FIFTH AMENDED AND RESTATED SCHEDULE TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Borrower: FLORIDA FINANCE GROUP INC.
LIBERTY FINANCE COMPANY
Address: 5200 S. WASHINGTON
TITUSVILLE, FLORIDA 32780-7316
Borrower: SMART CHOICE RECEIVABLES HOLDING COMPANY
P. O. Box 50102
Henderson, NV 89016
Date: MAY 11, 1998
This Fifth Amended and Restated Schedule ("Fifth Amended Schedule") is
executed in conjunction with a certain Amended and Restated Loan and Security
Agreement ("Agreement") of February 4, 1997, by and between FINOVA Capital
Corporation, as Lender, and the above Borrowers, as Borrower. This Fourth
Amended Schedule is an amendment and restatement of the Schedule to Amended and
Restated Loan and Security Agreement, dated of even date with the Agreement,.
that certain First Amended and Restated Schedule to Amended and Restated Loan
and Security Agreement, dated April 22, 1997, that certain Second Amended and
Restated Schedule to Amended and Restated Loan and Security Agreement, dated May
7, 1997, that certain Third Amended and Restated Schedule to Amended and
Restated Loan and Security Agreement, dated December 30, 1997 and that certain
Fourth Amended and Restated Schedule to Loan and Security Agreement, dated March
27, 1997.
The terms and provisions of this Fifth Amended Schedule shall supersede all
prior schedules. All references to Section numbers herein refer to Sections in
the Agreement.
1.A. BORROWERS (SECTION 1).
All references to "Borrower" in any and all Loan Documents are hereby
modified to include the following Borrower, as co-borrowers, jointly and
severally:
Florida Finance Group, Inc. - "FFG" or "Lead Borrower"
Liberty Finance Company - "Liberty"
Smart Choice Receivables Holding Company "Smart Choice Receivables"
1.13.A. MAXIMUM AMOUNT OF AN ELIGIBLE RECEIVABLE (SECTION 1.13).
The term "Maximum Amount of an Eligible Receivable" shall mean the sum of
Twenty Thousand Dollars ($20,000.00) remaining due thereon at any date of
determination.
1.13.B. MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE (SECTION 1.13).
The "Maximum Term of an Eligible Receivable" shall be Forty-Eight (48)
months remaining until the due date of such Eligible Receivable at any date
of determination.
1.13.C. AGING PROCEDURES AND ELIGIBILITY TEST (SECTION 1.13.)
AGING PROCEDURES FOR A CONTRACTUAL AGING:
1. No payment missed or due = Current.
2. 1 to 30 days past due = "30 day Account".
3. 31 to 60 days past due = "60 day Account".
4. 61 or more days past due = "60 + day Account"
ELIGIBILITY TEST:
The term "Eligibility Test" shall mean the test to determine the
eligibility of a Receivable for the purposes of Section 1.13 hereof, that
test, being as follows: no payment due on said Receivable remains unpaid
more than sixty (60) days from the specific date on which such payment was
due pursuant to the terms of said Receivable.
1.15 GUARANTOR (WHETHER ONE OR MORE) (SECTION 1.15)
Smart Choice Holdings, Inc.
Smart Choice Automotive Group, Inc.
(formerly known as Eckler Industries, Inc.)
First Choice Auto Finance, Inc.
2.1.A. AMOUNT OF REVOLVING CREDIT LINE (SECTION 2.1):
The Amount of Revolving Credit Line shall be as follows:
(i) If the date of determination is on or before June 30, 1998, then the
Amount of Revolving Credit Line shall be Fifty Million Dollars
($50,000,000.00).
(ii) If the date of determination is on or before December 31, 1998, but
after June 30, 1998, then the Amount of Revolving Credit Line shall be
Sixty Million Dollars ($60,000,000.00).
(iii)If the date of determination is on or before June 30, 1999, but after
December 31, 1998, then the Amount of Revolving Credit Line shall be
Seventy Million Dollars ($70,000,000.00).
(iv) If the date of determination is on or before December 31, 2001, but
after June 30, 1999, then the Amount of Revolving Credit Line shall be
Seventy-Five Million Dollars ($75,000,000.00).
2.1.B. AVAILABILITY ON ELIGIBLE RECEIVABLES (SECTION 2.1):
The "Availability on Eligible Receivables" shall be an amount equal to,
with respect to all Eligible Receivables, on the date of determination, the
sum of the following:
(i) Sixty percent (60%) of the aggregate unmatured and unpaid amount
due to Borrower from the Account Debtor named thereon, including all
unearned finance charges, time price differentials, insurance fees,
discounts, holdbacks and other fees and charges pursuant to the
Eligible Receivables with an origination date on or before June 30,
1998;
(ii) Fifty-five percent (55%) of the aggregate unmatured and unpaid
amount due to Borrower from the Account Debtor named thereon,
including all unearned finance charges, time price differentials,
insurance fees, discounts, holdbacks and other fees and charges
pursuant to the Eligible Receivables with an origination date after
June 30, 1998.
Notwithstanding any provision contained in the Loan Documents to the
contrary, if for the twelve (12) calendar month period immediately prior to
any date of determination, the Collateral Recovery Rate is less than
seventy-two and one-half percent (72.50%), or if on any date of
determination, the Collateral Performance Percentage is greater than ten
percent (10.0%), then in either event, Lender, in its sole and absolute
discretion, may modify the Availability on Eligible advance percentage set
forth above.
2.2. STATED INTEREST RATE (SECTION 2.2).
(i) The lesser of (a) the Governing Rate plus two and one-half percent
(2.50%) per annum; or (b) the Maximum Rate.
(ii) Notwithstanding the foregoing:
(a) if Borrower irrevocably elects to reduce the Availability on
Eligible Receivables advance rate set forth in Section 2.1.B (i)
and (ii) to fifty percent (50%), then the Stated Rate of Interest
shall be the lesser of (1) the Governing Rate plus two and
one-quarter percent (2.25%); or (2) the Maximum Rate.
(b) if Borrower irrevocably elects to reduce the Availability on
Eligible Receivables advance rate set forth in Section 2.1.B (i)
and (ii) to forty percent (40%), then the Stated Rate of Interest
shall be the lesser of (1) the Governing Rate plus one and
one-half percent (1.50%); or (4) (2) the Maximum Rate.
2.3.A. PAYMENTS (SECTION 2.3).
The first paragraph of Section 2.3 shall be deleted in its entirety and the
following substituted in lieu thereof:
2.3 PAYMENTS. All payments to Lender shall be payable at FINOVA
Capital Corporation, File No. 96425, P. O. Box 1067, Charlotte, NC
28201-1067. All payments received pursuant to this Agreement by wire
transfer or other electronic transfer method, where immediate credit
occurs, shall be applied to Borrower's Indebtedness on the Business
Day of actual receipt of such payment by Lender's depository bank,
payments received by any other method shall be applied to Borrower's
Indebtedness three (3) Business Days after the actual receipt of such
payment by Lender's depository bank if such payment is credited to
Lender's account. The Indebtedness shall be due and payable as
follows:
2.3.B. MATURITY DATE (SECTION 2.3.C).
The primary term of this Agreement shall expire on December 31, 2001. If
Borrower desires to extend the primary term or any term thereafter of this
Agreement, Borrower shall give Lender notice of its intent to extend the
term no earlier than one hundred and eighty (180) days and no later than
one hundred and fifty (150) days prior to any expiration date of this
Agreement. Upon the receipt by Lender of Borrower's notice to extend the
term of this Agreement, if Lender desires to renew and extend the term of
this Agreement, Lender shall give Borrower notice of Lender's intent to
extend the term of this Agreement, within sixty (60) days of Lender's
receipt of Borrower's notice to extend. If Lender does not give Borrower
notice of Lender's intent to extend the term of this Agreement within the
sixty (60) days period, then it shall be deemed that Lender does not intend
to renew and extend the term of this Agreement. Notwithstanding the
foregoing, the Borrower's obligation pursuant to this Agreement shall
remain in full force and effect until the Indebtedness due and owing to
Lender has been paid in full.
2.6. LIQUIDATED DAMAGES (SECTION 2.6).
The amount of "Liquidated Damages" shall be as follows:
None.
2.8 INTEREST AFTER DEFAULT (SECTION 2.8)
Section 2.8 of the Agreement is hereby deleted and the following is
substituted in lieu thereof:
"2.8 INTEREST AFTER DEFAULT. Upon the occurrence and during the
continuation of an Event of Default, Borrower shall pay Lender
interest on the daily outstanding balance of Borrower's Indebtedness
at a rate per annum that is the lesser of (i) four percent (4%) in
excess of the rate which would otherwise be applicable thereto
pursuant to the Schedule (Schedule Section 2.2) or (ii) sixteen
percent (16%)."
2.11. FACILITY FEE (SECTION 2.11).
Section 2.11 of the Loan Agreement shall be deleted in its entirety.
2.12 CO-BORROWER PROVISIONS AND TERMINATION FEE (SECTIONS 2.12, 2.13, 2.14 AND
2.15)
The following Sections 2.12, 2.13, 2.14 and 2.15 are hereby added to the
Agreement:
2.12 APPLICATION OF PAYMENTS. All payments and collections shall be
deemed to be comprised of a pro rata remittance or payment made by
each Borrower, based upon the proportion that the Eligible Receivables
of each Borrower bears to the aggregate of all Eligible Receivables of
the Borrowers, as of the date on which such remittance or payment is
received by Lender. In the event such remittance or payment shall be
made by the Lead Borrower, acting as agent or trustee for the other
Borrowers, each Borrower shall be deemed to have made their
proportionate amount of such remittance or payment to Lender by and
through such agent or trustee.
2.13. ADVANCES TO LEAD BORROWER. Borrower does hereby irrevocably
agree that in the event Lender makes advances to Lead Borrower, as
agent or trustee for each of Borrower, as contemplated in Section
2.14, each such advance shall be deemed to be made to each Borrower
based upon a proportion that each Borrower's Eligible Receivables bear
to the aggregate of all Eligible Receivables of Borrower,
notwithstanding any subsequent disbursement of said advance by the
Lead Borrower, acting as agent or trustee for the Borrowers. In the
event that the actual advances, direct or indirect, received by Lead
Borrower or any other Borrower or the balance due to Lender as shown
in the records of any Borrower shall be disproportionate when compared
to the proportion of the Eligible Receivables of each Borrower,
whether by way of subsequent disbursements by Lead Borrower, acting as
agent or trustee, by way of Lender electing to make advances to each
Borrower, as contemplated in Section 2.14 or otherwise, such
disproportionalities shall be deemed to have occurred by virtue of
loans made between and among Borrowers.
2.14 APPOINTMENT OF AGENT. Lender agrees that, in the sole discretion
of Lender, Borrower may, by written notice to Lender, designate a Lead
Borrower to receive advances from Lender, make payments to Lender,
communicate with Lender and generally represent the interests of the
Borrowers with respect to the subject matter of this Agreement;
notwithstanding the foregoing, Lender may, at its sole discretion and
upon notice to each of the Borrowers, make advances directly to each
of the Borrowers, require that payments due hereunder be made to
Lender by each of the Borrowers, require each of the Borrowers to
communicate directly with Lender, for its own account, and generally
deal independently and separately with each of the Borrowers. Until so
notified by Lender, each of the Borrowers hereby agree that any and
all funds advanced by Lender pursuant to the terms of this Agreement,
shall be advanced to the Lead Borrower and may be deposited or
transferred into the general corporate account of Lead Borrower, as
agent and/or trustee for Borrowers. Lead Borrower hereby agrees to
keep detailed and accurate records of all such disbursements made to
any other Borrowers. Lead Borrower hereby agrees to keep detailed and
accurate records of all loans and dealings between or among Lead
Borrower and the other Borrowers. Borrowers agree to furnish copies of
such records to Lender upon request. Each Borrower, other than the
Lead Borrower hereby irrevocably makes, constitutes, designates and
appoints Lead Borrower as its agent and/or trustee with full power to
receive all notices, request all Advances hereunder and to deal
generally with Lender as agent and/or trustee for the Borrowers and
Lead Borrower is hereby granted full power and authority to bind the
Borrowers in respect of any term, condition, covenant or undertaking
embraced in this Agreement. Lender may, without liability or
responsibility to the Borrowers rely upon the instructions or other
communications of Lead Borrower on behalf of each of the Borrowers in
connection with any notifications, requests or communications required
or permitted to be given hereunder with the same force and effect as
if actually given by each Borrower; each Borrower hereby agrees to
indemnify and hold Lender harmless from and against any liability,
claim, suit, action, penalty, fine or damage arising out of or
incurred in connection with Lender's reliance upon communications from
Lead Borrower on behalf of the Borrowers. It is specifically
understood and agreed that any Advance made hereunder by Lender to
Lead Borrower shall be considered and treated as an Advance to the
Borrowers and each Borrower shall be jointly and severally liable
therefor.
2.15. TERMINATION FEE. Borrower agrees to pay Lender a Termination Fee
(Schedule 2.15) upon the termination of the credit facility evidenced
by the Loan Documents. This Termination Fee shall be due and payable
together with the payment in full of the outstanding balance of the
Indebtedness, whether by a voluntary prepayment in full by Borrower
together with a request for Lender to terminate Lender's security
interest in the Collateral, the acceleration of the outstanding
balance of the Indebtedness upon an Event of Default or upon the
expiration of the term hereof. This Termination Fee shall be included
as an Additional Sum as defined in Section 2.7 of the Agreement.
2.15 TERMINATION FEE (SECTION 2.15).
The amount of the "Termination Fee shall be Three Million Dollars
($3,000,000.00).
3.2. BUSINESS LOCATIONS OF BORROWER (SECTIONS 3.2, 3.6 and 5.1.N.).
All locations are as set forth on the attach List of Locations
3.16 CROSS COLLATERALIZATION PROVISION (SECTION 3.16)
The following Section 3.16 is hereby added to the Agreement:
3.16 CROSS COLLATERALIZATION. Each Borrower agrees that the Collateral
of each Borrower pledged hereunder shall secure all of the obligations
of the Borrowers to Lender hereunder. Upon and after an Event of
Default by any Borrower, Lender may pursue all rights and remedies it
may have against all or any part of the Collateral regardless of the
status of legal title to such Collateral. Each Borrower hereby
acknowledges that this Cross Collateralization of their Collateral is
in consideration of Lender's extending the credit hereunder and
mutually beneficial to each Borrower.
5.1.B. BORROWER'S TRADENAMES (whether one or more) (SECTION 5.1.B.)
As set forth in List of Tradenames attached hereto
6.2.A. LEVERAGE RATIO LIMIT (SECTION 6.2.J).
None.
6.2.B. MINIMUM NET INCOME (SECTION 6.2.K).
(i) The Minimum Net Income for each of Florida Finance Group, Inc., Eckler
Industries, Inc., Smart Cars, Inc., First Choice Stuart 2, Inc., First
Choice Stuart 1, Inc., First Choice Melbourne 1, Inc., Dealer
Development Services, Inc., Dealer Insurance Services, Inc., Easy Pay
Insurance, Inc., and First Choice Auto Finance, Inc., Premium Bonding
& Insurance Services, Inc., Wholesale Acquisitions, Inc., Team
Automobile Sales & Finance, Inc. and Eckler Corvette Sales, Inc. shall
be at least One Dollar ($1.00) in each fiscal quarter, beginning the
fiscal quarter ending June 30, 1998 and
(ii) The consolidated Minimum Income of Smart Choice Automotive Group, Inc.
("SCAG") shall be One Dollar ($1.00) for each fiscal quarter of SCAG,
beginning with fiscal quarter ending June 30, 1998.
6.2.C. DISTRIBUTIONS LIMITATION (SECTION 6.2.L).
No Distributions without the prior written consent of Lender.
6.3.C. ANNUAL FINANCIAL STATEMENTS (SECTION 6.3).
Annual audited financial statements shall be prepared by independent
certified public accountants, reasonably acceptable to Lender.
8.1. REIMBURSEMENT OF EXPENSES (SECTION 8.1).
(i) Borrowers shall reimburse Lender an amount not to exceed Fifty
Thousand Dollars ($50,000.00), for legal fees and expenses incurred in
the due diligence with respect to, negotiations, preparation and
closing of this Fifth Amended and Restated Schedule to Amended and
Restated Loan and Security Agreement and the other Loan Documents
executed in connection therewith and the re-documentation and
codification of prior amendments to be prepared and closed into a
Second Amended and Restated Loan and Security Agreement and other Loan
Documents to be executed in connection therewith, within thirty (30)
days after the date of this Fifth Amended and Restated Schedule to
Amended and Restated Loan and Security Agreement.
(ii) Borrowers shall reimburse Lender an amount not to exceed Five Thousand
Dollars ($5,000.00) for audit fees on a quarterly basis beginning June
30, 1998.
9.1. NOTICES (SECTION 9.1).
Lender: FINOVA Capital Corporation
(copy each office below with all notices)
Corporate Finance Office:
FINOVA Capital Corporation
355 South Grand Avenue, Suite 2400
Los Angeles, CA 90071
Attn: John J. Bonano, Senior Vice President
Telephone: (213) 253-1600
Telecopy No.: (213) 625-0268
Corporate Office:
FINOVA Capital Corporation
1850 N. Central Avenue
Phoenix, AZ 85077
Attn: Joseph R. D'Amore, Senior Counsel
Telephone: (602) 207-4900
Telecopy No.: (602) 207-5543
Rediscount Finance Office:
FINOVA Capital Corporation
13355 Noel Road, Suite 800
Dallas, TX 75240
Attn: Douglas M. Fraser (Account Executive)
Telephone: (972) 458-5600
Telecopy No.: (972) 458-5650
Borrower: Florida Finance Group Inc.
Liberty Finance Company
5200 S. Washington
Titusville, Florida 32780-7316
Telephone: 407-269-9680
Telecopy No.:407-269-1880
Borrower: Smart Choice Receivables Holding Company
P. O. Box 50102
Henderson, NV 89016
Telephone: (702) 598-3738
Telecopy No.: (702) 598-3651
Guarantors: Smart Choice Holdings, Inc.
Smart Choice Automotive Group, Inc.
First Choice Auto Finance, Inc.
5200 S. Washington
Titusville, Florida 32780-7316
Telephone: 407-269-9680
Telecopy No.:407-269-1880
9.16. AGENT FOR SERVICE OF PROCESS (SECTION 9.16).
Gary Smith, whose address is 5200 S. Washington, Titusville, Florida
32780-7316 (Agent)
IN WITNESS WHEREOF, the parties have executed this Schedule on the day and
year first set forth above.
LENDER:
FINOVA CAPITAL CORPORATION,
a Delaware corporation
By: /s/ J. Steven Cammack
-------------------------
J. Steven Cammack, Vice President (Date)
BORROWERS:
FLORIDA FINANCE GROUP INC.
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)
LIBERTY FINANCE COMPANY
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)
SMART CHOICE RECEIVABLES HOLDING COMPANY
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)
GUARANTORS:
SMART CHOICE HOLDINGS, INC.
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)
SMART CHOICE AUTOMOTIVE GROUP, INC.
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)
FIRST CHOICE AUTO FINANCE, INC.
By: /s/ Gary R. Smith
---------------------
Gary Smith, President (Date)