EXHIBIT 10.21
FOURTH AMENDED AND RESTATED SCHEDULE TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Borrower: FLORIDA FINANCE GROUP INC.
LIBERTY FINANCE COMPANY
Address: 0000 X. XXXXXXXXXX
XXXXXXXXXX, XXXXXXX 00000-0000
Borrower: SMART CHOICE RECEIVABLES HOLDING COMPANY
P. O. Xxx 00000
Xxxxxxxxx, XX 00000
Date: MARCH 27, 1998
This Fourth Amended and Restated Schedule ("Fourth Amended Schedule") is
executed in conjunction with a certain Amended and Restated Loan and Security
Agreement ("Agreement") of February 4, 1997, by and between FINOVA Capital
Corporation, as Lender, and the above Borrowers, as Borrower. This Fourth
Amended Schedule is an amendment and restatement of the Schedule to Amended and
Restated Loan and Security Agreement, dated of even date with the Agreement. and
that certain First Amended and Restated Schedule to Amended and Restated Loan
and Security Agreement, dated April 22, 1997, that certain Second Amended and
Restated Schedule to Amended and Restated Loan and Security Agreement, dated May
7, 1997 and that certain Third Amended and Restated Schedule to Amended and
Restated Loan and Security Agreement, dated December 30, 1997. The terms and
provisions of this Fourth Amended Schedule shall supersede all prior schedules.
All references to Section numbers herein refer to Sections in the Agreement.
================================================================================
1.A. BORROWERS (SECTION 1).
All references to "Borrower" in any and all Loan Documents are hereby
modified to include the following Borrower, as co-borrowers, jointly and
severally:
Florida Finance Group, Inc. - "FFG" or "Lead Borrower"
Liberty Finance Company - "Liberty"
Smart Choice Receivables Holding Company "Smart Choice Receivables"
1.13.A. MAXIMUM AMOUNT OF AN ELIGIBLE RECEIVABLE (SECTION 1.13).
The term "Maximum Amount of an Eligible Receivable" shall mean the sum of
Twenty Thousand Dollars ($20,000.00) remaining due thereon at any date of
determination.
1.13.B. MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE (SECTION 1.13).
The "Maximum Term of an Eligible Receivable" shall be Forty-Eight (48)
months remaining until the due date of such Eligible Receivable at any date
of determination.
1.13.C. AGING PROCEDURES AND ELIGIBILITY TEST (SECTION 1.13.)
AGING PROCEDURES FOR A CONTRACTUAL AGING:
1. No payment missed or due = Current.
2. 1 to 30 days past due = "30 day Account".
3. 31 to 60 days past due = "60 day Account".
4. 61 or more days past due = "60 + day Account"
ELIGIBILITY TEST:
The term "Eligibility Test" shall mean the test to determine the
eligibility of a Receivable for the purposes of Section 1.13 hereof, that
test, being as follows: no payment due on said Receivable remains unpaid
more than sixty (60) days from the specific date on which such payment was
due pursuant to the terms of said Receivable.
1.15 GUARANTOR (WHETHER ONE OR MORE) (SECTION 1.15)
Smart Choice Holdings, Inc.
Smart Choice Automotive Group, Inc.
(formerly known as Xxxxxx Industries, Inc.)
1.22 MODIFICATION TO THE DEFINITION OF "LEVERAGE RATIO" (SECTION 1.22)
Section 1.22 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
"1.22 LEVERAGE RATIO. The term "Leverage Ratio" shall mean, at any
date of determination, total consolidated liabilities of Smart Choice
Automotive Group, Inc. ("SMAG"), including the outstanding balance of
the Indebtedness, less the outstanding balance due pursuant to all
subordinated debt which has been subordinated to all the rights of
Lender with respect to the Guaranty Agreement of SMAG in favor of
Lender, in a form and substance acceptable to Lender ("SMAG
Subordinated Debt"), divided by the sum of the amount of SMAG's
consolidated tangible net worth, as the term "tangible net worth" is
defined in the Agreement with respect to Borrower, plus the
outstanding balance due pursuant to all SMAG Subordinated Debt."
2.1.A. AMOUNT OF REVOLVING CREDIT LINE (SECTION 2.1):
Thirty Five Million Dollars ($35,000,000.00)
(i) If the date of determination is on or before April 30, 1998, then the
Amount of Revolving Credit Line shall be Forty-Two Million Five
Hundred Thousand Dollars ($42,500,000.00). Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) of the $42,500,000.00 represents a
temporary overline granted to Borrower that expires on April 30, 1998.
(ii) If the date of determination is after April 30, 1998, then the Amount
of Revolving Credit Line shall be Thirty-Five Million Dollars
($35,000,000.00).
2.1.B. AVAILABILITY ON ELIGIBLE RECEIVABLES (SECTION 2.1):
The "Availability on Eligible Receivables" shall be an amount equal to,
with respect to all Eligible Receivables, on the date of determination as
follows:
(i) if the date of determination is on or before the earlier of (a)
December 31, 1997, or (b) the effective date of a public offering for
the sale of securities by Smart Choice Automotive Group, Inc. or any
subsidiary thereof, then with respect to each Eligible Receivable
sixty percent (60%) of the aggregate unmatured and unpaid amount due
to Borrower from the Account Debtor named thereon, including all
unearned finance charges, time price differentials, insurance fees,
discounts, holdbacks and other fees and charges pursuant to the
Eligible Receivables; or
(ii) if the date of determination is after the earlier of (a) December 31,
1997, or (b) the effective date of a public offering for the sale of
securities by Smart Choice Automotive Group, Inc. or any subsidiary
thereof, then with respect to each Eligible Receivable fifty-five
percent (55%) of the aggregate unmatured and unpaid amount due to
Borrower from the Account Debtor named thereon, including all unearned
finance charges, time price differentials, insurance fees, discounts,
holdbacks and other fees and charges pursuant to the Eligible
Receivables
Notwithstanding any provision contained in the Loan Documents to the
contrary, if for the twelve (12) calendar month period immediately prior to
any date of determination, the Collateral Recovery Rate is less than
seventy percent (70%), or if on any date of determination, the Collateral
Performance Percentage is greater than ten percent (10.0%), then in either
event, Lender, in its sole and absolute discretion, may modify the
Availability on Eligible advance percentage set forth above.
2.2. STATED INTEREST RATE (SECTION 2.2).
The lesser of (i) the Governing Rate plus three percent (3.00%) per annum;
or (ii) the Maximum Rate.
2.3. MATURITY DATE (SECTION 2.3.C).
The primary term of this Agreement shall expire on December 31, 1999. If
Borrower desires to extend the primary term or any term thereafter of this
Agreement, Borrower shall give Lender notice of its intent to extend the
term no earlier than one hundred and eighty (180) days and no later than
one hundred and fifty (150) days prior to any expiration date of this
Agreement. Upon the receipt by Lender of Borrower's notice to extend the
term of this Agreement, if Lender desires to renew and extend the term of
this Agreement, Lender shall give Borrower notice of Lender's intent to
extend the term of this Agreement, within sixty (60) days of Lender's
receipt of Borrower's notice to extend. If Lender does not give Borrower
notice of Lender's intent to extend the term of this Agreement within the
sixty (60) days period, then it shall be deemed that Lender does not intend
to renew and extend the term of this Agreement. Notwithstanding the
foregoing, the Borrower's obligation pursuant to this Agreement shall
remain in full force and effect until the Indebtedness due and owing to
Lender has been paid in full.
2.6. LIQUIDATED DAMAGES (SECTION 2.6).
The amount of "Liquidated Damages" shall be as follows:
(i) if on or prior to December 31, 1997, Borrower pays the balance of the
Indebtedness in full and Borrower requests Lender to terminate
Lender's security interest in the Collateral, the amount of
"Liquidated Damages" shall be an amount equal to three percent (3%) of
the Amount of Revolving Credit Line;
(ii) if on or prior to December 31, 1998, but on or after January 1, 1998,
Borrower pays the balance of the Indebtedness in full and Borrower
requests Lender to terminate Lender's security interest in the
Collateral, the amount of "Liquidated Damages" shall be an amount
equal to two percent (2%) of the Amount of Revolving Credit Line;
(iii)if prior to December 31, 1999, but on or after January 1, 1999,
Borrower pays the balance of the Indebtedness in full and Borrower
requests Lender to terminate Lender's security interest in the
Collateral, the amount of "Liquidated Damages" shall be an amount
equal to one percent (1%) of the Amount of Revolving Credit Line.
2.11. FACILITY FEE (SECTION 2.11).
A Facility Fee shall not be due for any calender month ending on or after
April 30, 1997.
2.12 CO-BORROWER PROVISIONS (SECTIONS 2.12, 2.13, AND 2.14)
The following Sections 2.12, 2.13 and 2.14 are hereby added to the
Agreement:
2.12 APPLICATION OF PAYMENTS. All payments and collections shall be deemed
to be comprised of a pro rata remittance or payment made by each Borrower,
based upon the proportion that the Eligible Receivables of each Borrower
bears to the aggregate of all Eligible Receivables of the Borrowers, as of
the date on which such remittance or payment is received by Lender. In the
event such remittance or payment shall be made by the Lead Borrower, acting
as agent or trustee for the other Borrowers, each Borrower shall be deemed
to have made their proportionate amount of such remittance or payment to
Lender by and through such agent or trustee.
2.13. ADVANCES TO LEAD BORROWER. Borrower does hereby irrevocably agree
that in the event Lender makes advances to Lead Borrower, as agent or
trustee for each of Borrower, as contemplated in Section 2.14, each such
advance shall be deemed to be made to each Borrower based upon a proportion
that each Borrower's Eligible Receivables bear to the aggregate of all
Eligible Receivables of Borrower, notwithstanding any subsequent
disbursement of said advance by the Lead Borrower, acting as agent or
trustee for the Borrowers. In the event that the actual advances, direct or
indirect, received by Lead Borrower or any other Borrower or the balance
due to Lender as shown in the records of any Borrower shall be
disproportionate when compared to the proportion of the Eligible
Receivables of each Borrower, whether by way of subsequent disbursements by
Lead Borrower, acting as agent or trustee, by way of Lender electing to
make advances to each Borrower, as contemplated in Section 2.14 or
otherwise, such disproportionalities shall be deemed to have occurred by
virtue of loans made between and among Borrowers.
2.14 APPOINTMENT OF AGENT. Lender agrees that, in the sole discretion of
Lender, Borrower may, by written notice to Lender, designate a Lead
Borrower to receive advances from Lender, make payments to Lender,
communicate with Lender and generally represent the interests of the
Borrowers with respect to the subject matter of this Agreement;
notwithstanding the foregoing, Lender may, at its sole discretion and upon
notice to each of the Borrowers, make advances directly to each of the
Borrowers, require that payments due hereunder be made to Lender by each of
the Borrowers, require each of the Borrowers to communicate directly with
Lender, for its own account, and generally deal independently and
separately with each of the Borrowers. Until so notified by Lender, each of
the Borrowers hereby agree that any and all funds advanced by Lender
pursuant to the terms of this Agreement, shall be advanced to the Lead
Borrower and may be deposited or transferred into the general corporate
account of Lead Borrower, as agent and/or trustee for Borrowers. Lead
Borrower hereby agrees to keep detailed and accurate records of all such
disbursements made to any other Borrowers. Lead Borrower hereby agrees to
keep detailed and accurate records of all loans and dealings between or
among Lead Borrower and the other Borrowers. Borrowers agree to furnish
copies of such records to Lender upon request. Each Borrower, other than
the Lead Borrower hereby irrevocably makes, constitutes, designates and
appoints Lead Borrower as its agent and/or trustee with full power to
receive all notices, request all Advances hereunder and to deal generally
with Lender as agent and/or trustee for the Borrowers and Lead Borrower is
hereby granted full power and authority to bind the Borrowers in respect of
any term, condition, covenant or undertaking embraced in this Agreement.
Lender may, without liability or responsibility to the Borrowers rely upon
the instructions or other communications of Lead Borrower on behalf of each
of the Borrowers in connection with any notifications, requests or
communications required or permitted to be given hereunder with the same
force and effect as if actually given by each Borrower; each Borrower
hereby agrees to indemnify and hold Lender harmless from and against any
liability, claim, suit, action, penalty, fine or damage arising out of or
incurred in connection with Lender's reliance upon communications from Lead
Borrower on behalf of the Borrowers. It is specifically understood and
agreed that any Advance made hereunder by Lender to Lead Borrower shall be
considered and treated as an Advance to the Borrowers and each Borrower
shall be jointly and severally liable therefor.
3.2. BUSINESS LOCATIONS OF BORROWER (SECTIONS 3.2, 3.6 and 5.1.N.).
All locations are as set forth on the attach List of Locations
3.16 CROSS COLLATERALIZATION PROVISION (SECTION 3.16)
The following Section 3.16 is hereby added to the Agreement:
3.16 CROSS COLLATERALIZATION. Each Borrower agrees that the Collateral of
each Borrower pledged hereunder shall secure all of the obligations of the
Borrowers to Lender hereunder. Upon and after an Event of Default by any
Borrower, Lender may pursue all rights and remedies it may have against all
or any part of the Collateral regardless of the status of legal title to
such Collateral. Each Borrower hereby acknowledges that this Cross
Collateralization of their Collateral is in consideration of Lender's
extending the credit hereunder and mutually beneficial to each Borrower.
5.1.B. BORROWER'S TRADENAMES (whether one or more) (SECTION 5.1.B.)
As set forth in List of Tradenames attached hereto
6.2.A. LEVERAGE RATIO LIMIT (SECTION 6.2.J).
The term "Leverage Ratio Limit" shall mean 4.0 : 1.0
6.2.B. MINIMUM NET INCOME (SECTION 6.2.K).
The Minimum Net Income shall be One Dollar ($1.00) for each fiscal year of
Borrower, beginning with fiscal year ending December 31, 1997.
6.2.C. DISTRIBUTIONS LIMITATION (SECTION 6.2.L).
The Maximum Distributions shall not exceed twenty-five percent (25%) of Net
Income of the fiscal year in which such Distributions are made.
6.3.C. ANNUAL FINANCIAL STATEMENTS (SECTION 6.3).
Annual audited financial statements shall be prepared by independent
certified public accountants, reasonably acceptable to Lender.
8.1. REIMBURSEMENT OF EXPENSES (SECTION 8.1).
Borrowers shall reimburse Lender for legal fees and expenses incurred in
the negotiations, preparation and closing of this Third Amended and
Restated Schedule to Amended and Restated Loan and Security Agreement.
9.1. NOTICES (SECTION 9.1).
Lender: FINOVA Capital Corporation
(copy each office below with all notices)
Corporate Finance Office:
FINOVA Capital Corporation
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Senior Vice President
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Corporate Office:
FINOVA Capital Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. X'Xxxxx, Senior Counsel
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Rediscount Finance Office:
FINOVA Capital Corporation
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx (Account Executive)
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Borrower: Florida Finance Group Inc.
Liberty Finance Company
0000 X. Xxxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Telecopy No.:000-000-0000
Borrower: Smart Choice Receivables Holding Company
P. O. Xxx 00000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Guarantors: Smart Choice Holdings, Inc.
Smart Choice Automotive Group, Inc.
0000 X. Xxxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Telecopy No.:000-000-0000
9.16. AGENT FOR SERVICE OF PROCESS (SECTION 9.16).
Xxxx Xxxxx, whose address is 0000 X. Xxxxxxxxxx, Xxxxxxxxxx, Xxxxxxx
00000-0000 (Agent)
IN WITNESS WHEREOF, the parties have executed this Schedule on the day and year
first set forth above.
LENDER:
FINOVA CAPITAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx 3/27/98
------------------------------------------------
Xxxxxxx X. Xxxxxx, Vice President (Date)
BORROWERS:
FLORIDA FINANCE GROUP INC.
By: /s/ Xxxxxxx Xxxx 3/27/98
-----------------------------------------------
Xxxxxxx Xxxx, Assistant Vice President (Date)
LIBERTY FINANCE COMPANY
By: /s/ Xxxxxxx Xxxx 3/27/98
-----------------------------------------------
Xxxxxxx Xxxx, Assistant Vice President (Date)
SMART CHOICE RECEIVABLES HOLDING COMPANY
By: /s/ Xxxxxxx Xxxx 3/27/98
-----------------------------------------------
Xxxxxxx Xxxx, Assistant Vice President (Date)
GUARANTORS:
SMART CHOICE HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxx 3/27/98
-----------------------------------------------
Xxxxxxx Xxxx, Assistant Vice President (Date)
SMART CHOICE AUTOMOTIVE GROUP, INC.
By: /s/ Xxxxxxx Xxxx 3/27/98
-----------------------------------------------
Xxxxxxx Xxxx, Assistant Vice President (Date)
