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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
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 ▇▇▇▇▇▇▇▇▇ & 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 ▇▇▇▇▇▇▇▇▇ & 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 ▇▇▇▇ 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 ▇-▇, ▇-▇ 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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(ii) If to MMM:
Two Two Five North Military Corp.
d/b/a Miracle Mile Motors
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(iii) If to the Stockholder:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(iv) If to the Buyer:
c/o Smart Choice Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
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. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Vice President
PALM BEACH FINANCE AND MORTGAGE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
TWO TWO FIVE NORTH MILITARY CORP.
d/b/a Miracle Mile Motors
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
(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. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Vice President
February 14, 1997
Palm Beach Finance and
Mortgage Company
Two Two Five North
Military Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
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"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (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 ▇▇▇▇▇▇ Industries, Inc. ("▇▇▇▇▇▇").
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. ▇▇▇▇▇▇ shall propose to its Board of Directors that the
Stockholder be elected to the Board of Directors of ▇▇▇▇▇▇. ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ 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. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Accepted and agreed to as of
the date first above written.
PALM BEACH FINANCE AND
MORTGAGE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
TWO TWO FIVE NORTH MILITARY CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇