-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WqvZCK5PD4pxCdH6FK+KmYGGsLu4JhbIa+sfHfOvlj1xClcn64Ox/a46IidXKYcD KKiczE9awp+84ACq/mI73w== 0000949091-97-000005.txt : 19970227 0000949091-97-000005.hdr.sgml : 19970227 ACCESSION NUMBER: 0000949091-97-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 25 CONFORMED PERIOD OF REPORT: 19970212 ITEM INFORMATION: Other events FILED AS OF DATE: 19970226 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECKLER INDUSTRIES INC CENTRAL INDEX KEY: 0000949091 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 591469577 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14082 FILM NUMBER: 97544514 BUSINESS ADDRESS: STREET 1: 5200 S WASHINGTON AVE CITY: TITUSVILLE STATE: FL ZIP: 32780 BUSINESS PHONE: 4072699680 MAIL ADDRESS: STREET 1: PO BOX 5637 CITY: TITUSVILLE STATE: FL ZIP: 32783 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K ________________________________ CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 12, 1997 (Date of earliest event reported) ________________________________ ECKLER INDUSTRIES, INC. (Exact name of registrant as specified in its charter) ________________________________ Florida 1-14082 59-1469577 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation or organization) 5200 South Washington Avenue, Titusville, Florida 32780 (Address of principal executive offices, zip code) (407) 269-9680 (Registrant's telephone number, including area code) Item 5. Other Events. On February 12, 1997, the Registrant closed the acquisition of the assets of Wholesale Acquisitions, Inc. and Team Automobile Sales & Finance, Inc., Florida corporations, and the stock acquisition of Liberty Finance Company, a Florida corporation, all of which were owned and controlled by R.C. Hill, and which companies operate seven used car lots in Florida and a finance company (the "R.C. Hill Group"). The acquired businesses are being operated as subsidiaries of the Registrant. On February 13 and February 14, 1997, First Choice Auto Finance, Inc., a subsudiary of Registrant, closed on the acquisition of the assets of Palm Beach Finance and Mortgage Company, a Florida corporation, and Two Two Five North Military Corp. d/b/a Miracle Mile Motors, Inc., a Florida corporation. David Bumgardner is the principal shareholder, officer and director of the acquired businesses. Consolidated financial statements will be filed as an amendment to the Company's Report on Form 8-K (filed in connection with Registrant's merger with Smart Choice Holdings, Inc.) on or before April 14, 1997, which financial statements will reflect the merger of the Registrant and Smart Choice Holdings, Inc. which occurred on January 29, 1997, as well as the acquisition of the R.C. Hill companies and the Bumgardner companies. Item 7. Exhibits. 4.1 Registration Rights Agreements between Registrant and R.C. Hill, II dated February 12, 1997. 10.1 Merger Agreement dated February 12, 1997 by and among the Registrant, R.C. Acquisition, Inc., and R.C. Hill, II. 10.2 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Registrant in favor of Mr. & Mrs. R.C. Hill, III. 10.3 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance as maker in favor of Nate Weaver, Inc. 10.4 Consolidated, Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of John Jeyaseelan. 10.5 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of Nate Weaver, Inc. 10.6 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of Nate Weaver, Inc. 10.7 Lease dated February 12, 1997 between R.C. Hill, II as Landlord and First Choice Auto Finance, Inc. as tenant. 10.8 Employment Agreement dated February 12, 1997 between Liberty Finance Company and Leonard Vihtelic. 10.9 Employment Agreement dated February 12, 1997 between Liberty Finance Company and C. Lawrence Schuler. 10.10 Stock Purchase Agreement by and among the Registrant, First Choice Auto Finance, Inc. and R.C. Hill, II dated February 12, 1997. 10.11 Promissory Note dated February 12, 1997 by Eckler Industries, Inc. as maker in favor of R.C. Hill, II. 10.12 Corporate Guaranty by Registrant in favor of R.C. Hill, II. 10.13 Stock Pledge and Security Agreement dated February 12, 1997 by and among Registrant R.C. Hill, II and First Choice Auto Finance, Inc. 10.14 Indemnification Agreement dated February 12, 1997 by Registrant in favor of R.C. Hill, II. 10.15 Employment Agreement dated February 12, 1997 between First Choice Auto Finance, Inc. and R.C. Hill, II. 10.16 Employment Agreement dated February 12, 1997 between First Choice Auto Finance, Inc. and R.C. Hill, III. 10.17 Asset Purchase Agreement dated between First Choice Auto Finance, Inc., Palm Beach Finance and Mortgage Company, Two Two Five North Military Corp. d/b/a Miracle Mile Motors, and David Bumgardner, and Amendment thereto. 10.18 Loan and Security Agreement between Two Two Five North Military Corp. d/b/a Miracle Mile Motors and First Choice Auto Finance, Inc. 10.19 Promissory Note in favor of Two Two Five North Military Corporation and Palm Beach Finance and Mortgage Company. 10.20 9% Secured Convertible Note of First Choice Auto Finance, Inc. in favor of Two Two Five North Military Corporation and Palm Beach Finance and Mortgage Company. 10.21 9% Convertible Debenture of Smart Choice Holdings, Inc. in favor of Palm Beach Finance and Mortgage Company. 10.22 Lease between David Bumgardner as Lessor and First Choice Auto Finance, Inc. as Lessee. 10.23 Indemnification Agreement between First Choice Auto Finance, Inc. and Two Two Five North Military Corp. and Palm Beach Finance and Mortgage Company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ECKLER INDUSTRIES, INC. By: /S/ Gary R. Smith February 26, 1997 Gary R. Smith, President Exhibit Index Index No. Item 4.1 Registration Rights Agreements between Registrant and R.C. Hill, II dated February 12, 1997. 10.1 Merger Agreement dated February 12, 1997 by and among the Registrant, R.C. Acquisition, Inc., and R.C. Hill, II. 10.2 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Registrant in favor of Mr. & Mrs. R.C. Hill, III. 10.3 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance as maker in favor of Nate Weaver, Inc. 10.4 Consolidated, Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of John Jeyaseelan. 10.5 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of Nate Weaver, Inc. 10.6 Amended and Restated Renewal Promissory Note dated February 12, 1997 by Liberty Finance Company as maker in favor of Nate Weaver, Inc. 10.7 Lease dated February 12, 1997 between R.C. Hill, II as Landlord and First Choice Auto Finance, Inc. as tenant. 10.8 Employment Agreement dated February 12, 1997 between Liberty Finance Company and Leonard Vihtelic. 10.9 Employment Agreement dated February 12, 1997 between Liberty Finance Company and C. Lawrence Schuler. 10.10 Stock Purchase Agreement by and among the Registrant, First Choice Auto Finance, Inc. and R.C. Hill, II dated February 12, 1997. 10.11 Promissory Note dated February 12, 1997 by Eckler Industries, Inc. as maker in favor of R.C. Hill, II. 10.12 Corporate Guaranty by Registrant in favor of R.C. Hill, II. 10.13 Stock Pledge and Security Agreement dated February 12, 1997 by and among Registrant R.C. Hill, II and First Choice Auto Finance, Inc. 10.14 Indemnification Agreement dated February 12, 1997 by Registrant in favor of R.C. Hill, II. 10.15 Employment Agreement dated February 12, 1997 between First Choice Auto Finance, Inc. and R.C. Hill, II. 10.16 Employment Agreement dated February 12, 1997 between First Choice Auto Finance, Inc. and R.C. Hill, III. 10.17 Asset Purchase Agreement dated between First Choice Auto Finance, Inc., Palm Beach Finance and Mortgage Company, Two Two Five North Military Corp. d/b/a Miracle Mile Motors, and David Bumgardner, and Amendment thereto. 10.18 Loan and Security Agreement between Two Two Five North Military Corp. d/b/a Miracle Mile Motors and First Choice Auto Finance, Inc. 10.19 Promissory Note in favor of Two Two Five North Military Corporation and Palm Beach Finance and Mortgage Company. 10.20 9% Secured Convertible Note of First Choice Auto Finance, Inc. in favor of Two Two Five North Military Corporation and Palm Beach Finance and Mortgage Company. 10.21 9% Convertible Debenture of Smart Choice Holdings, Inc. in favor of Palm Beach Finance and Mortgage Company. 10.22 Lease between David Bumgardner as Lessor and First Choice Auto Finance, Inc. as Lessee. 10.23 Indemnification Agreement between First Choice Auto Finance, Inc. and Two Two Five North Military Corp. and Palm Beach Finance and Mortgage Company. EX-4.1 2 Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of February 11, 1997 by and among ECKLER INDUSTRIES, INC., a Florida corporation (the "Company"), and R.C. HILL, II (the "Holder"). R E C I T A L S: WHEREAS, the Holder is the beneficial owner of 176,078 shares of the Company's Class B $.01 par value Common Stock ("Common Stock"); and WHEREAS, the Holder acquired the Common Stock as part of the sale of his company, Liberty Finance Company, to a subsidiary of the Company. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and the Holder agree as follows: 1. Certain Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: "Commission" shall mean the Securities and Exchange Commission. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Registrable Stock" shall mean 176,078 shares of Common Stock beneficially owned by the Holder. "Secondary Offering" shall mean a public offering subsequent to the date hereof. "Securities Act" shall mean the Securities Act of 1933, as amended. "Selling Expenses" shall mean all underwriting discounts, selling commissions and underwriter expense reimbursement allowances applicable to the sale of Registrable Stock, as well as all fees and expenses of counsel for the Holder. 2. "Piggyback" Registration. (a) If the Company at any time after the date of this Agreement proposes to register any of its securities under the Securities Act (other than in connection with (i) a merger or pursuant to Form S-8 or other comparable form not available for registering the Registrable Stock for sale to the public), or (ii) a registration statement filed on the exercise of demand registration rights held by a holder of securities of the Company, the Company shall request that the managing underwriter (if any) of such Secondary Offering include the Registrable Stock in the registration statement for the public offering in such registration. If such managing underwriter agrees to include the Registrable Stock in the registration statement relating to the Secondary Offering, the Company shall at such time give prompt written notice to the Holder of its intention to effect such registration and of the Holder's right under such proposed registration, and upon the request of the Holder delivered to the Company within twenty (20) days after giving such notice (which request shall specify the Registrable Securities intended to be disposed of by the Holder), the Company shall include such Registrable Securities held by the Holder requested to be included in such registration; provided, however, that: (i) If, at any time after giving such written notice of the Company's intention to register any of the Holder's Registrable Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to file the registration statement wherein the Registrable Stock would be registered or to delay the registration of such Registrable Stock, at its sole election, the Company may give written notice of such determination to the Holder and thereupon shall be relieved of its obligation to register any Registrable Stock issued or issuable in connection with such registration (but not from its obligation to pay registration expenses in connection therewith or to register the Registrable Stock in a subsequent registration); and in the case of a determination to delay a registration, the Company shall thereupon be permitted to delay registering any Registrable Stock for the same period as the delay in respect of securities being registered for the Company's own account. (ii) If the managing underwriter in such Secondary Offering shall advise the Company that it declines to include a portion or all of the Common Stock which holders of Common Stock with piggyback registration rights have requested be included in such Secondary Offering, then registration of all or a portion of the Common Stock of all such holders shall be excluded from such registration, as appropriate, on a proportional basis determined by comparing the number of shares of Common Stock which each such holder requested be registered against the total of all shares of Common Stock that all such holders requested be registered. In such event the Company shall give the Holder prompt written notice of the number of shares of Registrable Stock excluded from such registration at the request of the managing underwriter. No such exclusion shall reduce the securities being offered by the Company for its own account to be included in such registration statement. (iii) The Company shall not be required to include any of the Holder's Registrable Stock in the registration statement relating to an underwritten offering of the Company's securities unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (provided such terms are usual and customary for selling stockholders) and the Holder agrees to execute and/or deliver such documents in connection with such registration as the Company or the managing underwriter may reasonably request. (iv) If the managing underwriter shall restrict the amount of the Holder's Registrable Shares which can be included in a Secondary Offering, then the balance of such Registrable Shares shall continue to be fully subject to the terms and rights of this Agreement, which specifically includes piggyback rights in any subsequent Secondary Offering, until all such Registrable Shares have been registered. (b) The Company may, in its sole discretion and without the consent of the Holder, withdraw such registration statement and abandon the proposed offering in which the Holder had requested to participate, but such abandonment shall not preclude subsequent request for registration pursuant to Section 2. (c) In the event that the Company shall not have undertaken a Secondary Offering on or before the expiration of one (1) year from the date hereof, then, at the written demand of Holder, the Company shall cause the Registrable Shares to be registered for public sale under the Securities Act. If there is a Secondary Offering and not all of Holder's Registrable Shares are included in the Secondary Offering, then the balance of those Registrable Shares will be registered at the latest of: (i) one (1) year from the date of the Secondary Offering, or (ii) the earliest date permitted by the managing underwriter in the Underwriting Agreement executed as part of the Secondary Offering. (d) In all events, if all of the Registrable Shares of Holder have not been registered on or before June 1, 1998, the Company shall cause the balance of the Registrable Shares to be registered for public sale. 3. Cooperation with Company. The Holder will cooperate with the Company in all respects in connection with this Agreement, including, without limitation, timely supplying all information reasonably requested by the Company and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Stock. 4. Expenses. All expenses incurred by the Company in complying with the provisions of this Agreement, including, without limitation, all restrictions and filing fees, printing expenses, fees and disbursements of Company counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars and costs of insurance, but excluding any Selling Expenses, are called "Registration Expenses." The Company will pay all Registration Expenses in connection with each registration of Registrable Stock pursuant to the provisions of this Agreement. All Selling Expenses in connection with each such registration statement shall be borne by the participating sellers in proportion to the number of shares sold by each, or by such participating sellers other than the Company (except to the extent the Company shall be a seller) as they may agree. 5. Indemnification and Contribution. (a) Company Indemnity. In the event of a registration of any of the Holder's Registrable Stock under the Securities Act pursuant to the provisions of this Agreement, the Company shall indemnify and hold harmless, to the extent permitted by law, the Holder, each underwriter of such Registrable Stock thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Stock was registered under the Securities Act pursuant to the provisions of this Agreement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such seller, any such underwriter or any such controlling person in writing specifically for use in such registration statement or prospectus; or (ii) the Holder's failure to deliver a copy of the final prospectus as then amended or supplemented after the Company has furnished the Holder with a sufficient number of copies of the same, but only if delivery of same is required by law and the same would have cured the defect giving rise to any such loss, claim, damage, liability or expense. (b) Holder Indemnity. In the event of a registration of any of the Registrable Stock under the Securities Act pursuant to the provisions of this Agreement, the Holder will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of the Holder under which such Registrable Stock was registered under the Securities Act pursuant to the provisions of this Agreement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damages, liability or action; provided that the Holder will be liable hereunder in an amount not to exceed the net proceeds received by the Holder in the sale of its Registrable Stock pursuant to such registration statement and, in any such case, if and only to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to the Holder furnished in writing to the Company by the Holder specifically for use in such registration statement or prospectus. (c) Notice; Right to Defend. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party, in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any such liability other than under this Section 6 and shall only relieve it from any liability which it may have to such indemnified party if such indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party under this Section 6 to such effect, the indemnifying party shall not be liable for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. (d) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) the Holder of Registrable Stock exercising rights under this Agreement, or any controlling person of the Holder, makes a claim for indemnification pursuant to this Section 6 but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 6 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Holder or any such controlling person in circumstances for which indemnification is provided under this Section 6, then, and in each such case, the Company and the Holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Holder is responsible for the portion represented by the percentage that the public offering price of its Registrable Stock offered by the registration statement bears to the public offering price of all securities offered by such registration statement (in an amount in any case not to exceed the net proceeds received by the Holder in the sale of its Registrable Stock pursuant to such registration statement), and the Company is responsible for the remaining portion; provided that, in any such case, no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 6. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Stock to the public without registration, at all times after 90 days after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (b) use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) furnish to the Holder of Registrable Stock forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing the Holder to sell any Registrable Stock without registration. 7. Successors and Assigns. The rights of the Holder granted under this Agreement, including the rights to cause the Company to register the Registrable Stock, may not be assigned without the prior written consent of the Company, which shall not be unreasonably withheld. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the Company and of the Holder. 8. Entire Agreement. This Agreement expresses the entire understanding of the Company and of the Holder of Registrable Stock and contemporaneous agreements and undertakings of the Company and the Holder with respect to the subject matter of this Agreement. 9. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be mailed by certified or registered mail, return receipt requested, postage prepaid, or telexed with confirmation of receipt, or delivered by hand or by a nationally recognized overnight delivery service, addressed as follows: (a) If to the Company, at: ECKLER INDUSTRIES, INC. 101 Phillippee Parkway Suite 300 Safety Harbor, Florida 34695 Attention: Thomas E. Conlan Telecopier: (813) 726-5885 or at such other address or addresses as shall have been furnished in writing to the Holder, or (b) If to the Holder, as follows: R.C. Hill, II 1211 Salerno Court Orlando, Florida 32806 With a copy to: David A. Webster, Esquire Milam, Otero, Larsen, Dawson & Taylor, P.A. 1301 Riverplace Boulevard, Suite 1301 Jacksonville, Florida 32207 (c) Any notice so addressed, when mailed by registered or certified mail shall be deemed to be given three days after so mailed, when telexed shall be deemed to be given when transmitted, or when delivered by hand or overnight shall be deemed to be given when delivered. 10. Amendment and Waiver. This Agreement may be amended, and the observance of any term of this Agreement may be waived, but only with the written consent of the Company and persons holding not less than 51% of all outstanding Registrable Stock. 11. Governing Law. This Agreement shall be construed in accordance with and governed by the internal, substantive laws of the State of Florida, without giving effect to the conflicts of law principles thereof. 12. Invalidity of Provisions. If any provisions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. 13. Headings. The headings in this Agreement are for purposes of reference only and shall not be deemed to alter or affect the meaning or interpretation of any of the provisions of this Agreement. 14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 15. Time of the Essence. Time shall be of the essence for all performances hereunder. IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the 12th day of February, 1997. ECKLER INDUSTRIES, INC., a Florida corporation By: /S/ J. Neal Hutchinson, Jr. Name: Title: Asst. V.P. HOLDER /S/ R.C. Hill, II R.C. Hill, II EX-10.1 3 4 MERGER AGREEMENT MERGER AGREEMENT (this "Agreement"), entered into this ____ day of February, 1997, by and among ECKLER INDUSTRIES, INC., a Florida corporation (the "Buyer") through its wholly-owned, newly-formed Florida corporate subsidiary, R. C. ACQUISITION, INC., which for purposes herein shall be deemed to be included in the term "Buyer" unless the context shall be inconsistent, in which case it shall be referred to as "NewCo"), and R. C. HILL, II, an individual (the "Stockholder"). W I T N E S S E T H: WHEREAS, Liberty Finance Co., a Florida corporation (the "Company"), is engaged in a business consisting primarily of finance and leasing activities in connection with the sale of used automobiles and other consumer vehicles (the "Business"); and WHEREAS, the Stockholder is the record and beneficial owner of all of the issued and outstanding capital stock of the Company (the "Stock"); and WHEREAS, the Buyer desires to acquire from the Stockholder, and the Stockholder desires to transfer to the Buyer, all upon the terms and subject to the conditions set forth in this Agreement, all (and not less than all) of the Stock, and the business of the Company as a going concern; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree, as of the Effective Date, as follows: 1. THE MERGER. 1.1 The Merger. At the time of the closing of the transactions contemplated hereby and in accordance with the provisions of this Agreement and the applicable provisions of the corporation laws of Florida (in such instance, "Applicable Law"), NewCo shall be merged with and into the Company, in accordance with the terms and conditions of this Agreement and articles of merger as may be required by Florida law, hereinafter referred to as the "Articles of Merger". The Company shall be the surviving corporation of the Merger (the Company, in such capacity, being hereinafter sometimes referred to as the "Surviving Corporation"). Thereupon, the separate existence of NewCo shall cease, and the Company, as the Surviving Corporation, shall continue its corporate existence under Applicable Law under its current name, as a wholly-owned subsidiary of Buyer. 1.2 Effectiveness of the Merger. As soon as practicable upon or after the execution of this Agreement, NewCo and the Company will execute appropriate Articles of Merger, and shall file or cause to be filed such Articles of Merger with the Secretary of State of Florida; and the subject Merger shall become effective as of the date (the "Effective Date") set forth in the Articles of Merger. 1.3 Effect of Merger. Upon the effectiveness of the Merger, (a) the Surviving Corporation shall own and possess all assets and property of every kind and description, and every interest therein, wherever located, and all rights, privileges, immunities, power, franchises and authority of a public as well as of a private nature, of NewCo and Company (the "Constituent Corporations"), and all obligations owed to, belonging to or due to each of the Constituent Corporations, all of which shall be vested in the Surviving Corporation pursuant to Applicable Law without further act or deed, and (b) the Surviving Corporation shall be liable for all claims, liabilities and obligations of the Constituent Corporations, all of which shall become and remain the obligations of the Surviving Corporation pursuant to Applicable Law without further act or deed. 1.4 Surviving Corporation. Upon the effectiveness of the Merger, the Articles of Incorporation and By-Laws of the Surviving Corporation shall be identical to those of the Company as in effect immediately prior to the effectiveness of such Merger. The directors and officers of the Surviving Corporation shall be modified and shall be determined by Buyer in its sole discretion. 1.5 Status and Conversion of Shares. Upon the effectiveness of the Merger: (a) Each share of capital stock held by the Company as treasury stock immediately prior to the effectiveness of the Merger shall be canceled and extinguished, and no payment or issuance of any consideration shall be payable or shall be made in respect thereof; (b) Each share of common stock of NewCo outstanding immediately prior to the effectiveness of the Merger shall be converted into and shall become one (1) share of common stock of the Surviving Corporation; and (c) Each share of $1.00 par value common stock of the Company (the "Company Stock") issued and outstanding immediately prior to the effectiveness of the Merger (excluding any shares as to which dissenters' appraisal rights have been validly exercised and perfected and for which cash is payable in accordance with applicable law) shall be canceled and extinguished and converted into the right to receive 176,078 shares (the "Shares") of the Class B Common Stock, $.01 par value, of Eckler ("Eckler Common Stock") for each share of Company Stock. For purposes hereof the number of Shares multiplied by $17.50 shall be the "Stock Valuation" hereunder. 1.6 Books and Records. On the date hereof, in addition to the delivery and transfer of the Stock to the Buyer, the Stockholder is delivering, and causing the Company to deliver, to the Buyer all of the stock books, records and minute books of the Company, all financial and accounting books and records of the Company, and all referral, client, customer and sales records of the Company. 2. INTENTIONALLY OMITTED. 3. REORGANIZATION. 3.1 Tax-Free Reorganization. The parties intend that the transactions pursuant to this Agreement qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended, and the parties shall report these transactions and take such actions and otherwise conduct their affairs so as to give effect to such intention. Specifically, the parties anticipate that NewCo will be merged into the Company, with the Company as the survivor, as a wholly-owned subsidiary of the Buyer, in a statutory merger, qualifying under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended. Eckler agrees for a period of two (2) years from the Effective Date to not take further actions regarding the corporate structure of the ownership of the Company without Stockholder's prior written approval, which approval shall be given upon receipt of an opinion of counsel, in form acceptable to Stockholder, that such restructuring will not cause the disqualification of this transaction for tax-free reorganization treatment to the Stockholder. Eckler agrees to indemnify and hold Stockholder harmless from any loss, including taxes, interest and penalties (to the extent not mitigated) which arise as a result of the Buyer's violation of this Section 3.1 4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. In connection with the sale and transfer of the Stock to the Buyer, the Stockholder hereby represents and warrants to the Buyer as set forth below. For purposes hereof "Material Adverse Effect" shall mean any event, occurrence or circumstance which (a) has or is reasonably likely to have a material adverse effect on the financial condition, results of operations, business or prospects of the Company taken as a whole, or the Buyer and its affiliates taken as a whole, as applicable, (b) would materially impair such party's ability to perform its obligations under this Agreement or the consummation of any of the transactions contemplated hereby, or (c) results in an adverse effect that is Two Thousand and 00/100ths Dollars ($2,000.00) or greater on any particular item related to the Buyer's purchase of the Business hereunder. 4.1 Title to the Stock. The Stockholder is the valid and lawful record and beneficial owner of all of the Stock. All of the Stock has been duly authorized and validly issued and is fully paid and non-assessable, and is free and clear of all pledges, liens, claims, charges, options, calls, encumbrances, restrictions and assessments whatsoever (except any restrictions which may be created by operation of state or federal securities laws). The Buyer is receiving from the Stockholder good, valid and marketable title to all of the Stock, free and clear of all pledges, liens, claims, charges, options, calls, encumbrances, restrictions and assessments whatsoever (except any restrictions which may be created by operation of state or federal securities laws). 4.2 Valid and Binding Agreement; No Breach. (a) The Stockholder has full legal right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except to the extent that such enforceability may be 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. (b) Except as disclosed in Schedule 4.2 annexed hereto, neither the execution and delivery of this Agreement by the Stockholder, nor compliance with the terms and provisions of this Agreement on the part of the Stockholder, will, under circumstances that would result in a Material Adverse Effect: (i) violate any statute or regulation of any governmental authority, domestic or foreign, affecting the Company or the Stockholder; (ii) require the issuance of any authorization, license, consent or approval of any federal or state governmental agency; or (iii) 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 Company or the Stockholder is a party, or by which the Company or the Stockholder is bound, or constitute a default thereunder, or require the consent of any other party to any of the foregoing. (c) Possible Acceleration of GE Debt. The Buyer acknowledges that the consummation of this transaction, without the prior written consent of General Electric Capital Corporation ("GE") under that certain Motor Vehicle Installment Contract Loan and Security Agreement between GE and the predecessor to the Company, dated June 3, 1993, as amended, and as modified by that certain Forbearance Agreement among GE, the Company, the Stockholder and others dated January 21, 1997 (the obligations of the Company under such agreements and the other agreements related thereto are hereinafter referred to as the "GE Debt"), will be a condition which, under the loan agreements for the GE Debt, will permit GE to accelerate the GE Debt and cause it to be immediately due and payable. As such, the Stockholder shall have no responsibility for or liability arising from such occurrence. 4.3 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, with full corporate power and authority to own its assets and conduct its business as owned and conducted on the date hereof. The Company is not required to be qualified as a foreign corporation under the laws of any jurisdiction. True and complete copies of the Articles of Incorporation and Bylaws of the Company (including all amendments thereto), and a correct and complete list of the officers and directors of the Company, are annexed hereto as Schedule 4.3. 4.4 Capital Structure; Equity Ownership. (a) The authorized capital stock of the Company is as set forth in its Articles of Incorporation as included in Schedule 4.3, and the Stock constitutes and represents all of the outstanding capital stock of the Company. (b) There are no outstanding subscriptions, options, rights, warrants, convertible securities or other agreements or calls, demands or commitments obligating the Company to issue, transfer or purchase any shares of its capital stock, or obligating the Stockholder to transfer any shares of the Stock. No shares of capital stock of the Company are reserved for issuance pursuant to stock options, warrants, agreements or other rights to purchase capital stock. 4.5 Subsidiaries and Investments. The Company 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 the Company. 4.6 Financial Information. (a) Annexed hereto as Schedule 4.6(a) are the audited financial statements (including balance sheet, income statement, statement of stockholders' equity, statement of cash flows, and notes thereto) for the Company as of December 31, 1994 and December 31, 1995 and for each of the years then ended, and the unaudited financial statements for the Company as of December 31, 1996 for the twelve (12) months then ended, and as of January 31, 1997 and for the month then ended (collectively, the "Financial Statements"), all of which fairly reflect, in all material respects, the financial condition and results of operations of the Company in accordance with generally accepted accounting principles consistently applied, as of the dates thereof and for the periods then ended; and, without limitation of the foregoing, the Company does not have 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 the Company's business. The Financial Statements (as of the dates thereof and for the periods covered thereby) are in accordance with the books and records of the Company, which are complete and accurate in all material respects. (b) The Buyer has been provided the payment histories of each of the credit agreements, finance leases and other agreements underlying the Receivables (defined below), 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) Annexed hereto as Schedule 4.6(c) is a listing of all debts and obligations and guarantees to which the Company is a party and all obligations of others which are secured by property of the Company, and the current principal amount of, accrued interest on, and any amount guaranteed under all such debts, obligations, or guarantees. Schedule 4.6(c) contains a separate listing of all debt obligations of the Company to the Stockholder and members of the Stockholder's family. Except as set forth on Schedule 4.6(c), the Company is not in default under any such debt obligations or guarantees, and the consummation of the transactions contemplated hereby will not result in any default on or acceleration of, or any consent being required as to, any debt, obligation, or guarantee described on Schedule 4.6(c). 4.7 No Material Changes. Except as disclosed in Schedule 4.7 annexed hereto, since the date of the most recent of the Financial Statements, (a) the business of the Company has been operated solely in the normal course, (b) there have been no changes which in the aggregate would have a Material Adverse Effect in the financial condition, operations or business of the Company from that reflected in such Financial Statements, (c) the Company has not incurred any material obligation or liability except in the normal course of business, (d) the Company has not effected or suffered any material modification in its collection practices, or with respect to the timing and manner of payment of its accounts payable, and (e) there has not been any (i) sale, assignment or transfer by the Company of any assets or other part of its business, excluding the sale or disposition of inventory, and/or the sale of loans, in the ordinary course of business, (ii) acquisitions or commitments to acquire (whether by purchase, lease or otherwise) any capital assets by the Company wherein the aggregate payments will exceed $10,000, (iii) increase or commitment to increase the compensation or benefits of any employees of the Company, (iv) implementation or institution of any bonus, benefit, profit-sharing, pension, retirement or other plan or similar arrangement which was not in existence on December 31, 1996, or (v) new employment agreement, or modification of any existing employment agreement, by the Company. 4.8 Tax Matters. (a) The Company has, to the date hereof, timely filed all tax reports and tax returns required to be filed by the Company, and the Company 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, employment, 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 the Company as of the date hereof have been fully paid, and all taxes and other assessments and levies which the Company 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 the Company. (b) Except as disclosed in Schedule 4.8 (b) annexed hereto, there are no audits pending with respect to any federal, state or local tax reports or tax returns of the Company, and no waiver of statutes of limitations have been given or requested with respect to any tax years or tax filings of the Company. (c) The Company has, since November 1, 1987 to the date hereof, been an electing small business corporation under Subchapter S of the Internal Revenue Code of 1986, as amended (the "Code"), and the corresponding tax provisions of Florida law, and has filed all tax reports required to be filed by the Company on or prior to the date hereof. The Company has further, to the date hereof, filed all other tax reports and tax returns required to be filed by the Company, and the Company and the Stockholder (as applicable) have paid all taxes, assessments and other impositions as and to the extent required by applicable law. Without limitation of the foregoing, the Company has made all required filings and payments to the date hereof in respect of franchise, sales, use, property, excise and other taxes (including interest and penalties and including estimated tax installments as required), and there are no outstanding or pending claims, deficiencies or assessments with respect to any taxes, interest or penalties of the Company. The Company has previously distributed to the Stockholder (and any former stockholder) all amounts which have been, are, or will be distributable to such persons in respect of all completed tax years of the Company and the 1997 tax year to date. The amounts distributed in respect of the 1996 tax year were not (on a proportionate basis) in excess of the distribution for prior years, and the 1997 distributions are not in excess of 40% of 1997 net income of the Company. 4.9 Title and Condition of the Assets. Except for liens arising under the instruments described on Schedule 4.9, the Company has and owns good and marketable title to all of its assets, free and clear of all liens, pledges, claims, security interests and encumbrances of every kind and nature, except for liens, pledges, claims, security interests or encumbrances which in the aggregate would not have a Material Adverse Effect. The Company has delivered to the Buyer all material documents pertaining to the liens referred to in the preceding sentence. All of the Company's fixed assets (to the extent that a failure would have a Material Adverse Affect) are in good operating condition and repair (reasonable wear and tear excepted), are adequate for its use in the Business as presently conducted, and are sufficient for the continued conduct of such Business, except for circumstances that would not have a Material Adverse Effect. All buildings, and all fixtures, equipment and other property and assets which are material to the Company's Business on a consolidated basis, held under leases or subleases by the Company are held under valid instruments enforceable in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws of general applicability affecting creditors rights generally and by general principles of equity (whether applied in a proceeding at law or in equity). 4.10 Receivables. All of the Receivables (whether reflected in the Financial Statements or thereafter created or acquired by the Company prior to the Effective Date), (a) have arisen in the normal course of the Company's business, (b) to the Stockholder's actual knowledge are not subject to any counterclaims, set-offs, allowances or discounts of any kind, except for counter claims, set-offs, allowances, or discounts which would not result in a Material Adverse Effect on a per item basis, and (c) have been, are and will be valid and generally collectible in the ordinary course of the Business; and the Stockholder has no knowledge of any material or unusual risk of non-payment for any of the Receivables. Except as set forth on Schedule 4.10, the Company has possession of all documents that represent the Receivables. Except for circumstances which would not result in a Material Adverse Effect on a per item basis, all the Receivables are genuine, valid, and legally binding obligations of the borrowers thereunder, have been duly executed by a borrower of legal capacity and are enforceable in accordance with their terms, except as enforcement thereof may be limited by (i) bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (whether applied in a proceeding, in equity or at law), (ii) state laws requiring creditors to proceed against the collateral before pursuing the borrower, and (iii) state laws on deficiencies, except where the invalidity or unenforceability of Receivables would not have a Material Adverse Effect on a per item basis. Neither the operation of any of the terms of the Receivables, nor the exercise of any right thereunder has rendered the related security interest or note unenforceable, in whole or in part, or subjected it to any right of rescission, setoff, counterclaim or defense, and no such right of rescission, setoff, counterclaim or defense has been asserted with respect thereto. The instruments representing the Receivables are in compliance with applicable laws and regulations and accurately represent the principal, interest, payment and other terms of the Receivables, except for circumstances which would not result in a Material Adverse Effect on a per item basis. For purposes hereof, the "Receivables" shall mean 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 or described on Schedule 4.10 annexed hereto. 4.11 Inventory. All of the Company's inventory (the "Inventory") (whether reflected in the Financial Statements or thereafter acquired by the Company prior to the Effective Date) is of a quality, age and quantity consistent with the historical practices of the Company, and is valued on the Company's books at cost. Schedule 4.11 sets forth a true and complete listing of the Inventory as of the date set forth on such schedule and includes a listing of the make, model, year, and vehicle identification number for each item of Inventory listed on such schedule. None of the Inventory is subject to any lien, charge, or encumbrance, except as set forth on Schedule 4.11. 4.12 Legal Compliance. (a) To the actual knowledge of the Shareholder the Company 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 the Company is not in default or violation in respect of or under any of the foregoing. The Stockholder is not aware of any past or present condition or circumstance in the Company's Business (including, without limitation, with respect to any real property now or previously occupied by the Company) which could give rise to any material liability under any such law, statute, regulation, rule or ordinance. (b) Except as set forth on Schedule 4.12(b) attached hereto the Company has not generated, operated, processed, distributed, transported, used, treated, stored, handled, emitted, discharged, released or disposed of (or caused any person or entity to do any of the foregoing or assisted any person or entity in doing any of the foregoing) any oil, gasoline, petroleum-related products, hazardous substances, hazardous waste, or pollutants or contaminants (as defined by CERCLA), including, without limitation, asbestos or asbestos containing materials, PCB's or urea formaldehyde, except in accordance with applicable laws or any product which may give ride to Hazardous Materials Liabilities. For purposes hereof, the following terms shall have the following meanings: (i) The term "Hazardous Materials" shall mean (a) hazardous materials, contaminants, constituents, medical wastes, hazardous or infectious wastes and hazardous substances as those terms are now defined in any Environmental Laws, including without limitation the following statutes and their implementing regulations: the Hazardous Materials Transportation Act, 49 U.S.C. 9601 et seq. (the "HMTA"), the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. et seq. (as so amended, "CERCLA"), THE Clean Water Act, 33 U.S.C. 1251 et seq. (the "CWA"), and the Clean Air Act, 42 U.S.C. 7401 et seq. (the "CAA"); (b) petroleum, including crude oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d) asbestos and/or asbestos-containing materials; and (e) polychlorinated biphenyl ("PCBs") or materials or fluids containing PCBs in excess of 50 parts per million; (ii) The term "Hazardous Materials Liabilities" shall mean any and all damages, losses, liabilities, disabilities, fines, penalties, costs or expenses (including reasonable attorneys' fees) incurred or to be incurred, whether absolute, fixed or contingent, civil or criminal, and whether arising under federal law or state law, incurred or to be incurred in connection with the handling, storage, transportation, or disposal of any Hazardous Materials; and (iii) The term "Environmental Laws" shall mean any statute, law, ordinance, code, rule, regulation, policy, guideline, permit, consent, approval, license, judgment, order, writ, decree or authorization, including the requirement to register storage tanks, established or enacted for, or relating to, the protection of the environment or the health and safety of any person (including, without limitation, those relating to 9a) the HMTA, CERCLA, the CWA, the CAA or the Resource Conservation and Recovery Act, 42 U.S.C. 6903 et seq.; (b) emissions, discharges, releases or threatened releases of Hazardous Materials into the environment, including, without limitation, into ambient air, soil, sediments, land surface or subsurface, buildings or facilities, surface water, ground water, publicly-owned treatment works, septic systems or land; or (c) the generation, treatment, storage, disposal, use, handling, manufacturing, transportation or shipment of Hazardous Materials. (c) Neither the Company nor the Stockholder has received any written notice of default or violation, nor, to the best of the Stockholder's knowledge, is the Company or any of its directors, officers or employees in default or violation, with respect to any judgment, order, writ, injunction, decree, demand or assessment issued by any court or any federal, state, local, municipal or other governmental agency, board, commission, bureau, instrumentality or department, domestic or foreign, relating to any aspect of the Company's business, affairs, properties or assets. Neither the Company nor the Stockholder has received written notice of, been charged with, or is, to the best of the Stockholder's knowledge, under investigation with respect to, any violation of any provision of any federal, state, local, municipal or other law or administrative rule or regulation, domestic or foreign, relating to any aspect of the Company's business, affairs, properties or assets, which violation would have a material adverse effect on the Company, its business or any material portion of its assets. 4.13 Real Property. (a) Schedule 4.13 annexed hereto lists and describes all real property owned, held or leased by the Company. The Company holds good and marketable title to the real property and leasehold interests listed in Schedule 4.13, subject only to those liens and mortgages set forth in Schedule 4.13, except for liens, pledges, claims, security interests or encumbrances which in the aggregate would not have a Material Adverse Effect. Neither the Company nor the Stockholder has received notice that any such real property or any buildings or improvements thereon (collectively, the "Facilities") or the use thereof by the Company is in violation of any applicable building, zoning or other law, ordinance or regulation affecting such real property, and no covenants, easements, rights-of-way or conditions of record impair such use, except as set forth in Schedule 4.13. The Company does not own or lease any real property which is not listed in Schedule 4.13, nor does the Company have any interest in any other real property, including partnerships, joint ventures, trust deeds or land sale contracts. (b) Each of the leases described in Schedule 4.13 is in full force and effect and constitutes a valid and binding obligation of the Company and, to the best knowledge of the Stockholder, the other parties thereto. Neither the Company nor the Stockholder has received any notice of default with respect to any term or condition of any of the leases identified in Schedule 4.13, nor is the Company in default or arrears in the performance or satisfaction of any material agreement or condition on its part to be performed or satisfied thereunder. Except as disclosed in Schedule 4.13, no waiver of default or indulgence has been granted by any of the lessors under said leases, and no event has occurred which, after notice or lapse of time or both, would constitute a default thereunder, or would permit the acceleration of any obligation of any party thereto. (c) Except as set forth in Schedule 4.13, all of the buildings, fixtures and other improvements located on the Facilities are accessible by public roads, and are adequate for use in the Company's business as presently conducted; and the operation of the Facilities as presently conducted is not in violation of any applicable building code, zoning ordinance or other law or regulation. 4.14 Insurance. The Company 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 set forth on the attached Schedule 4.14. 4.15 Employees. Except as disclosed in Schedule 4.15 annexed hereto, the Company 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 the Company. The Company has not had any material labor difficulty in the past two (2) years, and neither the Company nor the Stockholder has received notice of any unfair labor practice charges against the Company or any actual or alleged violation by the Company 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. 4.16 Employee Benefits. The Company does not maintain and is not required to make any contributions 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 the Company 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 the Company to its employees. 4.17 Contracts and Commitments. The Company has previously provided reasonable access to the Buyer and its representatives to permit such persons to inspect and copy 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, and (b) those contracts and commitments listed on Schedule 4.17 annexed hereto, there is no other contract, agreement, commitment or understanding which is material to the ongoing operation of the Business. To the best of the Stockholder's knowledge, all of such agreements and contracts are in full force and effect, and there is no material default or non-performance outstanding thereunder. 4.18 Litigation. Except as set forth on Schedule 4.18, there is no pending or, to the actual knowledge of the Stockholder, threatened litigation, arbitration, administrative proceeding or other legal action or proceeding against the Company or relating to its business. The Stockholder is not aware of any state of facts, events, conditions or occurrences which the Stockholder reasonably believes would properly constitute grounds for or the basis of any suit, action, arbitration, proceeding or investigation against or with respect to the Company. 4.19 Intellectual Property. To the Stockholder's actual knowledge the Company 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. The Buyer acknowledges that the trade name/trademark/service mark, "R.C. Hills," will not be usable by the Company or the Buyer and on the ninetieth (90th) day after the date of Closing all use by the Company will cease. 4.20 Bank Accounts. Annexed hereto as Schedule 4.20 is a correct and complete list of all bank accounts and safe deposit boxes maintained by or on behalf of the Company, with indication of all persons having signatory, access or other authority with respect thereto. 4.21 Going Concern. The Stockholder has no 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 Company to continue the Business in substantially the manner heretofore conducted (other than general, industry-wide conditions). 4.22 The Shares. The Stockholder 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. The Stockholder further confirms that he has received no assurance whatsoever as to whether or when any of the Shares will be registered under federal or state securities laws (except as provided herein), and that, accordingly, the Stockholder may be required to hold the Shares indefinitely. The Stockholder and Buyer are entering into a separate Registration Rights Agreement that provides the Stockholder registration rights on the Shares being issued to the Stockholder hereunder. 4.23 Disclosure and Duty of Inquiry. 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 Stockholder in this Agreement. 4.24 Allowance for Uncollectible Accounts. The Buyer accepts the amount of the allowance for uncollectible accounts shown in the Financial Statements as adequate in each case as of the dates thereof. Stockholder shall have no responsibility related to such allowance and makes no representation or warranty in regard thereto. 5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. In connection with the Buyer's acquisition of the Stock, the Buyer hereby represents and warrants to 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. The Buyer is qualified to do business in each foreign jurisdiction in which its business requires it to be qualified. 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; No Breach. (a) The Buyer has full legal right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. 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 that such enforceability may be 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. (b) Except as disclosed in Schedule 5.3 annexed hereto, 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, under circumstances that would result in a Material Adverse Effect: (i) violate any statute or regulation of any governmental authority, domestic or foreign, affecting the Buyer or any of its subsidiaries; (ii) require the issuance of any authorization, license, consent or approval of any federal or state governmental agency; or (iii) 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 or any of its subsidiaries is a party, or by which the Buyer or any of its subsidiaries is bound, or constitute a default thereunder, or require the consent of any other party to any of the foregoing. 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 Issuance of Shares. The issuance of the Shares hereunder has been duly authorized by all necessary corporate action on the part of the Buyer, and the Shares are validly issued, fully paid and non- assessable. The Stockholder will receive from Buyer good, valid, and marketable title to all of the Shares, free and clear of all pledges, liens, claims, charges, options, calls, encumbrances, restrictions and assessments whatsoever, (except any restrictions which may be created by operation of state or federal securities laws). 5.6 Investment. The Buyer is purchasing the Stock for its own account for investment, and not with a view to the resale or distribution thereof in violation of any applicable securities laws. 5.7 Disclosure and Duty of Inquiry. The Stockholder 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 Buyer in this Agreement. 5.8 Buyer's Information. The financial information and reports (the "Buyer's Information") which have been delivered or made available to Stockholder, including the items specifically listed on the attached Schedule 5.8, fairly present in all material respects the financial status of Eckler, and its subsidiaries (jointly referred to as "Eckler") as of the date of such information and do not contain a materially misleading statement or omit information or statements reasonably necessary to make such information reasonably illustrative of the financial condition, assets, liabilities, and other material matters as would be reasonably necessary to a prudent investor to reach an informed decision regarding an investment in the Shares. 5.9 Contingent Liabilities. There are no contingent liabilities, whether or not asserted, known to Buyer or the principal shareholders of Buyer, which are not reflected in the Buyer's Information which, if such contingent liabilities become actual liabilities, would or could have a material and adverse impact on Buyer and/or its subsidiaries or their prospects. 5.10 No Litigation. Neither the Buyer nor any of its affiliates or subsidiaries, is subject to or involved in any material litigation, arbitration, administrative proceedings, or other controversy. 5.11 No Tax Controversies. Neither the Buyer nor any of its subsidiaries have failed to file when due all of their respective income, franchise, sales and use, employment, property, excise and other federal, state and local tax returns or have failed to pay when due any tax liability shown to be due on such return. Neither the Buyer nor any of its subsidiaries have been notified of any audit of any of their respective activities by any governmental authority. 5.12 Title and Condition of Assets. All of the Buyer's assets, and all of its subsidiaries' assets, as shown in the Buyer's Information as provided to the Stockholder, are owned by the entity which is shown to own such asset, subject only to such liabilities as are disclosed in the Buyer's Information, and all of such assets are in good operating condition and repair (ordinary wear and tear excepted) and are adequate for their use in the respective businesses as conducted by the Buyer and its subsidiaries and are sufficient for the continued conduct of such businesses 5.13 Legal Compliance. (a) To the actual knowledge of the Buyer and its principal shareholders, the Buyer (and its subsidiaries) are, and for the past three (3) years have been, except for circumstances which in the aggregate would not result in a Material Adverse Effect, 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 the Buyer and its subsidiaries are not in default or violation in respect of or under any of the foregoing. Neither the Buyer nor its principal shareholders, are aware of any past or present condition or circumstance in the Buyer's (or its subsidiaries) business (including, without limitation, with respect to any real property now or previously occupied by any of them) which could give rise to any material liability under any such law, statute, regulation, rule or ordinance. (b) Except as set forth on Schedule 5.13 attached hereto, the Buyer has not generated, operated, processed, distributed, transported, used, treated, stored, handled, emitted, discharged, released or disposed of (or caused any person or entity to do any of the foregoing or assisted any person or entity in doing any of the foregoing) any oil, gasoline, petroleum-related products, hazardous substances, hazardous waste, or pollutants or contaminants (as defined by CERCLA), including, without limitation, asbestos or asbestos containing materials, PCB's or urea formaldehyde, except in accordance with applicable laws or any product which may give rise to Hazardous Materials Liabilities. (c) Neither the Buyer nor any of its principal shareholders has received any written notice of default or violation, nor, to the best of their knowledge, is the Buyer, its subsidiaries, or any of their respective directors, officers or employees in default or violation with respect to any judgment, order, writ, injunction, decree, demand or assessment issued by any court or any federal, state, local, municipal or other governmental agency, board, commission, bureau, instrumentality or department, domestic or foreign, relating to any aspect of the Buyer's or its subsidiaries' business, affairs, properties or assets. Neither the Buyer nor its principal shareholders has received written notice of, been charged with, or is, to the best of their knowledge, under investigation with respect to, any violation of any provision of any federal, state, local, municipal or other law or administrative rule or regulation, domestic or foreign, relating to any aspect of the Buyer's or its subsidiaries' business, affairs, properties or assets, which violation would have a Material Adverse Effect. 5.14 Intellectual Property. The Buyer and its subsidiaries have the valid right to utilize all trade names and other intellectual property utilized in their business, and have not received notice of any claimed infringement of any of such intellectual property with the rights or property of any other person. 5.15 Transactions with Related Parties. There are no agreements or contracts between the Buyer, and/or its subsidiaries, with any party who owns, directly or indirectly, or has the right to acquire more than ten percent (10%) of the common stock of the Buyer, or any affiliate of such person, other than as disclosed on the attached Schedule 5.15. 5.16 Status of NewCo. NewCo is a newly formed Florida corporation and has no assets, or liabilities. 5.17 No Material Changes. Except as disclosed in Schedule 5.17 annexed hereto, since the delivery of the Buyer's Information to the Stockholder, and except as set forth in the Buyer's Information (a) the business of the Buyer has been operated solely in the normal course, (b) there has been no changes in the financial condition, operations or business of the Company from that reflected in the Buyer's Information which in the aggregate would have a Material Adverse Effect, (c) the Buyer has not incurred any material obligation or liability except in the normal course of business, (d) the Buyer has not effected or suffered any material modification in its collection practices, or with respect to the timing and manner of payment of its accounts payable, and (e) there has not been any sale, assignment or transfer by the Buyer of any assets or other part of its business, excluding the sale or disposition of inventory, and/or the sale of loans, in the ordinary course of business. 6. ADDITIONAL AGREEMENTS. 6.1 Resignations. In addition to the other deliveries being made pursuant to this Agreement on the date hereof, the Stockholder is causing to be executed and delivered to the Company the resignations of all officers and directors of the Company (except to the extent that such resignations are not being required by the Buyer). 6.2 Audit of Financial Statements. The Stockholder shall, from time to time as and when requested by the Buyer from and after the date hereof, cooperate with and assist the Buyer in all reasonable respects in dealing with the accountants heretofore retained by the Company, in order that the Buyer and its accountants may obtain copies of all work papers utilized or prepared by the Company's accountants in connection with their review of the Financial Statements, and consult with the Company's accountants as and to the extent necessary or appropriate in connection with the preparation of audited financial statements of the Company for all periods from and after January 1, 1993 in accordance with Regulation S-X promulgated under the Securities Act of 1933, as amended. Any reasonable out-of-pocket expenses incurred or paid to third parties by Stockholder in complying with this Section 6.2 shall be reimbursed by Buyer, except that any such expenses exceeding $500 shall be approved by Buyer prior to such expenses being incurred. 6.3 1997 Tax Treatment. The parties hereby confirm and consent that the Company's income in respect of 1997 shall not be prorated as between the Stockholder (on the one hand) and the Buyer (on the other hand), but shall be determined based on actual income for that portion of 1997 through the date hereof and for that portion of 1997 subsequent to the date hereof, with the Company having been deemed to have closed its books for these purposes on and as of the date hereof. The "closing of the books" shall be accomplished in a manner that is consistent with accounting conventions and procedures used in closing the books in prior years for year end closings. All allocations or determinations of accounting questions will be handled in cooperation with the Shareholder. It is agreed that the intent shall be to minimize, to the extent possible, the income to be allocated to the Stockholder for the short period. 6.4 Intentionally Omitted. 6.5 Assumption of GE Debt; Hold Harmless. The Buyer will assume the obligation of the Company to GE, and to the extent that the GE Debt is the obligation of the Stockholder, or any other entity owned by the Stockholder, including Orange Acceptance Corporation, Motorcycle Insurance Agency, Inc., R.C. Hill Enterprises, Inc., Deltona House Rentals, Inc., Affordable Leasing, Inc., and Polaris of Orlando, Inc. (herein referred to as the "GE Guarantors"), whether as co-obligors or guarantors, the Buyer shall cause the release of the Stockholder, the GE Guarantors, and R.C. Hill, Sr. (as to his collateral assignment of mortgage provided to GE as part of the Forbearance Agreement arrangements entered into on January 21, 1997) (the "Indemnitees") from any obligation for the GE Debt, however arising, on or before the expiration of ninety (90) days from the date of this Agreement. The Buyer hereby agrees to indemnify and hold the Indemnitees harmless from and against the GE Debt, including principal, interest, defaults, default interest, penalties, and liens and security interests against the property of the Indemnitees, in accordance with the terms of the separate Indemnification Agreement attached hereto as Schedule 6.5. The dollar amount owed to GE by the Stockholder, R.C. Hill, Sr., and the GE Guarantors is set forth on Schedule 6.5. 6.6 Lease of West Colonial Property. As a precondition of the Stockholder's obligations to close hereunder, Buyer shall execute and deliver to Stockholder a commercial lease agreement in the form of that attached as Schedule 6.6, providing for a net lease of the Stockholder's property at 3411 West Colonial Drive, Orlando, Florida. 6.7 Access to Records of Company. Subsequent to the consummation of the acquisition and merger contemplated by this Agreement, the Buyer agrees to reasonably cooperate with the Stockholder in permitting Stockholder and his agents reasonable access to the records of the Company for periods prior to the Effective Date for Stockholder's reasonable needs, including, but not limited to, responding to inquiries from tax authorities, determining information related to transactions occurring in such prior periods, and the other reasonable business and personal needs of the Stockholder. 6.8 Conversion of Stockholder Capital Debt. The Stockholder shall cause the debt of the Company to the Stockholder, referenced as the "Notes Payable AmSouth $347,574.08" on the compiled Balance Sheet for the Company as of February 1997 to be converted to a capital contribution of the Stockholder, effective immediately prior to the consummation of this Merger, and there shall be no further liability of the Company to the Stockholder regarding such debt. 6.9 Conversion of Stockholder Finance Debt. As of the Effective Date, $281,367 in debt owed to the Stockholder by the Company, including accrued interest through February 12, 1997 (the "Finance Debt") shall be converted into a capital contribution by the Stockholder to the Company, and there shall be no further liability of the Company to the Stockholder regarding the Finance Debt. 6.10 Release/Indemnification From Specified Loans. The Buyer indemnifies and agrees to hold the Stockholder harmless, from and after closing, from the following loans made to the Company, which loans were co- signed or guaranteed personally by the Stockholder: (i) Nat Weaver, Inc.-dated January 1, 1993, for $70,000, due on December 31, 1997, plus interest at 16% per annum. (ii) Nat Weaver, Inc.-dated April 17, 1992, for $50,000, due on April 17, 1997, plus interest at 16% per annum. (iii) Nat Weaver, Inc.-dated August 1, 1992, for $60,000, due on July 31, 1997, plus interest at 16% per annum. (iv) Jeremy Hill-dated June 1, 1992, for $1,500, due on demand, plus interest at 15% per annum. (v) John Jeyaseelan-undated in 1994, for $10,000, due on demand, with interest at 15% per annum. (vi) John Jeyaseelan-dated December 30, 1994, for $5,000, due on demand, plus interest at 15% per annum. (vii) John Jeyaseelan-date December 27, 1994, for $5,000, due on demand, plus interest at 15% per annum. (viii) Lucy Lee Burton-dated January 1, 1995, for $100,000, due on October 30, 2001, plus interest at 10% per annum. (ix) Mark F. Burton-dated February 17, 1995, for $101,006.68, due on October 30, 2001, with interest at 10% per annum. (x) R.C. Hill, Sr.-dated August 1, 1993, for $200,000, due on December 31, 2001, with interest at 10% per annum. (xi) R.C. Hill III - $190,468.41, dated July 12, 1996, payable November 15, 2001, with interest at 15% per annum. (xii) Barnett Bank, N.A. - current balance $32,548.75, dated October 8, 1996. The Buyer shall cause the Stockholder to be released as a co-obligor or guarantor on or before the expiration of one hundred and eighty (180) days after the Effective Date. 7. [INTENTIONALLY OMITTED]. 8. INDEMNIFICATION. 8.1 General. (a) The Stockholder shall 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 ("Buyer Losses") as a result of any breach of, or failure by the Stockholder to perform, any of the representations, warranties, covenants or agreements of the Stockholder contained in this Agreement or in any Schedule(s) furnished by or on behalf of the Company or the Stockholder under this Agreement. (b) The Buyer shall defend, indemnify and hold harmless 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 Stockholder may incur, sustain or suffer ("Stockholder Losses") as a result of 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. (c) Subject to the limitations of Section 8.2, the representations, warranties and covenants contained herein shall survive the closing hereunder to the extent any party hereto is entitled to indemnification hereunder for any breach of any representation, warranty or covenant contained herein. (d) The Stockholder's indemnification obligations hereunder are secured by a Stock Pledge and Security Agreement of even date herewith among the Stockholder, the Buyer, and First Choice Auto Finance, Inc. 8.2 Limitations on Indemnity. (a) Notwithstanding any other provision of this Agreement to the contrary, (i) the Stockholder shall not be liable to the Buyer with respect to Buyer Losses unless and until the aggregate amount of all Buyer Losses shall exceed the sum of Fifty Thousand Dollars ($50,000) (the "Stockholder Basket"), and (ii) the Stockholder shall thereafter be liable for all Buyer Losses in excess of the Stockholder Basket, provided that the Stockholder's maximum aggregate liability in respect of all Buyer Losses shall not, in the absence of proven fraud by the Stockholder in respect of any particular Buyer Losses, in any event exceed the limitations set forth in Section 8.2(c) below; provided, however, that the Stockholder Basket and such limitation on liability shall not be available with respect to, and there shall not be counted against the Stockholder Basket or such limitation of liability, any Buyer Losses arising by reason of any proven fraud by the Stockholder. (b) Notwithstanding any other provision of this Agreement to the contrary, (i) the Buyer shall not be liable to the Stockholder with respect to Stockholder Losses unless and until the aggregate amount of all Stockholder Losses shall exceed the sum of Fifty Thousand Dollars ($50,000) (the "Buyer Basket"), and (ii) the Buyer shall thereafter be liable for all Stockholder Losses in excess of the Buyer Basket; provided, however that the Buyer Basket shall not be available with respect to, and there shall not be counted against the Buyer Basket any Stockholder Losses arising by reason of any Stockholder Losses involving proven fraud by the Buyer, its principal shareholders, officers, employees or directors. (c) Except with respect to any Buyer Losses involving proven fraud by the Stockholder, the Stockholder shall not be required to pay indemnification hereunder in an aggregate amount in excess of the Stock Valuation received by the Stockholder under the terms of this Agreement. The Stockholder shall have the option of satisfying all or any portion of any claim in respect of Buyer Losses by tendering to the Buyer for cancellation a number of Shares having an aggregate value (determined as provided below, subject to appropriate arithmetic adjustment to account for any stock split, stock dividend, combination of shares or other such event which may occur at any time or from time to time subsequent to the date hereof in respect of the outstanding Common Stock) equal to the amount of the subject claim which is to be satisfied in such manner. (d) The Buyer shall be entitled to indemnification by the Stockholder for Buyer Losses only in respect of claims for which notice of claim shall have been given to the Stockholder on or before March 31, 1998. The Stockholder shall be entitled to indemnification by the Buyer for Stockholder Losses only in respect of claims for which notice of claim shall have been given to the Buyer on or before March 31, 1998. (e) For purposes of Section 8.2(b) above, the Shares shall be deemed to have a value of $17.50 per Share. 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, through 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. With respect to the initial announcement of the consummation of the transactions pursuant to this Agreement and of any of the terms thereof, neither party shall make such an announcement without the prior review and approval thereof by the Buyer (in the case of any proposed disclosure or public announcement by 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 Bank Accounts. Upon the consummation of the transactions pursuant to this Agreement, the Stockholder shall cooperate with the Buyer to promptly modify to the Buyer's satisfaction the signatory and access arrangements for all bank accounts and safe deposit boxes maintained by or in the name of the Company. 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 ownership and operations of the Business. 10. COSTS. 10.1 Finder's or Broker's Fees. Each of the Buyer and the Stockholder represents and warrants that neither they or any of their respective affiliates have dealt with any broker or finder in connection with any of the transactions contemplated by this Agreement, or that any broker or other person is entitled to any commission or finder's fee in connection with any of these transactions. 10.2 Expenses. The parties (except as provided in Section 10.3) 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. 10.3 Stockholder's Costs. The Buyer shall pay the reasonable attorneys' and accountants' fees and costs associated with the negotiation and consummation of this transaction. Such fees and costs shall be paid immediately upon receipt of an invoice from the Stockholder's attorneys or accountants. The attorneys and accountants shall have the rights of enforcement provided in this Agreement and are intended beneficiaries of this provision. 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 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 the Stockholder: R. C. Hill, II 1211 Salerno Court Orlando, FL 32806 (ii) With a copy to: David A. Webster, Esquire Milam, Otero, Larsen, Dawson & Taylor, P.A. 1301 Riverplace Boulevard, Suite 1301 Jacksonville, Florida 32207 (iii) If to the Buyer: Eckler Industries, Inc. 5200 South Washington Avenue Titusville, FL 32780 Attn.: James Neal Hutchinson, Jr. General Counsel 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. 13.4 Costs of Enforcement. In the event that any party is required to bring an action to enforce its rights hereunder, the substantially prevailing party shall recover from the substantially non- prevailing party all of the substantially prevailing party's attorneys' fees and costs (the "Expenses") incurred in such action. For purposes herein, the Expenses shall include investigatory, trial, appeal, bankruptcy, mediation and arbitration expenses, and all costs of collection and shall cover fees and costs for the lawyers, experts, paralegals and clerks, and all other persons reasonably necessary as part of the enforcement process. All such Expenses shall bear interest from the date incurred until the date paid at the highest rate of interest permitted in Florida. The parties request that a court award the actual Expenses incurred by the substantially prevailing party, recognizing that it is the parties intention that the substantially prevailing party should be made completely whole. Costs incurred in enforcing this Section shall be included in Expenses. 13.5 Time of Essence. Time is of the essence of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the date first set forth above. The Buyer: ECKLER INDUSTRIES, INC., a Florida corporation By: /s/ J. Neal Hutchinson, Jr. Name: Its: Asst. V.P. The Stockholder: /s/R.C. Hill,II R. C. HILL, II EX-10.2 4 Exhibit 10.2 AMENDED AND RESTATED RENEWAL PROMISSORY NOTE $190,468.41 February 12, 1997 Orlando, Florida FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY and ECKLER INDUSTRIES, INC. (jointly and severally the "Maker"), promise to pay to Mr. & Mrs. R.C. HILL, III ( collectively the "Holder") the principal sum of ONE HUNDRED NINETY THOUSAND FOUR HUNDRED SIXTY EIGHT AND 41/100 DOLLARS ($190,468.41) on or before June 30, 1997, and promises to pay interest thereon at the rate of Fifteen Percent (15%) per annum on the principle balance from July 12, 1996, commencing August 1, 1996 and monthly thereafter on the first of each month. The said principal sum and interest shall be payable in lawful money of the United States of America at 3407 West Colonial Drive, Orlando, Florida 32808, or at such place as may hereafter be designated by written notice from the Holder to the Maker. This Promissory Note shall not be transferable by the Holder hereof. Each person liable hereon, whether maker, endorser or guarantor, hereby waives presentment, protest, notice, notice of protest and notice of dishonor and agrees to pay any and all costs, including actual attorney's fees, whether suit be brought or not, if, after maturity of this Promissory Note, or default hereunder, counsel shall be employed to collect on this Promissory Note. Whenever used herein the terms "holder" and "maker" shall be construed in the singular or plural as the context may require or admit. This Promissory Note amends, restates and renews in its entirety that certain promissory note made by Maker in favor of and currently owned and held by Holder, dated July 12, 1996, in the original principal sum of One Hundred Ninety Thousand Four Hundred Sixty Eight and 41/100 dollars ($190,468.41). In witness whereof, the undersigned Maker has executed and delivered this Promissory Note this 12th day of February 1997. ECKLER INDUSTRIES, INC. LIBERTY FINANCE COMPANY By: /S/ J. Neal Hutchinson, Jr. By: /S/ R.C. Hill, III J. Neal Hutchinson, Jr. Ass't Vice-Pres R.C. Hill, III, President EX-10.3 5 Exhibit 10.3 AMENDED AND RESTATED RENEWAL PROMISSORY NOTE $60,000 February 12, 1997 Orlando, Florida FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the "Maker"), promises to pay to NATE WEAVER, INC. (the "Holder") the principal sum of SIXTY THOUSAND AND NO/100 DOLLARS ($60,000) on or before July 31, 1997, and promises to pay interest thereon at the rate of Sixteen Percent (16%) per annum on the principle balance from August 1, 1992 commencing October 31, 1992 and quarterly thereafter on January 31, April 30, and July 31. The said principal sum and interest shall be payable in lawful money of the United States of America at 2519 Pershing Oaks Place, Orlando, Florida 32806, or at such place as may hereafter be designated by written notice from the Holder to the Maker. Until the principal is fully repaid, the undersigned agrees to pay a late charge of Six (6%) on any interest or principal payment received after Fifteen (15) calendar days from the due date. This Promissory Note shall not be transferable by the Holder hereof. Each person liable hereon, whether maker, endorser or guarantor, hereby waives presentment, protest, notice, notice of protest and notice of dishonor and agrees to pay any and all costs, including actual attorney's fees, whether suit be brought or not, if, after maturity of this Promissory Note, or default hereunder, counsel shall be employed to collect on this Promissory Note. Whenever used herein the terms "holder" and "maker" shall be construed in the singular or plural as the context may require or admit. This Promissory Note amends, restates and renews in its entirety that certain promissory note made by R.C. Hill's World of Wheels, Inc. in favor of and currently owned and held by Holder, dated August 1, 1992, in the original principal sum of Sixty Thousand and no/100 dollars ($60,000). Liberty Finance Company is the successor in interest, by merger, to R.C. Hill's World of Wheels, Inc. In witness whereof, the undersigned Maker has executed and delivered this Promissory Note this 12th day of February 1997. LIBERTY FINANCE COMPANY By: /S/ R.C. Hill, III R.C. Hill, III, President EX-10.4 6 Exhibit 10.4 CONSOLIDATED, AMENDED AND RESTATED RENEWAL PROMISSORY NOTE $20,000 February 12, 1997 Orlando, Florida FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the "Maker"), promises to pay to JOHN JEYASEELAN (the "Holder") the principal sum of TWENTY THOUSAND AND NO/100 DOLLARS ($20,000) on or before June 30, 1997, and promises to pay interest thereon at the rate of Fifteen Percent (15%) per annum on the principle balance from December 31, 1996 commencing on June 30, 1997 and annually thereafter. This Promissory Note shall not be transferable by the Holder hereof. Each person liable hereon, whether maker, endorser or guarantor, hereby waives presentment, protest, notice, notice of protest and notice of dishonor and agrees to pay any and all costs, including actual attorney's fees, whether suit be brought or not, if, after maturity of this Promissory Note, or default hereunder, counsel shall be employed to collect on this Promissory Note. Whenever used herein the terms "holder" and "maker" shall be construed in the singular or plural as the context may require or admit. This Promissory Note consolidates, amends, restates and renews in their entirety the following promissory notes made by Maker in favor of and currently owned and held by Holder: (1) that certain promissory note undated in 1994, in the original principal sum of Ten Thousand and No/100 Dollars ($10,000); (2) that certain promissory note dated December 30, 1994, in the original principal sum of Five Thousand and No/100 Dollars ($5,000); and (3) that certain promissory note dated December 27, 1995, in the original principal sum of Five Thousand and No/100 Dollars ($5,000). In witness whereof, the undersigned Maker has executed and delivered this Promissory Note this 12th day of February 1997. LIBERTY FINANCE COMPANY By: /S/ R.C. Hill R.C. Hill, III, President EX-10.5 7 Exhibit 10.5 AMENDED AND RESTATED RENEWAL PROMISSORY NOTE $70,000 February 12, 1997 Orlando, Florida FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the "Maker"), promises to pay to NATE WEAVER, INC. (the "Holder") the principal sum of SEVENTY THOUSAND AND NO/100 DOLLARS ($70,000) on or before December 31, 1997, and promises to pay interest thereon at the rate of Sixteen Percent (16%) per annum on the principle balance from January 31, 1993 and commencing on February 28, 1993 and quarterly thereafter on May 31, August 31, and November 30. The said principal sum and interest shall be payable in lawful money of the United States of America at 2519 Pershing Oaks Place, Orlando, Florida 32806, or at such place as may hereafter be designated by written notice from the Holder to the Maker. Until the principal is fully repaid, the undersigned agrees to pay a late charge of Six (6%) on any interest or principal payment received after Fifteen (15) calendar days from the due date. This Promissory Note shall not be transferable by the Holder hereof. Each person liable hereon, whether maker, endorser or guarantor, hereby waives presentment, protest, notice, notice of protest and notice of dishonor and agrees to pay any and all costs, including actual attorney's fees, whether suit be brought or not, if, after maturity of this Promissory Note, or default hereunder, counsel shall be employed to collect on this Promissory Note. Whenever used herein the terms "holder" and "maker" shall be construed in the singular or plural as the context may require or admit. This Promissory Note amends, restates and renews in its entirety that certain promissory note made by R.C. Hill's World of Wheels, Inc. in favor of and currently owned and held by Holder, dated January 1, 1993, in the original principal sum of Seventy Thousand and no/100 dollars ($70,000). Liberty Finance Company is the successor in interest, by merger, to R.C. Hill's World of Wheels, Inc. In witness whereof, the undersigned Maker has executed and delivered this Promissory Note this 12th day of February 1997. LIBERTY FINANCE COMPANY By:/s/ R.C. Hill R.C. Hill, III, President EX-10.6 8 Exhibit 10.6 AMENDED AND RESTATED RENEWAL PROMISSORY NOTE $50,000 February 12, 1997 Orlando, Florida FOR VALUE RECEIVED, the undersigned, LIBERTY FINANCE COMPANY (the "Maker"), promises to pay to NATE WEAVER, INC. (the "Holder") the principal sum of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000) on or before June 30, 1997, and promises to pay interest thereon at the rate of Sixteen Percent (16%) per annum on the principle balance from April 17, 1992 and commencing on June 30, 1992 and at the end of each calendar quarter thereafter. The said principal sum and interest shall be payable in lawful money of the United States of America at 2519 Pershing Oaks Place, Orlando, Florida 32806, or at such place as may hereafter be designated by written notice from the Holder to the Maker. Until the principal is fully repaid, the undersigned agrees to pay a late charge of Six (6%) on any interest or principal payment received after Fifteen (15) calendar days from the due date. This Promissory Note shall not be transferable by the Holder hereof. Each person liable hereon, whether maker, endorser or guarantor, hereby waives presentment, protest, notice, notice of protest and notice of dishonor and agrees to pay any and all costs, including actual attorney's fees, whether suit be brought or not, if, after maturity of this Promissory Note, or default hereunder, counsel shall be employed to collect on this Promissory Note. Whenever used herein the terms "holder" and "maker" shall be construed in the singular or plural as the context may require or admit. This Promissory Note amends, restates and renews in its entirety that certain promissory note made by R.C. Hill's World of Wheels, Inc. in favor of and currently owned and held by Holder, dated April 17, 1992 in the original principal sum of Fifty Thousand and no/100 dollars ($50,000). Liberty Finance Company is the successor in interest, by merger, to R.C. Hill's World of Wheels, Inc. In witness whereof, the undersigned Maker has executed and delivered this Promissory Note this 12th day of February 1997. LIBERTY FINANCE COMPANY By: /S/ R.C. Hill, III R.C. Hill, III, President EX-10.7 9 Exhibit 10.7 LEASE THIS LEASE (this "Lease") is made as of February 12, 1997 between "Landlord" and "Tenant" hereinafter named. WITNESSETH: 1. DEFINITIONS (a) "Landlord": R.C. HILL, II. Address: 1214 Salerno Court, Orlando, Florida. (b) "Tenant": FIRST CHOICE AUTO FINANCE, INC., a Florida corporation. Address: 101 Phillippe Parkway, Suite 300, Safety Harbor, Florida 34695. (c) "Premises": The land described in Exhibit A attached hereto and the building (the "Building") and other improvements located thereon. The address of the Premises is set forth on Exhibit A. (d) "Use of Premises": Automobile sales and financing and ancillary sales and administrative offices. Additionally, a portion of the Premises is subject to leases which leases are hereby assigned to Tenant, who agrees to become the Landlord thereunder. Such leases shall thereupon be deemed to be permitted sub-leases hereunder. The use of the Premises shall include rights to any signage leases on the Premises. (e) "Commencement Date": The date hereof. (f) "Term": The period commencing on the Commencement Date and ending on the last day of the sixtieth (60th) full calendar month after the Commencement Date. Tenant shall have the option to renew the term of this Lease in accordance with the provisions and conditions of Rider 1 attached to this Lease. (g) "Rent": The base rent payable by Tenant in accordance with the provisions of Section 3. Rent and all other sums payable by Tenant to Landlord under this Lease, plus any applicable tax, shall be paid to Landlord, without deduction or offset, at the address stated above, or at such other place as Landlord may hereafter specify in writing. (h) "Security Deposit": None. 2. PREMISES AND TERM. Landlord hereby leases to Tenant and Tenant leases from Landlord the Premises for the Term (unless sooner terminated as provided herein). The Lease Term shall begin as of the date set forth above, in that the Tenant will have immediate possession of said Premises. As of the date thirty (30) days from the date hereof Tenant shall be deemed to have accepted the Premises as complying fully with Landlord's covenants and obligations hereunder, except for those arising under paragraphs 5 or 27 and as to those matters as to which the Tenant shall have notified the Landlord on or before such date. 3. RENT: Tenant covenants and agrees to pay, without deduction or offset, to Landlord Rent for the Premises, on or before the first (1st) day of the first (1st) full calendar month of the Term and on or before the first (1st) day of each and every successive calendar month thereafter during the Term, along with any applicable sales or other tax, in accordance with the following schedule: (a) for the period from the Commencement Date through the last day of the sixth (6th) full calendar month of the Term, the sum of Fifteen Thousand Five Hundred Dollars ($15,500.00) per month; (b) for the period from the first day of the seventh (7th) full calendar month through the last day of the twelfth (12th) full calendar month of the Term, the sum of Sixteen Thousand Dollars ($16,000.00) per month; (c) for the period from the first day of the thirteenth (13th) full calendar month through the last day of the sixtieth (60th) full calendar month, the sum of $17,000.00 per month; and (d) beginning as of the first month of each Renewal Term for each successive twelve (12) month period during each Renewal Term (and any exercised renewal thereof), the sum determined by increasing the Rent in effect for the preceding twelve (12) month period pursuant to the CPI, in accordance with the provisions of Rider 2 attached to this Lease (the "CPI Adjustment"). In the event the Commencement Date occurs on a day other than the first (1st) day of a calendar month, the first Rent payment shall be on the Commencement Date in the amount of the Rent for one (1) full calendar month plus the prorated Rent for the calendar month in which the Term commences. Whenever any sum of money is required to be paid by Tenant in addition to the Rent herein reserved, whether or not such sum is herein described as "Additional Rent" or a provision is made for the collection of such sum as "Additional Rent," such sum shall be deemed Additional Rent and, except as otherwise specifically provided herein, shall be due and payable with the first installment of Rent thereafter falling due hereunder. 4. USE OF PREMISES: The Premises shall be used by Tenant as described above in Section 1(d), and for no other purpose without the prior written consent of Landlord. Tenant shall not allow the Premises to be used for any unlawful purpose; nor shall Tenant cause, maintain, or permit any nuisance (as reasonably determined by Landlord or by law) in or about the Premises or commit or suffer to be committed any waste in, on, or about the Premises. 5. COMPLIANCE WITH LAWS; ADA: Tenant shall comply with all laws, ordinances, orders, rules and regulations of state, federal, municipal or other agencies or bodies having jurisdiction relating to the use, condition and occupancy of the Premises. Without limiting the foregoing, Tenant shall be responsible for performing any and all alterations and improvements to the Premises necessary to comply with the requirements of the Americans With Disabilities Act of 1990, any comparable state or local law, and all regulations issued pursuant thereto. Landlord represents and warrants to Tenant that on the date hereof, the Premises were in compliance with all of the foregoing, to the extent such laws and regulations were applicable to Landlord's use. 6. ASSIGNMENT AND SUBLETTING. Tenant shall not assign the right of occupancy under this Lease, or any other interest therein, or sublet the Premises, or any portion thereof, without the prior written consent of Landlord, which may be withheld at Landlord's discretion. Notwithstanding any assignment of the Lease, or the subletting of the Premises, or any portion thereof, Tenant shall continue to be liable for the performance of the terms, conditions and covenants of this Lease, including, but not limited to, the payment of Rent and Additional Rent. Consent by Landlord to one or more assignments or sublettings shall not operate as a waiver of Landlord's rights as to any subsequent assignments or sublettings. Landlord shall have the additional option, which shall be exercised by providing Tenant with written notice, of terminating Tenant's rights and obligations under this Lease (or the applicable portion thereof as to any partial subletting) rather than permitting any assignment or subletting by Tenant. Notwithstanding the foregoing, if and only if the assignee shall have a net worth (determined in accordance with generally accepted accounting principles) at least equal to the net worth of Tenant at the time of such assignment, and such assignee shall expressly assume all obligations and liabilities of Tenant under this Lease, Tenant shall have the right to assign this Lease to the surviving corporation of a merger, consolidation, reorganization or recapitalization involving Tenant. Tenant shall give Landlord at least thirty (30) days' prior written notice of any such proposed assignment. Tenant shall deliver to Landlord all information and materials as are reasonably required by Landlord to verify the net worth of the assignee. In the event of the transfer and assignment by Landlord of its interest in this Lease and/or sale of the Premises, any of which it may do at its sole option, Landlord shall thereby be released from any further obligations hereunder, and Tenant agrees to look solely to such successor in interest of Landlord for performance of such obligations. The leases assigned to Tenant by Landlord described on the attached Exhibit B, shall become sub-leases under this Lease. During the Term of this Lease, the Tenant shall be entitled to collect the rent under such subleases and shall pay the principal and interest on the mortgages described below which are in place on the date hereof on the property which is the subject of such subleases. (1) Jasbir S. Kalsi, dated June 29, 1992, $68,086.40, mortgage on rental property ($709.99 per month). (2) Lonnie Lacy as Trustee of Jewel K. Ussery, Mortgage on 3410 and 3412 Cherry Lane in the monthly amount of $615.71. 7. ACCESS TO PREMISES. Landlord or its authorized employees, contractors or agents shall upon advance notice to Tenant have the right to enter upon the Premises at all reasonable times for the purposes of inspecting the same, preventing waste, making such repairs as Landlord may consider necessary (but without any obligation to do so except as expressly provided for herein), and showing the Premises to prospective tenants, mortgagees and/or purchasers. 8. UTILITY SERVICE. Tenant shall pay the cost of all utility services, including, but not limited to, initial connection charges, all charges for gas, sewer, water and electricity used on the Premises. Tenant shall pay all costs caused by Tenant introducing excessive pollutants into the sanitary sewer system, including permits, fees and charges levied by any utility provider or governmental agency for any pollutants or solids other than ordinary human waste. Tenant shall be responsible for the installation and maintenance of any dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand traps, grease traps or similar devices as may be required by any utility provider or governmental agency for Tenant's use of the sanitary sewer system. Tenant shall pay all charges for pest control and extermination. Landlord shall not be required to pay for any services, supplies or upkeep in connection with the Premises. No interruption or malfunction of any utility service not caused by Landlord shall render Landlord liable in any respect for damages, direct or consequential, to any person or property, nor be construed as an eviction of Tenant, nor work an abatement of Rent or Additional Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement of this Lease. 9. TAXES. As part of the consideration for this Lease and in addition to the Rent as herein provided, Tenant shall, during the Term pay to Landlord as Additional Rent, all taxes, levies, excises, franchises, imposts and charges, general and special, ordinary and extraordinary, or whatever name, nature and kind, which may hereafter be levied, assessed, charged or imposed, which are a lien (whether federal, state, city, county or other public authority) upon this Lease, the Premises or Tenant's use or occupancy thereof during the Term of this Lease. It is agreed that the above charges, hereinafter referred to as "Taxes", shall not be in any way construed to include any federal, state or local income taxes assessed against either Landlord or Tenant. Within thirty (30) days of Landlord's receipt of the ad valorem tax statement for the Premises, Landlord shall deliver a copy thereof to Tenant. Tenant shall, within thirty (30) days after receipt from Landlord of the tax statement, pay to Landlord the due tax amount as Additional Rent. The due tax amount shall be determined as follows: if the payment is made to Landlord before November 1st, the due tax amount shall be the November tax amount; if the payment is made after November 1st and before the 15th day of a calendar month, the due tax amount shall be the applicable tax amount for such calendar month; and if the payment is made after November 1st and after the 15th day of a calendar month, the due tax amount shall be the applicable tax amount for the next succeeding calendar month. Assuming Tenant performs its obligations for the payment of Taxes to Landlord, Landlord shall pay any Taxes placed on the Premises prior to the date the same shall become delinquent. The parties hereto agree that in the event of the installation during the Term of this Lease by any legal taking authority of any improvement including, but not limited to, sidewalks and storm and sanitary drains, then Tenant shall pay such special tax assessments. Tenant further agrees that during the Term of the Lease it will pay to Landlord, as Additional Rent, any "use" or "sales" tax that might be imposed by any governmental body against either Landlord or Tenant by reason of the occupancy of the Premises and payment of rental therefor by Tenant. 10. "AS IS" CONDITION. The Premises are rented "as is", without any additional alterations or improvements to be constructed by Landlord or any repairs to be performed by Landlord, and without any representation or warranty except as specifically set forth in this Lease. 11. REPAIRS AND MAINTENANCE: (a) Landlord shall have no obligation to perform or undertake any maintenance or repair of the Premises, and Landlord shall not be liable to Tenant for any damage or inconvenience, and Tenant shall not be entitled to any abatement or reduction of Rent or Additional Rent, by reason of any required maintenance, repairs, alterations or additions to the Premises. (b) Tenant shall, at its own risk and expense, maintain all parts of the Premises in good repair and condition (including all necessary replacements), including, but not limited to, the roof, the foundation, Building exterior (including repainting as necessary), mechanical, electrical, HVAC, plumbing systems, windows, doors, downspouts, dock bumpers, landscaping, parking improvements, and the regular removal of debris. Should Tenant neglect to keep and maintain the Premises, then Landlord shall have the right, but not the obligation, to have the work done and any reasonable costs therefor shall be charged to Tenant as Additional Rent. (c) At the termination of this Lease, Tenant shall deliver the Premises "broom clean" in the same good order and condition as existed at the Commencement Date, ordinary wear, natural deterioration beyond the control of Tenant, damage by fire, tornado or other casualty excepted. 12. ALTERATIONS AND IMPROVEMENTS: Tenant shall make no alterations, additions or improvements to the Premises without the prior written approval of Landlord which will not be reasonably withheld. Tenant shall conduct its work in such a manner as to maintain harmonious labor relations and shall, prior to the commencement of the work, submit to Landlord copies of all necessary permits. All alterations, additions or improvements, whether temporary or permanent in character, made in or upon the Premises, either by Landlord or Tenant, shall be Landlord's property and at the end of the Term shall remain in or upon the Premises without compensation to Tenant. All of Tenant's furniture, movable trade fixtures and equipment not attached to the Premises may be removed by Tenant at the termination of this Lease, if Tenant so elects, and shall be so removed, if required by Landlord, and, if not so removed, shall, at the option of Landlord, become the property of Landlord. 13. INDEMNITY. (a) Landlord shall not be liable for, and Tenant will indemnify and hold Landlord harmless of and from, all fines, suits, damages, claims, demands, losses, actions, liabilities and costs (including reasonable attorneys' fees) for any injury to person or damage to or loss of property on or about the Premises caused by the negligence or intentional tortious conduct or breach of this Lease by Tenant, its employees, subtenants, invitees or by any other person entering the Premises under express or implied invitation of Tenant, or arising out of Tenant's use of the Premises. Landlord shall not be liable or responsible for any loss or damage to any property or the death or injury to any person occasioned by theft, fire, act of God, public enemy, injunction, riot, strike, insurrection, war, court order, requisition of other governmental body or authority, by third parties or by any other matter beyond the reasonable control of Landlord, or for any injury or damage or inconvenience which may arise through repair or alteration of any part of the Premises, or failure to make repairs, or from any cause whatsoever except Landlord's negligence or intentional tortious conduct. Under no circumstances shall Landlord be liable for special or consequential damages. It is specifically understood and agreed that there shall be no personal liability of Landlord with respect to any of the covenants, conditions or provisions of this Lease; in the event of a breach or default by Landlord of any of its obligations under this Lease, Tenant shall look solely to the equity of the Landlord in the Premises for the satisfaction of Tenant's remedies. (b) Tenant shall not be liable for, and Landlord will indemnify and hold Tenant harmless of and from all fines, suits, damages, claims, demands, losses, actions, liabilities and costs (including reasonable attorneys' fees) for any injury to person or damage to or loss of property on or about the Premises caused by the negligence or intentional tortious conduct or breach of this Lease by Landlord, its employees, invitees, or by any other person entering the Premises under express or implied invitation of Landlord, or arising out of Landlord's actions in regard to the Premises. Tenant shall not be liable or responsible for any loss or damage to any property or the death or injury to any person occasioned by theft, fire, act of God, public enemy, injunction, riot, strike, insurrection, war, court order, requisition of other governmental body or authority, by third parties or any other matter beyond the reasonable control of Tenant, or for any injury or damage or inconvenience which may arise through repair or alteration of any part of the Premises (except for repairs or alterations which are made or required to be made by Tenant hereunder) or from any cause whatsoever except Tenant's negligence or intentional tortious conduct, or Tenant's failure to otherwise comply with the terms of this Lease, especially as to Tenant's duty of complete repair and maintenance of the Premises. Under no circumstances shall Tenant be liable for special or consequential damages 14. DAMAGE BY FIRE OR THE ELEMENTS. In the event that the Premises should be totally destroyed by fire or other casualty, or in the event the Premises should be so damaged that rebuilding or repairs cannot be completed within one hundred eighty (180) days after the date of such damage, either Landlord or Tenant may, at its option, by written notice to the other given not more than thirty (30) days after the date of such destruction or damage, terminate this Lease. In such event, the Rent shall be abated during the unexpired Term effective with the date of such destruction or damage. In the event the Premises should be damaged by fire or other casualty covered by Landlord's insurance but only to such extent that rebuilding or repairs can be completed within one hundred eighty (180) days after the date of such damage, or if the damage should be more serious but neither Landlord nor Tenant elects to terminate this Lease, then Landlord shall, within sixty (60) days after the date of such damage, commence to rebuild or repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition in which they were immediately prior to the happening of the casualty, except that Landlord shall not be required to rebuild, repair or replace any part of the furniture, equipment, fixtures and other improvements which may have been placed by Tenant on the Premises. Tenant's obligation for the payment of Rent and Additional Rent shall remain in effect, without abatement or reduction, during the time of such rebuilding or repairs. In the event any mortgagee, or the holder of any deed of trust, security agreement or mortgage on the Premises, should require that the insurance proceeds be used to retire the mortgage debt, Landlord shall have no obligation to rebuild and this Lease shall terminate upon notice to Tenant. Any insurance which may be carried by Landlord or Tenant against loss or damage to the Premises shall be for the sole benefit of the party carrying such insurance and under its sole control. 15. EMINENT DOMAIN. If any or all of the Premises are taken by the exercise of any power of eminent domain or are conveyed to or at the direction of any governmental entity under a threat of any such taking (each a "Condemnation"), Landlord shall be entitled to collect from the condemning authority thereunder the entire amount of any award made in any such proceeding or as consideration for such conveyance, without deduction therefrom for any leasehold or other estate or right held by Tenant under this Lease. Tenant hereby: (a) assigns to Landlord all of Tenant's right, title and interest, if any, in and to any such award; (b) waives any right which it may otherwise have in connection with such Condemnation, against Landlord or such condemning authority, to any payment for (i) the value of the then unexpired portion of the Term, (ii) leasehold damages, and (iii) any damage to or diminution of the value of Tenant's leasehold interest hereunder or any portion of the Premises not covered by such Condemnation; and (c) agrees to execute any and all further documents which may be required to facilitate Landlord's collection of any and all such awards. Subject to the operation and effect of the foregoing provisions of this Section, Tenant may seek, in a separate proceeding, a separate award on account of any damages or costs incurred by Tenant as a result of any Condemnation of any or all of the Premises, so long as such separate award in no way diminishes any award or payment which Landlord would otherwise receive as a result of such Condemnation. If (a) all of the Premises are taken by a Condemnation, or (b) any part of the Premises is taken by a Condemnation and the remainder thereof is unfit for the reasonable operation therein of Tenant's business, or (c) any of the Premises is taken by a Condemnation and, in Tenant's opinion, it would be impractical to restore the remainder thereof, or (d) any of the Premises is taken by a Condemnation and, in Tenant's reasonable opinion, it would be impractical to continue to operate the remainder thereof, then, in any such event, the Term shall terminate on the date on which possession of so much of the Premises as is taken by such Condemnation is taken by the condemning authority thereunder, and all Rent payable hereunder shall be apportioned and paid to such date. If there is a Condemnation and the Term does not terminate pursuant to the foregoing provisions of this Section, the operation and effect of this Lease shall be unaffected by such Condemnation, except that the Rent shall be reduced in proportion to the square footage of the area taken by such Condemnation. 16. DEFAULT. The following events shall constitute events of default by Tenant under this Lease: (a) Tenant's failure to pay the Rent, Additional Rent, or any other sums payable hereunder for a period of three (3) days after written notice by Landlord; (b) Either party's failure to observe, keep or perform any of the other terms, covenants, agreements or conditions of this Lease for a period of ten (10) days after written notice by the non- defaulting party, provided, however, that if such breach is capable of being cured, but not within such 10-day period, this Lease may not be terminated so long as the defaulting party commences appropriate curative action within such 10-day period and thereafter diligently prosecutes such cure to completion as promptly as possible; (c) the bankruptcy (as hereinafter defined) of Tenant or any guarantor or other obligor (an "Obligor") of all or any part of Tenant's obligations under this Lease; (d) Tenant's failure to occupy and assume possession of the Premises within fifteen (15) days after the Commencement Date; and (e) Tenant's vacating of all or substantially all of the Premises, whether or not Rent continues to be paid. As used herein, "bankruptcy" means, as to any Obligor, that Obligor's taking or acquiescing in the taking of any action seeking relief under, or advantage of, the Bankruptcy Code (11 U.S.C. 101 et seq., as amended and in effect from time to time), or any applicable debtor relief, liquidation, receivership, conservationship, moratorium, rearrangement, insolvency, assignment for benefit of creditors, reorganization or similar federal or state law, rule or regulation affecting the rights or remedies of creditors generally, as in effect from time to time. For the purpose of this definition, the term "acquiescing" shall include, without limitation, the failure to (a) file, within thirty (30) days after its entry, a petition, answer or motion to vacate or to discharge any order, judgment or decree providing for any relief under any such law, rule or regulation, and (b) have such order, judgment or decree vacated or discharged within sixty (60) days after its entry. Upon the occurrence of any one or more of such events of default, the non-defaulting party, at its election, may exercise any one or more of the following remedies. If default occurs: (1) by Tenant, Landlord may terminate Tenant's right to possession under the Lease and re-enter and retake possession of the Premises and relet or attempt to relet the Premises on behalf of Tenant at such rent and under such terms and conditions as Landlord may deem best under the circumstances for the purpose of reducing Tenant's liability. Landlord shall not be deemed to have thereby accepted a surrender of the Premises, and Tenant shall remain liable for all Rent, Additional Rent, or other sums due under this Lease and for all damages suffered by Landlord because of Tenant's breach of any of the covenants of the Lease. (2) by Tenant, Landlord may accelerate and declare the entire remaining unpaid Rent and Additional Rent for the balance of this Lease to be immediately due and payable forthwith, and may, at once, take legal action to recover and collect the same. (3) by either party, the non-defaulting party may declare this Lease to be terminated. (4) by either party, the non-defaulting party may enforce such other rights and remedies as are available at law or in equity for said default under this Lease. No re-entry or retaking possession of the Premises by Landlord due to default by Tenant shall be construed as an election on Landlord's part to terminate this Lease, unless a written notice of such intention be given to Tenant, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any Rent or other monies due to Landlord hereunder or of any damages accruing to Landlord by reason of the violations of any of the terms, provisions and covenants herein contained. Landlord's acceptance of Rent or Additional Rent or other monies following any event of default hereunder shall not be construed as Landlord's waiver of such event of default. No forbearance by a non-defaulting party of action upon any violation or breach of any of the terms, provisions, and covenants herein contained shall be deemed or construed to constitute a waiver of the terms, provisions, and covenants herein contained. Forbearance by a non- defaulting party to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of any other violation or default. Legal actions to recover for loss or damage that Landlord may suffer by reason of termination of this Lease due to default by Tenant or the deficiency from any reletting as provided for above shall include the expense of repossession or reletting and any repairs undertaken by Landlord following repossession. Legal actions to recover for loss or damage that Tenant may suffer by reason of termination of this Lease shall include relocation expenses. 17. LANDLORD'S LIEN. Landlord shall have, at all times, a valid security interest to secure payment of all Rent, Additional Rent and other sums of money becoming due hereunder from Tenant, and to secure payment of any damages or loss which Landlord may suffer by reason of the breach by Tenant of any covenant, agreement or condition contained herein, upon all goods, wares, equipment, fixtures, furniture, improvements and other personal property of Tenant presently or which may hereinafter be situated in the Premises, and all proceeds therefrom, and such property shall not be removed therefrom without the consent of Landlord until all arrearages in Rent, Additional Rent, and any and all other sums of money due to Landlord hereunder shall first have been paid and discharged and all of the covenants, agreements, and conditions hereof have been fully complied with and performed by Tenant. In consideration of this Lease, upon the occurrence of an event of default by Tenant, Landlord may, in addition to any other remedies provided herein, enter upon the Premises and take possession of any and all goods, wares, equipment, fixtures, furniture, improvements, and other personal property of Tenant situated on or in the Premises, without liability for trespass or conversion, and sell the same at public or private sale, with or without having such property at the sale, after giving Tenant reasonable notice of the time and place of any public sale or of the time after which any private sale is to be made, at which sale the Landlord or its assigns may purchase unless otherwise prohibited by law. Unless otherwise provided by law, and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable notice shall be met if such notice is given in the manner prescribed in Section 25 dealing with "Notices" in this Lease at least five (5) days before the time of sale. The proceeds from any such disposition, less any and all expenses connected with the taking of possession, holding and selling of the property (including reasonable attorneys' fees and other expenses), shall be applied as a credit against the indebtedness secured by the security interest granted in this Section 18. Any surplus shall be paid to Tenant or as otherwise required by law, and Tenant shall pay any deficiencies forthwith. Upon request by Landlord, Tenant agrees to execute and deliver to Landlord a financing statement in form sufficient to perfect the security interest of Landlord in the aforementioned property and proceeds thereof under the provisions of the Uniform Commercial Code in force in the State of Florida. Landlord may at its election at any time file a copy of this Lease as a financing statement. The security interest granted Landlord pursuant to this Section 18 is in addition to all landlord's liens and comparable rights provided by law (including, but not limited to, Section 83.08, Florida Statutes) or the other provisions of this Lease. 18. SUBORDINATION. This Lease shall be subject and subordinate to the lien, operation and effect of each mortgage and/or other similar instrument of encumbrance heretofore or hereafter covering any or all of the Premises (and each renewal, modification, consolidation, replacement or extension thereof) (each a "Mortgage"), all automatically and without the necessity of any action by either party hereto. Tenant shall, promptly at the request of Landlord or the holder of any Mortgage (a "Mortgagee"), execute, acknowledge and deliver such further instrument or instruments evidencing such subordination as Landlord or such Mortgagee deems necessary or desirable. Notwithstanding any contrary provision contained in this Lease, any Mortgagee may at any time subordinate the lien of its Mortgage to the operation and effect of this Lease without obtaining Tenant's consent thereto, by giving Tenant written notice thereof, in which event this Lease shall be deemed to be senior to such Mortgage without regard to their respective dates of execution, delivery and/or recordation among the applicable public records, and thereafter such Mortgagee shall have the same rights as to this Lease as it would have had, were this Lease executed and delivered before the execution of such Mortgage. Tenant agrees to attorn to any new owner of the Premises resulting from the foreclosure of any Mortgage or conveyance in lieu of foreclosure, if such new owner so requests. 19. QUIET ENJOYMENT. Provided Tenant has performed all of the terms, covenants, agreements and conditions of this Lease, including the payment of Rent and all other sums due hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises, except as described in Section 19, against Landlord and all persons claiming by, through or under Landlord, for the term herein described, subject to the provisions and conditions of this Lease. 20. DELETED. 21. CONSTRUCTION LIENS. Tenant shall (a) immediately after it is filed or claimed, have released (by bonding or otherwise) any construction, mechanics', materialman's or other lien filed or claimed against any or all of the Premises or any other property owned or leased by Landlord, by reason of labor or materials provided for Tenant or any of its contractors or subcontractors (other than labor or materials provided by Landlord pursuant to the provisions of this Lease), or otherwise arising out of Tenant's use or occupancy of the Premises, and (b) defend, indemnify and hold harmless Landlord against and from any and all liability, claim of liability or expense (including, without limitation, reasonable attorneys' fees) incurred by Landlord on account of any such lien or claim. Nothing in the provisions of this Lease shall be deemed in any way to give Tenant any right, power or authority to contract for or permit to be furnished any service or materials which would give rise to the filing of any mechanics' or materialmen's lien against Landlord's estate or interest in and to the Premises, it being expressly agreed that no estate or interest of Landlord in and to the Premises shall be subject to any lien arising in connection with any alteration, addition or improvement made by or on behalf of Tenant. At Landlord's request, Tenant shall execute a written instrument to be recorded for the purpose of providing notice of the existence of the provisions of the preceding sentence in accordance with Section 713.10, Florida Statutes. 22. HOLDING OVER. The failure of Tenant to surrender the Premises on the date provided herein for the expiration of the Term (or at the time the Lease may be otherwise terminated), and the subsequent holding over by Tenant, with or without the consent of Landlord, shall result in the creation of a tenancy at sufferance at double the Rent payable at the time of the date provided herein for the expiration of this Lease or at the time the Lease may be terminated otherwise by Landlord. This provision does not give Tenant any right to hold over at the expiration of the Term, and shall not be deemed, the parties agree, to be a renewal of the Term, either by operation of law or otherwise. 23. BROKERAGE COMMISSION. Landlord and Tenant hereby warrant to the other that there are no claims for broker's commissions or finder's fees in connection with its execution of this Lease and agrees to indemnify and save the other harmless from any liability that may arise from any such claim, including reasonable attorneys' fees incurred with any related defense. 24. NOTICES. Any notice or document required or permitted to be delivered hereunder shall be deemed to be delivered or given when (a) actually received or (b) signed for or "refused" as indicated on the postal or delivery service return receipt. Delivery may be by personal delivery, Federal Express (or other commercially recognized express mail or delivery service), or by United States mail, postage prepaid, certified or registered mail, addressed to the parties hereto at the respective addresses set out Sections 1(a) and 1(b), or at such other addresses as they may hereafter specify by written notice delivered in accordance herewith. 25. INSURANCE: Tenant shall, at Tenant's sole expense, obtain and keep in force at all times during the Term, comprehensive general liability insurance including property damage on an occurrence basis, with limits of not less than $3,000,000.00 combined single limit insuring Landlord and Tenant against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. The limit of said insurance shall not, however, limit the liability of Tenant hereunder. Tenant may carry said insurance under a blanket policy, provided an endorsement naming Landlord as an additional insured as attached hereto. Tenant shall maintain insurance upon all property in the Premises owned by Tenant or for which Tenant is legally liable. Tenant shall maintain insurance against such other perils and in such amounts as Landlord may in writing from time to time reasonably require. The insurance required to be obtained and maintained under this Lease shall be with a company or companies licensed to issue the relevant insurance and licensed to do business in the State of Florida. Such insurance company or companies shall each have a policyholder's rating of no less than "A, VII" in the most recent edition of Best's Insurance Reports. No policy shall be cancelable or subject to reduction of coverage except after thirty (30) days' prior written notice to Landlord. Landlord shall receive written evidence of insurance upon request. All policies of insurance maintained by Tenant shall be in form and substance reasonably acceptable to Landlord, with satisfactory evidence that all premiums have been paid. Tenant agrees not to violate knowingly or permit to be violated any of the conditions or provisions of the insurance policies required to be furnished hereunder, and agrees to promptly notify Landlord of any fire or other casualty affecting the Premises. If Tenant fails to procure and maintain insurance as required hereunder, Landlord may do so, and Tenant shall, on written demand, as Additional Rent, reimburse Landlord for all monies expended by Landlord to procure and maintain such insurance. As part of the consideration for this Lease and in addition to the above insurance requirements, Tenant shall, during the Term pay to Landlord as Additional Rent, the cost of the casualty or property damage insurance policy which Landlord shall maintain on the Premises from time to time during the Term. At Landlord's discretion, Landlord may maintain insurance on the Premises in the form of a blanket policy insuring other properties in addition to the Premises, and, in such event, a fair and reasonable amount of the cost of such blanket policy shall be allocated by Landlord to the Premises for the purpose of determining Tenant's Additional Rent obligation for such insurance. Tenant shall, within thirty (30) days after receipt from Landlord of a paid insurance premium statement (or other reasonable evidence of the payment of insurance costs by Landlord), reimburse Landlord for such payment as Additional Rent. Landlord agrees to render billing to Tenant for such Additional Rent within sixty (60) days after the relevant payment by Landlord. Tenant hereby waives and releases Landlord of and from any and all liabilities, claims and losses for which Landlord is or may be held liable to the extent Tenant receives insurance proceeds on account thereof. Landlord hereby waives and releases Tenant of and from any and all liabilities, claims and losses for which Tenant is or may be held liable to the extent Landlord receives insurance proceeds on account thereof. Tenant shall not permit the Premises to be used in any way which would, in the reasonable opinion of Landlord, be extra hazardous on account of fire or otherwise or which would in any way increase or render void any casualty or property damage insurance on the Premises. 26. HAZARDOUS SUBSTANCES. (a) Tenant shall not cause or permit any Hazardous Substance to be used, stored, generated, or disposed of on or in the Premises by Tenant, Tenant's agents, employees, contractors, or invitees without first obtaining Landlord's written consent. If Hazardous Substances are used, stored, generated, or disposed of on or in the Premises, or if the Premises become contaminated in any manner for which Tenant is legally liable, Tenant shall indemnify and hold harmless the Landlord from any and all claims, damages, fines, judgments, penalties, costs, liabilities, or losses (including, without limitation, any decrease in value of the Premises, damages caused by loss or restriction of rentable or usable space, or any damages caused by adverse impact on marketing of the space, and any and all sums paid for settlement of claims, reasonable attorneys' fees, consultant, and expert fees) arising during or after the Term and arising as a result of that contamination by Tenant. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site or any cleanup, removal, or restoration mandated by a federal, state, or local agency or political subdivision. Without limitation of the foregoing, if Tenant causes or permits the presence of any Hazardous Substance on the Premises and that results in contamination, Tenant shall promptly, at its sole expense, take any and all necessary actions to return the Premises to the condition existing prior to the presence of any such Hazardous Substance on the Premises. Tenant shall first obtain Landlord's approval for any such remedial action. "Hazardous Substance" includes any and all material or substances that are defined as "hazardous waste," "extremely hazardous waste," or a "hazardous substance" pursuant to federal, or local government law. "Hazardous Substance" includes, but is not restricted to, asbestos, polychlorobiphenyls ("PCBs"), petroleum, and any regulated toxic, ignitable, reactive, or corrosive substance. The provisions of this Section shall survive the expiration or termination of this Lease. (b) Landlord shall not cause or permit any Hazardous Substance to be used, stored, generated, or disposed of on or in the Premises by Landlord, Landlord's agents, employees, contractors, or invitees. If Hazardous Substances are used, stored, generated, or disposed of on or in the Premises, or if the Premises become contaminated in any manner for which Landlord is legally liable, Landlord shall indemnify and hold harmless the Tenant from any and all claims, damages, fines, judgments, penalties, costs, liabilities, or losses (including, without limitation, any decrease in value of the Premises, damages caused by loss or restriction of rentable or usable space, or any damages caused by adverse impact on marketing of the space, and any and all sums paid for settlement of claims, reasonable attorneys' fees, consultant, and expert fees) arising from actions or omissions occurring prior to the commencement of this Lease Term and/or arising as a result of contamination by Landlord. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site or any cleanup, removal, or restoration mandated by a federal, state, or local agency or political subdivision. Without limitation of the foregoing, if Landlord causes the presence of any Hazardous Substance on the Premises and that results in contamination, Landlord shall promptly, at its sole expense, take any and all necessary actions to return the Premises to the condition existing prior to the presence of any such Hazardous Substance on the Premises. "Hazardous Substance" includes, but is not restricted to, asbestos, polychlorobiphenyls ("PCBs"), petroleum, and any regulated toxic, ignitable, reactive, or corrosive substance. The provisions of this Section shall survive the expiration or termination of this Lease. 27. ESTOPPEL CERTIFICATE. Tenant shall from time to time, within five (5) days after being requested to do so by Landlord or any Mortgagee, execute, acknowledge and deliver to that Landlord (or, at Landlord's request, to any existing or prospective purchaser, transferee, assignee or Mortgagee of any or all of the Premises, any interest therein or any of Landlord's rights under this Lease) an instrument in recordable form, certifying (a) that this Lease is unmodified and in full force and effect (or, if there has been any modification thereof, that it is in full force and effect as so modified, stating therein the nature of such modification); (b) as to the dates to which the Rent and any Additional Rent and other charges arising hereunder have been paid; (c) as to the amount of any prepaid Rent or any credit due to Tenant hereunder; (d) that Tenant has accepted possession of the Premises, and the date on which the Term commenced; (e) as to whether, to the best knowledge of the signer of such certificate, Landlord or Tenant is then in default in performing any of its obligations hereunder (and, if so, specifying the nature of each such default); and (f) as to any other fact or condition reasonably requested by Landlord or such other addressee. Such instrument shall contain an express acknowledgment that the statements contained therein are being relied upon by Landlord and any such other addressee. 28. OSHA DISCLOSURE. Tenant acknowledges that it has been notified of the possible presence of asbestos-containing materials ("ACM") and materials designated by OSHA as presumed asbestos-containing materials ("PACM") located in the Premises. In addition, the following materials, if located in properties constructed prior to 1981, must, in accordance with the OSHA Regulations, be treated as PACM: any thermal system insulation and surfacing material that is sprayed on, troweled on, or applied in some other manner, as well as any resilient flooring material installed in 1980 or earlier. Upon written request by Tenant, Landlord shall provide Tenant with copies of any information pertaining to ACM or PACM in Landlord's files. 29. MISCELLANEOUS. (a) Force Majeure. Whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, theft, fire, public enemy, injunction, insurrection, court order, requisition of other governmental body or authority, war, governmental laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond the reasonable control of Landlord or Tenant. (b) Joint and Several Liability. If two or more individuals, corporations, partnerships, or other business associations (or any combination of two or more thereof) shall sign this Lease as Tenant, the liability of each such individual, corporation, partnership or other business association to pay Rent and perform all other obligations hereunder shall be deemed to be joint and several. In like manner, if the Tenant named in this Lease shall be a partnership or other business association, the members of which are, by virtue of statute or general law, subject to personal liability, the liability of each such member shall be joint and several. (c) Absence of Option. The submission of this Lease for examination does not constitute a reservation of or option for the Premises, and this Lease becomes effective only upon execution and delivery thereof by Landlord. (d) Entire Agreement. Any and all riders and exhibits attached to this Lease are made a part of this Lease for all purposes. This Lease contains the entire agreement between the parties hereto and may not be altered, changed or amended, except by written instrument signed by both parties hereto. (e) No Waiver. No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord and addressed to Tenant, nor shall any custom or practice which may grow up between the parties in the administration of the provisions hereof be construed to waive or lessen the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms hereof. (f) Successors and Assigns. The terms, provisions, covenants, and conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided. (g) Recording. This Lease shall not be recorded. However, a memorandum of lease, in the form of that attached hereto as Rider 3 may be recorded by Tenant, by Tenant's discretion, and at Tenant's sole expense. Such memorandum of lease shall provide that it will automatically expire by its terms at the expiration of the end of the current 5 year term of the Lease. In the event that the Tenant exercises its right to extend the Lease, the Tenant shall be permitted to file a new memorandum of lease for the extended period in similar form. (h) Default Interest. All past due Rent, Additional Rent and other sums payable by Tenant under this Lease shall bear interest from the date due until paid at a rate equal to the lesser of eighteen percent (18%) per annum and the maximum non-usurious rate permitted under applicable law from time to time. (i) Headings and Use of Terms. The section and paragraph headings to this Lease are for convenience and reference only. The words as provided in the section and paragraph headings will not be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the terms of this Lease. Terms defined in this Lease have the meaning, designation, and significance ascribed to the terms defined in this Lease. (j) Partial Invalidity. If any term of this Lease, or the application of the term to any person or circumstance is, to any extent, invalid or unenforceable, the remainder of this Lease, or the application of the term to persons or circumstances other than those as to which the term is held invalid or unenforceable, will not be affected by the application, and each term of this Lease will be valid and will be enforced to the fullest extent permitted by law. (k) Attorneys' Fees. If an action is begun, or a attorney is retained by Landlord or Tenant to enforce this Lease or collect any sums due as provided in this Lease or to collect money damages for breach of this Lease, against the other, the prevailing party will be entitled to collect from the other reimbursement for the reasonable actual fees of attorneys and court costs in connection with the action. (l) Governing Law. The validity, meaning, and effect of this Lease will be determined as provided by the law of the State of Florida applicable to agreements made and to be performed in the State of Florida. (m) Time of Essence. Time is of the essence with respect to each party's performance of its obligations under this Lease. (n) Radon. In accordance with the requirements of Section 404.056(8), Florida Statutes, the following notice is hereby given: RADON GAS: Radon is a naturally occurring radioactive gas that, when it is accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from the local County Public Health Center. 30. NET LEASE. It is the intention of Landlord and Tenant that rental under this Lease be absolutely net to Landlord, that all costs, expenses and obligations of every kind relating directly or indirectly in any way, foreseen or unforeseen, to the Premises which may arise or become due during the Term of this Lease shall, except as otherwise specifically provided in this Lease, be paid by Tenant and Tenant hereby indemnifies and holds Landlord harmless from and against any and all such costs, expenses, obligations, and liabilities. 31. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE PREMISES (INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD AND TENANT TO ENTER AND EXECUTE THIS LEASE. 32. RIDERS. The following Riders and/or Addenda are attached hereto and made a part of this Lease for all purposes: Rider 1 (Renewal Options); and Rider 2 (CPI Adjustment in Rent). 33. RENT A SEPARATE COVENANT. Tenant shall not for any reason withhold or reduce Tenant's required payments of Rent and Additional Rent, it being expressly understood and agreed by the parties that the payment of Rent and Additional Rent is a covenant by Tenant that is independent of the other covenants of the parties hereto. IN WITNESS WHEREOF, the undersigned have executed this Lease, effective as of the date first above written. Signed, sealed and delivered in the presence of: TENANT: FIRST CHOICE AUTO FINANCE, INC., a Florida corporation /S/ By: /S/ J. Neal Hutchinson, Jr. Witness Name: Title: Vice President /S/Frank S. Ioppolo, Jr. Witness LANDLORD: /S/ /S/ R.C. Hill, II Witness R.C. HILL, II /S/ Witness EXHIBIT "A" TO THE LEASE Description of real property leased: See attached real estate tax notices. Address of the Premises: 3411 West Colonial Drive Orlando, FL 32808 EXHIBIT "B" TO THE LEASE Month to month lease to LANETTE KENDRICK of 3410 Cherry Lane, for $350 per month. Month to month lease to DELORES BROWN of 3412 Cherry Lane, for $350 per month. RIDER No.1 Option to Renew 1. Grant of Option. Tenant shall have, and is hereby given, three (3) option(s) to renew and to extend the Term of this Lease, each option to follow consecutively upon the expiration of the initial Term (the "Primary Term") of this Lease (or the immediately preceding Renewal Term, if applicable), provided that at the time any option to renew is exercised, this Lease shall be in full force and effect and Tenant shall not be in default hereunder. Each renewal option shall be for a term of sixty (60) months (a "Renewal Term") and shall be exercised, if at all, by Tenant's giving written notice thereof to Landlord at least one hundred eighty (180) days before the expiration date of the Primary Term or the then current Renewal Term, as applicable. The renewal and extension of this Lease for any Renewal Term shall be on and under the same covenants, agreements, terms, provisions, and conditions as are contained in this Lease for the Primary Term (with Rent being subject to adjustment in accordance with the provisions of Section 3 and Rider 2 of this Lease), except that Tenant shall have no further option to renew after the third Renewal Term. The Rent and the Additional Rent and all other sums due and payable by Tenant under this Lease, shall continue to be made and to be paid by Tenant during any Renewal Term as provided in this Lease for the Primary Term. Any assignment or subletting by Tenant during the Primary Term shall terminate all options of Tenant set forth herein. 2. Definitions. Unless otherwise specifically defined in this Rider, capitalized terms shall have the same respective meanings as set forth in the non-Rider portion of this Lease. RIDER NO. 2 CPI Adjustment in Rent 1. Adjustment Computation. Commencing with the first day of the thirteenth (13th) full calendar month during the Term, and thereafter on each annual anniversary of such date during the Term (and any renewal thereof), the Rent [which term as used in this Rider means the Rent specified in Section 3(b), as adjusted from time to time pursuant to this Rider] shall be adjusted from time to time as follows: (a) The Rent in effect for each Lease Year (as defined below) shall be equal the product of (i) the Rent in effect for the immediately preceding Lease Year, multiplied by (ii) the greater of (A) one (1) or (B) the fraction in which CPI-2 (as defined below) is the numerator and CPI-1 (as defined below) is the denominator. In no event shall any adjustment made pursuant to this Rider or any decrease in the CPI ever result in a decrease in the Rent for any Lease Year below the Rent in effect at the end of the preceding Lease Year, which Rent shall, in that event, continue in effect until the next adjustment hereunder. Payment of the adjusted Rent amount shall begin on the first day of the first calendar month of the Lease Year to which such adjusted Rent applies. (b) As an example of the foregoing calculation for the increase in Rent, if the monthly Rent in the second Lease Year is $20,000.00, the CPI-1 is 1.50, and the CPI-2 is 1.55, then the monthly Rent for third Lease Year will be $20,000.00 x 1.55/1.50 = $20,666.67. 2. Alternative Index. If (a) the CPI ceases using the 1982-1984 average of 100 as the basis of calculation, (b) a significant change is made in the number or nature (or both) of items used to determine the CPI, (c) Landlord and Tenant agree that the CPI does not accurately reflect, in relationship to the Base CPI, the purchasing power of the dollar, or (d) the CPI shall be discontinued for any reason, the Bureau of Labor Statistics shall be requested to furnish a new index comparable to the CPI , together with information which will make possible the conversion to the new index in computing the adjusted Rent hereunder. If for any reason the Bureau of Labor Statistics does not furnish such an index and such information, Landlord and Tenant shall instead accept and use such other index or comparable statistics on the cost of living in the city or region in which the Building is located that is computed and published by an agency of the United States or a responsible financial periodical of recognized authority. 3. Definitions. As used herein, the term "Lease Year" means the period from the Commencement Date to the last day of the twelfth (12th) full calendar month during the Term and each succeeding twelve (12) month period thereafter during the Term (and any renewal thereof). As used herein, the term "CPI" means the Consumer Price Index for All Urban Consumers (CPI-U) for the Southeast Region of the United States, All Items (1982-84 = 100), published by the Bureau of Labor Statistics, United States Department of Labor. As used herein, the term "CPI-1" means the monthly CPI for the latest calendar month which ends at least sixty (60) days before the commencement of the Lease Year immediately preceding the Lease Year for which Rent is being adjusted. As used herein, the term "CPI-2" means the monthly CPI for the latest calendar month which ends at least sixty (60) days before the commencement of the Lease Year for which Rent is being adjusted. Unless otherwise specifically defined in this Rider, capitalized terms shall have the same respective meanings as set forth in the non-Rider portion of this Lease EX-10.8 10 Exhibit 10.8 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th day of February, 1997, by and between LIBERTY FINANCE CO., a Florida corporation (the "Company"), and LEONARD VIHTELIC, an individual (the "Employee"); W I T N E S S E T H: WHEREAS, the Employee has extensive experience relating to all aspects of the management and operation of automobile dealerships for used cars, including (without limitation) leasing and other financing activities in connection therewith; and WHEREAS, the Employee has heretofore been employed by Liberty Finance Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions, Inc., the businesses of which are being acquired by the Company and its affiliates on or about the date hereof; and WHEREAS, to promote the ongoing business of the Company, the Company desires to assure itself of the right to the Employee's services from and after the date hereof, on the terms and conditions of this Agreement; and WHEREAS, the Employee is willing and able to render his services to the Company from and after the date hereof, on the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 1. Nature of Employment. (a) Subject to the terms and conditions of this Agreement, the Company shall, throughout the term of this Agreement, retain the Employee, and the Employee shall render services to the Company, in a managerial capacity and with such title as shall be determined by the Board of Directors of the Company. In such capacity, the Employee shall have and exercise responsibility for managing, supervising, overseeing and actively participating in those aspects of the Company's day-to-day business in central Florida as are assigned by the President, another employee designated by the President and/or the board of directors (the "Board"), together with such other similar or related duties as may be assigned to the Employee from time to time by the Board. The Employee may also be given additional titles, and may be assigned responsibilities on behalf of certain of the Company's affiliates, without requirement of additional compensation hereunder. (b) Throughout the period of his employment hereunder, the Employee shall: (i) devote his full business time, attention, knowledge and skills, faithfully, diligently and to the best of his ability, to the active performance of his duties and responsibilities hereunder on behalf of the Company; (ii) observe and carry out such reasonable rules, regulations, policies, directions and restrictions as may be established from time to time by the Board, including but not limited to the standard policies and procedures of the Company as in effect from time to time; (iii) satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board; and (iv) do such traveling as may reasonably be required in connection with the performance of such duties and responsibilities; provided, however, that the Employee shall not be assigned to regular duties that would reasonably require him to relocate his permanent residence from that first set forth above. 2. Term of Employment. (a) Subject to prior termination in accordance with paragraph 2(b) below, the term of this Agreement and the Employee's employment hereunder shall commence on the date hereof and shall continue for a continuous three (3) year period thereafter (the "Term"). The Term shall thereafter automatically renew for additional terms of one (1) year each unless either party gives written notice of termination to the other party not less than ninety (90) days prior to the end of any renewal term (in which event this Agreement shall terminate effective as of the close of such renewal term). (b) This Agreement: (i) may be terminated upon mutual written agreement of the Company and the Employee; (ii) may be terminated, at the option of the Employee, upon fourteen (14) days' prior written notice to the Company, in the event that the Company shall (A) fail to make any payment to the Employee required to be made under the terms of this Agreement within fifteen (15) days after payment is due, or (B) fail to perform any other material covenant or agreement to be performed by it hereunder or take any action prohibited by this Agreement, and fail to cure or remedy same (if capable of being cured or remedied) within thirty (30) days after written notice thereof to the Company; (iii) may be terminated, at the option of the Company, upon written notice to the Employee, "for cause" (as hereinafter defined); (iv) may be terminated, at the option of the Company, in the event of the "permanent disability" (as hereinafter defined) of the Employee; (v) shall automatically terminate upon the death of the Employee; or (vi) may be terminated by either party for any reason or no reason on sixty (60) days prior written notice. If the Company terminates this Agreement under Section 2(b)(vi), then the Company shall continue to pay the Employee his salary for a period of 120 days after the date of termination. (c) As used herein, the term "for cause" shall mean and be limited to: (i) any material breach of this Agreement (including, without limitation, the covenants contained in paragraph 5 below) by the Employee which in any case is not fully corrected within thirty (30) days after written notice of same from the Company to the Employee; (ii) neglect by the Employee of his duties and responsibilities hereunder which in any case is not fully corrected immediately upon written notice of same from the Company to the Employee; (iii) any fraud, criminal misconduct, breach of fiduciary duty, dishonesty, or gross and willful misconduct by the Employee in connection with the performance of his duties and responsibilities hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs) during business hours or while on call, or being habitually drunk or addicted to drugs (provided that this shall not restrict the Employee from taking physician-prescribed medication in accordance with the applicable prescription); (v) the commission by the Employee of any crime of moral turpitude, or any other action by the Employee which may materially impair or damage the reputation of the Company; (vi) habitual breach by the Employee of any of the material provisions of this Agreement (regardless of any prior cure thereof); or (vii) repeated failure (which prior failures were brought to Employee's attention in writing) to satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board. (d) As used herein, the term "permanent disability" shall mean, and be limited to, any physical or mental illness, disability or impairment that prevents the Employee from continuing the performance of his normal duties and responsibilities hereunder for a period in excess of three (3) consecutive months. For purposes of determining whether a "permanent disability" has occurred under this Agreement, the written determination thereof by two (2) qualified practicing physicians selected and paid for by the Company (and reasonably acceptable to the Employee) shall be conclusive. (e) Upon any termination of this Agreement as hereinabove provided, the Employee (or his estate or legal representatives, as the case may be) shall be entitled to receive any and all unpaid Base Salary and any other amounts then due and payable to the Employee hereunder. All such payments shall be made on the next applicable payment date therefor (as provided in paragraph 3 below) following the effective date of termination. Such payments shall constitute all amounts to which the Employee shall be entitled hereunder upon termination of this Agreement. 3. Compensation and Benefits. (a) Base Salary. As compensation for his services to be rendered hereunder, the Company shall pay to the Employee a base salary at the rate of SIXTY TWO THOUSAND FOUR HUNDRED DOLLARS AND NO/100THS ($62,400) per annum (the "Base Salary"), payable in periodic installments in accordance with the standard payroll practices of the Company in effect from time to time. (b) Bonus. In addition to the foregoing Base Salary, the Employee shall be eligible to earn bonuses from time to time as may be determined by the Board, in its sole and exclusive discretion, or in accordance with the terms and conditions of any bonus program instituted for employees of a similar position by the Board (the "Bonus"). (c) Other Fringe Benefits. The Company shall also make available to the Employee, throughout the period of his employment hereunder, such benefits and perquisites as are generally provided by the Company to its employees, including but not limited to eligibility for participation in any group life, health, dental, vision, disability or accident insurance, pension plan, profit-sharing plan, retirement savings plan, 401(k) plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company for the benefit of its employees generally; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy. Participation in such benefit plans shall be subject to standard waiting periods following the commencement of full-time employment, as currently provided in such plans. (d) Expenses. Throughout the period of the Employee's employment hereunder, the Company shall also reimburse the Employee, upon presentment by the Employee to the Company of appropriate receipts and vouchers therefor, for any reasonable out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties and responsibilities hereunder; provided, however, that no reimbursement shall be required to be made for any expense which is not properly deductible (in whole or in part) by the Company for income tax purposes, or for any expense item which has not previously been approved in accordance with the Company's standard policies and procedures in effect from time to time, or otherwise approved by the Company. 4. Vacation, etc. The Employee shall be entitled to take, from time to time, normal and reasonable vacations with pay, consistent with the Company's standard policies and procedures in effect from time to time, at such times as shall be mutually convenient to the Employee and the Company, and so as not to interfere unduly with the conduct of the business of the Company. The Employee shall further be entitled to paid holidays, personal days and sick days in accordance with the Company's standard policies and procedures in effect from time to time. 5. Restrictive Covenants. The Employee hereby acknowledges and agrees that (i) the business contacts, customers, suppliers, know-how, trade secrets, marketing techniques, confidential information, financial and operating models, promotional methods and other aspects of the business of the Company, its affiliates and/or parent companies have been and are of value to the Company, and have provided and will hereafter provide the Company with substantial competitive advantages in the operation of its business, (ii) he has and will continue to have detailed knowledge and possesses and will possess confidential information concerning the business and operations of the Company, (iii) the restrictions set forth in this Section are reasonably necessary to protect the legitimate business interests of the Company, and (iv) but for Employee's agreement to be governed by the restrictions set forth in this Section 5, the Company would not have entered into this Agreement. The Employee hereby further acknowledges that his business skills are not uniquely suited to businesses of the type conducted by the Company, and that, if required, he could readily adapt and utilize such skills in one or more other types of businesses. The Employee shall not, directly or indirectly, for himself or through or on behalf of any other person or entity: (i) at any time, divulge, transmit or otherwise disclose or cause to be divulged, transmitted or otherwise disclosed, any business contacts, client or customer lists, technology, know-how, trade secrets, marketing techniques, contracts or other confidential or proprietary information of the Company of whatever nature, whether now existing or hereafter created or developed (provided, however, that for purposes hereof, information shall not be considered to be confidential or proprietary if (A) it is a matter of common knowledge or public record, (B) it is generally known in the industry, or (C) the Employee 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 (ii) at any time during the period from the date hereof through and including the date of the expiration or termination of the Employee's employment with the Company, and for an additional period of one (1) year thereafter in the event that such termination is effected by the Company "for cause" or is effected by the Employee other than pursuant to paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly or indirectly invest, carry on, engage or become involved, either as 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 Company or its subsidiaries, affiliates, successors or assigns) which (A) is located or operating, or solicits customers located, within 50 miles of where the Company or any of its affiliates has a place of business, at the time that the Employee first becomes involved with such business enterprise, and (B) derives any material revenues from the sale, lease, financing or other transactions in used automobiles or other consumer vehicles; provided that this Section 5(ii) shall be applicable prior to the termination of this Agreement and except for a termination of this Agreement under Section 2(b)(iii), shall be applicable after this Agreement is terminated only if the Company is making payments of salary to the Employee under Section 2(b)(vi). The Employee and the Company hereby acknowledge and agree that, in the event of any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants, it will be difficult to ascertain the precise amount of damages that may be suffered by the Company 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 Company, on demand from time to time, cash amounts equal to any and all gross revenues derived by the breaching party or parties, directly or indirectly, from any and all violative acts or activities. 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 breach of this paragraph 5 by the Employee, 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 subject breach. The Employee and the Company hereby further acknowledge and agree that any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants will cause the Company irreparable injury for which there is no adequate remedy at law. Accordingly, the Employee expressly agrees that, in the event of any such breach or any threatened breach hereunder by the Employee, directly or indirectly, the Company shall be entitled, in addition to any and all other remedies available (including but not limited to the liquidated damages provided for in paragraph 5(c) above), to seek and obtain injunctive and/or other equitable relief to require specific performance of or prevent, restrain and/or enjoin a breach under the provisions of this paragraph 5 without the necessity of proof of actual damages and without the necessity of posting bond. In the event either party does apply for such injunction, the other party shall not raise as a defense thereto that such applying party has an adequate remedy at law. In the event of any dispute under or arising out of this paragraph 5, the prevailing party in such dispute shall be entitled to recover from the non-prevailing party or parties, in addition to any damages and/or other relief that may be awarded, its actual costs and expenses (including actual attorneys' fees) incurred in connection with prosecuting or defending the subject dispute. (f) Employee expressly agrees that the existence of any claims that he has or that he may have against the Company, its affiliates or parent companies, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company of this Section 5. 6. Non-Assignability. In light of the unique personal services to be performed by the Employee hereunder, it is acknowledged and agreed that any purported or attempted assignment or transfer by the Employee or the Company of this Agreement or any of Employee's duties, responsibilities or obligations hereunder shall be void; provided, however, that the foregoing shall not apply to any transfer of capital stock of, any transfer of substantially all the assets of, or any merger or comparable transaction involving, the Company or any parent corporation of the Company. 7. Notices. Any notices, requests, demands or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, by telecopier (with proof of receipt) or three (3) days after being mailed by certified mail, return receipt requested, addressed to the party being notified at the address of such party first set forth above, or at such other address as such party may hereafter have designated by notice; provided, however, that any notice of change of address shall not be effective until its receipt by the party to be charged therewith. 8. General. (a) Neither this Agreement nor any of the terms or conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by the party to be charged therewith. Any waiver or amendment shall only be applicable in the specific instance, and shall not constitute or be construed as a waiver or amendment in any other or subsequent instance. No failure or delay on the part of either party in respect of any enforcement of obligations hereunder shall in any manner affect such party's right to seek or effect enforcement at any other time or in respect of any other required performance. (b) Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the express prior written consent of the other party. (c) The captions and paragraph headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof. (d) This Agreement, and all matters or disputes relating to the validity, construction, performance or enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Florida. (e) 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. (f) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original hereof, but all of which together shall constitute one and the same instrument. (g) The prevailing party in any action or proceeding hereunder shall be entitled to an award for its costs and actual attorneys' fees in connection with such action or proceeding, including the fees and costs of any appeals and all costs of collection. (h) This Agreement constitutes the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between them as to such subject matter. (i) This Agreement is intended for the sole and exclusive benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to claim or derive any benefit herefrom absent the express written consent of the party to be charged with such reliance or benefit. (j) If any provision of this Agreement is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require; and this Agreement shall be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be. (k) Employee represents and warrants that no action required of him under this Agreement or any other agreements or understandings, written or oral, entered into with the Company, its affiliates or parent companies, will conflict with, breach or otherwise impair any previously existing agreements or understandings, whether written or oral, into which Employee has entered with other persons or entities, including agreements with respect to proprietary information or non-competition. (l) Each party to this Agreement expressly recognizes that it results from a negotiated process in which each party was given the opportunity to consult with counsel and contributed to the drafting of this Agreement. Given this fact, no legal or other presumption against the party drafting this Agreement concerning its construction, interpretation or otherwise accrue to the benefit of any party to this Agreement and each party expressly waives the right to assert such a presumption in any proceedings or disputes connected with, arising out of, or involving this Agreement. (m) Time shall be of the essence for any performance required hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above. LIBERTY FINANCE CO. By:/s/J. Neal Hutchinson, Jr. As Its:Asst. V. P. /s/ Leonard Vihtelic LEONARD VIHTELIC EX-10.9 11 Exhibit 10.9 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 13th day of February, 1997, by and between LIBERTY FINANCE CO., a Florida corporation (the "Company"), and C. LAWRENCE SCHULER, individual (the "Employee"); W I T N E S S E T H: WHEREAS, the Employee has extensive experience relating to all aspects of the management and operation of automobile dealerships for used cars, including (without limitation) leasing and other financing activities in connection therewith; and WHEREAS, the Employee has heretofore been employed by Liberty Finance Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions, Inc., the businesses of which are being acquired by the Company and its affiliates on or about the date hereof; and WHEREAS, to promote the ongoing business of the Company, the Company desires to assure itself of the right to the Employee"s services from and after the date hereof, on the terms and conditions of this Agreement; and WHEREAS, the Employee is willing and able to render his services to the Company from and after the date hereof, on the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 1. Nature of Employment. (a) Subject to the terms and conditions of this Agreement, the Company shall, throughout the term of this Agreement, retain the Employee, and the Employee shall render services to the Company, in a managerial capacity and with the Controller of the Company. In such capacity, the Employee shall have and exercise responsibility for managing, supervising, overseeing and actively participating in those aspects of the Company"s day- to-day business in central Florida as are assigned by the President, another employee designated by the President and/or the board of directors (the "Board"), together with such other similar or related duties as may be assigned to the Employee from time to time by the Board. The Employee may also be given additional titles, and may be assigned responsibilities on behalf of certain of the Company"s affiliates, without requirement of additional compensation hereunder. (b) Throughout the period of his employment hereunder, the Employee shall: (i) devote his full business time, attention, knowledge and skills, faithfully, diligently and to the best of his ability, to the active performance of his duties and responsibilities hereunder on behalf of the Company; (ii) observe and carry out such reasonable rules, regulations, policies, directions and restrictions as may be established from time to time by the Board, including but not limited to the standard policies and procedures of the Company as in effect from time to time; (iii) satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board; and (iv) do such traveling as may reasonably be required in connection with the performance of such duties and responsibilities; provided, however, that the Employee shall not be assigned to regular duties that would reasonably require him to relocate his permanent residence from that first set forth above. 2. Term of Employment. (a) Subject to prior termination in accordance with paragraph 2(b) below, the term of this Agreement and the Employee"s employment hereunder shall commence on the date hereof and shall continue for a continuous three (3) year period thereafter (the "Term"). The Term shall thereafter automatically renew for additional terms of one (1) year each unless either party gives written notice of termination to the other party not less than ninety (90) days prior to the end of any renewal term (in which event this Agreement shall terminate effective as of the close of such renewal term). (b) This Agreement: (i) may be terminated upon mutual written agreement of the Company and the Employee; (ii) may be terminated, at the option of the Employee, upon fourteen (14) days" prior written notice to the Company, in the event that the Company shall (A) fail to make any payment to the Employee required to be made under the terms of this Agreement within fifteen (15) days after payment is due, or (B) fail to perform any other material covenant or agreement to be performed by it hereunder or take any action prohibited by this Agreement, and fail to cure or remedy same (if capable of being cured or remedied) within thirty (30) days after written notice thereof to the Company; (iii) may be terminated, at the option of the Company, upon written notice to the Employee, "for cause" (as hereinafter defined); (iv) may be terminated, at the option of the Company, in the event of the "permanent disability" (as hereinafter defined) of the Employee; (v) shall automatically terminate upon the death of the Employee; or (vi) may be terminated by either party for any reason or no reason on sixty (60) days prior written notice. If the Company terminates this Agreement under Section 2(b)(vi), then the Company shall continue to pay the Employee his salary for a period of 120 days after the date of termination. (c) As used herein, the term "for cause" shall mean and be limited to: (i) any material breach of this Agreement (including, without limitation, the covenants contained in paragraph 5 below) by the Employee which in any case is not fully corrected within thirty (30) days after written notice of same from the Company to the Employee; (ii) neglect by the Employee of his duties and responsibilities hereunder which in any case is not fully corrected immediately upon written notice of same from the Company to the Employee; (iii) any fraud, criminal misconduct, breach of fiduciary duty, dishonesty, or gross and willful misconduct by the Employee in connection with the performance of his duties and responsibilities hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs) during business hours or while on call, or being habitually drunk or addicted to drugs (provided that this shall not restrict the Employee from taking physician-prescribed medication in accordance with the applicable prescription); (v) the commission by the Employee of any crime of moral turpitude, or any other action by the Employee which may materially impair or damage the reputation of the Company; (vi) habitual breach by the Employee of any of the material provisions of this Agreement (regardless of any prior cure thereof); or (vii) repeated failure (which prior failures were brought to Employee"s attention in writing) to satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board. (d) As used herein, the term "permanent disability" shall mean, and be limited to, any physical or mental illness, disability or impairment that prevents the Employee from continuing the performance of his normal duties and responsibilities hereunder for a period in excess of three (3) consecutive months. For purposes of determining whether a "permanent disability" has occurred under this Agreement, the written determination thereof by two (2) qualified practicing physicians selected and paid for by the Company (and reasonably acceptable to the Employee) shall be conclusive. (e) Upon any termination of this Agreement as hereinabove provided, the Employee (or his estate or legal representatives, as the case may be) shall be entitled to receive any and all unpaid Base Salary and any other amounts then due and payable to the Employee hereunder. All such payments shall be made on the next applicable payment date therefor (as provided in paragraph 3 below) following the effective date of termination. Such payments shall constitute all amounts to which the Employee shall be entitled hereunder upon termination of this Agreement. 3. Compensation and Benefits. (a) Base Salary. As compensation for his services to be rendered hereunder, the Company shall pay to the Employee a base salary at the rate of EIGHTY-FIVE THOUSAND DOLLARS AND NO/100THS ($85,000) per annum (the "Base Salary"), payable in periodic installments in accordance with the standard payroll practices of the Company in effect from time to time. (b) Bonus. In addition to the foregoing Base Salary, the Employee shall be eligible to earn bonuses from time to time as may be determined by the Board, in its sole and exclusive discretion, or in accordance with the terms and conditions of any bonus program instituted for employees of a similar position by the Board (the "Bonus"). (c) Other Fringe Benefits. The Company shall also make available to the Employee, throughout the period of his employment hereunder, such benefits and perquisites as are generally provided by the Company to its employees, including but not limited to eligibility for participation in any group life, health, dental, vision, disability or accident insurance, pension plan, profit-sharing plan, retirement savings plan, 401(k) plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company for the benefit of its employees generally; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy. Participation in such benefit plans shall be subject to standard waiting periods following the commencement of full-time employment, as currently provided in such plans. (d) Expenses. Throughout the period of the Employee"s employment hereunder, the Company shall also reimburse the Employee, upon presentment by the Employee to the Company of appropriate receipts and vouchers therefor, for any reasonable out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties and responsibilities hereunder; provided, however, that no reimbursement shall be required to be made for any expense which is not properly deductible (in whole or in part) by the Company for income tax purposes, or for any expense item which has not previously been approved in accordance with the Company"s standard policies and procedures in effect from time to time, or otherwise approved by the Company. 4. Vacation, etc. The Employee shall be entitled to take, from time to time, normal and reasonable vacations with pay, consistent with the Company"s standard policies and procedures in effect from time to time, at such times as shall be mutually convenient to the Employee and the Company, and so as not to interfere unduly with the conduct of the business of the Company. The Employee shall further be entitled to paid holidays, personal days and sick days in accordance with the Company"s standard policies and procedures in effect from time to time. 5. Restrictive Covenants. The Employee hereby acknowledges and agrees that (i) the business contacts, customers, suppliers, know-how, trade secrets, marketing techniques, confidential information, financial and operating models, promotional methods and other aspects of the business of the Company, its affiliates and/or parent companies have been and are of value to the Company, and have provided and will hereafter provide the Company with substantial competitive advantages in the operation of its business, (ii) he has and will continue to have detailed knowledge and possesses and will possess confidential information concerning the business and operations of the Company, (iii) the restrictions set forth in this Section are reasonably necessary to protect the legitimate business interests of the Company, and (iv) but for Employee"s agreement to be governed by the restrictions set forth in this Section 5, the Company would not have entered into this Agreement. The Employee hereby further acknowledges that his business skills are not uniquely suited to businesses of the type conducted by the Company, and that, if required, he could readily adapt and utilize such skills in one or more other types of businesses. The Employee shall not, directly or indirectly, for himself or through or on behalf of any other person or entity: (i) at any time, divulge, transmit or otherwise disclose or cause to be divulged, transmitted or otherwise disclosed, any business contacts, client or customer lists, technology, know-how, trade secrets, marketing techniques, contracts or other confidential or proprietary information of the Company of whatever nature, whether now existing or hereafter created or developed (provided, however, that for purposes hereof, information shall not be considered to be confidential or proprietary if (A) it is a matter of common knowledge or public record, (B) it is generally known in the industry, or (C) the Employee 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 (ii) at any time during the period from the date hereof through and including the date of the expiration or termination of the Employee"s employment with the Company, and for an additional period of one (1) year thereafter in the event that such termination is effected by the Company "for cause" or is effected by the Employee other than pursuant to paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly or indirectly invest, carry on, engage or become involved, either as 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 Company or its subsidiaries, affiliates, successors or assigns) which (A) is located or operating, or solicits customers located, within 50 miles of where the Company or any of its affiliates has a place of business, at the time that the Employee first becomes involved with such business enterprise, and (B) derives any material revenues from the sale, lease, financing or other transactions in new or used automobiles or other consumer vehicles; provided that this Section 5(ii) shall be applicable prior to the termination of this Agreement and except for a termination of this Agreement under Section 2(b)(iii), shall be applicable after this Agreement is terminated only if the Company is making payments of salary to the Employee under Section 2(b) (vi). The Employee and the Company hereby acknowledge and agree that, in the event of any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants, it will be difficult to ascertain the precise amount of damages that may be suffered by the Company 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 Company, on demand from time to time, cash amounts equal to any and all gross revenues derived by the breaching party or parties, directly or indirectly, from any and all violative acts or activities. 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 breach of this paragraph 5 by the Employee, 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 subject breach. The Employee and the Company hereby further acknowledge and agree that any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants will cause the Company irreparable injury for which there is no adequate remedy at law. Accordingly, the Employee expressly agrees that, in the event of any such breach or any threatened breach hereunder by the Employee, directly or indirectly, the Company shall be entitled, in addition to any and all other remedies available (including but not limited to the liquidated damages provided for in paragraph 5(c) above), to seek and obtain injunctive and/or other equitable relief to require specific performance of or prevent, restrain and/or enjoin a breach under the provisions of this paragraph 5 without the necessity of proof of actual damages and without the necessity of posting bond. In the event either party does apply for such injunction, the other party shall not raise as a defense thereto that such applying party has an adequate remedy at law. In the event of any dispute under or arising out of this paragraph 5, the prevailing party in such dispute shall be entitled to recover from the non-prevailing party or parties, in addition to any damages and/or other relief that may be awarded, its actual costs and expenses (including actual attorneys" fees) incurred in connection with prosecuting or defending the subject dispute. (f) Employee expressly agrees that the existence of any claims that he has or that he may have against the Company, its affiliates or parent companies, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company of this Section 5. 6. Non-Assignability. In light of the unique personal services to be performed by the Employee hereunder, it is acknowledged and agreed that any purported or attempted assignment or transfer by the Employee or the Company of this Agreement or any of Employee"s duties, responsibilities or obligations hereunder shall be void; provided, however, that the foregoing shall not apply to any transfer of capital stock of, any transfer of substantially all the assets of, or any merger or comparable transaction involving, the Company or any parent corporation of the Company. 7. Notices. Any notices, requests, demands or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, by telecopier (with proof of receipt) or three (3) days after being mailed by certified mail, return receipt requested, addressed to the party being notified at the address of such party first set forth above, or at such other address as such party may hereafter have designated by notice; provided, however, that any notice of change of address shall not be effective until its receipt by the party to be charged therewith. 8. General. (a) Neither this Agreement nor any of the terms or conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by the party to be charged therewith. Any waiver or amendment shall only be applicable in the specific instance, and shall not constitute or be construed as a waiver or amendment in any other or subsequent instance. No failure or delay on the part of either party in respect of any enforcement of obligations hereunder shall in any manner affect such party"s right to seek or effect enforcement at any other time or in respect of any other required performance. (b) Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the express prior written consent of the other party. (c) The captions and paragraph headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof. (d) This Agreement, and all matters or disputes relating to the validity, construction, performance or enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Florida. (e) 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. (f) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original hereof, but all of which together shall constitute one and the same instrument. (g) The prevailing party in any action or proceeding hereunder shall be entitled to an award for its costs and actual attorneys" fees in connection with such action or proceeding, including the fees and costs of any appeals and all costs of collection. (h) This Agreement constitutes the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between them as to such subject matter. (i) This Agreement is intended for the sole and exclusive benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to claim or derive any benefit herefrom absent the express written consent of the party to be charged with such reliance or benefit. (j) If any provision of this Agreement is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require; and this Agreement shall be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be. (k) Employee represents and warrants that no action required of him under this Agreement or any other agreements or understandings, written or oral, entered into with the Company, its affiliates or parent companies, will conflict with, breach or otherwise impair any previously existing agreements or understandings, whether written or oral, into which Employee has entered with other persons or entities, including agreements with respect to proprietary information or non-competition. (l) Each party to this Agreement expressly recognizes that it results from a negotiated process in which each party was given the opportunity to consult with counsel and contributed to the drafting of this Agreement. Given this fact, no legal or other presumption against the party drafting this Agreement concerning its construction, interpretation or otherwise accrue to the benefit of any party to this Agreement and each party expressly waives the right to assert such a presumption in any proceedings or disputes connected with, arising out of, or involving this Agreement. (m) Time shall be of the essence for any performance required hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above. LIBERTY FINANCE CO. By:/S/ J. Neal Hutchinson, Jr. As Its:Asst. V.P. /S/ C. Lawrence Schuler C. LAWRENCE SCHULER EX-10.10 12 Exhibit 10.10 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (this "Agreement"), entered into this 12th day of February, 1997, by and among FIRST CHOICE AUTO FINANCE, INC., a Florida corporation (the "Buyer"), ECKLER INDUSTRIES, INC., a Florida corporation ("Eckler") and R.C. HILL, II, an individual (the "Stockholder"); W I T N E S S E T H: WHEREAS, Wholesale Acquisitions, Inc.("WAI"), a Florida corporation is engaged in a business consisting primarily of wholesale acquisitions and sales activities in connection with the sale of used automobiles and other consumer vehicles (the " WAI Business"); and WHEREAS, Team Automobile Sales & Service, Inc. ("Team"), a Florida corporation, is engaged in a business consisting primarily of retail sales activities in connection with the sale of used automobiles and other consumer vehicles (the "Team Business"); and WHEREAS, for purposes herein, the WAI Business and the Team Business shall be jointly referred to as the "Business" unless the context shall require otherwise; and WHEREAS, the Stockholder is the record and beneficial owner of all of the issued and outstanding capital stock of WAI (the "WAI Stock") and of the issued and outstanding stock of Team (the " Team Stock"); the WAI Stock and the Team Stock are hereby referred to jointly as the "Stock" unless the context shall require otherwise; WHEREAS, the Buyer desires to purchase from the Stockholder, and the Stockholder desires to sell to the Buyer, all upon the terms and subject to the conditions set forth in this Agreement, all (and not less than all) of the Stock, and the businesses of WAI and Team, as going concerns; and WHEREAS, Eckler owns all the outstanding capital stock of the parent of the Buyer; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as of the Effective Date, as follows: 1. ACQUISITION OF THE STOCK. 1.1 Exchange of Shares. Subject to the terms and conditions of this Agreement, on the date hereof, Buyer is purchasing and acquiring from the Stockholder, and the Stockholder is selling and transferring to Buyer, all (and not less than all) of the Stock, in exchange for the consideration provided in Section 2 below. In furtherance thereof, the Stockholder is, simultaneously with the execution and delivery of this Agreement, delivering to the Buyer the certificates representing all of the Stock, duly endorsed for transfer or accompanied by stock powers executed in blank for transfer. 1.2 Books and Records. On the date hereof, in addition to the delivery and transfer of the Stock to the Buyer, the Stockholder is delivering, and causing WAI and Team to deliver, to the Buyer all of the stock books, records and minute books of each of them, all financial and accounting books and records of each of them, and all referral, client, customer and sales records of each of them. 1.3 Effective Date. The effective date (the "Effective Date") of the transactions contemplated hereby shall be February 11, 1997. 2. CONSIDERATION. 2.1 Purchase Price. The total purchase price for the WAI Stock shall be Four Hundred Five Thousand and No/100ths Dollars ($405,000). The total purchase price for the Team Stock shall be One Million Ninety Five Thousand and No/100ths Dollars ($1,095,000). Unless the context shall otherwise require, the purchase price for the WAI Stock and the purchase price for the Team Stock shall be jointly referred to herein as the "Purchase Price." 2.2 Payment of Purchase Price. The Purchase Price shall be paid by the Buyer executing and delivering a promissory note (the "Note") in the form of that attached hereto as Schedule 2.2(b), which shall contain the following terms and conditions: (i) The principal of the Note shall be paid as follows: (1) Due in full the earlier of: (i) one (1) year from the date of the Note, or (ii) fifteen (15) days after the date on which Eckler and/or any of its corporate affiliates shall consummate a public offering of its equity securities of at least $20,000,000.00. (2) Fifty Thousand and No/100ths Dollars ($50,000.00) shall be paid in cash at closing. (3) Beginning on 1 March 1997, and on the first day of each calendar month thereafter, a principal payment of Thirty Thousand and no/100ths Dollars ($30,000.00) shall be due and payable. (ii) The Note shall bear interest a the rate of eight percent (8%) per annum, with interest payable on the first day of each calendar month, beginning on 1 March 1997, in arrears. (iii) The Note shall be guaranteed by Eckler in the form of the Corporate Guaranty attached hereto as Schedule 2.2(b). The Buyer, with a guarantee by Eckler, shall assume the debt of Stockholder to Barnett Bank of Central Florida, N.A., in the approximate principal balance of Three Hundred Thousand and 00/100ths Dollars ($300,000), the payment of which shall satisfy the obligation of WAI to the Stockholder in the same amount. Buyer acknowledges that such Barnett Bank obligation is due in March, 1997, and agrees to make payment in full directly to Barnett Bank. Upon such payment, the obligation of WAI to the Stockholder will be satisfied to the same extent as the payments made to Barnett Bank. 3. INTENTIONALLY LEFT BLANK 4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. In connection with the sale and transfer of the Stock to the Buyer, the Stockholder hereby represents and warrants to the Buyer as set forth below. For purposes hereof "Material Adverse Effect" shall mean any event, occurrence or circumstance which (a) has or is reasonably likely to have a material adverse effect on the financial condition, results of operations, business or prospects of the Company taken as a whole, or the Buyer and its affiliates taken as a whole, as applicable, (b) would materially impair such party's ability to perform its obligations under this Agreement or the consummation of any of the transactions contemplated hereby, or (c) results in an adverse effect that is Two Thousand and 00/100ths Dollars ($2,000.00) or greater on any particular item related to the Buyer's purchase of the Business hereunder. 4.1 Title to the Stock. The Stockholder is the valid and lawful record and beneficial owner of all of the Stock. All of the Stock has been duly authorized and validly issued and is fully paid and non-assessable, and is free and clear of all pledges, liens, claims, charges, options, calls, encumbrances, restrictions and assessments whatsoever (except any restrictions which may be created by operation of state or federal securities laws). The Buyer is receiving from the Stockholder good, valid and marketable title to all of the Stock, free and clear of all pledges, liens, claims, charges, options, calls, encumbrances, restrictions and assessments whatsoever (except any restrictions which may be created by operation of state or federal securities laws). 4.2 Valid and Binding Agreement; No Breach. (a) The Stockholder has full legal right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except to the extent that such enforceability may be 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. (b) Except as disclosed in Schedule 4.2 annexed hereto, neither the execution and delivery of this Agreement by the Stockholder, nor compliance with the terms and provisions of this Agreement on the part of the Stockholder, will, under circumstances that would result in a Material Adverse Effect: (i) violate any statute or regulation of any governmental authority, domestic or foreign, affecting WAI, Team or the Stockholder; (ii) require the issuance of any authorization, license, consent or approval of any federal or state governmental agency; or (iii) 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 WAI, Team or the Stockholder is a party, or by which WAI, Team or the Stockholder is bound, or constitute a default thereunder, or require the consent of any other party to any of the foregoing. 4.3 Organization, Good Standing and Qualification WAI and Team are corporations duly organized, validly existing and in good standing under the laws of the State of Florida, with full corporate power and authority to own their assets and conduct their business as owned and conducted on the date hereof. WAI and Team are not required to be qualified as a foreign corporation under the laws of any jurisdiction. True and complete copies of the Articles of Incorporation and Bylaws of WAI and Team (including all amendments thereto), and a correct and complete list of the officers and directors of WAI and Team, are annexed hereto as Schedule 4.3. 4.4 Capital Structure; Equity Ownership. (a) The authorized capital stock of WAI and Team is as set forth in their Articles of Incorporation as included in Schedule 4.3, and the Stock constitutes and represents all of the outstanding capital stock of WAI and Team. (b) There are no outstanding subscriptions, options, rights, warrants, convertible securities or other agreements or calls, demands or commitments obligating WAI or Team to issue, transfer or purchase any shares of their capital stock, or obligating the Stockholder to transfer any shares of the Stock. No shares of capital stock of WAI or Team are reserved for issuance pursuant to stock options, warrants, agreements or other rights to purchase capital stock. 4.5 Subsidiaries and Investments. Neither WAI nor Team owns, directly or indirectly, any stock or other equity securities of any corporation or entity, or has any direct or indirect equity or ownership interest in any person, firm, partnership, corporation, venture or business other than the business conducted by WAI and Team, respectively. 4.6 Financial Information. (a) Annexed hereto as Schedule 4.6(a) are the audited financial statements (including balance sheet, income statement, statement of stockholders' equity, statement of cash flows, and notes thereto) for WAI and Team as of December 31, 1994 and December 31, 1995 and for each of the years then ended, and the unaudited financial statements for WAI and Team as of December 31, 1996 for the twelve (12) months then ended and as of January 31, 1997 and for the month then ended (collectively, the "Financial Statements"), all of which fairly reflect, in all material respects, the financial condition and results of operations of WAI and Team in accordance with generally accepted accounting principles consistently applied, as of the dates thereof and for the periods then ended; and, without limitation of the foregoing, neither WAI nor Team 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 their businesses. The Financial Statements (as of the dates thereof and for the periods covered thereby) are in accordance with the books and records of WAI and Team, which are complete and accurate in all material respects. (b) The Buyer has been provided the payment histories of each of the credit agreements, finance leases and other agreements underlying the Receivables (defined below), 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) Annexed hereto as Schedule 4.6(c) is a listing of all debts and obligations and guarantees to which WAI or Team is a party and all obligations of others which are secured by property of WAI or Team, and the current principal amount of, accrued interest on, and any amount guaranteed under all such debts, obligations, or guarantees. Schedule 4.6(c) contains a separate listing of all debt obligations of WAI or Team to the Stockholder and members of the Stockholder's family. Except as set forth on Schedule 4.6(c), WAI and Team are not in default under any such debt obligations or guarantees, and the consummation of the transactions contemplated hereby will not result in any default on or acceleration of, or any consent being required as to, any debt, obligation, or guarantee described on Schedule 4.6(c). 4.7 No Material Changes. Except as disclosed in Schedule 4.7 annexed hereto, since the date of the most recent of the Financial Statements, (a) the businesses of WAI and Team have been operated solely in the normal course, (b) there have been no changes which in the aggregate would have a Material Adverse Effect in the financial condition, operations or business of the Company from that reflected in such Financial Statements, (c) neither WAI nor Team has incurred any material obligation or liability except in the normal course of business, (d) neither WAI nor Team has effected or suffered any material modification in its collection practices, or with respect to the timing and manner of payment of its accounts payable, and (e) there has not been any (i) sale, assignment or transfer by WAI or Team of any assets or other part of their businesses, excluding the sale or disposition of inventory, and/or the sale of loans, in the ordinary course of business, (ii) acquisitions or commitments to acquire (whether by purchase, lease or otherwise) any capital assets by WAI or Team wherein the aggregate payments will exceed $10,000, (iii) increase or commitment to increase the compensation or benefits of any employees of WAI or Team, (iv) implementation or institution of any bonus, benefit, profit-sharing, pension, retirement or other plan or similar arrangement which was not in existence on December 31, 1996, or (v) new employment agreement, or modification of any existing employment agreement, by WAI or Team. 4.8 Tax Matters. (a) WAI and Team have, to the date hereof timely filed all tax reports and tax returns required to be filed by WAI and Team, and WAI and Team have 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 WAI and Team as of the date hereof have been fully paid, and all taxes and other assessments and levies which WAI or Team 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 WAI or Team. (b) Except as disclosed in Schedule 4.8 annexed hereto, there are no audits pending with respect to any federal, state or local tax reports or tax returns of WAI or Team, and no waiver of statutes of limitations have been given or requested with respect to any tax years or tax filings of WAI or Team. (c) WAI and Team have to the date hereof been electing small business corporations under Subchapter S of the Internal Revenue Code of 1986, as amended (the "Code"), and the corresponding tax provisions of Florida law, and have filed all tax reports required to be filed by WAI or Team on or prior to the date hereof. WAI and Team have further, to the date hereof, filed all other tax reports and tax returns required to be filed by WAI or Team, and WAI, Team and the Stockholder (as applicable) have paid all taxes, assessments and other impositions as and to the extent required by applicable law. Without limitation of the foregoing, WAI and Team have made all required filings and payments to the date hereof in respect of franchise, sales, use, property, excise and other taxes (including interest and penalties and including estimated tax installments as required), and there are no outstanding or pending claims, deficiencies or assessments with respect to any taxes, interest or penalties of WAI or Team. WAI and Team have previously distributed to the Stockholder (and any former stockholder) all amounts which have been, are, or will be distributable to such persons in respect of all completed tax years of WAI and Team and the 1997 tax year to date. The amounts distributed in respect of the 1996 tax year were not (on a proportionate basis) in excess of the distribution for prior years, and the 1997 distributions are not in excess of 40% of 1997 net income of either of them. 4.9 Title and Condition of the Assets. Except for liens arising under the instruments described on Schedule 4.9, WAI and Team have and own good and marketable title to all of their assets, free and clear of all liens, pledges, claims, security interests and encumbrances of every kind and nature, except for liens, pledges, claims, security interests or encumbrances which in the aggregate would not have a Material Adverse Effect. WAI and Team have delivered to the Buyer all material documents pertaining to the liens referred to in the preceding sentence. All of the fixed assets of WAI and Team (to the extent that a failure would have a Material Adverse Affect) are in good operating condition and repair (reasonable wear and tear excepted), are adequate for its use in the Business as presently conducted, and are sufficient for the continued conduct of such Business. All buildings, and all fixtures, equipment and other property and assets which are material to the Business on a consolidated basis, held under leases or subleases by WAI or Team are held under valid instruments enforceable in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws of general applicability affecting creditors rights generally and by general principles of equity (whether applied in a proceeding at law or in equity). 4.10 Receivables. All of the Receivables (whether reflected in the Financial Statements or thereafter created or acquired by WAI or Team prior to the Effective Date), (a) have arisen in the normal course of business of WAI or Team, (b) to the Stockholder's actual knowledge are not subject to any counterclaims, set-offs, allowances or discounts of any kind, except for counter claims set-offs , allowances, or discounts which would not result in a Material Adverse Effect on a per item basis, and (c) have been, are and will be valid and generally collectible in the ordinary course of the Business; and the Stockholder has no knowledge of any material or unusual risk of non-payment for any of the Receivables. Except as set forth on Schedule 4.10, WAI and Team have possession of all documents that represent the Receivables. Except for circumstances which would not result in a Material Adverse Effect on a per item basis, all the Receivables are genuine, valid, and legally binding obligations of the borrowers thereunder, have been duly executed by a borrower of legal capacity and are enforceable in accordance with their terms, except as enforcement thereof may be limited by (i) bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (whether applied in a proceeding, in equity or at law), (ii) state laws requiring creditors to proceed against the collateral before pursuing the borrower, and (iii) state laws on deficiencies, except where the invalidity or enforceability of Receivables would not have a Material Adverse Effect on a per item basis. Neither the operation of any of the terms of the Receivables, nor the exercise of any right thereunder has rendered the related security interest or note unenforceable, in whole or in part, or subjected it to any right of rescission, setoff, counterclaim or defense, and no such right of rescission, setoff, counterclaim or defense has been asserted with respect thereto. The instruments representing the Receivables are in compliance with applicable laws and regulations and accurately represent the principal, interest, payment and other terms of the Receivables, except for circumstances which would not result in a Material Adverse Effect on a per item basis. For purposes hereof, the "Receivables" shall mean 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 or described on Schedule 4.10 annexed hereto. 4.11 Inventory. All of the inventory (the "Inventory") (whether reflected in the Financial Statements or thereafter acquired by WAI or Team prior to the Effective Date) is of a quality, age and quantity consistent with the historical practices of WAI and Team, and is valued on the books of WAI and Team at cost. Schedule 4.11 sets forth a true and complete listing of the Inventory as of the date set forth on such schedule and includes a listing of the make, model, year, and vehicle identification number for each item of Inventory listed on such schedule. None of the Inventory is subject to any lien, charge, or encumbrance, except as set forth on Schedule 4.11. 4.12 Legal Compliance. (a) To the actual knowledge of the Shareholder, WAI and Team are, and for the past three (3) years have been, in compliance in all material respects with all laws, statutes, regulations, rules and ordinances applicable to the conduct of their businesses (including, without limitation, all applicable environmental laws, statutes, regulations, rules and ordinances), and have in full force and effect all licenses, permits and other authorizations required for the conduct of their businesses as presently constituted; and neither WAI nor Team is in default or violation in respect of or under any of the foregoing. The Stockholder is not aware of any past or present condition or circumstance in the business of WAI or Team (including, without limitation, with respect to any real property now or previously occupied by WAI or Team) which could give rise to any material liability under any such law, statute, regulation, rule or ordinance. (b) Except as set forth on Schedule 4.12(b) attached hereto, neither WAI nor Team has generated, operated, processed, distributed, transported, used, treated, stored, handled, emitted, discharged, released or disposed of (or caused any person or entity to do any of the foregoing or assisted any person or entity in doing any of the foregoing) any oil, gasoline, petroleum-related products, hazardous substances, hazardous waste, or pollutants or contaminants (as defined by CERCLA), including, without limitation, asbestos or asbestos containing materials, PCB's or urea formaldehyde, except in accordance with applicable laws or any product which may give ride to Hazardous Materials Liabilities. For purposes hereof, the following terms shall have the following meanings: (i) The term "Hazardous Materials" shall mean (a) hazardous materials, contaminants, constituents, medical wastes, hazardous or infectious wastes and hazardous substances as those terms are now defined in any Environmental Laws, including without limitation the following statutes and their implementing regulations: the Hazardous Materials Transportation Act, 49 U.S.C. 9601 et seq. (the "HMTA"), the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. et seq. (as so amended, "CERCLA"), The Clean Water Act, 33 U.S.C. 1251 et seq. (the "CWA"), and the Clean Air Act, 42 U.S.C. 7401 et seq. (the "CAA"); (b) petroleum, including crude oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d) asbestos and/or asbestos-containing materials; and (e) polychlorinated biphenyl ("PCBs") or materials or fluids containing PCBs in excess of 50 parts per million; (ii) The term "Hazardous Materials Liabilities" shall mean any and all damages, losses, liabilities, disabilities, fines, penalties, costs or expenses (including reasonable attorneys' fees) incurred or to be incurred, whether absolute, fixed or contingent, civil or criminal, and whether arising under federal law or state law, incurred or to be incurred in connection with the handling, storage, transportation, or disposal of any Hazardous Materials; and (iii) The term "Environmental Laws" shall mean any statute, law, ordinance, code, rule, regulation, policy, guideline, permit, consent, approval, license, judgment, order, writ, decree or authorization, including the requirement to register storage tanks, established or enacted for, or relating to, the protection of the environment or the health and safety of any person (including, without limitation, those relating to 9a) the HMTA, CERCLA, the CWA, the CAA or the Resource Conservation and Recovery Act, 42 U.S.C. 6903 et seq.; (b) emissions, discharges, releases or threatened releases of Hazardous Materials into the environment, including, without limitation, into ambient air, soil, sediments, land surface or subsurface, buildings or facilities, surface water, ground water, publicly-owned treatment works, septic systems or land; or (c) the generation, treatment, storage, disposal, use, handling, manufacturing, transportation or shipment of Hazardous Materials. (c) Neither WAI, Team nor the Stockholder has received any written notice of default or violation, nor, to the best of the Stockholder's knowledge, are WAI or Team or any of their directors, officers or employees in default or violation, with respect to any judgment, order, writ, injunction, decree, demand or assessment issued by any court or any federal, state, local, municipal or other governmental agency, board, commission, bureau, instrumentality or department, domestic or foreign, relating to any aspect of the business, affairs, properties or assets of WAI or Team. Neither WAI, Team nor the Stockholder has received written notice of, been charged with, or is, to the best of the Stockholder's knowledge, under investigation with respect to, any violation of any provision of any federal, state, local, municipal or other law or administrative rule or regulation, domestic or foreign, relating to any aspect of the business, affairs, properties or assets of WAI or Team, which violation would have a material adverse effect on WAI or Team, its businesses or any material portion of its assets. 4.13 Real Property. (a) Schedule 4.13 annexed hereto lists and describes all real property owned, held or leased by WAI or Team. WAI or Team holds good and marketable title to the real property and leasehold interests listed in Schedule 4.13, subject only to those liens and mortgages set forth in Schedule 4.13, except for liens, pledges, claims, security interests or encumbrances which in the aggregate would not have a Material Adverse Effect. Neither WAI, Team nor the Stockholder has received notice that any such real property or any buildings or improvements thereon (collectively, the "Facilities") or the use thereof by WAI or Team is in violation of any applicable building, zoning or other law, ordinance or regulation affecting such real property, and no covenants, easements, rights-of-way or conditions of record impair such use, except as set forth in Schedule 4.13. Neither WAI nor Team owns or leases any real property which is not listed in Schedule 4.13, nor does WAI or Team have any interest in any other real property, including partnerships, joint ventures, trust deeds or land sale contracts. (b) Each of the leases described in Schedule 4.13 is in full force and effect and constitutes a valid and binding obligation of WAI or Team and, to the best knowledge of the Stockholder, the other parties thereto. Neither WAI, Team nor the Stockholder has received any notice of default with respect to any term or condition of any of the leases identified in Schedule 4.13, nor is WAI or Team in default or arrears in the performance or satisfaction of any material agreement or condition on their part to be performed or satisfied thereunder. Except as disclosed in Schedule 4.13, no waiver of default or indulgence has been granted by any of the lessors under said leases, and no event has occurred which, after notice or lapse of time or both, would constitute a default thereunder, or would permit the acceleration of any obligation of any party thereto. (c) Except as set forth in Schedule 4.13, all of the buildings, fixtures and other improvements located on the Facilities are accessible by public roads, and are adequate for use in the businesses as presently conducted; and the operation of the Facilities as presently conducted is not in violation of any applicable building code, zoning ordinance or other law or regulation. 4.14 Insurance. WAI and Team maintain, have in full force and effect, and have paid all premiums in respect of insurance covering their businesses and assets against such hazards and in such amounts as are noted on the attached Schedule 4.14. 4.15 Employees. Except as disclosed in Schedule 4.15 annexed hereto, neither WAI or Team is 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 WAI or Team. Neither WAI nor Team has had any material labor difficulty in the past two (2) years, and neither WAI, Team nor the Stockholder has received notice of any unfair labor practice charges against WAI or Team or any actual or alleged violation by WAI or Team 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. 4.16 Employee Benefits. Neither WAI nor Team maintains and neither is required to make any contributions 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 neither WAI nor Team has 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 WAI and Team to their employees. 4.17 Contracts and Commitments. WAI and Team have previously provided reasonable access to the Buyer and its representatives to permit such persons to inspect and copy 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, and (b) 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. To the Stockholder's actual knowledge, all of such agreements and contracts are in full force and effect, and there is no material default or non- performance outstanding thereunder. 4.18 Litigation. Except as set forth in Schedule 4.18, there is no pending or, to the actual knowledge of the Stockholder, threatened litigation, arbitration, administrative proceeding or other legal action or proceeding against WAI or Team or relating to their businesses. The Stockholder is not aware of any state of facts, events, conditions or occurrences which the Stockholder reasonably believes would properly constitute grounds for or the basis of any suit, action, arbitration, proceeding or investigation against or with respect to WAI or Team. 4.19 Intellectual Property. To the Stockholder's actual knowledge WAI and Team have the valid right to utilize all trade names and other intellectual property utilized in their businesses, and have not received notice of any claimed infringement of any of such intellectual property with the rights or property of any other person. The Buyer acknowledges that the trade name/trademark/service mark, "R.C. Hills," will not be usable by WAI or Team or the Buyer and on the ninetieth (90th) day after the date of closing all use by the Buyer, WAI or Team will cease. 4.20 Bank Accounts. Annexed hereto as Schedule 4.20 is a correct and complete list of all bank accounts and safe deposit boxes maintained by or on behalf of WAI or Team, with indication of all persons having signatory, access or other authority with respect thereto. 4.21 Going Concern. The Stockholder has no 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 WAI and Team to continue the Business in substantially the manner heretofore conducted (other than general, industry-wide conditions). 4.22 Disclosure and Duty of Inquiry. 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 Stockholder in this Agreement. 4.23 Allowance for Uncollectible Accounts. The Buyer and Eckler accept the amount of the allowance for uncollectible accounts shown in the Financial Statements as adequate in each case as of the dates thereof. Stockholder shall have no responsibility related to such allowance and makes no representation or warranty in regard thereto. 5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. In connection with the Buyer's acquisition of the Stock, the Buyer and Eckler hereby represent and warrant to the Stockholder as follows: 5.1 Organization, Good Standing and Qualification. The Buyer and Eckler are corporations 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. The Buyer is qualified to do business in each foreign jurisdiction in which its business requires it to be qualified. 5.2 Authorization of Agreement. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by the Buyer and by Eckler has been duly and validly authorized by the Boards of Directors of the Buyer and Eckler. No further corporate authorization is required on the part of the Buyer or Eckler to consummate the transactions contemplated hereby. 5.3 Valid and Binding Agreement; No Breach. (a) The Buyer and Eckler each have full legal right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Buyer and of Eckler, enforceable against the Buyer and Eckler in accordance with its terms, except to the extent that such enforceability may be 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. (b) Except as disclosed in Schedule 5.3 annexed hereto, neither the execution and delivery of this Agreement by the Buyer or Eckler, nor compliance with the terms and provisions of this Agreement on the part of the Buyer or Eckler, will, under circumstances that would result in a Material Adverse Effect: (i) violate any statute or regulation of any governmental authority, domestic or foreign, affecting the Buyer, Eckler, or any of its subsidiaries; (ii) require the issuance of any authorization, license, consent or approval of any federal or state governmental agency; or (iii) 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, Eckler or any of Eckler's subsidiaries is a party, or by which the Buyer, Eckler or any of Eckler's subsidiaries is bound, or constitute a default thereunder, or require the consent of any other party to any of the foregoing. 5.4 No Breach of Statute or Contract. Neither the execution and delivery of this Agreement by the Buyer or Eckler, nor compliance with the terms and provisions of this Agreement on the part of the Buyer or Eckler, will: (a) violate any statute or regulation of any governmental authority, domestic or foreign, affecting the Buyer or Eckler; (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 or Eckler is a party, or by which the Buyer or Eckler 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 or Eckler is a party, or by which the Buyer or Eckler is bound. 5.5 Investment. The Buyer is purchasing the Stock for its own account for investment, and not with a view to the resale or distribution thereof in violation of any applicable securities laws. 5.6 Disclosure and Duty of Inquiry. The Stockholder 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 Buyer and Eckler in this Agreement. 6. ADDITIONAL AGREEMENTS. 6.1 Resignations. In addition to the other deliveries being made pursuant to this Agreement on the date hereof, the Stockholder is causing to be executed and delivered to WAI and Team, respectively, the resignations of all officers and directors of each of them (except to the extent that such resignations are not being required by the Buyer). 6.2 Audit of Financial Statements. The Stockholder shall, from time to time as and when requested by the Buyer from and after the date hereof, cooperate with and assist the Buyer in all reasonable respects in dealing with the accountants heretofore retained by either WAI or Team, in order that the Buyer and its accountants may obtain copies of all work papers utilized or prepared by WAI's or Team's accountants in connection with their review of the Financial Statements, and consult with their accountants as and to the extent necessary or appropriate in connection with the preparation of audited financial statements of them for all periods from and after January 1, 1993 in accordance with Regulation S-X of the Securities and Exchange Commission. Any reasonable out-of-pocket expenses incurred or paid to third parties by Stockholder in complying with this Section 6.2 shall be reimbursed by Buyer, except that any such expenses exceeding $500 shall be approved by Buyer prior to such expenses being incurred. 6.3 1997 Tax Treatment. The parties hereby confirm and consent that the income of WAI and Team in respect of 1997 shall not be prorated as between the Stockholder (on the one hand) and the Buyer (on the other hand), but shall be determined based on actual income for that portion of 1997 through the date hereof and for that portion of 1997 subsequent to the date hereof, with each of them having been deemed to have closed their books for these purposes on and as of the date hereof. The "closing of the books" shall be accomplished in a manner that is consistent with accounting conventions and procedures used in closing the books in prior years for year end closings. All allocations or determinations of accounting questions will be handled in cooperation with the Shareholder. It is agreed that the intent shall be to minimize, to the extent possible, the income to be allocated to the Stockholder for the short period. 6.4 Intentionally Omitted. 6.5 Access to Records. Subsequent to the consummation of the acquisition contemplated by this Agreement, the Buyer agrees to reasonably cooperate with the Stockholder in accessing the records of WAI and Team for periods prior to the Effective Date for Stockholder's reasonable needs, including, but not limited to, responding to inquiries from tax authorities, determining information related to transactions occurring in such prior periods, and the other reasonable business and personal needs of the Stockholder. 6.6 Release/Indemnification from Specified Loans. The Buyer indemnifies and agrees to hold the Stockholder harmless, from and after closing, from the following loans made to the Company, which loans were co- signed or guaranteed personally by the Stockholder: (i) Barnett Bank, N.A. original principal balance $34,120.95, dated October 8, 1996. 7. [INTENTIONALLY OMITTED]. 8. INDEMNIFICATION. 8.1 General. (a) The Stockholder shall defend, indemnify and hold harmless the Buyer and Eckler (for purposes of this Article 8, the Buyer and Eckler are referred to collectively as 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 ("Buyer Losses") as a result of any breach of, or failure by the Stockholder, WAI or Team to perform, any of the representations, warranties, covenants or agreements of any of them contained in this Agreement or in any Schedule(s) furnished by or on behalf of WAI, Team, or the Stockholder under this Agreement. (b) The Buyer shall defend, indemnify and hold harmless 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 Stockholder may incur, sustain or suffer ("Stockholder Losses") as a result of 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 in any Schedule(s) furnished by or on behalf of Buyer and/or Eckler under this Agreement. (c) Subject to the limitations of Section 8.2, the representations, warranties and covenants contained herein shall survive the closing hereunder to the extent any party hereto is entitled to indemnification hereunder for any breach of any representation, warranty or covenant contained herein. (d) The Stockholder's indemnification obligations hereunder are secured by a Stock Pledge and Security Agreement of even date herewith among the Stockholder, the Buyer, and Eckler Industries, Inc. 8.2 Limitations on Certain Indemnity. (a) Notwithstanding any other provision of this Agreement to the contrary, (i) the Stockholder shall not be liable to the Buyer with respect to Buyer Losses unless and until the aggregate amount of all Buyer Losses shall exceed the sum of Fifty Thousand and 00/100ths Dollars ($50,000.00) (the "Stockholder Basket"), and (ii) the Stockholder shall thereafter be liable for all Buyer Losses in excess of the Stockholder Basket, provided that the Stockholder's maximum aggregate liability in respect of all Buyer Losses shall not, in the absence of proven fraud by the Stockholder, WAI or Team in respect of any particular Buyer Losses, in any event exceed the limitations set forth in Section 8.2(c) below; provided, however, that the Stockholder Basket and such limitation on liability shall not be available with respect to, and there shall not be counted against the Stockholder Basket or such limitation of liability, any Buyer Losses arising by reason of any Buyer Losses involving proven fraud by the Stockholder, WAI or Team. (b) Notwithstanding any other provision of this Agreement to the contrary, (i) the Buyer shall not be liable to the Stockholder with respect to Stockholder Losses unless and until the aggregate amount of all Stockholder Losses shall exceed the sum of Fifty Thousand and 00/100ths Dollars ($50,000.00) (the "Buyer Basket"), and (ii) the Buyer shall thereafter be liable for all Stockholder Losses in excess of the Buyer Basket; provided, however that the Buyer Basket shall not be available with respect to, and there shall not be counted against the Buyer Basket any Stockholder Losses arising by reason of any Stockholder Losses involving proven fraud by the Buyer, its principal shareholders, officers, employees or directors. (c) Except with respect to any Buyer Losses involving proven fraud by the Stockholder, WAI or Team, the Stockholder shall not be required to pay indemnification hereunder in an aggregate amount in excess of Purchase Price, to the extent actually received by the Stockholder under the terms of this Agreement. (d) The Buyer shall be entitled to indemnification by the Stockholder for Buyer Losses only in respect of claims for which notice of claim shall have been given to the Stockholder on or before March 31, 1997. The Stockholder shall be entitled to indemnification by the Buyer for Stockholder Losses only in respect of claims for which notice of claim shall have been given to the Buyer on or before March 31, 1998. 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, through 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. With respect to the initial announcement of the consummation of the transactions pursuant to this Agreement and of any of the terms thereof, neither party shall make such an announcement without the prior review and approval thereof by the Buyer (in the case of any proposed disclosure or public announcement by 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 Bank Accounts. Upon the consummation of the transactions pursuant to this Agreement, the Stockholder shall cooperate with the Buyer to promptly modify to the Buyer's satisfaction the signatory and access arrangements for all bank accounts and safe deposit boxes maintained by or in the name of WAI or Team. 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 ownership and operations of the Business. 10. COSTS. 10.1 Finder's or Broker's Fees. Each of the Buyer, Eckler, and the Stockholder represents and warrants that neither it nor he 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. 10.2 Expenses. The parties (except as provided in Section 10.3) 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. 10.3 Stockholder's Costs. The Buyer shall pay the reasonable attorneys' and accountants' fees and costs associated with the negotiation and consummation of this transaction. Such fees and costs shall be paid immediately upon receipt of an invoice from the Stockholder's attorneys or accountants. The attorneys and accountants shall have the rights of enforcement provided in this Agreement and are intended beneficiaries of this provision. 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 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 the Stockholder: R. C. Hill, II 1211 Salerno Court Orlando, FL 32806 (ii) With a copy to: David A. Webster, Esq. Milam, Otero, Larsen, Dawson & Traylor, P.A. 1301 Riverplace Boulevard, Suite 1301 Jacksonville, FL 32207 (iii) If to Eckler or the Buyer: First Choice Auto Finance, Inc. Eckler Industries, Inc. 5200 South Washington Avenue Titusville, FL 32780 Attn: James Neal Hutchinson, Jr. General Counsel 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. 13.4 Costs of Enforcement. In the event that any party is required to bring an action to enforce its rights hereunder, the substantially prevailing party shall recover from the substantially non- prevailing party all of the substantially prevailing party's attorneys' fees and costs (the "Expenses") incurred in such action. For purposes herein, the Expenses shall include investigatory, trial, appeal, bankruptcy, mediation and arbitration expenses, and all costs of collection and shall cover fees and costs for the lawyers, experts, paralegals and clerks, and all other persons reasonably necessary as part of the enforcement process. All such Expenses shall bear interest from the date incurred until the date paid at the highest rate of interest permitted in Florida. The parties request that a court award the actual Expenses incurred by the substantially prevailing party, recognizing that it is the parties intention that the substantially prevailing party should be made completely whole. Costs incurred in enforcing this Section shall be included in Expenses. 13.5 Time of the Essence. Time is of the essence for all performances under this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the date first set forth above. The Buyer: FIRST CHOICE AUTO FINANCE, INC., a Florida corporation By: /S/J. Neal Hutchinson, Jr. Title:Asst. V.P. The Stockholder: /S/ R.C. Hill, II R. C. HILL, II Eckler: ECKLER INDUSTRIES, INC., a Florida corporation By: /S/J. Neal Hutchinson, Jr. Title: Asst. V. P. EX-10.11 13 Exhibit 10.11 PROMISSORY NOTE $1,500,000 February 12, 1997 FOR VALUE RECEIVED, the undersigned, ECKLER INDUSTRIES INC., a Florida corporation (the "Maker"), hereby promises to pay to R.C. HILL, II (the "Payee"), the principal sum of One Million Five Hundred and 00/100 ($1,500,000) Dollars, together with interest on the outstanding principal balance hereunder accrued from the date hereof at the rate of eight (8%) percent per annum. All payments of principal and/or interest shall be paid as set forth below, and each such payment shall be made in lawful money of the United States of America. 1. Payments of Principal and Interest. (a) The principal balance of this Note shall be payable as follows: (i) Fifty Thousand and no/100ths Dollars ($50,000.00) shall be due and payable upon the execution of this Note. (ii) Beginning on 1 March 1997, and on the first day of each succeeding calendar month, a principal payment of Thirty Thousand and no/100ths Dollars ($30,000.00) shall be paid to the Holder. (iii) The remaining unpaid principal balance of this Note shall be due and payable upon the earlier to occur of the following: (1) The first anniversary of the date of execution and delivery of this Note, as provided above. (2) Fifteen (15) days after the date on which the Maker, and/or any of its corporate affiliates, shall consumate a public offering of its equity securities of at least $20,000,000. (b) The accrued interest on this Note shall be payable, in arrears, on the first (1st) day of each calendar month, beginning 1 March 1997, so long as any principal amount remains unpaid. All accrued but unpaid interest shall be due and payable at the same time as the remaining principal balance is paid pursuant to subparagraph 1.(a)(iii) above. (c) In the event that any scheduled payment date hereunder is a day on which banks in the State of Florida are required or authorized to be closed, then the payment that would be due on such day shall instead be due and payable on the next day which is not such a non-banking day, with additional interest for such delay at the rate then in effect hereunder. 2. Prepayment. The Maker shall have the right to prepay, without premium or penalty, at any time or times after the date hereof, all or any portion of the outstanding principal balance of and/or accrued interest under this Note. 3. Events of Default. The following are Events of Default hereunder: (a) Any failure by the Maker to pay when due all or any principal or interest hereunder; or (b) Any failure of Maker to pay, perform, hold harmless or otherwise perform any or all of its obligations to R.C, Hill, II ("Hill") under the Indemnification Agreement between Eckler Industries, Inc. and R.C. Hill, II, of even date herewith (a "Non-Performance"), which Non-Performance results in a third party taking action against Hill which action is or could cause damages to Hill, however arising. (c) If the Maker (i) admits in writing its inability to pay generally its debts as they mature, or (ii) makes a general assignment for the benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent, or (iv) files a voluntary petition in bankruptcy, or (v)takes advantage, as against its creditors, of any bankruptcy law or statute of the United States of America or any state or subdivision thereof now or hereafter in effect, or (vi) has a petition or proceeding filed against it under any provision of any bankruptcy or insolvency law or statute of the United States of America or any state or subdivision thereof, which petition or proceeding is not dismissed within thirty (30) days after the date of the commencement thereof, (vii) has a receiver, liquidator, trustee, custodian, conservator, sequestrator or other such person appointed by any court to take charge of its affairs or assets or business and such appointment is not vacated or discharged within thirty (30) days thereafter, or (viii) takes any action in furtherance of any of the foregoing; or (b) Any liquidation, dissolution or winding up of the Maker or its business. 4. Remedies on Default. If any Event of Default shall occur and be continuing, the holder hereof shall, in addition to any and all other available rights and remedies, have the right, at its option (except for an Event of Default under paragraph 4(b) above, the occurrence of which shall automatically effect acceleration hereunder), (a) to declare the entire unpaid principal balance of this Note, together with all accrued interest hereunder, to be immediately due and payable, and (b) to pursue any and all available remedies for the collection of such principal and interest. 5. Certain Waivers. Except as otherwise expressly provided in this Note, the Maker hereby waives diligence, demand, presentment for payment, protest, dishonor, nonpayment, default, and notice of any and all of the foregoing. All amounts payable under this Note shall be payable without relief under any applicable valuation and appraisement laws. The Maker hereby expressly agrees that this Note, or any payment hereunder, may be extended, modified or subordinated (by forbearance or otherwise) from time to time, without in any way affecting the liability of the Maker. The Maker hereby further waives the benefit of any exemption under the homestead exemption laws, if any, or any other exemption or insolvency laws. 6. Waivers and Amendments. Neither any provision of this Note nor any performance hereunder may be amended or waived orally, but only by an agreement in writing and signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 7. Cumulative Remedies. No right or remedy conferred upon the Payee under this Note is intended to be exclusive of any other right or remedy contained herein or in any instrument or document delivered in connection herewith, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and/or now or hereafter existing at law or in equity or otherwise. 8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial, Time of the Essence. This Note shall be deemed to be a contract made under the laws of the State of Florida and shall be governed by, and construed in accordance with, the laws of the State of Florida. The Maker hereby irrevocably consents to the jurisdiction of all courts (state and federal) sitting in the State of Florida in connection with any claim, action or proceeding relating to or for the collection or enforcement of this Note, and hereby waives any defense of forum non conveniens or other such claim or defense in respect of the lodging of any such claim, action or proceeding in any such court. Time shall be of the essence for performance hereunder. 9. Collection Costs. In the event that the Payee shall, after the occurrence of an Event of Default, turn this Note over to an attorney for collection, the Maker shall further be liable for and shall pay to the Payee all collection costs and expenses incurred by the Payee, including reasonable attorneys' fees and expenses. ECKLER INDUSTRIES, INC. By:/S/J. Neal Hutchinson, Jr. As its:Asst. V. P. EX-10.12 14 4 Exhibit 10.12 CORPORATE GUARANTY This GUARANTY is made and entered as of February 12, 1997 (the "Effective Date") from ECKLER INDUSTRIES, INC., a Florida corporation (the "Guarantor") to R.C. HILL, II ("Hill"). WITNESSETH: In consideration of any loan or other financial accommodation heretofore or hereafter at any time made or granted to First Choice Auto Finance, Inc. ("FCAF"), the Guarantor agrees as follows: 1. DEFINITION For purposes of this Agreement, "Indebtedness" shall mean any obligation or indebtedness of FCAF pursuant to that certain $1,500,000 Note of FCAF to Hill of even date herewith. 2. GUARANTY a. Guaranty Obligations. The Guarantor hereby unconditionally and absolutely guarantees (i) the full and prompt payment when due, whether by acceleration or otherwise, and at all times hereafter, of all Indebtedness and (ii) the full and prompt performance of all the terms, covenants, conditions and agreements related to the Indebtedness. The Guarantor further agrees to pay all reasonable expenses, including without limitation, attorneys' fees and court costs, paid or incurred by Hill in endeavoring to collect the Indebtedness, or any part thereof, and in enforcing the Guaranty, plus interest on such amounts at the maximum rate permitted by law. Interest on such amounts paid or incurred by Hill shall be computed from the date of payment made by Hill and shall be payable on demand. b. Absolute and Unconditional Nature of the Guaranty. The Guarantor acknowledges that this Guaranty is a guaranty of payment and not of collection, and that its obligations hereunder shall be absolute, unconditional and unaffected by: (i) the waiver of the performance or observance by Dealer of any agreement, covenant, term or condition to be performed or observed by Dealer; (ii) the extension of time for the payment of any sums owing or payable with respect to the Indebtedness or the time for performance of any other obligation arising out of the Indebtedness; (iii) the modification, alteration or amendment of any obligation arising out of the Indebtedness; (iv) the failure, delay or omission by Hill to enforce, assert or exercise any right, power or remedy in connection with the Indebtedness; (v) the genuineness, validity, or enforceability of the Indebtedness or any document related thereto; (vi) the voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the property, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment or other similar application or proceeding affecting FCAF or any assets of FCAF; or (vii) the release or discharge of FCAF from the performance or observance of any agreements, covenants, terms or conditions in connection with the Indebtedness by operation of law or otherwise. c. Continuing and Unlimited Nature of the Guaranty. The obligations of the Guarantor under this Guaranty shall be continuing and shall cover all Indebtedness existing as of the Effective Date of this Guaranty and Indebtedness existing at the time of termination of this Guaranty. This Guaranty shall be unlimited in amount and shall continue in effect until the Guaranty is terminated pursuant to Section 3 hereof. d. Waivers by Guarantor. The Guarantor hereby expressly waives: (i) notice of the acceptance by Hill of this Guaranty; (ii) notice of the existence or creation or non-payment of all or any of the Indebtedness; (iii) presentment, demand, notice of dishonor, protest, and all other notices whatsoever, and (iv) diligence in collection or protection of or realization upon the Indebtedness, or any part thereof, any obligation under this Guaranty or any security for or guaranty of any of the foregoing. e. Authorization. This Guaranty has been expressly authorized by Guarantor's Board of Directors pursuant to a Board of Director's resolution in form and substance satisfactory to Hill. f. Enforcement. In no event shall Hill have any obligation to proceed against FCAF, any other entity or any security pledged in connection with the Indebtedness before seeking satisfaction from the Guarantor. Hill may, at its option, proceed, prior or subsequent to, or simultaneously with, the enforcement of its rights hereunder, to exercise any right or remedy it may have against FCAF, any other entity or any security pledged in connection with the Indebtedness. g. Reinstatement. The Guarantor agrees that if at any time all or any part of any payment theretofore applied by Hill to any of the Indebtedness is or must be rescinded or returned by Hill for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of Dealer), such Indebtedness shall, for purposes of this Guaranty, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application by Hill, and this Guaranty shall continue to be effective or reinstated, as applicable, as to such Indebtedness, all as though such application by Hill had not been made. 3. TERMINATION This Guaranty shall be terminated upon: (i) the payment by FCAF or the Guarantor, either jointly or severally, of the aggregate amount of Indebtedness outstanding, and (ii) the payment and performance of all obligations by the Guarantor which may be due to Hill under this Guaranty or otherwise. 4. EVENTS OF DEFAULT Any one or more of the following events shall constitute an Event of Default hereunder: a. If Guarantor fails to make any payment hereunder and such failure shall continue for five (5) days after written notice from Hill; b. If Guarantor fails to perform or observe any agreement, covenant, term or condition contained in this Guaranty (other than the monetary obligations described in Section 4(a) above) and such failure shall continue for thirty (30) days after written notice from Hill; c. If Guarantor makes an assignment for the benefit of creditors or fails to pay its debts as the same become due and payable; d. If Guarantor petitions or applies to any tribunal for the appointment of a trustee or receiver of the business, estate or assets of any substantial portion of the business, estate or assets of Guarantor, or commences any proceedings relating to Guarantor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect; e. If any such petition or application is filed or any such proceedings are commenced against Guarantor and Guarantor by any act indicates its approval thereof, consent thereto or acquiescence therein, or any order is entered appointing any such trustee or receiver, or declaring Guarantor bankrupt or insolvent, or approving the petition in any such proceedings; or If an Event of Default under this Guaranty shall have occurred, in addition to pursuing any remedies which may be available to Hill with respect to the Indebtedness, Hill, at its option, may take whatever action at law or in equity Hill may deem necessary regardless of whether Hill shall have exercised any of its rights or remedies with respect to any of the Indebtedness, and Hill may demand, at its option, that the Guarantor pay forthwith the full amount which would be due and payable hereunder as if all Indebtedness were then due and payable. 5. GENERAL a. Entire Agreement. This Guaranty contains the entire and only agreement between the Guarantor and Hill with respect to the guaranty of Indebtedness and any representation, promise, condition or understanding in connection therewith which is not expressed in this Guaranty shall not be binding upon the Guarantor or Hill. All prior understandings and agreements related to the guaranty of the Indebtedness shall be superseded by this Guaranty as of the Effective Date. b. Application of Payments; Subrogation. Any amounts received by Hill from any source on account of the Indebtedness may be applied by it toward the payment of such of the Indebtedness, and in such order of application, as Hill may from time to time elect. Notwithstanding any payments made by or for the account of the Guarantor, the Guarantor shall not be subrogated to any rights of Hill until such time as this Guaranty has been terminated in accordance with Section 3(a) above. c. Notices. All notices to the Guarantor shall be forwarded by express mail for overnight delivery to the address set forth below the Guarantor's signature, or such other address as the Guarantor may from time to time specify in writing to Hill. All notices to Hill shall be forwarded by express mail for overnight delivery (except for the notice given pursuant to Section 3(b) to the following address: at 1214 Salerno Court, Orlando, Florida 32806, or such other address as Hill may specify to the Guarantor in writing. d. Governing Law; Severability. This Guaranty shall be governed by the laws of the State of Florida. Wherever possible, each provision of this Guaranty shall be interpreted in such manner to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, the remaining provisions of this Guaranty shall remain in full force and effect. e. Successors and Assigns. All guaranties and agreements contained in this Guaranty shall bind the legal representatives, heirs, successors and assigns of the Guarantor. f. References to Guarantor. Each reference to Guarantor herein shall be deemed to include the legal representatives, heirs, and agents of the Guarantor and their respective successors and assigns. g. Rights and Remedies of Hill. No delays on the part of the Hill in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any power or right hereunder or the failure to exercise same in any instance preclude other or further exercise of any other power or right, nor shall Hill be liable for exercising or failing to exercise any such power or right. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies which Hill may or will otherwise have. h. Amendments. This Guaranty may not be modified or amended except by a writing duly executed by the Guarantor. Any such modification or amendment must be expressly consented to in writing by Hill. i. Time of the Essence. Time shall be of the essence for all performances hereunder. j. Costs of Enforcement. In the event that any party is required to bring an action to enforce its rights hereunder, the substantially prevailing party shall recover from the substantially non-prevailing party all of the substantially prevailing party's attorneys' fees and costs (the "Expenses") incurred in such action. For purposes herein, the Expenses shall include investigatory, trial, appeal, bankruptcy, mediation and arbitration expenses, and all costs of collection and shall cover fees and costs for the lawyers, experts, paralegals and clerks, and all other persons reasonably necessary as part of the enforcement process. All such Expenses shall bear interest from the date incurred until the date paid at the highest rate of interest permitted in Florida. The parties request that a court award the actual Expenses incurred by the substantially prevailing party, recognizing that it is the parties' intention that the substantially prevailing party should be made completely whole. Costs incurred in enforcing this Section shall be included in Expenses. GUARANTOR: ECKLER INDUSTRIES, INC., a Florida corporation By:/S/J. Neal Hutchinson, Jr. Name: Title:Asst. V. P. HILL: /S/ R.C. Hill, II R. C. HILL, II EX-10.13 15 Exhibit 10.13 STOCK PLEDGE AND SECURITY AGREEMENT This Stock Pledge and Security Agreement (the "Agreement"), is made and entered into this 12th day of February, 1997, by and among R.C. Hill, II, ("Hill"), First Choice Auto Finance, Inc., a Florida corporation ("FCAF") and Eckler Industries, Inc., a Florida corporation ("Eckler") (FCAF and Eckler are referred to collectively as the "Secured Parties"). RECITALS: This Agreement is made and entered into under the following circumstances: 1. Hill is the record shareholder of 176,078 shares (the "Shares") of the outstanding common capital stock, Class B, $.01 par value (the "Common Stock") of Eckler, such Shares being represented by certificate number 176,078 (the "Certificate"). 2. Hill and Eckler have entered into that certain Merger Agreement and Hill, Eckler, and FCAF have entered into that certain Stock Purchase Agreement, both of even date herewith, pursuant to which Eckler is acquiring certain businesses of Hill (such agreements are referred to herein collectively as the "Acquisition Agreements"). 3. Eckler and FCAF have required the execution and delivery of this Agreement to provide security for the obligations of Hill under the Acquisition Agreements. NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. Pledge of Shares. Hill hereby pledges his interest in the Shares as security for his obligations (the "Obligations") under the Acquisition Agreements and all agreements executed and delivered in connection with the Acquisition Agreements, including his obligations with respect to the representations and warranties under the foregoing. The Secured Parties shall have (and are hereby granted) a security interest in the Shares (and related Certificates) (herein called the "Collateral") and all proceeds thereof and accessions thereto to secure the Obligations. 2. Ownership Rights. Unless a breach or default has occurred under the Acquisition Agreements or this Agreement, Hill shall have and enjoy all rights and attributes relating to the Shares, including, without limitation, all voting rights and rights to dividends and other distributions in respect thereof; provided however that Hill shall not transfer any of the Shares during the time when this Agreement is in effect. 3. Adjustments. In the event that during the term of this Agreement, any share dividend, reclassification, readjustment, or other change is declared or made in the capital structure of the Secured Parties, all new, substituted, and additional shares, options or other securities issued with respect to the pledged Collateral by reason of any such change shall be delivered to the Secured Parties and held by the Secured Parties under the terms of this Agreement in the same manner as the Collateral originally pledged hereunder. 4. Warrants and Rights. In the event that during the term of this Agreement, subscription warrants or any other rights or options shall be issued to or for the benefit of Hill or otherwise with respect to the Collateral, such warrants, rights and options shall be immediately assigned and delivered by Hill to the Secured Parties and shall become part of the Collateral hereunder. 5. Events of Default; the Secured Parties Remedies. In the event Hill shall, following the date hereof: (a) default under or breach of any of the Obligations or this Agreement (collectively, the "Security Documents"), (b) make an assignment for the benefit of his creditors, (c) commence proceedings in bankruptcy for the adjustment of any of Hill's debts under the Bankruptcy Code or under any law, whether state or federal, now or hereafter existing for the relief of debtors, (d) have a receiver appointed for any substantial part of Hill's assets, (e) transfer a substantial part of his property, or (g) become insolvent or unable to pay debts as they mature (each of the foregoing being an "Event of Default"), the Secured Parties shall have the rights and remedies provided in the Florida Uniform Commercial Code in effect on the date of this Agreement (the "Code") and may sell any such Collateral in any manner provided under the Code, and the proceeds of any such sale shall be applied first to the expenses of such sale (including, but not limited to, reasonable attorneys' fees incurred by the Secured Parties in connection with any such default by Hill) and the balance, if any, shall be paid to Hill. Further, following an Event of Default, the Secured Parties shall have the right, but not the duty, to thereafter exercise all rights with respect to voting privileges for the Shares and upon notice from the Secured Parties, Hill shall no longer exercise any voting rights with respect to the Shares, or if so directed by the the Secured Parties, shall vote the Shares as directed by the Secured Parties. If an Event of Default shall occur, the Secured Parties shall satisfy any resulting claim by the Secured Parties against Hill resulting from such Event of Default by causing Shares having an aggregate value (determined as provided below, subject to appropriate adjustment to account for any stock split, stock dividend, combination of shares or other such event which may occur at any time prior to the termination of this Agreement) equal to the amount of such claim by the Secured Parties against Hill to be transferred from Hill to the Secured Parties for cancellation. For purposes hereof, the Shares shall be deemed to have a value per share equal to $17.50. No delay or omission on the part of the Secured Parties in exercising any right granted hereunder shall operate as a waiver of such right or any other right. A waiver on any one occasion by the Secured Parties shall not be construed as a bar to or waiver of any right on any future occasion. All rights and remedies of the Secured Parties, whether granted herein or by the Acquisition Agreements, shall be cumulative and may be exercised separately or concurrently. 6. Termination of Pledge; Release of Shares. The pledge created hereby shall terminate upon the termination of the Obligations. On termination the Secured Parties shall release their security interest in the Collateral and shall deliver to Hill the Certificates and stock powers relating thereto, and any other Collateral remaining in the possession of the Secured Parties. 7. Amendment. This Agreement shall not be amended except by a writing which refers to this Agreement and is executed by each of the parties hereto. 8. Complete Agreement. This Agreement sets forth the entire understanding of the parties hereto concerning the subject matter hereof, including the agreements referenced herein, and supersedes all prior contracts, arrangements, communications, discussions, representations and warranties, whether oral or written, among the parties relating to the subject matter of this Agreement. 9. Notices. All notices, requests, consents, and other communications hereunder shall be in writing and delivered to the person to whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as registered or certified item with return receipt requested, (iii) delivered by delivery service, or (iv) sent by facsimile (with confirmation or receipt), telex or telecopy. Notices delivered by mail shall be deemed to be given when deposited in a post office or other depository under the care or custody of the United States Postal Service, enclosed in a wrapper, addressed properly with proper postage affixed or when received at the address set forth herein if delivered or sent by facsimile. All notices shall be addressed as follows: If to Hill: R.C. Hill, II 1211 Salerno Court Orlando, FL 32806 With a copy to: David A. Webster, Esquire Milam, Otero, Larsen, Dawson & Taylor, P.A. 1301 Riverplace Boulevard, Suite 1301 Jacksonville, Florida 32207 If to the Secured Parties: Eckler Industries, Inc. 5200 S. Washington Avenue Titusville, FL 32780 or to such other address or addresses as the party addressed may from time to time designate to the others in writing in accordance with this paragraph. 10. Governing Law. This Agreement shall in all respects be interpreted, governed by, and construed in accordance with the laws of the State of Florida. 11. Severability. Each section, subsection, and lesser section of this Agreement constitutes a separate and distinct undertaking, covenant, or provision hereof. In the event that any provision of this Agreement shall finally be determined to be unlawful, such provision shall be deemed limited by construction in scope and effect to the minimum extent necessary to render the same valid and enforceable, and, if such a limiting construction is not possible, any such provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect. 12. Third Parties. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any other person or entity other than the parties hereto any rights or remedies under or by reason of this Agreement. 13. Headings. The headings in this Agreement are intended solely for convenience of reference and shall not be given any effect in the construction or interpretation of this Agreement. 14. Counterparts. This Agreement may be executed and delivered in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement. 15. Waiver of Trial by Jury. THE PARTIES HEREBY MUTUALLY AGREE THAT NEITHER PARTY, NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE PARTIES (ALL OF WHOM ARE HEREINAFTER REFERRED TO AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT, INSTRUMENT, OR AGREEMENT EXECUTED IN CONNECTION HEREWITH, ANY RELATED AGREEMENT OR INSTRUMENT OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG THE PARTIES, OR ANY OF THEM. NONE OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES. THE WAIVER CONTAINED HEREIN IS IRREVOCABLE, CONSTITUTES A KNOWING AN VOLUNTARY WAIVER, AND SHALL BE SUBJECT TO NO EXCEPTIONS. ECKLER HAS IN NO WAY AGREED WITH OR REPRESENTED TO GUARANTOR OR ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the date first written above. Hill: /S/ R.C. Hill, II R.C. Hill, II Eckler: ECKLER INDUSTRIES, INC., a Florida corporation By:/S/ J. Neal Hutchinson, Jr. Title:Asst. V. P. FCAF: FIRST CHOICE AUTO FINANCE, INC., a Florida corporation By: /S/ Title: EX-10.14 16 Exhibit 10.14 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into as of and effective the 12th day of February, 1997, by and between ECKLER INDUSTRIES, INC., whose mailing address is 5200 S. Washington Avenue, Titusville, Florida 32780 ("Eckler"), and R.C. HILL, II, whose mailing address is 2211 N. Halifax Avenue, Daytona Beach, Florida 3118 ("Hill"). W I T N E S S E T H: THIS AGREEMENT is made and entered into under the following circumstances: A. Hill has sold his interest in Liberty Finance Company ("Liberty"), Team Automobile Sales & Service, Inc. ("Team") and Wholesale Acquisitions, Inc. ("Wholesale") (Liberty, Team and Wholesale maybe referred to sometimes hereinafter as the "Acquirees"), to the Eckler pursuant to those certain purchase agreements dated even herewith; B. Hill has previously personally guaranteed certain obligations of the Acquirees to certain creditors, secured and unsecured (the "Obligations"), as more specifically identified in Exhibit "A", a true and accurate copy of which is attached hereto and incorporated herein by this reference; and C. Eckler desires to indemnify Hill, and others as named below, against any personal liability incurred in connection with the Obligations as the result of Eckler's failure to perform as to payment thereof. NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the parties hereto covenant and agree as follows: 1. Eckler's Indemnification of Hill Parties. Eckler shall indemnify and hold harmless Hill, R.C. Hill, Sr., R.C. Hill Enterprises, Inc., Deltona House Rentals, Inc., Affordable Leasing, Inc., Polaris of Orlando, Inc., Motorcycle Insurance Agency, Inc., Orange Acceptance Corporation and R.C. Hill, Sr. (all of which are jointly referred to herein as the "Hill Parties" and are intended beneficiaries of this Agreement with the same rights of enforcement against the Eckler hereunder) from and against the Obligations, including payments, liabilities, costs (including attorneys fees and costs), and penalties thereunder, however arising. Specifically, the Eckler acknowledges that certain Forebearance Agreement (and associated documents) between the Hill Parties (and others) and General Electric Credit Corporation ("GE") dated 21 January 1997, wherein the Hill parties guaranteed to GE the payment of the obligations of Liberty Finance Company to GE (the "GE Debt"), and further acknowledges that the Hill Parties, in some cases, provided security to GE for the GE Debt, including collateral assignments of mortgages (in the case of R.C. Hill, Sr., and Hill) as well as other security. Eckler acknowledges that the duty of indemnification includes ensuring that the Hill Parties suffer no detriment to the security which was provided to GE, to the extent the detriment arises from a failure by Eckler to pay the GE Debt resulting in action by GE against such security that is detrimental to the interests of the party who owns such collateral. This duty of indemnification shall continue until, if ever, the Obligations are paid in full, the Hill Parties have been fully released from liability by the holders of the Obligations, and all security which has been pledged to secure any of the Obligations has been released to the Hill Parties owner of such property. 2. Indemnification Procedure. (a) 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. (b) 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, through 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. 3. Notices. All notices, requests, consents, and other communications hereunder shall be in writing and delivered to the person to whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as registered or certified item with return receipt requested, (iii) delivered by delivery service, or (iv) sent by facsimile, telex or telecopy. Notices delivered by mail shall be deemed to be given when deposited in a post office or other depository under the care or custody of the United States Postal Service, enclosed in a wrapper, addressed properly with proper postage affixed or when received at the address set forth herein if delivered or sent by facsimile. All notices shall be addressed as follows: If to Hill: R.C. Hill, II 1211 Salerno Court Orlando, Florida 32806 With a copy to: David A. Webster, Esquire Milam, Otero, Larsen, Dawson & Taylor, P.A. 1301 Riverplace Boulevard, Suite 1301 Jacksonville, Florida 32207 If to Eckler: Eckler Industries, Inc. 5200 S. Washington Avenue Titusville, Florida 32780 With a copy to: F. S. Ioppolo, Jr., Esquire Greenberg Traurig 111 North Orange Avenue Suite 2050 Orlando, Florida 32801 or to such other address or addresses as the party addressed may from time to time designate to the others in writing in accordance with this paragraph. 4. Counterparts. This Agreement may be executed in one or more counterparts by the parties by the parties hereto, and all such counterparts together shall constitute one and the same agreement. 5. Successors, etc. This Agreement is for the benefit of the parties hereto, and shall be binding upon them, together with their respective heirs, executors, administrators, successors, and assigns. No right or obligation created hereunder shall be assignable or delegable by any party hereto without the prior written consent of every other party hereto. 6. Governing Law; Jurisdiction. The validity, interpretation, and performance of this Agreement shall be governed by the laws of the State of Florida, without giving effect to the principles of comity or conflicts of laws thereof. Each party hereto agrees to submit to the personal jurisdiction and venue of the state and federal courts located in Orange County, Florida, for a resolution of all disputes between the parties arising in connection with this Agreement, and hereby waives the claim or defense therein that such courts constitute an inconvenient forum. 7. Severability. Each section, subsection, and lesser section of this Agreement constitutes a separate and distinct undertaking, covenant, or provision hereof. In the event that any provision of this Agreement shall finally be determined to be invalid or unenforceable, such provision shall be deemed limited by construction in scope and effect to the minimum extent necessary to render the same valid and enforceable, and, in the event such a limiting construction is impossible, such unlawful provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect. 8. Waivers. Any waiver by any party of any violation of, breach of, or default under any provision of this Agreement by another party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of, or default under any other provision of this Agreement. 9. Third Parties. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any other person or entity other than the parties hereto any rights or remedies under or by reason of this Agreement. 10. Costs of Enforcement. In the event a party initiates legal action (including both trial and appellate proceedings) to enforce his or its rights hereunder, the prevailing party in such action shall recover from the non-prevailing party in such action his or its reasonable litigation expenses (including, but not limited to reasonable attorneys' fees and court costs) of all such proceedings. 11. Time of the Essence. Time shall be of the essence for all performances hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. Eckler: Eckler Industries, Inc. By: /S/ J. Neal Hutchinson, Jr. Title:Asst. V. P. Hill: /S/ R.C. Hill, II R. C. Hill, II Exhibit "A" OBLIGATIONS OF THE HILL PARTIES 1. General Electric Credit Corporation pursuant to that certain Motor Vehicle Installment Contract Loan and Security Agreement dated June 3, 1993, as amended, together with that certain Forebearance Agreement, and associated documents, dated 21 January 1997 (the "GE Debt"). 2. (i) Nat Weaver, Inc.-dated January 1, 1993, for $70,000, due on December 31, 1997, plus interest at 16% per annum. (ii) Nat Weaver, Inc.-dated April 17, 1992, for $50,000, due on April 17, 1997, plus interest at 16% per annum. (iii) Nat Weaver, Inc.-dated August 1, 1992, for $60,000, due on July 31, 1997, plus interest at 16% per annum. (iv) Jeremy Hill-dated June 1, 1992, for $1,500, due on demand, plus interest at 15% per annum. (v) John Jeyaseelan-undated in 1994, for $10,000, due on demand, with interest at 15% per annum. (vi) John Jeyaseelan-dated December 30, 1994, for $5,000, due on demand, plus interest at 15% per annum. (vii) John Jeyaseelan-dated December 27, 1994, for $5,000, due on demand, plus interest at 15% per annum. (viii) Lucy Lee Burton-dated January 1, 1995, for $100,000, due on October 30, 2001, plus interest at 10% per annum. (ix) Mark F. Burton-dated February 17, 1995, for $101,006.68, due on October 30, 2001, with interest at 10% per annum. (x) R.C. Hill, Sr.-dated August 1, 1993, for $200,000, due on December 31, 2001, with interest at 10% per annum. (xi) R. C. Hill, III - $190,468.41, dated July 12, 1996, payable November 15, 2001 with interest at 15% per annum. 3. Barnett Bank of Central Florida, N.A., dated April 30, 1996, original principal $300,000 due on demand, plus interest at the rate of 9.250%. 4. Barnett Bank, N.A. - original principal $34,120.05, dated November 8, 1996 for Chevy Suburban owned by Wholesale Acquisitions, Inc. 5. Manheim Automotive Financial Services, Inc. - Note $2,000,000, dated July 30, 1996, Wholesale Acquisitions, Inc., Maker, Liberty Finance Company and R.C. Hill, Jr., Guarantors. EX-10.15 17 Exhibit 10.15 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th day of February, 1997, by and between FIRST CHOICE AUTO FINANCE, INC., a Florida corporation (the "Company"), and R.C. HILL, II, an individual (the "Employee"); W I T N E S S E T H: WHEREAS, the Employee has extensive experience relating to all aspects of the management and operation of automobile dealerships for new and used cars, including (without limitation) leasing and other financing activities in connection therewith; and WHEREAS, the Employee has heretofore been affiliated with Liberty Finance Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions, Inc., the businesses of which are being acquired by the Company and its affiliates on or about the date hereof; and WHEREAS, to promote the ongoing business of the Company, the Company desires to assure itself of the right to the Employee's services from and after the date hereof, on the terms and conditions of this Agreement; and WHEREAS, the Employee is willing and able to render his services to the Company from and after the date hereof, on the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 1. Nature of Employment. (a) Subject to the terms and conditions of this Agreement, the Company shall, throughout the term of this Agreement, retain the Employee, and the Employee shall render services to the Company, in a managerial capacity and with such title as may be determined by the Board of Directors of the Company. In such capacity, the Employee shall have and exercise responsibility for managing, supervising, overseeing and actively participating in those aspects of the Company's day-to-day business in central Florida as are assigned by the President, another employee designated by the President and/or the board of directors (the "Board"), together with such other similar or related duties as may be assigned to the Employee from time to time by the Board. The Employee may also be given additional titles, and may be assigned responsibilities on behalf of certain of the Company's affiliates, without requirement of additional compensation hereunder. (b) Throughout the period of his employment hereunder, the Employee shall: (i) devote his full business time, attention, knowledge and skills, faithfully, diligently and to the best of his ability, to the active performance of his duties and responsibilities hereunder on behalf of the Company; (ii) observe and carry out such reasonable rules, regulations, policies, directions and restrictions as may be established from time to time by the Board, including but not limited to the standard policies and procedures of the Company as in effect from time to time; (iii) satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board; and (iv) do such traveling as may reasonably be required in connection with the performance of such duties and responsibilities; provided, however, that the Employee shall not be assigned to regular duties that would reasonably require him to relocate his permanent residence from that first set forth above. 2. Term of Employment. (a) Subject to prior termination in accordance with paragraph 2(b) below, the term of this Agreement and the Employee's employment hereunder shall commence on the date hereof and shall continue for a continous three (3) year period thereafter (the "Term"). The Term shall thereafter automatically renew for additional terms of one (1) year each unless either party gives written notice of termination to the other party not less than ninety (90) days prior to the end of any renewal term (in which event this Agreement shall terminate effective as of the close of such renewal term). (b) This Agreement: (i) may be terminated upon mutual written agreement of the Company and the Employee; (ii) may be terminated, at the option of the Employee, upon fourteen (14) days' prior written notice to the Company, in the event that the Company shall (A) fail to make any payment to the Employee required to be made under the terms of this Agreement, or any other agreement or any other obligation due to Employee by the Company or any company affiliated with the Company, within fifteen (15) days after payment is due, or (B) fail to perform any other material covenant or agreement to be performed by it hereunder or take any action prohibited by this Agreement, and fail to cure or remedy same (if capable of being cured or remedied) within thirty (30) days after written notice thereof to the Company; (iii) may be terminated, at the option of the Company, upon written notice to the Employee, "for cause" (as hereinafter defined); (iv) may be terminated, at the option of the Company, in the event of the "permanent disability" (as hereinafter defined) of the Employee; or (v) shall automatically terminate upon the death of the Employee. (c) As used herein, the term "for cause" shall mean and be limited to: (i) any material breach of this Agreement (including, without limitation, the covenants contained in paragraph 5 below) by the Employee which in any case is not fully corrected within thirty (30) days after written notice of same from the Company to the Employee; (ii) neglect by the Employee of his duties and responsibilities hereunder which in any case is not fully corrected immediately upon written notice of same from the Company to the Employee; (iii) any fraud, criminal misconduct, breach of fiduciary duty, dishonesty, or gross and willful misconduct by the Employee in connection with the performance of his duties and responsibilities hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs) during business hours or while on call, or being habitually drunk or addicted to drugs (provided that this shall not restrict the Employee from taking physician-prescribed medication in accordance with the applicable prescription); (v) the commission by the Employee of any crime of moral turpitude, or any other action by the Employee which may materially impair or damage the reputation of the Company; (vi) habitual breach by the Employee of any of the material provisions of this Agreement (regardless of any prior cure thereof); or (vii) repeated failure (which prior failures were brought to Employee's attention in writing), to satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board. (d) As used herein, the term "permanent disability" shall mean, and be limited to, any physical or mental illness, disability or impairment that prevents the Employee from continuing the performance of his normal duties and responsibilities hereunder for a period in excess of three (3) consecutive months. For purposes of determining whether a "permanent disability" has occurred under this Agreement, the written determination thereof by two (2) qualified practicing physicians selected and paid for by the Company (and reasonably acceptable to the Employee) shall be conclusive. (e) Upon any termination of this Agreement as hereinabove provided, the Employee (or his estate or legal representatives, as the case may be) shall be entitled to receive any and all unpaid Base Salary and minimum Bonus appropriately prorated to and as of the effective date of termination (based on the number of days elapsed prior to the date of termination), and any other amounts then due and payable to the Employee hereunder. All such payments shall be made on the next applicable payment date therefor (as provided in paragraph 3 below) following the effective date of termination. Such payments shall constitute all amounts to which the Employee shall be entitled hereunder upon termination of this Agreement. 3. Compensation and Benefits. (a) Base Salary. As compensation for his services to be rendered hereunder, the Company shall pay to the Employee a base salary at the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS AND NO/100THS ($120,000) per annum (the "Base Salary"), payable in periodic installments in accordance with the standard payroll practices of the Company in effect from time to time. (b) Bonus. In addition to the foregoing Base Salary, the Employee shall be eligible to earn bonuses from time to time as may be determined by the Board, in its sole and exclusive discretion, or in accordance with the terms and conditions of any bonus program instituted for employees of a similar position by the Board; provided, however, that notwithstanding the foregoing, Employee's bonus for the first year of the Term of this Agreement shall not be less than EIGHTY THOUSAND AND NO/100THS DOLLARS ($80,000) (the "Bonus"), payable quarterly in equal installments of $20,000 on the 90th, the 180th, the 270th, and the 360th day after the date of this Agreement. (c) Additional Incentives. The Employee shall further be entitled to participate in any stock options, incentive awards or other such plans or programs which may be adopted or implemented by the Company (or adopted by the parent company of the Company) from time to time during the period of the Employee's employment hereunder, provided that the Employee's level of participation therein shall be consistent with other similarly situated management level persons. (d) Auto Allowance. The Company shall also provide to the Employee, throughout the period of his employment hereunder, an automobile allowance at the rate of $600 per month for the use, maintenance, insurance, parking and garaging of an automobile which will be used by the Employee for business purposes, provided that the Employee shall not be required to account to the Company for the specific expenditure of such automobile allowance. The Employee shall be solely responsible for any and all taxes which may be payable by reason of the Employee's receipt of such automobile allowance. Unless otherwise expressly agreed to by a senior executive of the Company (other than the Employee), such automobile allowance is in lieu of any and all other reimbursements for the use of the Employee's automobile in the course of Company business. (e) Other Fringe Benefits. The Company shall also make available to the Employee, throughout the period of his employment hereunder, such benefits and perquisites as are generally provided by the Company to its employees, including but not limited to eligibility for participation in any group life, health, dental, vision, disability or accident insurance, pension plan, profit-sharing plan, retirement savings plan, 401(k) plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company for the benefit of its employees generally; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy. Participation in such benefit plans shall be subject to standard waiting periods following the commencement of full-time employment, as currently provided in such plans. (f) Expenses. Throughout the period of the Employee's employment hereunder, the Company shall also reimburse the Employee, upon presentment by the Employee to the Company of appropriate receipts and vouchers therefor, for any reasonable out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties and responsibilities hereunder; provided, however, that no reimbursement shall be required to be made for any expense which is not properly deductible (in whole or in part) by the Company for income tax purposes, or for any expense item which has not previously been approved in accordance with the Company's standard policies and procedures in effect from time to time, or otherwise approved by the Company. 4. Vacation, etc. (a) The Employee shall be entitled to take, from time to time, four (4) weeks of vacation with pay, consistent with the Company's standard policies and procedures in effect from time to time, at such times as shall be mutually convenient to the Employee and the Company, and so as not to interfere unduly with the conduct of the business of the Company. (b) The Employee shall further be entitled to paid holidays, personal days and sick days in accordance with the Company's standard policies and procedures in effect from time to time. 5. Restrictive Covenants. (a) The Employee hereby acknowledges and agrees that (i) the business contacts, customers, suppliers, know-how, trade secrets, marketing techniques, confidential information, financial and operating models, promotional methods and other aspects of the business of the Company, its affiliates and/or parent companies have been and are of value to the Company, and have provided and will hereafter provide the Company with substantial competitive advantages in the operation of its business, (ii) he has and will continue to have detailed knowledge and possesses and will possess confidential information concerning the business and operations of the Company, (iii) the restrictions set forth in this Section are reasonably necessary to protect the legitimate business interests of the Company, and (iv) but for Employee's agreement to be governed by the restrictions set forth in this Section 5, the Company would not have entered into this Agreement. The Employee hereby further acknowledges that his business skills are not uniquely suited to businesses of the type conducted by the Company, and that, if required, he could readily adapt and utilize such skills in one or more other types of businesses. (b) The Employee shall not, directly or indirectly, for himself or through or on behalf of any other person or entity: (i) at any time, divulge, transmit or otherwise disclose or cause to be divulged, transmitted or otherwise disclosed, any business contacts, client or customer lists, technology, know-how, trade secrets, marketing techniques, contracts or other confidential or proprietary information of the Company of whatever nature, whether now existing or hereafter created or developed (provided, however, that for purposes hereof, information shall not be considered to be confidential or proprietary if (A) it is a matter of common knowledge or public record, (B) it is generally known in the industry, or (C) the Employee 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 (ii) at any time during the period from the date hereof through and including the date of the expiration or termination of the Employee's employment with the Company, and for an additional period of one (1) year thereafter in the event that such termination is effected by the Company "for cause" or is effected by the Employee other than pursuant to paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly or indirectly invest, carry on, engage or become involved, either as 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 Company or its subsidiaries, affiliates, successors or assigns) which (A) is located or operating, or solicits customers located, within 50 miles of where the Company or any of its affiliates has a place of business, at the time that the Employee first becomes involved with such business enterprise, and (B) derives any material revenues from the sale, lease, financing or other transactions in new or used automobiles or other consumer vehicles. (c) The Employee and the Company hereby acknowledge and agree that, in the event of any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants, it will be difficult to ascertain the precise amount of damages that may be suffered by the Company 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 Company, on demand from time to time, cash amounts equal to any and all gross revenues derived by the breaching party or parties, directly or indirectly, from any and all violative acts or activities. 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 breach of this paragraph 5 by the Employee, 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 subject breach. (d) The Employee and the Company hereby further acknowledge and agree that any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants will cause the Company irreparable injury for which there is no adequate remedy at law. Accordingly, the Employee expressly agrees that, in the event of any such breach or any threatened breach hereunder by the Employee, directly or indirectly, the Company shall be entitled, in addition to any and all other remedies available (including but not limited to the liquidated damages provided for in paragraph 5(c) above), to seek and obtain injunctive and/or other equitable relief to require specific performance of or prevent, restrain and/or enjoin a breach under the provisions of this paragraph 5 without the necessity of proof of actual damages and without the necessity of posting bond. In the event either party does apply for such injunction, the other party shall not raise as a defense thereto that such applying party has an adequate remedy at law. (e) In the event of any dispute under or arising out of this paragraph 5, the prevailing party in such dispute shall be entitled to recover from the non-prevailing party or parties, in addition to any damages and/or other relief that may be awarded, its actual costs and expenses (including actual attorneys' fees) incurred in connection with prosecuting or defending the subject dispute. (f) Employee expressly agrees that the existence of any claims that he has or that he may have against the Company, its affiliates or parent companies, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company of this Section 5. 6. Non-Assignability. In light of the unique personal services to be performed by the Employee hereunder, it is acknowledged and agreed that any purported or attempted assignment or transfer by the Employee or the Company of this Agreement or any of Employee's duties, responsibilities or obligations hereunder shall be void; provided, however, that the foregoing shall not apply to any transfer of capital stock of, any transfer of substantially all the assets of, or any merger or comparable transaction involving, the Company or any parent corporation of the Company. 7. Notices. Any notices, requests, demands or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, by telecopier (with proof of receipt) or three (3) days after being mailed by certified mail, return receipt requested, addressed to the party being notified at the address of such party first set forth above, or at such other address as such party may hereafter have designated by notice; provided, however, that any notice of change of address shall not be effective until its receipt by the party to be charged therewith. 8. General. (a) Neither this Agreement nor any of the terms or conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by the party to be charged therewith. Any waiver or amendment shall only be applicable in the specific instance, and shall not constitute or be construed as a waiver or amendment in any other or subsequent instance. No failure or delay on the part of either party in respect of any enforcement of obligations hereunder shall in any manner affect such party's right to seek or effect enforcement at any other time or in respect of any other required performance. Time shall be of the essence for any performance required hereunder. (b) Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the express prior written consent of the other party. (c) The captions and paragraph headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof. (d) This Agreement, and all matters or disputes relating to the validity, construction, performance or enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Florida. (e) 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. (f) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original hereof, but all of which together shall constitute one and the same instrument. (g) The prevailing party in any action or proceeding hereunder shall be entitled to an award for its costs and actual attorneys' fees in connection with such action or proceeding, including the fees and costs of any appeals and all costs of collection. (h) This Agreement constitutes the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between them as to such subject matter. (i) This Agreement is intended for the sole and exclusive benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to claim or derive any benefit herefrom absent the express written consent of the party to be charged with such reliance or benefit. (j) If any provision of this Agreement is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require; and this Agreement shall be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be. (k) Employee represents and warrants that no action required of him under this Agreement or any other agreements or understandings, written or oral, entered into with the Company, its affiliates or parent companies, will conflict with, breach or otherwise impair any previously existing agreements or understandings, whether written or oral, into which Employee has entered with other persons or entities, including agreements with respect to proprietary information or non-competition. (l) Each party to this Agreement expressly recognizes that it results from a negotiated process in which each party was given the opportunity to consult with counsel and contributed to the drafting of this Agreement. Given this fact, no legal or other presumption against the party drafting this Agreement concerning its construction, interpretation or otherwise accrue to the benefit of any party to this Agreement and each party expressly waives the right to assert such a presumption in any proceedings or disputes connected with, arising out of, or involving this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above. FIRST CHOICE AUTO FINANCE, INC. By:/S/ J. Neal Hutchinson, Jr. As its:Asst. V. P. /S/ R.C. Hill, II R.C. Hill, II EX-10.16 18 Exhibit 10.16 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 12th day of February, 1997, by and between FIRST CHOICE AUTO FINANCE, INC., a Florida corporation (the "Company"), and R.C. HILL, III, an individual (the "Employee"); W I T N E S S E T H: WHEREAS, the Employee has extensive experience relating to all aspects of the management and operation of automobile dealerships for used cars, including (without limitation) leasing and other financing activities in connection therewith; and WHEREAS, the Employee has heretofore been employed by Liberty Finance Company, Team Automobile Sales & Finance, Inc. and Wholesale Acquisitions, Inc., the businesses of which are being acquired by the Company and its affiliates on or about the date hereof; and WHEREAS, to promote the ongoing business of the Company, the Company desires to assure itself of the right to the Employee's services from and after the date hereof, on the terms and conditions of this Agreement; and WHEREAS, the Employee is willing and able to render his services to the Company from and after the date hereof, on the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: 1. Nature of Employment. (a) Subject to the terms and conditions of this Agreement, the Company shall, throughout the term of this Agreement, retain the Employee, and the Employee shall render services to the Company, in a managerial capacity and with such title as shall be determined by the Board of Directors of the Company. In such capacity, the Employee shall have and exercise responsibility for managing, supervising, overseeing and actively participating in those aspects of the Company's day-to-day business in central Florida as are assigned by the President, another employee designated by the President and/or the board of directors (the "Board"), together with such other similar or related duties as may be assigned to the Employee from time to time by the Board. The Employee may also be given additional titles, and may be assigned responsibilities on behalf of certain of the Company's affiliates, without requirement of additional compensation hereunder. (b) Throughout the period of his employment hereunder, the Employee shall: (i) devote his full business time, attention, knowledge and skills, faithfully, diligently and to the best of his ability, to the active performance of his duties and responsibilities hereunder on behalf of the Company; (ii) observe and carry out such reasonable rules, regulations, policies, directions and restrictions as may be established from time to time by the Board, including but not limited to the standard policies and procedures of the Company as in effect from time to time; (iii) satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board; and (iv) do such traveling as may reasonably be required in connection with the performance of such duties and responsibilities; provided, however, that the Employee shall not be assigned to regular duties that would reasonably require him to relocate his permanent residence from that first set forth above. 2. Term of Employment. (a) Subject to prior termination in accordance with paragraph 2(b) below, the term of this Agreement and the Employee's employment hereunder shall commence on the date hereof and shall continue for a continuous three (3) year period thereafter (the "Term"). The Term shall thereafter automatically renew for additional terms of one (1) year each unless either party gives written notice of termination to the other party not less than ninety (90) days prior to the end of any renewal term (in which event this Agreement shall terminate effective as of the close of such renewal term). (b) This Agreement: (i) may be terminated upon mutual written agreement of the Company and the Employee; (ii) may be terminated, at the option of the Employee, upon fourteen (14) days' prior written notice to the Company, in the event that the Company shall (A) fail to make any payment to the Employee required to be made under the terms of this Agreement within fifteen (15) days after payment is due, or (B) fail to perform any other material covenant or agreement to be performed by it hereunder or take any action prohibited by this Agreement, and fail to cure or remedy same (if capable of being cured or remedied) within thirty (30) days after written notice thereof to the Company; (iii) may be terminated, at the option of the Company, upon written notice to the Employee, "for cause" (as hereinafter defined); (iv) may be terminated, at the option of the Company, in the event of the "permanent disability" (as hereinafter defined) of the Employee; (v) shall automatically terminate upon the death of the Employee; or (vi) may be terminated by either party for any reason or no reason on sixty (60) days prior written notice. If the Company terminates this Agreement under Section 2(b)(vi), then the Company shall continue to pay the Employee his salary for a period of 120 days after the date of termination. (c) As used herein, the term "for cause" shall mean and be limited to: (i) any material breach of this Agreement (including, without limitation, the covenants contained in paragraph 5 below) by the Employee which in any case is not fully corrected within thirty (30) days after written notice of same from the Company to the Employee; (ii) neglect by the Employee of his duties and responsibilities hereunder which in any case is not fully corrected immediately upon written notice of same from the Company to the Employee; (iii) any fraud, criminal misconduct, breach of fiduciary duty, dishonesty, or gross and willful misconduct by the Employee in connection with the performance of his duties and responsibilities hereunder; (iv) the Employee being legally intoxicated (alcohol or drugs) during business hours or while on call, or being habitually drunk or addicted to drugs (provided that this shall not restrict the Employee from taking physician-prescribed medication in accordance with the applicable prescription); (v) the commission by the Employee of any crime of moral turpitude, or any other action by the Employee which may materially impair or damage the reputation of the Company; (vi) habitual breach by the Employee of any of the material provisions of this Agreement (regardless of any prior cure thereof); or (vii) repeated failure (which prior failures were brought to Employee's attention in writing) to satisfactorily perform those duties assigned to Employee, in the reasonable discretion of the Board. (d) As used herein, the term "permanent disability" shall mean, and be limited to, any physical or mental illness, disability or impairment that prevents the Employee from continuing the performance of his normal duties and responsibilities hereunder for a period in excess of three (3) consecutive months. For purposes of determining whether a "permanent disability" has occurred under this Agreement, the written determination thereof by two (2) qualified practicing physicians selected and paid for by the Company (and reasonably acceptable to the Employee) shall be conclusive. (e) Upon any termination of this Agreement as hereinabove provided, the Employee (or his estate or legal representatives, as the case may be) shall be entitled to receive any and all unpaid Base Salary and any other amounts then due and payable to the Employee hereunder. All such payments shall be made on the next applicable payment date therefor (as provided in paragraph 3 below) following the effective date of termination. Such payments shall constitute all amounts to which the Employee shall be entitled hereunder upon termination of this Agreement. 3. Compensation and Benefits. (a) Base Salary. As compensation for his services to be rendered hereunder, the Company shall pay to the Employee a base salary at the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS AND NO/100THS ($120,000) per annum (the "Base Salary"), payable in periodic installments in accordance with the standard payroll practices of the Company in effect from time to time. (b) Bonus. In addition to the foregoing Base Salary, the Employee shall be eligible to earn bonuses from time to time as may be determined by the Board, in its sole and exclusive discretion, or in accordance with the terms and conditions of any bonus program instituted for employees of a similar position by the Board (the "Bonus"). (c) Other Fringe Benefits. The Company shall also make available to the Employee, throughout the period of his employment hereunder, such benefits and perquisites as are generally provided by the Company to its employees, including but not limited to eligibility for participation in any group life, health, dental, vision, disability or accident insurance, pension plan, profit-sharing plan, retirement savings plan, 401(k) plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company for the benefit of its employees generally; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy. Participation in such benefit plans shall be subject to standard waiting periods following the commencement of full-time employment, as currently provided in such plans. (d) Expenses. Throughout the period of the Employee's employment hereunder, the Company shall also reimburse the Employee, upon presentment by the Employee to the Company of appropriate receipts and vouchers therefor, for any reasonable out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties and responsibilities hereunder; provided, however, that no reimbursement shall be required to be made for any expense which is not properly deductible (in whole or in part) by the Company for income tax purposes, or for any expense item which has not previously been approved in accordance with the Company's standard policies and procedures in effect from time to time, or otherwise approved by the Company. 4. Vacation, etc. The Employee shall be entitled to take, from time to time, normal and reasonable vacations with pay, consistent with the Company's standard policies and procedures in effect from time to time, at such times as shall be mutually convenient to the Employee and the Company, and so as not to interfere unduly with the conduct of the business of the Company. The Employee shall further be entitled to paid holidays, personal days and sick days in accordance with the Company's standard policies and procedures in effect from time to time. 5. Restrictive Covenants. The Employee hereby acknowledges and agrees that (i) the business contacts, customers, suppliers, know-how, trade secrets, marketing techniques, confidential information, financial and operating models, promotional methods and other aspects of the business of the Company, its affiliates and/or parent companies have been and are of value to the Company, and have provided and will hereafter provide the Company with substantial competitive advantages in the operation of its business, (ii) he has and will continue to have detailed knowledge and possesses and will possess confidential information concerning the business and operations of the Company, (iii) the restrictions set forth in this Section are reasonably necessary to protect the legitimate business interests of the Company, and (iv) but for Employee's agreement to be governed by the restrictions set forth in this Section 5, the Company would not have entered into this Agreement. The Employee hereby further acknowledges that his business skills are not uniquely suited to businesses of the type conducted by the Company, and that, if required, he could readily adapt and utilize such skills in one or more other types of businesses. The Employee shall not, directly or indirectly, for himself or through or on behalf of any other person or entity: (i) at any time, divulge, transmit or otherwise disclose or cause to be divulged, transmitted or otherwise disclosed, any business contacts, client or customer lists, technology, know-how, trade secrets, marketing techniques, contracts or other confidential or proprietary information of the Company of whatever nature, whether now existing or hereafter created or developed (provided, however, that for purposes hereof, information shall not be considered to be confidential or proprietary if (A) it is a matter of common knowledge or public record, (B) it is generally known in the industry, or (C) the Employee 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 (ii) at any time during the period from the date hereof through and including the date of the expiration or termination of the Employee's employment with the Company, and for an additional period of one (1) year thereafter in the event that such termination is effected by the Company "for cause" or is effected by the Employee other than pursuant to paragraph 2(b)(ii) above (collectively, the "Restrictive Period"), directly or indirectly invest, carry on, engage or become involved, either as 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 Company or its subsidiaries, affiliates, successors or assigns) which (A) is located or operating, or solicits customers located, within 50 miles of where the Company or any of its affiliates has a place of business, at the time that the Employee first becomes involved with such business enterprise, and (B) derives any material revenues from the sale, lease, financing or other transactions in new or used automobiles or other consumer vehicles; provided that this Section 5(ii) shall be applicable prior to the termination of this Agreement and except for a termination of this Agreement under Section 2(b)(iii), shall be applicable after this Agreement is terminated only if the Company is making payments of salary to the Employee under Section 2(b)(vi). The Employee and the Company hereby acknowledge and agree that, in the event of any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants, it will be difficult to ascertain the precise amount of damages that may be suffered by the Company 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 Company, on demand from time to time, cash amounts equal to any and all gross revenues derived by the breaching party or parties, directly or indirectly, from any and all violative acts or activities. 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 breach of this paragraph 5 by the Employee, 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 subject breach. The Employee and the Company hereby further acknowledge and agree that any breach by the Employee, directly or indirectly, of the foregoing restrictive covenants will cause the Company irreparable injury for which there is no adequate remedy at law. Accordingly, the Employee expressly agrees that, in the event of any such breach or any threatened breach hereunder by the Employee, directly or indirectly, the Company shall be entitled, in addition to any and all other remedies available (including but not limited to the liquidated damages provided for in paragraph 5(c) above), to seek and obtain injunctive and/or other equitable relief to require specific performance of or prevent, restrain and/or enjoin a breach under the provisions of this paragraph 5 without the necessity of proof of actual damages and without the necessity of posting bond. In the event either party does apply for such injunction, the other party shall not raise as a defense thereto that such applying party has an adequate remedy at law. In the event of any dispute under or arising out of this paragraph 5, the prevailing party in such dispute shall be entitled to recover from the non-prevailing party or parties, in addition to any damages and/or other relief that may be awarded, its actual costs and expenses (including actual attorneys' fees) incurred in connection with prosecuting or defending the subject dispute. (f) Employee expressly agrees that the existence of any claims that he has or that he may have against the Company, its affiliates or parent companies, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company of this Section 5. 6. Non-Assignability. In light of the unique personal services to be performed by the Employee hereunder, it is acknowledged and agreed that any purported or attempted assignment or transfer by the Employee or the Company of this Agreement or any of Employee's duties, responsibilities or obligations hereunder shall be void; provided, however, that the foregoing shall not apply to any transfer of capital stock of, any transfer of substantially all the assets of, or any merger or comparable transaction involving, the Company or any parent corporation of the Company. 7. Notices. Any notices, requests, demands or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, by telecopier (with proof of receipt) or three (3) days after being mailed by certified mail, return receipt requested, addressed to the party being notified at the address of such party first set forth above, or at such other address as such party may hereafter have designated by notice; provided, however, that any notice of change of address shall not be effective until its receipt by the party to be charged therewith. 8. General. (a) Neither this Agreement nor any of the terms or conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by the party to be charged therewith. Any waiver or amendment shall only be applicable in the specific instance, and shall not constitute or be construed as a waiver or amendment in any other or subsequent instance. No failure or delay on the part of either party in respect of any enforcement of obligations hereunder shall in any manner affect such party's right to seek or effect enforcement at any other time or in respect of any other required performance. (b) Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the express prior written consent of the other party. (c) The captions and paragraph headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof. (d) This Agreement, and all matters or disputes relating to the validity, construction, performance or enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Florida. (e) 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. (f) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original hereof, but all of which together shall constitute one and the same instrument. (g) The prevailing party in any action or proceeding hereunder shall be entitled to an award for its costs and actual attorneys' fees in connection with such action or proceeding, including the fees and costs of any appeals and all costs of collection. (h) This Agreement constitutes the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between them as to such subject matter. (i) This Agreement is intended for the sole and exclusive benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns, and no other person or entity shall have any right to rely on this Agreement or to claim or derive any benefit herefrom absent the express written consent of the party to be charged with such reliance or benefit. (j) If any provision of this Agreement is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require; and this Agreement shall be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be. (k) Employee represents and warrants that no action required of him under this Agreement or any other agreements or understandings, written or oral, entered into with the Company, its affiliates or parent companies, will conflict with, breach or otherwise impair any previously existing agreements or understandings, whether written or oral, into which Employee has entered with other persons or entities, including agreements with respect to proprietary information or non-competition. (l) Each party to this Agreement expressly recognizes that it results from a negotiated process in which each party was given the opportunity to consult with counsel and contributed to the drafting of this Agreement. Given this fact, no legal or other presumption against the party drafting this Agreement concerning its construction, interpretation or otherwise accrue to the benefit of any party to this Agreement and each party expressly waives the right to assert such a presumption in any proceedings or disputes connected with, arising out of, or involving this Agreement. (m) Time shall be of the essence for any performance required hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above. FIRST CHOICE AUTO FINANCE, INC. By:/S/J. Neal Hutchinson, Jr. As Its:Asst. V. P. /S/ R.C. Hill, III R.C. Hill,III EX-10.17 19 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 DAVID BUMGARDNER, 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 Templeton & 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 Templeton & 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 bill 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 S-4, S-8 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 225 North Military Trail West Palm Beach, Florida 33415 (ii) If to MMM: Two Two Five North Military Corp. d/b/a Miracle Mile Motors 225 North Military Trail West Palm Beach, Florida 33415 (iii) If to the Stockholder: David Baumgardner c/o Robert Saylor, Esq. 1615 Forum Place, Suite 300 West Palm Beach, Florida 33401 (iv) If to the Buyer: c/o Smart Choice Holdings, Inc. 625 Main Street, Suite 25 Windermere, Florida 34786 Attn: Tom Conlan 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. Neal Hutchinson, Jr. Vice President PALM BEACH FINANCE AND MORTGAGE COMPANY By: /s/ David Bumgardner, President TWO TWO FIVE NORTH MILITARY CORP. d/b/a Miracle Mile Motors By: /s/ David Bumgardner, President /s/ David Bumgardner David Bumgardner (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. Neal Hutchinson, Jr. Vice President February 14, 1997 Palm Beach Finance and Mortgage Company Two Two Five North Military Corp. David Bumgardner 225 North Military Trail West Palm Beach, FL 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"), David Bumgardner (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 Eckler Industries, Inc. ("Eckler"). 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. Eckler shall propose to its Board of Directors that the Stockholder be elected to the Board of Directors of Eckler. Eckler 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 Eckler 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 Beatrice Bumgardner 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. Neal Hutchinson, Jr. FIRST CHOICE AUTO FINANCE, INC. By: /s/ J. Neal Hutchinson, Jr. ECKLER INDUSTRIES, INC. By: /s/ J. Neal Hutchinson, Jr. Accepted and agreed to as of the date first above written. PALM BEACH FINANCE AND MORTGAGE COMPANY By: /s/ David Bumgardner TWO TWO FIVE NORTH MILITARY CORP. By: /s/ David Bumgardner /s/ David Bumgardner EX-10.18 20 4 Exhibit 10.18 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made and entered into as of the 14th day of February, 1997, by and between TWO TWO FIVE NORTH MILITARY CORP. db/a MIRACLE MILE MOTORS, a Florida corporation (the "Lender"), with its principal place of business located at 225 North Military Trail, West Palm Beach, Florida 33415, and FIRST CHOICE AUTO FINANCE, INC., a Florida corporation (the "Borrower"), a Florida corporation, with its principal office and place of business located at 101 Phillippe Parkway, Suite 300, Safety Harbor, Florida 34695. In consideration of the mutual promises contained herein and to induce Lender to make loans or grant other financial accommodation to Borrower, the parties agree as follows: 1. Definitions. As used herein: a. The definitions of terms set forth in the Florida Uniform Commercial Code, Chapters 671 - 680, Florida Statutes, shall be controlling in this Agreement unless the context clearly requires otherwise. b. "Collateral" shall mean with regard to the loan described in paragraph 2 hereof- (a) all Financed Inventory and all products and proceeds of all of the foregoing; and (b) all property of Borrower now or hereafter in possession of or under control of Lender in any capacity whatsoever, including, but not limited to, any balance of any trust, deposit, checking reserve or agency account and proceeds thereof. c. "Financed Inventory" shall mean all Used Motor Vehicle Inventory held for sale, lease or rent or being possessed for sale, lease or rent, now held at or hereafter acquired for, Borrower's business located at 225 North Military Trail, West Palm Beach, Florida 33415, together with all increases, parts, fittings, radios, accessories and special tools now or hereafter affixed to any or any part thereof and all replacements of all or any part thereof. d. "Guarantor" shall mean ECKLER INDUSTRIES, INC., a Florida corporation. e. "Guaranty" shall mean that certain guaranty agreement executed by the Guarantor in favor of the Lender of even date herewith. f. "Liability" or "Liabilities" shall include the Note and all liabilities or obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due pursuant to the Note and this Agreement, including costs, expenses, and attorneys, fees (including attorneys' fees in any Bankruptcy or appellate case or proceeding), whether or not a lawsuit is instituted. g. "Note" shall mean the 9% Secured Convertible Note in the principal amount of Eight Hundred Thousand Dollars ($800,000.00) payable pursuant to the terms and conditions of the Note, representing the Borrower's indebtedness described in paragraph 2 hereof and otherwise payable pursuant to the provisions of this Agreement. in form and substance satisfactory to the Lender and any and all renewal or modifications thereof and all changes thereto. h. "Used Motor Vehicle Inventory" shall mean all program/demonstrator and/or used motor vehicles and held for sale, lease or rent or being processed for sale, lease or rent in Borrower's business at the Borrower's business located at 225 North Military Trail, West Palm Beach, Florida ')')415, as now or hereafter conducted, together with increases, parts, fittings, radios, accessories and special tools now or hereafter affixed to any or any part thereof and all replacements of all or any part thereof. 2. Loan. The Lender is extending credit to the Borrower in the form a purchase money credit in connection with the Borrower's purchase of the assets of the Lender. 3. Interest Rate. The interest rate accruing under the Note shall never exceed the maximum lawful rate, established from time to time, under the laws applicable to loans in Florida. Any interest due on the loan made hereunder or any other Liability shall be calculated on the basis of a year containing 365 days, 4. Security Interest. As security for the payment of all loans and advances now or in the future made hereunder, including the Note, and for all other Liabilities, including any extensions, renewals or changes in form of any thereof, Borrower hereby assigns to Lender and grants to Lender a security interest in the Collateral. The parties hereto agree that the Borrower is in the business of selling used motor vehicles at retail, and the Borrower shall have the right to sell at retail in the ordinary course of business used motor vehicles that constitute Financed Inventory free from any lien or encumbrance hereunder. 5. Additional Covenants. Borrower shall: (a) immediately notify Lender in writing of any change in the location of the place of business where the bulk of Borrower's Financed Inventory is located; (b) sell its Financed Inventory only in the ordinary course of business; (c) keep accurate and complete records of its Financed Inventory; (d) pay and discharge when due all taxes, levies and other charges on its Financed Inventory; (e) join with Lender in executing one or more financing statements, notices, affidavits, or similar instruments in form satisfactory to Lender, and such other instruments as Lender may from time to time request, and pay the cost of filing the same in any public office deemed advisable by Lender; (f) deposit with Lender any certificates of title issued with respect to any of the Financed Inventory with an open reassignment; (g) give Lender immediate written notice of (A) any adverse change in Borrower's financial condition, and (B) all threatened or actual actions, investigations or proceedings affecting Borrower; and (h) within ten (IO) business days of the date hereof, deliver to the Lender such UCC-3 termination statements and/or other documents or instruments necessary to enable the Borrower to grant to the Lender a first priority security interest in the Collateral. 6. Representations and Warranties of Borrower. Borrower hereby represents and warrants to Lender that: (a) Borrower is a corporation duly organized and validly existing under the laws of the State of Florida; (b) Borrower has all the power necessary to own assets; (c) the execution of this Agreement and the documents referred to herein have been duly authorized by the requisite corporate action; (d) the person signing for the Borrower has been duly authorized to do so; (e) in connection with Borrower's inventory Borrower is and will be the absolute owner thereof, and (f) Borrower is not a party to any agreement which, by its terms or by operation of law, would conflict with this Agreement. 7. Insurance. Borrower shall, at Borrower's expense, acquire and at all times maintain one or more policies of insurance covering Borrower's Financed Inventory in such amounts, covering such risks and with such insurance companies as may be satisfactory to Lender from time to time. Lender shall be named as loss payee under such policy by New York standard or Union standard endorsement. Certificates evidencing such insurance shall be delivered to Lender. The policy and certificate shall provide that the policy is not cancelable on less than ten (10) days notice to Lender. If Borrower fails to obtain and pay for insurance as provided herein, then Lender may pay the premiums or acquire insurance from another source and insure the interests of Lender and Borrower or insure only the interests of Lender, without waiving or affecting any rights under this Agreement. Every payment for insurance made by Lender shall bear interest from the date thereof at the maximum rate allowed by law and each such payment and interest thereon shall be secured by this Agreement. Lender shall be entitled to retain and receive all experience rating credits which may accrue under or in connection with any insurance which is procured by Lender pursuant to the authorization contained herein. 8. Adjustments to Collateral. Lender shall have the right at any time and from time to time, without notice to: (a) insure Financed Inventory to Lender's satisfaction if Borrower fails to do so and pay for the same, and pay for the account of Borrower, any taxes, levies or other charges affecting Borrower's Financed Inventory or upon or on account of this Agreement or any Liability or any writing evidencing any Liability, which Borrower fails to pay, and any such payment shall constitute a Liability of Borrower; and (b) inspect any of the places of business of Borrower from time to time upon demand. 9. Use of Collateral. Until default, Borrower may: (a) use its Financed Inventory in any lawful manner not inconsistent with this Agreement and the terms of any insurance thereon; (b) sell its Financed Inventory in the ordinary course of business; and (c) use and consume any raw materials and supplies, the use and consumption of which is necessary to carry on Borrower's business. 10. Location of Financed Inventory. Borrower agrees not to remove or permit the removal of any Financed Inventory outside the continental United States or Canada or transfer, dispose of or illegally or improperly use said Financed Inventory. 11. Default and Remedies. Borrower shall be in default under this Agreement if. at any time any warranty, representation, certificate or statement of Borrower is not true, if Borrower should fail to observe or perform any agreement or term set forth in this Agreement or in the Note, or the Guarantor defaults under the Guaranty, and 30 days have elapsed since the Lender shall have provided Borrower written notice of the default and the Borrower shall not have cured such default within a reasonable time after such notice. If Borrower is in default under this Agreement, then: (i) in addition to any other rights and remedies which Lender may have, Lender shall have and may exercise immediately and without demand, any and all the rights and remedies granted to a secured party upon default under the Uniform Commercial Code; (ii) upon the request or demand of Lender, Borrower shall, at Borrower's expense, assemble the Collateral and make it available to Lender at a convenient place acceptable to Lender; (iii) Borrower shall immediately execute and deliver to Lender any and all instruments, documents, certificates of title, or any similar items which Lender, in its sole discretion, deems necessary to dispose of said Financed Inventory and Borrower hereby appoints Lender its attorney in fact to execute, sign and seal any and all instruments, documents, certificates of title or any similar items which the Lender, in its sole discretion, deems necessary to dispose of the Collateral after default; and (iv) Borrower shall pay to Lender on demand any and all costs and expenses, including legal expenses and reasonable attorneys' fees, including costs, expenses and reasonable attorneys, fees on appeal, incurred or paid by Lender in protecting and enforcing Liabilities and the right of Lender hereunder, including Lender's right to take possession of the Collateral and to hold, prepare for sale, sell and dispose of the Collateral, whether or not a lawsuit is instituted. Any notice of sale, disposition or other intended action by Lender, sent to Borrower at the address of Borrower as may from time to time be shown on Lender's records, at least five (5) days prior to such action, shall constitute reasonable notice to Borrower although a shorter period of notice may also be reasonable. It shall be commercially reasonable for Lender to sell the Collateral on a wholesale basis to a dealer or dealers in new or used property of like kind to the Collateral, or to sell to a purchaser directly or through a dealer in such new or used property; but the enumeration of the foregoing methods of disposition are without limitation on Lender's right to dispose of the Collateral by any other manner or method (whether by sale, lease or otherwise) in a commercially reasonable manner. Lender shall have the right to apply all or any part of any surplus if any, from disposition of the Collateral to (or to hold same as a reserve against) all or any Liabilities of Borrower to Lender, whether or not they, or any of them, be then due, and in such order of application as Lender may from time to time elect. 12. Waiver. No waiver by Lender of any default shall operate as a waiver of any other default or of the same default on a future occasion. No delay or omission on the part of Lender in exercising any right or remedy shall operate as waiver thereof, and no single or partial exercise by Lender of any right or remedy shall preclude or affect any other or further exercise thereof or the exercise of any other right or remedy. 13. Successors and Assigns. All rights of Lender hereunder shall inure to the benefit of Lender's successors and assigns. All obligations of Borrower shall bind the successors and assigns of Borrower. 14. Termination. This Agreement may be terminated by Borrower by the payment of ali Liabilities, if not earlier terminated as provided herein. Termination of this Agreement shall not in any way affect the rights and liabilities of the parties hereunder relating to Financed Inventory or other Collateral pledged prior to the date specified in such notice. 15. Costs and Expenses. Borrower shall pay upon demand all costs and expenses arising out of or in connection with this Agreement, including documentary stamp taxes, filing and recording fees and fees in connection with the preparation of this Agreement and related documents. 16. Miscellaneous, Time is of the essence of this Agreement. The provisions of this Agreement are cumulative and in addition to the provisions of any liability and any note or other writing evidencing any Liability secured by this Agreement, and Lender shall have all the benefits, rights, and remedies of any liability and any note or other writing evidencing any Liability secured hereby. The singular pronoun when used herein, shall include the plural, and the neuter shall include the masculine and feminine. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provisions of this Agreement shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The paragraph headings used herein are for convenience of reference only and shall not be considered to expand, limit or otherwise construe the terms of this Agreement. Agreed to as of the date first set forth above. "LENDER' TWO TWO FIVE NORTH MILITARY CORP. d/b/a MIRACLE MILE MOTORS, a Florida corporation By: /s/ David E. Bumgardner Name: David E. Bumgardner Title: President (CORPORATE SEAL) [SIGNATURES CONTINUED ON NEXT PAGE] "BORROWER" FIRST CHOICE AUTO FINANCE, INC., a Florida corporation By: /s/ J. Neal Hutchinson, Jr. Name: J. Neal Hutchinson, Jr. Its: Vice President (CORPORATE SEAL) EX-10.19 21 Exhibit 10.19 PROMISSORY NOTE $205,574 February 13, 1997 FOR VALUE RECEIVED, the undersigned, FIRST CHOICE AUTO FINANCE, INC., a Florida corporation (the "Maker"), hereby promises to pay to TWO TWO FIVE NORTH MILITARY CORPORATION and PALM BEACH FINANCE AND MORTGAGE COMPANY, a Florida corporation (the "Payees"), the principal sum of Two Hundred Five Thousand Five Hundred Seventy Four Dollars ($205,574), together with interest on the outstanding principal balance hereunder accrued from the date hereof at the rate of nine percent (9%) per annum. All outstanding principal and accrued interest on this Note shall be payable on the earlier of 30 days from the date hereof or the completion of a financing by FCAF or any parent corporation of FACF in an amount in excess of $3 million. The following are Events of Default hereunder: (a) Any failure by the Maker to pay when due all or any principal or interest hereunder; or (b) If the Maker (i) admits in writing its inability to pay generally its debts as they mature, or (ii) makes a general assignment for the benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent, or (iv) files a voluntary petition in bankruptcy, or (v)takes advantage, as against its creditors, of any bankruptcy law or statute of the United States of America or any state or subdivision thereof now or hereafter in effect, or (vi) has a petition or proceeding filed against it under any provision of any bankruptcy or insolvency law or statute of the United States of America or any state or subdivision thereof, which petition or proceeding is not dismissed within thirty (30) days after the date of the commencement thereof, (vii) has a receiver, liquidator, trustee, custodian, conservator, sequestrator or other such person appointed by any court to take charge of its affairs or assets or business and such appointment is not vacated or discharged within thirty (30) days thereafter, or (viii) takes any action in furtherance of any of the foregoing. The Maker hereby waives diligence, demand, presentment for payment, protest, dishonor, nonpayment, default, and notice of any and all of the foregoing. This Note shall be governed by the laws of the State of Florida. In the event that the Payees shall, after the occurrence of an Event of Default, turn this Note over to an attorney for collection, the Maker shall further be liable for and shall pay to the Payees all collection costs and expenses incurred by the Payees, including reasonable attorneys' fees and expenses. FIRST CHOICE AUTO FINANCING, INC. By: /s/ J. Neal Hutchinson, Jr. As its: Asst. Vice President EX-10.20 22 3 Exhibit 10.20 $800,000 February 13, 1997 FIRST CHOICE AUTO FINANCE, INC. 9% SECURED CONVERTIBLE NOTE This Note and the Common Stock issuable upon conversion hereof (until such time as such Common Stock is registered with the Securities and Exchange Commission pursuant to an effective registration statement) have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and no sale, transfer or other disposition of any interest herein may be made unless, in the written opinion of counsel to the Company, such transfer would not violate or require registration under any such statute. 1. Payment. First Choice Auto Finance, Inc., a corporation duly organized and existing under the laws of the State of Florida (herein referred to as the "Company"), for value received, hereby promises to pay to Palm Beach Finance and Mortgage Company and Two Two Five North Military Corporation, or registered assigns ("Holder"), the principal sum of Eight Hundred Thousand Dollars ($800,000), together with any accrued unpaid interest, on the Maturity Date (as hereinafter defined), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. All the principal on this Note may be prepaid at the option of the Company at any time prior to maturity. The Maturity Date shall be the earlier of (a) one year from the date hereof, or (b) the date on which Eckler Industries, Inc., a Florida corporation and the parent of the Company ("Eckler"), completes an underwritten public offering, of common stock of Eckler (the "Secondary Offering"). This Note shall bear simple, non-cumulative interest from the date hereof through the Maturity Date at an interest rate of nine percent (9%) per annum. Accrued interest on this Note shall be payable monthly on the first day of each calendar month through the Maturity Date at which time all accrued but unpaid interest shall be due and payable. This Note is convertible into Class B Common Stock ("Common Stock"), $.01 par value, of Eckler, at the option of Holder, pursuant to Section 4(a) in lieu of repayment of the principal and accrued interest. Eckler shall no later than April 15, 1997 complete a reclassification of its common stock so that by such date all of the Eckler Class B Common Stock shall have been reclassified into shares of the publicly traded common stock of Eckler at a reclassification rate of two shares of the publicly traded common stock of Eckler for each share of Eckler Class B Common Stock. By acceptance of this Note, the Holder agrees that it will promptly deliver and surrender this Note to the Company upon full payment thereof, and that it will promptly notify the Company of any disposition of the Note and of the name and address of the transferee of this Note. For purposes of this Note, the Company may assume that Holder is the holder hereunder unless notified to the contrary in the manner provided in Section 7. 2. Security. This Note is secured by that certain Loan and Security Agreement (the "Loan and Security Agreement") of even date herewith between the Company and Two Two Five North Military Corp. 3. Guaranty. This Note is guaranteed by Smart Choice Holdings, Inc., the parent of the Company, pursuant to that certain Corporate Guaranty of even date herewith. 4. Conversion. (a) Conversion. The Holder hereof shall have the right to elect to convert the Note into Common Stock as set forth in Section 4(b), as of the date (the "Conversion Date") on which Eckler successfully completes the Secondary Offering. Eckler shall notify the Holder in writing of Eckler's intent of proceed with the Secondary Offering at least 15 days prior to the date on which Eckler intends to file the registration statement for the Secondary Offering with the Securities and Exchange Commission (the "SEC"). The Holder shall notify Eckler in writing of the Holder's election to convert this Note within five days of the date on which Eckler notifies the Holder as provided in the preceding sentence. (b) Mechanics of Conversion. Upon notice to Eckler of the Holder's election to convert as provided in Section 4 (a) the Holder may convert into Common Stock at the Conversion Price the entire principal amount outstanding on the Note as of the Conversion Date. Upon conversion, the principal amount of the Note shall be converted into Common Stock at the price of one share of Common Stock for each $17.50 of outstanding principal (the "Conversion Price"). The number of shares of Common Stock issuable upon conversion are subject to adjustment as provided in Section 4. No fractional shares of Common Stock shall be issued upon conversion of the Note. In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the Conversion Price. Further, any accrued but unpaid interest outstanding on the Conversion Date shall be paid to the Holder in cash. To exercise the Holder's conversion rights, the Holder shall give written notice to Eckler at Eckler's office as indicated under Section 7, that the Holder elects to convert the Note and the name or names of the Holder's nominees, if any, in which the Holder wishes the certificate or certificates for shares of Common Stock to be issued. (c) Issuance of Common Stock Upon Conversion. Within a reasonable time, not exceeding twenty (20) days after the Conversion Date, the Company shall deliver or cause to be delivered to or upon the written order of the Holder of the Note so converted certificates representing the number of fully paid and nonassessable shares of Common Stock into which such Note may be converted in accordance with the provisions of this Section 4. Within a reasonable time, not exceeding ten (10) days after receipt by the Holder of the certificates, the Holder of the Note so converted shall surrender the Note to the Company for cancellation. Subject to the following provisions of this Section 4 such conversion shall be deemed to have occurred on the Conversion Date, so that the rights of the Holder of such Note shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time. (d) Taxes on Conversion. The issuance of certificates for shares of Common Stock upon the conversion of the Note shall be made without charge by the Company to the converting Holder for any tax in respect of the issuance of such certificates and such certificates shall be issued in the name of, or in such names as may be directed by, the Holder of the Note converted; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of any such certificate in a name other than that of the Holder of the Note converted, and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. (e) Adjustment of Conversion Price. (i) Stock Dividends, Distributions or Subdivisions. In the event Eckler shall issue additional shares of common stock (or securities convertible into its common stock) in a stock dividend, stock distribution or subdivision paid with respect to its common stock, or declare any dividend or other distribution payable with additional shares of its common stock (or securities convertible into its common stock) or effect a split or subdivision of the outstanding shares of its common stock, the Conversion Price shall, concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, or the earlier declaration thereof, be proportionately decreased. (ii) Combinations or Consolidations. In the event that Eckler's common stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of common stock, the Conversion Price shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. (f) No Impairment. Neither the Company nor Eckler will, by amendment of their incorporation documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 2 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of this Note against impairment. (g) Common Stock Reserved. Eckler shall reserve and keep available out of its authorized but unissued Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect conversion of the Note. 5. Registration Rights. At the time that Eckler shall file any registration statement which includes any common stock of Eckler with the Securities and Exchange Commission subsequent to the date hereof (other than a registration statement on Form S-4, S-8 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), Eckler shall, at its expense, cause all Common Stock held by the Holder (or such portion thereof as may be directed by the Holder) then owned by the Holders to be included in such registration statement, provided that, in connection therewith, and as a condition to the obligations of Eckler hereunder, each subject Holder shall provide to Eckler and/or its underwriters such information regarding the Holder and such indemnities, as are reasonably required by the Eckler and/or its underwriters and are customary in connection with a public registration, and further provided that the 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. The Company shall notify the Holder in writing of Eckler's intent to file with the SEC a registration statement to which the Holder would have registration rights hereunder at least 15 days prior to the date on which Eckler intends to file such registration statement with the SEC. The Holder shall notify Eckler in writing of the Holder's election to register the Common Stock held by the Holder on such registration statement within five days of the date on which Eckler notifies the Holder as provided in the preceding sentence. 6. Events of Default. If any default described in the Loan and Security Agreement shall occur and be continuing, then the Holder shall have the rights on default set forth in the Loan and Security Agreement. 7. Communications and Notices. Except as otherwise specifically provided herein, all communications and notices provided for in this Note shall be sent by first class mail, facsimile or telegram to the Holder at the Holder's address as provided to the Secretary of the Company from time to time and, if to the Company or Eckler, to either of them c/o Greenberg Traurig, 111 North Orange Avenue, Suite 2000, Orlando, Florida 32801, or such other address as may be furnished in writing from time to time. Any first-class mail notice provided pursuant to this Section 7 shall be deemed given three days after being sent by first-class mail. Notices sent by telegram or facsimile shall be deemed received upon delivery. The Company, Eckler, and the Holder may from time to time change their respective addresses, for purposes of this Section 7, by written notice to the other parties; provided, however, that notice of such change shall be effective only upon receipt. 8. Governing Law. This Note shall be construed in accordance with and governed by the laws of the State of Florida. 9. Assignment. This Note shall bind and inure to the benefit of the respective successors and assigns of the parties hereto. 10. Securities Restrictions. THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER SAID SECURITIES NOR ANY SECURITIES WHICH MAY BE ISSUED IN EXCHANGE FOR, UPON THE CONVERSION OF, OR OTHERWISE IN RESPECT OF, SAID SECURITIES MAY BE SOLD, OFFERED FOR SALE, OR ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER SAID SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 11. Waiver. No waiver of a right in any instance shall constitute a continuing waiver of successive rights, and any one waiver shall govern only the particular matters waived. IN WITNESS WHEREOF, First Choice Auto Finance, Inc. and Eckler Industries, Inc. have caused this Note to be executed on their behalf on the date first above written. FIRST CHOICE AUTO FINANCE, INC. By:/s/ J. Neal Hutchinson, Jr. As Its:Vice President ECKLER INDUSTRIES, INC. By:/s/ J. Neal Hutchinson As Its:Asst. Vice President EX-10.21 23 4 Exhibit 10.21 $467,601 February 13, 1997 SMART CHOICE HOLDINGS, INC. 9% CONVERTIBLE DEBENTURE This Debenture and the Common Stock issuable upon conversion hereof (until such time as such Common Stock is registered with the Securities and Exchange Commission pursuant to an effective registration statement) have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and no sale, transfer or other disposition of any interest herein may be made unless, in the written opinion of counsel to the Company, such transfer would not violate or require registration under any such statute. 1. Payment. Smart Choice Holdings, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to Palm Beach Finance and Mortgage Company, or registered assigns ("Holder"), the principal sum of Four Hundred Sixty Seven Thousand Six Hundred One Dollars ($467,601), together with any accrued unpaid interest, on the Maturity Date (as hereinafter defined), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. All the principal on this Debenture may be prepaid at the option of the Company at any time prior to maturity. The Maturity Date shall be the earlier of one year from the date hereof or (b) the date on which Eckler Industries, Inc., a Florida corporation and the parent of the Company ("Eckler"), completes an underwritten public offering, of common stock of Eckler (the "Secondary Offering"). This Debenture shall bear simple, non-cumulative interest from the date hereof through the Maturity Date at an interest rate of nine percent (9%) per annum. Accrued interest on this Debenture shall be payable monthly on the first day of each calendar month through the Maturity Date at which time all accrued but unpaid interest shall be due and payable. This Debenture is convertible into Class B Common Stock ("Common Stock"), $.01 par value, of Eckler, at the option of Holder, pursuant to Section 2(a) in lieu of repayment of the principal and accrued interest. Eckler shall no later than April 15, 1997 complete a reclassification of its common stock so that by such date all of the Eckler Class B Common Stock shall have been reclassified into shares of the publicly traded common stock of Eckler at a reclassification rate of two shares of the publicly traded common stock of Eckler for each share of Eckler Class B Common Stock. By acceptance of this Debenture, the Holder agrees that it will promptly deliver and surrender this Debenture to the Company upon full payment thereof, and that it will promptly notify the Company of any disposition of the Debenture and of the name and address of the transferee of this Debenture. For purposes of this Debenture, the Company may assume that Holder is the holder hereunder unless notified to the contrary in the manner provided in Section 5. 2. Conversion. (a) Conversion. The Holder hereof shall have the right to elect to convert the Note into Common Stock as set forth in Section 2(b), as of the date (the "Conversion Date") on which Eckler successfully completes the Secondary Offering. Eckler shall notify the Holder in writing of Eckler's intent of proceed with the Secondary Offering at least 15 days prior to the date on which Eckler intends to file the registration statement for the Secondary Offering with the Securities and Exchange Commission (the "SEC"). The Holder shall notify Eckler in writing of the Holder's election to convert this Note within five days of the date on which Eckler notifies the Holder as provided in the preceding sentence. (b) Mechanics of Conversion. Upon notice to Eckler of the Holder's election to convert as provided in Section 2 (a) the Holder may convert into Common Stock at the Conversion Price the entire principal amount outstanding on the Debenture as of the Conversion Date. Upon conversion, the principal amount of the Debenture shall be converted into Common Stock at the price of one share of Common Stock for each $17.50 of outstanding principal (the "Conversion Price"). The number of shares of Common Stock issuable upon conversion are subject to adjustment as provided in Section 2. No fractional shares of Common Stock shall be issued upon conversion of the Debenture. In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the Conversion Price. Further, any accrued but unpaid interest outstanding on the Conversion Date shall be paid to the Holder in cash. To exercise the Holder's conversion rights, the Holder shall give written notice to Eckler at Eckler's office as indicated under Section 5, that the Holder elects to convert the Debenture and the name or names of the Holder's nominees, if any, in which the Holder wishes the certificate or certificates for shares of Common Stock to be issued. (c) Issuance of Common Stock Upon Conversion. Within a reasonable time, not exceeding twenty (20) days after the Conversion Date, the Company shall deliver or cause to be delivered to or upon the written order of the Holder of the Debenture so converted certificates representing the number of fully paid and nonassessable shares of Common Stock into which such Debenture may be converted in accordance with the provisions of this Section 2. Within a reasonable time, not exceeding ten (10) days after receipt by the Holder of the certificates, the Holder of the Debenture so converted shall surrender the Debenture to the Company for cancellation. Subject to the following provisions of this Section 2 such conversion shall be deemed to have occurred on the Conversion Date, so that the rights of the Holder of such Debenture shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time. (d) Taxes on Conversion. The issuance of certificates for shares for Common Stock upon the conversion of the Debenture shall be made without charge by the Company to the converting Holder for any tax in respect of the issuance of such certificates and such certificates shall be issued in the name of, or in such names as may be directed by, the Holder of the Debenture converted; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of any such certificate in a name other than that of the Holder of the Debenture converted, and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. (e) Adjustment of Conversion Price. (i) Stock Dividends, Distributions or Subdivisions. In the event Eckler shall issue additional shares of common stock (or securities convertible into its common stock) in a stock dividend, stock distribution or subdivision paid with respect to its common stock, or declare any dividend or other distribution payable with additional shares of its common stock (or securities convertible into its common stock) or effect a split or subdivision of the outstanding shares of its common stock, the Conversion Price shall, concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, or the earlier declaration thereof, be proportionately decreased. (ii) Combinations or Consolidations. In the event that Eckler's common stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of common stock, the Conversion Price shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. (f) No Impairment. Neither the Company nor Eckler will, by amendment of their incorporation documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder but will at all times in good faith assist in the carrying out of all the provisions of this Section 2 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of this Debenture against impairment. (g) Common Stock Reserved. Eckler shall reserve and keep available out of its authorized but unissued Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect conversion of the Debenture. 3. Registration Rights. At the time that Eckler shall file any registration statement which includes any common stock of Eckler with the Securities and Exchange Commission subsequent to the date hereof (other than a registration statement on Form S-4, S-8 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), Eckler shall, at its expense, cause all Common Stock held by the Holder (or such portion thereof as may be directed by the Holder) then owned by the Holders to be included in such registration statement, provided that, in connection therewith, and as a condition to the obligations of Eckler hereunder, each subject Holder shall provide to Eckler and/or its underwriters such information regarding the Holder and such indemnities, as are reasonably required by the Eckler and/or its underwriters and are customary in connection with a public registration, and further provided that the 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. The Company shall notify the Holder in writing of Eckler's intent to file with the SEC a registration statement to which the Holder would have registration rights hereunder at least 15 days prior to the date on which Eckler intends to file such registration statement with the SEC. The Holder shall notify Eckler in writing of the Holder's election to register the Common Stock held by the Holder on such registration statement within five days of the date on which Eckler notifies the Holder as provided in the preceding sentence. 4. Events of Default. If any of the following events (herein defined as "Events of Default") shall occur and be continuing: (a) if the Company defaults in the payment of the principal or interest under the Debenture or any part thereof when the same shall become due and payable, either by the terms hereof or otherwise as herein provided; (b) upon the breach of the covenants of the Company or Eckler contained in the Debenture; (c) if any proceedings involving the Company or Eckler are commenced by or as to the Company or Eckler under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law or statute of the federal government or any state government and, if such proceedings are instituted against the Company or Eckler, the Company or Eckler by any action or failure to act indicates its approval of, consent to or acquiescence therein, or an order shall be entered approving the petition in such proceeding and, within fifty (50) days after the entry thereof, such order is not vacated, or stayed on appeal or otherwise, or shall not otherwise have ceased to continue in effect; then, as to the Events of Default under clauses (a) and (b) hereinabove, the Holder of this Debenture may at its option after thirty (30) days' advance written notice to the Company (during which time the Company shall have the right to cure such Event of Default) declare the Debenture to be forthwith due and payable in cash. If an Event of Default exists after the thirty day notice and a failure of the Company to cure as provided above, the Holder may pursue all remedies available to the Holder at law or in equity. As to an Event of Default under clause (c) hereinabove, then the Debenture shall become immediately due and payable in cash and the Holder may pursue all remedies available to the Holder at law or in equity. 5. Communications and Notices. Except as otherwise specifically provided herein, all communications and notices provided for in this Debenture shall be sent by first class mail, facsimile or telegram to the Holder at the Holder's address as provided to the Secretary of the Company from time to time and, if to the Company or Eckler, to either of them c/o Greenberg Traurig, 111 North Orange Avenue, Suite 2000, Orlando, Florida 32801, or such other address as may be furnished in writing from time to time. Any first-class mail notice provided pursuant to this Section 5 shall be deemed given three days after being sent by first-class mail. Notices sent by telegram or facsimile shall be deemed received upon delivery. The Company, Eckler, and the Holder may from time to time change their respective addresses, for purposes of this Section 5, by written notice to the other parties; provided, however, that notice of such change shall be effective only upon receipt. 6. Governing Law. This Debenture shall be construed in accordance with and governed by the laws of the State of Florida. 7. Assignment. This Debenture shall bind and inure to the benefit of the respective successors and assigns of the parties hereto. 8. Securities Restrictions. THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER SAID SECURITIES NOR ANY SECURITIES WHICH MAY BE ISSUED IN EXCHANGE FOR, UPON THE CONVERSION OF, OR OTHERWISE IN RESPECT OF, SAID SECURITIES MAY BE SOLD, OFFERED FOR SALE, OR ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER SAID SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 9. Waiver. No waiver of a right in any instance shall constitute a continuing waiver of successive rights, and any one waiver shall govern only the particular matters waived. IN WITNESS WHEREOF, Smart Choice Holdings, Inc. and Eckler Industries, Inc. have caused this Debenture to be executed on their behalf on the date first above written. SMART CHOICE HOLDINGS, INC. By:/s/ J. Neal Hutchinson, Jr. As Its:Vice President ECKLER INDUSTRIES, INC. By:/s/ J. Neal Hutchinson, Jr. As Its:Asst. Vice President EX-10.22 24 9 ORLANDO/IOPPOLOF/5037/3vx01!.DOC/2/26/97 Exhibit 10.22 LEASE THE STATE OF FLORIDA COUNTY OF PALM BEACH This lease is made and executed in duplicate by and between DAVID BUMGARDNER, SR., of 13365 Doubletree Circle, Wellington, State of Florida, "lessor," and FIRST CHOICE AUTO FINANCE, INC., a Florida corporation, of 225 North Military Trail, West Palm Beach, State of Florida, "lessee." SECTION I DESCRIPTION OF PREMISES Lessor leases to lessee, and lessee hires from lessor, the premises located at 225 North Military Trail and adjoining parcels, West Palm Beach, State of Florida, and described more particularly as follows: FERRIS PARK LTS 9 TO 12 (LESS N 8 FT), E 10 FT OF LT 13 & LTS 14 & 15 (LESS N 8 FT) LT 16 (LESS N 8 FT & E 10 FT) LTS 11 , 10, 23 (LESS E 10 FT) LTS 17 TO 23 (LESS E 10 FT) LTS 25 & 26 & E 10 FT, LOT 26 & LTS 27 TO 30 AND ABND ALLEY LYG E O AND ADJ 2 LOTS 15 & 24 FERRIS PARK LTS 46 TO 48 INC. SECTION II TERM The term of this lease is for a period of five years beginning February 13, 1997 and terminating at midnight on February 13, 2002. SECTION III RENT The total rent of this lease is the sum of $720,000.00. Lessee agrees to pay lessor this amount in installments of $12,000.00 each month, payable to lessor at 13365 Doubletree Circle, Wellington, State of Florida, beginning on the first day of this lease and payable on the same day of each month thereafter during the term of this lease. Upon the execution of this lease, lessee agrees and lessor acknowledges receipt herein the sum of $24,000.00 plus sales tax in the amount of $1,440.00 representing first and last month's installments of the term of this lease. SECTION IV STATE SALES TAX In addition to rent lessee shall be responsible for payment of state sales tax for the leased premises. The current rate is six (6%) percent to be paid in addition to and included in the monthly rental installments. Any increase in the state sales tax will be borne by lessee and included in the monthly rental installments. SECTION V PAYMENT OF REAL PROPERTY TAXES AND ASSESSMENTS Lessee, in addition to the fixed rent provided for herein, shall pay all taxes and assessments upon the leased premises, and upon the buildings and improvements thereon, which are assessed during the lease term. All taxes assessed prior to but payable in whole or in installments after the effective date of the lease term, and all taxes assessed during the term payable in whole or in installments after the lease term, shall be adjusted and prorated, so that lessor shall pay its prorated share for the period prior to and for the period subsequent to the lease term and lessee shall pay its prorated share for the lease term. Lessor agrees to provide to lessee Notice of Assessment of Real Property Taxes and Assessments and lessee shall have fifteen (15) days after receipt of same in which to pay the assessed value of the real property. Lessee may dispute and contest any taxes by appropriate proceedings diligently conducted in good faith. Any excess amounts paid by lessee to lessor for any taxes shall be promptly refunded to lessee. SECTION VI USE OF PREMISES The premises are leased to be used for the purposes of automobile sales, financing and any related or ancillary use. Lessee agrees to restrict its use to those purposes, and not to use, or permit the use of, the premises for any other purpose without first obtaining the consent in writing of lessor, or of lessor's authorized agent. SECTION VII OPTION TO RENEW Lessor grants lessee an option to renew this lease for two additional five year terms at a base rental of $720,000.00 for each term. All other terms, covenants, and conditions of the renewal lease shall be the same as those contained herein. To exercise such option, lessee must give lessor written notice of its intention to renew said lease at least ninety (90) days prior to the expiration of each term. The rent for each lease year of any of the extended terms provided for in this lease shall be $144,000.00 plus such additional amount, if any, as shall be sufficient to give to lessor for each lease year during such extended terms a total annual net rent equal to the purchasing power of $144,000.00 during January, 1997. Said rent for any renewal term shall be paid in equal monthly installments. Within thirty (30) days after the publication and issuance thereof, lessor shall deliver to lessee a true copy of the Consumer Price Index, hereinafter called the Index, for all items of the Bureau of Labor Statistics of the United States Department of Labor for the month of January, 1997, hereinafter called the base month, for the month of January, 2002, and for the corresponding month in each lease year thereafter. If the Index for the month of January 2002, and for each corresponding month in each lease year thereafter shows a decrease in the purchasing power of $144,000.00 as compared, in each such case, to the Index for the month ending January, 1997, lessor, as soon as possible after the delivery of each Index subsequent to the Index for the base month, shall furnish lessee with the computation of the additional amount, if any, to be paid by lessee for the lease year in question. Such additional amount shall be divided and paid in 12 equal monthly installments during each such lease year. Pending the determination of the additional amount, if any, to be paid by lessee, lessee shall continue to pay the net rent at the rate of $144,000.00 per annum. When said additional amount has been determined, lessee shall pay to lessor, on the date of rent payment for the month immediately following the date lessor furnished to lessee the computation thereof, the number of installments that shall have elapsed from the commencement of the lease year in question up to and including the current month. If at the time required for the determination of the additional rent the Index is no longer published or issued, or if at that time lessor and lessee mutually agree that the Index does not accurately reflect, in relationship to the base date, the purchasing power of $144,000.00, the parties shall mutually agree upon such other index as is then generally recognized and accepted for similar determinations of purchasing power. If the parties are unable to agree on the selection of an index which would most accurately carry out the intent hereof, or if there is a dispute with respect to the computation of the additional rent as herein provided, then the issue with respect thereto shall be determined by arbitration as provided for in this lease. SECTION VIII PROHIBITION AGAINST WASTE, NUISANCE OR UNLAWFUL USE Lessee shall not commit, or allow to be committed, any waste on the premises, create or allow any nuisance to exist on the premises, or use or allow the premises to be used for any unlawful purpose. SECTION IX PAYMENT OF UTILITIES Lessee shall pay for all utilities furnished to the premises for the term of this lease, including electricity, gas, water, and telephone service. SECTION X REPAIRS AND MAINTENANCE Lessee, at its expense, shall maintain and keep the premises, including without limitation, windows, doors, skylights, adjacent sidewalks, storefront, and interior walls, in good repair. This provision shall be deemed a material provision of this lease. SECTION XI DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES Lessor represents that the premises are in fit condition for use as described herein. Lessee agrees to accept the premises on possession as being in a good state of repair and in sanitary condition. Lessee agrees to surrender the premises to lessor at the end of the lease term, if the lease is not renewed, in the same condition as when lessee took possession, allowing for reasonable use and wear, and damage by acts of God, including fire and storms. Lessee agrees to remove all business signs or symbols placed on the premises by lessee before redelivery of the premises to lessor, and to restore the portion of the premises on which said signs or symbols were placed in the same condition as before such placement. SECTION XII DESTRUCTION OF PREMISES Partial destruction of the leased premises shall not render this lease void or voidable, or terminate it except as provided herein. If the premises are partially destroyed during the term of this lease, lessee shall repair them, when such repairs can be made, in conformity with local, state, and federal laws and regulations, within 120 days of the partial destruction. Rent for the premises will remain in effect during repairs. If the repairs cannot be so made within the time limited, lessor has the option to make said repairs within a reasonable time and continue this lease in effect with rent abated proportionally for that portion of the leased premises lessee reasonably determines is unusable. If the repairs cannot be made in 180 days, and if lessor does not attempt to make said repairs within a reasonable time, either party to this lease has the option to terminate the lease. A total destruction of the premises, or of the building, shall terminate this lease. In the event of any dispute between lessor and lessee relative to the provisions of this Section or Section XXIII, the parties shall submit their dispute to arbitration in accordance with the rules of the American Arbitration Association, and the arbitration shall be final and binding upon both lessor and lessee, and the cost of such arbitration shall be borne by the substantially non-prevailing party. SECTION XIII LESSOR'S RIGHT TO INSPECT, REPAIR, AND MAINTAIN PREMISES Lessor reserves the right to enter the premises at reasonable times and with advanced written notice from lessor to lessee to inspect the leased premises. Should lessee be in default under this lease, lessor shall have the right to perform any maintenance and repair required under this lease to any part of the building upon the leased premises. Lessor may, in connection with such repairs, reasonably erect scaffolding, fences, and similar structures, post relevant notices, and place moveable equipment without any obligation to reduce lessee's rent for the premises during such period, and without incurring liability to lessee for disturbance of quiet enjoyment of the premises, or loss of occupation of the premises. SECTION XIV POSTING OF SIGNS BY LESSOR Lessor reserves the right to place "For Sale" signs on the premises at any time during the lease, or "For Lease" or "For Rent" signs on the premises at any time within ninety days of expiration of the lease, if lessee has not exercised its option to renew, and lessee agrees to permit lessor to do so. SECTION XV POSTING OF SIGNS, AWNINGS, OR MARQUEES BY LESSEE Lessee agrees that it will not construct or place, or permit to be constructed or placed, signs, awnings, marquees, or other structures projecting from the exterior of the premises without lessor's written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Lessee further agrees to remove signs, displays, advertisements or decorations it has placed, or permitted to be placed, on the premises, which violate any governmental ordinance, are reasonably offensive or otherwise reasonably objectionable. If lessee fails to remove such signs, displays, advertisements, or decorations within thirty (30) days after receiving prior written notice from lessor to remove them, lessor reserves the right to enter the premises and remove them, at lessee's expense. SECTION XVI INDEMNIFICATION, HOLD HARMLESS AND LIABILITY INSURANCE Lessee agrees to procure and maintain in force during the term of this lease and any extension of this lease, at its expense, public liability insurance adequate to protect against liability for damage claims through public use of or arising out of accidents occurring in or around the leased premises, in an amount no less than $1 million for each person injured, $2 million for any one accident, and $250,000 for property damage. The insurance policies shall provide coverage for lessor's contingent liability on such claims or losses. Proof of such insurance will be provided to lessor upon request by lessor. Lessee agrees to obtain a written obligation from the insurers to notify lessor in writing at least thirty (30) days prior to cancellation or refusal to renew any policies. Lessee agrees that, if the insurance policies are not kept in force during the entire term of this lease and any extension of this lease, lessor may procure the necessary insurance, pay the premium, and that premium shall be repaid to lessor as an additional rent installment for the month following the date on which such premiums are paid. Lessee shall indemnify lessor against all liabilities, expenses, and losses incurred by lessor as a result of (a) failure by lessee to perform any covenant required to be performed by lessee hereunder; (b) any accident, injury, or damage which shall happen in or about the leased premises or appurtenances, or on or under the adjoining streets, sidewalks, curbs, or vaults, or resulting from the condition of the leased premises not in existence on the date hereof or from the maintenance or operation of the leased premises during the term of this lease. Lessor shall indemnify lessee against all liabilities, expenses, and losses incurred by lessee as a result of failure by lessor to perform any covenant required to be performed by lessor hereunder. SECTION XVII ASSIGNMENT OR SUBLEASE Lessee agrees not to assign or sublease the leased premises, any part thereof, or any right or privilege connected with the premises, or to allow any other person, except lessee's agents and employees, to occupy the premises or any part of the premises, without first obtaining lessor's written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Consent by lessor shall not be a consent to a subsequent assignment, sublease, or occupation by other persons. Lessee's unauthorized assignment, sublease, or license to occupy shall be void, and shall terminate the lease at lessor's option. Lessee's interest in this lease is not assignable by operation of law, nor is any assignment of its interest in it, without lessor's written consent. Lessee shall have the right in the event of a merger, consolidation, reorganization, or recapitalization, whether or not lessee survives as the surviving corporation, to assign or transfer this lease to such surviving corporation. Such right of assignment of transfer shall, however, be limited to an assignee whose book value is equal to or greater than the book value of lessee at the time of such assignment or transfer. In the event lessee contemplates making an assignment or transfer as provided in this section, lessee shall give thirty (30) days notice to lessor of its intent to make such assignment or transfer and shall furnish to lessor all pertinent information as to the book value of the proposed assignee. Upon assignment or transfer, as provided in this section, the liability of lessee shall terminate and lessor shall look to the assignee for performance under this lease provided such assignee agrees in writing to be bound by the terms and conditions of this lease as though an original signatory to this agreement. Except as otherwise expressly provided in this lease, lessee shall remain fully liable on this lease and shall not be released from performing any of the terms, covenants, and conditions of this lease unless lessor consents. Lessee immediately and irrevocably assigns to lessor, as security for lessee's obligations under this lease, all rent from any subletting of all or a part of the premises as permitted by this lease, and lessor, as assignee and as attorney-in-fact for lessee, or a receiver for lessee appointed on lessor's application, may collect such rent and apply it toward lessee's obligations under this lease, except that, unless there is a continuing default hereunder by lessee, lessee shall have the right to collect such rent. Lessee agrees to reimburse lessor for all expenses, including reasonable attorneys' fees, incurred by lessor in connection with any requested and permitted assignment or subleasing. Such sum shall be in addition to the attorneys' fees and costs allowed under this lease. SECTION XVIII DEFAULT The following shall constitute a default under this lease: a. if lessee fails to cure a breach for payment of amounts due under this lease within fifteen (15) days after any such payment is due; b. if either party breaches a material term of this lease (other than a default described in paragraph XVIII(a) above) and fails to cure such breach within thirty (30) days after written notice of such breach is received by the defaulting party from the non-defaulting party; provided, however, that if such breach is capable of being cured, but not within such 30-day period, this lease may not be terminated so long as the defaulting party commences appropriate curative action within such 30-day period and thereafter diligently prosecutes such cure to completion as promptly as possible; Should lessor be in default under this lease, then lessee in addition to, but not in limitation of any other right or remedy, may at its option, either remedy the condition or matter referred to in said notice, and lessor agrees to reimburse lessee for any expense reasonably incurred in connection therewith, and if lessor fails to reimburse lessee within ten days after being submitted a written bill for monies so expended, lessee may deduct said sum from the next ensuing rental payment or payments or pursue any other remedy provided at law or in equity. Should lessee be in default under this lease, lessor shall have the following remedies in addition to his other rights and remedies in such event: a. Reentry. Lessor has the right to obtain possession of the premises as provided by law. b. Termination. After reentry, lessor may terminate the lease on giving thirty (30) days written notice of such termination to lessee. Reentry only, without notice of termination, will not terminate the lease. c. Reletting Premises. After reentering, lessor may relet the premises or any part thereof, for any term, without terminating the lease at such rent and on such terms as he may choose. Lessor may make repairs to the premises. (1) Liability of Lessee on Reletting. Lessee shall be liable to lessor in addition to his other liability for breach of the lease for all reasonable expenses of the reletting, and any repairs made, which lessor may reasonably incur. In addition, lessee shall be liable to lessor for the difference between the rent received by lessor under the reletting and the rent installments that are due for the same period under this lease. (2) Application of Rent on Reletting. Lessor at his option may apply the rent received from reletting the premises as follows: (a) To reduce lessee's indebtedness to lessor under the lease, not including indebtedness for rent; (b) To reasonable expenses of the reletting and repairs made; (c ) To rent due under this lease; (d) To payment of future rent under this lease as it becomes due. If the new lessee does not pay a rent installment promptly to lessor, and the rent installment has been credited in advance of payment to lessee's indebtedness other than rent, or if rentals from the new lessee have been otherwise applied by lessor as provided for in this lease, and during any rent installment period are less than the rent payable for the corresponding installment period under this lease, lessee agrees to pay lessor the deficiency separately for each rent-installment deficiency period, and before the end of that period. SECTION XIX NOTICES Notices given pursuant to the provisions of this lease, or necessary to carry out its provisions, shall be in writing, and delivered personally to the person to whom the notice is to be given, or mailed postage prepaid, addressed to such person. Lessor's address for this purpose shall be 13365 Doubletree Circle, Wellington, Florida, or such other address as he may in writing designate to lessee. Notices to lessee may be addressed to lessee at the leased premises. SECTION XX QUIET ENJOYMENT Lessor covenants, warrants and represents that lessor has full right and power to execute and perform this lease, and to grant the estate demised herein; and that lessee, upon the payment of the rent herein reserved and performance of the covenants and agreements herein contained shall peaceably and quietly have, hold and enjoy the leased premises and all rights, easements, covenants and privileges belonging or in any way appertaining thereto. SECTION XXI BINDING EFFECT ON SUCCESSORS AND ASSIGNS This lease and the covenants and conditions of this lease apply to and are binding on the heirs, successors, executors, administrators, and assigns of the parties to this lease. SECTION XXII TIME OF THE ESSENCE Time is of the essence in this lease. SECTION XXIII EFFECT OF EMINENT DOMAIN PROCEEDINGS If any part of the leased premises is taken by eminent domain, lessor may, at its sole option, terminate the lease by giving written notice to lessee within forty-five (45) days after the taking, or if by reason of any such taking lessee's operation on the leased premises is materially impaired, lessee shall have the option to terminate this lease, by giving written notice to lessor within forty-five (45) days after the taking and the rent will be adjusted as of the date of the notice. SECTION XXIV INSOLVENCY The occurrence of any of the following events shall constitute a breach of this lease by lessee and a default under this agreement: (1) the appointment of a receiver to take possession of all or substantially all of the assets of lessee; or (2) a general assignment by lessee for the benefit of creditors; or (3) any action taken by lessee under any insolvency or bankruptcy act. SECTION XXV COMPLIANCE WITH LAW Lessee shall, at its sole cost and expense, comply with all laws pertaining to lessee's use of the premises, and shall faithfully observe all laws in the use of the premises. Lessee shall not be required to remedy any pre-existing condition. The judgment of any court of competent jurisdiction, or the admission of lessee in any action or proceeding against lessee, whether the lessor is a party to it or not, that lessee has violated any law in the use of the premises shall be conclusive of that fact as between lessor and lessee. Without limiting the generality of the foregoing, the duties of lessee under this provision shall include the making of all such alterations of the premises as may be required by law by reason of the particular manner or mode of use of the premises by lessee, or occasioned by reason of the failure of lessee to maintain or repair the premises as required under this lease. XXVI LESSEE'S RIGHT OF FIRST REFUSAL If lessor has the opportunity to sell the leased premises, he shall give lessee thirty (30) days' prior written notice of such proposed sale and the terms thereof. Lessee shall have the first option to purchase the leased premises within such 30-day period at the same price and on the same terms of any such proposal. Should lessee decide not to purchase the leased premises pursuant to the option set forth hereinabove, lessee shall have no less than ninety (90) days from the date of the expiration of said 30-day period to relocate to another property. XXVII EFFECT OF EXERCISE OF OR FAILURE TO EXERCISE RIGHTS BY LESSOR Neither the exercise of nor failure to exercise any right, option, or privilege under this lease by lessor shall exclude lessor from exercising any and all other rights, options, or privileges under this lease, nor shall such exercise or nonexercise relieve lessee from lessee's obligation to perform each and every covenant and condition to be performed by lessee under this lease, or from damages or other remedy for failure to perform or meet the obligations of this lease. XXVIII WAIVER The waiver by lessor of any breach of any term, covenant, or condition contained in this lease shall not be deemed to be a waiver of such term, covenant, or condition, or of any subsequent breach of such term, covenant, or condition, or of any other term, covenant, or condition in this lease. The acceptance of rent under this lease by lessor shall not be deemed to be a waiver of any preceding breach by lessee of any term, covenant, or condition of this lease other than lessee's breach in failing to pay the particular rent so accepted regardless of lessor's knowledge of such additional preceding breach at the time of the acceptance of such rent. SECTION XXIX REPRESENTATIONS This lease represents the entire agreement of the parties with respect to the parties' rights and duties under this lease. Lessee acknowledges that neither lessor nor any agent, servant, or representative of lessor, or any person purporting to act on lessor's behalf, has made any representation, warranty, or statement regarding any matter relating to this lease that is not expressly covered in this lease. With respect to such matters, lessee is relying upon lessee's own independent investigation and sources of information. SECTION XXX MEMORANDUM OF LEASE Each party shall cooperate in executing any and all other documents required to protect a party's rights hereunder or permit lessee's permitted use including, without limitation, applications for permits or government approvals, zoning applications, a Memorandum of Lease or easement agreements. The aforementioned Memorandum of Lease in the form of Exhibit A attached hereto shall be executed by both parties and recorded. IN WITNESS WHEREOF, the parties hereto have hereunto executed this instrument for the purpose herein expressed, the day and year above written. Signed, sealed and delivered in the presence of: LESSOR: /S/ DAVID BUMGARDNER Name: DAVID BUMGARDNER Name: LESSEE: FIRST CHOICE AUTO FINANCE, INC., a Florida corporation By: /S/ J. NEAL HUTCHINSON, JR. Name Name: J. NEAL HUTCHINSON, JR. Title: VICE PRESIDENT Name: STATE OF FLORIDA COUNTY OF______________ BEFORE ME, the undersigned authority, personally appeared DAVID BUMGARDNER to me known to be the person who executed this document the foregoing lease on this day of ____________, 1997. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day of ____________, 1997. NOTARY PUBLIC at Large [Notary Seal] State of Florida My Commission Expires: EX-10.23 25 2 Exhibit 10.23 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into on the ____ day of February, 1997, among TWO TWO FIVE NORTH MILITARY CORP., a Florida corporation ("225"), PALM BEACH FINANCE AND MORTGAGE COMPANY, a Florida corporation ("PBF"), and FIRST CHOICE AUTO FINANCE, INC., a Florida corporation ("FCAF"). W I T N E S S E T H: THIS AGREEMENT is made and entered into under the following circumstances: A. FCAF is acquiring the assets of 225 and PBF; B. 1st United Bank has extended credit to 225 and PBF pursuant to that certain Business Loan Agreement dated May 8, 1996, as to which David E. Bumgardner ("DEB") and Beatrice E. Bumgardner ("BEB") are guarantors (225, PBF, DEB and BEB are referred to herein as the "Indemnified Parties" and the obligations of 225, PBF, DEB and BEB under such Business Loan Agreement are referred to herein as the "Obligations"). NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the parties hereto covenant and agree as follows: 1. Indemnification. FCAF shall indemnify and hold harmless the Indemnified Parties from and against the Obligations, including payments, liabilities, costs (including attorneys fees and costs), and penalties thereunder, however arising. 2. Indemnification Procedure. (a) Claim for Indemnity. If a claim shall arise for which any Indemnified Party shall be entitled to indemnification hereunder, the Indemnified Party shall notify FCAF in writing on receipt of notice of, or an Indemnified Party's obtaining actual knowledge of, such claim. Such notice shall specify all facts known to the Indemnified Party giving rise to such indemnity rights. (b) 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 an Indemnified Party, FCAF shall be entitled (without prejudice to the Indemnified Party's right to participate at its own expense through counsel of its own choosing), at its expense and through a single counsel of its own choosing, to defend or prosecute such claim in the name of FCAF, or if necessary, in the name of the Indemnified Party. In any event, the Indemnified Party shall give FCAF 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, FCAF 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, FCAF shall be required to undertake, conduct and control, through 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. 3. Notices. All notices, requests, consents, and other communications hereunder shall be in writing and delivered to the person to whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as registered or certified item with return receipt requested, (iii) delivered by delivery service, or (iv) sent by facsimile, telex or telecopy. Notices delivered by mail shall be deemed to be given when deposited in a post office or other depository under the care or custody of the United States Postal Service, enclosed in a wrapper, addressed properly with proper postage affixed or when received at the address set forth herein if delivered or sent by facsimile. All notices shall be addressed as follows: If to an Indemnified Party: David E. Bumgardner 13365 Doubletree Circle Wellington, Florida If to FCAF: First Choice Auto Finance, Inc. 5200 S. Washington Avenue Titusville, Florida 32780 or to such other address or addresses as the party addressed may from time to time designate to the others in writing in accordance with this paragraph. 4. Counterparts. This Agreement may be executed in one or more counterparts by the parties by the parties hereto, and all such counterparts together shall constitute one and the same agreement. 5. Successors, etc. This Agreement is for the benefit of the parties hereto, and shall be binding upon them, together with their respective heirs, executors, administrators, successors, and assigns. No right or obligation created hereunder shall be assignable or delegable by any party hereto without the prior written consent of every other party hereto. 6. Governing Law; Jurisdiction. The validity, interpretation, and performance of this Agreement shall be governed by the laws of the State of Florida, without giving effect to the principles of comity or conflicts of laws thereof. Each party hereto agrees to submit to the personal jurisdiction and venue of the state and federal courts located in Brevard County, Florida, for a resolution of all disputes between the parties arising in connection with this Agreement, and hereby waives the claim or defense therein that such courts constitute an inconvenient forum. 7. Costs of Enforcement. In the event a party initiates legal action (including both trial and appellate proceedings) to enforce his or its rights hereunder, the prevailing party in such action shall recover from the non-prevailing party in such action his or its reasonable litigation expenses (including, but not limited to reasonable attorneys' fees and court costs) of all such proceedings. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. FCAF: FIRST CHOICE AUTO FINANCE, INC. By: /S/ J. Neal Hutchinson, Jr. Title: Vice President 225: TWO TWO FIVE NORTH MILITARY CORP. By: David Bumgardner Title: President PBF: PALM BEACH FINANCE AND MORTGAGE COMPANY By:David Bumgardner Title:President -----END PRIVACY-ENHANCED MESSAGE-----