EXHIBIT 10.73
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is entered into among
Smart Choice Automotive Group, Inc., First Choice Auto Finance, Inc., First
Choice Stuart 2, Inc., Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx, F. Xxxxx
Xxxxxxxx, Xxxxxxxx Xxxxxxxx P.A. and Xxxx X. Xxxxxxxx:
RECITALS
1. First Choice Auto Finance, Inc. entered into an Asset Purchase Agreement
on or about December 19, 1996, for certain assets of Xxxx Xxxxxxx Enterprises,
Inc. used in its operation of a retail automobile dealership for Volvo
automobiles and other consumer vehicles.
2. Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx and
First Choice Auto Finance, Inc. entered into a Management Agreement on March 27,
1997.
3. First Choice Auto Finance, Inc. assigned some of the rights and
obligations of the December 19, 1996 Asset Purchase Agreement to First Choice
Stuart 2, Inc.
4. Smart Choice Automotive Group, Inc. is the parent company of First
Choice Auto Finance, Inc. and First Choice Stuart 2, Inc.
5. Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx are the shareholders of Xxxx Xxxxxxx
Enterprises, Inc.
6. Xxxx X. Xxxxxxxx and his law firm, Xxxxxxxx Xxxxxxxx, P.A., were the
attorneys for Xxxx Xxxxxxx Enterprises and its' shareholders in regard to the
transaction contemplated by the December 19, 1996 Asset Purchase Agreement. Xxxx
X. Xxxxxxxx and Xxxxxxxx Xxxxxxxx provided limited assistance to Smart Choice
Automotive Group, Inc, First Choice Auto Finance, Inc. and First Choice Stuart
2, Inc. in preparing dealer applications with the full knowledge and consent of
all parties involved.
7. The transaction contemplated by the December 19, 1996 Asset Purchase
Agreement closed on August 21, 1997.
8. Amongst other consideration, Xxxx Xxxxxxx Enterprises, Inc. and/or Xxxx
Xxxxxxx and/or F. Xxxxx Xxxxxxxx received 18,362 shares of Smart Choice
Automotive Group, Inc. stock and a Promissory Note from First Choice Auto
Finance, Inc. in the principal amount of $900,000 due and payable on 16 February
1998.
9. Smart Choice Automotive Group, Inc., First Choice Auto Finance, Inc. and
First Choice Stuart 2, Inc. have raised defenses to the Promissory Note
described in paragraph 8.
10. Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx deny
that any defense to the Promissory Note described in paragraph 8 exists.
11. Smart Choice Automotive Group, Inc., First Choice Auto Finance, Inc.
and First Choice Stuart 2, Inc. have alleged that a confidential attorney/client
relationship existed with Xxxx X. Xxxxxxxx and Xxxxxxxx Xxxxxxxx P.A. and was
breached, causing undisclosed damages.
12. Xxxx X. Xxxxxxxx and Xxxxxxxx Xxxxxxxx P.A. deny that a confidential
attorney/client relationship existed or was breached with Smart Choice
Automotive Group, Inc., First Choice Auto Finance, Inc. and First Choice Stuart
2, Inc. and maintain that they are owed fees for services rendered.
13. The parties desire to resolve any and all claims that may exist between
them, including but not limited to those arising out of the transaction
contemplated by the December 19, 1996 Asset Purchase Agreement, the March 27,
1997 Management Agreement, and the alleged relationship between Xxxx X. Xxxxxxxx
and Xxxxxxxx Xxxxxxxx P.A. and Smart Choice Automotive Group, Inc., First Choice
Auto Finance, Inc. and First Choice Stuart 2, Inc..
AGREEMENT
In consideration of the mutual promises and releases set forth below and
other valuable consideration, the sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx will
return the $900,000 Promissory Note executed by First Choice Auto Finance, Inc.
marked "Canceled" in exchange for three new Promissory Notes. These three
Promissory Notes will be as follows:
a. Note 1. First Choice Auto Finance, Inc. will promise to pay to Xxxx
Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx the
principal sum of $300,000, together with interest at 6% on or before
February 16, 1998;
b. Note 2. First Choice Auto Finance, Inc. will promise to pay to Xxxx
Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx the
principal sum of $200,000, together with interest at 6% on or before
May 16, 1998;
c. Note 3. First Choice Auto Finance, Inc. will promise to pay to Xxxx
Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx the
principal sum of $100,000, together with interest at 6% on or before
September 16, 1998.
Smart Choice Automotive Group, Inc., First Choice Auto Finance, Inc., and
First Choice Stuart 2, Inc. acknowledge by execution of this Release that no
defenses will exist as to payment of these Promissory Notes. Further, should
First Choice Auto Finance, Inc. fail to timely satisfy any Promissory Note when
due, all other outstanding Promissory Notes will be accelerated and become due.
2. Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx will
cause to be returned to Smart Choice Automotive Group, Inc. on February 16,
1998, upon payment of the first Promissory Note referenced hereinabove the
18,362 shares of stock tendered at closing and bearing Certificate Number
SC0247.
3. First Choice Stuart 2, Inc. and First Choice Auto Finance, Inc. will
cooperate with Xxxxxxx-Xxxxxxx Group, Inc. in its efforts to sell the property
described as 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000. Said actions
will include, but will not be limited, to:
a. Providing Xxxxxxxx-Xxxxxxx Group, Inc. and its Buyer with a
Certificate of Insurance issued to First Choice Stuart 2, Inc., naming
Buyer as an additional insured and providing coverage as set forth in
the current Lease of the property with First Choice Stuart 2, Inc. by
February 4, 1998;
b. Providing Xxxxxxxx-Xxxxxxx Group, Inc. with an estoppel certificate
from First Choice Stuart 2, Inc. setting forth the current status of
the Lease by February 4, 1998 in a form approved by counsel for
Xxxxxxxx-Xxxxxxx Group, Inc.;
c. Providing Xxxxxxxx-Xxxxxxx Group, Inc. with a letter advising that
First Choice Stuart 2, Inc. will not be exercising its option to
purchase the lease premises by February 4, 1998.
4. Smart Choice Automotive Group, Inc. and/or First Choice Auto Finance,
Inc. and/or First Choice Stuart 2, Inc. will immediately bring the Xxxxx
Financial Corporation lease payments current and will assume said lease,
removing Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx from
all obligations under said lease.
5. Xxxx X. Xxxxxxxx and the law firm of Xxxxxxxx Xxxxxxxx P.A. will waive
right to all outstanding invoices directed to Smart Choice Automotive Group,
Inc. in exchange for the releases set forth in this Agreement.
RELEASE OF LIABILITY CLAIMS
6. For and in consideration, the receipt and sufficiency of which is hereby
acknowledged, Smart Choice Automotive Group, Inc., First Choice Auto Finance,
Inc., First Choice Stuart 2, Inc., their subsidiaries, parent companies, holding
companies, and their respective officers, directors, employees, assigns, heirs
and representatives, do hereby fully, finally and completely release Xxxx
Xxxxxxx Enterprises, Inc., Xxxxxxxx-Xxxxxxx Group, Inc., Xxxx Xxxxxxx, F. Xxxxx
Xxxxxxxx, and their officers, directors, employees, assigns, heirs and
representatives from any and all claims, damages and causes of action, whether
known or unknown, whether accrued or not; it being the purpose hereof to forever
release and lay to rest all rights, claims and benefits which they may have or
have had against said parties from the beginning of time to this date without
limitation or qualification.
7. For and in consideration, the receipt and sufficiency of which is hereby
acknowledged, Smart Choice Automotive Group, Inc., First Choice Auto Finance,
Inc., First Choice Stuart 2, Inc., their subsidiaries, parent companies, holding
companies, and their respective officers, directors, employees, assigns, heirs
and representatives, do hereby fully, finally and completely release Xxxxxxxx
Xxxxxxxx, P.A. and Xxxx X. Xxxxxxxx, and their officers, directors, employees,
assigns, heirs and representatives from any and all claims, conflict, damages
and causes of action, whether known or unknown, whether accrued or not; it being
the purpose hereof to forever release and lay to rest all rights, claims and
benefits which they may have or have had against said parties from the beginning
of time to this date without limitation or qualification. Smart Choice
Automotive Group, Inc., First Choice Auto Finance, Inc. and First Choice Stuart
2, Inc. specifically warrant that they have reviewed this Release with their
attorney, Xxxxxxx X. Xxxxxx.
For and in consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxx Xxxxxxx Enterprises, Inc., Xxxx Xxxxxxx, F. Xxxxx Xxxxxxxx,
Xxxxxxxx Xxxxxxxx, P.A., Xxxx X. Xxxxxxxx, and their respective officers,
directors, employees, assigns, heirs and representatives, do hereby fully,
finally and completely release Smart Choice Automotive Group, Inc., First Choice
Auto Finance, Inc., First Choice Stuart 2, Inc., their subsidiaries, parent
companies, holding companies, and their officers, directors, employees, assigns,
heirs and representatives from any and all claims, damages and causes of action,
whether known or unknown, whether accrued or not; it being the purpose hereof to
forever release and lay to rest all rights, claims and benefits which they may
have or have had against said parties from the beginning of time to this date
without limitation. Notwithstanding the foregoing, nothing in this Agreement is
meant to release Smart Choice Automotive Group, Inc., First Choice Auto Finance,
Inc. and First Choice Stuart 2, Inc. from the obligations pursuant to the Lease
referenced in paragraph 3 of the Agreement section and the lease guaranty and
obligations under the Xxxxx lease and the Promissory Notes executed with this
Agreement and referenced in paragraph 1 of the Agreement section.
COMPLETE AGREEMENT/SUBSEQUENT MODIFICATIONS
8. This Agreement constitutes the complete agreement of the parties. No
verbal representations made prior to or contemporaneously with this agreement
are enforceable against any party hereto unless such representations are
included herein. The terms of this agreement may be altered or amended, in whole
or in part, only upon written consent of all the parties to this agreement. No
oral agreement may modify any term of this agreement.
SEVERABILITY
9. In the event that any portion of this agreement is found to be
unenforceable for any reason whatsoever, the unenforceable provision shall be
considered to be severable, and the remainder of this agreement shall continue
in full force and effect.
ATTORNEYS' FEES
10. The parties shall each bear their own attorneys' fees and costs arising
from this agreement and the matters referred to herein. Any party successfully
bringing an action to enforce this Agreement shall be entitled to its reasonable
attorneys' fees and cost.
REPRESENTATION OF UNDERSTANDING OF AGREEMENT
11. In entering into this Agreement, the parties are represented by an
attorney(s) of his/its own choice. The parties represent and warrant that he/it
has read all the terms of this Agreement and that he/it fully understands and
voluntarily accepts these terms.
EXECUTION
12. This Agreement may be executed in counterparts with the same force and
effect as if all signatures appeared on one documents.
WAIVER
13. No waiver of any of the terms of this Agreement shall constitute a
waiver of any other terms, whether or not similar, nor shall any waiver be a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver. Any party may waiver any provisions of this Agreement
intended for its benefit, but such waiver shall in no way excuse the other party
from the performance of any of its other obligations under this Agreement.
GOVERNING LAW
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida.
Dated this 30th day of January, 1998.
Smart Choice Automotive Group, Inc.
By: /s/ Xxxx X. Xxxxx 1-30-98
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President
First Choice Auto Finance, Inc.
By: /s/ Xxxx X. Xxxxx 1-30-98
-------------------------------
President
First Choice Stuart 2, Inc.
By: /s/ Xxxx X. Xxxxx 1-30-98
-------------------------------
President
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Counsel for
Smart Choice Automotive Group, Inc.,
First Choice Auto Finance, Inc., and
First Choice Stuart 2, Inc.
Xxxx Xxxxxxx Enterprises, Inc.
By: /s/ Xxxx Xxxxxxx
--------------------
President
/s/ Xxxx Xxxxxxx
----------------
Xxxx Xxxxxxx
/s/ F. Xxxxx Xxxxxxxx
---------------------
F. Xxxxx Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx, Counsel for
Xxxx Xxxxxxx Enterprises, Inc.,
Xxxx Xxxxxxx and F. Xxxxx Xxxxxxxx
XXXXXXXX XXXXXXXX, P.A.
By:
President
/s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx
