay any and all costs, including actual attorney's
fees, whether suit be brought or not, if, after maturity of this Promissory
Note, or default hereunder, counsel shall be employed to collect on this
Promissory Note.
Whenever used herein the terms "holder" and "maker" shall be construed
in the singular or plural as the context may require or admit.
This Promissory Note amends, restates and renews in its entirety that
certain promissory note made by R.C. Hill's World of Wheels, Inc. in favor
of and currently owned and held by Holder, dated January 1, 1993, in the
original principal sum of Seventy Thousand and no/100 dollars ($70,000).
Liberty Finance Company is the successor in interest, by merger, to R.C.
Hill's World of Wheels, Inc.
In witness whereof, the undersigned Maker has executed and delivered
this Promissory Note this 12th day of February 1997.
LIBERTY FINANCE COMPANY
By:/s/ R.C. Hill
R.C. Hill, III, President
Exhibit 10.6
AMENDED AND RESTATED RENEWAL PROMISSORY NOTE
$50,000 February 12, 1997
Orlando, Florida
FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY
(the "Maker"), promises to pay to NATE WEAVER, INC. (the
"Holder") the principal sum of FIFTY THOUSAND AND NO/100 DOLLARS
($50,000) on or before June 30, 1997, and promises to pay
interest thereon at the rate of Sixteen Percent (16%) per annum
on the principle balance from April 17, 1992 and commencing on
June 30, 1992 and at the end of each calendar quarter thereafter.
The said principal sum and interest shall be payable in lawful
money of the United States of America at 2519 Pershing Oaks
Place, Orlando, Florida 32806, or at such place as may hereafter
be designated by written notice from the Holder to the Maker.
Until the principal is fully repaid, the undersigned agrees to
pay a late charge of Six (6%) on any interest or principal
payment received after Fifteen (15) calendar days from the due
date.
This Promissory Note shall not be transferable by the Holder
hereof.
Each person liable hereon, whether maker, endorser or
guarantor, hereby waives presentment, protest, notice, notice of
protest and notice of dishonor and agrees to pay any and all
costs, including actual attorney's fees, whether suit be brought
or not, if, after maturity of this Promissory Note, or default
hereunder, counsel shall be employed to collect on this
Promissory Note.
Whenever used herein the terms "holder" and "maker" shall be
construed in the singular or plural as the context may require or
admit.
This Promissory Note amends, restates and renews in its
entirety that certain promissory note made by R.C. Hill's World
of Wheels, Inc. in favor of and currently owned and held by
Holder, dated April 17, 1992 in the original principal sum of
Fifty Thousand and no/100 dollars ($50,000). Liberty Finance
Company is the successor in interest, by merger, to R.C. Hill's
World of Wheels, Inc.
In witness whereof, the undersigned Maker has executed and
delivered this Promissory Note this 12th day of February 1997.
LIBERTY FINANCE COMPANY
By: /S/ R.C. Hill, III
R.C. Hill, III, President
Exhibit 10.7
LEASE
THIS LEASE (this "Lease") is made as of February 12, 1997 between
"Landlord" and "Tenant" hereinafter named.
WITNESSETH:
1. DEFINITIONS
(a) "Landlord": R.C. HILL, II.
Address: 1214 Salerno Court, Orlando, Florida.
(b) "Tenant": FIRST CHOICE AUTO FINANCE, INC., a Florida corporation.
Address: 101 Phillippe Parkway, Suite 300, Safety Harbor,
Florida 34695.
(c) "Premises": The land described in Exhibit A attached
hereto and the building (the "Building") and other improvements
located thereon. The address of the Premises is set forth on
Exhibit A.
(d) "Use of Premises": Automobile sales and financing and ancillary
sales and administrative offices. Additionally, a portion of the
Premises is subject to leases which leases are hereby assigned to
Tenant, who agrees to become the Landlord thereunder. Such
leases shall thereupon be deemed to be permitted sub-leases
hereunder. The use of the Premises shall include rights to any
signage leases on the Premises.
(e) "Commencement Date": The date hereof.
(f) "Term": The period commencing on the Commencement Date and
ending on the last day of the sixtieth (60th) full calendar month
after the Commencement Date. Tenant shall have the option to
renew the term of this Lease in accordance with the provisions
and conditions of Rider 1 attached to this Lease.
(g) "Rent": The base rent payable by Tenant in accordance with
the provisions of Section 3. Rent and all other sums payable by
Tenant to Landlord under this Lease, plus any applicable tax,
shall be paid to Landlord, without deduction or offset, at the
address stated above, or at such other place as Landlord may
hereafter specify in writing.
(h) "Security Deposit": None.
2. PREMISES AND TERM. Landlord hereby leases to Tenant and Tenant
leases from Landlord the Premises for the Term (unless sooner terminated as
provided herein).
The Lease Term shall begin as of the date set forth above, in that the
Tenant will have immediate possession of said Premises. As of the date
thirty (30) days from the date hereof Tenant shall be deemed to have
accepted the Premises as complying fully with Landlord's covenants and
obligations hereunder, except for those arising under paragraphs 5 or 27
and as to those matters as to which the Tenant shall have notified the
Landlord on or before such date.
3. RENT: Tenant covenants and agrees to pay, without deduction or
offset, to Landlord Rent for the Premises, on or before the first (1st) day
of the first (1st) full calendar month of the Term and on or before the
first (1st) day of each and every successive calendar month thereafter
during the Term, along with any applicable sales or other tax, in
accordance with the following schedule:
(a) for the period from the Commencement Date through the last day of
the sixth (6th) full calendar month of the Term, the sum of Fifteen
Thousand Five Hundred Dollars ($15,500.00) per month;
(b) for the period from the first day of the seventh (7th) full
calendar month through the last day of the twelfth (12th) full calendar
month of the Term, the sum of Sixteen Thousand Dollars ($16,000.00) per
month;
(c) for the period from the first day of the thirteenth (13th) full
calendar month through the last day of the sixtieth (60th) full calendar
month, the sum of $17,000.00 per month; and
(d) beginning as of the first month of each Renewal Term for each
successive twelve (12) month period during each Renewal Term (and any
exercised renewal thereof), the sum determined by increasing the Rent in
effect for the preceding twelve (12) month period pursuant to the CPI, in
accordance with the provisions of Rider 2 attached to this Lease (the "CPI
Adjustment").
In the event the Commencement Date occurs on a day other than the first
(1st) day of a calendar month, the first Rent payment shall be on the
Commencement Date in the amount of the Rent for one (1) full calendar month
plus the prorated Rent for the calendar month in which the Term commences.
Whenever any sum of money is required to be paid by Tenant in addition
to the Rent herein reserved, whether or not such sum is herein described as
"Additional Rent" or a provision is made for the collection of such sum as
"Additional Rent," such sum shall be deemed Additional Rent and, except as
otherwise specifically provided herein, shall be due and payable with the
first installment of Rent thereafter falling due hereunder.
4. USE OF PREMISES: The Premises shall be used by Tenant as
described above in Section 1(d), and for no other purpose without the prior
written consent of Landlord. Tenant shall not allow the Premises to be used
for any unlawful purpose; nor shall Tenant cause, maintain, or permit any
nuisance (as reasonably determined by Landlord or by law) in or about the
Premises or commit or suffer to be committed any waste in, on, or about the
Premises.
5. COMPLIANCE WITH LAWS; ADA: Tenant shall comply with all laws,
ordinances, orders, rules and regulations of state, federal, municipal or
other agencies or bodies having jurisdiction relating to the use, condition
and occupancy of the Premises. Without limiting the foregoing, Tenant shall
be responsible for performing any and all alterations and improvements to
the Premises necessary to comply with the requirements of the Americans
With Disabilities Act of 1990, any comparable state or local law, and all
regulations issued pursuant thereto. Landlord represents and warrants to
Tenant that on the date hereof, the Premises were in compliance with all of
the foregoing, to the extent such laws and regulations were applicable to
Landlord's use.
6. ASSIGNMENT AND SUBLETTING. Tenant shall not assign the right of
occupancy under this Lease, or any other interest therein, or sublet the
Premises, or any portion thereof, without the prior written consent of
Landlord, which may be withheld at Landlord's discretion. Notwithstanding
any assignment of the Lease, or the subletting of the Premises, or any
portion thereof, Tenant shall continue to be liable for the performance of
the terms, conditions and covenants of this Lease, including, but not
limited to, the payment of Rent and Additional Rent. Consent by Landlord
to one or more assignments or sublettings shall not operate as a waiver of
Landlord's rights as to any subsequent assignments or sublettings.
Landlord shall have the additional option, which shall be exercised by
providing Tenant with written notice, of terminating Tenant's rights and
obligations under this Lease (or the applicable portion thereof as to any
partial subletting) rather than permitting any assignment or subletting by
Tenant.
Notwithstanding the foregoing, if and only if the assignee shall have
a net worth (determined in accordance with generally accepted accounting
principles) at least equal to the net worth of Tenant at the time of such
assignment, and such assignee shall expressly assume all obligations and
liabilities of Tenant under this Lease, Tenant shall have the right to
assign this Lease to the surviving corporation of a merger, consolidation,
reorganization or recapitalization involving Tenant. Tenant shall give
Landlord at least thirty (30) days' prior written notice of any such
proposed assignment. Tenant shall deliver to Landlord all information and
materials as are reasonably required by Landlord to verify the net worth of
the assignee.
In the event of the transfer and assignment by Landlord of its
interest in this Lease and/or sale of the Premises, any of which it may do
at its sole option, Landlord shall thereby be released from any further
obligations hereunder, and Tenant agrees to look solely to such successor
in interest of Landlord for performance of such obligations.
The leases assigned to Tenant by Landlord described on the attached
Exhibit B, shall become sub-leases under this Lease. During the Term of
this Lease, the Tenant shall be entitled to collect the rent under such
subleases and shall pay the principal and interest on the mortgages
described below which are in place on the date hereof on the property which
is the subject of such subleases.
(1) Jasbir S. Kalsi, dated June 29, 1992, $68,086.40, mortgage on
rental property ($709.99 per month).
(2) Lonnie Lacy as Trustee of Jewel K. Ussery, Mortgage on 3410 and
3412 Cherry Lane in the monthly amount of $615.71.
7. ACCESS TO PREMISES. Landlord or its authorized employees,
contractors or agents shall upon advance notice to Tenant have the right to
enter upon the Premises at all reasonable times for the purposes of
inspecting the same, preventing waste, making such repairs as Landlord may
consider necessary (but without any obligation to do so except as expressly
provided for herein), and showing the Premises to prospective tenants,
mortgagees and/or purchasers.
8. UTILITY SERVICE. Tenant shall pay the cost of all utility
services, including, but not limited to, initial connection charges, all
charges for gas, sewer, water and electricity used on the Premises. Tenant
shall pay all costs caused by Tenant introducing excessive pollutants into
the sanitary sewer system, including permits, fees and charges levied by
any utility provider or governmental agency for any pollutants or solids
other than ordinary human waste. Tenant shall be responsible for the
installation and maintenance of any dilution tanks, holding tanks, settling
tanks, sewer sampling devices, sand traps, grease traps or similar devices
as may be required by any utility provider or governmental agency for
Tenant's use of the sanitary sewer system. Tenant shall pay all charges
for pest control and extermination. Landlord shall not be required to pay
for any services, supplies or upkeep in connection with the Premises. No
interruption or malfunction of any utility service not caused by Landlord
shall render Landlord liable in any respect for damages, direct or
consequential, to any person or property, nor be construed as an eviction
of Tenant, nor work an abatement of Rent or Additional Rent, nor relieve
Tenant from the obligation to fulfill any covenant or agreement of this
Lease.
9. TAXES. As part of the consideration for this Lease and in
addition to the Rent as herein provided, Tenant shall, during the Term pay
to Landlord as Additional Rent, all taxes, levies, excises, franchises,
imposts and charges, general and special, ordinary and extraordinary, or
whatever name, nature and kind, which may hereafter be levied, assessed,
charged or imposed, which are a lien (whether federal, state, city, county
or other public authority) upon this Lease, the Premises or Tenant's use or
occupancy thereof during the Term of this Lease. It is agreed that the
above charges, hereinafter referred to as "Taxes", shall not be in any way
construed to include any federal, state or local income taxes assessed
against either Landlord or Tenant.
Within thirty (30) days of Landlord's receipt of the ad valorem
tax statement for the Premises, Landlord shall deliver a copy thereof to
Tenant. Tenant shall, within thirty (30) days after receipt from Landlord
of the tax statement, pay to Landlord the due tax amount as Additional
Rent. The due tax amount shall be determined as follows: if the payment is
made to Landlord before November 1st, the due tax amount shall be the
November tax amount; if the payment is made after November 1st and before
the 15th day of a calendar month, the due tax amount shall be the
applicable tax amount for such calendar month; and if the payment is made
after November 1st and after the 15th day of a calendar month, the due tax
amount shall be the applicable tax amount for the next succeeding calendar
month. Assuming Tenant performs its obligations for the payment of Taxes
to Landlord, Landlord shall pay any Taxes placed on the Premises prior to
the date the same shall become delinquent.
The parties hereto agree that in the event of the installation
during the Term of this Lease by any legal taking authority of any
improvement including, but not limited to, sidewalks and storm and sanitary
drains, then Tenant shall pay such special tax assessments.
Tenant further agrees that during the Term of the Lease it will
pay to Landlord, as Additional Rent, any "use" or "sales" tax that might be
imposed by any governmental body against either Landlord or Tenant by
reason of the occupancy of the Premises and payment of rental therefor by
Tenant.
10. "AS IS" CONDITION. The Premises are rented "as is", without any
additional alterations or improvements to be constructed by Landlord or any
repairs to be performed by Landlord, and without any representation or
warranty except as specifically set forth in this Lease.
11. REPAIRS AND MAINTENANCE: (a) Landlord shall have no obligation
to perform or undertake any maintenance or repair of the Premises, and
Landlord shall not be liable to Tenant for any damage or inconvenience, and
Tenant shall not be entitled to any abatement or reduction of Rent or
Additional Rent, by reason of any required maintenance, repairs,
alterations or additions to the Premises.
(b) Tenant shall, at its own risk and expense, maintain all
parts of the Premises in good repair and condition (including all necessary
replacements), including, but not limited to, the roof, the foundation,
Building exterior (including repainting as necessary), mechanical,
electrical, HVAC, plumbing systems, windows, doors, downspouts, dock
bumpers, landscaping, parking improvements, and the regular removal of
debris. Should Tenant neglect to keep and maintain the Premises, then
Landlord shall have the right, but not the obligation, to have the work
done and any reasonable costs therefor shall be charged to Tenant as
Additional Rent.
(c) At the termination of this Lease, Tenant shall deliver the
Premises "broom clean" in the same good order and condition as existed at
the Commencement Date, ordinary wear, natural deterioration beyond the
control of Tenant, damage by fire, tornado or other casualty excepted.
12. ALTERATIONS AND IMPROVEMENTS: Tenant shall make no alterations,
additions or improvements to the Premises without the prior written
approval of Landlord which will not be reasonably withheld. Tenant shall
conduct its work in such a manner as to maintain harmonious labor relations
and shall, prior to the commencement of the work, submit to Landlord copies
of all necessary permits. All alterations, additions or improvements,
whether temporary or permanent in character, made in or upon the Premises,
either by Landlord or Tenant, shall be Landlord's property and at the end
of the Term shall remain in or upon the Premises without compensation to
Tenant. All of Tenant's furniture, movable trade fixtures and equipment
not attached to the Premises may be removed by Tenant at the termination of
this Lease, if Tenant so elects, and shall be so removed, if required by
Landlord, and, if not so removed, shall, at the option of Landlord, become
the property of Landlord.
13. INDEMNITY.
(a) Landlord shall not be liable for, and Tenant will indemnify
and hold Landlord harmless of and from, all fines, suits, damages, claims,
demands, losses, actions, liabilities and costs (including reasonable
attorneys' fees) for any injury to person or damage to or loss of property
on or about the Premises caused by the negligence or intentional tortious
conduct or breach of this Lease by Tenant, its employees, subtenants,
invitees or by any other person entering the Premises under express or
implied invitation of Tenant, or arising out of Tenant's use of the
Premises. Landlord shall not be liable or responsible for any loss or
damage to any property or the death or injury to any person occasioned by
theft, fire, act of God, public enemy, injunction, riot, strike,
insurrection, war, court order, requisition of other governmental body or
authority, by third parties or by any other matter beyond the reasonable
control of Landlord, or for any injury or damage or inconvenience which may
arise through repair or alteration of any part of the Premises, or failure
to make repairs, or from any cause whatsoever except Landlord's negligence
or intentional tortious conduct. Under no circumstances shall Landlord be
liable for special or consequential damages. It is specifically understood
and agreed that there shall be no personal liability of Landlord with
respect to any of the covenants, conditions or provisions of this Lease; in
the event of a breach or default by Landlord of any of its obligations
under this Lease, Tenant shall look solely to the equity of the Landlord in
the Premises for the satisfaction of Tenant's remedies.
(b) Tenant shall not be liable for, and Landlord will indemnify
and hold Tenant harmless of and from all fines, suits, damages, claims,
demands, losses, actions, liabilities and costs (including reasonable
attorneys' fees) for any injury to person or damage to or loss of property
on or about the Premises caused by the negligence or intentional tortious
conduct or breach of this Lease by Landlord, its employees, invitees, or by
any other person entering the Premises under express or implied invitation
of Landlord, or arising out of Landlord's actions in regard to the
Premises. Tenant shall not be liable or responsible for any loss or damage
to any property or the death or injury to any person occasioned by theft,
fire, act of God, public enemy, injunction, riot, strike, insurrection,
war, court order, requisition of other governmental body or authority, by
third parties or any other matter beyond the reasonable control of Tenant,
or for any injury or damage or inconvenience which may arise through repair
or alteration of any part of the Premises (except for repairs or
alterations which are made or required to be made by Tenant hereunder) or
from any cause whatsoever except Tenant's negligence or intentional
tortious conduct, or Tenant's failure to otherwise comply with the terms of
this Lease, especially as to Tenant's duty of complete repair and
maintenance of the Premises. Under no circumstances shall Tenant be liable
for special or consequential damages
14. DAMAGE BY FIRE OR THE ELEMENTS. In the event that the Premises
should be totally destroyed by fire or other casualty, or in the event the
Premises should be so damaged that rebuilding or repairs cannot be
completed within one hundred eighty (180) days after the date of such
damage, either Landlord or Tenant may, at its option, by written notice to
the other given not more than thirty (30) days after the date of such
destruction or damage, terminate this Lease. In such event, the Rent shall
be abated during the unexpired Term effective with the date of such
destruction or damage.
In the event the Premises should be damaged by fire or other casualty
covered by Landlord's insurance but only to such extent that rebuilding or
repairs can be completed within one hundred eighty (180) days after the
date of such damage, or if the damage should be more serious but neither
Landlord nor Tenant elects to terminate this Lease, then Landlord shall,
within sixty (60) days after the date of such damage, commence to rebuild
or repair the Premises and shall proceed with reasonable diligence to
restore the Premises to substantially the same condition in which they were
immediately prior to the happening of the casualty, except that Landlord
shall not be required to rebuild, repair or replace any part of the
furniture, equipment, fixtures and other improvements which may have been
placed by Tenant on the Premises. Tenant's obligation for the payment of
Rent and Additional Rent shall remain in effect, without abatement or
reduction, during the time of such rebuilding or repairs. In the event any
mortgagee, or the holder of any deed of trust, security agreement or
mortgage on the Premises, should require that the insurance proceeds be
used to retire the mortgage debt, Landlord shall have no obligation to
rebuild and this Lease shall terminate upon notice to Tenant. Any insurance
which may be carried by Landlord or Tenant against loss or damage to the
Premises shall be for the sole benefit of the party carrying such insurance
and under its sole control.
15. EMINENT DOMAIN. If any or all of the Premises are taken by the
exercise of any power of eminent domain or are conveyed to or at the
direction of any governmental entity under a threat of any such taking
(each a "Condemnation"), Landlord shall be entitled to collect from the
condemning authority thereunder the entire amount of any award made in any
such proceeding or as consideration for such conveyance, without deduction
therefrom for any leasehold or other estate or right held by Tenant under
this Lease. Tenant hereby: (a) assigns to Landlord all of Tenant's right,
title and interest, if any, in and to any such award; (b) waives any right
which it may otherwise have in connection with such Condemnation, against
Landlord or such condemning authority, to any payment for (i) the value of
the then unexpired portion of the Term, (ii) leasehold damages, and (iii)
any damage to or diminution of the value of Tenant's leasehold interest
hereunder or any portion of the Premises not covered by such Condemnation;
and (c) agrees to execute any and all further documents which may be
required to facilitate Landlord's collection of any and all such awards.
Subject to the operation and effect of the foregoing provisions of this
Section, Tenant may seek, in a separate proceeding, a separate award on
account of any damages or costs incurred by Tenant as a result of any
Condemnation of any or all of the Premises, so long as such separate award
in no way diminishes any award or payment which Landlord would otherwise
receive as a result of such Condemnation. If (a) all of the Premises are
taken by a Condemnation, or (b) any part of the Premises is taken by a
Condemnation and the remainder thereof is unfit for the reasonable
operation therein of Tenant's business, or (c) any of the Premises is taken
by a Condemnation and, in Tenant's opinion, it would be impractical to
restore the remainder thereof, or (d) any of the Premises is taken by a
Condemnation and, in Tenant's reasonable opinion, it would be impractical
to continue to operate the remainder thereof, then, in any such event, the
Term shall terminate on the date on which possession of so much of the
Premises as is taken by such Condemnation is taken by the condemning
authority thereunder, and all Rent payable hereunder shall be apportioned
and paid to such date. If there is a Condemnation and the Term does not
terminate pursuant to the foregoing provisions of this Section, the
operation and effect of this Lease shall be unaffected by such
Condemnation, except that the Rent shall be reduced in proportion to the
square footage of the area taken by such Condemnation.
16. DEFAULT. The following events shall constitute events of default
by Tenant under this Lease:
(a) Tenant's failure to pay the Rent, Additional Rent, or any
other sums payable hereunder for a period of three (3) days after
written notice by Landlord;
(b) Either party's failure to observe, keep or perform any of the
other terms, covenants, agreements or conditions of this Lease
for a period of ten (10) days after written notice by the non-
defaulting party, provided, however, that if such breach is
capable of being cured, but not within such 10-day period, this
Lease may not be terminated so long as the defaulting party
commences appropriate curative action within such 10-day period
and thereafter diligently prosecutes such cure to completion as
promptly as possible;
(c) the bankruptcy (as hereinafter defined) of Tenant or any
guarantor or other obligor (an "Obligor") of all or any part of
Tenant's obligations under this Lease;
(d) Tenant's failure to occupy and assume possession of the
Premises within fifteen (15) days after the Commencement Date;
and
(e) Tenant's vacating of all or substantially all of the
Premises, whether or not Rent continues to be paid.
As used herein, "bankruptcy" means, as to any Obligor, that Obligor's
taking or acquiescing in the taking of any action seeking relief under, or
advantage of, the Bankruptcy Code (11 U.S.C. 101 et seq., as amended and in
effect from time to time), or any applicable debtor relief, liquidation,
receivership, conservationship, moratorium, rearrangement, insolvency,
assignment for benefit of creditors, reorganization or similar federal or
state law, rule or regulation affecting the rights or remedies of creditors
generally, as in effect from time to time. For the purpose of this
definition, the term "acquiescing" shall include, without limitation, the
failure to (a) file, within thirty (30) days after its entry, a petition,
answer or motion to vacate or to discharge any order, judgment or decree
providing for any relief under any such law, rule or regulation, and (b)
have such order, judgment or decree vacated or discharged within sixty (60)
days after its entry.
Upon the occurrence of any one or more of such events of default, the
non-defaulting party, at its election, may exercise any one or more of the
following remedies. If default occurs:
(1) by Tenant, Landlord may terminate Tenant's right to
possession under the Lease and re-enter and retake possession of
the Premises and relet or attempt to relet the Premises on behalf
of Tenant at such rent and under such terms and conditions as
Landlord may deem best under the circumstances for the purpose of
reducing Tenant's liability. Landlord shall not be deemed to
have thereby accepted a surrender of the Premises, and Tenant
shall remain liable for all Rent, Additional Rent, or other sums
due under this Lease and for all damages suffered by Landlord
because of Tenant's breach of any of the covenants of the Lease.
(2) by Tenant, Landlord may accelerate and declare the entire
remaining unpaid Rent and Additional Rent for the balance of this
Lease to be immediately due and payable forthwith, and may, at
once, take legal action to recover and collect the same.
(3) by either party, the non-defaulting party may declare this
Lease to be terminated.
(4) by either party, the non-defaulting party may enforce such
other rights and remedies as are available at law or in equity
for said default under this Lease.
No re-entry or retaking possession of the Premises by Landlord due to
default by Tenant shall be construed as an election on Landlord's part to
terminate this Lease, unless a written notice of such intention be given to
Tenant, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any Rent or other monies due to Landlord hereunder
or of any damages accruing to Landlord by reason of the violations of any
of the terms, provisions and covenants herein contained. Landlord's
acceptance of Rent or Additional Rent or other monies following any event
of default hereunder shall not be construed as Landlord's waiver of such
event of default. No forbearance by a non-defaulting party of action upon
any violation or breach of any of the terms, provisions, and covenants
herein contained shall be deemed or construed to constitute a waiver of the
terms, provisions, and covenants herein contained. Forbearance by a non-
defaulting party to enforce one or more of the remedies herein provided
upon an event of default shall not be deemed or construed to constitute a
waiver of any other violation or default. Legal actions to recover for
loss or damage that Landlord may suffer by reason of termination of this
Lease due to default by Tenant or the deficiency from any reletting as
provided for above shall include the expense of repossession or reletting
and any repairs undertaken by Landlord following repossession. Legal
actions to recover for loss or damage that Tenant may suffer by reason of
termination of this Lease shall include relocation expenses.
17. LANDLORD'S LIEN. Landlord shall have, at all times, a valid
security interest to secure payment of all Rent, Additional Rent and other
sums of money becoming due hereunder from Tenant, and to secure payment of
any damages or loss which Landlord may suffer by reason of the breach by
Tenant of any covenant, agreement or condition contained herein, upon all
goods, wares, equipment, fixtures, furniture, improvements and other
personal property of Tenant presently or which may hereinafter be situated
in the Premises, and all proceeds therefrom, and such property shall not be
removed therefrom without the consent of Landlord until all arrearages in
Rent, Additional Rent, and any and all other sums of money due to Landlord
hereunder shall first have been paid and discharged and all of the
covenants, agreements, and conditions hereof have been fully complied with
and performed by Tenant. In consideration of this Lease, upon the
occurrence of an event of default by Tenant, Landlord may, in addition to
any other remedies provided herein, enter upon the Premises and take
possession of any and all goods, wares, equipment, fixtures, furniture,
improvements, and other personal property of Tenant situated on or in the
Premises, without liability for trespass or conversion, and sell the same
at public or private sale, with or without having such property at the
sale, after giving Tenant reasonable notice of the time and place of any
public sale or of the time after which any private sale is to be made, at
which sale the Landlord or its assigns may purchase unless otherwise
prohibited by law. Unless otherwise provided by law, and without intending
to exclude any other manner of giving Tenant reasonable notice, the
requirement of reasonable notice shall be met if such notice is given in
the manner prescribed in Section 25 dealing with "Notices" in this Lease at
least five (5) days before the time of sale. The proceeds from any such
disposition, less any and all expenses connected with the taking of
possession, holding and selling of the property (including reasonable
attorneys' fees and other expenses), shall be applied as a credit against
the indebtedness secured by the security interest granted in this Section
18. Any surplus shall be paid to Tenant or as otherwise required by law,
and Tenant shall pay any deficiencies forthwith. Upon request by Landlord,
Tenant agrees to execute and deliver to Landlord a financing statement in
form sufficient to perfect the security interest of Landlord in the
aforementioned property and proceeds thereof under the provisions of the
Uniform Commercial Code in force in the State of Florida. Landlord may at
its election at any time file a copy of this Lease as a financing
statement.
The security interest granted Landlord pursuant to this Section 18 is
in addition to all landlord's liens and comparable rights provided by law
(including, but not limited to, Section 83.08, Florida Statutes) or the
other provisions of this Lease.
18. SUBORDINATION. This Lease shall be subject and subordinate to
the lien, operation and effect of each mortgage and/or other similar
instrument of encumbrance heretofore or hereafter covering any or all of
the Premises (and each renewal, modification, consolidation, replacement or
extension thereof) (each a "Mortgage"), all automatically and without the
necessity of any action by either party hereto. Tenant shall, promptly at
the request of Landlord or the holder of any Mortgage (a "Mortgagee"),
execute, acknowledge and deliver such further instrument or instruments
evidencing such subordination as Landlord or such Mortgagee deems necessary
or desirable. Notwithstanding any contrary provision contained in this
Lease, any Mortgagee may at any time subordinate the lien of its Mortgage
to the operation and effect of this Lease without obtaining Tenant's
consent thereto, by giving Tenant written notice thereof, in which event
this Lease shall be deemed to be senior to such Mortgage without regard to
their respective dates of execution, delivery and/or recordation among the
applicable public records, and thereafter such Mortgagee shall have the
same rights as to this Lease as it would have had, were this Lease executed
and delivered before the execution of such Mortgage. Tenant agrees to
attorn to any new owner of the Premises resulting from the foreclosure of
any Mortgage or conveyance in lieu of foreclosure, if such new owner so
requests.
19. QUIET ENJOYMENT. Provided Tenant has performed all of the terms,
covenants, agreements and conditions of this Lease, including the payment
of Rent and all other sums due hereunder, Tenant shall peaceably and
quietly hold and enjoy the Premises, except as described in Section 19,
against Landlord and all persons claiming by, through or under Landlord,
for the term herein described, subject to the provisions and conditions of
this Lease.
20. DELETED.
21. CONSTRUCTION LIENS. Tenant shall (a) immediately after it is
filed or claimed, have released (by bonding or otherwise) any construction,
mechanics', materialman's or other lien filed or claimed against any or all
of the Premises or any other property owned or leased by Landlord, by
reason of labor or materials provided for Tenant or any of its contractors
or subcontractors (other than labor or materials provided by Landlord
pursuant to the provisions of this Lease), or otherwise arising out of
Tenant's use or occupancy of the Premises, and (b) defend, indemnify and
hold harmless Landlord against and from any and all liability, claim of
liability or expense (including, without limitation, reasonable attorneys'
fees) incurred by Landlord on account of any such lien or claim. Nothing
in the provisions of this Lease shall be deemed in any way to give Tenant
any right, power or authority to contract for or permit to be furnished any
service or materials which would give rise to the filing of any mechanics'
or materialmen's lien against Landlord's estate or interest in and to the
Premises, it being expressly agreed that no estate or interest of Landlord
in and to the Premises shall be subject to any lien arising in connection
with any alteration, addition or improvement made by or on behalf of
Tenant. At Landlord's request, Tenant shall execute a written instrument
to be recorded for the purpose of providing notice of the existence of the
provisions of the preceding sentence in accordance with Section 713.10,
Florida Statutes.
22. HOLDING OVER. The failure of Tenant to surrender the Premises on
the date provided herein for the expiration of the Term (or at the time the
Lease may be otherwise terminated), and the subsequent holding over by
Tenant, with or without the consent of Landlord, shall result in the
creation of a tenancy at sufferance at double the Rent payable at the time
of the date provided herein for the expiration of this Lease or at the time
the Lease may be terminated otherwise by Landlord. This provision does not
give Tenant any right to hold over at the expiration of the Term, and shall
not be deemed, the parties agree, to be a renewal of the Term, either by
operation of law or otherwise.
23. BROKERAGE COMMISSION. Landlord and Tenant hereby warrant to the
other that there are no claims for broker's commissions or finder's fees in
connection with its execution of this Lease and agrees to indemnify and
save the other harmless from any liability that may arise from any such
claim, including reasonable attorneys' fees incurred with any related
defense.
24. NOTICES. Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered or given when (a)
actually received or (b) signed for or "refused" as indicated on the postal
or delivery service return receipt. Delivery may be by personal delivery,
Federal Express (or other commercially recognized express mail or delivery
service), or by United States mail, postage prepaid, certified or
registered mail, addressed to the parties hereto at the respective
addresses set out Sections 1(a) and 1(b), or at such other addresses as
they may hereafter specify by written notice delivered in accordance
herewith.
25. INSURANCE: Tenant shall, at Tenant's sole expense, obtain and
keep in force at all times during the Term, comprehensive general liability
insurance including property damage on an occurrence basis, with limits of
not less than $3,000,000.00 combined single limit insuring Landlord and
Tenant against any liability arising out of the ownership, use, occupancy
or maintenance of the Premises and all areas appurtenant thereto. The
limit of said insurance shall not, however, limit the liability of Tenant
hereunder. Tenant may carry said insurance under a blanket policy,
provided an endorsement naming Landlord as an additional insured as
attached hereto. Tenant shall maintain insurance upon all property in the
Premises owned by Tenant or for which Tenant is legally liable. Tenant
shall maintain insurance against such other perils and in such amounts as
Landlord may in writing from time to time reasonably require. The
insurance required to be obtained and maintained under this Lease shall be
with a company or companies licensed to issue the relevant insurance and
licensed to do business in the State of Florida. Such insurance company or
companies shall each have a policyholder's rating of no less than "A, VII"
in the most recent edition of Best's Insurance Reports. No policy shall be
cancelable or subject to reduction of coverage except after thirty (30)
days' prior written notice to Landlord. Landlord shall receive written
evidence of insurance upon request. All policies of insurance maintained
by Tenant shall be in form and substance reasonably acceptable to Landlord,
with satisfactory evidence that all premiums have been paid. Tenant agrees
not to violate knowingly or permit to be violated any of the conditions or
provisions of the insurance policies required to be furnished hereunder,
and agrees to promptly notify Landlord of any fire or other casualty
affecting the Premises. If Tenant fails to procure and maintain insurance
as required hereunder, Landlord may do so, and Tenant shall, on written
demand, as Additional Rent, reimburse Landlord for all monies expended by
Landlord to procure and maintain such insurance.
As part of the consideration for this Lease and in addition to the
above insurance requirements, Tenant shall, during the Term pay to Landlord
as Additional Rent, the cost of the casualty or property damage insurance
policy which Landlord shall maintain on the Premises from time to time
during the Term. At Landlord's discretion, Landlord may maintain insurance
on the Premises in the form of a blanket policy insuring other properties
in addition to the Premises, and, in such event, a fair and reasonable
amount of the cost of such blanket policy shall be allocated by Landlord to
the Premises for the purpose of determining Tenant's Additional Rent
obligation for such insurance. Tenant shall, within thirty (30) days after
receipt from Landlord of a paid insurance premium statement (or other
reasonable evidence of the payment of insurance costs by Landlord),
reimburse Landlord for such payment as Additional Rent. Landlord agrees to
render billing to Tenant for such Additional Rent within sixty (60) days
after the relevant payment by Landlord.
Tenant hereby waives and releases Landlord of and from any and all
liabilities, claims and losses for which Landlord is or may be held liable
to the extent Tenant receives insurance proceeds on account thereof.
Landlord hereby waives and releases Tenant of and from any and all
liabilities, claims and losses for which Tenant is or may be held liable to
the extent Landlord receives insurance proceeds on account thereof.
Tenant shall not permit the Premises to be used in any way which
would, in the reasonable opinion of Landlord, be extra hazardous on account
of fire or otherwise or which would in any way increase or render void any
casualty or property damage insurance on the Premises.
26. HAZARDOUS SUBSTANCES.
(a) Tenant shall not cause or permit any Hazardous Substance to
be used, stored, generated, or disposed of on or in the Premises by Tenant,
Tenant's agents, employees, contractors, or invitees without first
obtaining Landlord's written consent. If Hazardous Substances are used,
stored, generated, or disposed of on or in the Premises, or if the Premises
become contaminated in any manner for which Tenant is legally liable,
Tenant shall indemnify and hold harmless the Landlord from any and all
claims, damages, fines, judgments, penalties, costs, liabilities, or losses
(including, without limitation, any decrease in value of the Premises,
damages caused by loss or restriction of rentable or usable space, or any
damages caused by adverse impact on marketing of the space, and any and all
sums paid for settlement of claims, reasonable attorneys' fees, consultant,
and expert fees) arising during or after the Term and arising as a result
of that contamination by Tenant. This indemnification includes, without
limitation, any and all costs incurred because of any investigation of the
site or any cleanup, removal, or restoration mandated by a federal, state,
or local agency or political subdivision. Without limitation of the
foregoing, if Tenant causes or permits the presence of any Hazardous
Substance on the Premises and that results in contamination, Tenant shall
promptly, at its sole expense, take any and all necessary actions to return
the Premises to the condition existing prior to the presence of any such
Hazardous Substance on the Premises. Tenant shall first obtain Landlord's
approval for any such remedial action. "Hazardous Substance" includes any
and all material or substances that are defined as "hazardous waste,"
"extremely hazardous waste," or a "hazardous substance" pursuant to
federal, or local government law. "Hazardous Substance" includes, but is
not restricted to, asbestos, polychlorobiphenyls ("PCBs"), petroleum, and
any regulated toxic, ignitable, reactive, or corrosive substance. The
provisions of this Section shall survive the expiration or termination of
this Lease.
(b) Landlord shall not cause or permit any Hazardous Substance
to be used, stored, generated, or disposed of on or in the Premises by
Landlord, Landlord's agents, employees, contractors, or invitees. If
Hazardous Substances are used, stored, generated, or disposed of on or in
the Premises, or if the Premises become contaminated in any manner for
which Landlord is legally liable, Landlord shall indemnify and hold
harmless the Tenant from any and all claims, damages, fines, judgments,
penalties, costs, liabilities, or losses (including, without limitation,
any decrease in value of the Premises, damages caused by loss or
restriction of rentable or usable space, or any damages caused by adverse
impact on marketing of the space, and any and all sums paid for settlement
of claims, reasonable attorneys' fees, consultant, and expert fees) arising
from actions or omissions occurring prior to the commencement of this Lease
Term and/or arising as a result of contamination by Landlord. This
indemnification includes, without limitation, any and all costs incurred
because of any investigation of the site or any cleanup, removal, or
restoration mandated by a federal, state, or local agency or political
subdivision. Without limitation of the foregoing, if Landlord causes the
presence of any Hazardous Substance on the Premises and that results in
contamination, Landlord shall promptly, at its sole expense, take any and
all necessary actions to return the Premises to the condition existing
prior to the presence of any such Hazardous Substance on the Premises.
"Hazardous Substance" includes, but is not restricted to, asbestos,
polychlorobiphenyls ("PCBs"), petroleum, and any regulated toxic,
ignitable, reactive, or corrosive substance. The provisions of this Section
shall survive the expiration or termination of this Lease.
27. ESTOPPEL CERTIFICATE. Tenant shall from time to time, within
five (5) days after being requested to do so by Landlord or any Mortgagee,
execute, acknowledge and deliver to that Landlord (or, at Landlord's
request, to any existing or prospective purchaser, transferee, assignee or
Mortgagee of any or all of the Premises, any interest therein or any of
Landlord's rights under this Lease) an instrument in recordable form,
certifying (a) that this Lease is unmodified and in full force and effect
(or, if there has been any modification thereof, that it is in full force
and effect as so modified, stating therein the nature of such
modification); (b) as to the dates to which the Rent and any Additional
Rent and other charges arising hereunder have been paid; (c) as to the
amount of any prepaid Rent or any credit due to Tenant hereunder; (d) that
Tenant has accepted possession of the Premises, and the date on which the
Term commenced; (e) as to whether, to the best knowledge of the signer of
such certificate, Landlord or Tenant is then in default in performing any
of its obligations hereunder (and, if so, specifying the nature of each
such default); and (f) as to any other fact or condition reasonably
requested by Landlord or such other addressee. Such instrument shall
contain an express acknowledgment that the statements contained therein are
being relied upon by Landlord and any such other addressee.
28. OSHA DISCLOSURE. Tenant acknowledges that it has been notified
of the possible presence of asbestos-containing materials ("ACM") and
materials designated by OSHA as presumed asbestos-containing materials
("PACM") located in the Premises. In addition, the following materials, if
located in properties constructed prior to 1981, must, in accordance with
the OSHA Regulations, be treated as PACM: any thermal system insulation and
surfacing material that is sprayed on, troweled on, or applied in some
other manner, as well as any resilient flooring material installed in 1980
or earlier. Upon written request by Tenant, Landlord shall provide Tenant
with copies of any information pertaining to ACM or PACM in Landlord's
files.
29. MISCELLANEOUS.
(a) Force Majeure. Whenever a period of time is herein
prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant
shall not be liable or responsible for, and there shall be excluded from
the computation for any such period of time, any delays due to strikes,
riots, acts of God, shortages of labor or materials, theft, fire, public
enemy, injunction, insurrection, court order, requisition of other
governmental body or authority, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond
the reasonable control of Landlord or Tenant.
(b) Joint and Several Liability. If two or more individuals,
corporations, partnerships, or other business associations (or any
combination of two or more thereof) shall sign this Lease as Tenant, the
liability of each such individual, corporation, partnership or other
business association to pay Rent and perform all other obligations
hereunder shall be deemed to be joint and several. In like manner, if the
Tenant named in this Lease shall be a partnership or other business
association, the members of which are, by virtue of statute or general law,
subject to personal liability, the liability of each such member shall be
joint and several.
(c) Absence of Option. The submission of this Lease for
examination does not constitute a reservation of or option for the
Premises, and this Lease becomes effective only upon execution and delivery
thereof by Landlord.
(d) Entire Agreement. Any and all riders and exhibits attached
to this Lease are made a part of this Lease for all purposes. This Lease
contains the entire agreement between the parties hereto and may not be
altered, changed or amended, except by written instrument signed by both
parties hereto.
(e) No Waiver. No provision of this Lease shall be deemed to
have been waived by Landlord unless such waiver be in writing signed by
Landlord and addressed to Tenant, nor shall any custom or practice which
may grow up between the parties in the administration of the provisions
hereof be construed to waive or lessen the right of Landlord to insist upon
the performance by Tenant in strict accordance with the terms hereof.
(f) Successors and Assigns. The terms, provisions, covenants,
and conditions contained in this Lease shall apply to, inure to the benefit
of, and be binding upon the parties hereto, and upon their respective
successors in interest and legal representatives, except as otherwise
herein expressly provided.
(g) Recording. This Lease shall not be recorded. However, a
memorandum of lease, in the form of that attached hereto as Rider 3 may be
recorded by Tenant, by Tenant's discretion, and at Tenant's sole expense.
Such memorandum of lease shall provide that it will automatically expire by
its terms at the expiration of the end of the current 5 year term of the
Lease. In the event that the Tenant exercises its right to extend the
Lease, the Tenant shall be permitted to file a new memorandum of lease for
the extended period in similar form.
(h) Default Interest. All past due Rent, Additional Rent and
other sums payable by Tenant under this Lease shall bear interest from the
date due until paid at a rate equal to the lesser of eighteen percent (18%)
per annum and the maximum non-usurious rate permitted under applicable law
from time to time.
(i) Headings and Use of Terms. The section and paragraph
headings to this Lease are for convenience and reference only. The words
as provided in the section and paragraph headings will not be held to
explain, modify, amplify, or aid in the interpretation, construction, or
meaning of the terms of this Lease. Terms defined in this Lease have the
meaning, designation, and significance ascribed to the terms defined in
this Lease.
(j) Partial Invalidity. If any term of this Lease, or the
application of the term to any person or circumstance is, to any extent,
invalid or unenforceable, the remainder of this Lease, or the application
of the term to persons or circumstances other than those as to which the
term is held invalid or unenforceable, will not be affected by the
application, and each term of this Lease will be valid and will be enforced
to the fullest extent permitted by law.
(k) Attorneys' Fees. If an action is begun, or a attorney is
retained by Landlord or Tenant to enforce this Lease or collect any sums
due as provided in this Lease or to collect money damages for breach of
this Lease, against the other, the prevailing party will be entitled to
collect from the other reimbursement for the reasonable actual fees of
attorneys and court costs in connection with the action.
(l) Governing Law. The validity, meaning, and effect of this
Lease will be determined as provided by the law of the State of Florida
applicable to agreements made and to be performed in the State of Florida.
(m) Time of Essence. Time is of the essence with respect to
each party's performance of its obligations under this Lease.
(n) Radon. In accordance with the requirements of Section
404.056(8), Florida Statutes, the following notice is hereby given:
RADON GAS: Radon is a naturally occurring radioactive
gas that, when it is accumulated in a building in sufficient
quantities, may present health risks to persons who are
exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon
testing may be obtained from the local County Public Health
Center.
30. NET LEASE. It is the intention of Landlord and Tenant that
rental under this Lease be absolutely net to Landlord, that all costs,
expenses and obligations of every kind relating directly or indirectly in
any way, foreseen or unforeseen, to the Premises which may arise or become
due during the Term of this Lease shall, except as otherwise specifically
provided in this Lease, be paid by Tenant and Tenant hereby indemnifies and
holds Landlord harmless from and against any and all such costs, expenses,
obligations, and liabilities.
31. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS LEASE OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN
ANY MANNER WITH THE PREMISES (INCLUDING WITHOUT LIMITATION, ANY ACTION TO
RESCIND OR CANCEL THIS LEASE OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS
LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS
WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD AND TENANT TO ENTER AND
EXECUTE THIS LEASE.
32. RIDERS. The following Riders and/or Addenda are attached
hereto and made a part of this Lease for all purposes: Rider 1 (Renewal
Options); and Rider 2 (CPI Adjustment in Rent).
33. RENT A SEPARATE COVENANT. Tenant shall not for any reason
withhold or reduce Tenant's required payments of Rent and Additional Rent,
it being expressly understood and agreed by the parties that the payment of
Rent and Additional Rent is a covenant by Tenant that is independent of the
other covenants of the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Lease,
effective as of the date first above written.
Signed, sealed and
delivered in the
presence of: TENANT:
FIRST CHOICE AUTO FINANCE, INC.,
a Florida corporation
/S/ By: /S/ J. Neal Hutchinson, Jr.
Witness Name:
Title: Vice President
/S/Frank S. Ioppolo, Jr.
Witness
LANDLORD:
/S/ /S/ R.C. Hill, II
Witness R.C. HILL, II
/S/
Witness
EXHIBIT "A"
TO THE LEASE
Description of real property leased:
See attached real estate tax notices.
Address of the Premises:
3411 West Colonial Drive
Orlando, FL 32808
EXHIBIT "B"
TO THE LEASE
Month to month lease to LANETTE KENDRICK of 3410 Cherry Lane, for $350
per month.
Month to month lease to DELORES BROWN of 3412 Cherry Lane, for $350
per month.
RIDER No.1
Option to Renew
1. Grant of Option. Tenant shall have, and is hereby given, three (3)
option(s) to renew and to extend the Term of this Lease, each option to
follow consecutively upon the expiration of the initial Term (the "Primary
Term") of this Lease (or the immediately preceding Renewal Term, if
applicable), provided that at the time any option to renew is exercised,
this Lease shall be in full force and effect and Tenant shall not be in
default hereunder. Each renewal option shall be for a term of sixty (60)
months (a "Renewal Term") and shall be exercised, if at all, by Tenant's
giving written notice thereof to Landlord at least one hundred eighty (180)
days before the expiration date of the Primary Term or the then current
Renewal Term, as applicable. The renewal and extension of this Lease for
any Renewal Term shall be on and under the same covenants, agreements,
terms, provisions, and conditions as are contained in this Lease for the
Primary Term (with Rent being subject to adjustment in accordance with the
provisions of Section 3 and Rider 2 of this Lease), except that Tenant
shall have no further option to renew after the third Renewal Term. The
Rent and the Additional Rent and all other sums due and payable by Tenant
under this Lease, shall continue to be made and to be paid by Tenant during
any Renewal Term as provided in this Lease for the Primary Term. Any
assignment or subletting by Tenant during the Primary Term shall terminate
all options of Tenant set forth herein.
2. Definitions. Unless otherwise specifically defined in this Rider,
capitalized terms shall have the same respective meanings as set forth in
the non-Rider portion of this Lease.
RIDER NO. 2
CPI Adjustment in Rent
1. Adjustment Computation. Commencing with the first day of the
thirteenth (13th) full calendar month during the Term, and thereafter on
each annual anniversary of such date during the Term (and any renewal
thereof), the Rent [which term as used in this Rider means the Rent
specified in Section 3(b), as adjusted from time to time pursuant to this
Rider] shall be adjusted from time to time as follows:
(a) The Rent in effect for each Lease Year (as defined below) shall
be equal the product of (i) the Rent in effect for the immediately
preceding Lease Year, multiplied by (ii) the greater of (A) one (1) or (B)
the fraction in which CPI-2 (as defined below) is the numerator and CPI-1
(as defined below) is the denominator. In no event shall any adjustment
made pursuant to this Rider or any decrease in the CPI ever result in a
decrease in the Rent for any Lease Year below the Rent in effect at the end
of the preceding Lease Year, which Rent shall, in that event, continue in
effect until the next adjustment hereunder. Payment of the adjusted Rent
amount shall begin on the first day of the first calendar month of the
Lease Year to which such adjusted Rent applies.
(b) As an example of the foregoing calculation for the increase in
Rent, if the monthly Rent in the second Lease Year is $20,000.00, the CPI-1
is 1.50, and the CPI-2 is 1.55, then the monthly Rent for third Lease Year
will be $20,000.00 x 1.55/1.50 = $20,666.67.
2. Alternative Index. If (a) the CPI ceases using the 1982-1984
average of 100 as the basis of calculation, (b) a significant change is
made in the number or nature (or both) of items used to determine the CPI,
(c) Landlord and Tenant agree that the CPI does not accurately reflect, in
relationship to the Base CPI, the purchasing power of the dollar, or (d)
the CPI shall be discontinued for any reason, the Bureau of Labor
Statistics shall be requested to furnish a new index comparable to the CPI
, together with information which will make possible the conversion to the
new index in computing the adjusted Rent hereunder. If for any reason the
Bureau of Labor Statistics does not furnish such an index and such
information, Landlord and Tenant shall instead accept and use such other
index or comparable statistics on the cost of living in the city or region
in which the Building is located that is computed and published by an
agency of the United States or a responsible financial periodical of
recognized authority.
3. Definitions. As used herein, the term "Lease Year" means the
period from the Commencement Date to the last day of the twelfth (12th)
full calendar month during the Term and each succeeding twelve (12) month
period thereafter during the Term (and any renewal thereof). As used
herein, the term "CPI" means the Consumer Price Index for All Urban
Consumers (CPI-U) for the Southeast Region of the United States, All Items
(1982-84 = 100), published by the Bureau of Labor Statistics, United States
Department of Labor. As used herein, the term "CPI-1" means the monthly CPI
for the latest calendar month which ends at least sixty (60) days before
the commencement of the Lease Year immediately preceding the Lease Year for
which Rent is being adjusted. As used herein, the term "CPI-2" means the
monthly CPI for the latest calendar month which ends at least sixty (60)
days before the commencement of the Lease Year for which Rent is being
adjusted. Unless otherwise specifically defined in this Rider, capitalized
terms shall have the same respective meanings as set forth in the non-Rider
portion of this Lease
Exhibit 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th
day of February, 1997, by and between LIBERTY FINANCE CO., a Florida
corporation (the "Company"), and LEONARD VIHTELIC, an individual (the
"Employee");
W I T N E S S E T H:
WHEREAS, the Employee has extensive experience relating to all aspects
of the management and operation of automobile dealerships for used cars,
including (without limitation) leasing and other financing activities in
connection therewith; and
WHEREAS, the Employee has heretofore been employed by Liberty Finance
Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions,
Inc., the businesses of which are being acquired by the Company and its
affiliates on or about the date hereof; and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee's services from and
after the date hereof, on the terms and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to
the Company from and after the date hereof, on the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee,
and the Employee shall render services to the Company, in a managerial
capacity and with such title as shall be determined by the Board of
Directors of the Company. In such capacity, the Employee shall have and
exercise responsibility for managing, supervising, overseeing and actively
participating in those aspects of the Company's day-to-day business in
central Florida as are assigned by the President, another employee
designated by the President and/or the board of directors (the "Board"),
together with such other similar or related duties as may be assigned to
the Employee from time to time by the Board. The Employee may also be
given additional titles, and may be assigned responsibilities on behalf of
certain of the Company's affiliates, without requirement of additional
compensation hereunder.
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention,
knowledge and skills, faithfully, diligently and to the best of his
ability, to the active performance of his duties and responsibilities
hereunder on behalf of the Company; (ii) observe and carry out such
reasonable rules, regulations, policies, directions and restrictions as may
be established from time to time by the Board, including but not limited to
the standard policies and procedures of the Company as in effect from time
to time; (iii) satisfactorily perform those duties assigned to Employee, in
the reasonable discretion of the Board; and (iv) do such traveling as may
reasonably be required in connection with the performance of such duties
and responsibilities; provided, however, that the Employee shall not be
assigned to regular duties that would reasonably require him to relocate
his permanent residence from that first set forth above.
2. Term of Employment.
(a) Subject to prior termination in accordance with paragraph
2(b) below, the term of this Agreement and the Employee's employment
hereunder shall commence on the date hereof and shall continue for a
continuous three (3) year period thereafter (the "Term"). The Term shall
thereafter automatically renew for additional terms of one (1) year each
unless either party gives written notice of termination to the other party
not less than ninety (90) days prior to the end of any renewal term (in
which event this Agreement shall terminate effective as of the close of
such renewal term).
(b) This Agreement:
(i) may be terminated upon mutual written agreement of the
Company and the Employee;
(ii) may be terminated, at the option of the Employee, upon
fourteen (14) days' prior written notice to the Company, in the event that
the Company shall (A) fail to make any payment to the Employee required to
be made under the terms of this Agreement within fifteen (15) days after
payment is due, or (B) fail to perform any other material covenant or
agreement to be performed by it hereunder or take any action prohibited by
this Agreement, and fail to cure or remedy same (if capable of being cured
or remedied) within thirty (30) days after written notice thereof to the
Company;
(iii) may be terminated, at the option of the Company, upon
written notice to the Employee, "for cause" (as hereinafter defined);
(iv) may be terminated, at the option of the Company, in
the event of the "permanent disability" (as hereinafter defined) of the
Employee;
(v) shall automatically terminate upon the death of the
Employee; or
(vi) may be terminated by either party for any reason or no
reason on sixty (60) days prior written notice. If the Company terminates
this Agreement under Section 2(b)(vi), then the Company shall continue to
pay the Employee his salary for a period of 120 days after the date of
termination.
(c) As used herein, the term "for cause" shall mean and be
limited to: (i) any material breach of this Agreement (including, without
limitation, the covenants contained in paragraph 5 below) by the Employee
which in any case is not fully corrected within thirty (30) days after
written notice of same from the Company to the Employee; (ii) neglect by
the Employee of his duties and responsibilities hereunder which in any case
is not fully corrected immediately upon written notice of same from the
Company to the Employee; (iii) any fraud, criminal misconduct, breach of
fiduciary duty, dishonesty, or gross and willful misconduct by the Employee
in connection with the performance of his duties and responsibilities
hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs)
during business hours or while on call, or being habitually drunk or
addicted to drugs (provided that this shall not restrict the Employee from
taking physician-prescribed medication in accordance with the applicable
prescription); (v) the commission by the Employee of any crime of moral
turpitude, or any other action by the Employee which may materially impair
or damage the reputation of the Company; (vi) habitual breach by the
Employee of any of the material provisions of this Agreement (regardless of
any prior cure thereof); or (vii) repeated failure (which prior failures
were brought to Employee's attention in writing) to satisfactorily perform
those duties assigned to Employee, in the reasonable discretion of the
Board.
(d) As used herein, the term "permanent disability" shall mean,
and be limited to, any physical or mental illness, disability or impairment
that prevents the Employee from continuing the performance of his normal
duties and responsibilities hereunder for a period in excess of three (3)
consecutive months. For purposes of determining whether a "permanent
disability" has occurred under this Agreement, the written determination
thereof by two (2) qualified practicing physicians selected and paid for by
the Company (and reasonably acceptable to the Employee) shall be
conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case
may be) shall be entitled to receive any and all unpaid Base Salary and any
other amounts then due and payable to the Employee hereunder. All such
payments shall be made on the next applicable payment date therefor (as
provided in paragraph 3 below) following the effective date of termination.
Such payments shall constitute all amounts to which the Employee shall be
entitled hereunder upon termination of this Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, the Company shall pay to the Employee a base salary at
the rate of SIXTY TWO THOUSAND FOUR HUNDRED DOLLARS AND NO/100THS ($62,400)
per annum (the "Base Salary"), payable in periodic installments in
accordance with the standard payroll practices of the Company in effect
from time to time.
(b) Bonus. In addition to the foregoing Base Salary, the
Employee shall be eligible to earn bonuses from time to time as may be
determined by the Board, in its sole and exclusive discretion, or in
accordance with the terms and conditions of any bonus program instituted
for employees of a similar position by the Board (the "Bonus").
(c) Other Fringe Benefits. The Company shall also make
available to the Employee, throughout the period of his employment
hereunder, such benefits and perquisites as are generally provided by the
Company to its employees, including but not limited to eligibility for
participation in any group life, health, dental, vision, disability or
accident insurance, pension plan, profit-sharing plan, retirement savings
plan, 401(k) plan, or other such benefit plan or policy which may presently
be in effect or which may hereafter be adopted by the Company for the
benefit of its employees generally; provided, however, that nothing herein
contained shall be deemed to require the Company to adopt or maintain any
particular plan or policy. Participation in such benefit plans shall be
subject to standard waiting periods following the commencement of full-time
employment, as currently provided in such plans.
(d) Expenses. Throughout the period of the Employee's
employment hereunder, the Company shall also reimburse the Employee, upon
presentment by the Employee to the Company of appropriate receipts and
vouchers therefor, for any reasonable out-of-pocket business expenses
incurred by the Employee in connection with the performance of his duties
and responsibilities hereunder; provided, however, that no reimbursement
shall be required to be made for any expense which is not properly
deductible (in whole or in part) by the Company for income tax purposes, or
for any expense item which has not previously been approved in accordance
with the Company's standard policies and procedures in effect from time to
time, or otherwise approved by the Company.
4. Vacation, etc.
The Employee shall be entitled to take, from time to time,
normal and reasonable vacations with pay, consistent with the Company's
standard policies and procedures in effect from time to time, at such times
as shall be mutually convenient to the Employee and the Company, and so as
not to interfere unduly with the conduct of the business of the Company.
The Employee shall further be entitled to paid holidays,
personal days and sick days in accordance with the Company's standard
policies and procedures in effect from time to time.
5. Restrictive Covenants.
The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, know-how, trade secrets, marketing
techniques, confidential information, financial and operating models,
promotional methods and other aspects of the business of the Company, its
affiliates and/or parent companies have been and are of value to the
Company, and have provided and will hereafter provide the Company with
substantial competitive advantages in the operation of its business, (ii)
he has and will continue to have detailed knowledge and possesses and will
possess confidential information concerning the business and operations of
the Company, (iii) the restrictions set forth in this Section are
reasonably necessary to protect the legitimate business interests of the
Company, and (iv) but for Employee's agreement to be governed by the
restrictions set forth in this Section 5, the Company would not have
entered into this Agreement. The Employee hereby further acknowledges that
his business skills are not uniquely suited to businesses of the type
conducted by the Company, and that, if required, he could readily adapt and
utilize such skills in one or more other types of businesses.
The Employee shall not, directly or indirectly, for himself
or through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise disclose or
cause to be divulged, transmitted or otherwise disclosed, any business
contacts, client or customer lists, technology, know-how, trade secrets,
marketing techniques, contracts or other confidential or proprietary
information of the Company of whatever nature, whether now existing or
hereafter created or developed (provided, however, that for purposes
hereof, information shall not be considered to be confidential or
proprietary if (A) it is a matter of common knowledge or public record, (B)
it is generally known in the industry, or (C) the Employee can demonstrate
that such information was already known to the recipient thereof other than
by reason of any breach of any obligation under this Agreement or any other
confidentiality or non-disclosure agreement); and/or
(ii) at any time during the period from the date hereof
through and including the date of the expiration or termination of the
Employee's employment with the Company, and for an additional period of one
(1) year thereafter in the event that such termination is effected by the
Company "for cause" or is effected by the Employee other than pursuant to
paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly
or indirectly invest, carry on, engage or become involved, either as an
employee, agent, advisor, officer, director, stockholder (excluding
ownership of not more than 3% of the outstanding shares of a publicly held
corporation if such ownership does not involve managerial or operational
responsibility), manager, partner, joint venturer, participant or
consultant, in any business enterprise (other than the Company or its
subsidiaries, affiliates, successors or assigns) which (A) is located or
operating, or solicits customers located, within 50 miles of where the
Company or any of its affiliates has a place of business, at the time that
the Employee first becomes involved with such business enterprise, and (B)
derives any material revenues from the sale, lease, financing or other
transactions in used automobiles or other consumer vehicles; provided that
this Section 5(ii) shall be applicable prior to the termination of this
Agreement and except for a termination of this Agreement under Section
2(b)(iii), shall be applicable after this Agreement is terminated only if
the Company is making payments of salary to the Employee under Section
2(b)(vi).
The Employee and the Company hereby acknowledge and agree
that, in the event of any breach by the Employee, directly or indirectly,
of the foregoing restrictive covenants, it will be difficult to ascertain
the precise amount of damages that may be suffered by the Company by reason
of such breach; and accordingly, the parties hereby agree that, as
liquidated damages (and not as a penalty) in respect of any such breach,
the breaching party or parties shall be required to pay to the Company, on
demand from time to time, cash amounts equal to any and all gross revenues
derived by the breaching party or parties, directly or indirectly, from any
and all violative acts or activities. The parties hereby agree that the
foregoing constitutes a fair and reasonable estimate of the actual damages
that might be suffered by reason of any breach of this paragraph 5 by the
Employee, and the parties hereby agree to such liquidated damages in lieu
of any and all other measures of damages that might be asserted in respect
of any subject breach.
The Employee and the Company hereby further acknowledge and
agree that any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants will cause the Company irreparable injury
for which there is no adequate remedy at law. Accordingly, the Employee
expressly agrees that, in the event of any such breach or any threatened
breach hereunder by the Employee, directly or indirectly, the Company shall
be entitled, in addition to any and all other remedies available (including
but not limited to the liquidated damages provided for in paragraph 5(c)
above), to seek and obtain injunctive and/or other equitable relief to
require specific performance of or prevent, restrain and/or enjoin a breach
under the provisions of this paragraph 5 without the necessity of proof of
actual damages and without the necessity of posting bond. In the event
either party does apply for such injunction, the other party shall not
raise as a defense thereto that such applying party has an adequate remedy
at law.
In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to
recover from the non-prevailing party or parties, in addition to any
damages and/or other relief that may be awarded, its actual costs and
expenses (including actual attorneys' fees) incurred in connection with
prosecuting or defending the subject dispute.
(f) Employee expressly agrees that the existence of any claims
that he has or that he may have against the Company, its affiliates or
parent companies, whether or not arising from this Agreement, shall not
constitute a defense to the enforcement by the Company of this Section 5.
6. Non-Assignability.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee or the Company of this
Agreement or any of Employee's duties, responsibilities or obligations
hereunder shall be void; provided, however, that the foregoing shall not
apply to any transfer of capital stock of, any transfer of substantially
all the assets of, or any merger or comparable transaction involving, the
Company or any parent corporation of the Company.
7. Notices.
Any notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and shall be deemed
to have been given when delivered personally, by telecopier (with proof of
receipt) or three (3) days after being mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of
such party first set forth above, or at such other address as such party
may hereafter have designated by notice; provided, however, that any notice
of change of address shall not be effective until its receipt by the party
to be charged therewith.
8. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver
or amendment shall only be applicable in the specific instance, and shall
not constitute or be construed as a waiver or amendment in any other or
subsequent instance. No failure or delay on the part of either party in
respect of any enforcement of obligations hereunder shall in any manner
affect such party's right to seek or effect enforcement at any other time
or in respect of any other required performance.
(b) Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the express prior written
consent of the other party.
(c) The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Florida.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but
all of which together shall constitute one and the same instrument.
(g) The prevailing party in any action or proceeding hereunder
shall be entitled to an award for its costs and actual attorneys' fees in
connection with such action or proceeding, including the fees and costs of
any appeals and all costs of collection.
(h) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of
every kind and nature between them as to such subject matter.
(i) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns,
and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit herefrom absent the express
written consent of the party to be charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or
application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require; and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
(k) Employee represents and warrants that no action required of
him under this Agreement or any other agreements or understandings, written
or oral, entered into with the Company, its affiliates or parent companies,
will conflict with, breach or otherwise impair any previously existing
agreements or understandings, whether written or oral, into which Employee
has entered with other persons or entities, including agreements with
respect to proprietary information or non-competition.
(l) Each party to this Agreement expressly recognizes that it
results from a negotiated process in which each party was given the
opportunity to consult with counsel and contributed to the drafting of this
Agreement. Given this fact, no legal or other presumption against the
party drafting this Agreement concerning its construction, interpretation
or otherwise accrue to the benefit of any party to this Agreement and each
party expressly waives the right to assert such a presumption in any
proceedings or disputes connected with, arising out of, or involving this
Agreement.
(m) Time shall be of the essence for any performance required
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
LIBERTY FINANCE CO.
By:/s/J. Neal Hutchinson, Jr.
As Its:Asst. V. P.
/s/ Leonard Vihtelic
LEONARD VIHTELIC
Exhibit 10.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 13th
day of February, 1997, by and between LIBERTY FINANCE CO., a Florida
corporation (the "Company"), and C. LAWRENCE SCHULER, individual (the
"Employee");
W I T N E S S E T H:
WHEREAS, the Employee has extensive experience relating to all aspects
of the management and operation of automobile dealerships for used cars,
including (without limitation) leasing and other financing activities in
connection therewith; and
WHEREAS, the Employee has heretofore been employed by Liberty Finance
Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions,
Inc., the businesses of which are being acquired by the Company and its
affiliates on or about the date hereof; and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee"s services from and
after the date hereof, on the terms and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to
the Company from and after the date hereof, on the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee,
and the Employee shall render services to the Company, in a managerial
capacity and with the Controller of the Company. In such capacity, the
Employee shall have and exercise responsibility for managing, supervising,
overseeing and actively participating in those aspects of the Company"s day-
to-day business in central Florida as are assigned by the President,
another employee designated by the President and/or the board of directors
(the "Board"), together with such other similar or related duties as may be
assigned to the Employee from time to time by the Board. The Employee may
also be given additional titles, and may be assigned responsibilities on
behalf of certain of the Company"s affiliates, without requirement of
additional compensation hereunder.
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention,
knowledge and skills, faithfully, diligently and to the best of his
ability, to the active performance of his duties and responsibilities
hereunder on behalf of the Company; (ii) observe and carry out such
reasonable rules, regulations, policies, directions and restrictions as may
be established from time to time by the Board, including but not limited to
the standard policies and procedures of the Company as in effect from time
to time; (iii) satisfactorily perform those duties assigned to Employee, in
the reasonable discretion of the Board; and (iv) do such traveling as may
reasonably be required in connection with the performance of such duties
and responsibilities; provided, however, that the Employee shall not be
assigned to regular duties that would reasonably require him to relocate
his permanent residence from that first set forth above.
2. Term of Employment.
(a) Subject to prior termination in accordance with paragraph
2(b) below, the term of this Agreement and the Employee"s employment
hereunder shall commence on the date hereof and shall continue for a
continuous three (3) year period thereafter (the "Term"). The Term shall
thereafter automatically renew for additional terms of one (1) year each
unless either party gives written notice of termination to the other party
not less than ninety (90) days prior to the end of any renewal term (in
which event this Agreement shall terminate effective as of the close of
such renewal term).
(b) This Agreement:
(i) may be terminated upon mutual written agreement of the
Company and the Employee;
(ii) may be terminated, at the option of the Employee, upon
fourteen (14) days" prior written notice to the Company, in the event that
the Company shall (A) fail to make any payment to the Employee required to
be made under the terms of this Agreement within fifteen (15) days after
payment is due, or (B) fail to perform any other material covenant or
agreement to be performed by it hereunder or take any action prohibited by
this Agreement, and fail to cure or remedy same (if capable of being cured
or remedied) within thirty (30) days after written notice thereof to the
Company;
(iii) may be terminated, at the option of the Company, upon
written notice to the Employee, "for cause" (as hereinafter defined);
(iv) may be terminated, at the option of the Company, in
the event of the "permanent disability" (as hereinafter defined) of the
Employee;
(v) shall automatically terminate upon the death of the
Employee; or
(vi) may be terminated by either party for any reason or no
reason on sixty (60) days prior written notice. If the Company terminates
this Agreement under Section 2(b)(vi), then the Company shall continue to
pay the Employee his salary for a period of 120 days after the date of
termination.
(c) As used herein, the term "for cause" shall mean and be
limited to: (i) any material breach of this Agreement (including, without
limitation, the covenants contained in paragraph 5 below) by the Employee
which in any case is not fully corrected within thirty (30) days after
written notice of same from the Company to the Employee; (ii) neglect by
the Employee of his duties and responsibilities hereunder which in any case
is not fully corrected immediately upon written notice of same from the
Company to the Employee; (iii) any fraud, criminal misconduct, breach of
fiduciary duty, dishonesty, or gross and willful misconduct by the Employee
in connection with the performance of his duties and responsibilities
hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs)
during business hours or while on call, or being habitually drunk or
addicted to drugs (provided that this shall not restrict the Employee from
taking physician-prescribed medication in accordance with the applicable
prescription); (v) the commission by the Employee of any crime of moral
turpitude, or any other action by the Employee which may materially impair
or damage the reputation of the Company; (vi) habitual breach by the
Employee of any of the material provisions of this Agreement (regardless of
any prior cure thereof); or (vii) repeated failure (which prior failures
were brought to Employee"s attention in writing) to satisfactorily perform
those duties assigned to Employee, in the reasonable discretion of the
Board.
(d) As used herein, the term "permanent disability" shall mean,
and be limited to, any physical or mental illness, disability or impairment
that prevents the Employee from continuing the performance of his normal
duties and responsibilities hereunder for a period in excess of three (3)
consecutive months. For purposes of determining whether a "permanent
disability" has occurred under this Agreement, the written determination
thereof by two (2) qualified practicing physicians selected and paid for by
the Company (and reasonably acceptable to the Employee) shall be
conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case
may be) shall be entitled to receive any and all unpaid Base Salary and any
other amounts then due and payable to the Employee hereunder. All such
payments shall be made on the next applicable payment date therefor (as
provided in paragraph 3 below) following the effective date of termination.
Such payments shall constitute all amounts to which the Employee shall be
entitled hereunder upon termination of this Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, the Company shall pay to the Employee a base salary at
the rate of EIGHTY-FIVE THOUSAND DOLLARS AND NO/100THS ($85,000) per annum
(the "Base Salary"), payable in periodic installments in accordance with
the standard payroll practices of the Company in effect from time to time.
(b) Bonus. In addition to the foregoing Base Salary, the
Employee shall be eligible to earn bonuses from time to time as may be
determined by the Board, in its sole and exclusive discretion, or in
accordance with the terms and conditions of any bonus program instituted
for employees of a similar position by the Board (the "Bonus").
(c) Other Fringe Benefits. The Company shall also make
available to the Employee, throughout the period of his employment
hereunder, such benefits and perquisites as are generally provided by the
Company to its employees, including but not limited to eligibility for
participation in any group life, health, dental, vision, disability or
accident insurance, pension plan, profit-sharing plan, retirement savings
plan, 401(k) plan, or other such benefit plan or policy which may presently
be in effect or which may hereafter be adopted by the Company for the
benefit of its employees generally; provided, however, that nothing herein
contained shall be deemed to require the Company to adopt or maintain any
particular plan or policy. Participation in such benefit plans shall be
subject to standard waiting periods following the commencement of full-time
employment, as currently provided in such plans.
(d) Expenses. Throughout the period of the Employee"s
employment hereunder, the Company shall also reimburse the Employee, upon
presentment by the Employee to the Company of appropriate receipts and
vouchers therefor, for any reasonable out-of-pocket business expenses
incurred by the Employee in connection with the performance of his duties
and responsibilities hereunder; provided, however, that no reimbursement
shall be required to be made for any expense which is not properly
deductible (in whole or in part) by the Company for income tax purposes, or
for any expense item which has not previously been approved in accordance
with the Company"s standard policies and procedures in effect from time to
time, or otherwise approved by the Company.
4. Vacation, etc.
The Employee shall be entitled to take, from time to time,
normal and reasonable vacations with pay, consistent with the Company"s
standard policies and procedures in effect from time to time, at such times
as shall be mutually convenient to the Employee and the Company, and so as
not to interfere unduly with the conduct of the business of the Company.
The Employee shall further be entitled to paid holidays,
personal days and sick days in accordance with the Company"s standard
policies and procedures in effect from time to time.
5. Restrictive Covenants.
The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, know-how, trade secrets, marketing
techniques, confidential information, financial and operating models,
promotional methods and other aspects of the business of the Company, its
affiliates and/or parent companies have been and are of value to the
Company, and have provided and will hereafter provide the Company with
substantial competitive advantages in the operation of its business, (ii)
he has and will continue to have detailed knowledge and possesses and will
possess confidential information concerning the business and operations of
the Company, (iii) the restrictions set forth in this Section are
reasonably necessary to protect the legitimate business interests of the
Company, and (iv) but for Employee"s agreement to be governed by the
restrictions set forth in this Section 5, the Company would not have
entered into this Agreement. The Employee hereby further acknowledges that
his business skills are not uniquely suited to businesses of the type
conducted by the Company, and that, if required, he could readily adapt and
utilize such skills in one or more other types of businesses.
The Employee shall not, directly or indirectly, for himself
or through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise disclose or
cause to be divulged, transmitted or otherwise disclosed, any business
contacts, client or customer lists, technology, know-how, trade secrets,
marketing techniques, contracts or other confidential or proprietary
information of the Company of whatever nature, whether now existing or
hereafter created or developed (provided, however, that for purposes
hereof, information shall not be considered to be confidential or
proprietary if (A) it is a matter of common knowledge or public record, (B)
it is generally known in the industry, or (C) the Employee can demonstrate
that such information was already known to the recipient thereof other than
by reason of any breach of any obligation under this Agreement or any other
confidentiality or non-disclosure agreement); and/or
(ii) at any time during the period from the date hereof
through and including the date of the expiration or termination of the
Employee"s employment with the Company, and for an additional period of one
(1) year thereafter in the event that such termination is effected by the
Company "for cause" or is effected by the Employee other than pursuant to
paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly
or indirectly invest, carry on, engage or become involved, either as an
employee, agent, advisor, officer, director, stockholder (excluding
ownership of not more than 3% of the outstanding shares of a publicly held
corporation if such ownership does not involve managerial or operational
responsibility), manager, partner, joint venturer, participant or
consultant, in any business enterprise (other than the Company or its
subsidiaries, affiliates, successors or assigns) which (A) is located or
operating, or solicits customers located, within 50 miles of where the
Company or any of its affiliates has a place of business, at the time that
the Employee first becomes involved with such business enterprise, and (B)
derives any material revenues from the sale, lease, financing or other
transactions in new or used automobiles or other consumer vehicles;
provided that this Section 5(ii) shall be applicable prior to the
termination of this Agreement and except for a termination of this
Agreement under Section 2(b)(iii), shall be applicable after this Agreement
is terminated only if the Company is making payments of salary to the
Employee under Section 2(b) (vi).
The Employee and the Company hereby acknowledge and agree
that, in the event of any breach by the Employee, directly or indirectly,
of the foregoing restrictive covenants, it will be difficult to ascertain
the precise amount of damages that may be suffered by the Company by reason
of such breach; and accordingly, the parties hereby agree that, as
liquidated damages (and not as a penalty) in respect of any such breach,
the breaching party or parties shall be required to pay to the Company, on
demand from time to time, cash amounts equal to any and all gross revenues
derived by the breaching party or parties, directly or indirectly, from any
and all violative acts or activities. The parties hereby agree that the
foregoing constitutes a fair and reasonable estimate of the actual damages
that might be suffered by reason of any breach of this paragraph 5 by the
Employee, and the parties hereby agree to such liquidated damages in lieu
of any and all other measures of damages that might be asserted in respect
of any subject breach.
The Employee and the Company hereby further acknowledge and
agree that any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants will cause the Company irreparable injury
for which there is no adequate remedy at law. Accordingly, the Employee
expressly agrees that, in the event of any such breach or any threatened
breach hereunder by the Employee, directly or indirectly, the Company shall
be entitled, in addition to any and all other remedies available (including
but not limited to the liquidated damages provided for in paragraph 5(c)
above), to seek and obtain injunctive and/or other equitable relief to
require specific performance of or prevent, restrain and/or enjoin a breach
under the provisions of this paragraph 5 without the necessity of proof of
actual damages and without the necessity of posting bond. In the event
either party does apply for such injunction, the other party shall not
raise as a defense thereto that such applying party has an adequate remedy
at law.
In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to
recover from the non-prevailing party or parties, in addition to any
damages and/or other relief that may be awarded, its actual costs and
expenses (including actual attorneys" fees) incurred in connection with
prosecuting or defending the subject dispute.
(f) Employee expressly agrees that the existence of any claims
that he has or that he may have against the Company, its affiliates or
parent companies, whether or not arising from this Agreement, shall not
constitute a defense to the enforcement by the Company of this Section 5.
6. Non-Assignability.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee or the Company of this
Agreement or any of Employee"s duties, responsibilities or obligations
hereunder shall be void; provided, however, that the foregoing shall not
apply to any transfer of capital stock of, any transfer of substantially
all the assets of, or any merger or comparable transaction involving, the
Company or any parent corporation of the Company.
7. Notices.
Any notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and shall be deemed
to have been given when delivered personally, by telecopier (with proof of
receipt) or three (3) days after being mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of
such party first set forth above, or at such other address as such party
may hereafter have designated by notice; provided, however, that any notice
of change of address shall not be effective until its receipt by the party
to be charged therewith.
8. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver
or amendment shall only be applicable in the specific instance, and shall
not constitute or be construed as a waiver or amendment in any other or
subsequent instance. No failure or delay on the part of either party in
respect of any enforcement of obligations hereunder shall in any manner
affect such party"s right to seek or effect enforcement at any other time
or in respect of any other required performance.
(b) Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the express prior written
consent of the other party.
(c) The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Florida.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but
all of which together shall constitute one and the same instrument.
(g) The prevailing party in any action or proceeding hereunder
shall be entitled to an award for its costs and actual attorneys" fees in
connection with such action or proceeding, including the fees and costs of
any appeals and all costs of collection.
(h) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of
every kind and nature between them as to such subject matter.
(i) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns,
and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit herefrom absent the express
written consent of the party to be charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or
application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require; and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
(k) Employee represents and warrants that no action required of
him under this Agreement or any other agreements or understandings, written
or oral, entered into with the Company, its affiliates or parent companies,
will conflict with, breach or otherwise impair any previously existing
agreements or understandings, whether written or oral, into which Employee
has entered with other persons or entities, including agreements with
respect to proprietary information or non-competition.
(l) Each party to this Agreement expressly recognizes that it
results from a negotiated process in which each party was given the
opportunity to consult with counsel and contributed to the drafting of this
Agreement. Given this fact, no legal or other presumption against the
party drafting this Agreement concerning its construction, interpretation
or otherwise accrue to the benefit of any party to this Agreement and each
party expressly waives the right to assert such a presumption in any
proceedings or disputes connected with, arising out of, or involving this
Agreement.
(m) Time shall be of the essence for any performance required
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
LIBERTY FINANCE CO.
By:/S/ J. Neal Hutchinson, Jr.
As Its:Asst. V.P.
/S/ C. Lawrence Schuler
C. LAWRENCE SCHULER
Exhibit 10.10
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), entered into this 12th
day of February, 1997, by and among FIRST CHOICE AUTO FINANCE, INC., a
Florida corporation (the "Buyer"), ECKLER INDUSTRIES, INC., a Florida
corporation ("Eckler") and R.C. HILL, II, an individual (the
"Stockholder");
W I T N E S S E T H:
WHEREAS, Wholesale Acquisitions, Inc.("WAI"), a Florida corporation is
engaged in a business consisting primarily of wholesale acquisitions and
sales activities in connection with the sale of used automobiles and other
consumer vehicles (the " WAI Business"); and
WHEREAS, Team Automobile Sales & Service, Inc. ("Team"), a Florida
corporation, is engaged in a business consisting primarily of retail sales
activities in connection with the sale of used automobiles and other
consumer vehicles (the "Team Business"); and
WHEREAS, for purposes herein, the WAI Business and the Team Business
shall be jointly referred to as the "Business" unless the context shall
require otherwise; and
WHEREAS, the Stockholder is the record and beneficial owner of all of
the issued and outstanding capital stock of WAI (the "WAI Stock") and of
the issued and outstanding stock of Team (the " Team Stock"); the WAI
Stock and the Team Stock are hereby referred to jointly as the "Stock"
unless the context shall require otherwise;
WHEREAS, the Buyer desires to purchase from the Stockholder, and the
Stockholder desires to sell to the Buyer, all upon the terms and subject to
the conditions set forth in this Agreement, all (and not less than all) of
the Stock, and the businesses of WAI and Team, as going concerns; and
WHEREAS, Eckler owns all the outstanding capital stock of the parent
of the Buyer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as of the Effective
Date, as follows:
1. ACQUISITION OF THE STOCK.
1.1 Exchange of Shares. Subject to the terms and conditions of
this Agreement, on the date hereof, Buyer is purchasing and acquiring from
the Stockholder, and the Stockholder is selling and transferring to Buyer,
all (and not less than all) of the Stock, in exchange for the consideration
provided in Section 2 below. In furtherance thereof, the Stockholder is,
simultaneously with the execution and delivery of this Agreement,
delivering to the Buyer the certificates representing all of the Stock,
duly endorsed for transfer or accompanied by stock powers executed in blank
for transfer.
1.2 Books and Records. On the date hereof, in addition to the
delivery and transfer of the Stock to the Buyer, the Stockholder is
delivering, and causing WAI and Team to deliver, to the Buyer all of the
stock books, records and minute books of each of them, all financial and
accounting books and records of each of them, and all referral, client,
customer and sales records of each of them.
1.3 Effective Date. The effective date (the "Effective Date")
of the transactions contemplated hereby shall be February 11, 1997.
2. CONSIDERATION.
2.1 Purchase Price. The total purchase price for the WAI Stock
shall be Four Hundred Five Thousand and No/100ths Dollars ($405,000). The
total purchase price for the Team Stock shall be One Million Ninety Five
Thousand and No/100ths Dollars ($1,095,000). Unless the context shall
otherwise require, the purchase price for the WAI Stock and the purchase
price for the Team Stock shall be jointly referred to herein as the
"Purchase Price."
2.2 Payment of Purchase Price. The Purchase Price shall be
paid by the Buyer executing and delivering a promissory note (the "Note")
in the form of that attached hereto as Schedule 2.2(b), which shall contain
the following terms and conditions:
(i) The principal of the Note shall be paid as
follows:
(1) Due in full the earlier of: (i) one (1) year
from the date of the Note, or (ii) fifteen (15) days
after the date on which Eckler and/or any of its
corporate affiliates shall consummate a public offering
of its equity securities of at least $20,000,000.00.
(2) Fifty Thousand and No/100ths Dollars
($50,000.00) shall be paid in cash at closing.
(3) Beginning on 1 March 1997, and on the first
day of each calendar month thereafter, a principal
payment of Thirty Thousand and no/100ths Dollars
($30,000.00) shall be due and payable.
(ii) The Note shall bear interest a the rate of eight
percent (8%) per annum, with interest payable on
the first day of each calendar month, beginning on
1 March 1997, in arrears.
(iii) The Note shall be guaranteed by Eckler in the
form of the Corporate Guaranty attached hereto as
Schedule 2.2(b).
The Buyer, with a guarantee by Eckler, shall assume the debt of Stockholder
to Barnett Bank of Central Florida, N.A., in the approximate principal
balance of Three Hundred Thousand and 00/100ths Dollars ($300,000), the
payment of which shall satisfy the obligation of WAI to the Stockholder in
the same amount. Buyer acknowledges that such Barnett Bank obligation is
due in March, 1997, and agrees to make payment in full directly to Barnett
Bank. Upon such payment, the obligation of WAI to the Stockholder will be
satisfied to the same extent as the payments made to Barnett Bank.
3. INTENTIONALLY LEFT BLANK
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER.
In connection with the sale and transfer of the Stock to the Buyer,
the Stockholder hereby represents and warrants to the Buyer as set forth
below. For purposes hereof "Material Adverse Effect" shall mean any event,
occurrence or circumstance which (a) has or is reasonably likely to have a
material adverse effect on the financial condition, results of operations,
business or prospects of the Company taken as a whole, or the Buyer and its
affiliates taken as a whole, as applicable, (b) would materially impair
such party's ability to perform its obligations under this Agreement or the
consummation of any of the transactions contemplated hereby, or (c) results
in an adverse effect that is Two Thousand and 00/100ths Dollars ($2,000.00)
or greater on any particular item related to the Buyer's purchase of the
Business hereunder.
4.1 Title to the Stock. The Stockholder is the valid and lawful
record and beneficial owner of all of the Stock. All of the Stock has been
duly authorized and validly issued and is fully paid and non-assessable,
and is free and clear of all pledges, liens, claims, charges, options,
calls, encumbrances, restrictions and assessments whatsoever (except any
restrictions which may be created by operation of state or federal
securities laws). The Buyer is receiving from the Stockholder good, valid
and marketable title to all of the Stock, free and clear of all pledges,
liens, claims, charges, options, calls, encumbrances, restrictions and
assessments whatsoever (except any restrictions which may be created by
operation of state or federal securities laws).
4.2 Valid and Binding Agreement; No Breach.
(a) The Stockholder has full legal right, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, and except that the
remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought.
(b) Except as disclosed in Schedule 4.2 annexed hereto,
neither the execution and delivery of this Agreement by the Stockholder,
nor compliance with the terms and provisions of this Agreement on the part
of the Stockholder, will, under circumstances that would result in a
Material Adverse Effect: (i) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting WAI, Team or the
Stockholder; (ii) require the issuance of any authorization, license,
consent or approval of any federal or state governmental agency; or (iii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, note, indenture,
loan agreement or other agreement or instrument to which WAI, Team or the
Stockholder is a party, or by which WAI, Team or the Stockholder is bound,
or constitute a default thereunder, or require the consent of any other
party to any of the foregoing.
4.3 Organization, Good Standing and Qualification WAI and Team
are corporations duly organized, validly existing and in good standing
under the laws of the State of Florida, with full corporate power and
authority to own their assets and conduct their business as owned and
conducted on the date hereof. WAI and Team are not required to be
qualified as a foreign corporation under the laws of any jurisdiction.
True and complete copies of the Articles of Incorporation and Bylaws of WAI
and Team (including all amendments thereto), and a correct and complete
list of the officers and directors of WAI and Team, are annexed hereto as
Schedule 4.3.
4.4 Capital Structure; Equity Ownership.
(a) The authorized capital stock of WAI and Team is as set
forth in their Articles of Incorporation as included in Schedule 4.3, and
the Stock constitutes and represents all of the outstanding capital stock
of WAI and Team.
(b) There are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements or calls,
demands or commitments obligating WAI or Team to issue, transfer or
purchase any shares of their capital stock, or obligating the Stockholder
to transfer any shares of the Stock. No shares of capital stock of WAI or
Team are reserved for issuance pursuant to stock options, warrants,
agreements or other rights to purchase capital stock.
4.5 Subsidiaries and Investments. Neither WAI nor Team owns,
directly or indirectly, any stock or other equity securities of any
corporation or entity, or has any direct or indirect equity or ownership
interest in any person, firm, partnership, corporation, venture or business
other than the business conducted by WAI and Team, respectively.
4.6 Financial Information.
(a) Annexed hereto as Schedule 4.6(a) are the audited
financial statements (including balance sheet, income statement, statement
of stockholders' equity, statement of cash flows, and notes thereto) for
WAI and Team as of December 31, 1994 and December 31, 1995 and for each of
the years then ended, and the unaudited financial statements for WAI and
Team as of December 31, 1996 for the twelve (12) months then ended and as
of January 31, 1997 and for the month then ended (collectively, the
"Financial Statements"), all of which fairly reflect, in all material
respects, the financial condition and results of operations of WAI and Team
in accordance with generally accepted accounting principles consistently
applied, as of the dates thereof and for the periods then ended; and,
without limitation of the foregoing, neither WAI nor Team has any material
liabilities, fixed or contingent, known or unknown, except to the extent
reflected in the most recent of such Financial Statements or thereafter
incurred in the normal course of their businesses. The Financial
Statements (as of the dates thereof and for the periods covered thereby)
are in accordance with the books and records of WAI and Team, which are
complete and accurate in all material respects.
(b) The Buyer has been provided the payment histories of
each of the credit agreements, finance leases and other agreements
underlying the Receivables (defined below), all of which fairly present the
dates and amounts of all receipts and disbursements under or in respect of
such credit agreements, finance leases and other agreements. Except as and
to the extent reflected in such payment histories, (i) all payments under
such credit agreements, finance leases and other agreements have been made
in a full and timely manner, and (ii) there have been no prepayments made
in respect of any such credit agreements, finance leases or other
agreements.
(c) Annexed hereto as Schedule 4.6(c) is a listing of all
debts and obligations and guarantees to which WAI or Team is a party and
all obligations of others which are secured by property of WAI or Team, and
the current principal amount of, accrued interest on, and any amount
guaranteed under all such debts, obligations, or guarantees. Schedule
4.6(c) contains a separate listing of all debt obligations of WAI or Team
to the Stockholder and members of the Stockholder's family. Except as set
forth on Schedule 4.6(c), WAI and Team are not in default under any such
debt obligations or guarantees, and the consummation of the transactions
contemplated hereby will not result in any default on or acceleration of,
or any consent being required as to, any debt, obligation, or guarantee
described on Schedule 4.6(c).
4.7 No Material Changes. Except as disclosed in Schedule 4.7
annexed hereto, since the date of the most recent of the Financial
Statements, (a) the businesses of WAI and Team have been operated solely in
the normal course, (b) there have been no changes which in the aggregate
would have a Material Adverse Effect in the financial condition, operations
or business of the Company from that reflected in such Financial
Statements, (c) neither WAI nor Team has incurred any material obligation
or liability except in the normal course of business, (d) neither WAI nor
Team has effected or suffered any material modification in its collection
practices, or with respect to the timing and manner of payment of its
accounts payable, and (e) there has not been any (i) sale, assignment or
transfer by WAI or Team of any assets or other part of their businesses,
excluding the sale or disposition of inventory, and/or the sale of loans,
in the ordinary course of business, (ii) acquisitions or commitments to
acquire (whether by purchase, lease or otherwise) any capital assets by WAI
or Team wherein the aggregate payments will exceed $10,000, (iii) increase
or commitment to increase the compensation or benefits of any employees of
WAI or Team, (iv) implementation or institution of any bonus, benefit,
profit-sharing, pension, retirement or other plan or similar arrangement
which was not in existence on December 31, 1996, or (v) new employment
agreement, or modification of any existing employment agreement, by WAI or
Team.
4.8 Tax Matters.
(a) WAI and Team have, to the date hereof timely filed all
tax reports and tax returns required to be filed by WAI and Team, and WAI
and Team have paid all taxes, assessments and other impositions as and to
the extent required by applicable law. All federal, state and local
income, franchise, sales, use, property, excise and other taxes (including
interest and penalties and including estimated tax installments where
required to be filed and paid) due from or with respect to WAI and Team as
of the date hereof have been fully paid, and all taxes and other
assessments and levies which WAI or Team is required by law to withhold or
to collect have been duly withheld and collected and have been paid over to
the proper governmental authorities to the extent due and payable. There
are no outstanding or pending claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of WAI or
Team.
(b) Except as disclosed in Schedule 4.8 annexed hereto,
there are no audits pending with respect to any federal, state or local tax
reports or tax returns of WAI or Team, and no waiver of statutes of
limitations have been given or requested with respect to any tax years or
tax filings of WAI or Team.
(c) WAI and Team have to the date hereof been electing
small business corporations under Subchapter S of the Internal Revenue Code
of 1986, as amended (the "Code"), and the corresponding tax provisions of
Florida law, and have filed all tax reports required to be filed by WAI or
Team on or prior to the date hereof. WAI and Team have further, to the
date hereof, filed all other tax reports and tax returns required to be
filed by WAI or Team, and WAI, Team and the Stockholder (as applicable)
have paid all taxes, assessments and other impositions as and to the extent
required by applicable law. Without limitation of the foregoing, WAI and
Team have made all required filings and payments to the date hereof in
respect of franchise, sales, use, property, excise and other taxes
(including interest and penalties and including estimated tax installments
as required), and there are no outstanding or pending claims, deficiencies
or assessments with respect to any taxes, interest or penalties of WAI or
Team. WAI and Team have previously distributed to the Stockholder (and any
former stockholder) all amounts which have been, are, or will be
distributable to such persons in respect of all completed tax years of WAI
and Team and the 1997 tax year to date. The amounts distributed in respect
of the 1996 tax year were not (on a proportionate basis) in excess of the
distribution for prior years, and the 1997 distributions are not in excess
of 40% of 1997 net income of either of them.
4.9 Title and Condition of the Assets. Except for liens arising
under the instruments described on Schedule 4.9, WAI and Team have and own
good and marketable title to all of their assets, free and clear of all
liens, pledges, claims, security interests and encumbrances of every kind
and nature, except for liens, pledges, claims, security interests or
encumbrances which in the aggregate would not have a Material Adverse
Effect. WAI and Team have delivered to the Buyer all material documents
pertaining to the liens referred to in the preceding sentence. All of the
fixed assets of WAI and Team (to the extent that a failure would have a
Material Adverse Affect) are in good operating condition and repair
(reasonable wear and tear excepted), are adequate for its use in the
Business as presently conducted, and are sufficient for the continued
conduct of such Business. All buildings, and all fixtures, equipment and
other property and assets which are material to the Business on a
consolidated basis, held under leases or subleases by WAI or Team are held
under valid instruments enforceable in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, and similar laws of general applicability
affecting creditors rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
4.10 Receivables. All of the Receivables (whether reflected in
the Financial Statements or thereafter created or acquired by WAI or Team
prior to the Effective Date), (a) have arisen in the normal course of
business of WAI or Team, (b) to the Stockholder's actual knowledge are not
subject to any counterclaims, set-offs, allowances or discounts of any
kind, except for counter claims set-offs , allowances, or discounts which
would not result in a Material Adverse Effect on a per item basis, and (c)
have been, are and will be valid and generally collectible in the ordinary
course of the Business; and the Stockholder has no knowledge of any
material or unusual risk of non-payment for any of the Receivables. Except
as set forth on Schedule 4.10, WAI and Team have possession of all
documents that represent the Receivables. Except for circumstances which
would not result in a Material Adverse Effect on a per item basis, all the
Receivables are genuine, valid, and legally binding obligations of the
borrowers thereunder, have been duly executed by a borrower of legal
capacity and are enforceable in accordance with their terms, except as
enforcement thereof may be limited by (i) bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity (whether applied in a proceeding, in equity
or at law), (ii) state laws requiring creditors to proceed against the
collateral before pursuing the borrower, and (iii) state laws on
deficiencies, except where the invalidity or enforceability of Receivables
would not have a Material Adverse Effect on a per item basis. Neither the
operation of any of the terms of the Receivables, nor the exercise of any
right thereunder has rendered the related security interest or note
unenforceable, in whole or in part, or subjected it to any right of
rescission, setoff, counterclaim or defense, and no such right of
rescission, setoff, counterclaim or defense has been asserted with respect
thereto. The instruments representing the Receivables are in compliance
with applicable laws and regulations and accurately represent the
principal, interest, payment and other terms of the Receivables, except for
circumstances which would not result in a Material Adverse Effect on a per
item basis. For purposes hereof, the "Receivables" shall mean all finance
receivables, accounts receivable, notes receivable and other rights to
receive payment (including any related guaranties, security deposits or
other collateral therefor) under credit agreements, finance leases and
other such agreements entered into in the Business, including but not
limited to those credit agreements, finance leases and other agreements
listed or described on Schedule 4.10 annexed hereto.
4.11 Inventory. All of the inventory (the "Inventory") (whether
reflected in the Financial Statements or thereafter acquired by WAI or Team
prior to the Effective Date) is of a quality, age and quantity consistent
with the historical practices of WAI and Team, and is valued on the books
of WAI and Team at cost. Schedule 4.11 sets forth a true and complete
listing of the Inventory as of the date set forth on such schedule and
includes a listing of the make, model, year, and vehicle identification
number for each item of Inventory listed on such schedule. None of the
Inventory is subject to any lien, charge, or encumbrance, except as set
forth on Schedule 4.11.
4.12 Legal Compliance.
(a) To the actual knowledge of the Shareholder, WAI and
Team are, and for the past three (3) years have been, in compliance in all
material respects with all laws, statutes, regulations, rules and
ordinances applicable to the conduct of their businesses (including,
without limitation, all applicable environmental laws, statutes,
regulations, rules and ordinances), and have in full force and effect all
licenses, permits and other authorizations required for the conduct of
their businesses as presently constituted; and neither WAI nor Team is in
default or violation in respect of or under any of the foregoing. The
Stockholder is not aware of any past or present condition or circumstance
in the business of WAI or Team (including, without limitation, with respect
to any real property now or previously occupied by WAI or Team) which could
give rise to any material liability under any such law, statute,
regulation, rule or ordinance.
(b) Except as set forth on Schedule 4.12(b) attached
hereto, neither WAI nor Team has generated, operated, processed,
distributed, transported, used, treated, stored, handled, emitted,
discharged, released or disposed of (or caused any person or entity to do
any of the foregoing or assisted any person or entity in doing any of the
foregoing) any oil, gasoline, petroleum-related products, hazardous
substances, hazardous waste, or pollutants or contaminants (as defined by
CERCLA), including, without limitation, asbestos or asbestos containing
materials, PCB's or urea formaldehyde, except in accordance with applicable
laws or any product which may give ride to Hazardous Materials Liabilities.
For purposes hereof, the following terms shall have the following meanings:
(i) The term "Hazardous Materials" shall mean (a)
hazardous materials, contaminants, constituents, medical wastes, hazardous
or infectious wastes and hazardous substances as those terms are now
defined in any Environmental Laws, including without limitation the
following statutes and their implementing regulations: the Hazardous
Materials Transportation Act, 49 U.S.C. 9601 et seq. (the "HMTA"), the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. et
seq. (as so amended, "CERCLA"), The Clean Water Act, 33 U.S.C. 1251 et
seq. (the "CWA"), and the Clean Air Act, 42 U.S.C. 7401 et seq. (the
"CAA"); (b) petroleum, including crude oil and any fractions thereof; (c)
natural gas, synthetic gas and any mixtures thereof; (d) asbestos and/or
asbestos-containing materials; and (e) polychlorinated biphenyl ("PCBs") or
materials or fluids containing PCBs in excess of 50 parts per million;
(ii) The term "Hazardous Materials Liabilities" shall
mean any and all damages, losses, liabilities, disabilities, fines,
penalties, costs or expenses (including reasonable attorneys' fees)
incurred or to be incurred, whether absolute, fixed or contingent, civil or
criminal, and whether arising under federal law or state law, incurred or
to be incurred in connection with the handling, storage, transportation, or
disposal of any Hazardous Materials; and
(iii) The term "Environmental Laws" shall mean any
statute, law, ordinance, code, rule, regulation, policy, guideline, permit,
consent, approval, license, judgment, order, writ, decree or authorization,
including the requirement to register storage tanks, established or enacted
for, or relating to, the protection of the environment or the health and
safety of any person (including, without limitation, those relating to 9a)
the HMTA, CERCLA, the CWA, the CAA or the Resource Conservation and
Recovery Act, 42 U.S.C. 6903 et seq.; (b) emissions, discharges, releases
or threatened releases of Hazardous Materials into the environment,
including, without limitation, into ambient air, soil, sediments, land
surface or subsurface, buildings or facilities, surface water, ground
water, publicly-owned treatment works, septic systems or land; or (c) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Materials.
(c) Neither WAI, Team nor the Stockholder has received any
written notice of default or violation, nor, to the best of the
Stockholder's knowledge, are WAI or Team or any of their directors,
officers or employees in default or violation, with respect to any
judgment, order, writ, injunction, decree, demand or assessment issued by
any court or any federal, state, local, municipal or other governmental
agency, board, commission, bureau, instrumentality or department, domestic
or foreign, relating to any aspect of the business, affairs, properties or
assets of WAI or Team. Neither WAI, Team nor the Stockholder has received
written notice of, been charged with, or is, to the best of the
Stockholder's knowledge, under investigation with respect to, any violation
of any provision of any federal, state, local, municipal or other law or
administrative rule or regulation, domestic or foreign, relating to any
aspect of the business, affairs, properties or assets of WAI or Team, which
violation would have a material adverse effect on WAI or Team, its
businesses or any material portion of its assets.
4.13 Real Property.
(a) Schedule 4.13 annexed hereto lists and describes all
real property owned, held or leased by WAI or Team. WAI or Team holds good
and marketable title to the real property and leasehold interests listed in
Schedule 4.13, subject only to those liens and mortgages set forth in
Schedule 4.13, except for liens, pledges, claims, security interests or
encumbrances which in the aggregate would not have a Material Adverse
Effect. Neither WAI, Team nor the Stockholder has received notice that any
such real property or any buildings or improvements thereon (collectively,
the "Facilities") or the use thereof by WAI or Team is in violation of any
applicable building, zoning or other law, ordinance or regulation affecting
such real property, and no covenants, easements, rights-of-way or
conditions of record impair such use, except as set forth in Schedule 4.13.
Neither WAI nor Team owns or leases any real property which is not listed
in Schedule 4.13, nor does WAI or Team have any interest in any other real
property, including partnerships, joint ventures, trust deeds or land sale
contracts.
(b) Each of the leases described in Schedule 4.13 is in
full force and effect and constitutes a valid and binding obligation of WAI
or Team and, to the best knowledge of the Stockholder, the other parties
thereto. Neither WAI, Team nor the Stockholder has received any notice of
default with respect to any term or condition of any of the leases
identified in Schedule 4.13, nor is WAI or Team in default or arrears in
the performance or satisfaction of any material agreement or condition on
their part to be performed or satisfied thereunder. Except as disclosed
in Schedule 4.13, no waiver of default or indulgence has been granted by
any of the lessors under said leases, and no event has occurred which,
after notice or lapse of time or both, would constitute a default
thereunder, or would permit the acceleration of any obligation of any party
thereto.
(c) Except as set forth in Schedule 4.13, all of the
buildings, fixtures and other improvements located on the Facilities are
accessible by public roads, and are adequate for use in the businesses as
presently conducted; and the operation of the Facilities as presently
conducted is not in violation of any applicable building code, zoning
ordinance or other law or regulation.
4.14 Insurance. WAI and Team maintain, have in full force and
effect, and have paid all premiums in respect of insurance covering their
businesses and assets against such hazards and in such amounts as are noted
on the attached Schedule 4.14.
4.15 Employees. Except as disclosed in Schedule 4.15 annexed
hereto, neither WAI or Team is a party to or bound by any collective
bargaining agreement, employment agreement, consulting agreement or other
commitment for the employment or retention of any person, and no union is
now certified or has claimed the right to be certified as a collective
bargaining agent to represent any employees of WAI or Team. Neither WAI
nor Team has had any material labor difficulty in the past two (2) years,
and neither WAI, Team nor the Stockholder has received notice of any unfair
labor practice charges against WAI or Team or any actual or alleged
violation by WAI or Team of any law, regulation, or order affecting the
collective bargaining rights of employees, equal opportunity in employment,
or employee health, safety, welfare, or wages and hours.
4.16 Employee Benefits. Neither WAI nor Team maintains and
neither is required to make any contributions to any pension, profit-
sharing, retirement, deferred compensation or other such plan or
arrangement for the benefit of any employee, former employee or other
person, and neither WAI nor Team has any obligations with respect to
deferred compensation or future benefits to any past or present employee.
Schedule 4.16 annexed hereto fairly summarizes the employee benefits
currently granted by WAI and Team to their employees.
4.17 Contracts and Commitments. WAI and Team have previously
provided reasonable access to the Buyer and its representatives to permit
such persons to inspect and copy all of the credit agreements, finance
leases and other agreements underlying the Receivables. Other than (a)
such credit agreements, finance leases and other agreements underlying the
Receivables, and (b) those contracts and commitments listed on Schedule
4.17 annexed hereto, there is no contract, agreement, commitment or
understanding which is material to the ongoing operation of the Business.
To the Stockholder's actual knowledge, all of such agreements and contracts
are in full force and effect, and there is no material default or non-
performance outstanding thereunder.
4.18 Litigation. Except as set forth in Schedule 4.18, there is
no pending or, to the actual knowledge of the Stockholder, threatened
litigation, arbitration, administrative proceeding or other legal action or
proceeding against WAI or Team or relating to their businesses. The
Stockholder is not aware of any state of facts, events, conditions or
occurrences which the Stockholder reasonably believes would properly
constitute grounds for or the basis of any suit, action, arbitration,
proceeding or investigation against or with respect to WAI or Team.
4.19 Intellectual Property. To the Stockholder's actual
knowledge WAI and Team have the valid right to utilize all trade names and
other intellectual property utilized in their businesses, and have not
received notice of any claimed infringement of any of such intellectual
property with the rights or property of any other person. The Buyer
acknowledges that the trade name/trademark/service mark, "R.C. Hills," will
not be usable by WAI or Team or the Buyer and on the ninetieth (90th) day
after the date of closing all use by the Buyer, WAI or Team will cease.
4.20 Bank Accounts. Annexed hereto as Schedule 4.20 is a correct
and complete list of all bank accounts and safe deposit boxes maintained by
or on behalf of WAI or Team, with indication of all persons having
signatory, access or other authority with respect thereto.
4.21 Going Concern. The Stockholder has no knowledge of any
fact, event, circumstance or condition (including but not limited to any
announced or anticipated changes in the policies of any material supplier,
referral source, client or customer) that would materially impair the
ability of WAI and Team to continue the Business in substantially the
manner heretofore conducted (other than general, industry-wide conditions).
4.22 Disclosure and Duty of Inquiry. The Buyer is not and will
not be required to undertake any independent investigation to determine the
truth, accuracy and completeness of the representations and warranties made
by the Stockholder in this Agreement.
4.23 Allowance for Uncollectible Accounts. The Buyer and Eckler
accept the amount of the allowance for uncollectible accounts shown in the
Financial Statements as adequate in each case as of the dates thereof.
Stockholder shall have no responsibility related to such allowance and
makes no representation or warranty in regard thereto.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's acquisition of the Stock, the Buyer and
Eckler hereby represent and warrant to the Stockholder as follows:
5.1 Organization, Good Standing and Qualification. The Buyer
and Eckler are corporations duly organized, validly existing and in good
standing under the laws of the State of Florida, with all necessary power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Buyer is qualified to do business in
each foreign jurisdiction in which its business requires it to be
qualified.
5.2 Authorization of Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer and by Eckler has been duly and validly
authorized by the Boards of Directors of the Buyer and Eckler. No further
corporate authorization is required on the part of the Buyer or Eckler to
consummate the transactions contemplated hereby.
5.3 Valid and Binding Agreement; No Breach.
(a) The Buyer and Eckler each have full legal right, power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of the Buyer and of Eckler, enforceable
against the Buyer and Eckler in accordance with its terms, except to the
extent that such enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and
except that the remedy of specific performance or similar equitable relief
is available only at the discretion of the court before which enforcement
is sought.
(b) Except as disclosed in Schedule 5.3 annexed hereto,
neither the execution and delivery of this Agreement by the Buyer or
Eckler, nor compliance with the terms and provisions of this Agreement on
the part of the Buyer or Eckler, will, under circumstances that would
result in a Material Adverse Effect: (i) violate any statute or regulation
of any governmental authority, domestic or foreign, affecting the Buyer,
Eckler, or any of its subsidiaries; (ii) require the issuance of any
authorization, license, consent or approval of any federal or state
governmental agency; or (iii) conflict with or result in a breach of any of
the terms, conditions or provisions of any judgment, order, injunction,
decree, note, indenture, loan agreement or other agreement or instrument to
which the Buyer, Eckler or any of Eckler's subsidiaries is a party, or by
which the Buyer, Eckler or any of Eckler's subsidiaries is bound, or
constitute a default thereunder, or require the consent of any other party
to any of the foregoing.
5.4 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer or Eckler, nor compliance with the
terms and provisions of this Agreement on the part of the Buyer or Eckler,
will: (a) violate any statute or regulation of any governmental authority,
domestic or foreign, affecting the Buyer or Eckler; (b) require the
issuance of any authorization, license, consent or approval of any federal
or state governmental agency; (c) conflict with or result in a breach of
any of the terms, conditions or provisions of any judgment, order,
injunction, decree, note, indenture, loan agreement or other agreement or
instrument to which the Buyer or Eckler is a party, or by which the Buyer
or Eckler is bound, or constitute a default thereunder; or (d) require the
consent of any third party under any outstanding statute, regulation,
judgment, order, injunction, decree, agreement or instrument to which the
Buyer or Eckler is a party, or by which the Buyer or Eckler is bound.
5.5 Investment. The Buyer is purchasing the Stock for its own
account for investment, and not with a view to the resale or distribution
thereof in violation of any applicable securities laws.
5.6 Disclosure and Duty of Inquiry. The Stockholder is not and
will not be required to undertake any independent investigation to
determine the truth, accuracy and completeness of the representations and
warranties made by the Buyer and Eckler in this Agreement.
6. ADDITIONAL AGREEMENTS.
6.1 Resignations. In addition to the other deliveries being
made pursuant to this Agreement on the date hereof, the Stockholder is
causing to be executed and delivered to WAI and Team, respectively, the
resignations of all officers and directors of each of them (except to the
extent that such resignations are not being required by the Buyer).
6.2 Audit of Financial Statements. The Stockholder shall, from
time to time as and when requested by the Buyer from and after the date
hereof, cooperate with and assist the Buyer in all reasonable respects in
dealing with the accountants heretofore retained by either WAI or Team, in
order that the Buyer and its accountants may obtain copies of all work
papers utilized or prepared by WAI's or Team's accountants in connection
with their review of the Financial Statements, and consult with their
accountants as and to the extent necessary or appropriate in connection
with the preparation of audited financial statements of them for all
periods from and after January 1, 1993 in accordance with Regulation S-X of
the Securities and Exchange Commission. Any reasonable out-of-pocket
expenses incurred or paid to third parties by Stockholder in complying with
this Section 6.2 shall be reimbursed by Buyer, except that any such
expenses exceeding $500 shall be approved by Buyer prior to such expenses
being incurred.
6.3 1997 Tax Treatment. The parties hereby confirm and consent
that the income of WAI and Team in respect of 1997 shall not be prorated as
between the Stockholder (on the one hand) and the Buyer (on the other
hand), but shall be determined based on actual income for that portion of
1997 through the date hereof and for that portion of 1997 subsequent to the
date hereof, with each of them having been deemed to have closed their
books for these purposes on and as of the date hereof. The "closing of the
books" shall be accomplished in a manner that is consistent with accounting
conventions and procedures used in closing the books in prior years for
year end closings. All allocations or determinations of accounting
questions will be handled in cooperation with the Shareholder. It is
agreed that the intent shall be to minimize, to the extent possible, the
income to be allocated to the Stockholder for the short period.
6.4 Intentionally Omitted.
6.5 Access to Records. Subsequent to the consummation of the
acquisition contemplated by this Agreement, the Buyer agrees to reasonably
cooperate with the Stockholder in accessing the records of WAI and Team for
periods prior to the Effective Date for Stockholder's reasonable needs,
including, but not limited to, responding to inquiries from tax
authorities, determining information related to transactions occurring in
such prior periods, and the other reasonable business and personal needs of
the Stockholder.
6.6 Release/Indemnification from Specified Loans. The Buyer
indemnifies and agrees to hold the Stockholder harmless, from and after
closing, from the following loans made to the Company, which loans were co-
signed or guaranteed personally by the Stockholder:
(i) Barnett Bank, N.A. original principal balance
$34,120.95, dated October 8, 1996.
7. [INTENTIONALLY OMITTED].
8. INDEMNIFICATION.
8.1 General.
(a) The Stockholder shall defend, indemnify and hold
harmless the Buyer and Eckler (for purposes of this Article 8, the Buyer
and Eckler are referred to collectively as the "Buyer") from, against and
in respect of any and all claims, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest,
penalties and reasonable attorneys' fees, that the Buyer may incur, sustain
or suffer ("Buyer Losses") as a result of any breach of, or failure by the
Stockholder, WAI or Team to perform, any of the representations,
warranties, covenants or agreements of any of them contained in this
Agreement or in any Schedule(s) furnished by or on behalf of WAI, Team, or
the Stockholder under this Agreement.
(b) The Buyer shall defend, indemnify and hold harmless the
Stockholder from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees,
that the Stockholder may incur, sustain or suffer ("Stockholder Losses") as
a result of any breach of, or failure by the Buyer to perform, any of the
representations, warranties, covenants or agreements of the Buyer contained
in this Agreement or in any Schedule(s) furnished by or on behalf of Buyer
and/or Eckler under this Agreement.
(c) Subject to the limitations of Section 8.2, the
representations, warranties and covenants contained herein shall survive
the closing hereunder to the extent any party hereto is entitled to
indemnification hereunder for any breach of any representation, warranty or
covenant contained herein.
(d) The Stockholder's indemnification obligations hereunder
are secured by a Stock Pledge and Security Agreement of even date herewith
among the Stockholder, the Buyer, and Eckler Industries, Inc.
8.2 Limitations on Certain Indemnity.
(a) Notwithstanding any other provision of this Agreement
to the contrary, (i) the Stockholder shall not be liable to the Buyer with
respect to Buyer Losses unless and until the aggregate amount of all Buyer
Losses shall exceed the sum of Fifty Thousand and 00/100ths Dollars
($50,000.00) (the "Stockholder Basket"), and (ii) the Stockholder shall
thereafter be liable for all Buyer Losses in excess of the Stockholder
Basket, provided that the Stockholder's maximum aggregate liability in
respect of all Buyer Losses shall not, in the absence of proven fraud by
the Stockholder, WAI or Team in respect of any particular Buyer Losses, in
any event exceed the limitations set forth in Section 8.2(c) below;
provided, however, that the Stockholder Basket and such limitation on
liability shall not be available with respect to, and there shall not be
counted against the Stockholder Basket or such limitation of liability, any
Buyer Losses arising by reason of any Buyer Losses involving proven fraud
by the Stockholder, WAI or Team.
(b) Notwithstanding any other provision of this Agreement
to the contrary, (i) the Buyer shall not be liable to the Stockholder with
respect to Stockholder Losses unless and until the aggregate amount of all
Stockholder Losses shall exceed the sum of Fifty Thousand and 00/100ths
Dollars ($50,000.00) (the "Buyer Basket"), and (ii) the Buyer shall
thereafter be liable for all Stockholder Losses in excess of the Buyer
Basket; provided, however that the Buyer Basket shall not be available with
respect to, and there shall not be counted against the Buyer Basket any
Stockholder Losses arising by reason of any Stockholder Losses involving
proven fraud by the Buyer, its principal shareholders, officers, employees
or directors.
(c) Except with respect to any Buyer Losses involving
proven fraud by the Stockholder, WAI or Team, the Stockholder shall not be
required to pay indemnification hereunder in an aggregate amount in excess
of Purchase Price, to the extent actually received by the Stockholder under
the terms of this Agreement.
(d) The Buyer shall be entitled to indemnification by the
Stockholder for Buyer Losses only in respect of claims for which notice of
claim shall have been given to the Stockholder on or before March 31, 1997.
The Stockholder shall be entitled to indemnification by the Buyer for
Stockholder Losses only in respect of claims for which notice of claim
shall have been given to the Buyer on or before March 31, 1998.
8.3 Claims for Indemnity. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder the
indemnified party shall notify the indemnifying party or parties in writing
within sixty (60) days of the indemnified party's first receipt of notice
of, or the indemnified party's obtaining actual knowledge of, such claim,
and in any event within such shorter period as may be necessary for the
indemnifying party or parties to take appropriate action to resist such
claim. Such notice shall specify all facts known to the indemnified party
giving rise to such indemnity rights and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom.
If an indemnifying party shall be duly notified of such dispute, the
parties shall attempt to settle and compromise the same or may agree to
submit the same to arbitration or, if unable or unwilling to do any of the
foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement,
compromise, arbitration or litigation shall promptly thereafter be paid and
satisfied by those indemnifying parties obligated to make indemnification
hereunder.
8.4 Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by
any third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel
of its own choosing), at their expense and through a single counsel of
their own choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name
of the indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
indemnifying party shall be required to undertake, conduct and control,
through counsel of its own choosing and at its sole expense, the settlement
or defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
9. POST-CLOSING EVENTS.
9.1 Announcements. With respect to the initial announcement of
the consummation of the transactions pursuant to this Agreement and of any
of the terms thereof, neither party shall make such an announcement without
the prior review and approval thereof by the Buyer (in the case of any
proposed disclosure or public announcement by the Stockholder) or the
Stockholder (in the case of any proposed disclosure or public announcement
by the Buyer), such approval not to be unreasonably withheld or delayed.
9.2 Bank Accounts. Upon the consummation of the transactions
pursuant to this Agreement, the Stockholder shall cooperate with the Buyer
to promptly modify to the Buyer's satisfaction the signatory and access
arrangements for all bank accounts and safe deposit boxes maintained by or
in the name of WAI or Team.
9.3 Further Assurances. From time to time from and after the
date hereof, the parties will execute and deliver to one another any and
all further agreements, instruments, certificates and other documents as
may reasonably be requested by any other party in order more fully to
consummate the transactions contemplated hereby, and to effect an orderly
transition of the ownership and operations of the Business.
10. COSTS.
10.1 Finder's or Broker's Fees. Each of the Buyer, Eckler, and
the Stockholder represents and warrants that neither it nor he nor any of
their respective affiliates have dealt with any broker or finder in
connection with any of the transactions contemplated by this Agreement, and
no broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
10.2 Expenses. The parties (except as provided in Section 10.3)
shall each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement.
10.3 Stockholder's Costs. The Buyer shall pay the reasonable
attorneys' and accountants' fees and costs associated with the negotiation
and consummation of this transaction. Such fees and costs shall be paid
immediately upon receipt of an invoice from the Stockholder's attorneys or
accountants. The attorneys and accountants shall have the rights of
enforcement provided in this Agreement and are intended beneficiaries of
this provision.
11. FORM OF AGREEMENT.
11.1 Effect of Headings. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes
of convenience only, and shall not affect the construction or
interpretation of any of the provisions hereof or of the information set
forth in such Schedules.
11.2 Entire Agreement; Waivers. This Agreement and the other
agreements and instruments referred to herein constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all prior agreements or understandings as to such subject matter.
No party hereto has made any representation or warranty or given any
covenant to the other except as set forth in this Agreement, the Schedules
hereto, and the other agreements and instruments referred to herein. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
11.3 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12. PARTIES.
12.1 Parties in Interest. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties to it and
their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligations or liability of
any third persons to any party to this Agreement, nor shall any provision
give any third persons any right of subrogation or action over or against
any party to this Agreement.
12.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
to have been duly given (a) on the date of service if served personally on
the party to whom notice is to be given, (b) on the day after the date sent
by recognized overnight courier service, properly addressed and with all
charges prepaid or billed to the account of the sender, or (c) on the third
day after mailing if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid, and properly
addressed as follows:
(i) If to the Stockholder:
R. C. Hill, II
1211 Salerno Court
Orlando, FL 32806
(ii) With a copy to:
David A. Webster, Esq.
Milam, Otero, Larsen, Dawson & Traylor, P.A.
1301 Riverplace Boulevard, Suite 1301
Jacksonville, FL 32207
(iii) If to Eckler or the Buyer:
First Choice Auto Finance, Inc.
Eckler Industries, Inc.
5200 South Washington Avenue
Titusville, FL 32780
Attn: James Neal Hutchinson, Jr.
General Counsel
or to such other address as any party shall have specified by notice in
writing given to the other party.
13. MISCELLANEOUS.
13.1 Amendments and Modifications. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in
writing and signed by the party to be charged therewith.
13.2 Non-Assignability; Binding Effect. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all
other parties hereto. Otherwise, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors and
permitted assigns.
13.3 Governing Law; Jurisdiction. This Agreement shall be
construed and interpreted and the rights granted herein governed in
accordance with the laws of the State of Florida applicable to contracts
made and to be performed wholly within such State.
13.4 Costs of Enforcement. In the event that any party is
required to bring an action to enforce its rights hereunder, the
substantially prevailing party shall recover from the substantially non-
prevailing party all of the substantially prevailing party's attorneys'
fees and costs (the "Expenses") incurred in such action. For purposes
herein, the Expenses shall include investigatory, trial, appeal,
bankruptcy, mediation and arbitration expenses, and all costs of collection
and shall cover fees and costs for the lawyers, experts, paralegals and
clerks, and all other persons reasonably necessary as part of the
enforcement process. All such Expenses shall bear interest from the date
incurred until the date paid at the highest rate of interest permitted in
Florida. The parties request that a court award the actual Expenses
incurred by the substantially prevailing party, recognizing that it is the
parties intention that the substantially prevailing party should be made
completely whole. Costs incurred in enforcing this Section shall be
included in Expenses.
13.5 Time of the Essence. Time is of the essence for all
performances under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
The Buyer:
FIRST CHOICE AUTO FINANCE, INC.,
a Florida corporation
By: /S/J. Neal Hutchinson, Jr.
Title:Asst. V.P.
The Stockholder:
/S/ R.C. Hill, II
R. C. HILL, II
Eckler:
ECKLER INDUSTRIES, INC.,
a Florida corporation
By: /S/J. Neal Hutchinson, Jr.
Title: Asst. V. P.
Exhibit 10.11
PROMISSORY NOTE
$1,500,000 February 12, 1997
FOR VALUE RECEIVED, the undersigned, ECKLER INDUSTRIES INC., a Florida
corporation (the "Maker"), hereby promises to pay to R.C. HILL, II (the
"Payee"), the principal sum of One Million Five Hundred and 00/100
($1,500,000) Dollars, together with interest on the outstanding principal
balance hereunder accrued from the date hereof at the rate of eight (8%)
percent per annum. All payments of principal and/or interest shall be paid
as set forth below, and each such payment shall be made in lawful money of
the United States of America.
1. Payments of Principal and Interest.
(a) The principal balance of this Note shall be payable as follows:
(i) Fifty Thousand and no/100ths Dollars ($50,000.00) shall be due and
payable upon the execution of this Note.
(ii) Beginning on 1 March 1997, and on the first day of each
succeeding calendar month, a principal payment of Thirty Thousand
and no/100ths Dollars ($30,000.00) shall be paid to the Holder.
(iii) The remaining unpaid principal balance of this Note shall be
due and payable upon the earlier to occur of the following:
(1) The first anniversary of the date of execution and delivery
of this Note, as provided above.
(2) Fifteen (15) days after the date on which the Maker, and/or
any of its corporate affiliates, shall consumate a public
offering of its equity securities of at least $20,000,000.
(b) The accrued interest on this Note shall be payable, in arrears, on the
first (1st) day of each calendar month, beginning 1 March 1997, so long
as any principal amount remains unpaid. All accrued but unpaid interest
shall be due and payable at the same time as the remaining principal
balance is paid pursuant to subparagraph 1.(a)(iii) above.
(c) In the event that any scheduled payment date hereunder is a day
on which banks in the State of Florida are required or authorized to be
closed, then the payment that would be due on such day shall instead be due
and payable on the next day which is not such a non-banking day, with
additional interest for such delay at the rate then in effect hereunder.
2. Prepayment.
The Maker shall have the right to prepay, without premium or
penalty, at any time or times after the date hereof, all or any portion of
the outstanding principal balance of and/or accrued interest under this
Note.
3. Events of Default.
The following are Events of Default hereunder:
(a) Any failure by the Maker to pay when due all or any
principal or interest hereunder; or
(b) Any failure of Maker to pay, perform, hold harmless or otherwise
perform any or all of its obligations to R.C, Hill, II ("Hill") under the
Indemnification Agreement between Eckler Industries, Inc. and R.C. Hill,
II, of even date herewith (a "Non-Performance"), which Non-Performance
results in a third party taking action against Hill which action is or
could cause damages to Hill, however arising.
(c) If the Maker (i) admits in writing its inability to pay
generally its debts as they mature, or (ii) makes a general assignment for
the benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent,
or (iv) files a voluntary petition in bankruptcy, or (v)takes advantage, as
against its creditors, of any bankruptcy law or statute of the United
States of America or any state or subdivision thereof now or hereafter in
effect, or (vi) has a petition or proceeding filed against it under any
provision of any bankruptcy or insolvency law or statute of the United
States of America or any state or subdivision thereof, which petition or
proceeding is not dismissed within thirty (30) days after the date of the
commencement thereof, (vii) has a receiver, liquidator, trustee, custodian,
conservator, sequestrator or other such person appointed by any court to
take charge of its affairs or assets or business and such appointment is
not vacated or discharged within thirty (30) days thereafter, or
(viii) takes any action in furtherance of any of the foregoing; or
(b) Any liquidation, dissolution or winding up of the Maker or
its business.
4. Remedies on Default.
If any Event of Default shall occur and be continuing, the holder
hereof shall, in addition to any and all other available rights and
remedies, have the right, at its option (except for an Event of Default
under paragraph 4(b) above, the occurrence of which shall automatically
effect acceleration hereunder), (a) to declare the entire unpaid principal
balance of this Note, together with all accrued interest hereunder, to be
immediately due and payable, and (b) to pursue any and all available
remedies for the collection of such principal and interest.
5. Certain Waivers.
Except as otherwise expressly provided in this Note, the Maker
hereby waives diligence, demand, presentment for payment, protest,
dishonor, nonpayment, default, and notice of any and all of the foregoing.
All amounts payable under this Note shall be payable without relief under
any applicable valuation and appraisement laws. The Maker hereby expressly
agrees that this Note, or any payment hereunder, may be extended, modified
or subordinated (by forbearance or otherwise) from time to time, without in
any way affecting the liability of the Maker. The Maker hereby further
waives the benefit of any exemption under the homestead exemption laws, if
any, or any other exemption or insolvency laws.
6. Waivers and Amendments.
Neither any provision of this Note nor any performance hereunder
may be amended or waived orally, but only by an agreement in writing and
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
7. Cumulative Remedies.
No right or remedy conferred upon the Payee under this Note is
intended to be exclusive of any other right or remedy contained herein or
in any instrument or document delivered in connection herewith, and every
such right or remedy shall be cumulative and shall be in addition to every
other such right or remedy contained herein and/or now or hereafter
existing at law or in equity or otherwise.
8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial,
Time of the Essence.
This Note shall be deemed to be a contract made under the laws of
the State of Florida and shall be governed by, and construed in accordance
with, the laws of the State of Florida. The Maker hereby irrevocably
consents to the jurisdiction of all courts (state and federal) sitting in
the State of Florida in connection with any claim, action or proceeding
relating to or for the collection or enforcement of this Note, and hereby
waives any defense of forum non conveniens or other such claim or defense
in respect of the lodging of any such claim, action or proceeding in any
such court. Time shall be of the essence for performance hereunder.
9. Collection Costs.
In the event that the Payee shall, after the occurrence of an
Event of Default, turn this Note over to an attorney for collection, the
Maker shall further be liable for and shall pay to the Payee all collection
costs and expenses incurred by the Payee, including reasonable attorneys'
fees and expenses.
ECKLER INDUSTRIES, INC.
By:/S/J. Neal Hutchinson, Jr.
As its:Asst. V. P.
4
Exhibit 10.12
CORPORATE GUARANTY
This GUARANTY is made and entered as of February 12, 1997 (the
"Effective Date") from ECKLER INDUSTRIES, INC., a Florida corporation (the
"Guarantor") to R.C. HILL, II ("Hill").
WITNESSETH:
In consideration of any loan or other financial accommodation
heretofore or hereafter at any time made or granted to First Choice Auto
Finance, Inc. ("FCAF"), the Guarantor agrees as follows:
1. DEFINITION
For purposes of this Agreement, "Indebtedness" shall mean any
obligation or indebtedness of FCAF pursuant to that certain $1,500,000 Note
of FCAF to Hill of even date herewith.
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 reasonable expenses, including without
limitation, attorneys' fees and court costs, paid or incurred by Hill in
endeavoring to collect the Indebtedness, or any part thereof, and in
enforcing the Guaranty, plus interest on such amounts at the maximum rate
permitted by law. Interest on such amounts paid or incurred by Hill shall
be computed from the date of payment made by Hill 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 Hill 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 voluntary or involuntary liquidation, dissolution, sale
of all or substantially all of the property, marshaling 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 FCAF or
any assets of FCAF; or
(vii) the release or discharge of FCAF 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 obligations
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 Hill 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 of 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 Hill.
f. Enforcement. In no event shall Hill have any obligation to
proceed against FCAF, any other entity or any security pledged in
connection with the Indebtedness before seeking satisfaction from the
Guarantor. Hill 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 FCAF, 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 Hill to any of the
Indebtedness is or must be rescinded or returned by Hill 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 or
returned, be deemed to have continued in existence, notwithstanding such
application by Hill, and this Guaranty shall continue to be effective or
reinstated, as applicable, as to such Indebtedness, all as though such
application by Hill had not been made.
3. TERMINATION
This Guaranty shall be terminated upon: (i) the payment by FCAF or
the Guarantor, either jointly or severally, of the aggregate amount of
Indebtedness outstanding, and (ii) the payment and performance of all
obligations by the Guarantor which may be due to Hill under this Guaranty
or otherwise.
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 Hill;
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 Hill;
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 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
If an Event of Default under this Guaranty shall have occurred, in
addition to pursuing any remedies which may be available to Hill with
respect to the Indebtedness, Hill, at its option, may take whatever action
at law or in equity Hill may deem necessary regardless of whether Hill
shall have exercised any of its rights or remedies with respect to any of
the Indebtedness, and Hill 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 Hill 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 Hill. 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
Hill 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 Hill 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 Hill 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 Hill. All notices to Hill shall be forwarded
by express mail for overnight delivery (except for the notice given
pursuant to Section 3(b) to the following address: at 1214 Salerno Court,
Orlando, Florida 32806, or such other address as Hill may specify to the
Guarantor in writing.
d. Governing Law; Severability. This Guaranty shall be governed by
the laws of the State of Florida. Wherever possible, each provision of
this Guaranty shall be interpreted in such manner to be effective and valid
under applicable law, but if any 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 legal representatives, heirs, successors
and assigns of the Guarantor.
f. References to Guarantor. Each reference to Guarantor herein
shall be deemed to include the legal representatives, heirs, and agents of
the Guarantor and their respective successors and assigns.
g. Rights and Remedies of Hill. No delays on the part of the Hill
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 Hill 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 Hill may or will otherwise have.
h. 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 Hill.
i. Time of the Essence. Time shall be of the essence for all
performances hereunder.
j. Costs of Enforcement. In the event that any party is required to
bring an action to enforce its rights hereunder, the substantially
prevailing party shall recover from the substantially non-prevailing party
all of the substantially prevailing party's attorneys' fees and costs (the
"Expenses") incurred in such action. For purposes herein, the Expenses
shall include investigatory, trial, appeal, bankruptcy, mediation and
arbitration expenses, and all costs of collection and shall cover fees and
costs for the lawyers, experts, paralegals and clerks, and all other
persons reasonably necessary as part of the enforcement process. All such
Expenses shall bear interest from the date incurred until the date paid at
the highest rate of interest permitted in Florida. The parties request
that a court award the actual Expenses incurred by the substantially
prevailing party, recognizing that it is the parties' intention that the
substantially prevailing party should be made completely whole. Costs
incurred in enforcing this Section shall be included in Expenses.
GUARANTOR:
ECKLER INDUSTRIES, INC.,
a Florida corporation
By:/S/J. Neal Hutchinson, Jr.
Name:
Title:Asst. V. P.
HILL:
/S/ R.C. Hill, II
R. C. HILL, II
Exhibit 10.13
STOCK PLEDGE AND SECURITY AGREEMENT
This Stock Pledge and Security Agreement (the "Agreement"), is made
and entered into this 12th day of February, 1997, by and among R.C. Hill,
II, ("Hill"), First Choice Auto Finance, Inc., a Florida corporation
("FCAF") and Eckler Industries, Inc., a Florida corporation ("Eckler")
(FCAF and Eckler are referred to collectively as the "Secured Parties").
RECITALS:
This Agreement is made and entered into under the following
circumstances:
1. Hill is the record shareholder of 176,078 shares (the "Shares")
of the outstanding common capital stock, Class B, $.01 par value (the
"Common Stock") of Eckler, such Shares being represented by certificate
number 176,078 (the "Certificate").
2. Hill and Eckler have entered into that certain Merger Agreement
and Hill, Eckler, and FCAF have entered into that certain Stock Purchase
Agreement, both of even date herewith, pursuant to which Eckler is
acquiring certain businesses of Hill (such agreements are referred to
herein collectively as the "Acquisition Agreements").
3. Eckler and FCAF have required the execution and delivery of this
Agreement to provide security for the obligations of Hill under the
Acquisition Agreements.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. Pledge of Shares. Hill hereby pledges his interest in the Shares
as security for his obligations (the "Obligations") under the Acquisition
Agreements and all agreements executed and delivered in connection with the
Acquisition Agreements, including his obligations with respect to the
representations and warranties under the foregoing. The Secured Parties
shall have (and are hereby granted) a security interest in the Shares (and
related Certificates) (herein called the "Collateral") and all proceeds
thereof and accessions thereto to secure the Obligations.
2. Ownership Rights. Unless a breach or default has occurred under
the Acquisition Agreements or this Agreement, Hill shall have and enjoy all
rights and attributes relating to the Shares, including, without
limitation, all voting rights and rights to dividends and other
distributions in respect thereof; provided however that Hill shall not
transfer any of the Shares during the time when this Agreement is in
effect.
3. Adjustments. In the event that during the term of this
Agreement, any share dividend, reclassification, readjustment, or other
change is declared or made in the capital structure of the Secured Parties,
all new, substituted, and additional shares, options or other securities
issued with respect to the pledged Collateral by reason of any such change
shall be delivered to the Secured Parties and held by the Secured Parties
under the terms of this Agreement in the same manner as the Collateral
originally pledged hereunder.
4. Warrants and Rights. In the event that during the term of this
Agreement, subscription warrants or any other rights or options shall be
issued to or for the benefit of Hill or otherwise with respect to the
Collateral, such warrants, rights and options shall be immediately assigned
and delivered by Hill to the Secured Parties and shall become part of the
Collateral hereunder.
5. Events of Default; the Secured Parties Remedies. In the event
Hill shall, following the date hereof: (a) default under or breach of any
of the Obligations or this Agreement (collectively, the "Security
Documents"), (b) make an assignment for the benefit of his creditors, (c)
commence proceedings in bankruptcy for the adjustment of any of Hill's
debts under the Bankruptcy Code or under any law, whether state or federal,
now or hereafter existing for the relief of debtors, (d) have a receiver
appointed for any substantial part of Hill's assets, (e) transfer a
substantial part of his property, or (g) become insolvent or unable to pay
debts as they mature (each of the foregoing being an "Event of Default"),
the Secured Parties shall have the rights and remedies provided in the
Florida Uniform Commercial Code in effect on the date of this Agreement
(the "Code") and may sell any such Collateral in any manner provided under
the Code, and the proceeds of any such sale shall be applied first to the
expenses of such sale (including, but not limited to, reasonable attorneys'
fees incurred by the Secured Parties in connection with any such default by
Hill) and the balance, if any, shall be paid to Hill. Further, following
an Event of Default, the Secured Parties shall have the right, but not the
duty, to thereafter exercise all rights with respect to voting privileges
for the Shares and upon notice from the Secured Parties, Hill shall no
longer exercise any voting rights with respect to the Shares, or if so
directed by the the Secured Parties, shall vote the Shares as directed by
the Secured Parties.
If an Event of Default shall occur, the Secured Parties shall satisfy
any resulting claim by the Secured Parties against Hill resulting from such
Event of Default by causing Shares having an aggregate value (determined as
provided below, subject to appropriate adjustment to account for any stock
split, stock dividend, combination of shares or other such event which may
occur at any time prior to the termination of this Agreement) equal to the
amount of such claim by the Secured Parties against Hill to be transferred
from Hill to the Secured Parties for cancellation. For purposes hereof,
the Shares shall be deemed to have a value per share equal to $17.50.
No delay or omission on the part of the Secured Parties in exercising
any right granted hereunder shall operate as a waiver of such right or any
other right. A waiver on any one occasion by the Secured Parties shall not
be construed as a bar to or waiver of any right on any future occasion.
All rights and remedies of the Secured Parties, whether granted herein or
by the Acquisition Agreements, shall be cumulative and may be exercised
separately or concurrently.
6. Termination of Pledge; Release of Shares. The pledge created
hereby shall terminate upon the termination of the Obligations. On
termination the Secured Parties shall release their security interest in
the Collateral and shall deliver to Hill the Certificates and stock powers
relating thereto, and any other Collateral remaining in the possession of
the Secured Parties.
7. Amendment. This Agreement shall not be amended except by a
writing which refers to this Agreement and is executed by each of the
parties hereto.
8. Complete Agreement. This Agreement sets forth the entire
understanding of the parties hereto concerning the subject matter hereof,
including the agreements referenced herein, and supersedes all prior
contracts, arrangements, communications, discussions, representations and
warranties, whether oral or written, among the parties relating to the
subject matter of this Agreement.
9. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and delivered to the person to
whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as
registered or certified item with return receipt requested, (iii) delivered
by delivery service, or (iv) sent by facsimile (with confirmation or
receipt), telex or telecopy. Notices delivered by mail shall be deemed to
be given when deposited in a post office or other depository under the care
or custody of the United States Postal Service, enclosed in a wrapper,
addressed properly with proper postage affixed or when received at the
address set forth herein if delivered or sent by facsimile. All notices
shall be addressed as follows:
If to Hill: R.C. Hill, II
1211 Salerno Court
Orlando, FL 32806
With a copy to: David A. Webster, Esquire
Milam, Otero, Larsen, Dawson &
Taylor, P.A.
1301 Riverplace Boulevard, Suite 1301
Jacksonville, Florida 32207
If to the Secured Parties: Eckler Industries, Inc.
5200 S. Washington Avenue
Titusville, FL 32780
or to such other address or addresses as the party addressed may from time
to time designate to the others in writing in accordance with this
paragraph.
10. Governing Law. This Agreement shall in all respects be
interpreted, governed by, and construed in accordance with the laws of the
State of Florida.
11. Severability. Each section, subsection, and lesser section of
this Agreement constitutes a separate and distinct undertaking, covenant,
or provision hereof. In the event that any provision of this Agreement
shall finally be determined to be unlawful, such provision shall be deemed
limited by construction in scope and effect to the minimum extent necessary
to render the same valid and enforceable, and, if such a limiting
construction is not possible, any such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall
remain in full force and effect.
12. Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any other person or
entity other than the parties hereto any rights or remedies under or by
reason of this Agreement.
13. Headings. The headings in this Agreement are intended solely for
convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
14. Counterparts. This Agreement may be executed and delivered in
two or more counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same Agreement.
15. Waiver of Trial by Jury. THE PARTIES HEREBY MUTUALLY AGREE THAT
NEITHER PARTY, NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE
OF THE PARTIES (ALL OF WHOM ARE HEREINAFTER REFERRED TO AS THE "PARTIES")
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY
OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY DOCUMENT, INSTRUMENT, OR AGREEMENT EXECUTED IN CONNECTION HEREWITH, ANY
RELATED AGREEMENT OR INSTRUMENT OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG THE PARTIES, OR ANY OF THEM. NONE OF THE PARTIES WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES. THE WAIVER
CONTAINED HEREIN IS IRREVOCABLE, CONSTITUTES A KNOWING AN VOLUNTARY WAIVER,
AND SHALL BE SUBJECT TO NO EXCEPTIONS. ECKLER HAS IN NO WAY AGREED WITH OR
REPRESENTED TO GUARANTOR OR ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the date first written above.
Hill:
/S/ R.C. Hill, II
R.C. Hill, II
Eckler:
ECKLER INDUSTRIES, INC.,
a Florida corporation
By:/S/ J. Neal Hutchinson, Jr.
Title:Asst. V. P.
FCAF:
FIRST CHOICE AUTO FINANCE,
INC.,
a Florida corporation
By: /S/
Title:
Exhibit 10.14
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of and effective the 12th day of February, 1997, by and between
ECKLER INDUSTRIES, INC., whose mailing address is 5200 S. Washington
Avenue, Titusville, Florida 32780 ("Eckler"), and R.C. HILL, II, whose
mailing address is 2211 N. Halifax Avenue, Daytona Beach, Florida 3118
("Hill").
W I T N E S S E T H:
THIS AGREEMENT is made and entered into under the following
circumstances:
A. Hill has sold his interest in Liberty Finance Company
("Liberty"), Team Automobile Sales & Service, Inc. ("Team") and Wholesale
Acquisitions, Inc. ("Wholesale") (Liberty, Team and Wholesale maybe
referred to sometimes hereinafter as the "Acquirees"), to the Eckler
pursuant to those certain purchase agreements dated even herewith;
B. Hill has previously personally guaranteed certain obligations of
the Acquirees to certain creditors, secured and unsecured (the
"Obligations"), as more specifically identified in Exhibit "A", a true and
accurate copy of which is attached hereto and incorporated herein by this
reference; and
C. Eckler desires to indemnify Hill, and others as named below,
against any personal liability incurred in connection with the Obligations
as the result of Eckler's failure to perform as to payment thereof.
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the parties hereto covenant and agree as
follows:
1. Eckler's Indemnification of Hill Parties. Eckler shall
indemnify and hold harmless Hill, R.C. Hill, Sr., R.C. Hill Enterprises,
Inc., Deltona House Rentals, Inc., Affordable Leasing, Inc., Polaris of
Orlando, Inc., Motorcycle Insurance Agency, Inc., Orange Acceptance
Corporation and R.C. Hill, Sr. (all of which are jointly referred to herein
as the "Hill Parties" and are intended beneficiaries of this Agreement with
the same rights of enforcement against the Eckler hereunder) from and
against the Obligations, including payments, liabilities, costs (including
attorneys fees and costs), and penalties thereunder, however arising.
Specifically, the Eckler acknowledges that certain Forebearance Agreement
(and associated documents) between the Hill Parties (and others) and
General Electric Credit Corporation ("GE") dated 21 January 1997, wherein
the Hill parties guaranteed to GE the payment of the obligations of
Liberty Finance Company to GE (the "GE Debt"), and further acknowledges
that the Hill Parties, in some cases, provided security to GE for the GE
Debt, including collateral assignments of mortgages (in the case of R.C.
Hill, Sr., and Hill) as well as other security. Eckler acknowledges that
the duty of indemnification includes ensuring that the Hill Parties suffer
no detriment to the security which was provided to GE, to the extent the
detriment arises from a failure by Eckler to pay the GE Debt resulting in
action by GE against such security that is detrimental to the interests of
the party who owns such collateral. This duty of indemnification shall
continue until, if ever, the Obligations are paid in full, the Hill Parties
have been fully released from liability by the holders of the Obligations,
and all security which has been pledged to secure any of the Obligations
has been released to the Hill Parties owner of such property.
2. Indemnification Procedure.
(a) Claims for Indemnity. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder the
indemnified party shall notify the indemnifying party or parties in writing
within sixty (60) days of the indemnified party's first receipt of notice
of, or the indemnified party's obtaining actual knowledge of, such claim,
and in any event within such shorter period as may be necessary for the
indemnifying party or parties to take appropriate action to resist such
claim. Such notice shall specify all facts known to the indemnified party
giving rise to such indemnity rights and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom.
If an indemnifying party shall be duly notified of such dispute, the
parties shall attempt to settle and compromise the same or may agree to
submit the same to arbitration or, if unable or unwilling to do any of the
foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement,
compromise, arbitration or litigation shall promptly thereafter be paid and
satisfied by those indemnifying parties obligated to make indemnification
hereunder.
(b) Right to Defend. If the facts giving rise to any claim
for indemnification shall involve any actual or threatened action or demand
by any third party against the indemnified party or any of its affiliates,
the indemnifying party or parties shall be entitled (without prejudice to
the indemnified party's right to participate at its own expense through
counsel of its own choosing), at their expense and through a single counsel
of their own choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name
of the indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
indemnifying party shall be required to undertake, conduct and control,
through counsel of its own choosing and at its sole expense, the settlement
or defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
3. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and delivered to the person to
whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as
registered or certified item with return receipt requested, (iii) delivered
by delivery service, or (iv) sent by facsimile, telex or telecopy. Notices
delivered by mail shall be deemed to be given when deposited in a post
office or other depository under the care or custody of the United States
Postal Service, enclosed in a wrapper, addressed properly with proper
postage affixed or when received at the address set forth herein if
delivered or sent by facsimile. All notices shall be addressed as follows:
If to Hill: R.C. Hill, II
1211 Salerno Court
Orlando, Florida 32806
With a copy to: David A. Webster, Esquire
Milam, Otero, Larsen, Dawson & Taylor, P.A.
1301 Riverplace Boulevard, Suite 1301
Jacksonville, Florida 32207
If to Eckler: Eckler Industries, Inc.
5200 S. Washington Avenue
Titusville, Florida 32780
With a copy to: F. S. Ioppolo, Jr., Esquire
Greenberg Traurig
111 North Orange Avenue
Suite 2050
Orlando, Florida 32801
or to such other address or addresses as the party addressed may from time
to time designate to the others in writing in accordance with this
paragraph.
4. Counterparts. This Agreement may be executed in one or more
counterparts by the parties by the parties hereto, and all such
counterparts together shall constitute one and the same agreement.
5. Successors, etc. This Agreement is for the benefit of the
parties hereto, and shall be binding upon them, together with their
respective heirs, executors, administrators, successors, and assigns. No
right or obligation created hereunder shall be assignable or delegable by
any party hereto without the prior written consent of every other party
hereto.
6. Governing Law; Jurisdiction. The validity, interpretation,
and performance of this Agreement shall be governed by the laws of the
State of Florida, without giving effect to the principles of comity or
conflicts of laws thereof. Each party hereto agrees to submit to the
personal jurisdiction and venue of the state and federal courts located in
Orange County, Florida, for a resolution of all disputes between the
parties arising in connection with this Agreement, and hereby waives the
claim or defense therein that such courts constitute an inconvenient forum.
7. Severability. Each section, subsection, and lesser section
of this Agreement constitutes a separate and distinct undertaking,
covenant, or provision hereof. In the event that any provision of this
Agreement shall finally be determined to be invalid or unenforceable, such
provision shall be deemed limited by construction in scope and effect to
the minimum extent necessary to render the same valid and enforceable, and,
in the event such a limiting construction is impossible, such unlawful
provision shall be deemed severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
8. Waivers. Any waiver by any party of any violation of,
breach of, or default under any provision of this Agreement by another
party shall not be construed as, or constitute, a continuing waiver of such
provision, or waiver of any other violation of, breach of, or default under
any other provision of this Agreement.
9. Third Parties. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any
other person or entity other than the parties hereto any rights or remedies
under or by reason of this Agreement.
10. Costs of Enforcement. In the event a party initiates legal
action (including both trial and appellate proceedings) to enforce his or
its rights hereunder, the prevailing party in such action shall recover
from the non-prevailing party in such action his or its reasonable
litigation expenses (including, but not limited to reasonable attorneys'
fees and court costs) of all such proceedings.
11. Time of the Essence. Time shall be of the essence for all
performances hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
Eckler:
Eckler Industries, Inc.
By: /S/ J. Neal Hutchinson, Jr.
Title:Asst. V. P.
Hill:
/S/ R.C. Hill, II
R. C. Hill, II
Exhibit "A"
OBLIGATIONS OF THE HILL PARTIES
1. General Electric Credit Corporation pursuant to that certain Motor
Vehicle Installment Contract Loan and Security Agreement dated June 3,
1993, as amended, together with that certain Forebearance Agreement, and
associated documents, dated 21 January 1997 (the "GE Debt").
2. (i) Nat Weaver, Inc.-dated January 1, 1993, for $70,000, due on
December 31, 1997, plus interest at 16% per annum.
(ii) Nat Weaver, Inc.-dated April 17, 1992, for $50,000, due on April
17, 1997, plus interest at 16% per annum.
(iii) Nat Weaver, Inc.-dated August 1, 1992, for $60,000, due on July
31, 1997, plus interest at 16% per annum.
(iv) Jeremy Hill-dated June 1, 1992, for $1,500, due on demand, plus
interest at 15% per annum.
(v) John Jeyaseelan-undated in 1994, for $10,000, due on demand, with
interest at 15% per annum.
(vi) John Jeyaseelan-dated December 30, 1994, for $5,000, due on
demand, plus interest at 15% per annum.
(vii) John Jeyaseelan-dated December 27, 1994, for $5,000, due on
demand, plus interest at 15% per annum.
(viii) Lucy Lee Burton-dated January 1, 1995, for $100,000, due on
October 30, 2001, plus interest at 10% per annum.
(ix) Mark F. Burton-dated February 17, 1995, for $101,006.68, due on
October 30, 2001, with interest at 10% per annum.
(x) R.C. Hill, Sr.-dated August 1, 1993, for $200,000, due on
December 31, 2001, with interest at 10% per annum.
(xi) R. C. Hill, III - $190,468.41, dated July 12, 1996, payable
November 15, 2001 with interest at 15% per annum.
3. Barnett Bank of Central Florida, N.A., dated April 30, 1996, original
principal $300,000 due on demand, plus interest at the rate of 9.250%.
4. Barnett Bank, N.A. - original principal $34,120.05, dated November 8,
1996 for Chevy Suburban owned by Wholesale Acquisitions, Inc.
5. Manheim Automotive Financial Services, Inc. - Note $2,000,000, dated
July 30, 1996, Wholesale Acquisitions, Inc., Maker, Liberty Finance Company
and R.C. Hill, Jr., Guarantors.
Exhibit 10.15
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th
day of February, 1997, by and between FIRST CHOICE AUTO FINANCE, INC., a
Florida corporation (the "Company"), and R.C. HILL, II, an individual (the
"Employee");
W I T N E S S E T H:
WHEREAS, the Employee has extensive experience relating to all aspects
of the management and operation of automobile dealerships for new and used
cars, including (without limitation) leasing and other financing activities
in connection therewith; and
WHEREAS, the Employee has heretofore been affiliated with Liberty
Finance Company, Team Automobile Sales & Finance, Inc. and Wholesale
Acquisitions, Inc., the businesses of which are being acquired by the
Company and its affiliates on or about the date hereof; and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee's services from and
after the date hereof, on the terms and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to
the Company from and after the date hereof, on the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee,
and the Employee shall render services to the Company, in a managerial
capacity and with such title as may be determined by the Board of Directors
of the Company. In such capacity, the Employee shall have and exercise
responsibility for managing, supervising, overseeing and actively
participating in those aspects of the Company's day-to-day business in
central Florida as are assigned by the President, another employee
designated by the President and/or the board of directors (the "Board"),
together with such other similar or related duties as may be assigned to
the Employee from time to time by the Board. The Employee may also be
given additional titles, and may be assigned responsibilities on behalf of
certain of the Company's affiliates, without requirement of additional
compensation hereunder.
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention, knowledge
and skills, faithfully, diligently and to the best of his ability, to the
active performance of his duties and responsibilities hereunder on behalf
of the Company; (ii) observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as may be established
from time to time by the Board, including but not limited to the standard
policies and procedures of the Company as in effect from time to time;
(iii) satisfactorily perform those duties assigned to Employee, in the
reasonable discretion of the Board; and (iv) do such traveling as may
reasonably be required in connection with the performance of such duties
and responsibilities; provided, however, that the Employee shall not be
assigned to regular duties that would reasonably require him to relocate
his permanent residence from that first set forth above.
2. Term of Employment.
(a) Subject to prior termination in accordance with paragraph
2(b) below, the term of this Agreement and the Employee's employment
hereunder shall commence on the date hereof and shall continue for a
continous three (3) year period thereafter (the "Term"). The Term shall
thereafter automatically renew for additional terms of one (1) year each
unless either party gives written notice of termination to the other party
not less than ninety (90) days prior to the end of any renewal term (in
which event this Agreement shall terminate effective as of the close of
such renewal term).
(b) This Agreement:
(i) may be terminated upon mutual written agreement of the
Company and the Employee;
(ii) may be terminated, at the option of the Employee, upon
fourteen (14) days' prior written notice to the Company, in the event that
the Company shall (A) fail to make any payment to the Employee required to
be made under the terms of this Agreement, or any other agreement or any
other obligation due to Employee by the Company or any company affiliated
with the Company, within fifteen (15) days after payment is due, or (B)
fail to perform any other material covenant or agreement to be performed by
it hereunder or take any action prohibited by this Agreement, and fail to
cure or remedy same (if capable of being cured or remedied) within thirty
(30) days after written notice thereof to the Company;
(iii) may be terminated, at the option of the Company, upon
written notice to the Employee, "for cause" (as hereinafter defined);
(iv) may be terminated, at the option of the Company, in
the event of the "permanent disability" (as hereinafter defined) of the
Employee; or
(v) shall automatically terminate upon the death of the
Employee.
(c) As used herein, the term "for cause" shall mean and be
limited to: (i) any material breach of this Agreement (including, without
limitation, the covenants contained in paragraph 5 below) by the Employee
which in any case is not fully corrected within thirty (30) days after
written notice of same from the Company to the Employee; (ii) neglect by
the Employee of his duties and responsibilities hereunder which in any case
is not fully corrected immediately upon written notice of same from the
Company to the Employee; (iii) any fraud, criminal misconduct, breach of
fiduciary duty, dishonesty, or gross and willful misconduct by the Employee
in connection with the performance of his duties and responsibilities
hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs)
during business hours or while on call, or being habitually drunk or
addicted to drugs (provided that this shall not restrict the Employee from
taking physician-prescribed medication in accordance with the applicable
prescription); (v) the commission by the Employee of any crime of moral
turpitude, or any other action by the Employee which may materially impair
or damage the reputation of the Company; (vi) habitual breach by the
Employee of any of the material provisions of this Agreement (regardless of
any prior cure thereof); or (vii) repeated failure (which prior failures
were brought to Employee's attention in writing), to satisfactorily perform
those duties assigned to Employee, in the reasonable discretion of the
Board.
(d) As used herein, the term "permanent disability" shall mean,
and be limited to, any physical or mental illness, disability or impairment
that prevents the Employee from continuing the performance of his normal
duties and responsibilities hereunder for a period in excess of three (3)
consecutive months. For purposes of determining whether a "permanent
disability" has occurred under this Agreement, the written determination
thereof by two (2) qualified practicing physicians selected and paid for by
the Company (and reasonably acceptable to the Employee) shall be
conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case
may be) shall be entitled to receive any and all unpaid Base Salary and
minimum Bonus appropriately prorated to and as of the effective date of
termination (based on the number of days elapsed prior to the date of
termination), and any other amounts then due and payable to the Employee
hereunder. All such payments shall be made on the next applicable payment
date therefor (as provided in paragraph 3 below) following the effective
date of termination. Such payments shall constitute all amounts to which
the Employee shall be entitled hereunder upon termination of this
Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, the Company shall pay to the Employee a base salary at
the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS AND NO/100THS ($120,000)
per annum (the "Base Salary"), payable in periodic installments in
accordance with the standard payroll practices of the Company in effect
from time to time.
(b) Bonus. In addition to the foregoing Base Salary, the
Employee shall be eligible to earn bonuses from time to time as may be
determined by the Board, in its sole and exclusive discretion, or in
accordance with the terms and conditions of any bonus program instituted
for employees of a similar position by the Board; provided, however, that
notwithstanding the foregoing, Employee's bonus for the first year of the
Term of this Agreement shall not be less than EIGHTY THOUSAND AND NO/100THS
DOLLARS ($80,000) (the "Bonus"), payable quarterly in equal installments of
$20,000 on the 90th, the 180th, the 270th, and the 360th day after the date
of this Agreement.
(c) Additional Incentives. The Employee shall further be
entitled to participate in any stock options, incentive awards or other
such plans or programs which may be adopted or implemented by the Company
(or adopted by the parent company of the Company) from time to time during
the period of the Employee's employment hereunder, provided that the
Employee's level of participation therein shall be consistent with other
similarly situated management level persons.
(d) Auto Allowance. The Company shall also provide to the
Employee, throughout the period of his employment hereunder, an automobile
allowance at the rate of $600 per month for the use, maintenance,
insurance, parking and garaging of an automobile which will be used by the
Employee for business purposes, provided that the Employee shall not be
required to account to the Company for the specific expenditure of such
automobile allowance. The Employee shall be solely responsible for any and
all taxes which may be payable by reason of the Employee's receipt of such
automobile allowance. Unless otherwise expressly agreed to by a senior
executive of the Company (other than the Employee), such automobile
allowance is in lieu of any and all other reimbursements for the use of the
Employee's automobile in the course of Company business.
(e) Other Fringe Benefits. The Company shall also make
available to the Employee, throughout the period of his employment
hereunder, such benefits and perquisites as are generally provided by the
Company to its employees, including but not limited to eligibility for
participation in any group life, health, dental, vision, disability or
accident insurance, pension plan, profit-sharing plan, retirement savings
plan, 401(k) plan, or other such benefit plan or policy which may presently
be in effect or which may hereafter be adopted by the Company for the
benefit of its employees generally; provided, however, that nothing herein
contained shall be deemed to require the Company to adopt or maintain any
particular plan or policy. Participation in such benefit plans shall be
subject to standard waiting periods following the commencement of full-time
employment, as currently provided in such plans.
(f) Expenses. Throughout the period of the Employee's
employment hereunder, the Company shall also reimburse the Employee, upon
presentment by the Employee to the Company of appropriate receipts and
vouchers therefor, for any reasonable out-of-pocket business expenses
incurred by the Employee in connection with the performance of his duties
and responsibilities hereunder; provided, however, that no reimbursement
shall be required to be made for any expense which is not properly
deductible (in whole or in part) by the Company for income tax purposes, or
for any expense item which has not previously been approved in accordance
with the Company's standard policies and procedures in effect from time to
time, or otherwise approved by the Company.
4. Vacation, etc.
(a) The Employee shall be entitled to take, from time to time, four
(4) weeks of vacation with pay, consistent with the Company's standard
policies and procedures in effect from time to time, at such times as shall
be mutually convenient to the Employee and the Company, and so as not to
interfere unduly with the conduct of the business of the Company.
(b) The Employee shall further be entitled to paid holidays, personal
days and sick days in accordance with the Company's standard policies and
procedures in effect from time to time.
5. Restrictive Covenants.
(a) The Employee hereby acknowledges and agrees that (i) the business
contacts, customers, suppliers, know-how, trade secrets, marketing
techniques, confidential information, financial and operating models,
promotional methods and other aspects of the business of the Company, its
affiliates and/or parent companies have been and are of value to the
Company, and have provided and will hereafter provide the Company with
substantial competitive advantages in the operation of its business, (ii)
he has and will continue to have detailed knowledge and possesses and will
possess confidential information concerning the business and operations of
the Company, (iii) the restrictions set forth in this Section are
reasonably necessary to protect the legitimate business interests of the
Company, and (iv) but for Employee's agreement to be governed by the
restrictions set forth in this Section 5, the Company would not have
entered into this Agreement. The Employee hereby further acknowledges that
his business skills are not uniquely suited to businesses of the type
conducted by the Company, and that, if required, he could readily adapt and
utilize such skills in one or more other types of businesses.
(b) The Employee shall not, directly or indirectly, for himself or
through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise disclose or
cause to be divulged, transmitted or otherwise disclosed, any business
contacts, client or customer lists, technology, know-how, trade secrets,
marketing techniques, contracts or other confidential or proprietary
information of the Company of whatever nature, whether now existing or
hereafter created or developed (provided, however, that for purposes
hereof, information shall not be considered to be confidential or
proprietary if (A) it is a matter of common knowledge or public record, (B)
it is generally known in the industry, or (C) the Employee can demonstrate
that such information was already known to the recipient thereof other than
by reason of any breach of any obligation under this Agreement or any other
confidentiality or non-disclosure agreement); and/or
(ii) at any time during the period from the date hereof
through and including the date of the expiration or termination of the
Employee's employment with the Company, and for an additional period of one
(1) year thereafter in the event that such termination is effected by the
Company "for cause" or is effected by the Employee other than pursuant to
paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly
or indirectly invest, carry on, engage or become involved, either as an
employee, agent, advisor, officer, director, stockholder (excluding
ownership of not more than 3% of the outstanding shares of a publicly held
corporation if such ownership does not involve managerial or operational
responsibility), manager, partner, joint venturer, participant or
consultant, in any business enterprise (other than the Company or its
subsidiaries, affiliates, successors or assigns) which (A) is located or
operating, or solicits customers located, within 50 miles of where the
Company or any of its affiliates has a place of business, at the time that
the Employee first becomes involved with such business enterprise, and (B)
derives any material revenues from the sale, lease, financing or other
transactions in new or used automobiles or other consumer vehicles.
(c) The Employee and the Company hereby acknowledge and agree that,
in the event of any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants, it will be difficult to ascertain the
precise amount of damages that may be suffered by the Company by reason of
such breach; and accordingly, the parties hereby agree that, as liquidated
damages (and not as a penalty) in respect of any such breach, the breaching
party or parties shall be required to pay to the Company, on demand from
time to time, cash amounts equal to any and all gross revenues derived by
the breaching party or parties, directly or indirectly, from any and all
violative acts or activities. The parties hereby agree that the foregoing
constitutes a fair and reasonable estimate of the actual damages that might
be suffered by reason of any breach of this paragraph 5 by the Employee,
and the parties hereby agree to such liquidated damages in lieu of any and
all other measures of damages that might be asserted in respect of any
subject breach.
(d) The Employee and the Company hereby further acknowledge and agree
that any breach by the Employee, directly or indirectly, of the foregoing
restrictive covenants will cause the Company irreparable injury for which
there is no adequate remedy at law. Accordingly, the Employee expressly
agrees that, in the event of any such breach or any threatened breach
hereunder by the Employee, directly or indirectly, the Company shall be
entitled, in addition to any and all other remedies available (including
but not limited to the liquidated damages provided for in paragraph 5(c)
above), to seek and obtain injunctive and/or other equitable relief to
require specific performance of or prevent, restrain and/or enjoin a breach
under the provisions of this paragraph 5 without the necessity of proof of
actual damages and without the necessity of posting bond. In the event
either party does apply for such injunction, the other party shall not
raise as a defense thereto that such applying party has an adequate remedy
at law.
(e) In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to
recover from the non-prevailing party or parties, in addition to any
damages and/or other relief that may be awarded, its actual costs and
expenses (including actual attorneys' fees) incurred in connection with
prosecuting or defending the subject dispute.
(f) Employee expressly agrees that the existence of any claims
that he has or that he may have against the Company, its affiliates or
parent companies, whether or not arising from this Agreement, shall not
constitute a defense to the enforcement by the Company of this Section 5.
6. Non-Assignability.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee or the Company of this
Agreement or any of Employee's duties, responsibilities or obligations
hereunder shall be void; provided, however, that the foregoing shall not
apply to any transfer of capital stock of, any transfer of substantially
all the assets of, or any merger or comparable transaction involving, the
Company or any parent corporation of the Company.
7. Notices.
Any notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and shall be deemed
to have been given when delivered personally, by telecopier (with proof of
receipt) or three (3) days after being mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of
such party first set forth above, or at such other address as such party
may hereafter have designated by notice; provided, however, that any notice
of change of address shall not be effective until its receipt by the party
to be charged therewith.
8. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver
or amendment shall only be applicable in the specific instance, and shall
not constitute or be construed as a waiver or amendment in any other or
subsequent instance. No failure or delay on the part of either party in
respect of any enforcement of obligations hereunder shall in any manner
affect such party's right to seek or effect enforcement at any other time
or in respect of any other required performance. Time shall be of the
essence for any performance required hereunder.
(b) Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the express prior written
consent of the other party.
(c) The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Florida.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but
all of which together shall constitute one and the same instrument.
(g) The prevailing party in any action or proceeding hereunder
shall be entitled to an award for its costs and actual attorneys' fees in
connection with such action or proceeding, including the fees and costs of
any appeals and all costs of collection.
(h) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of
every kind and nature between them as to such subject matter.
(i) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns,
and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit herefrom absent the express
written consent of the party to be charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or
application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require; and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
(k) Employee represents and warrants that no action required of
him under this Agreement or any other agreements or understandings, written
or oral, entered into with the Company, its affiliates or parent companies,
will conflict with, breach or otherwise impair any previously existing
agreements or understandings, whether written or oral, into which Employee
has entered with other persons or entities, including agreements with
respect to proprietary information or non-competition.
(l) Each party to this Agreement expressly recognizes that it
results from a negotiated process in which each party was given the
opportunity to consult with counsel and contributed to the drafting of this
Agreement. Given this fact, no legal or other presumption against the
party drafting this Agreement concerning its construction, interpretation
or otherwise accrue to the benefit of any party to this Agreement and each
party expressly waives the right to assert such a presumption in any
proceedings or disputes connected with, arising out of, or involving this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
FIRST CHOICE AUTO FINANCE, INC.
By:/S/ J. Neal Hutchinson, Jr.
As its:Asst. V. P.
/S/ R.C. Hill, II
R.C. Hill, II
Exhibit 10.16
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th
day of February, 1997, by and between FIRST CHOICE AUTO FINANCE, INC., a
Florida corporation (the "Company"), and R.C. HILL, III, an individual (the
"Employee");
W I T N E S S E T H:
WHEREAS, the Employee has extensive experience relating to all aspects
of the management and operation of automobile dealerships for used cars,
including (without limitation) leasing and other financing activities in
connection therewith; and
WHEREAS, the Employee has heretofore been employed by Liberty Finance
Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions,
Inc., the businesses of which are being acquired by the Company and its
affiliates on or about the date hereof; and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee's services from and
after the date hereof, on the terms and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to
the Company from and after the date hereof, on the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee,
and the Employee shall render services to the Company, in a managerial
capacity and with such title as shall be determined by the Board of
Directors of the Company. In such capacity, the Employee shall have and
exercise responsibility for managing, supervising, overseeing and actively
participating in those aspects of the Company's day-to-day business in
central Florida as are assigned by the President, another employee
designated by the President and/or the board of directors (the "Board"),
together with such other similar or related duties as may be assigned to
the Employee from time to time by the Board. The Employee may also be
given additional titles, and may be assigned responsibilities on behalf of
certain of the Company's affiliates, without requirement of additional
compensation hereunder.
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention, knowledge
and skills, faithfully, diligently and to the best of his ability, to the
active performance of his duties and responsibilities hereunder on behalf
of the Company; (ii) observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as may be established
from time to time by the Board, including but not limited to the standard
policies and procedures of the Company as in effect from time to time;
(iii) satisfactorily perform those duties assigned to Employee, in the
reasonable discretion of the Board; and (iv) do such traveling as may
reasonably be required in connection with the performance of such duties
and responsibilities; provided, however, that the Employee shall not be
assigned to regular duties that would reasonably require him to relocate
his permanent residence from that first set forth above.
2. Term of Employment.
(a) Subject to prior termination in accordance with paragraph
2(b) below, the term of this Agreement and the Employee's employment
hereunder shall commence on the date hereof and shall continue for a
continuous three (3) year period thereafter (the "Term"). The Term shall
thereafter automatically renew for additional terms of one (1) year each
unless either party gives written notice of termination to the other party
not less than ninety (90) days prior to the end of any renewal term (in
which event this Agreement shall terminate effective as of the close of
such renewal term).
(b) This Agreement:
(i) may be terminated upon mutual written agreement of the
Company and the
Employee;
(ii) may be terminated, at the option of the Employee, upon
fourteen (14) days' prior written notice to the Company, in the event that
the Company shall (A) fail to make any payment to the Employee required to
be made under the terms of this Agreement within fifteen (15) days after
payment is due, or (B) fail to perform any other material covenant or
agreement to be performed by it hereunder or take any action prohibited by
this Agreement, and fail to cure or remedy same (if capable of being cured
or remedied) within thirty (30) days after written notice thereof to the
Company;
(iii) may be terminated, at the option of the Company, upon
written notice to the Employee, "for cause" (as hereinafter defined);
(iv) may be terminated, at the option of the Company, in
the event of the "permanent disability" (as hereinafter defined) of the
Employee;
(v) shall automatically terminate upon the death of the
Employee; or
(vi) may be terminated by either party for any reason or no
reason on sixty (60) days prior written notice. If the Company terminates
this Agreement under Section 2(b)(vi), then the Company shall continue to
pay the Employee his salary for a period of 120 days after the date of
termination.
(c) As used herein, the term "for cause" shall mean and be
limited to: (i) any material breach of this Agreement (including, without
limitation, the covenants contained in paragraph 5 below) by the Employee
which in any case is not fully corrected within thirty (30) days after
written notice of same from the Company to the Employee; (ii) neglect by
the Employee of his duties and responsibilities hereunder which in any case
is not fully corrected immediately upon written notice of same from the
Company to the Employee; (iii) any fraud, criminal misconduct, breach of
fiduciary duty, dishonesty, or gross and willful misconduct by the Employee
in connection with the performance of his duties and responsibilities
hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs)
during business hours or while on call, or being habitually drunk or
addicted to drugs (provided that this shall not restrict the Employee from
taking physician-prescribed medication in accordance with the applicable
prescription); (v) the commission by the Employee of any crime of moral
turpitude, or any other action by the Employee which may materially impair
or damage the reputation of the Company; (vi) habitual breach by the
Employee of any of the material provisions of this Agreement (regardless of
any prior cure thereof); or (vii) repeated failure (which prior failures
were brought to Employee's attention in writing) to satisfactorily perform
those duties assigned to Employee, in the reasonable discretion of the
Board.
(d) As used herein, the term "permanent disability" shall mean,
and be limited to, any physical or mental illness, disability or impairment
that prevents the Employee from continuing the performance of his normal
duties and responsibilities hereunder for a period in excess of three (3)
consecutive months. For purposes of determining whether a "permanent
disability" has occurred under this Agreement, the written determination
thereof by two (2) qualified practicing physicians selected and paid for by
the Company (and reasonably acceptable to the Employee) shall be
conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case
may be) shall be entitled to receive any and all unpaid Base Salary and any
other amounts then due and payable to the Employee hereunder. All such
payments shall be made on the next applicable payment date therefor (as
provided in paragraph 3 below) following the effective date of termination.
Such payments shall constitute all amounts to which the Employee shall be
entitled hereunder upon termination of this Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, the Company shall pay to the Employee a base salary at
the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS AND NO/100THS ($120,000)
per annum (the "Base Salary"), payable in periodic installments in
accordance with the standard payroll practices of the Company in effect
from time to time.
(b) Bonus. In addition to the foregoing Base Salary, the
Employee shall be eligible to earn bonuses from time to time as may be
determined by the Board, in its sole and exclusive discretion, or in
accordance with the terms and conditions of any bonus program instituted
for employees of a similar position by the Board (the "Bonus").
(c) Other Fringe Benefits. The Company shall also make
available to the Employee, throughout the period of his employment
hereunder, such benefits and perquisites as are generally provided by the
Company to its employees, including but not limited to eligibility for
participation in any group life, health, dental, vision, disability or
accident insurance, pension plan, profit-sharing plan, retirement savings
plan, 401(k) plan, or other such benefit plan or policy which may presently
be in effect or which may hereafter be adopted by the Company for the
benefit of its employees generally; provided, however, that nothing herein
contained shall be deemed to require the Company to adopt or maintain any
particular plan or policy. Participation in such benefit plans shall be
subject to standard waiting periods following the commencement of full-time
employment, as currently provided in such plans.
(d) Expenses. Throughout the period of the Employee's
employment hereunder, the Company shall also reimburse the Employee, upon
presentment by the Employee to the Company of appropriate receipts and
vouchers therefor, for any reasonable out-of-pocket business expenses
incurred by the Employee in connection with the performance of his duties
and responsibilities hereunder; provided, however, that no reimbursement
shall be required to be made for any expense which is not properly
deductible (in whole or in part) by the Company for income tax purposes, or
for any expense item which has not previously been approved in accordance
with the Company's standard policies and procedures in effect from time to
time, or otherwise approved by the Company.
4. Vacation, etc.
The Employee shall be entitled to take, from time to time,
normal and reasonable vacations with pay, consistent with the Company's
standard policies and procedures in effect from time to time, at such times
as shall be mutually convenient to the Employee and the Company, and so as
not to interfere unduly with the conduct of the business of the Company.
The Employee shall further be entitled to paid holidays,
personal days and sick days in accordance with the Company's standard
policies and procedures in effect from time to time.
5. Restrictive Covenants.
The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, know-how, trade secrets, marketing
techniques, confidential information, financial and operating models,
promotional methods and other aspects of the business of the Company, its
affiliates and/or parent companies have been and are of value to the
Company, and have provided and will hereafter provide the Company with
substantial competitive advantages in the operation of its business, (ii)
he has and will continue to have detailed knowledge and possesses and will
possess confidential information concerning the business and operations of
the Company, (iii) the restrictions set forth in this Section are
reasonably necessary to protect the legitimate business interests of the
Company, and (iv) but for Employee's agreement to be governed by the
restrictions set forth in this Section 5, the Company would not have
entered into this Agreement. The Employee hereby further acknowledges that
his business skills are not uniquely suited to businesses of the type
conducted by the Company, and that, if required, he could readily adapt and
utilize such skills in one or more other types of businesses.
The Employee shall not, directly or indirectly, for himself
or through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise disclose or
cause to be divulged, transmitted or otherwise disclosed, any business
contacts, client or customer lists, technology, know-how, trade secrets,
marketing techniques, contracts or other confidential or proprietary
information of the Company of whatever nature, whether now existing or
hereafter created or developed (provided, however, that for purposes
hereof, information shall not be considered to be confidential or
proprietary if (A) it is a matter of common knowledge or public record, (B)
it is generally known in the industry, or (C) the Employee can demonstrate
that such information was already known to the recipient thereof other than
by reason of any breach of any obligation under this Agreement or any other
confidentiality or non-disclosure agreement); and/or
(ii) at any time during the period from the date hereof
through and including the date of the expiration or termination of the
Employee's employment with the Company, and for an additional period of one
(1) year thereafter in the event that such termination is effected by the
Company "for cause" or is effected by the Employee other than pursuant to
paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly
or indirectly invest, carry on, engage or become involved, either as an
employee, agent, advisor, officer, director, stockholder (excluding
ownership of not more than 3% of the outstanding shares of a publicly held
corporation if such ownership does not involve managerial or operational
responsibility), manager, partner, joint venturer, participant or
consultant, in any business enterprise (other than the Company or its
subsidiaries, affiliates, successors or assigns) which (A) is located or
operating, or solicits customers located, within 50 miles of where the
Company or any of its affiliates has a place of business, at the time that
the Employee first becomes involved with such business enterprise, and (B)
derives any material revenues from the sale, lease, financing or other
transactions in new or used automobiles or other consumer vehicles;
provided that this Section 5(ii) shall be applicable prior to the
termination of this Agreement and except for a termination of this
Agreement under Section 2(b)(iii), shall be applicable after this Agreement
is terminated only if the Company is making payments of salary to the
Employee under Section 2(b)(vi).
The Employee and the Company hereby acknowledge and agree
that, in the event of any breach by the Employee, directly or indirectly,
of the foregoing restrictive covenants, it will be difficult to ascertain
the precise amount of damages that may be suffered by the Company by reason
of such breach; and accordingly, the parties hereby agree that, as
liquidated damages (and not as a penalty) in respect of any such breach,
the breaching party or parties shall be required to pay to the Company, on
demand from time to time, cash amounts equal to any and all gross revenues
derived by the breaching party or parties, directly or indirectly, from any
and all violative acts or activities. The parties hereby agree that the
foregoing constitutes a fair and reasonable estimate of the actual damages
that might be suffered by reason of any breach of this paragraph 5 by the
Employee, and the parties hereby agree to such liquidated damages in lieu
of any and all other measures of damages that might be asserted in respect
of any subject breach.
The Employee and the Company hereby further acknowledge and
agree that any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants will cause the Company irreparable injury
for which there is no adequate remedy at law. Accordingly, the Employee
expressly agrees that, in the event of any such breach or any threatened
breach hereunder by the Employee, directly or indirectly, the Company shall
be entitled, in addition to any and all other remedies available (including
but not limited to the liquidated damages provided for in paragraph 5(c)
above), to seek and obtain injunctive and/or other equitable relief to
require specific performance of or prevent, restrain and/or enjoin a breach
under the provisions of this paragraph 5 without the necessity of proof of
actual damages and without the necessity of posting bond. In the event
either party does apply for such injunction, the other party shall not
raise as a defense thereto that such applying party has an adequate remedy
at law.
In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to
recover from the non-prevailing party or parties, in addition to any
damages and/or other relief that may be awarded, its actual costs and
expenses (including actual attorneys' fees) incurred in connection with
prosecuting or defending the subject dispute.
(f) Employee expressly agrees that the existence of any claims
that he has or that he may have against the Company, its affiliates or
parent companies, whether or not arising from this Agreement, shall not
constitute a defense to the enforcement by the Company of this Section 5.
6. Non-Assignability.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee or the Company of this
Agreement or any of Employee's duties, responsibilities or obligations
hereunder shall be void; provided, however, that the foregoing shall not
apply to any transfer of capital stock of, any transfer of substantially
all the assets of, or any merger or comparable transaction involving, the
Company or any parent corporation of the Company.
7. Notices.
Any notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and shall be deemed
to have been given when delivered personally, by telecopier (with proof of
receipt) or three (3) days after being mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of
such party first set forth above, or at such other address as such party
may hereafter have designated by notice; provided, however, that any notice
of change of address shall not be effective until its receipt by the party
to be charged therewith.
8. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver
or amendment shall only be applicable in the specific instance, and shall
not constitute or be construed as a waiver or amendment in any other or
subsequent instance. No failure or delay on the part of either party in
respect of any enforcement of obligations hereunder shall in any manner
affect such party's right to seek or effect enforcement at any other time
or in respect of any other required performance.
(b) Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the express prior written
consent of the other party.
(c) The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Florida.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but
all of which together shall constitute one and the same instrument.
(g) The prevailing party in any action or proceeding hereunder
shall be entitled to an award for its costs and actual attorneys' fees in
connection with such action or proceeding, including the fees and costs of
any appeals and all costs of collection.
(h) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of
every kind and nature between them as to such subject matter.
(i) This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns,
and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit herefrom absent the express
written consent of the party to be charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or
application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require; and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
(k) Employee represents and warrants that no action required of
him under this Agreement or any other agreements or understandings, written
or oral, entered into with the Company, its affiliates or parent companies,
will conflict with, breach or otherwise impair any previously existing
agreements or understandings, whether written or oral, into which Employee
has entered with other persons or entities, including agreements with
respect to proprietary information or non-competition.
(l) Each party to this Agreement expressly recognizes that it
results from a negotiated process in which each party was given the
opportunity to consult with counsel and contributed to the drafting of this
Agreement. Given this fact, no legal or other presumption against the
party drafting this Agreement concerning its construction, interpretation
or otherwise accrue to the benefit of any party to this Agreement and each
party expressly waives the right to assert such a presumption in any
proceedings or disputes connected with, arising out of, or involving this
Agreement.
(m) Time shall be of the essence for any performance required
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
FIRST CHOICE AUTO FINANCE, INC.
By:/S/J. Neal Hutchinson, Jr.
As Its:Asst. V. P.
/S/ R.C. Hill, III
R.C. Hill,III
Exhibit 10.17
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), entered into this 14th
day of February, 1997, by and among FIRST CHOICE AUTO FINANCE, INC., a
Florida corporation (the "Buyer"), PALM BEACH FINANCE AND MORTGAGE COMPANY,
a Florida corporation ("PBF"), TWO TWO FIVE NORTH MILITARY CORP., d/b/a
MIRACLE MILE MOTORS, a Florida corporation ("MMM"), and DAVID BUMGARDNER,
an individual (the "Stockholder");
W I T N E S S E T H:
WHEREAS, PBF and MMM (each a "Seller" and collectively the "Sellers")
are engaged, among other things, in a business consisting of a retail
automobile dealership for both new and used automobiles and other consumer
vehicles, including finance and leasing activities in connection therewith
(collectively, the "Business"); and
WHEREAS, the Stockholder is the record and beneficial owner of all of
the issued and outstanding capital stock of each of the Sellers, and as
such will derive substantial benefit from the transactions contemplated by
this Agreement; and
WHEREAS, in connection with and in furtherance of such Business, the
Sellers are the owners of certain assets and properties; and
WHEREAS, the Sellers desire to sell substantially all of their assets
and properties to the Buyer, and the Buyer desires to purchase such assets
and properties, and the Business as a going concern, all upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. ACQUIRED ASSETS.
_1.1 PBF Assets. Subject to the terms and conditions of this
Agreement, PBF hereby sells, transfers and delivers to the Buyer, and the
Buyer hereby purchases and receives from PBF, the following assets,
properties and business of PBF as same are constituted on the date hereof
(the "PBF Assets"):
(a) All cash and marketable securities of PBF;
(b) all finance receivables, accounts receivable, notes receivable
and other rights to receive payment (including any related guaranties,
security deposits or other collateral therefor) under credit agreements,
finance leases and other such agreements entered into in the Business,
including but not limited to those credit agreements, finance leases and
other agreements listed on Schedule 1.3 annexed hereto (collectively, the
"PBF Receivables");
(c) All inventory of PBF, consisting primarily of new and used
vehicles, auto supplies and spare auto parts (collectively, the "PBF
Inventory");
(d) All tangible fixed assets, furniture, fixtures, machinery,
equipment, tools, vehicles, signs, lighting and other fixed assets of PBF
(the "PBF Fixed Assets");
(e) Any and all prepaid expenses of PBF (excluding prepaid sales
taxes):
(f) All trade names, customer lists, supplier lists, trade secrets,
technical information, and other such knowledge and information
constituting the "know-how" of PBF, and the good will of PBF;
(g) All contract rights, commitments and claims of PBF, including
rights as lessee under PBF's Lease (as such term is defined in Section 4.13
below), any equipment leases and vehicle leases, and rights under
manufacturer's warranties and any licenses or license agreements relating
to patents, trademarks or other intangibles;
(h) All software, books, records, printouts, drawings, data, files,
notes, notebooks, accounts, invoices, correspondence and memoranda relating
to the Assets and/or the business of PBF; and
(i) All other rights and assets of any kind, tangible or intangible,
of PBF, whether or not reflected in PBF's financial statements or on its
books and records, including but not limited to such rights (if any) as PBF
may have with respect to its existing telephone numbers, fax numbers and
directory listings.
1.2 MMM Assets. Subject to the terms and conditions of this
Agreement, MMM hereby sells, transfers and delivers to the Buyer, and the
Buyer hereby purchases and receives from MMM, the following assets,
properties and business of MMM as same are constituted on the date hereof
(the "MMM Assets"):
(a) All cash and marketable securities of MMM;
(b) All finance receivables, accounts receivable, notes receivable
and other rights to receive payment (including any related guaranties,
security deposits or other collateral therefor) under credit agreements,
finance leases and other such agreements entered into in the Business,
including but not limited to those credit agreements, finance leases and
other agreements listed on Schedule 3 annexed hereto (collectively, the
"MMM Receivables", and collectively with the PBF Receivables, the
"Receivables");
(c) All inventory of MMM, consisting primarily of new and used
vehicles, auto supplies and spare auto parts (collectively, the "MMM
Inventory", and collectively with the PBF Inventory, the "Inventory");
(d) All tangible fixed assets, furniture, fixtures, machinery,
equipment, tools, vehicles, signs, lighting and other fixed assets of MMM
(the "MMM Fixed Assets", and collectively with the PBF Fixed Assets, the
"Fixed Assets");
(e) Any and all prepaid expenses of MMM (excluding prepaid sales
taxes);
(f) All trade names, customer lists, supplier lists, trade secrets,
technical information, and other such knowledge and information
constituting the "know-how" of MMM, and the good will of MMM;
(g) All contract rights, commitments and claims of MMM, including
rights as lessee under MMM's Lease (as such term is defined in Section 4.13
below), any equipment leases and vehicle leases, and rights under
manufacturer's warranties and any licenses or license agreements relating
to patents, trademarks or other intangibles;
(h) All software, books, records, printouts, drawings, data, files,
notes, notebooks, accounts, invoices, correspondence and memoranda relating
to the Assets and/or the business of MMM; and
(i) All other rights and assets of any kind, tangible or intangible,
of MMM, whether or not reflected in MMM's financial statements or on its
books and records, including but not limited to such rights (if any) as MMM
may have with respect to its existing telephone numbers, fax numbers and
directory listings.
1.3 The Assets. The PBF Assets and the MMM Assets are collectively
referred to in this Agreement as the "Assets". Annexed as Schedule 1.3 is
a correct and complete list of substantially all of the Assets, provided
that the omission of any Assets from such list shall not be deemed to
exclude such Assets from the Assets being transferred to the Buyer
hereunder.
2. ASSUMED LIABILITIES.
2.1 Assumed Liabilities. Subject to the terms and conditions of this
Agreement, each of the Sellers hereby assigns to the Buyer, and the Buyer
hereby assumes, and agrees to pay and perform when due, the following
liabilities and obligations of the Sellers, as same are constituted on the
date hereof (collectively, the "Assumed Liabilities"):
(a) All trade accounts payable of the Sellers incurred in the normal
course of business;
(b) All payroll and related federal and state withholding taxes for
the Sellers' current payroll remittance period (to the extent not
heretofore remitted by the subject Seller to the applicable taxing
authority);
(c) All liabilities of the Sellers from and after the date hereof as
lessee under the Leases and those outstanding vehicle and equipment leases
or financing agreements listed on Schedule 2.1 annexed hereto;
(d) All ongoing customer service obligations in the normal course of
business in respect of vehicle sales and leasing transactions by the
Sellers prior to the date hereof, except to the extent that any such
obligations may, in any instance, arise out of the gross negligence,
willful misconduct or fraudulent act of either Seller or any of its
employees or agents; and
(e) All other executory contracts, service contracts, orders and
commitments which in any instances are for the purchase of inventory and/or
supplies or the rendition of services by the Sellers, and which have been
entered into by the Sellers in the normal course of business prior to the
date hereof.
Annexed hereto as Schedule 2.1 is a correct and complete listing of all of
the Assumed Liabilities.
2.2 Excluded Liabilities. Notwithstanding anything to the contrary
contained in Section 2.1 above, the Buyer shall not assume, or become in
any way liable for, the payment or performance of any debts, liabilities or
obligations (absolute or contingent) of either of the Sellers (a) in the
nature of customer claims, employee claims or other contingent liabilities
arising out of or relating to any operations of either of the Sellers prior
to the date hereof, except to the extent specifically assumed pursuant to
Section 2.1(d) above, (b) relating to any lease obligations of any kind
other than for periods from and after the date hereof under the Leases and
any leases for personal property listed on Schedule 2.1, (c) under or
relating to any line of credit or other arrangement under which either
Seller is or may be a borrower, (d) except to the extent expressly assumed
pursuant to Section 2.1(b) above, relating to any federal, state or local
income, franchise, sales, use, property, excise, transfer or other taxes
payable by or in respect of either of the Sellers, including but not
limited to any such taxes which may be assessable against either Seller
arising out of, in connection with or as a result of the transactions
contemplated by this Agreement and/or the consummation thereof, (e)
relating to or arising out of any pending claims, actions, arbitrations
and/or other proceedings against either Seller, (f) relating to recapture
of any depreciation deduction or investment tax credit of either Seller,
(g) under or in respect of any benefit plans now or heretofore maintained
by either Seller in respect of or for the benefit of any of its employees,
or (h) not specifically assumed by the Buyer in Section 2.1 above.
3. PURCHASE PRICE.
3.1 PBF Purchase Price.
(a) The net purchase price for the PBF Assets (collectively, the "PBF
Purchase Price") is the sum of (i) $1,023,148, which is being paid to PBF
by certified or bank cashier's check being delivered to PBF concurrently
with the execution and delivery of this Agreement, or by wire transfer of
immediately available funds to PBF's designated account on the date hereof,
and (ii) an aggregate of 68,783 shares of common stock of the Buyer's
corporate parent, Smart Choice Holdings, Inc. (the "Parent"), which are
being issued and delivered to PBF concurrently with the execution and
delivery of this Agreement, and which the Buyer and PBF agree have a fair
value on the date hereof of $601,852. The parties hereby acknowledge and
confirm that the sum of $50,000 has previously been deposited into escrow
as a down payment on that portion of the PBF Purchase Price set forth in
clause (i) of this Section 3.1(a), and the parties hereby confirm, by their
execution and delivery of this Agreement, that such down payment and all
interest earned thereon may be released from escrow and paid to PBF (and
same shall constitute partial payment under clause (i) hereof).
(b) In the event that none of the following events occurs: (i) the
Parent consummates an initial public offering of its common stock on or
prior to June 30, 1997, (ii) the Parent consummates, on or prior to June
30, 1997, a merger, share exchange or other business combination (a
"Combination") with another entity (an "Exchange Entity") whereby the
stockholders of the Parent receive shares of such Exchange Entity of a
class which is listed or traded on any national securities exchange or
recognized automated quotation system (such as NASDAQ), or (iii) the shares
of common stock of the Parent issued hereunder are included in a
registration statement filed on or before June 30, 1997 in accordance with
Section 9.2 below, and any such registration statement, if timely filed, is
thereafter pursued to effectiveness with reasonable diligence; then (A) the
Buyer shall cause the Parent to redeem all of the shares of common stock of
the Parent issued hereunder for an aggregate price equal to the agreed
value thereof pursuant to Section 3.1(a) above, which shall be payable in
immediately available funds within sixty (60) days after written demand
therefor made at any time after July 1, 1997 and prior to the occurrence of
either of the events described in clauses (i) and (ii) of this Section
3.1(b) (without regard to the date of the occurrence of such event), and
(B) any failure to effect any such required redemption shall constitute a
default under any lease agreement between the Buyer and any of its
affiliates (on the one hand) and either of the Sellers or the Stockholder
or any of their respective affiliates (on the other hand).
3.2 MMM Purchase Price.
(a) The net purchase price for the MMM Assets (collectively, the "MMM
Purchase Price") is the sum of (i) $3,226,852, which is being paid to MMM
by certified or bank cashier's check being delivered to MMM concurrently
with the execution and delivery of this Agreement, or by wire transfer of
immediately available funds to MMM's designated account on the date hereof,
and (ii) an aggregate of 216,931 shares of common stock of the Parent,
which are being issued and delivered to MMM concurrently with the execution
and delivery of this Agreement, and which the Buyer and MMM agree have a
fair value on the date hereof of $1,898,148. The shares being issued to
MMM on the date hereof under this Section 3.2 shall be subject to possible
redemption in a manner consistent with the provisions of Section 3.1(b)
above.
(b) The shares of common stock of the Parent being issued pursuant to
Section 3.1 above and this Section 3.2 are collectively referred to as the
"Shares".
3.3 Net Price. The foregoing purchase price for the Assets shall be
in addition to the assumption of the Assumed Liabilities set forth in
Section 2.1 above.
3.4 Allocation of Consideration. The purchase price specified in
Sections 3.1 and 3.2 above shall be allocated, as among the Assets and the
Sellers' covenants pursuant to Section 7 below, in accordance with Schedule
3.4 annexed hereto.
3.5 Application of Certain Proceeds. To the extent required in order
to permit the transfer and delivery of the Assets free and clear of all
liens, pledges, claims, security interests and encumbrances, the Sellers
shall utilize a portion of the PBF Purchase Price and/or the MMM Purchase
Price to repay any obligations for which any of the Assets constitutes
collateral (including, without limitation, any line of credit or other
arrangement under which either Seller is or may be a borrower).
4. REPRESENTATIONS AND WARRANTIES OF
THE SELLERS AND THE STOCKHOLDER .
(a) PBF and the Stockholder hereby jointly and severally represent and
warrant to the Buyer solely with respect to PBF, the PBF Assets and PBF's
Business, (b) MMM and the Stockholder hereby jointly and severally
represent and warrant to the Buyer solely with respect to MMM, the MMM
Assets and MMM's Business, and (c) the Sellers and the Stockholder hereby
jointly and severally represent and warrant solely as to Sections 4.6(c)
and 4.6(d) below, as follows:
4.2 Organization, Good Standing and Qualification. PBF is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida, and MMM is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida. Such Seller has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby, and to own its assets and conduct its business as owned and
conducted on the date hereof. Such Seller is not required to be qualified
as a foreign corporation under the laws of any jurisdiction.
4.3 Authorization of Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by such Seller has been duly and validly authorized by
the Board of Directors of such Seller and by the Stockholder (as the sole
stockholder of such Seller). No further corporate authorization is
required on the part of such Seller to consummate the transactions
contemplated hereby.
4.4 Valid and Binding Agreement. This Agreement constitutes the
legal, valid and binding obligation of such Seller and the Stockholder,
enforceable against such Seller and the Stockholder in accordance with its
terms, except to the extent limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and
except that the remedy of specific performance or similar equitable relief
is available only at the discretion of the court before which enforcement
is sought.
4.5 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by such Seller and the Stockholder, nor
compliance with the terms and provisions of this Agreement on the part of
such Seller and the Stockholder, will: (a) violate any statute or
regulation of any governmental authority, domestic or foreign, affecting
such Seller; (b) require the issuance to such Seller of any authorization,
license, consent or approval of any federal or state governmental agency or
any other person; (c) conflict with or result in a breach of any of the
terms, conditions or provisions of such Seller's certificate of
incorporation or by-laws or any judgment, order, injunction, decree,
agreement or instrument to which such Seller or the Stockholder is a party,
or by which such Seller or the Stockholder is bound, or constitute a
default thereunder; or (d) require the consent of any third party under any
outstanding statute, regulation, judgment, order, injunction, decree,
agreement or instrument to which such Seller or the Stockholder is a party
or by which such Seller or the Stockholder is bound.
4.6 Subsidiaries and Investments. Such Seller does not own, directly
or indirectly, any stock or other equity securities of any corporation or
entity, or have any direct or indirect equity or ownership interest in any
person, firm, partnership, corporation, venture or business other than the
Business conducted by such Seller.
4.7 Financial Information.
(a) Annexed hereto as Schedule 4.6(a) are (i) the unaudited combined
financial statements (including combined balance sheet, combined income
statement and combined statement of cash flows) for the Sellers as of
December 31, 1993, December 31, 1994 and December 31, 1995 and for each of
the years then ended, which have been reviewed by Templeton & Company,
P.A., independent certified public accountants, in accordance with the
Statement of Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants, and (ii) the unaudited
combined financial statements (including combined balance sheet, combined
income statement and combined statement of cash flows) for the Sellers as
of June 30, 1996 and for the six (6) months then ended, which have been
compiled by Templeton & Company, P.A., independent certified public
accountants, in accordance with the applicable accounting standards
therefor (collectively, the "Financial Statements"), all of which fairly
reflect, in all material respects, the financial condition and results of
operations of the subject Seller as of the dates thereof and for the
periods then ended (subject to non-material audit adjustments and the
absence of full footnote disclosures); and, without limitation of the
foregoing, neither of the Sellers has any material liabilities, fixed or
contingent, known or unknown, except to the extent reflected in the most
recent of such Financial Statements or thereafter incurred in the normal
course of such Seller's business.
(b) Annexed hereto as Schedule 4.6(b) are the payment histories of
each of the credit agreements, finance leases and other agreements
underlying the Receivables, all of which fairly present the dates and
amounts of all receipts and disbursements under or in respect of such
credit agreements, finance leases and other agreements. Except as and to
the extent reflected in such payment histories, (i) all payments under such
credit agreements, finance leases and other agreements have been made in a
full and timely manner, and (ii) there have been no prepayments made in
respect of any such credit agreements, finance leases or other agreements.
(c) With respect to the calendar year 1993, as at the end of any
calendar month in such calendar year, the Value (as such term is
hereinafter defined) of the Sellers' Receivables did not at any time exceed
the aggregate amount of $5,324,346 and were at no time less than the
aggregate amount of $4,452,501; and, during calendar year 1993, the Sellers
(on a combined basis) collected not less than $4,557,014 in cash in respect
of Receivables. With respect to the calendar year 1994, as at the end of
any calendar month in such calendar year, the Value of the Sellers'
Receivables did not at any time exceed the aggregate amount of $5,549,965
and were at no time less than the aggregate amount of $4,658,164; and,
during calendar year 1994, the Sellers (on a combined basis) collected not
less than $4,534,904 in cash in respect of Receivables. With respect to
the calendar year 1995, as at the end of any calendar month in such
calendar year, the Value of the Sellers' Receivables did not at any time
exceed the aggregate amount of $5,888,744 and were at no time less than the
aggregate amount of $5,008,428; and, during calendar year 1995, the Sellers
(on a combined basis) collected not less than $4,347,111 in cash in respect
of Receivables. With respect to the five months ended May 31, 1996, as at
the end of any calendar month during such period, the Value of the Sellers'
Receivables did not at any time exceed the aggregate amount of $5,933,427
and were at no time less than the aggregate amount of $5,377,358; and the
Sellers (on a combined basis) collected not less than $1,851,844 in cash in
respect of Receivables during such five (5) months. As used herein, the
term "Value", as applied to Receivables at any date in question, means the
outstanding principal and unpaid accrued and future interest of the
Receivables as of such date, without deduction for any reserve for doubtful
accounts.
(d) On the date hereof, the sum of (i) the value of the Sellers' cash
and marketable securities (valued at face amount or current market price,
as the case may be), plus (ii) the Value of the Receivables, is not less
than $5,800,000; and the aggregate value of the Inventory (valued at the
lower of cost or market, on a first in-first out basis) on the date hereof
is not less than $800,000.
4.8 No Material Changes. Since the date of the most recent of the
Financial Statements, (a) the business of such Seller has been operated
solely in the normal course, (b) there has been no material adverse change
in the financial condition, operations or business of such Seller from that
reflected in such Financial Statements, (c) such Seller has not incurred
any material obligation or liability except in the normal course of
business, (d) such Seller has not effected or suffered any material change
in its collection practices, or with respect to the timing and manner of
payment of accounts payable, (e) such Seller has not paid any dividends or
made any other distributions to any of its stockholders or any of their
respective affiliates, except for compensation for services rendered in
dollar amounts consistent with the past practices of such Seller, and (f)
there has not been any (i) sale, assignment or transfer by such Seller of
any assets or other part of its business, excluding the sale or disposition
of inventory in the ordinary course of business, (ii) acquisitions or
commitments to acquire (whether by purchase, lease or otherwise) any
capital assets (excluding inventory) by the Sellers (collectively) wherein
the aggregate payments will exceed $10,000, (iii) increase or commitment to
increase the compensation or benefits of any employees, (iv) implementation
or institution of any bonus, benefit, profit-sharing, pension, retirement
or other plan or similar arrangement which was not in existence on June 30,
1996, or (v) new employment agreement, or modification of any existing
employment agreement, by such Seller. Repayments under any outstanding
line of credit or other borrowing arrangement, whether or not consistent
with past practice, shall not constitute a material change which would be
required to be disclosed pursuant to this Section 4.7.
4.9 Tax Matters.
(a) Such Seller has, to the date hereof, timely filed all
tax reports and tax returns required to be filed by such Seller, and such
Seller has paid all taxes, assessments and other impositions as and to the
extent required by applicable law. All federal, state and local income,
franchise, sales, use, property, excise and other taxes (including interest
and penalties and including estimated tax installments where required to be
filed and paid) due from or with respect to such Seller as of the date
hereof have been fully paid, and all taxes and other assessments and levies
which such Seller is required by law to withhold or to collect have been
duly withheld and collected and have been paid over to the proper
governmental authorities to the extent due and payable. There are no
outstanding or pending claims, deficiencies or assessments for taxes,
interest or penalties with respect to any taxable period of such Seller.
(b) There are no audits pending with respect to any
federal, state or local tax reports or tax returns of such Seller, and no
waiver of statutes of limitations have been given or requested with respect
to any tax years or tax filings of such Seller.
4.10 Title and Condition of the Assets. PBF has and owns good
and marketable title to all of the PBF Assets, and MMM has and owns good
and marketable title to all of the MMM Assets, in each case free and clear
of all liens, pledges, claims, security interests and encumbrances of every
kind and nature (except for any such liens, security interests or
encumbrances which are being discharged pursuant to Section 3.5 above).
All of the Fixed Assets are in good operating condition and repair
(reasonable wear and tear excepted), are adequate for their use in the
Business as presently conducted, and are sufficient for the continued
conduct of such Business.
4.11 Receivables. All of the Receivables (whether reflected in
the Financial Statements or thereafter created or acquired by such Seller
prior to the date hereof), (a) have arisen in the normal course of such
Seller's business, (b) are not subject to any counterclaims, set-offs,
allowances or discounts of any kind, except to the extent of the reserve
for doubtful accounts in the amount set forth in the June 30, 1996
Financial Statements, and (c) have been, are and will be valid and
collectible in the ordinary course of the Business; and neither such Seller
nor the Stockholder has any knowledge of any material or unusual risk of
non-payment of any of the Receivables.
4.12 Inventory. All of the Inventory (whether reflected in the
Financial Statements or thereafter acquired by such Seller prior to the
date hereof) is of a quality, age and quantity consistent with the
historical practices of the subject Seller, and is valued on such Seller's
books at the lower of cost or market (on a first in-first out basis).
4.13 Legal Compliance. Such Seller is, and for the past three
(3) years has been, in compliance in all material respects with all laws,
statutes, regulations, rules and ordinances applicable to the conduct of
its business (including, without limitation, all applicable environmental
laws, statutes, regulations, rules and ordinances), and has in full force
and effect all licenses, permits and other authorizations required for the
conduct of its business as presently constituted; and such Seller is not in
default or violation in respect of or under any of the foregoing, and
neither such Seller nor the Stockholder is aware of any past or present
condition or circumstance in such Seller's business (including, without
limitation, with respect to any real property now or previously occupied by
such Seller) which could give rise to any material liability under any such
law, statute, regulation, rule or ordinance.
4.14 Real Property. Such Seller does not own any real estate or
any interest therein, except to the extent of such Seller's interests as
lessee or sublessee under those leases or subleases annexed hereto as
Schedule 4.13 (collectively, the "Leases"). Such Seller (and, to the best
of such Seller's and the Stockholder's knowledge, the landlords thereunder)
is presently in compliance with all of its obligations under the Leases,
and the premises leased thereunder are in good condition (reasonable wear
and tear excepted), and are adequate for the operation of the Business as
presently conducted. No consent of any landlord under any of the Leases
which has not previously been obtained is required in order to effect the
assignment of the Leases to the Buyer pursuant to this Agreement.
4.15 Insurance. Such Seller maintains, has in full force and
effect, and has paid all premiums in respect of insurance covering its
business and assets against such hazards and in such amounts as are normal
and customary for businesses of similar size, scope and nature.
4.16 Employees. Such Seller is not a party to or bound by any
collective bargaining agreement, employment agreement, consulting agreement
or other commitment for the employment or retention of any person, and no
union is now certified or has claimed the right to be certified as a
collective bargaining agent to represent any employees of such Seller.
Such Seller has not had any material labor difficulty in the past two (2)
years, and neither such Seller nor the Stockholder has received notice of
any unfair labor practice charges against such Seller or any actual or
alleged violation by such Seller of any law, regulation, or order affecting
the collective bargaining rights of employees, equal opportunity in
employment, or employee health, safety, welfare, or wages and hours.
4.17 Employee Benefits. Such Seller is not required to make any
contributions, and has no outstanding obligation to make any contribution,
to any pension, profit-sharing, retirement, deferred compensation or other
such plan or arrangement for the benefit of any employee, former employee
or other person, and such Seller does not have any obligations with respect
to deferred compensation or future benefits to any past or present
employee. Schedule 4.16 annexed hereto fairly summarizes the employee
benefits currently granted by such Seller to its employees, provided that
nothing herein contained shall be deemed to obligate the Buyer to assume or
continue any such employee benefit or provide any comparable benefit.
4.18 Contracts and Commitments. Such Seller has previously
provided to the Buyer true and complete copies of all of the credit
agreements, finance leases and other agreements underlying the Receivables.
Other than (a) such credit agreements, finance leases and other agreements
underlying the Receivables, (b) the Leases, and (c) those contracts and
commitments listed on Schedule 4.17 annexed hereto, there is no contract,
agreement, commitment or understanding which is material to the ongoing
operation of the Business.
4.19 Litigation. There is no pending or, to the best knowledge
of such Seller and the Stockholder, threatened litigation, arbitration,
administrative proceeding or other legal action or proceeding against such
Seller or relating to its business.
4.20 Intellectual Property. Such Seller has the valid right to
utilize all trade names and other intellectual property utilized in its
business, and has not received notice of any claimed infringement of any of
such intellectual property with the rights or property of any other person.
4.21 Going Concern. Neither such Seller nor the Stockholder has
any knowledge of any fact, event, circumstance or condition (including but
not limited to any announced or anticipated changes in the policies of any
material supplier, referral source, client or customer) that would
materially impair the ability of the Buyer to continue the Business
heretofore conducted by such Seller in substantially the manner heretofore
conducted by such Seller (other than general, industry-wide conditions).
4.22 The Shares. Such Seller hereby confirms that the Shares
constitute "restricted securities" under applicable federal and state
securities laws, and that the Shares may not be resold in the absence of an
effective registration thereof under federal and state securities laws or
an available exemption from such registration requirements.
4.23 Disclosure and Duty of Inquiry. Subject to Section 5.7
below, the Buyer is not and will not be required to undertake any
independent investigation to determine the truth, accuracy and completeness
of the representations and warranties made by the Sellers and the
Stockholder in this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's purchase of the Assets from the
Sellers, the Buyer hereby represents and warrants to the Sellers and the
Stockholder as follows:
5.1 Organization, Good Standing and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida, with all necessary power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
5.2 Authorization of Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by
the Board of Directors of the Buyer. No further corporate authorization is
required on the part of the Buyer to consummate the transactions
contemplated hereby.
5.3 Valid and Binding Agreement. This Agreement constitutes the
legal, valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms, except to the extent limited by
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally, and except that the remedy of specific performance or
similar equitable relief is available only at the discretion of the court
before which enforcement is sought.
5.4 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer, nor compliance with the terms and
provisions of this Agreement on the part of the Buyer, will: (a) violate
any statute or regulation of any governmental authority, domestic or
foreign, affecting the Buyer; (b) require the issuance of any
authorization, license, consent or approval of any federal or state
governmental agency; (c) conflict with or result in a breach of any of the
terms, conditions or provisions of any judgment, order, injunction, decree,
note, indenture, loan agreement or other agreement or instrument to which
the Buyer is a party, or by which the Buyer is bound, or constitute a
default thereunder; or (d) require the consent of any third party under any
outstanding statute, regulation, judgment, order, injunction, decree,
agreement or instrument to which the Buyer is a party, or by which the
Buyer is bound.
5.5 Capitalization. The issuance of the Shares hereunder has been
duly authorized by all necessary corporate action on the part of the
Parent, and the Shares are validly issued, fully paid and non-assessable.
5.6 Access to Books and Records. The Buyer has permitted the Sellers
to have access to such of the books and records of the Buyer as the Sellers
have requested in connection with the transactions contemplated by this
Agreement.
5.7 Review of Schedules. The Buyer has reviewed the various
Schedules provided by the Sellers and the Stockholder pursuant to this
Agreement, provided that such review shall not render the Buyer responsible
for the truth, accuracy or completeness of any information contained in (or
required to be contained in) any of such Schedules.
5.8 Business Plan. The Buyer has provided to the Sellers and the
Stockholder, either in writing or verbally, all material information
regarding the Buyer's business plan as developed to date, provided that
nothing herein contained shall be deemed to preclude the Buyer from
amending such business plan in its discretion at any time and from time to
time hereafter.
5.9 Disclosure and Duty of Inquiry. The Sellers and the Stockholders
are not and will not be required to undertake any independent investigation
to determine the truth, accuracy and completeness of the representations
and warranties made by the Buyer in this Agreement.
6. ADDITIONAL AGREEMENTS.
6.1 Bills of Sale; Assumption Agreements. The parties hereby confirm
that this Agreement shall be sufficient as a bill of sale in respect of the
Assets and as an assumption agreement in respect of the Assumed
Liabilities; provided, however, that if, as and when required, or
reasonably requested by any party, the parties shall execute and deliver
such supplemental agreements, instruments, certificates of title and other
documents as may be necessary or appropriate in order to give effect to the
transfer of the Assets to the Buyer and the assignment to and assumption by
the Buyer of the Assumed Liabilities.
6.2 Certificates of Title. Concurrently with the execution and
delivery of this Agreement, the Sellers are delivering to the Buyer the
properly endorsed Certificates of Title and/or other evidences of ownership
of all vehicles in the Inventory, and any and all vehicles constituting
part of the Fixed Assets, all of which title documents shall contain all
necessary endorsements to effect the removal of any liens or encumbrances
on any of such vehicles. The Buyer shall be responsible for effecting the
recordation of such certificates and the reissuance (as required) of new
certificates of title for such vehicles in the name of the Buyer; and the
Sellers shall be responsible for the payment of any applicable transfer
taxes in connection therewith.
6.3 Audit of Financial Statements. Each Seller shall, from time to
time as and when requested by the Buyer and/or the Parent from and after
the date hereof, (a) permit the Buyer, the Parent and their accountants to
have access to all books and records of the Sellers for the purpose of
performing an audit of the Sellers and/or the Financial Statements
sufficient to enable such accountants to render their unqualified opinion
on the financial statements of the Business for all periods from and after
January 1, 1993 in accordance with Regulation S-X promulgated under the
Securities Act of 1933, as amended, and (b) permit the Buyer, the Parent
and their accountants to obtain copies of all work papers utilized or
prepared by the Sellers' accountants in connection with their review of the
Financial Statements, and consult with the Sellers' accountants as and to
the extent necessary or appropriate in connection with the preparation of
the audited financial statements contemplated by this Section 6.3.
7. RESTRICTIVE COVENANTS.
7.45 Acknowledgements. The Sellers and the Stockholder
acknowledge and agree that: (gg) the business contacts, customers,
suppliers, know-how, trade secrets, marketing techniques and other aspects
of the Business have been of value to the Sellers, and have provided the
Sellers (and will hereafter provide the Buyer) with substantial competitive
advantage in the operation of the Business, and (hh) by virtue of their
previous relationships, the Sellers and the Stockholder have detailed
knowledge and possess confidential information concerning the Business.
7.46 Limitations. Neither of the Sellers nor the Stockholder
shall directly or indirectly, for itself or himself, or through or on
behalf of any other person or entity:
(a) at any time, divulge, transmit or otherwise disclose or cause to
be divulged, transmitted or otherwise disclosed, any business contacts,
client or customer lists, know-how, trade secrets, marketing techniques,
contracts or other confidential or proprietary information relating to the
Business of whatever nature existing on or prior to the date hereof
(provided, however, that for purposes hereof, information shall not be
considered to be confidential or proprietary if (i) it is a matter of
common knowledge or public record, (ii) it is generally known in the
industry, or (iii) the subject Seller or Stockholder can demonstrate that
such information was already known to the recipient thereof other than by
reason of any breach of any obligation under this Agreement or any other
confidentiality or non-disclosure agreement); and/or
(b) at any time during the one (1) year period from and after the date
hereof (the "Restrictive Period"), invest, carry on, engage or become
involved, either as a principal, operator, an employee, agent, advisor,
officer, director, stockholder (excluding ownership of not more than 3% of
the outstanding shares of a publicly held corporation if such ownership
does not involve managerial or operational responsibility), manager,
partner, joint venturer, participant or consultant, in any business
enterprise (other than the Parent or any of its subsidiaries, affiliates,
successors or assigns) which: (i) is or shall be located or operating, or
soliciting or servicing automobile dealers, clients or customers located,
anywhere in the State of Florida, and (ii) is or becomes, at any time
during the Restrictive Period, engaged in any manner in any retail sale or
leasing of automobiles or other consumer vehicles, or in any leasing or
financing activities related to or arising out of any retail sale of
automobiles or other consumer vehicles.
7.3 Remedies.
(a) The parties hereby acknowledge and agree that, in the event of
any breach, directly or indirectly, of Section 7.2 above, it will be
difficult to ascertain the precise amount of damages that may be suffered
by the Buyer by reason of such breach; and accordingly, the parties hereby
agree that, as liquidated damages (and not as a penalty) in respect of any
such breach, the breaching party or parties shall be required to pay to the
Buyer, on demand from time to time, the aggregate sum of $100 per day for
each day in which any violative acts or activities existed or were
continuing. The parties hereby agree that the foregoing constitutes a fair
and reasonable estimate of the actual damages that might be suffered by
reason of any such breach, and the parties hereby agree to such liquidated
damages in lieu of any and all other measures of damages that might be
asserted in respect of any such breach.
(b) The parties hereby further acknowledge and agree that any breach,
directly or indirectly, of Section 7.2 above will cause the Buyer
irreparable injury for which there is no adequate remedy at law.
Accordingly, each of the Sellers and the Stockholder expressly agrees that,
in the event of any such breach or any threatened breach hereunder,
directly or indirectly, the Buyer shall be entitled, in addition to any and
all other remedies available (including but not limited to the liquidated
damages provided for in Section 7.3(a) above), to seek and obtain, without
requirement of posting any bond or other security, injunctive and/or other
equitable relief to require specific performance of or prevent, restrain
and/or enjoin a breach under the provisions of this Agreement.
(e) In the event of any dispute under or arising out of
this Section 7, the prevailing party or parties in such dispute shall be
entitled to recover from the non-prevailing party or parties, in addition
to any damages that may be awarded, its or their reasonable costs and
expenses (including reasonable attorneys' fees) incurred in connection with
prosecuting or defending the subject dispute.
7.4 Severability. It is acknowledged, understood and agreed that the
restrictions contained in this Section 7 (a) are made for good, valuable
and adequate consideration received and to be received by the Sellers and
the Stockholder, and (b) are reasonable and necessary, in terms of the
time, geographic scope and nature of the restrictions, for the protection
of the Buyer and the good will thereof. It is intended that said
provisions be fully severable, and in the event that any of the foregoing
restrictions, or any portion of the foregoing restrictions, shall be deemed
contrary to law, invalid or unenforceable in any respect by any court or
other tribunal of competent jurisdiction, then such restrictions shall be
deemed to be amended, modified and reduced in scope and effect, as to
duration, geographic area or in any other relevant respect, only to that
extent necessary to render same valid and enforceable, and any other of the
foregoing restrictions shall be unaffected and shall remain in full force
and effect.
8. INDEMNIFICATION.
8.1 General.
(a) Without prejudice to any rights of contribution as among each
Seller and the Stockholder, (i) PBF and the Stockholder shall jointly and
severally defend, indemnify and hold harmless the Buyer from, against and
in respect of any and all claims, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest,
penalties and reasonable attorneys' fees, that the Buyer may incur, sustain
or suffer ("PBF Losses") as a result of (A) any breach of, or failure by
PBF or the Stockholder to perform, any of the representations, warranties,
covenants or agreements of PBF or the Stockholder contained in this
Agreement or in any Schedule(s) furnished by or on behalf of PBF or the
Stockholder under this Agreement, or (B) any failure by PBF to pay or
perform when due any of its retained liabilities, and (ii) MMM and the
Stockholder shall jointly and severally defend, indemnify and hold harmless
the Buyer from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees,
that the Buyer may incur, sustain or suffer ("MMM Losses") as a result of
(A) any breach of, or failure by MMM or the Stockholder to perform, any of
the representations, warranties, covenants or agreements of MMM or the
Stockholder contained in this Agreement or in any Schedule(s) furnished by
or on behalf of MMM or the Stockholder under this Agreement, or (B) any
failure by MMM to pay or perform when due any of its retained liabilities.
The PBF Losses and the MMM Losses are collectively referred to in this
Agreement as "Losses".
(b) The Buyer shall defend, indemnify and hold harmless the Sellers
and the Stockholder from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees,
that the Sellers or the Stockholder may incur, sustain or suffer as a
result of (i) any breach of, or failure by the Buyer to perform, any of the
representations, warranties, covenants or agreements of the Buyer contained
in this Agreement, or (ii) any failure by the Buyer to pay or perform when
due any of the Assumed Liabilities.
8.2 Limitations on Certain Indemnity.
(a) Notwithstanding any other provision of this Agreement to the
contrary, (i) neither PBF nor the Stockholder shall be liable to the Buyer
with respect to PBF Losses unless and until the aggregate amount of all PBF
Losses incurred by the Buyer shall exceed the sum of $12,500 (the "PBF
Basket"), and (ii) PBF and the Stockholder shall thereafter be jointly and
severally liable for all PBF Losses in excess of the PBF Basket, provided
that PBF's and the Stockholder's maximum aggregate liability in respect of
all PBF Losses shall not, in the absence of proven fraud by PBF or the
Stockholder in respect of any particular PBF Losses, in any event exceed
the limitations set forth in Section 8.2(c)(i) below; provided, however,
that the PBF Basket and such limitation on liability shall not be available
with respect to, and there shall not be counted against the PBF Basket or
such limitation of liability, any PBF Losses arising by reason of (A) any
breach by PBF or the Stockholder of Section 7.2 above, (B) any failure by
PBF to pay or perform when due any of its retained liabilities, or (C) any
PBF Losses involving proven fraud by PBF or the Stockholder.
(b) Notwithstanding any other provision of this Agreement to the
contrary, (i) neither MMM nor the Stockholder shall be liable to the Buyer
with respect to MMM Losses unless and until the aggregate amount of all MMM
Losses incurred by the Buyer shall exceed the sum of $37,500 (the "MMM
Basket"), and (ii) MMM and the Stockholder shall thereafter be jointly and
severally liable for all MMM Losses in excess of the MMM Basket, provided
that MMM's and the Stockholder's maximum aggregate liability in respect of
all MMM Losses shall not, in the absence of proven fraud by MMM or the
Stockholder in respect of any particular MMM Losses, in any event exceed
the limitations set forth in Section 8.2(c)(ii) below; provided, however,
that the MMM Basket and such limitation on liability shall not be available
with respect to, and there shall not be counted against the MMM Basket or
such limitation of liability, any MMM Losses arising by reason of (A) any
breach by MMM or the Stockholder of Section 7.2 above, (B) any failure by
MMM to pay or perform when due any of its retained liabilities, or (C) any
MMM Losses involving proven fraud by MMM or the Stockholder.
(c) Except with respect to any Losses involving proven fraud by the
subject Seller or the Stockholder, or any breach of Section 7.2 above, or
any failure by either Seller to pay or perform when due any of its retained
liabilities, (i) PBF and the Stockholder shall not be required to pay
indemnification hereunder in respect of PBF Losses in an aggregate amount
in excess of the PBF Purchase Price, and (ii) MMM and the Stockholder shall
not be required to pay indemnification hereunder in respect of MMM Losses
in an aggregate amount in excess of the MMM Purchase Price.
(d) Each Seller and the Stockholder shall have the option of
satisfying a portion of each claim in respect of Losses by tendering to the
Parent for cancellation a number of Shares (which, for purposes of this
Section 8.2(d), shall include any shares of an Exchange Entity issued in
exchange or substitution for the Shares by reason of any Combination)
having an aggregate value (determined in accordance with Section 3 above,
subject to appropriate arithmetic adjustment to account for any stock
split, stock dividend, combination of shares or other such event (including
any Combination) which may occur at any time or from time to time
subsequent to the date hereof in respect of the outstanding common stock of
the Parent) equal to that portion of the subject claim to be satisfied in
such manner, which portion shall not exceed (a) as to PBF and the
Stockholder, the proportion of the total PBF Purchase Price represented by
the value (determined in accordance with Section 3 above, subject to
appropriate arithmetic adjustment to account for any stock split, stock
dividend, combination of shares or other such event (including any
Combination) which may occur at any time or from time to time subsequent to
the date hereof in respect of the outstanding common stock of the Parent)
of the Shares issued to PBF hereunder, and (b) in the case of MMM and the
Stockholder, the proportion of the total MMM Purchase Price represented by
the value (determined in accordance with Section 3 above, subject to
appropriate arithmetic adjustment to account for any stock split, stock
dividend, combination of shares or other such event (including any
Combination) which may occur at any time or from time to time subsequent to
the date hereof in respect of the outstanding common stock of the Parent)
of the Shares issued to MMM hereunder.
(e) The Buyer shall be entitled to indemnification by the Sellers and
the Stockholder for Losses only in respect of claims for which notice of
claim shall have been given to the subject Seller or the Stockholder on or
before December 31, 1997.
8.3 Claims for Indemnity. Whenever a claim shall arise for which
any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party or parties in writing within
sixty (60) days of the indemnified party's first receipt of notice of, or
the indemnified party's obtaining actual knowledge of, such claim, and in
any event within such shorter period as may be necessary for the
indemnifying party or parties to take appropriate action to resist such
claim. Such notice shall specify all facts known to the indemnified party
giving rise to such indemnity rights and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom.
If an indemnifying party shall be duly notified of such dispute, the
parties shall attempt to settle and compromise the same or may agree to
submit the same to arbitration or, if unable or unwilling to do any of the
foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement,
compromise, arbitration or litigation shall promptly thereafter be paid and
satisfied by those indemnifying parties obligated to make indemnification
hereunder.
8.4 Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by
any third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel
of its own choosing), at their expense and through a single counsel of
their own choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name
of the indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
indemnifying party shall be required to undertake, conduct and control,
though counsel of its own choosing and at its sole expense, the settlement
or defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
9. POST-CLOSING EVENTS.
9.1 Announcements. No party hereto shall make any disclosure or
public announcement of the consummation of the transactions pursuant to
this Agreement, or of any of the terms thereof, without the prior review
and approval thereof by the Buyer (in the case of any proposed disclosure
or public announcement by either Seller or the Stockholder) or the
Stockholder (in the case of any proposed disclosure or public announcement
by the Buyer), such approval not to be unreasonably withheld or delayed.
9.2 Registration of Shares.
(a) To the extent that either or both of the Sellers (or any of their
respective Affiliates) still own any or all of the Shares (which, for
purposes of this Section 9.2, shall include any shares of an Exchange
Entity issued in exchange or substitution for the Shares by reason of any
Combination) acquired pursuant to this Agreement, then, at the time that
the Parent or the subject Exchange Entity shall file its first registration
statement which includes any common stock of the Parent or such Exchange
Entity with the Securities and Exchange Commission subsequent to the date
hereof (other than a registration statement on Form S-4, S-8 or other
comparable form in respect of employee stock options or other employee
benefit plans or in respect of any merger, consolidation, acquisition or
like transaction), the Parent or such Exchange Entity shall, at its
expense, cause all such Shares (or such portion thereof as may be directed
by the holders thereof) then owned by the Sellers or their respective
Affiliates (collectively, "Holders") to be included in such registration
statement, provided that, in connection therewith, and as a condition to
the obligations of the Parent or the Exchange Entity under this Section
9.2, each subject Holder shall provide to the Parent or the Exchange Entity
and/or its underwriters such information regarding such Holder, and such
indemnities and such holdback or "lock-up" agreements, as are reasonably
required by the Parent or the Exchange Entity and/or its underwriters and
are customary in connection with a public registration, and further
provided that each Holder shall be responsible for its own selling expenses
and underwriting commissions (if any) in connection with such registration
and any sale of its shares; provided, however, that no Holder shall be
required to enter into any "lock-up" agreement which, by its terms, would
not permit such Holder to freely dispose of up to 20% of its Shares in each
three (3) month period commencing six (6) months after the effective date
of the subject registration statement.
(b) Anything elsewhere contained in this Section 9.2 to the contrary
notwithstanding, no representation or warranty is made as to the timing of
the filing or the effectiveness of any registration statement, and the
registration rights in respect of particular Shares shall expire and be of
no further force or effect from and after the date that such Shares shall
first become eligible for resale under Rule 144 promulgated under the
Securities Act of 1933, as amended.
9.3 Further Assurances. From time to time from and after the date
hereof, the parties will execute and deliver to one another any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by any other party in order more fully to
consummate the transactions contemplated hereby, and to effect an orderly
transition of the Business being acquired by the Buyer hereunder. Without
limitation of the foregoing, each Seller shall cooperate with the Buyer in
order to cause the local telephone company to transfer to the Buyer's name
and account all telephone numbers and fax numbers currently held by the
Sellers (provided that the Buyer acknowledges that the transfer of such
telephone numbers and fax numbers is in the discretion of the local
telephone companies).
10. COSTS.
10.1 Finder's or Broker's Fees. Each of the Buyer, the Sellers
and the Stockholder represents and warrants that neither they nor any of
their respective affiliates have dealt with any broker or finder in
connection with any of the transactions contemplated by this Agreement, and
no broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions, except that the Buyer agrees to
be solely responsible for any compensation payable to Greyhouse Services
Corporation in connection with the transactions contemplated by this
Agreement.
10.2 Expenses. The Buyer, the Sellers and the Stockholder shall
each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement.
11. FORM OF AGREEMENT.
11.1 Effect of Headings. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes
of convenience only, and shall not affect the construction or
interpretation of any of the provisions hereof or of the information set
forth in such Schedules.
11.2 Entire Agreement; Waivers. This Agreement and the other
agreements and instruments referred to herein constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all prior agreements or understandings as to such subject matter.
No party hereto has made any representation or warranty or given any
covenant to the other except as set forth in this Agreement, the Schedules
hereto, and the other agreements and instruments referred to herein. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
11.3 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
12. PARTIES.
12.1 Parties in Interest. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties to it and
their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligations or liability of
any third persons to any party to this Agreement, nor shall any provision
give any third persons any right of subrogation or action over or against
any party to this Agreement.
12.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
to have been duly given (a) on the date of service if served personally on
the party to whom notice is to be given, (b) on the day after the date sent
by recognized overnight courier service, properly addressed and with all
charges prepaid or billed to the account of the sender, or (c) on the third
day after mailing if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid, and properly
addressed as follows:
(i) If to PBF:
Palm Beach Finance and Mortgage Company
225 North Military Trail
West Palm Beach, Florida 33415
(ii) If to MMM:
Two Two Five North Military Corp.
d/b/a Miracle Mile Motors
225 North Military Trail
West Palm Beach, Florida 33415
(iii) If to the Stockholder:
David Baumgardner
c/o Robert Saylor, Esq.
1615 Forum Place, Suite 300
West Palm Beach, Florida 33401
(iv) If to the Buyer:
c/o Smart Choice Holdings, Inc.
625 Main Street, Suite 25
Windermere, Florida 34786
Attn: Tom Conlan
or to such other address as any party shall have specified by notice in
writing given to the other party.
13. MISCELLANEOUS.
13.1 Amendments and Modifications. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in
writing and signed by the party to be charged therewith.
13.2 Non-Assignability; Binding Effect. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all
other parties hereto. Otherwise, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors and
permitted assigns.
13.3 Governing Law; Jurisdiction. This Agreement shall be
construed and interpreted and the rights granted herein governed in
accordance with the laws of the State of Florida applicable to contracts
made and to be performed wholly within such State. Except for any judicial
proceeding seeking equitable relief as contemplated by Section 7.3(b)
above, or as otherwise provided in Section 8.3 above, any claim, dispute or
controversy arising under or in connection with this Agreement or any
actual or alleged breach hereof shall be settled exclusively by arbitration
to be held before a single arbitrator in Orlando, Florida, or in any other
locale or venue as legal jurisdiction may otherwise be had over the party
against whom the proceeding is commenced, in accordance with the commercial
arbitration rules of the American Arbitration Association then obtaining.
As part of his or her award, the arbitrator shall make a fair allocation of
the fee of the American Arbitration Association, the cost of any
transcript, and the parties' reasonable attorneys' fees, taking into
account the merits and good faith of the parties' claims and defenses.
Judgment may be entered on the award so rendered in any court having
jurisdiction. Any process or other papers hereunder may be served by
registered or certified mail, return receipt requested, or by personal
service, provided that a reasonable time for appearance or response is
allowed.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ J. Neal Hutchinson, Jr.
Vice President
PALM BEACH FINANCE AND MORTGAGE COMPANY
By: /s/ David Bumgardner, President
TWO TWO FIVE NORTH MILITARY CORP.
d/b/a Miracle Mile Motors
By: /s/ David Bumgardner, President
/s/ David Bumgardner
David Bumgardner
(a) joins in the representations and warranties of the Buyer made in
Section 5.5 of the foregoing Agreement, and (b) hereby confirms that it
will, if, as, when and to the extent contemplated by Section 3 of the
foregoing Agreement, redeem Shares as provided therein.
SMART CHOICE
HOLDINGS, INC.
By: /s/ J. Neal Hutchinson, Jr.
Vice President
February 14, 1997
Palm Beach Finance and
Mortgage Company
Two Two Five North
Military Corp.
David Bumgardner
225 North Military Trail
West Palm Beach, FL
Re: Amendment to Asset Purchase Agreement
Gentlemen:
Reference is made to that certain Asset Purchase Agreement (the
"Purchase Agreement") among Palm Beach Finance and Mortgage Company
("PBF"), Two Two Five North Military Corp., d/b/a Miracle Mile Motors
("MMM"), David Bumgardner (the "Stockholder"), and First Choice Auto
Finance, Inc. (the "Buyer"), as amended. Capitalized terms used herein
that are defined in the Purchase Agreement shall have the meanings therein
provided. The date of the closing (the "Closing") of the transactions
contemplated hereby is referred to herein as the "Closing Date."
For good and valuable consideration, the parties hereto agree as
follows:
1. Section 3 of the Purchase Agreement is hereby amended so that the
requirement that the Buyer make a cash payment of $1,023,148 to PBF as set
forth in Section 3.1(a) of the Purchase Agreement and a cash payment of
$3,226,852 to MMM as set forth in Section 3.2(a) of the Purchase Agreement
are hereby deleted from the Purchase Agreement, and in substitution
therefor, the parties hereto agree that the Purchase Agreement shall be
amended so that the following shall apply:
(a) At Closing, the Buyer shall pay MMM and PBF an amount in
cash equal to $3,000,000 and shall deliver to them a 30 day
Promissory Note in the form attached hereto having a principal
amount of $205,574.
(b) The Buyer shall deliver to MMM and PBF a Convertible
Debenture having a principal amount of $467,601 in the form
attached hereto.
(c) The Buyer shall deliver to MMM and PBF a Secured Convertible
Note in the principal amount of $800,000, a Loan and Security
Agreement and a Corporate Guaranty, all in the form attached
hereto.
2. Section 3 of the Purchase Agreement is hereby amended so that the
requirement that the Buyer deliver shares of Smart Choice Holdings, Inc. to
the Stockholder shall provide that the Buyer shall deliver a stock
certificate to the Stockholder representing 142,857 shares of Class B
Common Stock, $.01 par value, of Eckler Industries, Inc. ("Eckler").
3. Section 1.1(d) and Section 1.2(d) of the Purchase Agreement are
amended to provide that signs shall be deleted from the PBF Assets and the
MMM Assets.
4. The $50,000 deposit paid by the Buyer on execution of the
Purchase Agreement shall be applied to purchase all the title loans held by
PBF on the Closing Date, which are hereby conveyed to the Buyer.
5. Eckler shall propose to its Board of Directors that the
Stockholder be elected to the Board of Directors of Eckler. Eckler agrees
to use its best efforts, consistent with the fiduciary obligations of the
members of its Board of Directors, to cause the Stockholder to be elected
to the Board of Directors of Eckler for the period from the date hereof
through the date on which the Debenture and the Note described in Section 1
hereof shall have been paid in full.
6. In connection with the closing of the transactions contemplated
hereby, the Buyer shall indemnify PBF, MMM, the Stockholder, and Beatrice
Bumgardner against any loss by any of them with respect to that certain
Business Loan Agreement (the "Business Loan Agreement") dated May 8, 1996
between PBF and MMM as borrowers and 1st United Bank pursuant to an
Indemnification Agreement in the form attached hereto. The Buyer shall pay
in full all amounts outstanding under the Business Loan Agreement no later
than 30 days from the date hereof. The Purchase Agreement is hereby
amended so that the transfer of the PBF Assets and the MMM Assets with the
lien created by the Business Loan Agreement remaining in effect shall not
constitute a breach of the Purchase Agreement.
7. By the execution of this agreement, PBF, MMM, and the Stockholder
confirm that the representations and warranties of each of them in the
Purchase Agreement are true and correct having been made on the date
hereof. Except as amended hereby, the Purchase Agreement shall remain in
full force and effect in accordance with its terms.
Very truly yours,
SMART CHOICE HOLDINGS, INC.
By: /s/ J. Neal Hutchinson, Jr.
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ J. Neal Hutchinson, Jr.
ECKLER INDUSTRIES, INC.
By: /s/ J. Neal Hutchinson, Jr.
Accepted and agreed to as of
the date first above written.
PALM BEACH FINANCE AND
MORTGAGE COMPANY
By: /s/ David Bumgardner
TWO TWO FIVE NORTH MILITARY CORP.
By: /s/ David Bumgardner
/s/ David Bumgardner
4
Exhibit 10.18
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made and
entered into as of the 14th day of February, 1997, by and between TWO TWO
FIVE NORTH MILITARY CORP. db/a MIRACLE MILE MOTORS, a Florida corporation
(the "Lender"), with its principal place of business located at 225 North
Military Trail, West Palm Beach, Florida 33415, and FIRST CHOICE AUTO
FINANCE, INC., a Florida corporation (the "Borrower"), a Florida
corporation, with its principal office and place of business located at 101
Phillippe Parkway, Suite 300, Safety Harbor, Florida 34695.
In consideration of the mutual promises contained herein and to
induce Lender to make loans or grant other financial accommodation to
Borrower, the parties agree as follows:
1. Definitions. As used herein:
a. The definitions of terms set forth in the Florida Uniform
Commercial Code, Chapters 671 - 680, Florida Statutes, shall be controlling
in this Agreement unless the context clearly requires otherwise.
b. "Collateral" shall mean with regard to the loan described in
paragraph 2 hereof- (a) all Financed Inventory and all products and
proceeds of all of the foregoing; and (b) all property of Borrower now or
hereafter in possession of or under control of Lender in any capacity
whatsoever, including, but not limited to, any balance of any trust,
deposit, checking reserve or agency account and proceeds thereof.
c. "Financed Inventory" shall mean all Used Motor Vehicle
Inventory held for sale, lease or rent or being possessed for sale, lease
or rent, now held at or hereafter acquired for, Borrower's business located
at 225 North Military Trail, West Palm Beach, Florida 33415, together with
all increases, parts, fittings, radios, accessories and special tools now
or hereafter affixed to any or any part thereof and all replacements of all
or any part thereof.
d. "Guarantor" shall mean ECKLER INDUSTRIES, INC., a Florida
corporation.
e. "Guaranty" shall mean that certain guaranty agreement
executed by the Guarantor in favor of the Lender of even date herewith.
f. "Liability" or "Liabilities" shall include the Note and all
liabilities or obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due pursuant to the Note and this
Agreement, including costs, expenses, and attorneys, fees (including
attorneys' fees in any Bankruptcy or appellate case or proceeding), whether
or not a lawsuit is instituted.
g. "Note" shall mean the 9% Secured Convertible Note in the
principal amount of Eight Hundred Thousand Dollars ($800,000.00) payable
pursuant to the terms and conditions of the Note, representing the
Borrower's indebtedness described in paragraph 2 hereof and otherwise
payable pursuant to the provisions of this Agreement. in form and substance
satisfactory to the Lender and any and all renewal or modifications thereof
and all changes thereto.
h. "Used Motor Vehicle Inventory" shall mean all
program/demonstrator and/or used motor vehicles and held for sale, lease or
rent or being processed for sale, lease or rent in Borrower's business at
the Borrower's business located at 225 North Military Trail, West Palm
Beach, Florida ')')415, as now or hereafter conducted, together with
increases, parts, fittings, radios, accessories and special tools now or
hereafter affixed to any or any part thereof and all replacements of all or
any part thereof.
2. Loan. The Lender is extending credit to the Borrower in the form
a purchase money credit in connection with the Borrower's purchase of the
assets of the Lender.
3. Interest Rate. The interest rate accruing under the Note shall
never exceed the maximum lawful rate, established from time to time, under
the laws applicable to loans in Florida. Any interest due on the loan made
hereunder or any other Liability shall be calculated on the basis of a year
containing 365 days,
4. Security Interest. As security for the payment of all loans and
advances now or in the future made hereunder, including the Note, and for
all other Liabilities, including any extensions, renewals or changes in
form of any thereof, Borrower hereby assigns to Lender and grants to Lender
a security interest in the Collateral. The parties hereto agree that the
Borrower is in the business of selling used motor vehicles at retail, and
the Borrower shall have the right to sell at retail in the ordinary course
of business used motor vehicles that constitute Financed Inventory free
from any lien or encumbrance hereunder.
5. Additional Covenants. Borrower shall: (a) immediately notify
Lender in writing of any change in the location of the place of business
where the bulk of Borrower's Financed Inventory is located; (b) sell its
Financed Inventory only in the ordinary course of business; (c) keep
accurate and complete records of its Financed Inventory; (d) pay and
discharge when due all taxes, levies and other charges on its Financed
Inventory; (e) join with Lender in executing one or more financing
statements, notices, affidavits, or similar instruments in form
satisfactory to Lender, and such other instruments as Lender may from time
to time request, and pay the cost of filing the same in any public office
deemed advisable by Lender; (f) deposit with Lender any certificates of
title issued with respect to any of the Financed Inventory with an open
reassignment; (g) give Lender immediate written notice of (A) any adverse
change in Borrower's financial condition, and (B) all threatened or actual
actions, investigations or proceedings affecting Borrower; and (h) within
ten (IO) business days of the date hereof, deliver to the Lender such UCC-3
termination statements and/or other documents or instruments necessary to
enable the Borrower to grant to the Lender a first priority security
interest in the Collateral.
6. Representations and Warranties of Borrower. Borrower hereby
represents and warrants to Lender that: (a) Borrower is a corporation duly
organized and validly existing under the laws of the State of Florida; (b)
Borrower has all the power necessary to own assets; (c) the execution of
this Agreement and the documents referred to herein have been duly
authorized by the requisite corporate action; (d) the person signing for
the Borrower has been duly authorized to do so; (e) in connection with
Borrower's inventory Borrower is and will be the absolute owner thereof,
and (f) Borrower is not a party to any agreement which, by its terms or by
operation of law, would conflict with this Agreement.
7. Insurance. Borrower shall, at Borrower's expense, acquire and at
all times maintain one or more policies of insurance covering Borrower's
Financed Inventory in such amounts, covering such risks and with such
insurance companies as may be satisfactory to Lender from time to time.
Lender shall be named as loss payee under such policy by New York standard
or Union standard endorsement. Certificates evidencing such insurance
shall be delivered to Lender. The policy and certificate shall provide
that the policy is not cancelable on less than ten (10) days notice to
Lender. If Borrower fails to obtain and pay for insurance as provided
herein, then Lender may pay the premiums or acquire insurance from another
source and insure the interests of Lender and Borrower or insure only the
interests of Lender, without waiving or affecting any rights under this
Agreement. Every payment for insurance made by Lender shall bear interest
from the date thereof at the maximum rate allowed by law and each such
payment and interest thereon shall be secured by this Agreement. Lender
shall be entitled to retain and receive all experience rating credits which
may accrue under or in connection with any insurance which is procured by
Lender pursuant to the authorization contained herein.
8. Adjustments to Collateral. Lender shall have the right at any
time and from time to time, without notice to: (a) insure Financed
Inventory to Lender's satisfaction if Borrower fails to do so and pay for
the same, and pay for the account of Borrower, any taxes, levies or other
charges affecting Borrower's Financed Inventory or upon or on account of
this Agreement or any Liability or any writing evidencing any Liability,
which Borrower fails to pay, and any such payment shall constitute a
Liability of Borrower; and (b) inspect any of the places of business of
Borrower from time to time upon demand.
9. Use of Collateral. Until default, Borrower may: (a) use its
Financed Inventory in any lawful manner not inconsistent with this
Agreement and the terms of any insurance thereon; (b) sell its Financed
Inventory in the ordinary course of business; and (c) use and consume any
raw materials and supplies, the use and consumption of which is necessary
to carry on Borrower's business.
10. Location of Financed Inventory. Borrower agrees not to remove or
permit the removal of any Financed Inventory outside the continental United
States or Canada or transfer, dispose of or illegally or improperly use
said Financed Inventory.
11. Default and Remedies. Borrower shall be in default under this
Agreement if. at any time any warranty, representation, certificate or
statement of Borrower is not true, if Borrower should fail to observe or
perform any agreement or term set forth in this Agreement or in the Note,
or the Guarantor defaults under the Guaranty, and 30 days have elapsed
since the Lender shall have provided Borrower written notice of the default
and the Borrower shall not have cured such default within a reasonable time
after such notice. If Borrower is in default under this Agreement, then:
(i) in addition to any other rights and remedies which Lender may have,
Lender shall have and may exercise immediately and without demand, any and
all the rights and remedies granted to a secured party upon default under
the Uniform Commercial Code; (ii) upon the request or demand of Lender,
Borrower shall, at Borrower's expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender; (iii)
Borrower shall immediately execute and deliver to Lender any and all
instruments, documents, certificates of title, or any similar items which
Lender, in its sole discretion, deems necessary to dispose of said Financed
Inventory and Borrower hereby appoints Lender its attorney in fact to
execute, sign and seal any and all instruments, documents, certificates of
title or any similar items which the Lender, in its sole discretion, deems
necessary to dispose of the Collateral after default; and (iv) Borrower
shall pay to Lender on demand any and all costs and expenses, including
legal expenses and reasonable attorneys' fees, including costs, expenses
and reasonable attorneys, fees on appeal, incurred or paid by Lender in
protecting and enforcing Liabilities and the right of Lender hereunder,
including Lender's right to take possession of the Collateral and to hold,
prepare for sale, sell and dispose of the Collateral, whether or not a
lawsuit is instituted. Any notice of sale, disposition or other intended
action by Lender, sent to Borrower at the address of Borrower as may from
time to time be shown on Lender's records, at least five (5) days prior to
such action, shall constitute reasonable notice to Borrower although a
shorter period of notice may also be reasonable. It shall be commercially
reasonable for Lender to sell the Collateral on a wholesale basis to a
dealer or dealers in new or used property of like kind to the Collateral,
or to sell to a purchaser directly or through a dealer in such new or used
property; but the enumeration of the foregoing methods of disposition are
without limitation on Lender's right to dispose of the Collateral by any
other manner or method (whether by sale, lease or otherwise) in a
commercially reasonable manner. Lender shall have the right to apply all
or any part of any surplus if any, from disposition of the Collateral to
(or to hold same as a reserve against) all or any Liabilities of Borrower
to Lender, whether or not they, or any of them, be then due, and in such
order of application as Lender may from time to time elect.
12. Waiver. No waiver by Lender of any default shall operate as a
waiver of any other default or of the same default on a future occasion.
No delay or omission on the part of Lender in exercising any right or
remedy shall operate as waiver thereof, and no single or partial exercise
by Lender of any right or remedy shall preclude or affect any other or
further exercise thereof or the exercise of any other right or remedy.
13. Successors and Assigns. All rights of Lender hereunder shall
inure to the benefit of Lender's successors and assigns. All obligations
of Borrower shall bind the successors and assigns of Borrower.
14. Termination. This Agreement may be terminated by Borrower by the
payment of ali Liabilities, if not earlier terminated as provided herein.
Termination of this Agreement shall not in any way affect the rights and
liabilities of the parties hereunder relating to Financed Inventory or
other Collateral pledged prior to the date specified in such notice.
15. Costs and Expenses. Borrower shall pay upon demand all costs and
expenses arising out of or in connection with this Agreement, including
documentary stamp taxes, filing and recording fees and fees in connection
with the preparation of this Agreement and related documents.
16. Miscellaneous, Time is of the essence of this Agreement. The
provisions of this Agreement are cumulative and in addition to the
provisions of any liability and any note or other writing evidencing any
Liability secured by this Agreement, and Lender shall have all the
benefits, rights, and remedies of any liability and any note or other
writing evidencing any Liability secured hereby. The singular pronoun when
used herein, shall include the plural, and the neuter shall include the
masculine and feminine. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provisions of this Agreement shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement. The paragraph headings used herein are for convenience of
reference only and shall not be considered to expand, limit or otherwise
construe the terms of this Agreement.
Agreed to as of the date first set forth above.
"LENDER'
TWO TWO FIVE NORTH MILITARY CORP.
d/b/a MIRACLE MILE MOTORS, a Florida corporation
By: /s/ David E. Bumgardner
Name: David E. Bumgardner
Title: President
(CORPORATE SEAL)
[SIGNATURES CONTINUED ON NEXT PAGE]
"BORROWER"
FIRST CHOICE AUTO FINANCE, INC.,
a Florida corporation
By: /s/ J. Neal Hutchinson, Jr.
Name: J. Neal Hutchinson, Jr.
Its: Vice President
(CORPORATE SEAL)
Exhibit 10.19
PROMISSORY NOTE
$205,574 February 13, 1997
FOR VALUE RECEIVED, the undersigned, FIRST CHOICE AUTO FINANCE, INC.,
a Florida corporation (the "Maker"), hereby promises to pay to TWO TWO FIVE
NORTH MILITARY CORPORATION and PALM BEACH FINANCE AND MORTGAGE COMPANY, a
Florida corporation (the "Payees"), the principal sum of Two Hundred Five
Thousand Five Hundred Seventy Four Dollars ($205,574), together with
interest on the outstanding principal balance hereunder accrued from the
date hereof at the rate of nine percent (9%) per annum. All outstanding
principal and accrued interest on this Note shall be payable on the earlier
of 30 days from the date hereof or the completion of a financing by FCAF or
any parent corporation of FACF in an amount in excess of $3 million.
The following are Events of Default hereunder:
(a) Any failure by the Maker to pay when due all or any principal or
interest hereunder; or
(b) If the Maker (i) admits in writing its inability to pay generally
its debts as they mature, or (ii) makes a general assignment for the
benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent, or
(iv) files a voluntary petition in bankruptcy, or (v)takes advantage, as
against its creditors, of any bankruptcy law or statute of the United
States of America or any state or subdivision thereof now or hereafter in
effect, or (vi) has a petition or proceeding filed against it under any
provision of any bankruptcy or insolvency law or statute of the United
States of America or any state or subdivision thereof, which petition or
proceeding is not dismissed within thirty (30) days after the date of the
commencement thereof, (vii) has a receiver, liquidator, trustee, custodian,
conservator, sequestrator or other such person appointed by any court to
take charge of its affairs or assets or business and such appointment is
not vacated or discharged within thirty (30) days thereafter, or
(viii) takes any action in furtherance of any of the foregoing.
The Maker hereby waives diligence, demand, presentment for
payment, protest, dishonor, nonpayment, default, and notice of any and all
of the foregoing.
This Note shall be governed by the laws of the State of Florida.
In the event that the Payees shall, after the occurrence of an Event
of Default, turn this Note over to an attorney for collection, the Maker
shall further be liable for and shall pay to the Payees all collection
costs and expenses incurred by the Payees, including reasonable attorneys'
fees and expenses.
FIRST CHOICE AUTO FINANCING, INC.
By: /s/ J. Neal Hutchinson, Jr.
As its: Asst. Vice President
3
Exhibit 10.20
$800,000 February 13, 1997
FIRST CHOICE AUTO FINANCE, INC.
9% SECURED CONVERTIBLE NOTE
This Note and the Common Stock issuable upon conversion hereof (until
such time as such Common Stock is registered with the Securities and
Exchange Commission pursuant to an effective registration statement) have
not been registered under the Securities Act of 1933, as amended, or any
state securities laws, and no sale, transfer or other disposition of any
interest herein may be made unless, in the written opinion of counsel to
the Company, such transfer would not violate or require registration under
any such statute.
1. Payment. First Choice Auto Finance, Inc., a corporation duly
organized and existing under the laws of the State of Florida (herein
referred to as the "Company"), for value received, hereby promises to pay
to Palm Beach Finance and Mortgage Company and Two Two Five North Military
Corporation, or registered assigns ("Holder"), the principal sum of Eight
Hundred Thousand Dollars ($800,000), together with any accrued unpaid
interest, on the Maturity Date (as hereinafter defined), in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts. All the
principal on this Note may be prepaid at the option of the Company at any
time prior to maturity. The Maturity Date shall be the earlier of (a) one
year from the date hereof, or (b) the date on which Eckler Industries,
Inc., a Florida corporation and the parent of the Company ("Eckler"),
completes an underwritten public offering, of common stock of Eckler (the
"Secondary Offering").
This Note shall bear simple, non-cumulative interest from the date
hereof through the Maturity Date at an interest rate of nine percent (9%)
per annum. Accrued interest on this Note shall be payable monthly on the
first day of each calendar month through the Maturity Date at which time
all accrued but unpaid interest shall be due and payable.
This Note is convertible into Class B Common Stock ("Common Stock"),
$.01 par value, of Eckler, at the option of Holder, pursuant to Section
4(a) in lieu of repayment of the principal and accrued interest. Eckler
shall no later than April 15, 1997 complete a reclassification of its
common stock so that by such date all of the Eckler Class B Common Stock
shall have been reclassified into shares of the publicly traded common
stock of Eckler at a reclassification rate of two shares of the publicly
traded common stock of Eckler for each share of Eckler Class B Common
Stock.
By acceptance of this Note, the Holder agrees that it will promptly
deliver and surrender this Note to the Company upon full payment thereof,
and that it will promptly notify the Company of any disposition of the Note
and of the name and address of the transferee of this Note. For purposes
of this Note, the Company may assume that Holder is the holder hereunder
unless notified to the contrary in the manner provided in Section 7.
2. Security. This Note is secured by that certain Loan and Security
Agreement (the "Loan and Security Agreement") of even date herewith between
the Company and Two Two Five North Military Corp.
3. Guaranty. This Note is guaranteed by Smart Choice Holdings,
Inc., the parent of the Company, pursuant to that certain Corporate
Guaranty of even date herewith.
4. Conversion.
(a) Conversion. The Holder hereof shall have the right to elect
to convert the Note into Common Stock as set forth in Section 4(b), as of
the date (the "Conversion Date") on which Eckler successfully completes the
Secondary Offering. Eckler shall notify the Holder in writing of Eckler's
intent of proceed with the Secondary Offering at least 15 days prior to the
date on which Eckler intends to file the registration statement for the
Secondary Offering with the Securities and Exchange Commission (the "SEC").
The Holder shall notify Eckler in writing of the Holder's election to
convert this Note within five days of the date on which Eckler notifies the
Holder as provided in the preceding sentence.
(b) Mechanics of Conversion. Upon notice to Eckler of the
Holder's election to convert as provided in Section 4 (a) the Holder may
convert into Common Stock at the Conversion Price the entire principal
amount outstanding on the Note as of the Conversion Date. Upon conversion,
the principal amount of the Note shall be converted into Common Stock at
the price of one share of Common Stock for each $17.50 of outstanding
principal (the "Conversion Price"). The number of shares of Common Stock
issuable upon conversion are subject to adjustment as provided in Section
4. No fractional shares of Common Stock shall be issued upon conversion of
the Note. In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Company shall pay cash equal to such fraction
multiplied by the Conversion Price. Further, any accrued but unpaid
interest outstanding on the Conversion Date shall be paid to the Holder in
cash. To exercise the Holder's conversion rights, the Holder shall give
written notice to Eckler at Eckler's office as indicated under Section 7,
that the Holder elects to convert the Note and the name or names of the
Holder's nominees, if any, in which the Holder wishes the certificate or
certificates for shares of Common Stock to be issued.
(c) Issuance of Common Stock Upon Conversion. Within a
reasonable time, not exceeding twenty (20) days after the Conversion Date,
the Company shall deliver or cause to be delivered to or upon the written
order of the Holder of the Note so converted certificates representing the
number of fully paid and nonassessable shares of Common Stock into which
such Note may be converted in accordance with the provisions of this
Section 4. Within a reasonable time, not exceeding ten (10) days after
receipt by the Holder of the certificates, the Holder of the Note so
converted shall surrender the Note to the Company for cancellation.
Subject to the following provisions of this Section 4 such conversion shall
be deemed to have occurred on the Conversion Date, so that the rights of
the Holder of such Note shall be treated for all purposes as having become
the record holder or holders of such shares of Common Stock at such time.
(d) Taxes on Conversion. The issuance of certificates for
shares of Common Stock upon the conversion of the Note shall be made
without charge by the Company to the converting Holder for any tax in
respect of the issuance of such certificates and such certificates shall be
issued in the name of, or in such names as may be directed by, the Holder
of the Note converted; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance or delivery of any such certificate in a name
other than that of the Holder of the Note converted, and the Company shall
not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
(e) Adjustment of Conversion Price.
(i) Stock Dividends, Distributions or Subdivisions. In the
event Eckler shall issue additional shares of common stock (or securities
convertible into its common stock) in a stock dividend, stock distribution
or subdivision paid with respect to its common stock, or declare any
dividend or other distribution payable with additional shares of its common
stock (or securities convertible into its common stock) or effect a split
or subdivision of the outstanding shares of its common stock, the
Conversion Price shall, concurrently with the effectiveness of such stock
dividend, stock distribution or subdivision, or the earlier declaration
thereof, be proportionately decreased.
(ii) Combinations or Consolidations. In the event that
Eckler's common stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of common
stock, the Conversion Price shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
(f) No Impairment. Neither the Company nor Eckler will, by
amendment of their incorporation documents or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company but will at all times in good faith assist in the
carrying out of all the provisions of this Section 2 and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the Holder of this Note against impairment.
(g) Common Stock Reserved. Eckler shall reserve and keep available
out of its authorized but unissued Common Stock such number of shares of
Common Stock as shall from time to time be sufficient to effect conversion
of the Note.
5. Registration Rights. At the time that Eckler shall file any
registration statement which includes any common stock of Eckler with the
Securities and Exchange Commission subsequent to the date hereof (other
than a registration statement on Form S-4, S-8 or other comparable form in
respect of employee stock options or other employee benefit plans or in
respect of any merger, consolidation, acquisition or like transaction),
Eckler shall, at its expense, cause all Common Stock held by the Holder (or
such portion thereof as may be directed by the Holder) then owned by the
Holders to be included in such registration statement, provided that, in
connection therewith, and as a condition to the obligations of Eckler
hereunder, each subject Holder shall provide to Eckler and/or its
underwriters such information regarding the Holder and such indemnities, as
are reasonably required by the Eckler and/or its underwriters and are
customary in connection with a public registration, and further provided
that the Holder shall be responsible for its own selling expenses and
underwriting commissions (if any) in connection with such registration and
any sale of its shares. The Company shall notify the Holder in writing of
Eckler's intent to file with the SEC a registration statement to which the
Holder would have registration rights hereunder at least 15 days prior to
the date on which Eckler intends to file such registration statement with
the SEC. The Holder shall notify Eckler in writing of the Holder's
election to register the Common Stock held by the Holder on such
registration statement within five days of the date on which Eckler
notifies the Holder as provided in the preceding sentence.
6. Events of Default. If any default described in the Loan and
Security Agreement shall occur and be continuing, then the Holder shall
have the rights on default set forth in the Loan and Security Agreement.
7. Communications and Notices. Except as otherwise specifically
provided herein, all communications and notices provided for in this Note
shall be sent by first class mail, facsimile or telegram to the Holder at
the Holder's address as provided to the Secretary of the Company from time
to time and, if to the Company or Eckler, to either of them c/o Greenberg
Traurig, 111 North Orange Avenue, Suite 2000, Orlando, Florida 32801, or
such other address as may be furnished in writing from time to time. Any
first-class mail notice provided pursuant to this Section 7 shall be deemed
given three days after being sent by first-class mail. Notices sent by
telegram or facsimile shall be deemed received upon delivery. The Company,
Eckler, and the Holder may from time to time change their respective
addresses, for purposes of this Section 7, by written notice to the other
parties; provided, however, that notice of such change shall be effective
only upon receipt.
8. Governing Law. This Note shall be construed in accordance with
and governed by the laws of the State of Florida.
9. Assignment. This Note shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto.
10. Securities Restrictions.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER
SAID SECURITIES NOR ANY SECURITIES WHICH MAY BE ISSUED IN EXCHANGE FOR,
UPON THE CONVERSION OF, OR OTHERWISE IN RESPECT OF, SAID SECURITIES MAY BE
SOLD, OFFERED FOR SALE, OR ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER SAID SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
11. Waiver. No waiver of a right in any instance shall constitute a
continuing waiver of successive rights, and any one waiver shall govern
only the particular matters waived.
IN WITNESS WHEREOF, First Choice Auto Finance, Inc. and Eckler
Industries, Inc. have caused this Note to be executed on their behalf on
the date first above written.
FIRST CHOICE AUTO FINANCE, INC.
By:/s/ J. Neal Hutchinson, Jr.
As Its:Vice President
ECKLER INDUSTRIES, INC.
By:/s/ J. Neal Hutchinson
As Its:Asst. Vice President
4
Exhibit 10.21
$467,601 February 13, 1997
SMART CHOICE HOLDINGS, INC.
9% CONVERTIBLE DEBENTURE
This Debenture and the Common Stock issuable upon conversion hereof
(until such time as such Common Stock is registered with the Securities and
Exchange Commission pursuant to an effective registration statement) have
not been registered under the Securities Act of 1933, as amended, or any
state securities laws, and no sale, transfer or other disposition of any
interest herein may be made unless, in the written opinion of counsel to
the Company, such transfer would not violate or require registration under
any such statute.
1. Payment. Smart Choice Holdings, Inc., a corporation duly
organized and existing under the laws of the State of Delaware (herein
referred to as the "Company"), for value received, hereby promises to pay
to Palm Beach Finance and Mortgage Company, or registered assigns
("Holder"), the principal sum of Four Hundred Sixty Seven Thousand Six
Hundred One Dollars ($467,601), together with any accrued unpaid interest,
on the Maturity Date (as hereinafter defined), in such coin or currency of
the United States of America as at the time of payment shall be legal
tender for the payment of public and private debts. All the principal on
this Debenture may be prepaid at the option of the Company at any time
prior to maturity. The Maturity Date shall be the earlier of one year from
the date hereof or (b) the date on which Eckler Industries, Inc., a
Florida corporation and the parent of the Company ("Eckler"), completes an
underwritten public offering, of common stock of Eckler (the "Secondary
Offering").
This Debenture shall bear simple, non-cumulative interest from the
date hereof through the Maturity Date at an interest rate of nine percent
(9%) per annum. Accrued interest on this Debenture shall be payable
monthly on the first day of each calendar month through the Maturity Date
at which time all accrued but unpaid interest shall be due and payable.
This Debenture is convertible into Class B Common Stock ("Common
Stock"), $.01 par value, of Eckler, at the option of Holder, pursuant to
Section 2(a) in lieu of repayment of the principal and accrued interest.
Eckler shall no later than April 15, 1997 complete a reclassification of
its common stock so that by such date all of the Eckler Class B Common
Stock shall have been reclassified into shares of the publicly traded
common stock of Eckler at a reclassification rate of two shares of the
publicly traded common stock of Eckler for each share of Eckler Class B
Common Stock.
By acceptance of this Debenture, the Holder agrees that it will
promptly deliver and surrender this Debenture to the Company upon full
payment thereof, and that it will promptly notify the Company of any
disposition of the Debenture and of the name and address of the transferee
of this Debenture. For purposes of this Debenture, the Company may assume
that Holder is the holder hereunder unless notified to the contrary in the
manner provided in Section 5.
2. Conversion.
(a) Conversion. The Holder hereof shall have the right to elect
to convert the Note into Common Stock as set forth in Section 2(b), as of
the date (the "Conversion Date") on which Eckler successfully completes the
Secondary Offering. Eckler shall notify the Holder in writing of Eckler's
intent of proceed with the Secondary Offering at least 15 days prior to the
date on which Eckler intends to file the registration statement for the
Secondary Offering with the Securities and Exchange Commission (the "SEC").
The Holder shall notify Eckler in writing of the Holder's election to
convert this Note within five days of the date on which Eckler notifies the
Holder as provided in the preceding sentence.
(b) Mechanics of Conversion. Upon notice to Eckler of the
Holder's election to convert as provided in Section 2 (a) the Holder may
convert into Common Stock at the Conversion Price the entire principal
amount outstanding on the Debenture as of the Conversion Date. Upon
conversion, the principal amount of the Debenture shall be converted into
Common Stock at the price of one share of Common Stock for each $17.50 of
outstanding principal (the "Conversion Price"). The number of shares of
Common Stock issuable upon conversion are subject to adjustment as provided
in Section 2. No fractional shares of Common Stock shall be issued upon
conversion of the Debenture. In lieu of any fractional shares to which the
Holder would otherwise be entitled, the Company shall pay cash equal to
such fraction multiplied by the Conversion Price. Further, any accrued but
unpaid interest outstanding on the Conversion Date shall be paid to the
Holder in cash. To exercise the Holder's conversion rights, the Holder
shall give written notice to Eckler at Eckler's office as indicated under
Section 5, that the Holder elects to convert the Debenture and the name or
names of the Holder's nominees, if any, in which the Holder wishes the
certificate or certificates for shares of Common Stock to be issued.
(c) Issuance of Common Stock Upon Conversion. Within a
reasonable time, not exceeding twenty (20) days after the Conversion Date,
the Company shall deliver or cause to be delivered to or upon the written
order of the Holder of the Debenture so converted certificates representing
the number of fully paid and nonassessable shares of Common Stock into
which such Debenture may be converted in accordance with the provisions of
this Section 2. Within a reasonable time, not exceeding ten (10) days
after receipt by the Holder of the certificates, the Holder of the
Debenture so converted shall surrender the Debenture to the Company for
cancellation. Subject to the following provisions of this Section 2 such
conversion shall be deemed to have occurred on the Conversion Date, so that
the rights of the Holder of such Debenture shall be treated for all
purposes as having become the record holder or holders of such shares of
Common Stock at such time.
(d) Taxes on Conversion. The issuance of certificates for
shares for Common Stock upon the conversion of the Debenture shall be made
without charge by the Company to the converting Holder for any tax in
respect of the issuance of such certificates and such certificates shall be
issued in the name of, or in such names as may be directed by, the Holder
of the Debenture converted; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance or delivery of any such certificate in a name
other than that of the Holder of the Debenture converted, and the Company
shall not be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
(e) Adjustment of Conversion Price.
(i) Stock Dividends, Distributions or Subdivisions. In the
event Eckler shall issue additional shares of common stock (or securities
convertible into its common stock) in a stock dividend, stock distribution
or subdivision paid with respect to its common stock, or declare any
dividend or other distribution payable with additional shares of its common
stock (or securities convertible into its common stock) or effect a split
or subdivision of the outstanding shares of its common stock, the
Conversion Price shall, concurrently with the effectiveness of such stock
dividend, stock distribution or subdivision, or the earlier declaration
thereof, be proportionately decreased.
(ii) Combinations or Consolidations. In the event that
Eckler's common stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of common
stock, the Conversion Price shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
(f) No Impairment. Neither the Company nor Eckler will, by
amendment of their incorporation documents or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder but will at all times in good faith assist in the carrying out of
all the provisions of this Section 2 and in the taking of all such action
as may be necessary or appropriate in order to protect the conversion
rights of the Holder of this Debenture against impairment.
(g) Common Stock Reserved. Eckler shall reserve and keep
available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect
conversion of the Debenture.
3. Registration Rights. At the time that Eckler shall file any
registration statement which includes any common stock of Eckler with the
Securities and Exchange Commission subsequent to the date hereof (other
than a registration statement on Form S-4, S-8 or other comparable form in
respect of employee stock options or other employee benefit plans or in
respect of any merger, consolidation, acquisition or like transaction),
Eckler shall, at its expense, cause all Common Stock held by the Holder (or
such portion thereof as may be directed by the Holder) then owned by the
Holders to be included in such registration statement, provided that, in
connection therewith, and as a condition to the obligations of Eckler
hereunder, each subject Holder shall provide to Eckler and/or its
underwriters such information regarding the Holder and such indemnities, as
are reasonably required by the Eckler and/or its underwriters and are
customary in connection with a public registration, and further provided
that the Holder shall be responsible for its own selling expenses and
underwriting commissions (if any) in connection with such registration and
any sale of its shares. The Company shall notify the Holder in writing of
Eckler's intent to file with the SEC a registration statement to which the
Holder would have registration rights hereunder at least 15 days prior to
the date on which Eckler intends to file such registration statement with
the SEC. The Holder shall notify Eckler in writing of the Holder's
election to register the Common Stock held by the Holder on such
registration statement within five days of the date on which Eckler
notifies the Holder as provided in the preceding sentence.
4. Events of Default. If any of the following events (herein
defined as "Events of Default") shall occur and be continuing: (a) if the
Company defaults in the payment of the principal or interest under the
Debenture or any part thereof when the same shall become due and payable,
either by the terms hereof or otherwise as herein provided; (b) upon the
breach of the covenants of the Company or Eckler contained in the
Debenture; (c) if any proceedings involving the Company or Eckler are
commenced by or as to the Company or Eckler under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law or statute of the federal government or any state
government and, if such proceedings are instituted against the Company or
Eckler, the Company or Eckler by any action or failure to act indicates its
approval of, consent to or acquiescence therein, or an order shall be
entered approving the petition in such proceeding and, within fifty (50)
days after the entry thereof, such order is not vacated, or stayed on
appeal or otherwise, or shall not otherwise have ceased to continue in
effect; then, as to the Events of Default under clauses (a) and (b)
hereinabove, the Holder of this Debenture may at its option after thirty
(30) days' advance written notice to the Company (during which time the
Company shall have the right to cure such Event of Default) declare the
Debenture to be forthwith due and payable in cash. If an Event of Default
exists after the thirty day notice and a failure of the Company to cure as
provided above, the Holder may pursue all remedies available to the Holder
at law or in equity. As to an Event of Default under clause (c)
hereinabove, then the Debenture shall become immediately due and payable in
cash and the Holder may pursue all remedies available to the Holder at law
or in equity.
5. Communications and Notices. Except as otherwise specifically
provided herein, all communications and notices provided for in this
Debenture shall be sent by first class mail, facsimile or telegram to the
Holder at the Holder's address as provided to the Secretary of the Company
from time to time and, if to the Company or Eckler, to either of them c/o
Greenberg Traurig, 111 North Orange Avenue, Suite 2000, Orlando, Florida
32801, or such other address as may be furnished in writing from time to
time. Any first-class mail notice provided pursuant to this Section 5
shall be deemed given three days after being sent by first-class mail.
Notices sent by telegram or facsimile shall be deemed received upon
delivery. The Company, Eckler, and the Holder may from time to time change
their respective addresses, for purposes of this Section 5, by written
notice to the other parties; provided, however, that notice of such change
shall be effective only upon receipt.
6. Governing Law. This Debenture shall be construed in accordance
with and governed by the laws of the State of Florida.
7. Assignment. This Debenture shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto.
8. Securities Restrictions.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER
SAID SECURITIES NOR ANY SECURITIES WHICH MAY BE ISSUED IN EXCHANGE FOR,
UPON THE CONVERSION OF, OR OTHERWISE IN RESPECT OF, SAID SECURITIES MAY BE
SOLD, OFFERED FOR SALE, OR ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER SAID SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
9. Waiver. No waiver of a right in any instance shall constitute a
continuing waiver of successive rights, and any one waiver shall govern
only the particular matters waived.
IN WITNESS WHEREOF, Smart Choice Holdings, Inc. and Eckler Industries,
Inc. have caused this Debenture to be executed on their behalf on the date
first above written.
SMART CHOICE HOLDINGS, INC.
By:/s/ J. Neal Hutchinson, Jr.
As Its:Vice President
ECKLER INDUSTRIES, INC.
By:/s/ J. Neal Hutchinson, Jr.
As Its:Asst. Vice President
9
ORLANDO/IOPPOLOF/5037/3vx01!.DOC/2/26/97
Exhibit 10.22
LEASE
THE STATE OF FLORIDA
COUNTY OF PALM BEACH
This lease is made and executed in duplicate by and between DAVID
BUMGARDNER, SR., of 13365 Doubletree Circle, Wellington, State of Florida,
"lessor," and FIRST CHOICE AUTO FINANCE, INC., a Florida corporation, of
225 North Military Trail, West Palm Beach, State of Florida, "lessee."
SECTION I
DESCRIPTION OF PREMISES
Lessor leases to lessee, and lessee hires from lessor, the premises
located at 225 North Military Trail and adjoining parcels, West Palm Beach,
State of Florida, and described more particularly as follows:
FERRIS PARK
LTS 9 TO 12 (LESS N 8 FT), E 10 FT OF LT 13 & LTS 14 &
15 (LESS N 8 FT) LT 16 (LESS N 8 FT & E 10 FT) LTS 11 ,
10, 23 (LESS E 10 FT) LTS 17 TO 23 (LESS E 10 FT) LTS
25 & 26 & E 10 FT, LOT 26 & LTS 27 TO 30 AND ABND ALLEY
LYG E O AND ADJ 2 LOTS 15 & 24
FERRIS PARK
LTS 46 TO 48 INC.
SECTION II
TERM
The term of this lease is for a period of five years beginning
February 13, 1997 and terminating at midnight on February 13, 2002.
SECTION III
RENT
The total rent of this lease is the sum of $720,000.00. Lessee
agrees to pay lessor this amount in installments of $12,000.00 each month,
payable to lessor at 13365 Doubletree Circle, Wellington, State of Florida,
beginning on the first day of this lease and payable on the same day of
each month thereafter during the term of this lease.
Upon the execution of this lease, lessee agrees and lessor
acknowledges receipt herein the sum of $24,000.00 plus sales tax in the
amount of $1,440.00 representing first and last month's installments of the
term of this lease.
SECTION IV
STATE SALES TAX
In addition to rent lessee shall be responsible for payment of state
sales tax for the leased premises. The current rate is six (6%) percent to
be paid in addition to and included in the monthly rental installments.
Any increase in the state sales tax will be borne by lessee and included in
the monthly rental installments.
SECTION V
PAYMENT OF REAL PROPERTY TAXES AND ASSESSMENTS
Lessee, in addition to the fixed rent provided for herein, shall pay
all taxes and assessments upon the leased premises, and upon the buildings
and improvements thereon, which are assessed during the lease term. All
taxes assessed prior to but payable in whole or in installments after the
effective date of the lease term, and all taxes assessed during the term
payable in whole or in installments after the lease term, shall be adjusted
and prorated, so that lessor shall pay its prorated share for the period
prior to and for the period subsequent to the lease term and lessee shall
pay its prorated share for the lease term.
Lessor agrees to provide to lessee Notice of Assessment of Real
Property Taxes and Assessments and lessee shall have fifteen (15) days
after receipt of same in which to pay the assessed value of the real
property. Lessee may dispute and contest any taxes by appropriate
proceedings diligently conducted in good faith. Any excess amounts paid by
lessee to lessor for any taxes shall be promptly refunded to lessee.
SECTION VI
USE OF PREMISES
The premises are leased to be used for the purposes of automobile
sales, financing and any related or ancillary use. Lessee agrees to
restrict its use to those purposes, and not to use, or permit the use of,
the premises for any other purpose without first obtaining the consent in
writing of lessor, or of lessor's authorized agent.
SECTION VII
OPTION TO RENEW
Lessor grants lessee an option to renew this lease for two additional
five year terms at a base rental of $720,000.00 for each term. All other
terms, covenants, and conditions of the renewal lease shall be the same as
those contained herein. To exercise such option, lessee must give lessor
written notice of its intention to renew said lease at least ninety (90)
days prior to the expiration of each term.
The rent for each lease year of any of the extended terms provided for
in this lease shall be $144,000.00 plus such additional amount, if any, as
shall be sufficient to give to lessor for each lease year during such
extended terms a total annual net rent equal to the purchasing power of
$144,000.00 during January, 1997. Said rent for any renewal term shall be
paid in equal monthly installments.
Within thirty (30) days after the publication and issuance thereof,
lessor shall deliver to lessee a true copy of the Consumer Price Index,
hereinafter called the Index, for all items of the Bureau of Labor
Statistics of the United States Department of Labor for the month of
January, 1997, hereinafter called the base month, for the month of January,
2002, and for the corresponding month in each lease year thereafter. If
the Index for the month of January 2002, and for each corresponding month
in each lease year thereafter shows a decrease in the purchasing power of
$144,000.00 as compared, in each such case, to the Index for the month
ending January, 1997, lessor, as soon as possible after the delivery of
each Index subsequent to the Index for the base month, shall furnish lessee
with the computation of the additional amount, if any, to be paid by lessee
for the lease year in question. Such additional amount shall be divided
and paid in 12 equal monthly installments during each such lease year.
Pending the determination of the additional amount, if any, to be paid by
lessee, lessee shall continue to pay the net rent at the rate of
$144,000.00 per annum. When said additional amount has been determined,
lessee shall pay to lessor, on the date of rent payment for the month
immediately following the date lessor furnished to lessee the computation
thereof, the number of installments that shall have elapsed from the
commencement of the lease year in question up to and including the current
month.
If at the time required for the determination of the additional rent
the Index is no longer published or issued, or if at that time lessor and
lessee mutually agree that the Index does not accurately reflect, in
relationship to the base date, the purchasing power of $144,000.00, the
parties shall mutually agree upon such other index as is then generally
recognized and accepted for similar determinations of purchasing power. If
the parties are unable to agree on the selection of an index which would
most accurately carry out the intent hereof, or if there is a dispute with
respect to the computation of the additional rent as herein provided, then
the issue with respect thereto shall be determined by arbitration as
provided for in this lease.
SECTION VIII
PROHIBITION AGAINST WASTE, NUISANCE OR UNLAWFUL USE
Lessee shall not commit, or allow to be committed, any waste on the
premises, create or allow any nuisance to exist on the premises, or use or
allow the premises to be used for any unlawful purpose.
SECTION IX
PAYMENT OF UTILITIES
Lessee shall pay for all utilities furnished to the premises for the
term of this lease, including electricity, gas, water, and telephone
service.
SECTION X
REPAIRS AND MAINTENANCE
Lessee, at its expense, shall maintain and keep the premises,
including without limitation, windows, doors, skylights, adjacent
sidewalks, storefront, and interior walls, in good repair. This provision
shall be deemed a material provision of this lease.
SECTION XI
DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES
Lessor represents that the premises are in fit condition for use as
described herein. Lessee agrees to accept the premises on possession as
being in a good state of repair and in sanitary condition. Lessee agrees
to surrender the premises to lessor at the end of the lease term, if the
lease is not renewed, in the same condition as when lessee took possession,
allowing for reasonable use and wear, and damage by acts of God, including
fire and storms. Lessee agrees to remove all business signs or symbols
placed on the premises by lessee before redelivery of the premises to
lessor, and to restore the portion of the premises on which said signs or
symbols were placed in the same condition as before such placement.
SECTION XII
DESTRUCTION OF PREMISES
Partial destruction of the leased premises shall not render this lease
void or voidable, or terminate it except as provided herein.
If the premises are partially destroyed during the term of this lease,
lessee shall repair them, when such repairs can be made, in conformity with
local, state, and federal laws and regulations, within 120 days of the
partial destruction. Rent for the premises will remain in effect during
repairs. If the repairs cannot be so made within the time limited, lessor
has the option to make said repairs within a reasonable time and continue
this lease in effect with rent abated proportionally for that portion of
the leased premises lessee reasonably determines is unusable. If the
repairs cannot be made in 180 days, and if lessor does not attempt to make
said repairs within a reasonable time, either party to this lease has the
option to terminate the lease.
A total destruction of the premises, or of the building, shall
terminate this lease. In the event of any dispute between lessor and
lessee relative to the provisions of this Section or Section XXIII, the
parties shall submit their dispute to arbitration in accordance with the
rules of the American Arbitration Association, and the arbitration shall be
final and binding upon both lessor and lessee, and the cost of such
arbitration shall be borne by the substantially non-prevailing party.
SECTION XIII
LESSOR'S RIGHT TO INSPECT, REPAIR, AND MAINTAIN PREMISES
Lessor reserves the right to enter the premises at reasonable times
and with advanced written notice from lessor to lessee to inspect the
leased premises. Should lessee be in default under this lease, lessor
shall have the right to perform any maintenance and repair required under
this lease to any part of the building upon the leased premises. Lessor
may, in connection with such repairs, reasonably erect scaffolding, fences,
and similar structures, post relevant notices, and place moveable equipment
without any obligation to reduce lessee's rent for the premises during such
period, and without incurring liability to lessee for disturbance of quiet
enjoyment of the premises, or loss of occupation of the premises.
SECTION XIV
POSTING OF SIGNS BY LESSOR
Lessor reserves the right to place "For Sale" signs on the premises at
any time during the lease, or "For Lease" or "For Rent" signs on the
premises at any time within ninety days of expiration of the lease, if
lessee has not exercised its option to renew, and lessee agrees to permit
lessor to do so.
SECTION XV
POSTING OF SIGNS, AWNINGS, OR MARQUEES BY LESSEE
Lessee agrees that it will not construct or place, or permit to be
constructed or placed, signs, awnings, marquees, or other structures
projecting from the exterior of the premises without lessor's written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Lessee further agrees to remove signs, displays,
advertisements or decorations it has placed, or permitted to be placed, on
the premises, which violate any governmental ordinance, are reasonably
offensive or otherwise reasonably objectionable. If lessee fails to remove
such signs, displays, advertisements, or decorations within thirty (30)
days after receiving prior written notice from lessor to remove them,
lessor reserves the right to enter the premises and remove them, at
lessee's expense.
SECTION XVI
INDEMNIFICATION, HOLD HARMLESS AND LIABILITY INSURANCE
Lessee agrees to procure and maintain in force during the term of this
lease and any extension of this lease, at its expense, public liability
insurance adequate to protect against liability for damage claims through
public use of or arising out of accidents occurring in or around the leased
premises, in an amount no less than $1 million for each person injured, $2
million for any one accident, and $250,000 for property damage. The
insurance policies shall provide coverage for lessor's contingent liability
on such claims or losses. Proof of such insurance will be provided to
lessor upon request by lessor. Lessee agrees to obtain a written
obligation from the insurers to notify lessor in writing at least thirty
(30) days prior to cancellation or refusal to renew any policies. Lessee
agrees that, if the insurance policies are not kept in force during the
entire term of this lease and any extension of this lease, lessor may
procure the necessary insurance, pay the premium, and that premium shall be
repaid to lessor as an additional rent installment for the month following
the date on which such premiums are paid.
Lessee shall indemnify lessor against all liabilities, expenses, and
losses incurred by lessor as a result of (a) failure by lessee to perform
any covenant required to be performed by lessee hereunder; (b) any
accident, injury, or damage which shall happen in or about the leased
premises or appurtenances, or on or under the adjoining streets, sidewalks,
curbs, or vaults, or resulting from the condition of the leased premises
not in existence on the date hereof or from the maintenance or operation of
the leased premises during the term of this lease. Lessor shall indemnify
lessee against all liabilities, expenses, and losses incurred by lessee as
a result of failure by lessor to perform any covenant required to be
performed by lessor hereunder.
SECTION XVII
ASSIGNMENT OR SUBLEASE
Lessee agrees not to assign or sublease the leased premises, any part
thereof, or any right or privilege connected with the premises, or to allow
any other person, except lessee's agents and employees, to occupy the
premises or any part of the premises, without first obtaining lessor's
written consent, which consent shall not be unreasonably withheld, delayed
or conditioned. Consent by lessor shall not be a consent to a subsequent
assignment, sublease, or occupation by other persons. Lessee's
unauthorized assignment, sublease, or license to occupy shall be void, and
shall terminate the lease at lessor's option. Lessee's interest in this
lease is not assignable by operation of law, nor is any assignment of its
interest in it, without lessor's written consent.
Lessee shall have the right in the event of a merger, consolidation,
reorganization, or recapitalization, whether or not lessee survives as the
surviving corporation, to assign or transfer this lease to such surviving
corporation. Such right of assignment of transfer shall, however, be
limited to an assignee whose book value is equal to or greater than the
book value of lessee at the time of such assignment or transfer. In the
event lessee contemplates making an assignment or transfer as provided in
this section, lessee shall give thirty (30) days notice to lessor of its
intent to make such assignment or transfer and shall furnish to lessor all
pertinent information as to the book value of the proposed assignee. Upon
assignment or transfer, as provided in this section, the liability of
lessee shall terminate and lessor shall look to the assignee for
performance under this lease provided such assignee agrees in writing to be
bound by the terms and conditions of this lease as though an original
signatory to this agreement.
Except as otherwise expressly provided in this lease, lessee shall
remain fully liable on this lease and shall not be released from performing
any of the terms, covenants, and conditions of this lease unless lessor
consents.
Lessee immediately and irrevocably assigns to lessor, as security for
lessee's obligations under this lease, all rent from any subletting of all
or a part of the premises as permitted by this lease, and lessor, as
assignee and as attorney-in-fact for lessee, or a receiver for lessee
appointed on lessor's application, may collect such rent and apply it
toward lessee's obligations under this lease, except that, unless there is
a continuing default hereunder by lessee, lessee shall have the right to
collect such rent.
Lessee agrees to reimburse lessor for all expenses, including
reasonable attorneys' fees, incurred by lessor in connection with any
requested and permitted assignment or subleasing. Such sum shall be in
addition to the attorneys' fees and costs allowed under this lease.
SECTION XVIII
DEFAULT
The following shall constitute a default under this lease:
a. if lessee fails to cure a breach for payment of amounts due under
this lease within fifteen (15) days after any such payment is due;
b. if either party breaches a material term of this lease (other
than a default described in paragraph XVIII(a) above) and fails to cure
such breach within thirty (30) days after written notice of such breach is
received by the defaulting party from the non-defaulting party; provided,
however, that if such breach is capable of being cured, but not within such
30-day period, this lease may not be terminated so long as the defaulting
party commences appropriate curative action within such 30-day period and
thereafter diligently prosecutes such cure to completion as promptly as
possible;
Should lessor be in default under this lease, then lessee in addition
to, but not in limitation of any other right or remedy, may at its option,
either remedy the condition or matter referred to in said notice, and
lessor agrees to reimburse lessee for any expense reasonably incurred in
connection therewith, and if lessor fails to reimburse lessee within ten
days after being submitted a written bill for monies so expended, lessee
may deduct said sum from the next ensuing rental payment or payments or
pursue any other remedy provided at law or in equity.
Should lessee be in default under this lease, lessor shall have the
following remedies in addition to his other rights and remedies in such
event:
a. Reentry. Lessor has the right to obtain possession of the
premises as provided by law.
b. Termination. After reentry, lessor may terminate the lease on
giving thirty (30) days written notice of such termination to lessee.
Reentry only, without notice of termination, will not terminate the lease.
c. Reletting Premises. After reentering, lessor may relet the
premises or any part thereof, for any term, without terminating the lease
at such rent and on such terms as he may choose. Lessor may make repairs
to the premises.
(1) Liability of Lessee on Reletting. Lessee shall be liable to
lessor in addition to his other liability for breach of the lease for all
reasonable expenses of the reletting, and any repairs made, which lessor
may reasonably incur. In addition, lessee shall be liable to lessor for
the difference between the rent received by lessor under the reletting and
the rent installments that are due for the same period under this lease.
(2) Application of Rent on Reletting. Lessor at his option may apply
the rent received from reletting the premises as follows:
(a) To reduce lessee's indebtedness to lessor under the lease, not
including indebtedness for rent;
(b) To reasonable expenses of the reletting and repairs made;
(c ) To rent due under this lease;
(d) To payment of future rent under this lease as it becomes due.
If the new lessee does not pay a rent installment promptly to lessor,
and the rent installment has been credited in advance of payment to
lessee's indebtedness other than rent, or if rentals from the new lessee
have been otherwise applied by lessor as provided for in this lease, and
during any rent installment period are less than the rent payable for the
corresponding installment period under this lease, lessee agrees to pay
lessor the deficiency separately for each rent-installment deficiency
period, and before the end of that period.
SECTION XIX
NOTICES
Notices given pursuant to the provisions of this lease, or necessary
to carry out its provisions, shall be in writing, and delivered personally
to the person to whom the notice is to be given, or mailed postage prepaid,
addressed to such person. Lessor's address for this purpose shall be 13365
Doubletree Circle, Wellington, Florida, or such other address as he may in
writing designate to lessee. Notices to lessee may be addressed to lessee
at the leased premises.
SECTION XX
QUIET ENJOYMENT
Lessor covenants, warrants and represents that lessor has full right
and power to execute and perform this lease, and to grant the estate
demised herein; and that lessee, upon the payment of the rent herein
reserved and performance of the covenants and agreements herein contained
shall peaceably and quietly have, hold and enjoy the leased premises and
all rights, easements, covenants and privileges belonging or in any way
appertaining thereto.
SECTION XXI
BINDING EFFECT ON SUCCESSORS AND ASSIGNS
This lease and the covenants and conditions of this lease apply to and
are binding on the heirs, successors, executors, administrators, and
assigns of the parties to this lease.
SECTION XXII
TIME OF THE ESSENCE
Time is of the essence in this lease.
SECTION XXIII
EFFECT OF EMINENT DOMAIN PROCEEDINGS
If any part of the leased premises is taken by eminent domain, lessor
may, at its sole option, terminate the lease by giving written notice to
lessee within forty-five (45) days after the taking, or if by reason of any
such taking lessee's operation on the leased premises is materially
impaired, lessee shall have the option to terminate this lease, by giving
written notice to lessor within forty-five (45) days after the taking and
the rent will be adjusted as of the date of the notice.
SECTION XXIV
INSOLVENCY
The occurrence of any of the following events shall constitute a
breach of this lease by lessee and a default under this agreement: (1) the
appointment of a receiver to take possession of all or substantially all of
the assets of lessee; or (2) a general assignment by lessee for the benefit
of creditors; or (3) any action taken by lessee under any insolvency or
bankruptcy act.
SECTION XXV
COMPLIANCE WITH LAW
Lessee shall, at its sole cost and expense, comply with all laws
pertaining to lessee's use of the premises, and shall faithfully observe
all laws in the use of the premises. Lessee shall not be required to
remedy any pre-existing condition. The judgment of any court of competent
jurisdiction, or the admission of lessee in any action or proceeding
against lessee, whether the lessor is a party to it or not, that lessee has
violated any law in the use of the premises shall be conclusive of that
fact as between lessor and lessee. Without limiting the generality of the
foregoing, the duties of lessee under this provision shall include the
making of all such alterations of the premises as may be required by law by
reason of the particular manner or mode of use of the premises by lessee,
or occasioned by reason of the failure of lessee to maintain or repair the
premises as required under this lease.
XXVI
LESSEE'S RIGHT OF FIRST REFUSAL
If lessor has the opportunity to sell the leased premises, he shall
give lessee thirty (30) days' prior written notice of such proposed sale
and the terms thereof. Lessee shall have the first option to purchase the
leased premises within such 30-day period at the same price and on the same
terms of any such proposal. Should lessee decide not to purchase the
leased premises pursuant to the option set forth hereinabove, lessee shall
have no less than ninety (90) days from the date of the expiration of said
30-day period to relocate to another property.
XXVII
EFFECT OF EXERCISE OF OR FAILURE
TO EXERCISE RIGHTS BY LESSOR
Neither the exercise of nor failure to exercise any right, option, or
privilege under this lease by lessor shall exclude lessor from exercising
any and all other rights, options, or privileges under this lease, nor
shall such exercise or nonexercise relieve lessee from lessee's obligation
to perform each and every covenant and condition to be performed by lessee
under this lease, or from damages or other remedy for failure to perform or
meet the obligations of this lease.
XXVIII
WAIVER
The waiver by lessor of any breach of any term, covenant, or condition
contained in this lease shall not be deemed to be a waiver of such term,
covenant, or condition, or of any subsequent breach of such term, covenant,
or condition, or of any other term, covenant, or condition in this lease.
The acceptance of rent under this lease by lessor shall not be deemed to be
a waiver of any preceding breach by lessee of any term, covenant, or
condition of this lease other than lessee's breach in failing to pay the
particular rent so accepted regardless of lessor's knowledge of such
additional preceding breach at the time of the acceptance of such rent.
SECTION XXIX
REPRESENTATIONS
This lease represents the entire agreement of the parties with respect
to the parties' rights and duties under this lease. Lessee acknowledges
that neither lessor nor any agent, servant, or representative of lessor, or
any person purporting to act on lessor's behalf, has made any
representation, warranty, or statement regarding any matter relating to
this lease that is not
expressly covered in this lease. With respect to such matters, lessee is
relying upon lessee's own independent investigation and sources of
information.
SECTION XXX
MEMORANDUM OF LEASE
Each party shall cooperate in executing any and all other documents
required to protect a party's rights hereunder or permit lessee's permitted
use including, without limitation, applications for permits or government
approvals, zoning applications, a Memorandum of Lease or easement
agreements. The aforementioned Memorandum of Lease in the form of Exhibit
A attached hereto shall be executed by both parties and recorded.
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose herein expressed, the day and year above
written.
Signed, sealed and delivered
in the presence of:
LESSOR:
/S/ DAVID BUMGARDNER
Name: DAVID BUMGARDNER
Name:
LESSEE:
FIRST CHOICE AUTO FINANCE,
INC., a Florida corporation
By: /S/ J. NEAL HUTCHINSON, JR.
Name Name: J. NEAL HUTCHINSON, JR.
Title: VICE PRESIDENT
Name:
STATE OF FLORIDA
COUNTY OF______________
BEFORE ME, the undersigned authority, personally appeared DAVID
BUMGARDNER to me known to be the person who executed this document the
foregoing lease on this day of ____________, 1997. IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the
day of ____________, 1997.
NOTARY PUBLIC at Large
[Notary Seal] State of Florida
My Commission Expires:
2
Exhibit 10.23
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into on the ____ day of February, 1997, among TWO TWO FIVE NORTH MILITARY
CORP., a Florida corporation ("225"), PALM BEACH FINANCE AND MORTGAGE
COMPANY, a Florida corporation ("PBF"), and FIRST CHOICE AUTO FINANCE,
INC., a Florida corporation ("FCAF").
W I T N E S S E T H:
THIS AGREEMENT is made and entered into under the following
circumstances:
A. FCAF is acquiring the assets of 225 and PBF;
B. 1st United Bank has extended credit to 225 and PBF pursuant to
that certain Business Loan Agreement dated May 8, 1996, as to which David
E. Bumgardner ("DEB") and Beatrice E. Bumgardner ("BEB") are guarantors
(225, PBF, DEB and BEB are referred to herein as the "Indemnified Parties"
and the obligations of 225, PBF, DEB and BEB under such Business Loan
Agreement are referred to herein as the "Obligations").
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the parties hereto covenant and agree as
follows:
1. Indemnification. FCAF shall indemnify and hold harmless the
Indemnified Parties from and against the Obligations, including payments,
liabilities, costs (including attorneys fees and costs), and penalties
thereunder, however arising.
2. Indemnification Procedure.
(a) Claim for Indemnity. If a claim shall arise for which any
Indemnified Party shall be entitled to indemnification hereunder, the
Indemnified Party shall notify FCAF in writing on receipt of notice of, or
an Indemnified Party's obtaining actual knowledge of, such claim. Such
notice shall specify all facts known to the Indemnified Party giving rise
to such indemnity rights.
(b) Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by
any third party against an Indemnified Party, FCAF shall be entitled
(without prejudice to the Indemnified Party's right to participate at its
own expense through counsel of its own choosing), at its expense and
through a single counsel of its own choosing, to defend or prosecute such
claim in the name of FCAF, or if necessary, in the name of the Indemnified
Party. In any event, the Indemnified Party shall give FCAF advance written
notice of any proposed compromise or settlement of any such claim. If the
remedy sought in any such action or demand is solely money damages, FCAF
shall have fifteen (15) days after receipt of such notice of settlement to
object to the proposed compromise or settlement, and if it does so object,
FCAF shall be required to undertake, conduct and control, through counsel
of its own choosing and at its sole expense, the settlement or defense
thereof, and the Indemnified Party shall cooperate with the Indemnifying
Party in connection therewith.
3. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and delivered to the person to
whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as
registered or certified item with return receipt requested, (iii) delivered
by delivery service, or (iv) sent by facsimile, telex or telecopy. Notices
delivered by mail shall be deemed to be given when deposited in a post
office or other depository under the care or custody of the United States
Postal Service, enclosed in a wrapper, addressed properly with proper
postage affixed or when received at the address set forth herein if
delivered or sent by facsimile. All notices shall be addressed as follows:
If to an Indemnified Party: David E. Bumgardner
13365 Doubletree Circle
Wellington, Florida
If to FCAF: First Choice Auto Finance, Inc.
5200 S. Washington Avenue
Titusville, Florida 32780
or to such other address or addresses as the party addressed may from time
to time designate to the others in writing in accordance with this
paragraph.
4. Counterparts. This Agreement may be executed in one or more
counterparts by the parties by the parties hereto, and all such
counterparts together shall constitute one and the same agreement.
5. Successors, etc. This Agreement is for the benefit of the
parties hereto, and shall be binding upon them, together with their
respective heirs, executors, administrators, successors, and assigns. No
right or obligation created hereunder shall be assignable or delegable by
any party hereto without the prior written consent of every other party
hereto.
6. Governing Law; Jurisdiction. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the State of
Florida, without giving effect to the principles of comity or conflicts of
laws thereof. Each party hereto agrees to submit to the personal
jurisdiction and venue of the state and federal courts located in Brevard
County, Florida, for a resolution of all disputes between the parties
arising in connection with this Agreement, and hereby waives the claim or
defense therein that such courts constitute an inconvenient forum.
7. Costs of Enforcement. In the event a party initiates legal
action (including both trial and appellate proceedings) to enforce his or
its rights hereunder, the prevailing party in such action shall recover
from the non-prevailing party in such action his or its reasonable
litigation expenses (including, but not limited to reasonable attorneys'
fees and court costs) of all such proceedings.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
FCAF:
FIRST CHOICE AUTO FINANCE, INC.
By: /S/ J. Neal Hutchinson, Jr.
Title: Vice President
225:
TWO TWO FIVE NORTH MILITARY
CORP.
By: David Bumgardner
Title: President
PBF:
PALM BEACH FINANCE AND
MORTGAGE COMPANY
By:David Bumgardner
Title:President
