AMENDMENT TO DEALER EQUIPMENT
LOAN AND SECURITY AGREEMENT
This Amendment to Dealer Equipment Loan and Security Agreement
("Amendment"), effective as of the 1st day of September, 1997 (the "Effective
Date"), by and between NISSAN MOTOR ACCEPTANCE CORPORATION ("NMAC") and FIRST
CHOICE STUART 1, INC., a Florida corporation d/b/a Stuart Nissan ("Dealer").
W I T N E S S E T H:
WHEREAS, NMAC and B & B Florida Enterprises, Inc., a Florida corporation
("B & B") entered into that certain Nissan Motor Acceptance Corporation Dealer
Equipment Loan and Security Agreement, dated October 12, 1995 (the "Loan
Agreement"), whereby NMAC agreed to advance to B & B the maximum sum of TWO
HUNDRED FIFTY THOUSAND AND NO/100 ($250,000.00) DOLLARS, upon fulfillment of the
terms and conditions thereof by B & B;
WHEREAS, the Loan Agreement was secured by, among other instruments, that
certain Guaranty Agreement dated October 12, 1995 (the "Original Guaranty")
executed by B & B, Xxxxxx XxXxxx, Xx., Xxxxxxx X. Xxxxxxxxxxx and Xxxxx X.
Xxxxxxxxxx (individually and collectively the "Original Guarantors");
WHEREAS, by instrument entitled Agreement and Plan of Merger, August 29,
1997 (the "Merger Agreement"), B & B merged into the Dealer with the Dealer
being the surviving corporation (the "Merger"), such Merger Agreement to be
filed with the Florida Secretary of State;
WHEREAS, B & B and Dealer have requested that NMAC consent to the Merger
and to further release the Original Guarantors from the Original Guaranty and
substitute Smart Choice Automotive Group, Inc., a Florida corporation, Smart
Cars, Inc., a Florida corporation and Smart Choice Automotive Group, Inc., a
Florida corporation (individually and collectively the "New Guarantors") for the
Original Guarantors; and
WHEREAS, NMAC has agreed not to declare a default under the terms of the
Loan Agreement by virtue of the Merger provided that the Dealer agrees to the
terms and conditions of this Amendment.
NOW THEREFORE, in consideration of the premises, Ten and No/100 ($10.00)
Dollars and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. The recitations set forth above are true and correct.
2. The terms and conditions of the Commitment Letter dated July 9, 1997 as
modified by letters dated July 30, 1997, August 8, 1997 and August 13, 1997 from
NMAC to the Dealer (the "Commitment Letter") are hereby incorporated into the
Loan Agreement in their entirety. The terms and conditions of the Commitment
Letter shall control over any conflict with the terms and conditions of this
Amendment and/or Loan Agreement. The Dealer agrees and understands that,
notwithstanding NMAC's execution of this Amendment and the delivery thereof to
the Dealer, all of the terms and conditions of the Commitment Letter (including
but not limited to the execution by the New Guarantors and the delivery of their
Guaranty Agreement to NMAC and the fulfillment of all of the "Conditions to
Commitment" set forth in SCHEDULE B to the Commitment Letter), must be fulfilled
within the time period(s) set forth within the Commitment Letter prior to this
Amendment becoming enforceable against NMAC.
3. The principal outstanding balance (exclusive of interest) owed to NMAC
under the Loan Agreement is ONE HUNDRED EIGHTY-THREE THOUSAND SEVEN HUNDRED
SIXTY-TWO AND 56/100 ($183,762.56) DOLLARS, less any principal payments (if any)
made subsequent to July 8, 1997.
4. All except the first two (2) sentences of Section 2.2 of the Loan
Agreement are hereby deleted in their entirety and the following is substituted
therefore:
"From the Effective Date of this Dealer Equipment Loan and
Security Agreement through the ninetieth (90th) day thereafter
(the "Interest Only Period"), accrued interest together with
all other fees, costs and charges shall be paid monthly on the
15th day thereof under this Loan. Commencing with the first
month following the expiration of the Interest Only Period and
continuing each month thereafter, successive monthly
installments of Principal in the amount of FOUR THOUSAND TWO
HUNDRED SEVENTY-THREE AND 56/100 ($4,273.56) DOLLARS each
together with all accrued and unpaid interest and all other
fees, costs and charges due and owing under this Loan shall be
paid on the 15th day of each month, followed by one final
installment on December 31, 1997 equal to the then unpaid
Principal, all accrued and unpaid interest and all other fees,
costs and charges due and owing under this Loan. Interest
shall be calculated on a daily basis, computed on the actual
number of days elapsed over a year of 365 or 366 days,
commencing on the date the Principal is funded.
Should Smart Choice Automotive Group, Inc., a Florida
corporation (and/or its successors or assigns), sell stock
pursuant to an underwritten public offering prior to December
31, 1997, the unpaid Principal together with all accrued and
unpaid interest and all other fees, costs and charges due and
owing under the Loan Agreement shall immediately be
accelerated and be due and payable in full."
5. The first sentence of Section 2.1 to the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefore:
The "NMAC Prime Rate" shall mean the per annum interest rate
from time to time announced by a majority of the following
banks: Bankers Trust Company, The Chase Manhattan Bank,
Citibank N.A., Bank of America, N.T. & S.A. and Xxxxxx
Guaranty Trust Company of New York, as their respective prime
or reference rate; provided that if fewer than three of such
banks have the same rate in effect, the median of the five
rates shall be the NMAC Prime Rate. For purposes of computing
interest hereunder, the NMAC Prime Rate in effect on the last
day of the month shall be deemed to be such rate in effect
through the succeeding month."
6. Section 6 to the Loan Agreement is hereby modified by adding the
following:
6.5 The occurrence of any default under or termination of
the Dealer Sales and Service Agreement between the
Borrower and Nissan Motor Corporation in U.S.A.
("NMC"); or
6.6 Termination of or default under that certain Lease
Agreement dated July 11, 1997 with TAD Partnership
regarding the property situated at 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxx, Xxxxxxx 00000; or
6.7 Failure to allow NMAC to audit the financial records of
the Borrower or any Guarantor; or
6.8 Failure of the Borrower to maintain Net Worth, Net Cash
and Working Capital Requirements established from time
to time by NMAC and/or NMC; or
6.9 The occurrence of an event of default under the terms
and conditions of any other loan or loans currently in
existence or to be consummated at a future date between
NMAC and the Borrower or any Guarantor or any of their
affiliates; or
6.10 Termination, for any reason, of Borrower's wholesale
inventory financing for new vehicles provided by NMAC;
or
6.11 Borrower and/or any Guarantor shall fail to furnish
periodic financial statements, income and expense
statements and balance sheets as may be required from
time to time by NMAC, all of such statements to set
forth in reasonable detail the financial condition of
the respective party and in form satisfactory to NMAC,
or
6.12 The Borrower fails at all times during the term of this
Loan to maintain Tangible Net Worth, Working Capital
and Net Cash Requirements as established by NMAC.
Effective July 1, 1997, the Capitalization Guidelines
(which are only minimum guidelines and may change in
the sole and absolute discretion of NMAC and/or NMC
upon notice to the Borrower) are as follows:
Required Minimum Amount
Tangible Net Worth $880,000.00
Working Capital $560,000.00
Net Cash $140,000.00
6.13 The Borrower fails at all times during the term of this
Loan to have the following person(s) participate in the
active management and operation of the Borrower:
NAME POSITION
---- --------
Xxxx X. Xxxxx Dealer Principal
6.14 Borrower fails to timely notify NMAC that Xxxxxx
XxXxxx, Xx. is no longer the Executive Manager of
Borrower and/or a new Executive Manager of the Borrower
is appointed without the prior written consent of NMAC
(which such consent will not be unreasonably withheld
or delayed).
Should Borrower not timely make any regularly scheduled payment of
principal or interest due and payable under this Loan, the Borrower
shall have fifteen (15) days following written notice of the default to
cure the default. NMAC shall be entitled to a four (4%) percent late
charge whenever any payment required under this Loan Agreement is not
paid when due."
7. Dealer hereby covenants to continue to abide by all of the terms and
conditions of the Loan Agreement in the same manner as if the Dealer had
originally executed the Loan Agreement. NMAC's waiver of any term, provision,
condition, covenant or agreement of the Loan Agreement prior to the Effective
Date hereof shall not be construed in any manner, to NMAC's consent to such
waiver on or after the Effective Date. No waiver of any term, provision,
condition, covenant or agreement contained in this Agreement or contained in the
Loan Agreement shall be effective unless set forth in writing signed by NMAC and
any such waiver shall be effective only to the extent set forth in such writing.
8. NMAC hereby waives its right to declare an event of default under the
terms of the Loan Agreement which would otherwise arise due to the transfer of
the ownership of B & B and the merger thereof into Dealer; however, the
foregoing shall not amend or modify the Loan Agreement or be deemed a waiver of
any rights of NMAC thereunder as to any further sale, transfer or conveyance of
any interest in the Dealer and/or the merger thereof into another entity.
9. Dealer agrees to pay any and all documentary stamps which are assessed
by the State of Florida on account of the execution and/or delivery of this
Amendment. Dealer shall pay such sums immediately upon receipt of notice of such
amounts from NMAC. If the Dealer fails to pay such sums to NMAC, NMAC may (and
without waiving such Event of Default), at its option, pay such taxes and any
such payment made by NMAC shall be added to the indebtedness hereof and shall
bear interest from the date advanced at the rate of the lesser of eighteen (18%)
percent per annum or the maximum rate permissible under Florida law.
10. The Dealer hereby represents, ratifies and affirms to NMAC that NMAC
has acted in good faith and has fulfilled and fully performed its obligations
under the Loan Agreement and all of its obligations with respect to the
administration and disbursement of the loan proceeds.
11. Except as specifically provided in this Amendment, no part of the Loan
Agreement or any other instrument securing the Loan Agreement is in any way
altered, amended or changed.
12. The parties hereto intend that this Amendment will not disturb the
existing lien priority of NMAC and that this Amendment will retain the same lien
and priority as the Loan Agreement which this Amendment modifies.
13. This Amendment shall be governed by and construed and the rights and
obligations of the parties under this Amendment shall be determined in
accordance with the laws of the State of Florida.
14. This Amendment and the Loan Agreement shall be binding upon and shall
enure to the benefit of the parties hereto and their respective personnel,
representatives, heirs, successors and assigns.
15. Each party to this Amendment acknowledges that it has reviewed this
Amendment and hereby declares that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Amendment. In the event that any terms or
provisions of this Amendment are held invalid or unenforceable, the remaining
terms and conditions of this Amendment shall continue to be fully enforceable
without change, and this Amendment shall be interpreted as if the unenforceable
provision had not been a part hereof.
16. NMAC AND DEALER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY AND ALL RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS, CROSS-CLAIMS OR A
THIRD-PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT,
THE LOAN AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH OR THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER WRITTEN OR VERBAL) OR ACTIONS OF ANY PARTY HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR NMAC TO ENTER INTO THIS AMENDMENT. THE
DEALER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF NMAC NOR NMAC'S
COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT NMAC WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION."
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
Signed, sealed and delivered in the presence of:
NISSAN MOTOR ACCEPTANCE CORPORATION
/s/ Xxxxxxxxx Xxxx By: /s/ Xxxx Doi Witness
Print Name: Xxxxxxxxx Xxxx Print Name: Xxxx Doi
Title: Commercial Credit Manager
/s/ Xxxx Xxxx
Witness
Print Name: Xxxx Xxxx
FIRST CHOICE STUART 1, INC.,
a Florida corporation d/b/a Stuart Nissan
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxx
Witness Print Name: Xxxx X. Xxxxx
Print Name: Xxxxxxx X. Xxxxxx Title: President
/s/ Xxxx X. Xxx
Witness
Print Name: Xxxx X. Xxx
