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: August 21, 1997
(Date of earliest event reported)
--------------------------------
SMART CHOICE AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)
--------------------------------
Florida 1-14082 59-1469577
(State or other (Commission File Number) (IRS Employer Identification No.)
jurisdiction of
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)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On August 21, 1997, Smart Choice Automotive Group, Inc. (the "Registrant")
purchased the assets of Jack Winters Enterprises, Inc. These assets consisted of
a retail automobile dealership located in Stuart, Florida for Volvo automobiles
and other consumer vehicles. The business is being operated by First Choice
Stuart 2, a 100% owned subsidiary of the Registrant. As consideration for the
assets acquired, the Registrant (i) paid the seller cash of $442,500; (ii)
issued the seller 18,322 shares of the Registrant's Common Stock; (iii) executed
two promissory notes, one in the amount of $900,000 payable on or before March
19, 1998 to Jack Winters Enterprises, Inc. d/b/a Motorcars of Stuart and Jack
Winters, an individual, and F. Craig Clements, an individual, which accrues
interest at the rate of ten percent per annum; and, a second note in the amount
of $300,000 payable on or before September 27, 1997 to the same payees, which
accrues interest at the rate of nine percent per annum; and, (iv) agreed to
issue additional shares if certain events occurred. In addition, the Registrant
assumed certain trade payables and other ordinary business indebtedness of the
Sellers. The amount of consideration paid by the Registrant for the assets of
the Sellers was determined through arms' length negotiations between
representatives of the Registrant and the Sellers.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of the acquired business will be provided within
the next sixty (60) days as an amendment to this filing.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated balance sheet and
income statement of the Registrant, will be provided within the
next sixty (60) days as an amendment to this filing.
(c) Exhibit Description
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10.1 $900,000 Promissory Note dated August 20,
1997 by First Choice Auto Finance, Inc.
("First Choice").
10.2 $300,000 Promissory Note dated August 20,
1997 by First Choice Auto Finance, Inc.
("First Choice").
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
SMART CHOICE AUTOMOTIVE GROUP, INC.
(Registrant)
Date: September 5, 1997 By: /s/ Gary R. Smith
Gary R. Smith
President and Chief Executive Officer
PROMISSORY NOTE
$900,000.00 August 20,1997
FOR VALUE RECEIVED, the undersigned, First Choice Auto Finance, Inc., a
Florida corporation (the "Maker"), hereby promises to pay to Jack Winters
Enterprises, Inc. d/b/a Motorcars of Stuart and Jack Winters, an individual, and
F. Craig Clements, an individual (the "Payees"), the principal sum of Nine
Hundred Thousand and 00/100 Dollars ($900,000.00) together with interest on the
outstanding balance hereunder accrued from the date hereof at the rate of ten
percent (10%) per annum. Payment of principal and interest shall be made on or
before one hundred eighty (180) days after the date hereof in lawful money of
the United States of America.
1. Segment of Total Closing. This Promissory Note is made in
conjunction with and as a part of payment pursuant to the "Asset Purchase
Agreement" dated December 19, 1996 and the "Addendum to Asset Purchase
Agreement" dated March 27, 1997 to which documents the parties hereto are
parties.
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) 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
(c) Any liquidation, dissolution or winding up of the Maker or its
business.
4. Remedies on Default. If any Event or 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 3(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.
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 Payees 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.
9. Collection Costs. In the event that it is necessary for either party to
retain the services of an attorney pursuant to any provisions of this Promissory
Note, the non-prevailing party shall pay to the prevailing party all costs and
expenses incurred by the prevailing party including reasonable attorney fees and
expenses.
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ Gary R. Smith
PROMISSORY NOTE
$300,000.00 August 20,1997
FOR VALUE RECEIVED, the undersigned, First Choice Auto Finance, Inc., a
Florida corporation (the "Maker"), hereby promises to pay to Jack Winters
Enterprises, Inc. d/b/a Motorcars of Stuart and Jack Winters, an individual, and
F. Craig Clements, an individual (the "Payees"), the principal sum of Three
Hundred Thousand and 00/100 Dollars ($300,000.00) together with interest on the
outstanding balance hereunder accrued from the date hereof at the rate of nine
percent (9%) per annum. Payment of principal and interest shall be made on or
before September 27, 1997 in lawful money of the United States of America.
1. Segment of Total Closing. This Promissory Note is made in conjunction
with and as a part of payment pursuant to the "Asset Purchase Agreement" dated
December 19, 1996 and the "Addendum to Asset Purchase Agreement" dated March 27,
1997 to which documents the parties hereto are parties.
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) 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 the 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
(c) Any liquidation, dissolution or winding up of the Maker or its
business.
4. Remedies on Default. If any Event or 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 3(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.
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 Payees 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.
9. Collection Costs. In the event that it is necessary for either party to
retain the services of an attorney pursuant to any provisions of this Promissory
Note, the non-prevailing party shall pay to the prevailing party all costs and
expenses incurred by the prevailing party including reasonable attorney fees and
expenses.
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ Gary R. Smith
