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: September 18, 1996
(Date of earliest event reported)
AUTOLEND GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-76200 13-3121813
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
930 Washington Avenue, Miami Beach, Florida 33139
(Address of principal executive offices) (Zip Code)
(305) 673-2700
(Registrant's telephone number, including area code)
420 Jefferson Avenue, Miami Beach, Florida 33139
(Former name or former address, if changed since last report)
The Exhibit Index is located on Page 12 of this document
Page 1 of 210
<PAGE>
Item 1. Changes in Control of Registrant
On December 11, 1995, the Registrant filed a declaratory judgment
action in the Circuit Court for Dade County, Florida against Nunzio P. DeSantis
("DeSantis"), Courtlandt G. Miller "Miller") and Vincent Villanueva
("Villanueva") seeking a declaration that certain voting trust agreements
between the Registrant and such defendants were valid and enforceable (the
"Florida Action").
On December 26, 1995, DeSantis, Miller and Villanueva (collectively,
the "Derivative Plaintiffs") commenced an action (the "Derivative Suit") in the
Delaware Court of Chancery for New Castle County (the "Court") against Steve
Simon ("Simon"), Stephen Raphael ("Raphael") and Elie Housman ("Housman"), and
the Registrant as nominal defendant seeking injunctive relief and damages.
On May 3, 1996, the parties to the Derivative Suit submitted a
Stipulation and Agreement of Compromise, Settlement and Release (the
"Stipulation") to the Delaware Court, settling the Derivative Suit. As part of
the settlement, the Registrant also agreed to dismiss the Florida Action with
prejudice, thereby restoring to Derivative Plaintiffs control over 908,000
shares of the Registrant's common stock ("Common Stock") owned by them and held
in the voting trust at issue in the Florida Action.
Pursuant to the Stipulation, on the date hereof (the "Closing Date"),
current management, including Simon and Helen Porter ("Porter"), are resigning
from their current positions as President, Chief Executive Officer, Director and
Chairman of the Board of the Registrant, and Executive Vice- President and Chief
Operating Officer of the Registrant, respectively.
Simultaneous with such resignations, the Registrant is paying Simon and
Porter the remaining sums due to each of them according to the terms of their
respective employment agreements, subject to the terms of certain tax indemnity
and escrow obligations on the part of Simon and Porter. Pursuant to the
Stipulation, upon Closing, such employment agreements will then be deemed
cancelled.
On the Closing Date, Simon and Porter are entering into ongoing
consulting agreements with the Registrant, pursuant to which, for a term of
three years, they will provide certain consulting services to the Registrant to
assist with certain ongoing operations in consideration of payment at Closing of
consulting fees of $210,000 to each of Simon and Porter.
In addition, on the Closing Date, the Registrant's Board of Directors
is electing DeSantis as a director, Chairman of the Board and Chief Executive
Officer of the Registrant. Effective on the Closing Date, each of the remaining
directors is submitting a letter of resignation and the resignations of
directors Robert Granoff, James Newman and Drew Sakson are being accepted.
The Derivative Plaintiffs have informed current management that the new
Board of Directors is to include: E. Gerald Riesenbach, Miles M. Stuchin,
Anthony Coelho, Philip J. Vitale, M.D., and Villanueva as Directors of the
Registrant, thereby filling the vacancies left by the outgoing Directors.
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<PAGE>
Also on the Closing Date, pursuant to the Stipulation, the Registrant
is entering into a Stock Purchase Agreement for the sale of its subsidiary
AutoLend IAP, Inc. ("IAP") to Auction Finance Group, Inc., an affiliate of
departing management, an Assignment of intellectual property relating to the
automotive finance business by the Registrant to IAP, a Licensing Agreement
governing the Registrant's limited continued rights to the use of "AutoLend
Group, Inc." and various related names, and is selling certain fixed assets used
in the business of IAP for approximately $175,000.
The consideration for the sale of IAP and related agreements includes
the settlement of intercompany indebtedness as of the Closing Date of
approximately $6.0 million and the issuance by IAP to the Registrant of
preferred stock with a face amount of $1 million, in accordance with the
Certificate of Designation of Rights, Preferences, and Privileges of $.01 Par
Value 11% Cumulative Convertible Preferred Stock.
Also on the Closing Date, Simon and Porter are entering into a new
Voting Trust Agreement with the Registrant and DeSantis (the "Voting Trust
Agreement"). Pursuant to the Voting Trust Agreement, all of the shares of Common
Stock now owned by Simon and Porter and any they may acquire in the future shall
be deposited into the Voting Trust until expiration of the Voting Trust or the
sale of the shares of the Common Stock at any time by Simon and Porter to an
unaffiliated purchaser. The initial Voting Trustee under the Voting Trust is to
be DeSantis.
Prior to the Closing Date, DeSantis beneficially owned 533,900 shares
of Common Stock (not including 51,600 shares owned by the Diagnostek Charitable
Foundation, for which DeSantis serves as Voting Trustee, with respect to which
DeSantis has disclaimed beneficial ownership), which represents 11.5% of the
outstanding Common Stock; Miller beneficially owned 307,900 shares of Common
Stock, which represents 6.6% of the outstanding Common Stock; and Villanueva
beneficially owned 66,200 shares of the Common Stock, which represents 1.4% of
the outstanding Common Stock. As a group such individuals beneficially owned
908,000 shares of Common Stock, which represents 19.6%.
On the Closing Date the principal executive offices of the Registrant
are moving to The Bradbury Court, 215 Central Avenue, N.W., 3-B, Albuquerque,
New Mexico 87102.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
On September 18, 1996, AutoLend Group, Inc. entered into a Stock
Purchase Agreement for the sale of its subsidiary, AutoLend IAP, Inc. ("IAP").
The following unaudited pro forma consolidated balance sheet as of
March 31, 1996, and the unaudited pro forma consolidated statements of earnings
for the three month period ended June 30, 1996 and the fiscal year ended March
31, 1996 have been prepared by adjusting the Company's historical consolidated
balance sheet as of June 30, 1996 and consolidated statements of earnings for
the three month period ended June 30, 1996 and fiscal year ended March 31, 1996.
The historical financial statements have been adjusted to give effect to the
disposition of IAP as if the disposition had occurred as of June 30, 1996 for
the unaudited pro forma consolidated balance sheet and as of April 1, 1996 and
1995 for the unaudited consolidated statements of earnings for the three month
period ended June 30, 1996 and the fiscal year ended March 31, 1996,
respectively. Such pro forma
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<PAGE>
adjustments are described in the accompanying notes to the pro forma
consolidated financial statements which should be read in conjunction with the
pro forma consolidated financial statements.
The unaudited pro forma consolidated financial statements do not
purport to be indicative of the actual financial position or results of
operations that would have been achieved had the transactions been consummated
prior to the periods in which they were completed, or that might be attained in
the future.
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Unaudited Pro forma
June 30, Pro forma June 30,
1996 Adjustments 1996
------------------ ----------- -------
<S> <C> <C> <C>
Assets:
Cash and cash equivalents $ 4,561,399 $ 5,165,585 (A) $9,726,984
Securities available for sale 175,000 1,000,000 (B) 1,175,000
Accounts receivable - matured insurance policies 148,102 148,102
Installment contracts receivable 10,062,914 10,062,914
Allowance for credit losses (3,020,776) (3,020,776)
Collateral owned 819,268 819,268
------------ -------------
Installment contracts receivable - net 7,861,406 7,861,406
------------- -------------
Purchased insurance policies, face value of $2,126,198 1,462,583 1,462,583
Accrued interest receivable on investments 5,535 5,535
Debt issuance costs, less accumulated amortization
of $3,337,418 295,987 295,987
Fixed assets, less accumulated depreciation of $147,770 323,361 323,361
Net assets of discontinued operation 6,087,777 (6,087,777) (C) --
Other 376,224 420,000 (D) 796,224
$ 21,297,374 $ 497,808 $ 21,795,182
=========== ============ ============
Liabilities:
Accounts payable and accrued liabilities $ 1,090,848 $ $ 1,090,848
Accrued acquisition costs 656,542 656,542
Accrued interest expense 1,635,057 1,635,057
Convertible debentures 22,050,000 22,050,000
------------ -------------
Total liabilities 25,432,447 25,432,447
------------ =============
Stockholders' Equity:
Preferred stock, $.002 par value. Authorized
5,000,000 shares; none issued or outstanding
Common stock, $.002 par value. Authorized
40,000,000 shares; issued 4,634,530 shares 9,269 9,269
Additional paid-in capital 5,946,904 5,946,904
Accumulated deficit (10,091,246) 497,808 (E) (9,593,438)
------------- ----------- -----------
Total stockholders' equity (4,135,073) 497,808 (3,637,265)
------------ ----------- ------------
$ 21,297,374 $ 497,808 $ 21,795,182
============ ============ ============
</TABLE>
See notes to pro forma consolidated balance sheet as of June 30, 1996.
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Balance Sheet
June 30, 1996
(unaudited)
A) To record the net estimated cash proceeds received from the sale
transaction.
B) To record the convertible preferred stock acquired as consideration for
the sale of IAP.
C) Elimination of assets of IAP, previously recorded as net assets of
discontinued operations.
D) To record prepaid consulting fees for services to be performed by
departing management over the next three years.
E) Net effect on accumulated earnings resulting from the expected gain on
the sale transaction.
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Three months ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Unaudited Pro forma
June 30, Pro forma June 30,
1996 Adjustments 1996
-------------- ----------- ------------
<S> <C> <C> <C>
Revenues:
Finance charges on installment contracts $ 616,639 $ $ 616,639
----------- ------------
Revenues from matured insurance policies -- --
Total revenues 616,639 616,639
Cost of matured insurance policies -- --
----------- ------------
Net revenues 616,639 616,639
General and administrative expenses 1,625,995 (141,218)(A) 1,484,777
Provision for credit losses 1,921,292 1,921,292
----------- ----------- ------------
Operating earnings (loss) (2,930,648) 141,218 (2,789,430)
----------- ----------- ------------
Other income:
Interest income on investments 22,223 22,223
Other 126,424 126,424
----------- ------------
Total other income 148,647 148,647
----------- ------------
Other expense:
Interest expense (537,228) (537,228)
Writeoff of fixed assets (568,649) (568,649)
----------- ------------
Total other expense (1,105,877) (1,105,877)
----------- ------------
Loss before income taxes and discontinued operations (3,887,878) 141,218 (3,746,660)
Benefit from income taxes -- -- --
----------- ----------- ------------
Loss before discontinued operations (3,887,878) 141,218 (3,746,660)
Discontinued operations:
Earnings (loss) from operations of discontinued
subsidiary 69,725 (210,943)(B) (141,218)
Gain on sale of subsidiary -- 497,808 (C) 497,808
----------- ----------- ------------
Earnings (loss) on discontinued operations 69,725 286,865 356,590
----------- ----------- ------------
Net Income (loss) $(3,818,153) $ 428,083 $ (3,390,070)
=========== =========== ============
Loss per share before discontinued operations $ (0.84) $ 0.03 $ (0.81)
Earnings (loss) per share on discontinued operations 0.02 0.06 0.08
----------- ----------- ------------
Net earnings (loss) per common share $ (0.82) $ 0.09 $ (0.73)
=========== =========== ============
Weighted average number of common and common
equivalent shares outstanding 4,634,530 4,634,530 4,634,530
=========== =========== ============
</TABLE>
See notes to pro forma consolidated statement of operations for the three
months ended June 30, 1996.
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Statement of Operations
Three months ended June 30, 1996
(unaudited)
A) To record a reduction in certain estimated general and administrative
expenses of $141,218 which have been allocated to IAP based on management's
best estimation the portion of such expenses attributable to IAP.
B) Elimination of earnings (loss) of IAP, previously recorded as earnings
(loss) from operations of discontinued subsidiary, and record the estimated
general and administrative expenses of $141,218 allocated to the operations
of IAP based on management's best estimation of the portion of such
expenses attributable to IAP.
C) To record the gain on the sale of IAP totalling approximately $497,808
consisting of $1,000,000 preferred stock offset by the remaining balance of
employment agreements of departing management totalling $502,192.
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
Year ended March 31, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical Pro forma Pro forma
1996 Adjustments 1996
---------- ----------- ---------
Revenues:
<S> <C> <C> <C>
Finance charges on installment contracts $ 7,808,369 $ $ 7,808,369
Revenues from matured insurance policies 1,326,706 1,326,706
Total revenues 9,135,075 9,135,075
Cost of matured insurance policies 784,848 784,848
Net revenues 8,350,227 8,350,227
General and administrative expenses 9,914,990 (146,243)(A) 9,768,747
Provision for credit losses 8,839,461 8,839,461
------------ ------------- ------------
Operating earnings (loss) (10,404,224) 146,243 (10,257,981)
------------ ------------- ------------
Other income:
Interest income on investments 603,356 603,356
Gain on sale of viatical trademarks 300,000 300,000
Other 65,337 65,337
------------ ------------- ------------
Total other income 968,693 968,693
------------ ------------- ------------
Other expense:
Interest expense (3,289,876) (3,289,876)
Loss on sale of viatical portfolio, net of
amortization of $1,844,259 (392,063) (392,063)
Realized gains (losses) on sales of marketable
securities, net 1,137 1,137
------------ ------------- ------------
Total other expense (3,680,802) (3,680,802)
------------ ------------- ------------
Income (loss) before income taxes, extraordinary item and
cumulative effect of change in accounting principle (13,116,333) 146,243 (12,970,090)
Benefit from income taxes 4,935,676 -- 4,935,676
------------ ------------- ------------
Income (loss) before discontinued operations, extraordinary item
and cumulative effect of change in accounting principle (8,180,657) 146,243 (8,034,414)
Discontinued operations -
Earnings (loss) from operations of discontinued subsidiary,
net of applicable income tax benefit (47,595) (98,648)(B) (146,243)
Gain on sale of subsidiary -- 497,808 (C) 497,808
------------ ------------- ------------
Earnings (loss) on discontinued operations (47,595) 399,160 351,565
------------ ------------- ------------
Income (loss) before extraordinary item and cumulative effect
of change in accounting principle (8,228,252) 545,403 (7,682,849)
Extraordinary item - gain on early extinguishment of debt,
net of amortization of deferred costs of $947,877 and
income taxes of $4,847,153 7,306,970 -- 7,306,970
------------ ------------- ------------
Income (loss) before cumulative effect of change in accounting
principle (921,282) 545,403 (375,879)
Cumulative effect of change in accounting principle, net
of income taxes of $117,239 176,735 -- 176,735
------------ ------------- ------------
Net Income (loss) $ (744,547) $ 545,403 $ (199,144)
============ ============= ============
Loss per share before discontinued operations, extraordinary item
and cumulative effect of change in accounting principle $ (1.77) $ 0.03 $ (1.73)
Loss per share on discontinued operations (0.01) 0.09 0.07
------------ ------------- ------------
Loss per share before extraordinary item and cumulative
effect of change in accounting principle (1.78) 0.12 (1.66)
Earnings per share on extraordinary item-gain on early
extinguishment of debt 1.58 -- 1.58
------------ ------------- ------------
Loss per share before cumulative effect of change
in accounting principle (0.20) 0.12 (0.08)
Earnings per share on cumulative effect of change in
accounting principle 0.04 -- 0.04
------------ ------------- ------------
Net loss per common share $ (0.16) $ 0.12 $ (0.04)
============ ============= ============
Weighted average number of common and common
equivalent shares outstanding 4,634,530 4,634,530 4,634,530
============ ============= ============
</TABLE>
See notes to pro forma consolidated statement of operations for the
year ended March 31, 1996
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<PAGE>
AUTOLEND GROUP, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Statement of Operations
Year ended March 31, 1996
(unaudited)
A) To record a reduction in certain estimated general and administrative
expenses of $146,243 which have been allocated to IAP based on management's
best estimation of the portion of such expenses attributable to IAP.
B) Elimination of earnings (loss) of IAP, previously recorded as earnings
(loss) from operations of discontinued subsidiary, and record the estimated
general and administrative expenses of $146,243 allocated to the operations
of IAP based on management's best estimation of the portion of such
expenses attributable to IAP.
C) To record the gain on the sale of IAP totalling approximately $497,808,
consisting of $1,000,000 preferred stock offset by the remaining balance of
employment agreements of departing management totalling $502,192.
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<PAGE>
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 thereunto duly authorized.
AUTOLEND GROUP, INC.
By: /s/ Steve Simon
-----------------------
Name: Steve Simon
Title: President
Date: September 18, 1996
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<PAGE>
EXHIBIT INDEX
2.1 Stipulation and Agreement of Compromise, Settlement and Release between
Nunzio P. DeSantis, Courtlandt G. Miller and Vincent Villanueva as
Plaintiffs, Steve Simon, Stephen Rafael and Elie Housman as Defendants,
and AutoLend Group, Inc., a Delaware corporation, as Nominal Defendant,
dated May 3, 1996, including exhibits thereto.
4.1 See Exhibit 2.1 above.
24 Power of Attorney (see signature page).
27 Financial Data Schedule.
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<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
)
NUNZIO P. DESANTIS, COURTLANDT G. MILLER )
and VINCENT VILLANUEVA, )
)
Plaintiffs, )
)
v. ) C.A. No. 17475
)
STEVE SIMON, STEPHEN RAPHAEL and ELIE )
HOUSMAN, )
)
Defendants. )
)
and )
)
AUTOLEND GROUP, INC., a Delaware corporation. )
)
Nominal Defendant. )
)
- ----------------------------------------------------------------------
</TABLE>
STIPULATION AND AGREEMENT
OF COMPROMISE, SETTLEMENT AND RELEASE
The parties to the above-captioned action, by and through their respective
attorneys, have entered into the following Stipulation and Agreement of
Compromise, Settlement and Release (the "Stipulation of Settlement" or
"Stipulation") subject to the approval of the Court:
WHEREAS,
A. Plaintiffs, Nunzio P. DeSantis ("DeSantis"), Courtlandt G. Miller
("Miller") and Vincent Villanueva ("Villanueva"), instituted this action
asserting individual claims, and derivative claims on behalf of AutoLend Group,
Inc. ("AutoLend"), against defendants, Steven Simon ("Simon"), Stephen Raphael
("Raphael") and Elie Housman ("Housman").
<PAGE>
B. Plaintiffs beneficially own in excess of 20 percent of the outstanding
voting stock of AutoLend and, at various times, each of the plaintiffs was a
director of Autolend. DeSantis also previously served as Chairman of the Board
and Chief Executive Officer of AutoLend, and Miller was its Corporate Secretary.
C. On or about October 10, 1991, AutoLend was incorporated in the State of
Delaware as CAPX Corporation ("CAPX"). CAPX was a wholly-owned subsidiary of
CapRx Corporation ("CapRx"), which was incorporated in Bermuda on May 23, 1989.
D. In 1991, CapRx sold $55,000,000 in aggregate principal amount of 9.5%
convertible subordinated debentures maturing on September 19, 1997 (the
"Debentures") which resulted in net proceeds to CapRx of $51.4 million. The
Debentures are convertible into common stock of AutoLend at a rate of one share
per $12.25 principal amount of Debentures.
E. In or about April 1991, CapRx entered the viatical settlement business,
when LB NM, Inc. ("LB NM"), its wholly-owned subsidiary, acquired certain assets
of Living Benefits Inc. ("LBI") and covenants not to compete from the former
owners of LBI. The viatical settlements business involves purchasing and
maintaining portfolios of life insurance
policies from individuals facing life-threatening illnesses for less than the
face value, and then redeeming those policies at full value upon the death of
the insured.
F. On or about February 26, 1992, CapRx merged with CAPX (the "Merger") and
CAPX was the surviving corporation. (The surviving company is sometimes
hereinafter referred to as the "Company"). The Debentures became obligations of
the Company upon the merger in February, 1992, but are subordinated to any
current or future indebtedness of the Company.
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<PAGE>
G. The Company's common stock has been and is currently traded on the
Boston Stock Exchange and the Nasdaq SmallCap Market. There presently are
approximately 4,634,530 shares of common stock outstanding.
H. On or about April 6, 1993, the Company, through its wholly-owned
subsidiary, American Life Resources Group, Inc. ("ALRG"), acquired certain
operating assets of American Life Resources, Inc. ("American Life"), which was
also engaged in the viatical settlements business. Defendant Simon and his wife
Helen Porter ("Porter") were the sole stockholders of American Life, with Simon
serving as its CEO and Porter as the Secretary and Treasurer.
I. In connection with the acquisition of American Life, ALRG entered into
five year employment agreements with Simon and Porter (the "Employment
Agreements"). Simon was employed as President, Chief Operating Officer and
director of ALRG at a minimum salary of $125,000 per year, adjusted annually.
Porter was employed as Executive Vice President of ALRG at a minimum salary of
$75,000 per year, adjusted annually. In
May, 1993, Simon was elected as a director of the Company and appointed its
President. As of April 24, 1996, Simon's salary was $175,000 per year and
Porter's was $150,000 per year.
J. The Initial Employment Agreements provided for the granting of an
aggregate 600,000 warrants to Simmon and Porter to purchase the common stock of
the Company. In June, 1993, the 600,000 warrants were canceled and, in exchange,
Simon was granted options to purchase 350,000 shares of common stock of the
Company, exercisable at a price of $4.25 per share, the then market value, and
vesting over a four year period. In or about February, 1995, Porter was granted
options to purchase 300,000 shares of common stock of the Company, exercisable
at a price of $2.00 per share, the then market value, vesting over a two year
period.
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<PAGE>
K. For the fiscal year ended March 31, 1993, the Company's net earnings
were $311,093 and its total stockholder equity was approximately $4,888,728.
L. In September, 1993, DeSantis resigned as Chief Executive Officer of the
Company and was replaced by Simon.
M. In March 1994, under Simon's direction, the Company formed AutoLend
Corporation (hereinafter "AC") to engage in the installment contract receivables
business, a specialty finance business, which entails purchasing, financing,
servicing and collecting retail installment loan contracts originated by
independent and franchised used automobile dealers. Simon was the initial
President and Chief Operating Officer of AC and Porter was the Vice
President of AC. Beginning in or about May, 1994, AC made several bulk purchases
of used automobile loan portfolios.
N. In May, 1994, DeSantis resigned from the Board of Directors of the
Company. In July, 1994, Miller resigned as Secretary of the Company and from its
Board of Directors and Villanueva resigned as a director of the Company.
O. In July, 1994, Simon was named Chairman of the Board to replace
DeSantis. Porter was named Executive Vice President and Chief Operating Officer.
P. To implement its plan to reduce its dependence on the viatical
settlement business, on or about July 29, 1994, the Company sold certain assets
of its viatical settlements business to National Capital Benefits Corporation
("NCBC"), a subsidiary of National Capital Management Corporation ("NCMC"). NCBC
paid $125,000 and issued 100,000 shares of the common stock of NCMC to the
Company for these assets. The Company has an option to sell these shares back to
NCMC within 24 months of the sale, at a price of $1.75 per share (subsequently
adjusted following a one for three reverse stock split). In addition, NCBC
agreed
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<PAGE>
to pay a royalty to the Company upon the maturing of all policies
purchased by NCBC during the next four years. Such royalty agreement was
modified after NCBC's stock split to provide for a discounted payment prior to
maturity of the policies. NCBC acquired the Company's proprietary client
management software system, all "work in process" and the trade names of both LB
NM and ALRG. Along with certain other assets, LB NM and ALRG retained their
existing accounts receivable and their inventory of owned policies.
Q. On or about February 6, 1995, the Company changed its name to AutoLend
Group, Inc.
R. To further its automobile financing business, in February, 1995, the
Company commenced an "Inventory Assistance Program" ("IAP"), through its
wholly-owned subsidiary AutoLend IAP, Inc. ("AIAP"). The IAP program consisted
of providing exclusive short-term financing to selected used car dealers for
purchases of used automobiles at regional automobile auctions.
S. On May 8, 1995 and July 18, 1995, ALRG and LB NM entered into certain
agreements with Viaticus Inc. ("Viaticus"), a subsidiary of the CNA Insurance
Companies. ALRG and LB NM assigned to Viaticus certain insurance policies
carried on the Company's consolidated balance sheet. The policies assigned had a
total book value of approximately $18.5 million for which Viaticus is obligated
to pay to LB NM and ALRG a combined total of approximately $20.2 million.
Payment for each policy is to be made after Viaticus receives the insurer's
acknowledgement of the assignment of the policy to it prior to the insured's
death. As of April 24, 1996, Viaticus had fulfilled its payment obligations
under the agreements.
T. In June, 1995, the Company hired Charley A. Pond ("Pond") as its
President and Chief Financial Officer. Mr. Pond was also elected as a Director.
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<PAGE>
U. At the 1995 annual meeting of the stockholders of the Company held on
September 15, 1995, the stockholders elected the directors nominated by
management. Those directors who were elected were Simon (serving as a director
since May, 1993). Raphael (serving as a director since March, 1995) and Housman
(serving as a director since June, 1995), as well as Pond (serving as a director
since June, 1995), Philip J. Vitale, M.D. ("Vitale") (serving as a director
since February, 1992), Marcel Fournier ("Fournier") (serving as a director since
March, 1995), Paul Gregory ("Gregory") (serving as a director since September,
1994) and Dan Porlyes ("Porlyes") (serving as a director since September, 1994).
V. For the first nine months of 1995, the Company experienced a $9,758,660
operating loss, compared with operating earnings of $2,411,252 for the first
nine months of 1994.
W. In the Quarterly Report on form 10-Q management of the Company filed
with the SEC for the quarter ended September 30, 1995, the Company reported that
it had increased its loss ratio on the automobile loan portfolios to 33%.
X. As of fiscal year end 1995, approximately 57.5% of the receivables in
the Company's auto finance business were 30 or more days past due, and,
consequently, AutoLend established reserves for potential credit losses of
$8,987.89.
Y. Herbert Sillman ("Sillman") (serving as a director since September,
1994) died in or about December 1995. By December 11, 1995, Pond, Fournier,
Porlyes and Gregory had resigned as directors of the Company, leaving as
directors Simon, Raphael, Housman and Vitale.
Z. On or about December 12, 1995, Drew Sakson ("Sakson") and Robert Granoff
("Granoff") were appointed by the Board to fill the vacancies created by two of
the director resignations.
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<PAGE>
AA. On or about December 15, 1995, Raphael tendered his resignation from
the Board of Directors and, on December 22, 1995, James Newman ("Newman") was
appointed by the remaining directors to fill the vacancy created by Raphael's
resignation.
BB. On or about December 27, 1995, Housman tendered his resignation from
the Board of Directors of the Company.
CC. DeSantis, Miller and Villanueva, as the largest group of shareholders
of the Company, became dissatisfied with the financial performance of the
automobile financing business including the increases in the loss ratios for the
installment contract receivables, the large number of director resignations and
plaintiffs' perception that the replacement directors were affiliated with
Simon. Plaintiffs believed that the Company should seek to develop alternative
lines of business.
DD. Plaintiffs concluded that immediate corrective action must be taken to
improve the Company's financial condition and threatened to initiate a proxy
contest.
EE. On or about December 20, 1995, DeSantis, Miller and Villanueva, as the
beneficial holders of in excess of 10% of the outstanding common stock of the
Company, demanded pursuant to Section 2 of the Company's Bylaws, that the Board
of Directors call a special meeting of the stockholders to consider and vote
upon the election of a new slate of directors.
FF. By the end of 1995, Simon had indicated to his fellow directors of the
Company that he was willing to acquire AIAP on terms to be negotiated.
Plaintiffs opposed the potential acquisition of AIAP by Simon so long as that
acquisition was negotiated by the existing Board of Directors, the majority of
which had not been elected by the shareholders.
- 7 -
<PAGE>
GG. Additionally, existing management intended to continue repurchasing
outstanding Debentures. Existing management of the Company believed that
continued repurchases were in the interest of the Company and that prior
purchases had been favorable to the Company in that such repurchases were at
prices approximately 50% below their stated principal amount. Plaintiffs were
opposed to any further repurchases; they believed that the cash of the Company
being spent to repurchase Debentures should instead be used to fund operations
and to facilitate what it perceived to be the Company's necessary expansion into
an alternative business.
HH. As plaintiffs believed that the Company might repurchase further
Debentures and sell AIAP to Simon before the stockholders' meeting they had
demanded could be held, on or about December 26, 1995, they commenced the
above-captioned action, individually and derivatively on behalf of the Company,
seeking to temporarily, preliminarily and, if necessary, permanently, enjoin
management from repurchasing Debentures and selling AIAP to Simon until a
special meeting of the shareholders could be held. In addition, plaintiffs
sought to remove Simon as the voting trustee of a Voting Trust, the creation of
which the plaintffs dispute and to bar Simon from voting plaintiffs' shares.
Plaintiffs also sought damages to the extent defendants proceeded with these
actions before injunctive relief could be obtained and for any breaches of
fiduciary duty, gross mismanagement and/or gross negligence that may have
occurred.
II. Defendants deny all claims of wrongdoing. In addition, Simon
affirmatively claims to have taken steps during his tenure as Chief Executive
Officer to attempt to improve the Company's financial performance in a difficult
economic environment for the automobile finance business. For example, Simon
claims to have reduced substantial amount of overhead and to have retained a
third party servicer with respect to the Company's automobile loan portfolio,
which retention, Simon asserts, proved very favorable for the Company. Moreover,
existing
- 8 -
<PAGE>
management claims that the repurchase of Debentures was an appropriate
and beneficial use of Company funds and that Simon would purchase AIAP at a fair
price.
JJ. Soon after the filing of this action, plaintiffs and defendants entered
into extensive, arms-length negotiations concerning a change in existing
management, the composition of the Board of Directors of the Company pending the
next annual stockholders' meeting and the resolution of all claims between the
parties, including the claims in this action.
KK. Defendants agreed that they would not cause the Company to repurchase
any Debentures or sell AIAP to Simon during the course of negotiations.
LL. As a result of these negotiations, the parties have agreed to the
settlement embodied in this Stipulation of Settlement and the agreements
attached hereto. Plaintiffs, though their attorneys, entered into this
Stipulation of Settlement because (i) it provides for a change of management and
the right to remove all of the existing directors; (ii) no further repurchases
of Debentures will occur until such time as the Company's new management may
determine appropriate, (iii) the actions plaintiffs sought to enjoin will be
prevented by the Stipulation of Settlement, with AIAP being sold to Simon only
after arms-length negotiations, utilizing an independent appraisal of its fair
value, (iv) it would not be appropriate to pursue claims to recover damages for
breach of fiduciary duties, gross negligence or gross mismanagement as
defendants did not, after the filing of the complaint in this action, proceed
with the transactions plaintiffs sought to enjoin and defendants will likely
argue that their decisions were legitimate exercises of business judgment; (v)
plaintiffs were permitted to conduct a due diligence investigation of the
Company, over a period of five days, prior to entering into this Stipulation and
will be afforded the opportunity to conduct another five days of confirmatory
due diligence immediately prior to the closing of this transaction; and (vi)
Simon
- 9 -
<PAGE>
has made representations in certain of the collateral documents which
provide further assurance to the Company and plaintiffs of the prudence of this
settlement. Accordingly, plaintiffs, upon advice of their counsel, and after
having conducted a due diligence investigation, have concluded that the
settlement as reflected in this Stipulation of Settlement is fair, reasonable
and adequate and in the best interests of the Company and its shareholders.
MM. Defendants vigorously deny any wrongdoing or liability with respect to
any and all of the facts and claims alleged in this action but consider it
desirable that this action be settled and dismissed because such settlement and
dismissal will avoid the substantial expense, inconveniences and distraction of
continued litigation, will avoid the possible expense and distraction of a proxy
contest between plaintiffs and defendants, will finally put to rest the claims
raised or which could have been raised in this litigation and will facilitate
the consummation of a transaction that is in the best interests of the Company
and its shareholders.
NOW THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and among plaintiffs
and defendants, subject to the approval of the Delaware Court of Chancery (the
"Court") and pursuant to Rule 23.1 of the Rules of the Court, as follows:
1. DISCONTINUANCE OF ACTION: The parties shall file with the Court
this Stipulation and seek the entry of a Final Order and Judgment (as set forth
in paragraph 23 below), which, among other things, dismisses this action with
prejudice.
2. LETTER AGREEMENT: As an inducement to execute and deliver this
Stipulation, Simon, Porter, the Company and the Plaintiffs shall enter into a
Letter Agreement, in the form of Exhibit 1 attached hereto.
3. RELEASES: (a) On or after the date on which the Final Order and
Judgment approving the Settlement becomes final and no longer subject to appeal
or review, whether by
- 10 -
<PAGE>
exhaustion of any possible appeal, lapse of time or otherwise (the "Approval
Date") and prior to the Closing Date (as defined in paragraph 15 herein), the
following parties shall execute releases as follows and then shall deliver the
executed releases at the Closing (as described in paragraph 15 herein) to
Kramer, Levin, Naftalis & Frankel ("Kramer, Levin") at which time Kramer, Levin
shall release to each such delivering party copies of all other releases
delivered pursuant to this Section 3.
(i) A general release by DeSantis in the form of Exhibit 2
attached hereto;
(ii) A general release by Miller in the form of Exhibit 3
attached hereto;
(iii) A general release by Villanueva in the form of Exhibit 4
attached hereto;
(iv) A general release by Simon in the form of Exhibit 5
attached hereto;
(v) A general release by Porter in the form of Exhibit 6
attached hereto;
(vi) A general release by Raphael in the form of Exhibit 7
attached hereto;
(vii) A general release by Housman in the form of Exhibit 8
attached hereto;
(viii) A general release by AutoLend in the form of Exhibit 9
attached hereto;
(ix) A general release by Newman in the form of Exhibit 10
attached hereto; and
(x) A general release by Sakson in the form of Exhibit 11
attached hereto;
(xi) A general release by Granoff in the form of Exhibit 12
attached hereto;
- 11 -
<PAGE>
(xii) A general release by Vitale in the form of Exhibit 13
attached hereto.
(b) Prior to or following the Approval Date, the following parties
shall execute releases as follows and shall deliver them to Kramer, Levin at
which time Kramer, Levin shall release to each such delivering party copies of
all other releases delivered pursuant to this Section 3, provided, however, that
this Agreement shall be effective regardless of the failure of any such party or
parties to execute and deliver a release:
(i) A general release by Carmignani in the form of Exhibit 14
attached hereto;
(ii) A general release by Fitzgibbons in the form of Exhibit 15
attached hereto;
(iii) A general release by the estate of Sillman in the form of
Exhibit 16 attached hereto;
(iv) A general release by Gregory in the form of Exhibit 17
attached hereto;
(v) A general release by Poryles in the form of Exhibit 18
attached hereto; and
(vi) A general release by Fournier in the form of Exhibit 19
attached hereto.
4. REPURCHASE OF BONDS: AutoLend agrees not to purchase any of its
Debentures prior to the Closing Date. DeSantis, Miller and Villanueva jointly
and not severally agree to hold harmless and indemnify the officers and
directors of the Company and the Company from any claims, actions, suits,
damages, losses, etc., resulting from not repurchasing the Company's outstanding
Debentures. Simon represents and warrants to each of the Company, DeSantis,
Miller and Villanueva that the Company has not entered into any agreement,
whether written or oral, which currently or in the future obligates the Company
to purchase any Debentures.
- 12 -
<PAGE>
5. RESIGNATIONS: On the Closing Date, Simon and Porter will deliver
their letters of resignation in the form of Exhibits 20 and 21 attached hereto
resigning their directorships and officerships with the Company, and with each
of the Company's subsidiaries, other than AIAP, and those resignations shall be
accepted.
6. CANCELLATION OF EMPLOYMENT CONTRACTS: On the Closing Date, the
Company shall pay to Simon and Porter the remaining sums due each of them
according to the terms of their respective employment agreements, $25,000 of
which payments shall be tendered by the Company on behalf of Simon and Porter to
the Escrow Agent (the "Escrow Agent") under that certain Escrow Agreement dated
as of the Closing Date among the Company, Simon, Porter and the Escrow Agent
(the "Tax Escrow Agreement") in the form of Exhibit 22 attached hereto, in
cancellation of their respective employment contracts, and Simon and Porter, in
consideration of such payments, relinquish their rights under such agreements.
The Company shall not withhold any taxes in respect of such payments, and Simon
and Porter shall be responsible for any income taxes due in respect of such
payments and shall indemnify the Company for any penalties or interest assessed
against the Company as a result of its not withholding taxes in respect of such
payments pursuant to the terms of the Indemnity Agreement in the form of Exhibit
23 attached hereto.
7. BOARD OF DIRECTORS: On the Closing Date, the Company's Board of
Directors shall elect DeSantis as a Director, Chairman of the Board and Chief
Executive Officer of the Company. Effective upon such Closing Date, each of the
remaining directors will provide letters of resignation; the resignations of the
directors Granoff, Newman, and Sakson shall be accepted. Except as otherwise
provided in Section 5 hereof, the resignation of the other directors may be
accepted or not.
- 13 -
<PAGE>
8. NEW STOCK OPTIONS AND PUT ESCROW AGREEMENT: On the Closing Date,
options to purchase 400,000 and 125, 000 shares of the Company's common stock
shall be granted to Simon and Porter, respectively, pursuant to Stock Option
Agreements in the form of Exhibits 24 and 25, respectively. Such grants have
been authorized by the Board of Directors of the Company. In addition, IAIP
shall deposit $250,000 with the Escrow Agent pursuant to the Put Escrow
Agreement in the form of Exhibit 26 attached hereto.
9. VOTING TRUST: On the Closing Date, Simon and Porter shall enter
into a Voting Trust, in the form of Exhibit 27 attached hereto in which shall be
deposited all
shares of the common stock of the Company that Simon and Porter now own, or may
in the future acquire. The Voting Trust does not restrict the sale of shares of
the common stock of the Company at any time by Simon and Porter to an
unaffiliated purchaser. The Trustee of the Voting Trust shall be selected by
DeSantis.
10. CONSULTING AGREEMENTS: On the Closing Date, Simon and Porter shall
enter into Consulting Agreements with the Company in the form of Exhibit 28
attached hereto. On the Closing Date, the Company shall pay to Simon and Porter
the entire sums due Simon and Porter under their respective Consulting
Agreements. The Company acknowledges that Simon and Porter will serve as
independent contractors under the Consulting Agreements, that the payments due
under this Section do not constitute wages, and that AutoLend will not withhold
taxes on such amounts.
11. AIAP STOCK: Prior to the Closing Date, AIAP shall have issued to
the Company forty shares of preferred stock subject to the terms of a
Certificate of Designation in the form of Exhibit 29 attached hereto. On the
Closing Date, the Company, Simon, Porter and an entity to be designated by Simon
and Porter shall enter into a Stock Purchase Agreement in
- 14 -
<PAGE>
the form of Exhibit 30 attached hereto, pursuant to which all common stock of
AIAP shall be sold to an entity designated by Simon and Porter.
12. AIAP RECEIVABLES: Any outstanding receivables of AIAP from loans
shall be paid to the Company on the Closing Date.
13. AIAP FINANCING AND EQUITY: Prior to the Closing Date, AIAP shall
be in receipt of commitments for $5 million in senior financing and at least $2
million in equity, such amounts to be funded at the closing.
14. AIAP INTANGIBLES: On the Closing Date, the Company shall execute
the assignment in the form of Exhibit 31 attached hereto and the license in the
form of Exhibit 32 attached hereto.
15. THE CLOSING: On the Approval Date, documents and agreements in the
forms of the Exhibits attached hereto shall be delivered to the parties for
execution. On the Approval Date, Kramer, Levin shall schedule after consulting
with counsel to Messrs, DeSantis, Miller and Villanueva as to such counsel's
availability, a closing of the transactions provided for under the Stock
Purchase Agreement (the "Closing"), at its offices, to be held absent a failure
to satisfy any of the closing conditions set forth in the Stock Purchase
Agreements, no earlier than five days after the Approval Date nor later than ten
days therefrom, the date of such Closing being referred to herein as the
"Closing Date." At the Closing, the executed exhibits shall be delivered, and
the payments recited in paragraphs 6, 8, 10 and 16 shall be made. Simon shall
deliver to the Company his affidavit in the form of Exhibit 33 which shall be
dated as of the Closing Date.
16. ATTORNEYS' FEES: At the settlement hearing for this action (as
described in paragraph 21 below), the attorneys for plaintiffs in this action
will apply to the Court for an
- 15 -
<PAGE>
award of attorneys' fees and expenses not to exceed $100,000, payable by
AutoLend. Defendants agree that they will not oppose said application. If said
application is approved by the Court, it will be paid by AutoLend to plaintiffs'
attorneys at the Closing.
17. TOTAL AGREEMENT: This Stipulation of Settlement contains the
entire understanding of the parties hereto, supersedes all prior agreements and
understandings between them, and shall not be changed, modified, amended,
extended, terminated, waived or discharged except by an instrument in writing
signed by the parties hereto.
18. COUNTERPARTS: This Stipulation of Settlement may be executed in
two or more counterparts, each of which shall be deemed an original. The
counterparts may be delivered by telecopier.
19. CHOICE OF LAW; JURISDICTION: This Stipulation of Settlement shall
in all respects be interpreted, enforced, governed and construed by and under
the laws of the State of Delaware, without regard to conflict of law principles.
The parties to this Stipulation of Settlement agree to submit to the
jurisdiction of the courts of the State of Delaware for the purpose of enforcing
this Stipulation of Settlement.
20. NO ADMISSIONS: Neither the execution and delivery of this
Stipulation of Settlement nor the performance of any acts in connection herewith
shall be construed at any time or place to be an admission by any party hereto
that it performed or failed to perform any act in violation of any law or
regulation or the rights of any other party or person whatsoever or that any
claim made in any action is valid. Neither this Stipulation of Settlement nor
the Releases attached as Exhibits 2-19 to this Stipulation of Settlement shall
be construed, offered or received in evidence as an admission or concession of
any liability or wrongdoing by any party hereto.
- 16 -
<PAGE>
21. SUBMISSION OF SCHEDULING ORDER: As soon as practical after this
Stipulation of Settlement has been executed, counsel for the parties shall
submit this Stipulation of Settlement to the Court for approval and shall move
for entry by the Court of an Order substantially in the form annexed hereto as
Exhibit A (the "Scheduling Order") which shall provide, among other things, for
a date for a hearing with respect to the proposed settlement and for notice of
the proposed settlement to be given to the stockholders of the Company. The form
of notice submitted to the Court shall be substantially in the form of Exhibit B
hereto. The record date for determining stockholders entitled to receive such
notice shall be a date not more than seven days prior to the mailing of a
notice.
22. PAYMENT OF COSTS: The Company shall pay the costs and expenses
incurred in providing notice of the settlement to its shareholders irrespective
of whether the settlement is approved by the Court. The Company, or its
designated agent, shall mail the notice in accordance with the Scheduling Order.
23. ENTRY OF FINAL ORDER AND JUDGMENT: If the settlement is approved
by the Court following such hearing, the parties shall jointly request the Court
to enter a Final Order and Judgment substantially in the form attached hereto as
Exhibit C.
24. ADMINISTRATION OF SETTLEMENT: The administration of the settlement
and the determination of all disputed questions of law or fact relating to this
Stipulation of Settlement or the terms and conditions thereof shall be within
the authority of the Court; and the Court shall retain jurisdiction over the
parties in connection therewith and for such other matters as may properly come
before it.
25. EXTENSION OF TIME: Without further order of the Court, the parties
may agree to a reasonable extension of time to carry out any of the provisions
of this Stipulation.
- 17 -
<PAGE>
26. EXHIBITS: Any exhibits attached hereto are incorporated herein by
reference as if set forth herein verbatim, and the terms and provisions of all
exhibits are expressly made part of this Stipulation.
27. AUTHORIZATION: Each of the attorneys executing the Stipulation on
behalf of one or more parties hereto warrants and represents that he or she has
been duly authorized and empowered to execute the Stipulation on behalf of his
or her respective clients.
IN WITNESS WHEREOF, the parties hereto have caused this Stipulation to
be executed by their duly authorized attorneys.
/s/ Matthew E. Fischer
------------------------------------
R. Franklin Balotti
Thomas A. Beck
Matthew E. Fischer
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899-0551
(302) 658-6541
Attorneys for Plaintiffs
OF COUNSEL
Cozen and O'Connor
The Atrium
1900 Market Street
Philadelphia, PA 19103
(215) 665-2000
- 18 -
<PAGE>
/s/ David C. McBride
------------------------------------
David C. McBride
Young, Conaway, Stargatt & Taylor
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6639
Attorneys for Defendants
OF COUNSEL
Kramer, Levin, Nafalis & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
/s/ Deborah A. Skakel
------------------------------------
Mark L. Friedman
Deborah A. Skakel
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
Attorneys for Steve Simon
Dated: May 3, 1996
- 19 -
<PAGE>
/s/ David C. McBride
------------------------------------
David C. McBride
Young, Conaway, Stargatt & Taylor
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6639
Attorneys for Defendants
OF COUNSEL
Kramer, Levin, Nafalis & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
/s/ Deborah A. Skakel
------------------------------------
Mark L. Friedman
Deborah A. Skakel
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
Attorneys for Steve Simon
Dated: May 3, 1996
- 19 -
EXHIBIT 1
Steve Simon
AutoLend Group, Inc.
839 Washington Avenue - 4th Floor
Miami Beach, Florida 33139
May __, 1996
Nunzio P. DeSantis
[Address]
Courtland G. Miller
[address]
Vincent Villanueva
[address]
Helen Porter
c/o AutoLend Group, Inc.
839 Washington Avenue - 4th Floor
Miami Beach, Florida 33139
Dear Sirs:
Reference is made to the Stipulation and Agreement of Compromise,
Settlement and Release (the "Stipulation") being entered into today by and
between Nunzio P. DeSantis, Courtland G. Miller, Vincent Villanueva, Steve
Simon, Stephen Raphael, Elie Housman and AutoLend Group, Inc. Capitalized terms
used without definition herein shall have the meanings ascribed to them in the
Stock Purchase Agreement, dated _______, 1996, by and between AutoLend Group,
Inc. ("AutoLend") and _________. As an inducement to execute and deliver the
Stipulation, the following sets forth certain additional terms to which certain
of the parties to the Stipulation have agreed.
1. Annual Report: I will sign AutoLend's Annual Report on Form 10-K for the
year ended March 31, 1996 (the "Form 10-K") in the event the Closing Date does
not occur by June 30, 1996. If the Closing Date is after May 1, 1996 and the
Form 10-K has not been filed with the Securities and Exchange Commission, I
agree to review the Form 10- K in the form prepared for filing and provide to
AutoLend my comments with my representation that, to my actual knowledge, were
my comments incorporated in the Form 10-K for filing, the Form 10-K would not
contain an untrue statement of a material fact or omit to state any material
fact known to me to be required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are made, not
misleading.
<PAGE>
2. Loans by the Company: I represent and warrant that no loans are
outstanding from AutoLend to Helen Porter or me or from Helen Porter or me to
AutoLend, other than a loan from Helen Porter to AutoLend in the amount of
$25,000, which will be repaid prior to the Closing.
3. Lease: I covenant and agree with AutoLend that neither I nor any of my
affiliates shall execute a lease for all or any portion of the premises
currently occupied by AutoLend on Washington Avenue unless, prior to or
contemporaneously with the execution of such new lease, AutoLend is released
from all obligations under its existing lease for the same premises.
4. Affidavit: I agree to execute and deliver to AutoLend an Affidavit
simultaneously with the execution and delivery of this Letter Agreement, dated
the date of this Letter Agreement, and on the Closing Date, dated the Closing
Date, in the form of Exhibit 34 to the Stipulation, which Affidavit shall
accompany the petition to be filed with the Court of Chancery with the State of
Delaware in and for Newcastle County requesting the Court's approval of the
Stipulation and the transactions contemplated thereby.
5. Access to Information: During the period between the execution and
delivery of this Letter Agreement and the Closing, AutoLend agrees to continue
to provide to DeSantis and his representatives, and I agree to cause AutoLend to
continue to provide to DeSantis and his representatives, information regarding
the cash receipts of AutoLend, consisting of the collection by LSI Financial
Group ("LSI") of accounts receivable of AutoLend and its subsidiaries, which
information shall be provided by means of a written weekly report. Any
information provided to DeSantis and his representatives under this paragraph
shall be maintained in strict confidence and shall not be disclosed to any
parties, without either the express written consent of AutoLend or a written
agreement delivered to AutoLend and signed by the party to whom such information
shall be made available, in which such party agrees to maintain the
confidentiality of such information; provided, however, that if the disclosure
of such information is required by law, or court order, subpoena or similar
ruling, DeSantis and his representatives agree to: (i) provide AutoLend with
prior written notice of such fact as soon as practicable in advance of such
disclosure; (ii) cooperate with AutoLend in seeking a protective or similar
order with respect to such disclosure; and (iii) disclose only such of the books
and records as shall be necessary, in the reasonable and good faith advice of
counsel to DeSantis, to comply with such law.
6. Asset List: Exhibit II attached hereto is a list of all of the tangible
assets of AutoLend as of the date of the Stipulation (the "Asset List"), which
Asset List I have approved as correct and complete. Exhibit III attached hereto
is a list of all the tangible assets on the Asset List which will be sold to
AutoLend IAP, Inc. on the Closing Date. Between the date hereof and the Closing
Date, AutoLend agrees not to sell, assign or otherwise transfer, and I agree to
cause AutoLend not to sell, assign or otherwise transfer, any of the assets set
forth on the Asset List without the prior written consent of DeSantis. On the
Closing Date, the assets on Exhibit III will be sold to AutoLend IAP, Inc. for
book value as of the Closing Date, with certain minor exceptions agreed to by
the parties. If, following the Closing Date, there is ascertained to be a
discrepancy between the assets set
<PAGE>
forth on the Asset Listand the assets of AutoLend at Closing immediately before
the purchase of the assets by AutoLend IAP, Inc. (the "Closing Assets"),
AutoLend shall have a right of action against me and my affiliates for the
difference in net asset value between the assets set forth on the Asset List and
the Closing Assets, but only to the extent that the discrepancy in net asset
value equals or is greater than $5,000 after application of any insurance or
other recovery (the "Basket"); provided, however, that if the discrepancy is
determined to be caused by conduct inconsistent with that to which I have
certified in either of the Affidavits to be delivered pursuant to this Letter
Agreement, the Basket shall be disregarded in any claim which AutoLend may bring
against me or my affiliates.
7. Tax Returns, Options: Helen Porter and I covenant and agree that we
shall report in our federal and state tax return(s) for the 1996 taxable year,
the payments received by us pursuant to Paragraph 6 of the Stipulation. Helen
Porter and I agree hereby, that upon the Closing, all options to purchase common
stock of the Company held by us prior to the Closing, shall be forfeit.
8. Due Dilligence: The parties hereto agree that beginning no more than
five (5) days immediately prior to the Closing Date, DeSantis, Miller and
Villaneuva and their representatives shall be granted permission to conduct a
due diligence review of AutoLend, including, but not limited to, a review of
AutoLend's books and records at the principal offices of AutoLend, to the extent
and in the manner in which the due diligence investigation was conducted by
agreement of the parties for the period ended November 30, 1995 prior to the
execution and delivery of the this Letter Agreement.
If you accept my offer that we shall all agree to abide by the foregoing,
please sign below. This Letter Agreement shall only be binding upon execution by
all of the parties hereto, provided, however that it may be executed in any
number of counterparts, all of which together shall for all purposes constitute
one agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
------------------------------
Steve Simon, individually
Agreed to as of May __, 1996:
- ---------------------------------
AutoLend Group, Inc.
By:
- ---------------------------------
Nunzio P. DeSantis
<PAGE>
- ---------------------------------
Courtland P. Miller
- ---------------------------------
Vincent Villanueva
For purposes of paragraph 7 only:
- ---------------------------------
Helen Porter
EXHIBIT 2
---------
GENERAL RELEASE BY NUNZIO P. DESANTIS
-------------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT NUNZIO
P. DESANTIS ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN RAPHAEL, ELIE
HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER
CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT
SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective heirs,
executors, administrators, successors and assigns and attorneys, advisors,
investment bankers and any other person or entity acting or claiming to be
acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
raised or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Nunzio P. DeSantis has hereunto set his hand and seal
on the date so indicated below.
Dated: _______ __, 1996
______________________________
Nunzio P. DeSantis
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Nunzio P.
DeSantis, to me known, and by me being duly sworn, did depose and say that he is
the individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 3
GENERAL RELEASE BY COURTLANDT G. MILLER
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT
COURTLANDT G. MILLER ("Releasor"), for good and valuable consideration, the
receipt whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN RAPHAEL, ELIE
HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER
CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT
SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective heirs,
executors, administrators, successors and assigns and attorneys, advisors,
investment bankers and any other person or entity acting or claiming to be
acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
raised or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Courtlandt G. Miller has hereunto set his hand and
seal on the date so indicated below.
Dated: _______ __, 1996
_________________________________
Courtlandt G. Miller
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Courtland G.
Miller, to me known, and by me being duly sworn, did depose and say that he is
the individual described in the foregoing General Release, and that he duly and
freely executed the same.
----------------------
Notary Public
- 3 -
EXHIBIT 4
GENERAL RELEASE BY VINCENT VILLANUEVA
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT VINCENT
VILLANUEVA ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, COURTLANDT G. MILLER, STEVE SIMON, STEPHEN RAPHAEL, ELIE
HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER
CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT
SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective heirs,
executors, administrators, successors and assigns and attorneys, advisors,
investment bankers and any other person or entity acting or claiming to be
acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
raised or that could have been raised
<PAGE>
in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware Action")
and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23) (Fl. Cir.
Ct.) (the "Florida Action"), or based upon, arising from or related to the facts
underlying the Delaware Action or the Florida Action, except Releasor's claims
under the Stipulation of Settlement to which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Vincent Villanueva has hereunto set his hand and seal
on the date so indicated below.
Dated: _______ __, 1996
_________________________________
Vincent Villanueva
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Vincent
Villanueva, to me known, and by me being duly sworn, did depose and say that he
is the individual described in the foregoing General Release, and that he duly
and freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 5
GENERAL RELEASE BY STEVE SIMON
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT STEVE
SIMON ("Releasor"), for good and valuable consideration, the receipt whereof is
hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLAND G. MILLER, VINCENT VILLANUEVA, MARCEL FOURNIER, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, and DR. PHILIP VITALE, and their respective heirs, executors,
administrators, successors and assigns and attorneys, advisors, investment
bankers and any other person or entity acting or claiming to be acting on any of
their respective behalves (collectively, the "Released Parties"), of and from
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever, in law, admiralty or equity, that
against them or any of them, whether jointly or severally, that Releasor and his
heirs, executors, administrators, predecessors, successors and assigns ever had,
now have, or hereafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of this General Release, including without limitation all claims raised
or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897- CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the singular
number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
In witness therefor, Steve Simon has hereunto set his hand and seal on the
date so indicated below.
Dated: __________ __, 1996
______________________________
Steve Simon
- 2 -
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Steve Simon, to
me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 6
---------
GENERAL RELEASE BY HELEN PORTER
-------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT HELEN
PORTER ("Releasor"), for good and valuable consideration, the receipt whereof is
hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLAND G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN RAPHAEL,
ELIE HOUSMAN, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER CARMIGNANI, HARRY
FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT SILLMAN, DR.
PHILIP VITALE and MARCEL FOURNIER, and their respective heirs, executors,
administrators, successors and assigns and attorneys, advisors, investment
bankers and any other person or entity acting or claiming to be acting on any of
their respective behalves (collectively, the "Released Parties"), of and from
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever, in law, admiralty or equity, that
against them or any of them, whether jointly or severally, that Releasor and his
heirs, executors, administrators, predecessors, successors and assigns ever had,
now have, or hereafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of this General Release, including without limitation all claims raised
or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
In witness therefor, Helen Porter has hereunto set her hand and seal on the
date so indicated below.
Dated: _________ __, 1996
_________________________________
Helen Porter
- 2 -
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Helen Porter, to
me known, and by me being duly sworn, did depose and say that she is the
individual described in the foregoing General Release, and that she duly and
freely executed the same.
________________________
Notary Public
- 3 -
EXHIBIT 7
GENERAL RELEASE BY STEPHEN RAPHAEL
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT STEPHEN
RAPHAEL ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLAND G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, MARCEL FOURNIER,
ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER
CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT
SILLMAN, and DR. PHILIP VITALE, and their respective heirs, executors,
administrators, successors and assigns and attorneys, advisors, investment
bankers and any other person or entity acting or claiming to be acting on any of
their respective behalves (collectively, the "Released Parties"), of and from
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever, in law, admiralty or equity, that
against them or any of them, whether jointly or severally, that Releasor and his
heirs, executors, administrators, predecessors, successors and assigns ever had,
now have, or hereafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of this General Release, including without limitation all claims raised
or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
In witness therefor, Stephen Raphael has hereunto set his hand and seal on
the date so indicated below.
Dated: _______ __, 1996
_________________________________
Stephen Raphael
- 2 -
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Stephen Raphael,
to me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 8
GENERAL RELEASE BY ELIE HOUSMAN
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT ELIE
HOUSMAN ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Elie Housman has hereunto set his hand and seal on the
date so indicated below.
Dated: _______ __, 1996
_________________________________
Elie Housman
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Elie Housman, to
me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 9
GENERAL RELEASE BY AUTOLEND GROUP, INC.
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT AUTOLEND
GROUP, INC. ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges NUNZIO
P. DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and its successors and any other party claiming or who may claim by or through
Releasor ever had, now have, or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this General Release, including without limitation all
claims raised or that could have been raised in DeSantis v. Simon, Civil Action
No. ___ (Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis,
Civil Action No. 95-23897-CA(23) (Fl. Cir. Ct.) (the
<PAGE>
"Florida Action"), or based upon, arising from or related to the facts
underlying the Delaware Action or the Florida Action, except Releasor's claims
under the Stipulation of Settlement to which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
In witness therefor, AutoLend Group, Inc. has hereunto set his hand and
seal on the date so indicated below.
Dated: _______ __, 1996
AUTOLEND GROUP, INC.
By:________________________________
Name:
Title:
- 2 -
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came____________,
__________ of AutoLend Group, Inc., to me known, and by me being duly sworn, did
depose and say that he is the ______________ of AutoLend Group, Inc., the
corporation described in the foregoing General Release, and that he duly
authorized and freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 10
---------
GENERAL RELEASE BY JAMES NEWMAN
-------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT
JAMES NEWMAN ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON,
STEPHEN RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW
SAKSON, ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE
ESTATE OF HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their
respective heirs, executors, administrators, successors and assigns and
attorneys, advisors, investment bankers and any other person or entity acting or
claiming to be acting on any of their respective behalves (collectively, the
"Released Parties"), of and from all actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law, admiralty
or equity, that against them or any of them, whether jointly or severally, that
Releasor and his heirs, executors, administrators, predecessors, successors and
assigns ever had, now have, or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this General Release, including without limitation all
claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in
writing and expressly agreed to or consented to in writing by a duly authorized
agent of Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, James Newman has hereunto set his hand and seal on
the date so indicated below.
Dated: _______ __, 1996
_________________________________
James Newman
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came James Newman,
to me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 11
---------
GENERAL RELEASE BY DREW SAKSON
------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT DREW
SAKSON ("Releasor"), for good and valuable consideration, the receipt whereof is
hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless
in writing and expressly agreed to or consented to in writing by a duly
authorized agent of Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Drew Sakson has hereunto set his hand and seal on the
date so indicated below. Dated: _______ __, 1996
___________________________
Drew Sakson
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Drew Sakson, to
me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
____________________
Notary Public
- 3 -
EXHIBIT 12
---------
GENERAL RELEASE BY ROBERT GRANOFF
---------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT ROBERT
GRANOFF ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Robert Granoff has hereunto set his hand and seal on
the date so indicated below.
Dated: _______ __, 1996
_________________________
Robert Granoff
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Robert Granoff,
to me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
____________________
Notary Public
- 3 -
EXHIBIT 13
---------
GENERAL RELEASE BY PHILIP V. VITALE
-----------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT PHILIP
V. VITALE ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Philip V. Vitale has hereunto set his hand and seal on
the date so indicated below.
Dated: _______ __, 1996
______________________________
Philip V. Vitale
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Philip V. Vitale,
to me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
_______________________
Notary Public
- 3 -
EXHIBIT 14
---------
GENERAL RELEASE BY ROGER CARMIGNANI
-----------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT ROGER
CARMIGNANI ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON,
STEPHEN RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW
SAKSON, ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE
ESTATE OF HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their
respective heirs, executors, administrators, successors and assigns and
attorneys, advisors, investment bankers and any other person or entity acting or
claiming to be acting on any of their respective behalves (collectively, the
"Released Parties"), of and from all actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law, admiralty
or equity, that against them or any of them, whether jointly or severally, that
Releasor and his heirs, executors, administrators, predecessors, successors and
assigns ever had, now have, or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this General Release, including without limitation all
claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Roger Carmignani has hereunto set his hand and seal on
the date so indicated below.
Dated: _______ __, 1996
__________________________________
Roger Carmignani
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Roger Carmignani,
to me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 15
---------
GENERAL RELEASE BY HARRY FITZGIBBONS
------------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT HARRY
FITZGIBBONS ("Releasor"), for good and valuable consideration, the receipt
whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON,
STEPHEN RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW
SAKSON, ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE
ESTATE OF HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their
respective heirs, executors, administrators, successors and assigns and
attorneys, advisors, investment bankers and any other person or entity acting or
claiming to be acting on any of their respective behalves (collectively, the
"Released Parties"), of and from all actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law, admiralty
or equity, that against them or any of them, whether jointly or severally, that
Releasor and his heirs, executors, administrators, predecessors, successors and
assigns ever had, now have, or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this General Release, including without limitation all
claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Harry Fitzgibbons has hereunto set his hand and seal
on the date so indicated below.
Dated: _______ __, 1996
___________________________
Harry Fitzgibbons
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Harry
Fitzgibbons, to me known, and by me being duly sworn, did depose and say that he
is the individual described in the foregoing General Release, and that he duly
and freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 16
---------
GENERAL RELEASE BY THE ESTATE OF HERB SILLMAN
---------------------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT THE
ESTATE OF HERB SILLMAN ("Releasor"), for good and valuable consideration, the
receipt whereof is hereby acknowledged, remises, releases and forever discharges
AUTOLEND GROUP, INC. and its parents, subsidiaries, and current and former
directors, officers, employees, attorneys, advisors, investment bankers and any
other person or entity acting or claiming to be acting on their behalves, and
NUNZIO P. DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON,
STEPHEN RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW
SAKSON, ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE
ESTATE OF HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their
respective heirs, executors, administrators, successors and assigns and
attorneys, advisors, investment bankers and any other person or entity acting or
claiming to be acting on any of their respective behalves (collectively, the
"Released Parties"), of and from all actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law, admiralty
or equity, that against them or any of them, whether jointly or severally, that
Releasor and his heirs, executors, administrators, predecessors, successors and
assigns ever had, now have, or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this General Release, including without
<PAGE>
limitation all claims raised or that could have been raised in DeSantis v.
Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware Action") and AutoLend
Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23) (Fl. Cir. Ct.) (the
"Florida Action"), or based upon, arising from or related to the facts
underlying the Delaware Action or the Florida Action, except Releasor's claims
under the Stipulation of Settlement to which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, the Estate of Herb Sillman has through its duly
authorized agent hereunto set its hand and seal on the date so indicated below.
Dated: _______ __, 1996
ESTATE OF HERB SILLMAN
By:___________________________
Name:
Title
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came
__________________, to me known, and by me being duly sworn, did depose and say
that he is the __________ of the Estate of Herb Sillman described in the
foregoing General Release, and that he, duly authorized on behalf of said
Estate, duly and freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 17
---------
GENERAL RELEASE BY PAUL GREGORY
-------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT PAUL
GREGORY ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Paul Gregory has hereunto set his hand and seal on the
date so indicated below.
Dated: _______ __, 1996
_________________________________
Paul Gregory
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Paul Gregory, to
me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 18
---------
GENERAL RELEASE BY DAN PORYLES
------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT DAN
PORYLES ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLANDT G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN
RAPHAEL, ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON,
ROGER CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF
HERBERT SILLMAN, DR. PHILIP VITALE and MARCEL FOURNIER, and their respective
heirs, executors, administrators, successors and assigns and attorneys,
advisors, investment bankers and any other person or entity acting or claiming
to be acting on any of their respective behalves (collectively, the "Released
Parties"), of and from all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law, admiralty or equity,
that against them or any of them, whether jointly or severally, that Releasor
and his heirs, executors, administrators, predecessors, successors and assigns
ever had, now have, or hereafter can, shall or may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
day of the date of this General Release, including without limitation all claims
<PAGE>
raised or that could have been raised in DeSantis v. Simon, Civil Action No. ___
(Del. Ch.) (the "Delaware Action") and AutoLend Group, Inc. v. DeSantis, Civil
Action No. 95-23897- CA(23) (Fl. Cir. Ct.) (the "Florida Action"), or based
upon, arising from or related to the facts underlying the Delaware Action or the
Florida Action, except Releasor's claims under the Stipulation of Settlement to
which this General Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 2 -
<PAGE>
In witness therefor, Dan Poryles has hereunto set his hand and seal on the
date so indicated below.
Dated: _______ __, 1996
_________________________________
Dan Poryles
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _______ 1996 before me personally came Dan Poryles, to
me known, and by me being duly sworn, did depose and say that he is the
individual described in the foregoing General Release, and that he duly and
freely executed the same.
______________________
Notary Public
- 3 -
EXHIBIT 19
---------
GENERAL RELEASE BY MARCEL FOURNIER
----------------------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT MARCEL
FOURNIER ("Releasor"), for good and valuable consideration, the receipt whereof
is hereby acknowledged, remises, releases and forever discharges AUTOLEND GROUP,
INC. and its parents, subsidiaries, and current and former directors, officers,
employees, attorneys, advisors, investment bankers and any other person or
entity acting or claiming to be acting on their behalves, and NUNZIO P.
DESANTIS, COURTLAND G. MILLER, VINCENT VILLANUEVA, STEVE SIMON, STEPHEN RAPHAEL,
ELIE HOUSMAN, HELEN PORTER, ROBERT GRANOFF, JAMES NEWMAN, DREW SAKSON, ROGER
CARMIGNANI, HARRY FITZGIBBONS, PAUL GREGORY, DAN PORYLES, THE ESTATE OF HERBERT
SILLMAN, and DR. PHILIP VITALE, and their respective heirs, executors,
administrators, successors and assigns and attorneys, advisors, investment
bankers and any other person or entity acting or claiming to be acting on any of
their respective behalves (collectively, the "Released Parties"), of and from
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever, in law, admiralty or equity, that
against them or any of them, whether jointly or severally, that Releasor and his
heirs, executors, administrators, predecessors, successors and assigns ever had,
now have, or hereafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of this General Release, including without limitation all claims raised
or that could have been
<PAGE>
raised in DeSantis v. Simon, Civil Action No. ___ (Del. Ch.) (the "Delaware
Action") and AutoLend Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA(23)
(Fl. Cir. Ct.) (the "Florida Action"), or based upon, arising from or related to
the facts underlying the Delaware Action or the Florida Action, except
Releasor's claims under the Stipulation of Settlement to which this General
Release is an Exhibit.
Whenever the text of this General Release may require, the use of the
singular number shall include the appropriate plural number.
This General Release shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflict of laws
principles.
This General Release shall not be modified in any way, unless in writing
and expressly agreed to or consented to in writing by a duly authorized agent of
Releasor and Releasee.
In witness therefor, Marcel Fournier has hereunto set his hand and seal on
the date so indicated below.
Dated: _____ __, 1996
---------------------------------
Marcel Fournier
- 2 -
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ____ day of _____ 1996 before me personally came Marcel
Fournier, to me known, and by me being duly sworn, did depose and say that he is
the individual described in the foregoing General Release, and that he duly and
freely executed the same.
_______________________
Notary Public
- 3 -
EXHIBIT 20
Steve Simon
C/O AutoLend Group, Inc.
420 Jefferson Avenue
Miami Beach, FL 33139
________ __, 1996
Board of Directors
AutoLend Group, Inc.
420 Jefferson Avenue
Miami Beach, FL 33139
Gentlemen:
This is to inform you that I hereby resign my positions as President, Chief
Executive Officer, director, and Chairman of the Board of AutoLend, Group Inc. I
also hereby resign my directorships and officerships with each of AutoLend
Group, Inc.'s subsidiaries, with the exception of my officerships and
directorship at AutoLend IAP, Inc. These resignations are effective immediately.
Sincerely Yours,
Steve Simon
EXHIBIT 21
Helen Porter
C O AutoLend Group, Inc.
420 Jefferson Avenue
Miami Beach, FL 33139
________ __, 1996
Board of Directors
AutoLend Group, Inc.
420 Jefferson Avenue
Miami Beach, FL 33139
Gentlemen:
This is to inform you that I hereby resign my positions as Executive
Vice President and Chief Operating Officer of AutoLend, Group Inc. I also hereby
resign my directorships and officerships with each of AutoLend Group, Inc.'s
subsidiaries, with the exception of my officerships and directorship at AutoLend
IAP, Inc. These resignations are effective immediately.
Sincerely Yours,
Helen Porter
EXHIBIT 22
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT is made and entered into as of the ___ day of
________ 1996 (the "Agreement"), by and among AutoLend Group, Inc., a Delaware
corporation, having its principal place of business at ________ (the "Company"),
Steven Simon, an individual residing at 1430 Ocean Drive, Miami Beach, FL 33139
("Simon"), Helen Porter, an individual residing at 1430 Ocean Drive, Miami
Beach, FL 33139 ("Porter", and together with Simon, the "Guarantors"), and
______________, as escrow agent (the "Escrow Agent").
WHEREAS, the Company, the Guarantors and certain other parties have entered
into a Stipulation and Agreement of Compromise, Settlement and Release (the
"Stipulation"), settling certain disputes between them; and
WHEREAS, pursuant to an Indemnity Agreement dated the date hereof, by and
among the Guarantors and the Company (the "Indemnity Agreement"), the Guarantors
have agreed to indemnify the Company for certain costs, expenses, damages,
liabilities and payments which may be payable by the Company in connection with
the Payments; and
WHEREAS, pursuant to the Indemnity Agreement the Guarantors have agreed to
deposit with the Escrow Agent $25,000 to guarantee the obligations of the
Guarantors under the Indemnity Agreement.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions.
1.1 The term "Escrowed Funds" shall mean $25,000 upon deposit thereof
with the Escrow Agent.
1.2 The term "Principal Guarantor" shall mean Steven Simon or,
following receipt by the Escrow Agent from Helen Porter of a sworn affidavit
attesting to his death or incapacity, Helen Porter.
1.3 The term "Tax Expiration Release Event" shall mean the sixth
anniversary of the filing of the tax return of the Company for the period during
which the Payments are made.
1.4 The term "Tax Liability Event" shall mean the assertion by any
taxing authority that the Company is obligated to pay any tax, penalty, interest
or other payment in respect of the Payments to any federal, state or local
taxing authorities; with respect to which obligation the Guarantors have agreed
to indemnify the Company pursuant to the Indemnity Agreement.
<PAGE>
1.5 The term "Tax Liability Payment Event" shall mean the incurrence
by the Company of any Liabilities, as such term is defined in the Indemnity
Agreement.
2. Acceptance of Appointment and Receipt and Investment of Escrowed Funds
by Escrow Agent.
2.1 The Escrow Agent hereby accepts its appointment and designation as
escrow agent pursuant to the terms of this Agreement.
2.2 The Escrow Agent hereby acknowledges receipt from the Guarantors
of the Escrowed Funds.
2.3 Any income received in respect of the Escrowed Funds which is not
otherwise required to make up a deficiency in the Escrowed Funds shall not be
deemed part of the "Escrowed Funds" and shall be released by the Escrow Agent,
upon receipt, to the Guarantors.
2.4 The Escrow Agent shall cause any cash which it holds to be
invested and reinvested from time to time as directed in writing by the
Principal Guarantor in (i) obligations of the U.S. government, (ii) certificates
of deposit of an FDIC-insured bank having combined capital and surplus of not
less than $50,000,000, or (iii) money market funds investing in obligations of
the U.S. government; provided that all such investments shall mature not later
than the sixth anniversary hereof and thereafter, not later than every thirty
(30) days.
3. Terms of Escrow.
3.1 Joint Written Instructions. Upon receipt by the Escrow Agent of
joint written instructions (executed by both the Principal Guarantor and the
Company) with respect to the release of the Escrowed Funds to either of the
parties, the Escrow Agent shall, within five (5) days of the receipt of such
instructions, deliver the Escrowed Funds specified in such instructions to the
party specified in such instructions; following such release, the Escrow Agent
shall have no further obligations or responsibilities under this Escrow
Agreement with respect to such Escrowed Funds.
3.2 Notice by the Company. (a) If at any time the Company believes a
Tax Liability Event has occurred, it shall promptly send written notice (a "Tax
Liability Event Notice") to the Escrow Agent, representing that a Tax Liability
Event has occurred and describing in reasonable detail such event. Upon receipt
of such Tax Liability Event Notice, the Escrow Agent shall send a copy thereof
promptly to the Principal Guarantor. If at any time thereafter, and from time to
time, the Company believes that a Tax Liability Payment Event has occurred, it
may invoke the following procedure:
(i) The Company may send a written notice (a "Request for
Payment") to the Escrow Agent not more than once monthly, representing that a
Tax Payment Liability Event has occurred and describing in reasonable detail
such event and the
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<PAGE>
amount of the Liabilities (as defined in the Indemnity Agreement) comprising
such event, and requesting that a specified amount of Escrowed Funds be released
to it (but in no event more than the liabilities set forth in the request for
Payment), including reasonable evidence substantiating the Tax Liability Payment
Event. Immediately upon receipt of a Request for Payment, the Escrow Agent shall
send a copy of such Request for Payment to the Guarantors, along with a written
notice (an "Escrow Agent's Payment Notice"), specifying that if the Escrow Agent
does not receive, within ten (10) days from the date of such Escrow Agent's
Payment Notice a written notice from the Principal Guarantor (a "Notice of
Guarantors' Objection to Payment") objecting to the release of the Escrowed
Funds specified in the Request for Payment, the Escrow Agent shall, upon the
expiration of such ten (10) days, release the Escrowed Funds specified in the
Request for Payment to the Company.
(ii) If by the expiration of ten (10) days from the date of the
Escrow Agent's Payment Notice the Escrow Agent shall not have received a Notice
of Guarantors' Objection to Payment, it shall, within five (5) days thereafter,
deliver the Escrowed Funds specified in the Request for Payment to the Company;
following such delivery, the Escrow Agent shall have no further obligations or
responsibilities under this Escrow Agreement with respect to such Escrowed
Funds.
(iii) If within ten (10) days from the date of the Escrow Agent's
Payment Notice the Escrow Agent shall receive a Notice of Guarantors' Objection
to Payment, the Escrow Agent shall continue to hold or shall dispose of the
Escrowed Funds as provided in Section 3.3, below.
3.3 Escrow Agent Actions. In the event the Escrow Agent shall receive
a Request for Payment from the Company and a timely Notice of Guarantors'
Objection to Payment, then the Escrow Agent, at its discretion, may:
(i) continue to hold the Escrowed Funds described in the Request
for Payment until directed to dispose of them pursuant to (a) a final order
or judgment of a court of competent jurisdiction or (b) instructions or
directions furnished in writing, signed by both the Principal Guarantor and
the Company; or
(ii) bring an appropriate action or proceeding to deposit the
Escrowed Funds described in the Request for Payment in a court of competent
jurisdiction.
3.4 Notice by the Guarantors. If at any time the Principal Guarantor
believes that a Tax Expiration Release Event has occurred, the Principal
Guarantor may deliver to the Escrow Agent a written notice to that effect and
requesting that Escrowed Funds be released to it, (a "Notice of Release Event");
the Escrow Agent shall thereupon follow the following procedure:
(i) Immediately upon receipt of the Notice of Release Event, the
Escrow Agent shall send a copy of such Notice of Release Event to the
Company, along with a written notice (an "Escrow Agent's Release Notice"),
specifying that if the Escrow Agent does not receive, within ten (10) days
from the date of such
-3-
<PAGE>
Escrow Agent's Release Notice, a written notice from the Company (a "Notice
of Company Objection"), objecting to the release (to the party specified in
the Notice of Release Event) of the Escrowed Funds specified in the Notice
of Release Event, the Escrow Agent shall, upon the expiration of such ten
(10) days, release the Escrowed Funds specified in the Notice of Release
Event to the Guarantors.
(ii) If by the expiration of ten (10) days from the date of the
Escrow Agent's Release Notice, the Escrow Agent shall not have received a
Notice of Company Objection, it shall, within five (5) days thereafter,
deliver the Escrowed Funds specified in the Notice of Release Event to the
party specified in the Notice of Release Event; following such delivery,
the Escrow Agent shall have no further obligations or responsibilities
under this Escrow Agreement with respect to such Escrowed Funds.
(iii) If within ten (10) days from the date of the Escrow Agent's
Release Notice, the Escrow Agent shall receive a Notice of the Company
Objection, then the Escrow Agent shall continue to hold or shall dispose of
the Escrowed Funds specified in the Notice of Release Event as provided in
Section 3.5, below.
3.5 Escrow Agent Actions. In the event the Escrow Agent shall receive
a Notice of Release Event from the Guarantors and a timely Notice of Company
Objection thereto, then the Escrow Agent, at its discretion, may:
(i) continue to hold the Escrowed Funds specified in the Notice
of Release Event until directed to dispose of them pursuant to (a) a final
order or judgment of a court of competent jurisdiction or (b) instructions
or directions furnished in writing, signed by both the Principal Guarantor
and the Company; or
(ii) bring an appropriate action or proceeding to deposit the
Escrowed Funds specified in the Notice of Release Event in a court of
competent jurisdiction.
4. The Escrow Agent. In order to induce the Escrow Agent to act as escrow
agent hereunder, each of the Company and the Guarantors hereby covenants to and
agrees with the other and with the Escrow Agent as follows:
4.1 The Escrow Agent shall not in any way be bound or affected by any
amendment, modification or cancellation of this Escrow Agreement, unless the
same shall have been agreed to, in writing, by the Escrow Agent. The Escrow
Agent shall comply with any written instructions issued pursuant to Section 2.4
hereof with respect to investment decisions relating to such cash. Failing
receipt of such written instructions, the Escrow Agent shall invest such cash in
United States treasury obligations with a maturity date no later than the sixth
anniversary of the date hereof.
4.2 The Escrow Agent shall be entitled to rely, and shall be
protected in acting in reliance upon, any certificates, instructions or
directions furnished to the Escrow Agent in writing under this Escrow Agreement
and shall be entitled to treat as genuine, and
-4-
<PAGE>
as the document it purports to be, any certificate, letter, instruction or other
document or instrument delivered to the Escrow Agent hereunder and believed by
the Escrow Agent to be genuine and to have been presented by the proper party or
parties, without being required to determine the authenticity or correctness of
any fact stated therein, the propriety or validity thereof, or the authority or
authorization of the party or parties making and/or delivering the same to do
so.
4.3 This Escrow Agreement sets forth exclusively the duties and
obligations of the Escrow Agent with respect to any and all matters pertinent to
its acting as escrow agent hereunder. The Escrow Agent is acting only as a
stakeholder with respect to the Escrowed Funds.
4.4 The Escrow Agent undertakes to perform only such duties as are
expressly set forth in this Escrow Agreement, and neither the Escrow Agent nor
any of its partners, employees or agents shall be in any manner liable or
responsible to the Guarantors or the Company or any other person or entity for
or in respect of any loss, claim, damage or liability (collectively, "Loss")
resulting from, or arising out of, any action or failure or omission to act
hereunder or for any mistake of fact or error of judgment, including, but not
limited to, any Loss that may occur by reason of the exercise of the Escrow
Agent's discretion in any particular matter or for any other reason, except that
the Escrow Agent shall be liable for any Loss which shall be finally
adjudicated, after all appeals have been exhausted or the time for appeal has
expired, by a court of competent jurisdiction to be the result of gross
negligence or willful misconduct on the part of the Escrow Agent.
4.5 The Company and the Guarantors, jointly and severally, covenant
and agree to indemnify and hold the Escrow Agent and its partners, employees and
agents (the Escrow Agent and any such person or entity seeking indemnification
hereunder being hereinafter referred to as an "Indemnified Party") harmless from
and against, and upon demand reimburse each Indemnified Party for, any and all
losses, claims, damages, liabilities, costs and expenses (including reasonable
expenses of its legal counsel) (collectively, "Indemnified Losses") which may be
paid, incurred or suffered by such Indemnified Party or to which such
Indemnified Party may become subject by reason of or in connection with the
administration of the Escrow Agent's duties as escrow agent hereunder
(including, but not limited to, any action taken or omitted by the Escrow Agent
in connection with this Escrow Agreement or any action allegedly so taken or
omitted) or by reason of, or as a result of, the Escrow Agent's compliance with
the instructions set forth herein or with any instructions delivered to the
Escrow Agent pursuant hereto, except with respect to Indemnified Losses which
shall be finally adjudicated, after all appeals have been exhausted or the time
for appeal has expired, by a court of competent jurisdiction to be the result of
gross negligence or willful misconduct on the part of such Indemnified Person.
4.6 In the event of any controversy or dispute hereunder, or with
respect to any question as to the construction of this Escrow Agreement or any
action to be taken by it hereunder, the Escrow Agent may, in its discretion,
obtain the advice of any counsel it shall select in connection with any matter
arising under this Agreement and the Escrow Agent
-5-
<PAGE>
shall incur no liability for any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
4.7 The Escrow Agent (or any successor escrow agent or agents) shall
be entitled to reimbursement for all fees, expenses, disbursements and advances
(including attorneys' fees and expenses) incurred or made by it in the
performance of its duties hereunder. One-half of all such fees, disbursements,
expenses and advances, if any, shall be paid by the Company and one-half shall
be paid by the Guarantors. The Escrow Agent shall not be entitled to a fee in
respect solely of its services as Escrow Agent.
4.8 Upon not less than 2 days' written notice to the Company and the
Guarantors of its intention to resign under this Escrow Agreement, the Escrow
Agent may resign as escrow agent hereunder and shall thereafter be discharged of
all its duties and obligations hereunder. Such resignation shall take effect
upon receipt by the Escrow Agent of an instrument of acceptance executed by a
successor escrow agent (which successor may be selected by the Escrow Agent with
the approval of the Company and the Guarantors, which approval shall not be
unreasonably withheld, and shall have all other rights of, and be deemed to be,
the Escrow Agent hereunder for all purposes hereof) and upon delivery by the
Escrow Agent to such successor of the remaining Escrowed Funds. In addition, the
Escrow Agent shall be discharged of all its duties and obligations hereunder
upon its deposit in a court of competent jurisdiction of all of the remaining
Escrowed Funds. Each of the Company and the Guarantors hereby submits to the
personal jurisdiction of any such court in any such action.
5. Miscellaneous.
5.1 The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
party at a later time to enforce the same. No waiver by any party of the breach
of any term or covenant contained in this Escrow Agreement shall release or
affect any liability resulting from such breach, and no waiver of any nature,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such condition or
breach, a waiver of any other condition or a waiver of any breach of any other
condition, term or covenant of this Escrow Agreement.
5.2 All notices and other communications pursuant to this Agreement
shall be in writing and deemed to be sufficient if contained in a written
instrument and shall be deemed given if delivered personally, telecopied, sent
by nationally-recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, as follows:
(a) If to the Guarantors:
Steven Simon
Telecopier:
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<PAGE>
Helen Porter
with a copy to:
(b) If to the Company:
AutoLend Group, Inc.
Attention:
Telecopier: (305)
with a copy to:
(c) If to the Escrow Agent:
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a telecopy, when the party receiving such copy shall have confirmed
receipt of the communication, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following dispatch,
and (d) in the case of mailing, upon actual receipt by the party to whom notice
has been given. Any party may, by notice given in accordance with this Section
5.2, designate another address or person for receipt of notices hereunder.
5.3 This Escrow Agreement shall be binding upon and enure to the
benefit of the permitted successors and assigns of such parties. This Agreement
may be assigned (i) by the Escrow Agent to a successor as provided herein, and
(ii) with the consent of all of the parties hereto.
5.4 This Escrow Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof, and may not be amended
except by a writing signed on behalf of each party hereto.
5.5 This Escrow Agreement shall be construed in accordance with and
governed by the internal laws of the State of Delaware, without regard to
principles of conflict of laws. The parties hereby consent to the jurisdiction
of any federal or state court sitting in the State of Delaware having
jurisdiction over disputes involving this Agreement. Any action to enforce or
interpret this Agreement must be brought in any federal or state court sitting
in the State of Delaware. The parties hereby consent to the exclusive
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<PAGE>
jurisdiction of the courts sitting in the State of Delaware, notwithstanding the
State of Incorporation of the Company or the state of residence of the
Guarantors or where a dispute concerning this Agreement arose.
5.6 The headings in this Escrow Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.7 Each party agrees to cooperate fully with the other parties and to
execute such further instruments, documents and agreements and to give such
further written assurances as may be reasonably requested by any other party to
evidence and reflect the transactions described herein and contemplated hereby
and to carry into effect the intents and purposes of this Agreement.
5.8 The Company and the Guarantors agree and acknowledge that the
initial Escrow Agent hereunder has acted and continues to act as counsel for
______ in connection with general matters and in connection with the ________
Agreement. ____________ acknowledges and agrees that such Escrow Agent will
continue to act as counsel to ___________ in connection with matters arising out
of this Escrow Agreement, including any future disputes between the Company and
the Guarantors relating thereto and that ___________ will not raise any
objection to such representation by the Escrow Agent.
5.9 This Escrow Agreement may be executed by the parties hereto in
counterparts and each such executed counterpart shall be an original instrument,
but all of which together shall constitute one and the same instrument.
[REMAINDER OF PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
[Signature Page Follows]
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AUTOLEND GROUP, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
STEVEN SIMON
By: ____________________________
Name: ____________________________
Title: ____________________________
HELEN PORTER
By: ____________________________
Name: ____________________________
Title: ____________________________
[ESCROW AGENT:]
By: ____________________________
Name: ____________________________
Title: ____________________________
[Signature Page of Escrow Agreement]
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EXHIBIT 23
INDEMNITY AGREEMENT
-------------------
This Indemnity Agreement (this "Indemnity Agreement"), dated as of _______,
1996, is by Steven Simon and Helen Porter (together, the "Indemnitors"), for the
benefit of AutoLend Group, Inc. (the "Indemnitee").
RECITALS
--------
WHEREAS, the Indemnitee has paid to the Indemnitors an aggregate of $_____
(the "Payment") pursuant to paragraph ___ of the Stipulation and Agreement of
Compromise, Settlement and Release, between the Indemnitee and certain other
parties, dated ______, 1996; and
WHEREAS, as a material inducement to the Indemnitee to make the Payment,
the Indemnitors have agreed to indemnify the Indemnitee, and the Indemnitee
desires to be so indemnified, in the manner and to the extent provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Indemnitee and the Indemnitors hereby agree as follows:
1. Definitions. Reference is made to that certain Escrow Agreement (the
"Escrow Agreement") between the Indemnitors, the Company and _____, as escrow
agent (the "Escrow Agent"), dated the date hereof, pursuant to which the
Indemnitors have deposited with the Escrow Agent $25,000. Capitalized terms used
in this Indemnity Agreement without definition shall have the meanings ascribed
to them in the Escrow Agreement.
2 Indemnification. The Indemnitors agree to indemnify and hold harmless the
Indemnitee from and against any and all losses, damages, liabilities, taxes,
interest, penalties and related costs and expenses (including reasonable legal
fees and expenses) (collectively, "Liabilities") incurred by the Indemnitee by
reason of any claim, alleged claim or other assertion by any federal, state or
local taxing authority that the Payment was subject to withholding, provided,
however, that the term "Liabilities" shall not include (1) the amount of the
Indemnitee's share of FICA or FUTA or (2) any amounts which would have been
imposed on Indemnitee under any state or local unemployment insurance,
disability, worker's compensation or other similar law, in connection with the
Payment if the Payment had been subject to the withholding of federal, state or
local tax at the time paid; provided, further, that if the Indemnitors have
timely paid in full all federal, state and local taxes due in respect of the
Payment, the term "Liabilities" shall also not include the amount of the
federal, state or local tax which the Indemnitee would have been required to
withhold if the Payment had been subject to federal, state and local withholding
tax at the time paid; and, provided, further, that the Indemnitors shall not be
required to indemnify and hold harmless the Indemnitee for any Liabilities with
respect to which the Indemnitee fails to comply with paragraph 3 hereof if such
failure shall have materially prejudiced Indemnitors' defense against such
claim.
<PAGE>
3. Notice of Claims. The Indemnitee agrees to give prompt written notice to
the Indemnitors, of any claim by any federal, state or local taxing authority
which might give rise to a claim under this Indemnity Agreement, stating the
nature and basis of said claim and the amount thereof to the extent known. The
Indemnitors shall have the right to elect to defend such claim, with counsel
reasonably satisfactory to the Indemnitee by written notice to the Indemnitee
within 15 days after receipt of such notice. The Indemnitee shall not compromise
or settle such claim without the written consent of the Indemnitors, which
consent shall not be unreasonably withheld. The Indemnitee shall make available
to the Indemnitors and their attorneys and accountants all books and records of
the Indemnitee relating to such proceedings or litigation, and shall render such
assistance, at the sole cost and expense of the Indemnitors as may reasonably be
required by the Indemnitors in order to ensure the proper and adequate defense
of any such claim. Any books and records of the Indemnitee provided to the
Indemnitors pursuant to this Agreement shall be maintained in strict confidence
and shall not be disclosed to any parties, including, without limitation, any
taxing authorities, without either the express written consent of the Indemnitee
or a written agreement delivered to the Indemnitee signed by the party to whom
such books and records shall be made available in which such party agrees to
maintain the confidentiality of such books and records; provided, however, that
if the disclosure of such books and records is required by law, or court order,
subpoena or similar ruling, or, if in the reasonable and good faith advice of
counsel to the Indemnitors, the disclosure of such books and records is
necessary for the proper and adequate defense of such claim, then prior to such
disclosure, the Indemnitors shall: (i) provide prior written notice of such fact
to the Indemnitee as soon as practicable in advance of such disclosure; (ii)
cooperate with the Indemnitee in seeking a protective or similar order with
respect to such disclosure; and (iii) disclose only such of the books and
records as shall be necessary, in the reasonable and good faith advice of
counsel to the Indemnitors, to comply with such law or to make such proper and
adequate defense.
4. Collateralization of Obligations; Escrow. Subject to the terms of the
Escrow Agreement, the Indemnitee shall have recourse to satisfy the obligations
of the Indemnitors hereunder to the Escrowed Funds held at any time by the
Escrow Agent pursuant to the Escrow Agreement. Notwithstanding anything in this
paragraph 4 to the contrary, the Indemnitee's rights against the Indemnitors
with respect to the Indemnitors' obligations under this Agreement shall not be
deemed to be non-recourse to the Escrowed Funds, and following recourse of such
Escrowed Funds, the Indemnitee shall have full recourse against the Indemnitors
to satisfy any remaining obligations of the Indemnitors to the Indemnitee
arising hereunder.
5. Notices. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other parties at (a) in the case of the Indemnitors, at
_______________________ or (b) in the case of the Indemnitee, at
____________________________________ or in any case at such other address as may
hereafter be furnished to the other parties by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date delivered to or received at the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt).
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<PAGE>
6. Counterparts. This Indemnity Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
7. Governing Law; Jurisdiction. This Indemnity shall be construed and
governed in accordance with the internal laws of the State of Delaware, without
regard to principles of conflict of law. Each of the parties hereto agrees to
submit to the jurisdiction of the federal or state courts located in the county
of New Castle, State of Delaware, in any action arriving out of or relating to
this Agreement.
IN WITNESS WHEREOF, the Indemnitors have duly executed this Indemnity
Agreement as of the day and year first written above.
Indemnitors:
____________________________________
Steven Simon
____________________________________
Helen Porter
Indemnitee:
AUTOLEND GROUP, INC.
by:__________________________________
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EXHIBIT 24
Optionee: Steven Simon
Grant: 400,000 shares
AUTOLEND GROUP, INC.
--------------------
STOCK OPTION AGREEMENT
----------------------
THIS STOCK OPTION AGREEMENT is made and entered into as of the ___ day of
_______, 1996 (the "Agreement"), by and between AutoLend Group, Inc., a Delaware
corporation, having its principal place of business at 420 Jefferson Avenue,
Miami Beach, FL 33139 (the "Company"), and Steven Simon, an individual residing
at [address], (the "Optionee").
WHEREAS, the Optionee has agreed to serve as a consultant to the Company
pursuant to a Consulting Agreement between the Company and the Optionee dated
the date hereof.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee on the date
hereof the right and option to purchase (subject to adjustment pursuant to
Section 6 hereof) an aggregate of 400,000 of its shares of Common Stock at an
option price per share of $2.65, subject to adjustment as provided herein.
2. Option Period. The option granted hereby each shall remain in full force
and effect and be fully exercisable until 12:01 a.m. Eastern Standard Time of
the thirty-first day (the "Expiration Date") following the tenth consecutive
trading day that the Market Price (as hereinafter defined) of the Company's
Common Stock equals or exceeds $6.00 per share, and the Registration Statement
referred to in Section 8 hereof is effective, provided however, that if, on the
date the Optionee elects to exercise this Option in the manner provided herein
during the thirty-one day period as aforesaid (the "Attempted Exercise Date"),
the Registration Statement referred to in Section 8 hereof shall not be
effective or the Optionee is otherwise unable to sell his shares into the public
market because of the Company's failure to comply with any applicable laws or
regulations required hereunder, then the Expiration Date shall be adjusted such
that this Option shall expire and no longer be exercisable following the tenth
day following the fifth consecutive trading day after the Attempted Exercise
Date that the Market Price (as hereinafter defined) of the Company's Common
Stock equals or exceeds $6.00 per share provided that during each of such ten
days the Registration Statement referred to in Section 8 hereof shall be
effective or the Optionee is otherwise able to sell his shares in the public
market. "Market Price" shall mean, as of any day, the closing sales price of the
Common Stock on such day on the New York Stock Exchange or the American Stock
Exchange (or if the Common Stock shall not then be listed on either such
exchange,
<PAGE>
the closing sales price on the principal (determined by highest volume averaged
for a period of twenty consecutive business days prior to the day as to which
"Market Price" is being determined) national securities exchange (as defined in
the Securities Exchange Act of 1934, as amended) on which the Common Stock may
then be listed) or, if there shall have been no sales on such exchange or
exchanges on such day, the closing sales price of the Common Stock on such day
on the NASDAQ National Market System or, if the Common Stock is not included on
the NASDAQ National Market System, the average of the bid and asked prices at
the end of such day or, if the Common Stock shall not be so listed, the average
of the bid and asked prices at the end of the day in the over-the-counter market
as reported by NASDAQ or, if the Common Stock is included on NASDAQ, as reported
by the National Quotation Bureau, Inc. or any successor organization, in each
such case, averaged for a period of 20 consecutive business days prior to the
day as to which "Market Price" is being determined.
3. Exercise of Option. (a) Prior to the Expiration Date, the right of
exercise shall be cumulative so that if this Option is exercised in part, it
shall remain exercisable, in part, with respect to all shares not so purchased
at any time prior to the Expiration Date or the earlier termination of this
option. This option may not be exercised at any time on or after the Expiration
Date.
(b) The Optionee may exercise the option (to the extent then exercisable)
by delivering to the Company a written notice duly signed by the Optionee in the
form attached hereto as Exhibit A (an "Exercise Notice") stating the number of
shares that the Optionee has elected to purchase, and accompanied by payment (in
cash or by certified check) of an amount equal to the full purchase price for
the shares to be purchased. The notice shall also contain a statement (if
required and in a form reasonably acceptable to the Company) that the Optionee
is acquiring the shares for investment only, and not with a view toward the
distribution or resale thereof, other than pursuant to an effective registration
statement under, or subject to an exemption from, the applicable requirements of
the Securities Act of 1933, as amended. Following receipt by the Company of such
notice and payment, the Company shall issue, within three (3) business days, the
shares in the name of the Optionee and deliver the certificate therefor to the
Optionee. No shares shall be issued until full payment therefor has been made
and until the Company has complied with all requirements of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, any
securities exchange on which the Company's stock may then be listed and all
applicable state laws in connection with the issuance of the shares or the
listing of the shares on said securities exchange. The Optionee shall have none
of the rights of a shareholder in respect of such shares until they are issued.
Notwithstanding anything herein to the contrary, the Optionee and the Company
currently are parties to a Voting Trust Agreement dated of even date herewith
and expiring on _____, pursuant to which all shares of the Company's common
stock now or hereafter owned by the Optionee shall be deposited with the Voting
Trustee under the Voting Trust Agreement and upon which the Voting Trustee shall
have certain rights and obligations as provided therein. So long as the Voting
Trust Agreement remains in effect, upon the exercise of this Option in whole or
in part by the Optionee, certificates representing shares issued upon exercise
of this Option shall be registered in the name of and delivered to the Voting
Trustee, and a copy of said certificates shall be delivered to the
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<PAGE>
Optionee accompanied by notice that delivery of the original certificates was
made to the Voting Trustee, provided, however, that to the extent that
simultaneously with the delivery of an Exercise Notice to the Company the
Optionee provides to the Company a Sale Affidavit (as such term is defined in
the Voting Trust Agreement), then the shares issued pursuant to such exercise
shall be issued in the name of and delivered directly by the Company to the
purchaser described in such Affidavit, and a copy of said certificates shall be
delivered to the Optionee accompanied by notice that delivery of the original
certificates was made to such Purchaser.
4. Death. The options granted hereunder shall not in any way be affected by
the death of the Optionee, and shall continue to be exercisable by his legal
representatives or beneficiaries pursuant to the terms hereof.
5. Tax Status. The Company makes no representation or warranty whatsoever
to the Optionee as to the tax consequences of the grant or exercise of the
Option or of the disposition of Shares acquired thereunder.
6. Antidilution Adjustments.
(a) Adjustment for Subdivisions or Combinations of Common Stock. In the
event the Company at any time or from time to time after the date hereof effects
a subdivision or combination of its outstanding capital stock into a greater or
lesser number of shares, then and in each such event the number of shares for
which the option is exercisable shall be proportionally increased (for
subdivisions) or decreased (for combinations). Any adjustment under this Section
6(a) shall become effective at the close of business on the date the subdivision
or combination becomes effective.
(b) Adjustment for Certain Dividends, Distributions and Common Stock
Equivalents. In the event the Company at any time or from time to time after the
date hereof shall make, issue or fix a record date for the determination of the
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
("Common Stock Equivalents") convertible into or entitling the holder to receive
additional shares of Common Stock or Common Stock Equivalents, without payment
of any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise), then the number of shares for which this
Option is exercisable shall be increased as of the time of such issuance, by
multiplying the number of shares for which this Option is then exercisable in
effect by a fraction,
(i) the numerator of which shall be the total number of shares of Common
Stock issued and outstanding or deemed to be issued and outstanding
immediately prior to the time of such issuance, plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution or upon conversion or exercise or successive conversion
or exercise of such Common Stock Equivalents; and
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<PAGE>
(ii) the denominator of which shall be the total number of shares of Common
Stock issued and outstanding or deemed to be issued and outstanding
immediately prior to the time of such issuance.
(c) Adjustment for Reclassification, Exchange, or Substitution. If the
Common Stock issuable upon the exercise of this Option shall be reclassified or
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 6), then and in each such event the
holder of this Option shall have the right thereafter to convert such shares
into the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock for which this Option might have
been exercised immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
(d) Reorganization, Mergers, Consolidations or Sales of Assets. If at any
time or from time to time there shall be a capital reorganization or the Common
Stock (other than a subdivision, combination, dividend, reclassification, or
exchange of shares provided from elsewhere in this Section), or a merger or
consolidation of the Company with or into another corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holder of this Option shall thereafter be
entitled to receive upon exercise of this Option the number of shares of stock
or other securities or property of the Company or of the successor corporation
resulting from such merger or consolidation or sale, to which a holder of the
Common Stock deliverable upon exercise of this Option immediately prior to such
capital reorganization, merger, consolidation or sale would have been entitled
upon such shares' capital reorganization, merger, consolidation or sale.
(e) Adjustment of Exercise Price. Upon each adjustment of the number of
shares for which this Option is exercisable as a result of the calculations made
in this Section, this Option shall thereafter evidence the right to purchase,
the adjusted number of shares at the adjusted Exercise Price (calculated to the
nearest cent), obtained by dividing (A) the product obtained by multiplying the
exercise price in effect prior to such adjustment by (B) the number of shares
for which this Option is exercisable prior to adjustment.
(f) Reservation of Stock Issuable Upon Exercise. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Option,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Option in full. If at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the exercise of this Option in full, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
- 4 -
<PAGE>
7. Fractional Shares. No fractional shares shall be issued upon the
exercise of this Option. If a requested exercise of this Option would result in
the issuance of a fractional share of Common Stock, the Company shall, in lieu
of issuing any fractional share, pay the holder otherwise entitled to such
fraction in cash, that fraction multiplied by the Market Price on the date of
receipt by the Company of the written n otice and payment in full of the
exercise price pursuant to Section 3(b).
8. Registration. The Company shall use its diligent best efforts to
register the exercise of the Option granted hereby and the resale of the Common
Stock issuable upon exercise of this Option on a registration statement, or
registration statements on Form S-3 and/or Form S-8 or such other form as shall
be appropriate and available for use to the Company, pursuant to the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(together, the "Act"), within 90 days after the execution of this Agreement, and
from such time as such registration statement shall have become effective,
maintain such registration in effect and keep available for delivery upon the
exercise of the Options, a prospectus that meets the requirements of Section 10
of the Act , and to comply with all applicable requirements of the Securities
Exchange Act of 1934, any securities exchange on which the Company's stock may
then be listed, and shall qualify the shares for sale under applicable state
securities laws; provided, however, that the Company shall not be required to
consent to general service of process, to subject itself to taxation, to qualify
to do business or to incur in excess of $7,500.00 as a condition of
qualification of the shares for sale under state securities laws; and provided,
further that the Company shall have no obligation to register the Common Stock
issuable upon exercise of this Option or maintain the effectiveness of such
registration or qualification or to keep available a prospectus, as aforesaid,
in the event that, by amendment to the Act or otherwise, such registration or
qualification or the delivery of such prospectus is not required at the time
said securities underlying this Option are to be issued or sold; and provided
further, that in the event, by amendment to the Act or otherwise, some other or
different requirement shall be imposed by act of the Congress of the United
States which shall relate to the issuance of such Common Stock issuable upon
exercise of this Option, the Company shall use its best efforts to comply with
such requirements so long as the same shall not be more burdensome to the
Company than the registration statement under the Act. Promptly after a
registration statement under the Act covering the aforementioned Common Stock
issuable upon exercise of this Option has become effective, or such other action
as contemplated hereby and as may be required has been taken, as the case may
be, the Company shall cause notice thereof or a copy of the prospectus covering
the aforementioned securities to be mailed to the Optionee.
9. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if mailed by first-class mail or
express delivery service, postage or other fee prepaid, with return receipt
requested, addressed to each party hereto as follows:
(a) if to the Company:
[address]
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<PAGE>
(b) if to the Optionee:
[address]
copy to:
Either party may designate any other address to which notice shall be given, by
giving written notice to the other of such change of address.
10. Governing Law. This Agreement shall be construed and governed in
accordance with the internal laws of the State of Delaware, without regard to
principles of conflict of law. Each of the parties hereto agrees to submit to
the jurisdiction of the federal or state courts located in the County of New
Castle, State of Delaware, in any action or proceeding arising out of or
relating to this Agreement.
11. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties, and may not be
altered or modified, except in writing and signed by the party to be charged
thereby, and supersedes any and all previous agreements between the parties.
12. Amendments, Etc. None of the terms hereof may be waived, modified or
discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
13. Severability. In the event that any provision of this Agreement would
be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable. If any court construes any of the
provisions of this Agreement to be unenforceable because of the duration of such
provision or the area covered thereby, such court shall have the power to reduce
the duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. In the event any of the
provisions contained in this Agreement should nevertheless be held to be
invalid, prohibited or unenforceable, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
14. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided however, that the Optionee may not assign this
Agreement without the Company's prior written consent.
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<PAGE>
15. Headings. The headings contained herein are included for convenience of
reference only and do not constitute a part of this Agreement.
16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AUTOLEND GROUP, INC.
By: __________________________
Name:
Title:
STEVEN SIMON
By: __________________________
Name:
Title:
[Signature Page for Stock Option Agreement]
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<PAGE>
EXHIBIT A
PURCHASE FORM
-------------
(To be signed and delivered to
AUTOLEND GROUP, INC.
upon exercise of the Option)
The undersigned, the holder of the foregoing Option, hereby
irrevocably elects to exercise the purchase rights represented by such Option,
and to purchase thereunder ____ shares of Common Stock, par value $.002 of
AutoLend Group, Inc. ("Shares"), and herewith makes payment of $ ($ per share)
therefor, and requests that the Certificates for the Shares be issued in the
name(s) of, and delivered to
whose address(es) is/are
.
The undersigned hereby represents that the shares to be purchased upon
the exercise of this Option are being purchased for investment only, and not
with a view toward the distribution or resale thereof, other than pursuant to an
effective registration statement under, or subject to an exemption from, the
applicable requirements of the Securities Act of 1933, as amended.
The undersigned hereby agrees to remit to AutoLend Group, Inc. (the
"Corporation") an amount sufficient to satisfy the Corporation's federal, state
and local withholding tax obligations with respect to the exercise of the
Option.
_______________________________
Dated: , 19__
EXHIBIT 25
Optionee: Helen Porter
Grant: 125,000 shares
AUTOLEND GROUP, INC.
--------------------
STOCK OPTION AGREEMENT
----------------------
THIS STOCK OPTION AGREEMENT is made and entered into as of the ___ day of
________, 1996 (the "Agreement"), by and between AutoLend Group, Inc., a
Delaware corporation, having its principal place of business at 420 Jefferson
Avenue, Miami Beach, FL 33139 (the "Company"), and Helen Porter, an individual
residing at [address], (the "Optionee").
WHEREAS, the Optionee has agreed to serve as a consultant to the Company
pursuant to a Consulting Agreement between the Company and the Optionee dated
the date hereof.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee on the date
hereof the right and option to purchase (subject to adjustment pursuant to
Section 6 hereof) an aggregate of 125,000 of its shares of Common Stock at an
option price per share of $2.65, subject to adjustment as provided herein.
2. Option Period. The option granted hereby each shall remain in full force
and effect and be fully exercisable until 12:01 a.m. Eastern Standard Time of
the thirty-first day (the "Expiration Date") following the tenth consecutive
trading day that the Market Price (as hereinafter defined) of the Company's
Common Stock equals or exceeds $6.00 per share, and the Registration Statement
referred to in Section 8 hereof is effective, provided however, that if, on the
date the Optionee elects to exercise this Option in the manner provided herein
during the thirty-one day period as aforesaid (the "Attempted Exercise Date"),
the Registration Statement referred to in Section 8 hereof shall not be
effective or the Optionee is otherwise unable to sell his shares into the public
market because of the Company's failure to comply with any applicable laws or
regulations required hereunder, then the Expiration Date shall be adjusted such
that this Option shall expire and no longer be exercisable following the tenth
day following the fifth consecutive trading day after the Attempted Exercise
Date that the Market Price (as hereinafter defined) of the Company's Common
Stock equals or exceeds $6.00 per share provided that during each of such ten
days the Registration Statement referred to in Section 8 hereof shall be
effective or the Optionee is otherwise able to sell her shares in the public
market. "Market Price" shall mean, as of any day, the closing sales price of the
Common Stock on such day on the New York Stock Exchange or the American Stock
Exchange (or if the Common Stock shall not then be listed on either such
exchange, the
<PAGE>
closing sales price on the principal (determined by highest volume averaged for
a period of twenty consecutive business days prior to the day as to which
"Market Price" is being determined) national securities exchange (as defined in
the Securities Exchange Act of 1934, as amended) on which the Common Stock may
then be listed) or, if there shall have been no sales on such exchange or
exchanges on such day, the closing sales price of the Common Stock on such day
on the NASDAQ National Market System or, if the Common Stock is not included on
the NASDAQ National Market System, the average of the bid and asked prices at
the end of such day or, if the Common Stock shall not be so listed, the average
of the bid and asked prices at the end of the day in the over-the-counter market
as reported by NASDAQ or, if the Common Stock is included on NASDAQ, as reported
by the National Quotation Bureau, Inc. or any successor organization, in each
such case, averaged for a period of 20 consecutive business days prior to the
day as to which "Market Price" is being determined.
3. Exercise of Option. (a) Prior to the Expiration Date, the right of
exercise shall be cumulative so that if this Option is exercised in part, it
shall remain exercisable, in part, with respect to all shares not so purchased
at any time prior to the Expiration Date or the earlier termination of this
option. This option may not be exercised at any time on or after the Expiration
Date.
(b) The Optionee may exercise the option (to the extent then exercisable)
by delivering to the Company a written notice duly signed by the Optionee in the
form attached hereto as Exhibit A (an "Exercise Notice") stating the number of
shares that the Optionee has elected to purchase, and accompanied by payment (in
cash or by certified check) of an amount equal to the full purchase price for
the shares to be purchased. The notice shall also contain a statement (if
required and in a form reasonably acceptable to the Company) that the Optionee
is acquiring the shares for investment only, and not with a view toward the
distribution or resale thereof, other than pursuant to an effective registration
statement under, or subject to an exemption from, the applicable requirements of
the Securities Act of 1933, as amended. Following receipt by the Company of such
notice and payment, the Company shall issue, within three (3) business days, the
shares in the name of the Optionee and deliver the certificate therefor to the
Optionee. No shares shall be issued until full payment therefor has been made
and until the Company has complied with all requirements of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, any
securities exchange on which the Company's stock may then be listed and all
applicable state laws in connection with the issuance of the shares or the
listing of the shares on said securities exchange. The Optionee shall have none
of the rights of a shareholder in respect of such shares until they are issued.
Notwithstanding anything herein to the contrary, the Optionee and the Company
currently are parties to a Voting Trust Agreement dated of even date herewith
and expiring on _____, pursuant to which all shares of the Company's common
stock now or hereafter owned by the Optionee shall be deposited with the Voting
Trustee under the Voting Trust Agreement and upon which the Voting Trustee shall
have certain rights and obligations as provided therein. So long as the Voting
Trust Agreement remains in effect, upon the exercise of this Option in whole or
in part by the Optionee, certificates representing shares issued upon exercise
of this Option shall be registered in the name of and delivered to the Voting
Trustee, and a copy of said certificates shall be delivered to the
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<PAGE>
Optionee accompanied by notice that delivery of the original certificates was
made to the Voting Trustee, provided, however, that to the extent that
simultaneously with the delivery of an Exercise Notice to the Company the
Optionee provides to the Company a Sale Affidavit (as such term is defined in
the Voting Trust Agreement), then the shares issued pursuant to such exercise
shall be issued in the name of and delivered directly by the Company to the
purchaser described in such Affidavit, and a copy of said certificates shall be
delivered to the Optionee accompanied by notice that delivery of the original
certificates was made to such Purchaser.
4. Death. The options granted hereunder shall not in any way be affected by
the death of the Optionee, and shall continue to be exercisable by his legal
representatives or beneficiaries pursuant to the terms hereof.
5. Tax Status. The Company makes no representation or warranty whatsoever
to the Optionee as to the tax consequences of the grant or exercise of the
Option or of the disposition of Shares acquired thereunder.
6. Antidilution Adjustments.
(a) Adjustment for Subdivisions or Combinations of Common Stock. In the
event the Company at any time or from time to time after the date hereof effects
a subdivision or combination of its outstanding capital stock into a greater or
lesser number of shares, then and in each such event the number of shares for
which the option is exercisable shall be proportionally increased (for
subdivisions) or decreased (for combinations). Any adjustment under this Section
6(a) shall become effective at the close of business on the date the subdivision
or combination becomes effective.
(b) Adjustment for Certain Dividends, Distributions and Common Stock
Equivalents. In the event the Company at any time or from time to time after the
date hereof shall make, issue or fix a record date for the determination of the
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
("Common Stock Equivalents") convertible into or entitling the holder to receive
additional shares of Common Stock or Common Stock Equivalents, without payment
of any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise), then the number of shares for which this
Option is exercisable shall be increased as of the time of such issuance, by
multiplying the number of shares for which this Option is then exercisable in
effect by a fraction,
(i) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding or deemed to be issued and
outstanding immediately prior to the time of such issuance,
plus the number of shares of Common Stock issuable in payment
of such dividend or distribution or upon conversion or
exercise or successive conversion or exercise of such Common
Stock Equivalents; and
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<PAGE>
(ii) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding or deemed to be issued
and outstanding immediately prior to the time of such
issuance.
(c) Adjustment for Reclassification, Exchange, or Substitution. If the
Common Stock issuable upon the exercise of this Option shall be reclassified or
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 6), then and in each such event the
holder of this Option shall have the right thereafter to convert such shares
into the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock for which this Option might have
been exercised immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
(d) Reorganization, Mergers, Consolidations or Sales of Assets. If at any
time or from time to time there shall be a capital reorganization or the Common
Stock (other than a subdivision, combination, dividend, reclassification, or
exchange of shares provided from elsewhere in this Section), or a merger or
consolidation of the Company with or into another corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holder of this Option shall thereafter be
entitled to receive upon exercise of this Option the number of shares of stock
or other securities or property of the Company or of the successor corporation
resulting from such merger or consolidation or sale, to which a holder of the
Common Stock deliverable upon exercise of this Option immediately prior to such
capital reorganization, merger, consolidation or sale would have been entitled
upon such shares' capital reorganization, merger, consolidation or sale.
(e) Adjustment of Exercise Price. Upon each adjustment of the number of
shares for which this Option is exercisable as a result of the calculations made
in this Section, this Option shall thereafter evidence the right to purchase,
the adjusted number of shares at the adjusted Exercise Price (calculated to the
nearest cent), obtained by dividing (A) the product obtained by multiplying the
exercise price in effect prior to such adjustment by (B) the number of shares
for which this Option is exercisable prior to adjustment.
(f) Reservation of Stock Issuable Upon Exercise. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Option,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Option in full. If at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the exercise of this Option in full, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
- 4 -
<PAGE>
7. Fractional Shares. No fractional shares shall be issued upon the
exercise of this Option. If a requested exercise of this Option would result in
the issuance of a fractional share of Common Stock, the Company shall, in lieu
of issuing any fractional share, pay the holder otherwise entitled to such
fraction in cash, that fraction multiplied by the Market Price on the date of
receipt by the Company of the written n otice and payment in full of the
exercise price pursuant to Section 3(b).
8. Registration. The Company shall use its diligent best efforts to
register the exercise of the Option granted hereby and the resale of the Common
Stock issuable upon exercise of this Option on a registration statement, or
registration statements on Form S-3 and/or Form S-8 or such other form as shall
be appropriate and available for use to the Company, pursuant to the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(together, the "Act"), within 90 days after the execution of this Agreement, and
from such time as such registration statement shall have become effective,
maintain such registration in effect and keep available for delivery upon the
exercise of the Options, a prospectus that meets the requirements of Section 10
of the Act , and to comply with all applicable requirements of the Securities
Exchange Act of 1934, any securities exchange on which the Company's stock may
then be listed, and all applicable state laws; provided however, that the
Company shall have no obligation to register the Common Stock issuable upon
exercise of this Option or maintain the effectiveness of such registration or
qualification or to keep available a prospectus, as aforesaid, in the event
that, by amendment to the Act or otherwise, such registration or qualification
or the delivery of such prospectus is not required at the time said securities
underlying this Option are to be issued or sold; and provided further, that in
the event, by amendment to the Act or otherwise, some other or different
requirement shall be imposed by act of the Congress of the United States which
shall relate to the issuance of such Common Stock issuable upon exercise of this
Option, the Company shall use its best efforts to comply with such requirements
so long as the same shall not be more burdensome to the Company than the
registration statement under the Act. Promptly after a registration statement
under the Act covering the aforementioned Common Stock issuable upon exercise of
this Option has become effective, or such other action as contemplated hereby
and as may be required has been taken, as the case may be, the Company shall
cause notice thereof or a copy of the prospectus covering the aforementioned
securities to be mailed to the Optionee.
9. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if mailed by first-class mail or
express delivery service, postage or other fee prepaid, with return receipt
requested, addressed to each party hereto as follows:
(a) if to the Company:
[address]
(b) if to the Optionee:
- 5 -
<PAGE>
[address]
copy to:
Either party may designate any other address to which notice shall be given, by
giving written notice to the other of such change of address.
10. Governing Law. This Agreement shall be construed and governed in
accordance with the internal laws of the State of Delaware, without regard to
principles of conflict of law. Each of the parties hereto agrees to submit to
the jurisdiction of the federal or state courts located in the County of New
Castle, State of Delaware, in any action or proceeding arising out of or
relating to this Agreement.
11. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties, and may not be
altered or modified, except in writing and signed by the party to be charged
thereby, and supersedes any and all previous agreements between the parties.
12. Amendments, Etc. None of the terms hereof may be waived, modified or
discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
13. Severability. In the event that any provision of this Agreement would
be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable. If any court construes any of the
provisions of this Agreement to be unenforceable because of the duration of such
provision or the area covered thereby, such court shall have the power to reduce
the duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. In the event any of the
provisions contained in this Agreement should nevertheless be held to be
invalid, prohibited or unenforceable, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
14. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided however, that the Optionee may not assign this
Agreement without the Company's prior written consent.
15. Headings. The headings contained herein are included for convenience of
reference only and do not constitute a part of this Agreement.
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<PAGE>
16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AUTOLEND GROUP, INC.
By: ________________________
Name:
Title:
HELEN PORTER
By: ________________________
Name:
Title:
[Signature Page for Stock Option Agreement]
<PAGE>
EXHIBIT A
PURCHASE FORM
-------------
(To be signed and delivered to
AUTOLEND GROUP, INC.
upon exercise of the Option)
The undersigned, the holder of the foregoing Option, hereby
irrevocably elects to exercise the purchase rights represented by such Option,
and to purchase thereunder ____ shares of Common Stock, par value $.002 of
AutoLend Group, Inc. ("Shares"), and herewith makes payment of $ ($ per share)
therefor, and requests that the Certificates for the Shares be issued in the
name(s) of, and delivered to
whose address(es) is/are
.
The undersigned hereby represents that the shares to be purchased upon
the exercise of this Option are being purchased for investment only, and not
with a view toward the distribution or resale thereof, other than pursuant to an
effective registration statement under, or subject to an exemption from, the
applicable requirements of the Securities Act of 1933, as amended.
The undersigned hereby agrees to remit to AutoLend Group, Inc. (the
"Corporation") an amount sufficient to satisfy the Corporation's federal, state
and local withholding tax obligations with respect to the exercise of the
Option.
_______________________________
Dated: , 19__
EXHIBIT 26
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT is made and entered into as of the ___ day of ______
1996 (the "Agreement"), by and among AutoLend Group, Inc., a Delaware
corporation, having its principal place of business at ________ (the "Company"),
AutoLend IAP, Inc. a Delaware corporation, having its principal place of
business at ("Inventory"), and ______________, as escrow agent (the "Escrow
Agent").
WHEREAS, the Company and Inventory are entering into this Agreement
pursuant to the terms of the Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated the date hereof, by and among the Company and __________, a
Delaware corporation (the "Purchaser"); and
WHEREAS, the Company is the holder of certain shares of 11% Cumulative
Convertible Preferred Stock ("Preferred Stock") of Inventory, the terms of which
entitle the Company to require Inventory to repurchase certain shares of
Preferred Stock during a 60- day exercise period effective after three years
from the date of issuance of such Preferred Stock; and
WHEREAS, pursuant to the Stock Purchase Agreement the Purchaser has agreed
to cause Inventory to deposit with the Escrow Agent $250,000 to guarantee, in
part, Inventory's obligation to repurchase the shares of Preferred Stock at the
price contemplated by the terms of such Preferred Stock; and
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions.
1.1 Capitalized terms used herein without definition shall have the
respective meanings given in the Stock Purchase Agreement.
1.2 The term "Default Release Event" shall mean the failure by
Inventory to honor its Mandatory Redemption obligation, set forth in Section 6
of the AutoLend Inventory Assistance Program, Inc. Certificate of Designation of
Rights, Preference and Privileges of $.01 Par Value 11% Cumulative Convertible
Preferred Stock (the "Certificate of Designation").
1.3 The term "Escrowed Funds" shall mean $250,000 upon deposit thereof
with the Escrow Agent.
1.4 The term "Expiration Release Event" shall mean the expiration
unexercised by the Company of the redemption rights granted pursuant to Section
6 of the Certificate of Designation.
<PAGE>
1.5 The term "Payment Release Event" shall mean Inventory having
discharged its redemption obligation pursuant to Section 6 of the Certificate of
Designation.
1.6 The term "Release Event" shall mean a Payment Release Event or an
Expiration Release Event.
2. Acceptance of Appointment and Receipt and Investment of Escrowed Funds
by Escrow Agent.
2.1 The Escrow Agent hereby accepts its appointment and designation as
escrow agent pursuant to the terms of this Agreement.
2.2 The Escrow Agent hereby acknowledges receipt from the Guarantors
of the Escrowed Funds.
2.3 Any income received in respect of the Escrowed Funds which is not
otherwise required to make up any deficiency in the Escrowed Funds shall not be
deemed part of the "Escrowed Funds" and shall be released by the Escrow Agent,
upon receipt, to Inventory.
2.4 The Escrow Agent shall cause any cash which it holds to be
invested and reinvested from time to time as directed in writing by Inventory in
(i) obligations of the U.S. government, (ii) certificates of deposit of an
FDIC-insured bank having combined capital and surplus of not less than
$50,000,000, or (iii) money market funds investing in obligations of the U.S.
government; provided that all such investments shall mature not later than the
third anniversary of the Original Issue Date (as defined in the Certificate of
Designation) and thereafter, not later than every thirty (30) days.
3. Terms of Escrow.
3.1 Joint Written Instructions. Upon receipt by the Escrow Agent of
joint written instructions (executed by both Inventory and the Company) with
respect to the release of the Escrowed Funds or the Escrowed Securities to
either of the parties, the Escrow Agent shall, within five (5) days of the
receipt of such instructions, deliver the Escrowed Funds specified in such
instructions to the party specified in such instructions; following such
release, the Escrow Agent shall have no further obligations or responsibilities
under this Escrow Agreement with respect to such Escrowed Funds.
3.2 Notice by the Company. If at any time after the third
anniversary of the Original Issue Date the Company believes that a Default
Release Event has occurred, it may invoke the following procedure:
(i) The Company may send a written notice (a "Request for Delivery")
to the Escrow Agent representing that a Default Release Event has occurred
and describing in reasonable detail such event, and requesting that the
Escrowed Funds be released to it. Immediately upon receipt of the Request
for Delivery, the Escrow
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<PAGE>
Agent shall send a copy of such Request for Delivery to Inventory, along
with a written notice (an "Escrow Agent's Delivery Notice"), specifying
that if the Escrow Agent does not receive, within ten (10) days from the
date of such Escrow Agent's Delivery Notice, a written notice from
Inventory (a "Notice of Inventory's Objection to Delivery") objecting to
the release of the Escrowed Funds to the Company, the Escrow Agent shall,
upon the expiration of such ten (10) days, release the Escrowed Funds to
the Company.
(ii) If by the expiration of ten (10) days from the date of the Escrow
Agent's Delivery Notice, the Escrow Agent shall not have received a Notice
of Inventory's Objection to Delivery, it shall, within five (5) days
thereafter, deliver the Escrowed Funds to the Company; following such
delivery, the Escrow Agent shall have no further obligations or
responsibilities under this Escrow Agreement.
(iii) If within ten (10) days from the date of the Escrow Agent's
Delivery Notice, the Escrow Agent shall receive a Notice of Inventory's
Objection to Delivery, the Escrow Agent shall continue to hold or shall
dispose of the Escrowed Funds as provided in Section 3.3, below.
3.3 Escrow Agent Actions. In the event the Escrow Agent shall receive
a Request for Delivery from the Company and a timely Notice of Inventory's
Objection to Delivery, then the Escrow Agent, at its discretion, may:
(i) continue to hold the Escrowed Funds described in the Request for
Delivery until directed to dispose of them pursuant to (a) a final order or
judgment of a court of competent jurisdiction or (b) instructions or
directions furnished in writing, signed by both Inventory and the Company;
or
(ii) bring an appropriate action or proceeding to deposit the Escrowed
Funds described in the Request for Delivery in a court of competent
jurisdiction.
3.4 Notice by Inventory. If at any time Inventory believes that a
Release Event has occurred, Inventory may deliver to the Escrow Agent a written
notice to that effect specifying and describing in reasonable detail the Release
Event and requesting that the Escrowed Funds be released to it (a "Notice of
Release Event"); the Escrow Agent shall thereupon follow the following
procedure:
(i) Immediately upon receipt of the Notice of Release Event, the
Escrow Agent shall send a copy of such Notice of Release Event to the
Company, along with a written notice (an "Escrow Agent's Release Notice"),
specifying that if the Escrow Agent does not receive, within ten (10) days
from the date of such Escrow Agent's Release Notice, a written notice from
the Company (a "Notice of Company Objection"), objecting to the release (to
the party specified in the Notice of Release Event) of the Escrowed Funds,
the Escrow Agent shall, upon the expiration of such ten (10) days, release
the Escrowed Funds to Inventory.
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<PAGE>
(ii) If by the expiration of ten (10) days from the date of the Escrow
Agent's Release Notice, the Escrow Agent shall not have received a Notice
of Company Objection, it shall, within five (5) days thereafter, deliver
the Escrowed Funds to the party specified in the Notice of Release Event;
following such delivery, the Escrow Agent shall have no further obligations
or responsibilities under this Escrow Agreement with respect to such
Escrowed Funds.
(iii) If within ten (10) days from the date of the Escrow Agent's
Release Notice, the Escrow Agent shall receive a Notice of the Company
Objection, then the Escrow Agent shall continue to hold or shall dispose of
the Escrowed Funds as provided in Section 3.5, below.
3.5 Escrow Agent Actions. In the event the Escrow Agent shall receive
a Notice of Release Event from Inventory and a timely Notice of Company
Objection thereto, then the Escrow Agent, at its discretion, may:
(i) continue to hold the Escrowed Funds until directed to dispose of
them pursuant to (a) a final order or judgment of a court of competent
jurisdiction or (b) instructions or directions furnished in writing, signed
by both Inventory and the Company; or
(ii) bring an appropriate action or proceeding to deposit the Escrowed
Funds in a court of competent jurisdiction.
4. The Escrow Agent. In order to induce the Escrow Agent to act as escrow
agent hereunder, each of Inventory and the Company hereby covenants to and
agrees with the other and with the Escrow Agent as follows:
4.1 The Escrow Agent shall not in any way be bound or affected by any
amendment, modification or cancellation of this Escrow Agreement, unless the
same shall have been agreed to, in writing, by the Escrow Agent. The Escrow
Agent shall comply with any written instructions issued pursuant to Section 2.4
hereof with respect to investment decisions relating to such cash. Failing
receipt of such written instructions, the Escrow Agent shall invest such cash in
United States treasury obligations with a maturity date no later than the third
anniversary of the Original Issue Date.
4.2 The Escrow Agent shall be entitled to rely, and shall be protected
in acting in reliance upon, any certificates, instructions or directions
furnished to the Escrow Agent in writing under this Escrow Agreement and shall
be entitled to treat as genuine, and as the document it purports to be, any
certificate, letter, instruction or other document or instrument delivered to
the Escrow Agent hereunder and believed by the Escrow Agent to be genuine and to
have been presented by the proper party or parties, without being required to
determine the authenticity or correctness of any fact stated therein, the
propriety or validity thereof, or the authority or authorization of the party or
parties making and/or delivering the same to do so.
-4-
<PAGE>
4.3 This Escrow Agreement sets forth exclusively the duties and
obligations of the Escrow Agent with respect to any and all matters pertinent to
its acting as escrow agent hereunder. The Escrow Agent is acting only as a
stakeholder with respect to the Escrowed Funds.
4.4 The Escrow Agent undertakes to perform only such duties as are
expressly set forth in this Escrow Agreement, and neither the Escrow Agent nor
any of its partners, employees or agents shall be in any manner liable or
responsible to Inventory or the Company or any other person or entity for or in
respect of any loss, claim, damage or liability (collectively, "Loss") resulting
from, or arising out of, any action or failure or omission to act hereunder or
for any mistake of fact or error of judgment, including, but not limited to, any
Loss that may occur by reason of the exercise of the Escrow Agent's discretion
in any particular matter or for any other reason, except that the Escrow Agent
shall be liable for any Loss which shall be finally adjudicated, after all
appeals have been exhausted or the time for appeal has expired, by a court of
competent jurisdiction to be the result of gross negligence or willful
misconduct on the part of the Escrow Agent.
4.5 The Company and Inventory, jointly and severally, covenant and
agree to indemnify and hold the Escrow Agent and its partners, employees and
agents (the Escrow Agent and any such person or entity seeking indemnification
hereunder being hereinafter referred to as an "Indemnified Party") harmless from
and against, and upon demand reimburse each Indemnified Party for, any and all
losses, claims, damages, liabilities, costs and expenses (including reasonable
expenses of its legal counsel) (collectively, "Indemnified Losses") which may be
paid, incurred or suffered by such Indemnified Party or to which such
Indemnified Party may become subject by reason of or in connection with the
administration of the Escrow Agent's duties as escrow agent hereunder
(including, but not limited to, any action taken or omitted by the Escrow Agent
in connection with this Escrow Agreement or any action allegedly so taken or
omitted) or by reason of, or as a result of, the Escrow Agent's compliance with
the instructions set forth herein or with any instructions delivered to the
Escrow Agent pursuant hereto, except with respect to Indemnified Losses which
shall be finally adjudicated, after all appeals have been exhausted or the time
for appeal has expired, by a court of competent jurisdiction to be the result of
gross negligence or willful misconduct on the part of such Indemnified Person.
4.6 In the event of any controversy or dispute hereunder, or with
respect to any question as to the construction of this Escrow Agreement or any
action to be taken by it hereunder, the Escrow Agent may, in its discretion,
obtain the advice of any counsel it shall select in connection with any matter
arising under this Agreement and the Escrow Agent shall incur no liability for
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
4.7 The Escrow Agent (or any successor escrow agent or agents) shall
be entitled to reimbursement for all fees, expenses, disbursements and advances
(including attorneys' fees and expenses) incurred or made by it in the
performance of its duties hereunder. One-half of all such fees, disbursements,
expenses and advances, if any, shall be
-5-
<PAGE>
paid by the Company and one-half shall be paid Inventory. The Escrow Agent shall
not be entitled to a fee in respect solely of its services as Escrow Agent.
4.8 Upon not less than 2 days' written notice to the Company and
Inventory of its intention to resign under this Escrow Agreement, the Escrow
Agent may resign as escrow agent hereunder and shall thereafter be discharged of
all its duties and obligations hereunder. Such resignation shall take effect
upon receipt by the Escrow Agent of an instrument of acceptance executed by a
successor escrow agent (which successor may be selected by the Escrow Agent with
the approval of the Company Inventory, which approval shall not be unreasonably
withheld, and shall have all other rights of, and be deemed to be, the Escrow
Agent hereunder for all purposes hereof) and upon delivery by the Escrow Agent
to such successor of the remaining Escrowed Funds. In addition, the Escrow Agent
shall be discharged of all its duties and obligations hereunder upon its deposit
in a court of competent jurisdiction of all of the remaining Escrowed Funds.
Each of the Company and the Inventory hereby submits to the personal
jurisdiction of any such court in any such action.
5. Miscellaneous.
5.1 The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
party at a later time to enforce the same. No waiver by any party of the breach
of any term or covenant contained in this Escrow Agreement shall release or
affect any liability resulting from such breach, and no waiver of any nature,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such condition or
breach, a waiver of any other condition or a waiver of any breach of any other
condition, term or covenant of this Escrow Agreement.
5.2 All notices and other communications pursuant to this Agreement
shall be in writing and deemed to be sufficient if contained in a written
instrument and shall be deemed given if delivered personally, telecopied, sent
by nationally-recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, as follows:
(a) If to Inventory:
Telecopier:
with a copy to:
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<PAGE>
(b) If to the Company:
AutoLend Group, Inc.
Attention:
Telecopier:
with a copy to:
(c) If to the Escrow Agent:
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a telecopy, when the party receiving such copy shall have confirmed
receipt of the communication, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following dispatch,
and (d) in the case of mailing, upon actual receipt by the party to whom notice
has been given. Any party may, by notice given in accordance with this Section
5.2, designate another address or person for receipt of notices hereunder.
5.3 This Escrow Agreement shall be binding upon and enure to the
benefit of the permitted successors and assigns of such parties. This Agreement
may be assigned (i) by the Escrow Agent to a successor as provided herein, and
(ii) with the consent of all of the parties hereto.
5.4 This Escrow Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof, and may not be amended
except by a writing signed on behalf of each party hereto.
5.5 This Escrow Agreement shall be construed in accordance with and
governed by the internal laws of the State of Delaware, without regard to
principles of conflict of laws. The parties hereby consent to the jurisdiction
of any federal or state court sitting in the State of Delaware having
jurisdiction over disputes involving this Agreement. Any action to enforce or
interpret this Agreement must be brought in any federal or state court sitting
in the State of Delaware. The parties hereby consent to the exclusive
jurisdiction of the courts sitting in the State of Delaware, notwithstanding the
state of incorporation of the Company or the state of incorporation of Inventory
or where a dispute concerning this Agreement arose.
5.6 The headings in this Escrow Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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<PAGE>
5.7 Each party agrees to cooperate fully with the other parties and to
execute such further instruments, documents and agreements and to give such
further written assurances as may be reasonably requested by any other party to
evidence and reflect the transactions described herein and contemplated hereby
and to carry into effect the intents and purposes of this Agreement.
5.8 The Company and Inventory agree and acknowledge that the initial
Escrow Agent hereunder has acted and continues to act as counsel for ______ in
connection with general matters and in connection with the ________ Agreement.
____________ acknowledges and agrees that such Escrow Agent will continue to act
as counsel to ___________ in connection with matters arising out of this Escrow
Agreement, including any future disputes between the Company and Inventory
relating thereto and that ___________ will not raise any objection to such
representation by the Escrow Agent.
5.9 This Escrow Agreement may be executed by the parties hereto in
counterparts and each such executed counterpart shall be an original instrument,
but all of which together shall constitute one and the same instrument.
[REMAINDER OF PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AUTOLEND GROUP, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
AUTOLEND IAP, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
HELEN PORTER
By: ____________________________
Name: ____________________________
Title: ____________________________
[ESCROW AGENT:]
By: ____________________________
Name: ____________________________
Title: ____________________________
[Signature Page of Escrow Agreement]
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EXHIBIT 27
VOTING TRUST AGREEMENT
THIS AGREEMENT made as of the ___ day of _________, 1996, by and among each
of Steven Simon and Helen Porter (individually, a "Shareholder" and together,
the "Shareholders"), AutoLend Group, Inc., a Delaware corporation (the
"Corporation") and Nunzio P. DeSantis, as the initial Voting Trustee (the
"Voting Trustee").
W I T N E S S E T H :
The parties hereto desire that the Shareholders transfer the shares of
common stock of the Corporation owned by the Shareholders (such shares, together
with any shares subsequently acquired by the Shareholders, whether upon purchase
on the open market or otherwise, upon the exercise of options, upon the exchange
or conversion of securities or rights which are exchangeable or convertible into
common stock, or the issuance of additional shares in respect of the shares
initially deposited herewith by virtue of any stock split, stock dividend or
recapitalization being hereinafter referred to as the "Trust Stock") to the
Voting Trustee for the purpose of vesting in the Voting Trustee voting and other
rights pertaining thereto for the period and upon the terms and conditions
stated in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and intending to be legally bound hereby, the parties agree as
follows:
1. Transfer of Trust Stock to Voting Trustee. Each Shareholder hereby
delivers, assigns and transfers unto the Voting Trustee hereunder all of the
shares of Trust Stock and agrees to deliver, assign and transfer any shares of
Trust Stock owned by him at any time in the future so long as this Voting Trust
Agreement continues to be effective.
2. Voting Trust Certificates. The Voting Trustee, in exchange for the Trust
Stock transferred and delivered to the Voting Trustee hereunder, will issue and
deliver to the Shareholder a voting trust certificate in substantially the form
set forth in Exhibit A attached hereto. A voting trust certificate shall be
transferable on the books of the Voting Trust by the record holder thereof in
person or by attorney duly authorized, upon the surrender of such voting trust
certificate properly endorsed for transfer, with all necessary transfer tax
stamps affixed, subject to the same limitations on transfer as are applicable to
transfers of the Trust Stock, the limitations contained in this Voting Trust
Agreement, and compliance with applicable securities laws. Upon the transfer on
the books of the Voting Trust of any voting trust certificate, the transferee
shall succeed to all the rights hereunder of the record holder thereof.
<PAGE>
3. Stock Issuances. In the event that the Voting Trustee shall receive any
additional stock certificates of the Corporation by way of dividend, stock
split, recapitalization, combination of shares or otherwise, upon stock held by
him under this Agreement, the Voting Trustee shall hold such stock certificates
likewise subject to the terms of this Agreement, and shall issue, on behalf of
the Voting Trust, voting trust certificates representing such stock certificates
to the respective registered holder of the then outstanding voting trust
certificate entitled to such stock certificate.
4. Transfer of Voting Trust Certificates. The Voting Trustee shall execute
any and all of the said voting trust certificates, and no voting trust
certificate shall be valid unless duly signed by the Voting Trustee. Each voting
trust certificate shall not be transferable except as provided herein.
5. Destruction or Mutilation of Voting Trust Certificates. The holder of
any voting trust certificate shall immediately notify the Voting Trustee of any
mutilation, loss or destruction thereof. In the case of mutilation, the Voting
Trustee may, in his discretion, cause one or more new certificates representing
the same number of shares, in the aggregate, to be issued to such holder upon
the surrender of the mutilated certificate. In the case of loss or destruction,
the Voting Trustee may, in his discretion, cause one or more new certificates
representing the same number of shares, in the aggregate, to be issued to such
holder; provided, however, that the Voting Trustee may require such holder to
indemnify the Voting Trust and the Voting Trustee, by way of bond or otherwise,
in such form and amount and with such sureties as the Voting Trustee may deem
necessary, against loss or liability by reason of the issuance of such new
certificates.
6. Dividends and Other Payments. Until the termination of this Agreement
each registered holder of a voting trust certificate shall be entitled to
receive promptly from the Voting Trustee payments equal to the amount of
dividends (other than dividends represented by capital stock of the Corporation)
or other distributions, if any, collected by the Voting Trustee upon the Trust
Stock represented by voting trust certificates held by such holder and any
payment representing the amount received upon redemption or sale of any such
Trust Stock, subject, however, to the terms and conditions of this Agreement.
Those registered as holders of voting trust certificates on the dates fixed as
record dates by the Corporation for dividends and for the allotment of rights
shall be entitled to such payments and to any rights to the benefit of which
holders of voting trust certificates may be entitled under this Agreement. The
Voting Trustee may, in his discretion, from time to time, close the voting trust
certificate books against transfers of voting trust certificates for the purpose
of determining the voting trust certificate holders
2
<PAGE>
entitled to vote at any meeting of such holders or to determine any other thing
or act to be done or performed by said holders.
7. Sale of Shares or Voting Trust Certificate by a Shareholder.
(a) Every transferee of any of the Trust Stock owned by either Shareholder,
other than a bona fide purchaser, who is either a Relative (including a spouse,
child, grandchild, great grandchild, parent, grand parent, great grandparent or
cousin to the first or second degree, for the purposes of this definition, a
legally adopted child of an individual shall be treated as a child of such
individual by blood) or an Affiliate (as such terms is defined by 17 C.F.R.
230.144(A)(1)) of any Shareholder shall, by acceptance of the Trust Stock,
become a party to this Agreement with the same force and effect as though an
original party hereto, and shall be deemed a "Shareholder."
(b) If, prior to the termination of this Agreement as provided herein,
Trust Stock is sold in a bona fide sale to a purchaser who is neither a Relative
nor an Affiliate of any of the Shareholders, the Shareholder whose shares of
Trust Stock are being sold shall deliver to the Voting Trustee an affidavit (a
"Sale Affidavit"), executed by the Shareholder under oath, stating: (i) the date
of the bona fide sale: (ii) the number of shares of Trust Stock sold and the
price therefor; (iii) the name, address and taxpayer identification number of
the purchaser in the event of a private sale; and (iv) that the purchaser is
neither a Relative nor an Affiliate of any of the Shareholders. Upon receipt of
the Sale Affidavit as aforesaid, accompanied by a Voting Trust Certificate in
respect of the Trust Stock which is sold, such Trust Stock shall be released
from the terms of this Agreement and the Voting Trustee shall deliver to the
Transfer Agent the certificates representing such Trust Stock for transfer to
the purchaser in accordance with the same standard of conduct as to delivery to
which a broker-dealer would be held in delivering equivalent share certificates.
To the extent the certificate or certificates representing the Trust Stock which
has been sold represents a number of shares greater than the Trust Stock which
was sold, a new certificate representing the Trust Stock which was not sold
shall be registered in the name of and delivered to the Voting Trustee to be
held in accordance with this Agreement, and a new Voting Trust Certificate in
respect thereof shall be delivered to the Shareholder.
8. Power of Voting Trustee. The Voting Trustee shall, in his discretion, in
respect of any and all of the Trust Stock, except as expressly limited by this
Agreement, possess and be entitled exclusively to exercise any and all rights
pertaining to the Trust Stock for every purpose, in person or by proxy, to waive
either Shareholder's privilege in respect to voting the Trust Stock (excluding
any right or privilege to subscribe for
3
<PAGE>
Trust Stock (excluding any right or privilege to subscribe for any increased
stock) and to consent to any lawful corporate act of the Corporation, as though
absolute owner of the Trust Stock, it being expressly agreed that each
Shareholder has hereby assigned to the Voting Trustee all voting rights which he
or she may have as pertains to ownership of the Trust Stock and arising out of
such ownership whether by operation of law or agreement, and further that no
voting rights shall pass to others by or under said voting trust certificates,
or by or under this Agreement, or by or under any other agreement, express or
implied. The Voting Trustee is authorized specifically, by way of example
without limiting his rights hereunder, to vote the Trust Stock held by him for,
or to consent in respect thereof to, any amendment to the Corporation's
Certificate of Incorporation, including any increase, reduction or other change
of the authorized capital of the Corporation, any agreement of consolidation,
merger, share exchange or the sale or other disposition of all, substantially
all, or any part of the property, assets and franchises of the Corporation and
the granting, ratification or confirmation of any option or options therefor
(whether executed before or after the execution of this Agreement, and whether
or not such option or options extend(s) beyond the term of this Agreement), or
the dissolution of the Corporation, and the judgment of the Voting Trustee as to
the adequacy of the consideration thereby to be received by the Corporation and
the Shareholders (provided each shareholder of the Corporation and each holder
of a voting trust certificate of each class is treated uniformly, share for
share) shall be conclusive and binding upon the Shareholders and the holders of
voting trust certificates and all persons claiming through or under them. The
Voting Trustee may act and receive compensation as a director or officer of the
Corporation or of any affiliated corporation and he, or any firm or corporation
with which he is in any way associated, may contract or maintain an interest in
any transaction with the Corporation, or any affiliated corporation, as fully as
though he were not the Voting Trustee.
9. Stock Subscription and Other Stock Transactions. In case any increased
or additional stock of the Corporation shall be offered with respect to the
Trust Stock to the Voting Trustee for subscription, then, in such case, the
Voting Trustee shall promptly deliver to the holders of any voting trust
certificate any written notice received by the Voting Trustee in respect of such
offer and, upon receiving from the holder of any voting trust certificate, prior
to the time limited by the Corporation for subscription and payment, a request
to subscribe in his behalf and money to pay for a stated amount of such
increased stock (not in excess of the ratable amount subscribable in respect of
the stock represented by such voting trust certificate), the Voting Trustee
shall make such subscription and payment, and upon receiving from the
Corporation the certificate or certificates for the stock so subscribed for,
shall issue a
4
<PAGE>
voting trust certificate or voting trust certificates in respect thereof to the
voting trust certificate holder who shall have made such a request and payment.
In case any reduction of the stock of the Corporation shall have been duly
authorized, the Voting Trustee is hereby authorized to make such surrender of
stock of the Corporation held by him hereunder, pro-rata on behalf of all
holders of voting trust certificates, as may be required under the terms
pursuant to which such reduction is to be effected, and to receive and hold any
and all stock of the Corporation issued in exchange for such surrendered stock.
Following any such action, the voting trust certificates issued and outstanding
pursuant hereto shall be deemed to represent a proportionately reduced number of
shares. Upon any duly authorized agreement of consolidation, merger, or share
exchange becoming effective, the Voting Trustee is authorized to make such
surrender of stock of the corporation held by him hereunder as may be required
thereby, and to receive and hold hereunder any and all stock or securities
issued to him in exchange for such surrendered stock or otherwise. The voting
trust certificates shall thereupon be deemed to represent a proportionate number
of the securities then received in exchange by the Voting Trustee. In the event
of the distribution of the assets of the Corporation upon the dissolution
thereof, the Voting Trustee shall promptly distribute the amount thereof
received by him according to the interests of such registered holders, upon the
surrender of the voting trust certificates held by them respectively. Upon the
distribution of such assets by the Voting Trustee, as aforesaid, this Agreement
shall terminate and all liability of the Voting Trust and the Voting Trustee, or
of any of the persons acting as such, for the delivery of stock certificates
hereunder shall cease and terminate.
10. Standard of Care. In voting the Trust Stock represented by the stock
certificate or certificates issued to the Voting Trustee as hereinafter provided
and/or otherwise exercising the right of the Voting Trustee granted hereunder,
the Voting Trustee shall exercise his best judgment to the end that the business
and affairs of the Corporation shall be properly managed; but, except for his
own gross negligence or willful misconduct, the Voting Trustee shall not assume
any responsibility or liability in respect of such management, or in respect of
any action taken by the Voting Trustee, or taken in pursuance of his consent
thereto, or in pursuance of his vote so cast, and the Voting Trustee shall not
incur any responsibility or liability, as a shareholder, Voting Trustee or
otherwise, by reason of any error of fact or law and/or of any matter or thing
omitted to be done except where such error of fact or law and/or matter or thing
omitted to be done shall have resulted form the Voting Trustee's gross
negligence or willful misconduct.
11. Compensation, Indemnity and Expense. The Voting Trustee shall not be
entitled to any compensation for his services as
5
<PAGE>
such, unless such compensation is authorized by a majority vote of the persons
then holding voting trust certificates hereunder; but it is expressly agreed
that the Voting Trustee shall be indemnified against and saved harmless from,
any and all liabilities, costs, damages and expenses (including reasonable
attorney's fees) incurred by the Voting Trustee by reason of any breach or
violation by any holder of a voting trust certificate of any provision of this
Agreement.
12. Acceptance of Trust. The Voting Trustee hereby accepts the above trust
subject to all terms, conditions and reservations herein contained and agrees
that he will exercise the powers and preform the duties of Voting Trustee as
herein set forth according to his best judgment.
13. Termination.
(a) This Agreement shall terminate one day prior to the ___ anniversary
date of this Agreement, without notice by or action of the Voting Trustee unless
sooner terminated as hereinafter provided. This Voting Trust Agreement may be
terminated at any time by the Voting Trustee, in his discretion from time to
time, by signing a declaration to that effect and sending a copy of the same to
each registered holder of voting trust certificates issued hereunder.
(b) Upon termination of this Agreement, the Voting Trustee, in exchange
for, or upon surrender of, any voting trust certificate then outstanding, shall,
in accordance with the terms hereof, and out of the shares held by him
hereunder, promptly deliver proper stock certificates of the Corporation to the
holders of voting trust certificates and thereupon all liability of the Voting
Trust and the Voting Trustee for the delivery of said stock certificates shall
cease and terminate. The Voting Trustee may call upon and require all holders of
voting trust certificates to surrender them in exchange for certificates of
stock for the number of shares to which they are entitled hereunder.
14. Successor Voting Trustee.
(a) Selection of Successor Voting Trustee. Upon the resignation, death or
legal incapacity of the Voting Trustee, a successor Voting Trustee shall be
selected by the Board of Directors of the Corporation or by such other person as
shall otherwise be designated by the Board of Directors of the Corporation to
designate a successor.
(b) Rights, Powers and Duties of Successor Voting Trustee. Any successor
Voting Trustee shall have all the rights, powers and duties of the Voting
Trustee hereunder and the term "Voting Trustee" as used in this Voting Trust
Agreement and in the voting trust certificate shall apply to the named Voting
6
<PAGE>
Trustee and to any successor hereunder. Notwithstanding any change in the Voting
Trustee, any certificate for the Trust Stock standing in the name of the Voting
Trustee may be endorsed and transferred by any successor Voting Trustee with the
same effect as if endorsed and transferred by the original Voting Trustee.
15. Miscellaneous.
(a) The titles and captions set forth herein are for convenience and
reference only and are not intended to modify, limit, describe or affect in any
way the contents, scope or intent of this Agreement.
(b) Whenever the context of this Agreement so requires, the masculine
and/or feminine gender shall be substituted for or deemed to include the neuter
and the plural shall be substituted for or deemed to include the singular, and
vice versa.
(c) This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which together shall constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all the parties
reflected hereon as signatories.
(d) This Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of Delaware. Each of the parties hereto
agrees to submit to the jurisdiction of the federal or state courts located in
the County of New Castle, State of Delaware, in any action or proceeding arising
out of or relating to this Agreement.
(e) Each and all of the terms and provisions of this Agreement, shall be
and are hereby made binding upon the Shareholder, his heirs, personal
representatives, successors and assigns.
(f) This writing represents the complete understanding of the parties
respecting the subject matter hereof and supersedes any and all oral or written
communications, negotiations, understandings or agreements respecting the
subject matter hereof; there are no contemporaneous oral or written
understandings or agreements with respect to the subject matter hereof.
(g) This Agreement shall be filed with the Voting Trustee, and a copy
hereof shall be filed at the principal office of the Corporation.
(h) If any provision of this Agreement shall be adjudicated by a court of
competent jurisdiction to be invalid or
7
<PAGE>
unenforceable, said provision shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable and the remainder of
this Agreement shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
------------------------------
Steven Simon
------------------------------
Helen Porter
AUTOLEND GROUP, INC.
By:___________________________
Title:________________________
------------------------------
______________, Voting Trustee
8
EXHIBIT 28
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT is made and entered into as of the ___ day of
________, 1996, (the "Agreement") by and between AutoLend Group, Inc., a
Delaware corporation, having its principal place of business at 420 Jefferson
Avenue, Miami Beach, Florida, 33139 (the "Company"), and Steven Simon, an
individual residing at 1430 Ocean Drive, Miami Beach, Florida 33139 (the
"Consultant").
WHEREAS, the Company desires to retain the Consultant and the Consultant
desires to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Engagement. The Company hereby engages the Consultant as a consultant to
the Company on such matters within the Consultant's expertise as the Company
shall from time to time reasonably designate to the Consultant which shall
involve performance by the Consultant of services of the type previously
performed by the Consultant for the Company, in an amount not unreasonable with
respect to an independent contractor such as the Consultant. The Company
acknowledges that the Consultant may have other activities, obligations and
engagements which may command his time and attention and the Company will
exercise its best efforts, in requesting the Consultant's services hereunder, to
respect such other commitments.
2. Term. The Consultant's retention hereunder shall be for a term
commencing on the date hereof and terminating on May ___, 1999 (the "Term").
3. Compensation. The Consultant shall be compensated at the rate of $70,000
per year for the Term, which total amount of $210,000 shall be payable on the
date hereof pursuant to paragraph 6 below. The Company acknowledges that the
Consultant is serving as an independent contractor hereunder, that the
compensation due under this Section does not constitute wages, and that the
Company shall not withhold taxes upon such amounts.
4. Benefits. If the health and/or life insurance plans maintained by the
Company as of the date hereof permit the provision of coverage to consultants of
the Company, the Company shall, during the term hereof, pay to the Consultant
monthly an amount equal to the aggregate total of the monthly premiums paid by
the Company under such life and/or health insurance plans, as the case may be,
to insure the Consultant during his employment by the Company immediately prior
to the date hereof. Other than with respect to the payments required to be paid
under this Section 4 and as otherwise shall be required by law, the Company
shall have no further obligation to the Consultant with regard to health,
hospitalization, disability, life or any other similar benefit, and shall not be
required to pay any premium or maintain in existence any benefit program to
which the Consultant was entitled to participate while an employee of the
Company.
<PAGE>
5. Expense Reimbursement. The Company shall reimburse the Consultant for
all out-of-pocket expenses incurred by the Consultant in fulfilling his duties
as a consultant to the Company pursuant to this Agreement, including any travel
expenses incurred by Consultant for travel outside of Miami Beach, Florida. The
Company shall reimburse the Consultant in cash for all out-of-pocket expenses to
which the Consultant is entitled to reimbursement provided however, that the
Consultant shall not incur any reimbursable expense in excess of $250 without
the prior written consent of the Company, and provided that the Company shall
not require services of the Consultant, pursuant to paragraph 1 hereof, without
simultaneously providing him with written consent to the incurrence of the
reasonable expenses foreseeable in connection therewith.
6. [Reserved.]
7. Confidentiality. The Consultant shall at all times maintain the
confidentiality of all information of which he comes into possession which the
Company identifies to the Consultant, in writing, as confidential or proprietary
information contemporaneously with his receipt thereof (provided, that if the
information is made available to Consultant verbally, the Company shall have
thirty (30) days within which to deliver to the Consultant in writing a summary
of the information designating it as confidential or proprietary), which is not
otherwise lawfully known by and readily available to the general public or the
Consultant, and the Consultant shall not communicate or divulge to, or use for
the direct or indirect benefit of the Consultant or for the benefit of any other
person or entity with which the Consultant is affiliated any of such
confidential information except as reasonably necessary in furtherance of the
Consultant's duties as contemplated under this Agreement. The Consultant's
obligations under this paragraph 7 shall survive the termination of this
Agreement for any reason.
8. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if mailed by first-class mail or
express delivery service, postage or other fee prepaid, with return receipt
requested, addressed to each party hereto as follows:
(a) if to the Company:
[address]
(b) if to the Consultant:
[address]
Either party may designate any other address to which notice shall be given, by
giving written notice to the other of such change of address.
9. Governing Law. This Agreement shall be construed and governed in
accordance with the internal laws of the State of Delaware, without regard to
principles of
- 2 -
<PAGE>
conflict of law. Each of the parties hereto agrees to submit to the jurisdiction
of the federal or state courts located in the county of New Castle, State of
Delaware, in any action arriving out of or relating to this Agreement.
10. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties and supersedes any
and all previous agreements between the parties.
11. Amendments, Etc. None of the terms hereof may be waived, modified or
discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
12. Severability. In the event that any provision of this Agreement would
be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided however, that the Company may not assign this
Agreement without the Consultant's prior written consent.
14. Headings. The headings contained herein are included for convenience of
reference only and do not constitute a part of this Agreement.
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
[Signature Page Follows]
- 3 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AUTOLEND GROUP, INC.
By: _____________________
Name:
Title:
STEVEN SIMON
______________________
[Signature Page for Consulting Agreement]
- 4 -
<PAGE>
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT is made and entered into as of the ___ day of
________, 1996, (the "Agreement") by and between AutoLend Group, Inc., a
Delaware corporation, having its principal place of business at 420 Jefferson
Avenue, Miami Beach, Florida, 33139 (the "Company"), and Steven Simon, an
individual residing at 1430 Ocean Drive, Miami Beach, Florida 33139 (the
"Consultant").
WHEREAS, the Company desires to retain the Consultant and the Consultant
desires to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Engagement. The Company hereby engages the Consultant as a consultant to
the Company on such matters within the Consultant's expertise as the Company
shall from time to time reasonably designate to the Consultant which shall
involve performance by the Consultant of services of the type previously
performed by the Consultant for the Company, in an amount not unreasonable with
respect to an independent contractor such as the Consultant. The Company
acknowledges that the Consultant may have other activities, obligations and
engagements which may command his time and attention and the Company will
exercise its best efforts, in requesting the Consultant's services hereunder, to
respect such other commitments.
2. Term. The Consultant's retention hereunder shall be for a term
commencing on the date hereof and terminating on May ___, 1999 (the "Term").
3. Compensation. The Consultant shall be compensated at the rate of $70,000
per year for the Term, which total amount of $210,000 shall be payable on the
date hereof pursuant to paragraph 6 below. The Company acknowledges that the
Consultant is serving as an independent contractor hereunder, that the
compensation due under this Section does not constitute wages, and that the
Company shall not withhold taxes upon such amounts.
4. Benefits. If the health and/or life insurance plans maintained by the
Company as of the date hereof permit the provision of coverage to consultants of
the Company, the Company shall, during the term hereof, pay to the Consultant
monthly an amount equal to the aggregate total of the monthly premiums paid by
the Company under such life and/or health insurance plans, as the case may be,
to insure the Consultant during his employment by the Company immediately prior
to the date hereof. Other than with respect to the payments required to be paid
under this Section 4 and as otherwise shall be required by law, the Company
shall have no further obligation to the Consultant with regard to health,
hospitalization, disability, life or any other similar benefit, and shall not be
required to pay any premium or maintain in existence any benefit program to
which the Consultant was entitled to participate while an employee of the
Company.
<PAGE>
5. Expense Reimbursement. The Company shall reimburse the Consultant for
all out-of-pocket expenses incurred by the Consultant in fulfilling his duties
as a consultant to the Company pursuant to this Agreement, including any travel
expenses incurred by Consultant for travel outside of Miami Beach, Florida. The
Company shall reimburse the Consultant in cash for all out-of-pocket expenses to
which the Consultant is entitled to reimbursement provided however, that the
Consultant shall not incur any reimbursable expense in excess of $250 without
the prior written consent of the Company, and provided that the Company shall
not require services of the Consultant, pursuant to paragraph 1 hereof, without
simultaneously providing him with written consent to the incurrence of the
reasonable expenses foreseeable in connection therewith.
6. [Reserved.]
7. Confidentiality. The Consultant shall at all times maintain the
confidentiality of all information of which he comes into possession which the
Company identifies to the Consultant, in writing, as confidential or proprietary
information contemporaneously with his receipt thereof (provided, that if the
information is made available to Consultant verbally, the Company shall have
thirty (30) days within which to deliver to the Consultant in writing a summary
of the information designating it as confidential or proprietary), which is not
otherwise lawfully known by and readily available to the general public or the
Consultant, and the Consultant shall not communicate or divulge to, or use for
the direct or indirect benefit of the Consultant or for the benefit of any other
person or entity with which the Consultant is affiliated any of such
confidential information except as reasonably necessary in furtherance of the
Consultant's duties as contemplated under this Agreement. The Consultant's
obligations under this paragraph 7 shall survive the termination of this
Agreement for any reason.
8. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if mailed by first-class mail or
express delivery service, postage or other fee prepaid, with return receipt
requested, addressed to each party hereto as follows:
(a) if to the Company:
[address]
(b) if to the Consultant:
[address]
Either party may designate any other address to which notice shall be given, by
giving written notice to the other of such change of address.
9. Governing Law. This Agreement shall be construed and governed in
accordance with the internal laws of the State of Delaware, without regard to
principles of
- 2 -
<PAGE>
conflict of law. Each of the parties hereto agrees to submit to the jurisdiction
of the federal or state courts located in the county of New Castle, State of
Delaware, in any action arriving out of or relating to this Agreement.
10. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties and supersedes any
and all previous agreements between the parties.
11. Amendments, Etc. None of the terms hereof may be waived, modified or
discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
12. Severability. In the event that any provision of this Agreement would
be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided however, that the Company may not assign this
Agreement without the Consultant's prior written consent.
14. Headings. The headings contained herein are included for convenience of
reference only and do not constitute a part of this Agreement.
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
[Signature Page Follows]
- 3 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AUTOLEND GROUP, INC.
By: _____________________
Name:
Title:
STEVEN SIMON
______________________
[Signature Page for Consulting Agreement]
- 4 -
EXHIBIT 29
AUTOLEND IAP, INC.
CERTIFICATE OF DESIGNATION
OF RIGHTS, PREFERENCES,
AND PRIVILEGES
OF $.01 PAR VALUE
11% CUMULATIVE CONVERTIBLE PREFERRED STOCK
The Undersigned, being the duly appointed President and Chief Executive
Officer and the Assistant Secretary of AUTOLEND IAP, INC., a Delaware
corporation (the "Corporation"), hereby certify that the following Certificate
of Designation of Rights, Preferences and Privileges for shares of the $.01 Par
Value 11% Cumulative Convertible Preferred Stock of the Corporation was
unanimously adopted and approved by the board of directors of the Corporation by
written consent dated as of the ____ day of April, 1996.
The rights, preferences, restrictions and other matters relating to shares
of the $.01 par value 11% Cumulative Convertible Preferred Stock of AutoLend
IAP, Inc., are as follows:
1. DESIGNATION. shares of the 11% Cumulative Convertible Preferred Stock of
AutoLend IAP, Inc. are hereby designated "11% Cumulative Convertible
Preferred Stock" (hereinafter referred to as the "Preferred Stock") with
the rights, preferences and privileges specified hereunder.
2. DIVIDENDS.
(a) Subject to Subparagraph (b) below, the holders of shares of the
Preferred Stock shall be entitled to receive, out of funds legally
available therefor, dividends at an annual rate per share equal to an
annual interest of 11% of the Stated Amount (as hereinafter defined)
divided by the total number of shares of Preferred Stock outstanding
(the "Dividend Payment"). Such Dividend Payments shall be cumulative
and accrue and be payable on April 15, July 15, October 15 and January
15 in each year (each of such dates being a "Dividend Payment Date"),
to holders of record at the close of business on the date which is
fifteen days prior to the next succeeding Dividend Payment Date (the
"Record Date"), in preference to dividends on any Junior Securities
(as defined below), commencing on the Dividend Date next succeeding
the Original Issue Date. Any Dividend Payments may only be paid out of
the Corporation's legally available surplus. Any Dividend Payment or
portion thereof that is not paid on the applicable Dividend Payment
date shall accrue and be cumulative from such date and shall be
payable upon the next Dividend Payment Date at which there is
sufficient legally available surplus of the Corporation to permit such
payment.
(b) Dividends payable on the first Dividend Payment Date next succeeding
the Original Issue Date shall accrue and be cumulative from such date.
Thereafter,
<PAGE>
dividends shall accrue and be payable from the last date to which
dividends have been paid, or if no dividends have been paid, from the
Original Issue Date. "Original Issue Date" means the date on which
Preferred Stock is first issued by the Corporation.
(c) Accrued but unpaid dividends for any past dividend periods may be
declared by the Board of Directors and paid on any date fixed by the
Board of Directors, whether or not a regular Dividend Payment Date, to
holders of record on the books of the Corporation on such record date
as may be fixed by the Board of Directors, which date shall be not
more that sixty nor less than ten days prior to the payment date
thereof.
(d) If any dividend is not paid on the Dividend Payment Date therefor,
whether or not declared, no cash interest shall accrue on such unpaid
dividend.
(e) "Junior Securities" means the Common Stock of the Corporation, any
securities ranking on a parity with the Common Stock as to dividend
rights and rights on liquidation, winding up and dissolution.
(f) "Stated Amount" shall mean $1,000,000 "Stated Amount Per Share" shall
mean the Stated Amount divided by the number of Shares of Preferred
Stock outstanding.
3. LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made to holders of
shares of capital stock of the Corporation ranking junior to the Preferred
Stock upon liquidation, dissolution or winding up, including the Common
Stock, unless, prior thereto, the holders of shares of Preferred Stock
shall have received an amount per share equal to the Stated Amount Per
Share plus an amount equal to accrued and unpaid dividends and
distributions thereon, to the date of payment, whether or not declared.
4. VOTING RIGHTS.
(a) Except as otherwise required by law or subsection (b) herein, a holder
of Preferred Stock shall not be entitled to vote on any matter upon
which the holders of Common Stock or other capital stock are entitled
to vote, and to receive notice of any stockholders meeting in
accordance with the by-laws of the Corporation.
(b) In the event that the Corporation has not paid in full all accrued and
unpaid dividends by the end of the 25th month following the Original
Issue Date, then the holders of Preferred Stock shall be entitled to
vote on all matters upon which the holders of Common Stock or other
capital stock are entitled to vote, and to receive notice of any
stockholders meeting in accordance with the by-laws of the
Corporation, until such time as all such accrued dividends have been
paid in full. In the event that the holders of Preferred Stock shall
be entitled to vote such Preferred Stock, each share of Preferred
Stock shall entitle its holder to a number
-2-
<PAGE>
of votes such that the holders of all of the Preferred Stock then
outstanding shall, in the aggregate, be entitled to cast that number
of votes which would be required to be cast to cause the approval or
rejection of any matter or thing upon which shareholders are eligible
to vote, such that on matters requiring approval of a majority of the
votes entitled to be cast, the holders of all of the Preferred Stock
shall be entitled to cast a majority of all votes entitled to be cast,
and on matters requiring approval of votes constituting a percentage
greater than a majority of the votes entitled to be cast, the holders
of all of the Preferred Stock shall be entitled to cast such
percentage.
5. REDEMPTION AT OPTION OF THE CORPORATION.
(a) The Preferred Stock may be redeemed by the Corporation, at its option
on any date set by the Board of Directors, in whole but not in part,
out of funds legally available therefor, at any time, at a redemption
price per share equal to the Stated Amount Per Share plus, in each
case, an amount in cash equal to all accumulated and unpaid dividends
thereon, if any, whether or not declared, to but excluding the date
fixed for redemption, such sum being hereinafter referred to as the
"Redemption Price." The aggregate Redemption Price paid to a holder of
Preferred Stock shall be the product of the aggregate number of shares
of Preferred Stock redeemed from such holder and the per share
Redemption Price, with such product being rounded to the nearest cent,
with one-half cent rounded upward.
(b) Not more than sixty nor less than ten days prior to the redemption
date fixed by the Board of Directors, written notice delivered by
first class mail, postage prepaid, shall be given to the holders of
record of shares of the Preferred Stock to be redeemed, addressed to
such holders at their last addresses as shown upon the stock transfer
books of the Corporation. Each such notice of redemption shall specify
(i) the date fixed for redemption, (ii) the Redemption Price, (iii)
the place or places of payment, (iv) that payment will be made upon
presentation and surrender of the certificates representing shares of
Preferred Stock, and (v) that on and after the date fixed for
redemption, dividends will cease to accumulate on such shares (unless
the Corporation defaults in the payment of the Redemption Price).
(c) Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of shares
of Preferred Stock receives such notice; and failure to give such
notice by mail, or any defect in such notice to the holders of any
shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Preferred Stock.
On or after the date fixed for redemption as stated in such notice,
each holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at a place
designated in such notice and shall thereupon be entitled to receive
payment of the Redemption Price for each share. Notice having been
given as aforesaid, if, on the date fixed for
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<PAGE>
redemption, funds necessary for the redemption shall be legally
available therefor and shall have been irrevocably deposited or set
aside, then, notwithstanding that the certificates evidencing any
shares of Preferred Stock so called for redemption, (i) dividends with
respect to the shares so called for redemption shall cease to
accumulate on the date fixed for redemption, (ii) such shares shall no
longer be deemed outstanding, (iii) the holders thereof shall cease to
be stockholders of the Corporation to the extent of their interest in
such shares and (iv) all rights whatsoever with respect to the shares
so called for redemption (except the right of the holders to receive
the Redemption Price for each share, without interest or any sum of
money in lieu of interest thereon, upon surrender of their
certificates therefor at a place designated in such notice) shall
terminate.
(d) Except as otherwise specified in Section 6 hereto, the shares of
Preferred Stock shall not be subject to the operation of any mandatory
redemption, purchase, retirement or sinking fund.
6. MANDATORY REDEMPTION. For a period of sixty days commencing on the third
anniversary of the Original Issue Date (the "Put Period"), the holder of
shares of Preferred Stock shall have the right to require the Corporation
to redeem all of its Preferred Stock for an aggregate purchase price per
share equal to the Stated Amount Per Share, plus all accrued and unpaid
dividends to the date of redemption, whether or not declared. Such right to
require redemption shall expire at the end of the Put Period.
If shares of Preferred Stock shall have been presented for redemption
pursuant to this Paragraph 6 hereof, and the Corporation shall have failed
to make payment in full for such redemption within 30 days of such request,
then at the option of the holder: (i) such shares of Preferred Stock shall
be convertible into shares of Common Stock of the Corporation at a ratio
such that upon conversion of all outstanding shares of Preferred Stock, the
Common Stock issued upon such conversion would entitle its holders in the
aggregate to a number of votes equal to 50% plus one (1) of the votes
eligible to be cast on any matter, on a fully diluted basis or (ii) until
such time as such payment has been made in full, the holder, of Preferred
Stock shall, in the aggregate, be entitled to cast that number of votes
which would be required to be cast to cause the approval or rejection of
any matter or thing upon which shareholders are eligible to vote, such that
on matters requiring approval of a majority of the votes entitled to be
cast, the holders of all of the Preferred Stock shall be entitled to cast a
majority of all votes entitled to be cast, and on matters requiring
approval of votes constituting a percentage greater than a majority of the
votes entitled to be cast, the holders of all of the Preferred Stock shall
be entitled to cast such percentage.
7. PREEMPTIVE RIGHTS. The Preferred Stock is not entitled to any preemptive or
subscription rights in respect of any securities of the Corporation.
8. SEVERABILITY OF PROVISIONS. Whenever possible, each provision hereof shall
be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid
under applicable law, such
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provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the
remaining provisions hereof.
9. THE UNDERSIGNED President and Chief Executive Officer and the Assistant
Secretary of AutoLend IAP, Inc., hereby make this certificate, declaring
and certifying that this is the duly authorized act and deed of the
Corporation and the facts herein stated are true, and accordingly have
hereunto set their hand this ___ day of April, 1996.
AUTOLEND IAP, INC.
By:__________________________________
Steve Simon, President and CEO
ATTEST:
_____________________________
Assistant Secretary
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EXHIBIT 30
STOCK PURCHASE AGREEMENT
among
AutoLend Group, Inc.
(the Seller)
and
(the Purchaser)
___________, 1996
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
ARTICLE I DEFINITIONS............................................................................... 1
Section 1.1. Definitions................................................................. 1
ARTICLE II PURCHASE OF COMMON STOCK...................................................................... 3
Section 2.1. Purchase and Sale of Common Stock; the Closing.............................. 3
Section 2.2. Closing Covenant............................................................ 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER .................................................. 4
Section 3.1. Authorization............................................................... 4
Section 3.2. No Consent or Violation..................................................... 4
Section 3.3. Purchase for Own Account ................................................... 4
Section 3.4. Investor Sophistication.................................................... 5
ARTICLE IV CERTAIN COVENANTS............................................................................. 5
Section 4.1. Guarantee of Mandatory Redemption
of Preferred Shares; Escrow................................................. 5
Section 4.2. Stockholders' Equity........................................................ 5
ARTICLE V CLOSING CONDITIONS............................................................................. 5
Section 5.1. Conditions Precedent to Obligations of the Seller............................ 5
Section 5.2. Conditions Precedent to Obligations of the Purchaser........................ 6
Section 5.3. Conditions Precedent to Obligations of both Purchaser
and seller
ARTICLE VI INDEMNIFICATION .............................................................................. 6
Section 6.1. General .................................................................... 6
Section 6.2. Procedure .................................................................. 7
ARTICLE VII MISCELLANEOUS.................................................................................. 7
Section 7.1. Entire Agreement; Survival of Provisions..................................... 7
Section 7.2. No Waiver; Modifications in Writing.......................................... 8
Section 7.3. Communications............................................................... 8
Section 7.4. Execution in Counterparts.................................................... 9
Section 7.5. Binding Effect; Assignment................................................... 9
Section 7.6. Governing Law: Jurisdiction.................................................. 9
Section 7.7. Severability of Provisions................................................... 9
</TABLE>
<PAGE>
Section 7.8. Headings...................................................... 10
Section 7.9. Costs, Expenses and Taxes..................................... 10
Section 7.10. Specific Performance.......................................... 10
Section 7.11. Certain Public Announcements.................................. 10
Section 7.12. Waiver of Jury Trial.......................................... 10
Exhibit A Form of Preferred Stock Certificate of Designation
Exhibit B Form of Escrow Agreement
Exhibit C Form of Licensing Agreement
Exhibit D Form of Assignment Agreement
-ii-
<PAGE>
STOCK PURCHASE AGREEMENT, dated ____________, 1996, among
AutoLend Group, Inc., a Delaware corporation (the "Seller") and _________, a
Delaware corporation (the "Purchaser").
WHEREAS, subject to the terms and conditions hereof, the
Purchaser desires to purchase from the Seller and the Seller desires to sell to
the Purchaser, all of the common stock of AutoLend IAP, Inc., a Delaware
corporation (the "Company");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, and unless the
context clearly requires a different meaning, the following terms have the
meanings indicated:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Assignment Agreement" means the Assignment Agreement to be entered
into among the Seller and the Company in the form attached hereto as Exhibit D.
"Business Day" means any day other than Saturday and Sunday and any
other day on which banking institutions in the State of New York are required or
authorized by law to close.
"Certificates" means certificates evidencing the Common Shares.
"Closing" has the meaning provided in Section 2.1 of this Agreement.
"Closing Date" has the meaning provided in Section 2.1 of this
Agreement.
"Common Shares" means the shares of Common Stock.
"Common Stock" means the common stock, no par value per share, of the
Company.
<PAGE>
"Company Receivables" means the outstanding receivables as of the
Closing Date of the Company in respect of automobile loans purchased by the
Company in the ordinary course of business.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Indemnifiable Costs and Expenses," and "Indemnified Person" have the
meanings provided in Section 6.1 of this Agreement.
"Licensing Agreement" means the Licensing Agreement to be
entered into among the Seller and the Company in the form attached hereto as
Exhibit C.
"Person" means any individual, company, corporation, partnership,
limited liability company, trust, division, governmental, quasi-governmental or
regulatory entity or authority or other entity.
"Plans" means any pension, profit sharing, thrift or other retirement
plan, employee stock ownership plan, deferred compensation, stock ownership,
stock purchase, performance share, bonus or other incentive plan, severance
plan, health or group insurance plan, welfare plan, or other similar plan,
agreement, policy, arrangement or understanding, whether written or oral,
whether or not such plan is intended to be qualified under Section 401(a) of the
Code, including without limitation, any employee benefit plan within the meaning
of Section 3(3) of ERISA, which Plan covers any employee or former employee of
the Company.
"Preferred Shares" means the ________ shares of Preferred Stock.
"Preferred Stock" means the Cumulative Convertible Preferred Stock of
the Company with terms set forth in the Preferred Stock Certificate of
Designation.
"Preferred Stock Certificate of Designation" means the Certificate of
Designation of Rights, Preferences, and Privileges of 11% Cumulative Convertible
Preferred Stock in the form attached hereto as Exhibit A.
"Principal Stockholders of Purchaser" means Steven Simon and Helen
Porter.
"Indemnified Person" has the meaning provided in Section 6.1 of this
Agreement.
"Put Escrow Agreement" means the Put Escrow Agreement to be entered
into among the Seller, the Company, and ________ as Escrow Agent, in the form
attached hereto as Exhibit B.
"Receivables Guarantee" means the Receivables Guarantee to be entered
into among the Principal Stockholders of Purchaser, Seller and the Company.
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<PAGE>
"Securities Act" means the Securities Act of 1933, as amended.
"Transaction Documents" means the Preferred Certificate of
Designation, the Licensing Agreement, the Assignment Agreement and the Put
Escrow Agreement.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
PURCHASE OF COMMON STOCK
Section 2.1. Purchase and Sale of Common Stock; the Closing. Subject
to the terms and conditions herein set forth, the Seller agrees that it will
sell to the Purchaser, and the Purchaser agrees that it will purchase from the
Seller, on the Closing Date (A) all of the outstanding shares of the Company's
Common Stock for consideration of (i) $500; (ii) the agreement of the Purchaser
to cause the Company to repay in cash at the Closing an amount equal to the
remaining amounts borrowed by the Company from the Seller through the Closing
Date to purchase Company Receivables, which amounts equal the face value of the
Company Receivables; (iii) the agreement by Purchaser to cause the Company to
deposit $250,000 in escrow, pursuant to the Put Escrow Agreement to guarantee,
in part, certain obligations of the Company in respect of its Preferred Stock,
pursuant to Section 4.2 hereof; and (iv) the agreement by Purchaser to cause the
Company to have as of the Closing Date no less than $2 million in equity,
pursuant to Section 4.3 hereof; and (B) all of the assets (the "Assets") listed
on Schedule I attached hereto for consideration, to be paid in cash at the
Closing, of the book value of such assets on the Company's balance sheet of
________, 199_, which value equals $_______. The Seller and Purchaser
acknowledge hereby that the Common Stock and Assets sold hereby and the
consideration to be received by the Seller pursuant hereto, represent reasonably
equivalent value. Seller also acknowledges that the payment by the Company
pursuant to clause (A)(ii) above shall be in satisfaction of all indebtedness of
the Company to the Seller.
(a) The sale and purchase of Common Shares and Assets by the Purchaser
will take place at a closing (the "Closing") at the offices of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue, New York, New York or at
such other location as shall be agreed to by the Seller and the Purchaser at
such time as the parties shall agree on the first Business Day to occur
following the date on which all of such conditions precedent shall have been
fulfilled or waived, or on such other date and/or at such other time or place as
the parties may agree upon in writing. The date on which the Closing occurs is
herein referred to as the Closing Date (the "Closing Date").
(b) Delivery of the Common Shares and Assets to be purchased by the
Purchaser pursuant to this Agreement shall be made at the Closing by the Seller
delivering to the Purchaser, against payment of the purchase price therefor, the
Assets and Certificates for the Common Shares, in such amounts and registered in
the name of the Purchaser or a nominee holding for the benefit of the Purchaser.
The Purchaser shall designate such names
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<PAGE>
in writing to the Seller at least two Business Days prior to the Closing Date.
The Purchaser acknowledges and agrees that each Certificate shall bear a legend
to reflect the applicability of Federal and state securities laws limitations on
the transfer of the Common Shares as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW
OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Section 2.2. Closing Covenant. The parties hereto agree to act in good
faith in taking any and all actions as shall reasonably be necessary to
facilitate the Closing of the purchase and sale of the Common Shares and Assets
and the other transactions contemplated by this Agreement, including, without
limitation, the satisfaction of the respective closing conditions of the parties
set forth herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby covenants and represents and warrants to the
Company that:
Section 3.1. Authorization. The Purchaser has the legal capacity to
execute and deliver this Agreement and each of the other Transaction Documents
to which it is a party, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. This Agreement
constitutes the legal,valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms except as enforceability may
be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
other than laws relating to fraudulent conveyances.
Section 3.2. No Consent or Violation. No consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution and
delivery by the Purchaser of this Agreement and each of the other Transaction
Documents to which it is a party, the consummation of the transactions
contemplated hereby and thereby and the performance by the Purchaser of its
obligations hereunder and thereunder. The execution and delivery by the
Purchaser of this Agreement and each of the other Transaction Documents to which
it is a party, the consummation of the transactions contemplated hereby and
thereby and the performance by the Purchaser of its obligations hereunder and
thereunder does not and will not (with the
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<PAGE>
giving of notice or the passage of time or both) conflict with or violate any
applicable law, regulation, judgment, injunction, order or decree binding upon
the Purchaser.
Section 3.3. Purchase for Own Account. (a) The Common Shares to be
acquired by the Purchaser pursuant to this Agreement are being acquired for its
own account with no intention of distributing or reselling such Common Shares in
any transaction which would be in violation of the applicable securities laws of
the United States or any state thereof, without prejudice, however, to the
Purchaser's rights at all times to sell or otherwise dispose of all or any part
of such Common Shares under a registration statement under the Securities Act or
under an exemption from such registration available under the Securities Act.
(b) The Purchaser has been afforded access to information about the
Company and its financial condition, results of operations, business, property,
management and prospects sufficient to enable such Purchaser to evaluate an
investment in the Common Stock.
(c) If the Purchaser should in the future decide to dispose of any
Common Shares being acquired pursuant hereto, the Purchaser understands and
agrees that it may do so only in compliance with the Securities Act.
Section 3.4. Investor Sophistication. The receipt by the Purchaser of
the Common Shares hereunder is exempt from Section 5 of the Securities Act.
ARTICLE IV
CERTAIN COVENANTS
Section 4.1. Guarantee of Mandatory Redemption of Preferred Shares;
Escrow. The Purchaser shall cause the Company to deposit in escrow, pursuant to
the Put Escrow Agreement, $250,000 to guarantee, in part, the obligation of the
Company under certain circumstances to redeem the Preferred Stock, pursuant to
the Preferred Stock Certificate of Designation.
Section 4.2. Stockholders' Equity. Purchaser shall cause equity
investments to be made in the Company, so that as of the Closing Date the
Company shall have stockholders' equity (as determined according to generally
accepted accounting principles) of no less than $2 million.
ARTICLE V
CLOSING CONDITIONS
Section 5.1. Conditions Precedent to Obligations of the Seller. The
obligations of the Seller to sell the Common Shares and Assets pursuant to this
Agreement are subject, at the Closing Date, to the satisfaction of the following
conditions:
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<PAGE>
(a) The representations and warranties made by the Purchaser herein
shall be true and correct on and as of the Closing Date.
(b) The Purchaser shall have duly executed and delivered each of the
Transaction Documents to which it is a party.
(c) The Purchaser shall have delivered to the Seller a certificate
executed by the Purchaser dated as of the Closing Date, certifying that the
representations and warranties of the Purchaser contained in this Agreement are
true and correct as of the Closing Date.
(d) The Company shall have complied with Sections 4.1 and 4.2 hereof.
Section 5.2. Conditions Precedent to Obligations of the Purchaser. The
obligations of the Purchaser to purchase the Common Shares and Assets pursuant
to this Agreement are subject, at the Closing Date, to the Purchaser having
received senior financing for the Company of no less than $5 million.
Section 5.3. Conditions Precedent to Obligations of Both Purchaser and
Seller. Obligations of both Purchaser and Seller are subject to the conditions
that (i) all documents connected to the Stipulation and Agreement of Compromise,
Settlement and Release, dated April __, 1996, by and among the parties to
Delaware Chancery Court Action No. 17475 (the "Stipulation"), shall be fully
executed, (ii) the Seller shall have received a fairness opinion from
_______________ which confirms the preliminary opinion expressed to the Board of
Directors of AutoLend Group, Inc. by Gil Matthews at the meeting of Thursday,
April 25, 1996 that the terms of the Stipulation and other documents referred to
therein are fair and reasonable to AutoLend Group, Inc. , and (iii) all
conditions to Closing under said Stipulation shall have been fully met. The
parties to this Agreement may waive, in writing, the requirements of this
section.
ARTICLE VI
INDEMNIFICATION
Section 6.1. General. (a) The Purchaser agrees and covenants to hold
harmless and indemnify the Seller and each of its Affiliates, and their
respective employees, directors, officers, principals, equity holders,
controlling Persons, advisors and agents (each of the foregoing Persons being an
"Indemnified Person") from and against any losses, claims, damages, liabilities
and expenses, including reasonable attorneys' fees and expenses of investigation
("Indemnifiable Costs and Expenses") incurred by such Indemnified Person arising
out of or based upon (i) any breach by the Purchaser of any their
representations, warranties or covenants contained herein or in any agreement or
document delivered by the Purchaser hereunder or (ii) enforcing the rights of
such Indemnified Person against the Purchaser under this Agreement (it being
understood that, in the case of this clause "ii," an Indemnified Person shall
not be entitled to indemnification for its expenses incurred in connection with
such an enforcement action if it is ultimately judicially determined that the
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<PAGE>
rights sought to be enforced did not exist or had been satisfied prior to such
enforcement action).
(b) The indemnification pursuant to this Article VI shall not apply
insofar as the indemnified items result directly from acts or omissions that are
finally, judicially determined to entail gross negligence or willful misconduct
on the part of an Indemnified Person.
(c) The Purchaser further agrees promptly upon demand by each
Indemnified Person to reimburse each Indemnified Person for any Indemnifiable
Costs and Expenses as they are incurred by it; provided that if the Purchaser
reimburses an Indemnified Person hereunder for any expenses incurred in
connection with a lawsuit, claim, inquiry or other proceeding or investigation
for which indemnification is sought, such Indemnified Person agrees to refund
such reimbursement of expenses to the extent it is finally judicially determined
that the indemnity provided for in this Article VI is not applicable to such
Indemnified Person in accordance with its terms or otherwise. The Purchaser
further agrees that the indemnification and reimbursement commitments set forth
in this Article VI shall apply whether or not an Indemnified Person is a formal
party to any such lawsuits, claims or other proceedings. The indemnity and
expense reimbursement obligation of the Purchaser under this Article VI shall be
in addition to any liability it may otherwise have.
(d) The obligations of the Purchaser under this Article VI shall
survive the Closing and any repurchase, conversion, exchange or transfer of the
Common Shares and Assets and the termination of this Agreement and shall not be
extinguished with respect to any Person because any other Person is not entitled
to indemnity or contribution hereunder.
Section 6.2. Procedure. Promptly after receipt by an Indemnified
Person of notice from any third party of the commencement of any lawsuit,
inquiry or other proceeding or investigation thereof, such Indemnified Person
will, if a claim in respect thereof is to be made against the Purchaser
hereunder, notify the Purchaser in writing of the commencement thereof; but the
omission so to notify the Purchaser will not relieve the Purchaser (x) from any
liability which it may have to any such Indemnified Person hereunder unless the
Purchaser is actually prejudiced thereby or (y) from any liability which it may
have to any such Indemnified Person otherwise than pursuant to this Agreement.
The Indemnified Person shall permit the Purchaser to assume the defense of such
claim with counsel reasonably satisfactory to the Indemnified Person; provided,
however, that the Indemnified Person shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (A) the Purchaser has agreed to pay such fees or expenses, (B) the
Purchaser shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to the Indemnified Person in a timely manner or
(C) in the reasonable judgment of any such Indemnified Person, based upon advice
of its counsel, a conflict of interest may exist between such Indemnified Person
and the Purchaser with respect to such claims (in which case, if the Indemnified
Person notifies the Purchaser in writing that such Indemnified Person elects to
employ separate counsel at the expense of the Purchaser, the Purchaser shall not
have the right to assume the defense of such claim on behalf of such Indemnified
Person).
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<PAGE>
The Purchaser will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
Indemnified Person will be required to consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Person of a release from
all liability in respect of such claim or litigation. If the Purchaser is not
entitled to, or elects not to, assume the defense of the claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by the Purchaser with respect to such claim, as well as one local
counsel in each relevant jurisdiction.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Entire Agreement; Survival of Provisions. This
Agreement and the other agreements and documents expressly referred to herein
constitute the entire agreement of the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings with
respect thereto. The covenants, representations and warranties of the parties
made herein shall survive the Closing and remain in full force and effect
regardless of acceptance of any of the Common Shares and Assets and payment
therefor.
Section 7.2. No Waiver; Modifications in Writing. No failure
or delay by a party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise. No waiver of or consent
to any departure by a party from any provision of this Agreement shall be
effective unless signed in writing by the parties entitled to the benefit
thereof. No amendment, modification or termination of any provision of this
Agreement shall be effective unless signed in writing by all parties. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which made or given.
Section 7.3. Communications. All notices, demands and other
communications provided for hereunder shall be in writing and shall only be
effective upon receipt, addressed to the Seller as follows:
AutoLend Group, Inc.
______________________________
______________________________
______________________________
Attention:____________________
Telecopy:_____________________
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<PAGE>
with a copy to:
______________________________
______________________________
______________________________
Attention:____________________
Telecopy:_____________________
and to the Purchaser as follows:
______________________________
______________________________
______________________________
Attention:____________________
Telecopy:_____________________
with a copy to:
or to such other address as any party shall designate in writing, and shall be
deemed given when received.
Section 7.4. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 7.5. Binding Effect; Assignment. The rights and obligations of
the Purchaser under this Agreement may not be assigned to any other Person prior
to the Closing Date. The rights and obligations of the Seller under this
Agreement may not be assigned to any other Person, except with the consent of
the Purchaser. Except as expressly provided in this Agreement, this Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
permitted assigns. This Agreement shall be binding upon the Seller, the
Purchaser and any such permitted assignee.
Section 7.6. Governing Law: Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE FEDERAL OR STATE COURTS
LOCATED IN THE COUNTY OF NEW CASTLE, STATE OF DELAWARE, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
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<PAGE>
Section 7.7. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 7.8. Headings. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
Section 7.9. Costs, Expenses and Taxes. The Seller shall pay any and
all stamp, transfer and other similar taxes payable or determined to be payable
in connection with the execution and delivery at the Closing Date of this
Agreement or the sale of the Common Shares and Assets, and shall save and hold
Purchaser harmless from and against any and all liabilities with respect to or
resulting from any delay in paying, or omission to pay, such taxes.
Section 7.10. Specific Performance. The Seller acknowledges that the
Common Shares are unique and otherwise not available and agrees that in the
event of any breach or anticipated breach hereunder, in addition to any other
remedies, the Purchaser shall be entitled to equitable relief (including but not
limited to injunction and specific performance) without the posting of any bond.
Section 7.11. Certain Public Announcements. The Seller and the
Purchaser each agree to obtain the prior written consent of the other, which
will not be unreasonably withheld, prior to issuing any press release or making
any public statement with respect to this Agreement or the transactions
contemplated hereby as to that portion, if any, of such press release or public
statement which refers to the Purchaser or any of its Affiliates or Seller of
any of its Affiliates or the transaction between the Seller and the Purchaser
hereunder; provided that nothing herein shall restrict Seller or Purchaser from
complying with applicable law or making such disclosures as shall be legally
required in the course of arranging for financing of the Seller, the Purchaser
or the Company, in each case based upon the advice of their respective counsel,
including, without limitation, the filing of this Agreement as an exhibit to any
periodic reports required to be filed by the Seller under the Securities
Exchange Act of 1934, as amended.
Section 7.12. Waiver of Jury Trial. The Seller and the Purchaser each
hereby irrevocably waive all right to a trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement, or the
transactions contemplated hereby or thereby.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers hereunto duly authorized, as of the
date first above written.
AUTOLEND GROUP, INC.
By:____________________________
Name:
Title:
___________________________, Inc.
By:____________________________
Name:
Title:
-11-
EXHIBIT 31
ASSIGNMENT
THIS ASSIGNMENT AGREEMENT is made and entered into as of the ___ day of
______, 1996, (the "Agreement") by and between AutoLend Group, Inc., a Delaware
corporation, having its principal place of business at 420 Jefferson Avenue,
Miami Beach, Florida 33139 (the "Assignor"), and AutoLend IAP, Inc., a Delaware
corporation, having its principal place of business at [address] ("Assignee").
WHEREAS Assignee is desirous of acquiring all right, title and interest
in and to any and all intellectual property, including computer software, owned
or licensed by the Assignor and solely used in or relating solely to the dealer
automotive finance business currently conducted by Assignee; and
WHEREAS the Assignor intends to use or has used the trademarks and
tradenames listed on Schedule I attached hereto (each a "Mark" and collectively,
the "Marks") and has filed applications for trademark or tradename registrations
as set forth therein with regard to the Marks; and
WHEREAS the Assignor intends to use or has used the copyrights listed
on Schedule II attached hereto (each a "Work" and collectively, the "Works") and
has filed applications for copyright registrations as set forth therein with
regard to the Works;
NOW THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the adequacy and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Assignment. The Assignor does hereby sell, assign, convey and
transfer to Assignee all right, title and interest in and to any and all
intellectual property, including computer software, owned or licensed by
Assignor, and solely used in or solely relating to the automotive finance
business (the "Property"), including without limitation:
(i) the Marks and Works set forth of Schedules I and II;
(ii) any applications or filings related to the Marks and Works
together with any and all rights pertaining thereto; and
(iii) the goodwill of the business associated with and symbolized by
the Marks and Works or any other Property;
in consideration of the receipt simultaneously herewith by the
Assignor from the Assignee, of $----.
<PAGE>
2. Limitation on Assignment Notwithstanding anything herein contained
to the contrary:
(i) nothing herein shall be construed as assigning, transferring,
licensing or otherwise making available to Assignee any hardware owned, leased
or licensed by Assignor;
(ii) this assignment shall not be deemed to assign to Assignee any
intellectual property, including computer software, owned or licensed by the
Assignor and solely used in or solely relating to the automotive consumer
finance business which is currently used for general business purposes not
solely related to the automotive dealer finance business;1
(iii) to the extent any of the Property may be used by Assignor in
connection with collecting receivables originated in its automobile consumer
finance business, Assignor shall retain a non-transferable, royalty-free,
non-exclusive right and license to use the Property in furtherance of collecting
such receivables.
3. Covenants of Assignor. The Assignor hereby covenants that it shall
use reasonable efforts, at Assignee's sole cost and expense, to assist Assignee
in filing applications for trademark, tradename and copyright registrations and
obtaining certificates of registration with respect to any trademarks,
tradenames and copyrights in both the United States and foreign countries by
executing any and all applicable documents and providing the necessary
information, to the extent reasonably available, concerning the prior use of the
Marks and Works.
4. Use of Phone Number. In addition, the Assignor does hereby sell,
assign, convey and transfer to Assignee all right, title, and interest in and to
the phone number "1-800- AutoLend", and the Assignor shall henceforth terminate
all use of such phone number. Commencing on the date hereof, Assignee shall be
obligated to pay all charges in connection with the maintenance of such phone
numbers. Assignee agrees to notify all callers to the phone number attempting to
contact Assignor of a phone number provided to Assignee by Assignor and to
promptly convey to Assignor any messages received at such phone number for
Assignor; Assignee shall convey no other communication nor make any other
statement to such callers without prior written consent of Assignor.
5. Costs. All costs related to the sale, assignment, conveyance or
transfer of the Property pursuant to this Agreement shall be paid by Assignee.
6. Indemnification by Assignor. Assignor shall indemnify the Assignee
from and against any and all claims, losses, damages, liabilities, or other
expenses (including attorneys' fees) suffered by Assignee as a result of the
Assignor's use of the Property following the assignment of the Property.
_______________________________
1S. Haas to clarify
-2-
<PAGE>
7. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if mailed by first-class mail or
express delivery service, postage or other fee prepaid, with return receipt
requested, addressed to each party hereto as follows:
(a) if to the Assignor:
[address]
(b) if to the Assignee:
[address]
with a copy to:
tel: ( )
telecopier: ( )
Either party may designate any other address to which notice shall be
given, by giving written notice to the other of such change of address.
8. Governing Law; Jurisdiction. This Agreement shall be construed and
governed in accordance with the internal laws of the State of Delaware, without
regard to principles of conflict of law. Each of the parties hereto agrees to
submit to the jurisdiction of the Federal or State courts located in the County
of New Castle, State of Delaware in any action or proceeding arising out of or
relating to this Agreement.
9. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties and supersedes any
and all previous agreements between the parties.
10. Amendments, Etc. None of the terms hereof may be waived, modified
or discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
11. Severability. In the event that any provision of this Agreement
would be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable.
12. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided
-3-
<PAGE>
however, that the Assignor may not assign this Agreement without the Assignee's
prior written consent which consent will not be unreasonably withheld.
13. Headings. The headings contained herein are included for
convenience of reference only and do not constitute a part of this Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AUTOLEND GROUP, INC.
By:____________________
Name:
Title:
AUTOLEND IAP, INC.
By:_____________________
Name:
Title:
[Signature Page of Assignment Agreement]
-5-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
TRADEMARKS AND TRADENAMES
Registration Application Serial Number Notice of Allowance Affidavit of Use
<C> <S> <C> <C> <C>
USA
1. AutoLend 74/538,471 8/15/95 2/13/96
2. Inventory Assistance 74/655,190
Program
3. Buy Now, Pay Later 74/677,284
4. " . . . Completes 74/538,554 8/22/95 2/16/95
the Deal!"
5. 1-800-AutoLend
6. AutoLend and 74/538,400 8/22/95 2/13/96
Design-logo
7. The Credit-Challenged 74/672,176
CANADA
1. AutoLend 762,928 5/17/95 8/30/97 (Due)
2. ". . . Completes 762,918 2/2/96 8/30/97 (Due)
the Deal!"
3. AutoLend and 762,967 2/2/96 8/30/97 (Due)
Design-logo
</TABLE>
-6-
<PAGE>
SCHEDULE II
COPYRIGHTS
Registration Registration Number Date Issued
-7-
EXHIBIT 32
LICENSING AGREEMENT
THIS LICENSING AGREEMENT is made and entered into as of the ___ day of
________, 1996, (the "Agreement") by and between AutoLend IAP, Inc., a Delaware
corporation, having its principal place of business at [address] (the
"Licensor"), and AutoLend Group, Inc., a Delaware corporation, having its
principal place of business at 420 Jefferson Avenue, Miami Beach, Florida 33139
(the "Licensee").
WHEREAS pursuant to the Assignment Agreement of even date herewith, by
and between the Licensor and the Licensee, the Licensor owns all rights, title
and interest in and to the tradename "AutoLend" (the "Tradename"); and
WHEREAS the Licensee is desirous of licensing the Tradename from the
Licensor solely for use in Licensee's name "AutoLend Group, Inc.", and only
until such time as Licensee obtains another corporate name;
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the adequacy and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Grant of License. The Licensor hereby grants to the Licensee a non-
transferable, royalty-free, non-exclusive right and license, solely within the
United States and only during the Term, to use the Tradename in conducting
business (the "Business") under the name "AutoLend Group, Inc." and not for any
other purpose.
2. Use of Tradename. Licensee may use the Tradename in connection with
collecting receivables in its automobile finance business and as its corporate
name for legal purposes.
3. Concurrent Use of Licensor's Tradenames. Licensee shall have the
right to reasonable use of its own tradenames and trademarks with the Tradename,
but shall not use composite marks consisting of a Licensee-owned mark or name,
or mark or logo of another company, and the Tradename. Licensee shall physically
separate, to the extent practicable, the appearance of the Tradename in any
advertising, labeling or other sales and promotional materials from any other
tradename or trademark used by Licensee in such materials in connection with the
Business.
4. Other Conditions of Use. (a) Licensee hereby recognizes and
acknowledges the ownership of the Tradename by Licensor and shall not at any
time do any act which is reasonably likely to impair the Tradename or the rights
of Licensor in the Tradename.
(b) Licensee shall not register or otherwise attempt to obtain, and
hereby disclaims any right, title or interest in or to, the Tradename, except
the right to use the Tradename as provided herein. If Licensee shall acquire any
right to the Tradename, Licensee shall assign such right to Licensor at no cost
or royalty immediately upon Licensor's request, whether before or after the
expiration or termination of the license granted hereunder.
<PAGE>
(c) Licensee's use of the Tradename shall adhere to those standards of
quality which are equal to or superior to those high standards of quality
heretofore adhered to by Licensee in using the Tradename in the Business.
Licensor acknowledges that Licensee's use of the Tradename on the date hereof
complies with this clause (c).
(d) Any labeling, or other materials of Licensee displaying the
Tradename otherwise permitted hereunder, other than stationery and envelopes
already printed as of the date hereof or in such forms modified solely to
reflect any new business of the Licensee, shall bear a statement that such
Tradename is a licensed tradename of AutoLend Inventory Assistance Program, Inc.
(e) Licensee shall notify Licensor promptly of any infringement or
potential infringement of the Tradename of which Licensee becomes aware.
Licensee shall cooperate with Licensor, and take such action as Licensor shall
reasonably request, at Licensor's sole cost and expense, to protect the rights
of Licensor in the Tradename against infringement.
5. Term. This Agreement shall commence on the date hereof and
terminate on the earlier of (i) the date of a change in the Licensee's corporate
name, or (ii) ninety (90) days following the date of the next meeting of
stockholders of the Licensee (the "Term"). Licensee hereby covenants and agrees
that it shall obtain a new name as promptly as possible.
6. Termination. (a) Notwithstanding the provisions of paragraph 5
above, Licensor shall have the right to cancel and terminate this license at any
time in the event Licensee has violated or failed to perform any of its material
obligations under this Agreement and has failed to correct such default within
fifteen (15) days after written notice thereof, or in the event of insolvency or
bankruptcy or upon the appointment of a receiver for Licensee or upon the
reorganization of Licensee for the benefit of creditors.
(b) Upon expiration or termination of the license granted hereunder to
use the Tradename, Licensee shall desist from using such Tradename and shall not
use any other tradename or trademark having a resemblance thereto or confusingly
similar therewith.
7. Indemnification by Licensee. The Licensee shall indemnify the
Licensor from and against any and all claims, losses, damages, liabilities, or
other expenses (including attorneys' fees) suffered by Licensor as a result of
the Licensee's use of the Tradename in a manner other than as permitted by this
Agreement.
8. Sublicense. Licensee shall not have the right to grant any
sublicense in the Tradename without the prior written consent of Licensor, which
consent may be withheld for any reason or for no reason.
9. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in person or by
telecopy, or when deposited in the mail, if
- 2 -
<PAGE>
mailed by first-class mail or express delivery service, postage or other fee
prepaid, with return receipt requested, addressed to each party hereto as
follows:
(a) if to the Licensor:
[address]
(b) if to the Licensee:
AutoLend Group, Inc.
Attn:
tel:
telecopier:
Either party may designate any other address to which notice shall be
given, by giving written notice to the other of such change of address.
10. Governing Law; Jurisdiction. This Agreement shall be construed and
governed in accordance with the internal laws of the State of Delaware, without
regard to principles of conflict of law. Each of the parties hereto agrees to
submit to the jurisdiction of the Federal or State courts located in the County
of New Castle, State of Delaware in any action or proceeding arising out of or
relating to this Agreement.
11. Entire Agreement. With respect to the subject matter hereof, this
Agreement contains the entire agreement between the parties, and may not be
altered or modified, except in writing and signed by the party to be charged
thereby, and supersedes any and all previous agreements between the parties.
12. Amendments, Etc. None of the terms hereof may be waived, modified
or discharged, except by an instrument in writing specifically referring to this
Agreement and signed by each of the parties hereto.
13. Severability. In the event that any provision of this Agreement
would be held to be invalid, prohibited or unenforceable for any reason unless
narrowed by construction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drafted so as not
to be invalid, prohibited or unenforceable. If any court construes any of the
provisions of this Agreement to be unenforceable because of the duration of such
provision or the area covered thereby, such court shall have the power to reduce
the duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. In the event any of the
provisions contained in this Agreement should nevertheless be held to be
invalid, prohibited or unenforceable, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
- 3 -
<PAGE>
14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, administrators,
successors and assigns; provided however, that the Company may not assign this
Agreement without the Licensor's prior written consent.
15. Headings. The headings contained herein are included for
convenience of reference only and do not constitute a part of this Agreement.
16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on each of the parties, notwithstanding that each of the
parties has not signed the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AUTOLEND GROUP, INC.
By:_______________
Name:
Title:
AUTOLEND IAP, INC.
By:_______________
Name:
Title:
[Signature Page of Licensing Agreement]
- 4 -
EXHIBIT 33
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NUNZIO P. DeSANTIS, )
COURTLANDT G. MILLER and )
VINCENT VILLANUEVA )
)
Plaintiffs, ) C.A. No. ________________
)
STEVE SIMON, STEPHEN RAPHAEL, )
and ELIE HOUSMAN, )
) AFFIDAVIT OF
Defendants, ) STEVE SIMON
)
and )
)
AUTOLEND GROUP, INC., a Delaware )
corporation, )
)
Nominal Defendant. )
State of Florida )
) ss.:
County of Dade )
STEVE SIMON, being duly sworn, states:
1. I am a director and the Chief Executive Officer of AutoLend
Group, Inc. ("AutoLend") and I make this affidavit in support of the motion to
approve the settlement of the above-captioned litigation. I understand that the
plaintiffs are relying on this statement in agreeing to enter into a settlement
and that the Court may rely upon it in approving the settlement.
<PAGE>
2. I have reviewed the complaint in this action and state that
the allegations accusing me of having committed gross negligence, gross
mismanagement and breach of fiduciary duty are groundless and without merit.
During my tenure as chief executive officer, AutoLend has in all respects
conducted its business in a good and diligent manner. The business of AutoLend
has not only been conducted in the ordinary and usual course during my tenure,
but under my direction the books and financial records and ledgers of AutoLend
have accurately reflected the business of AutoLend, including all expenditures
made and payments received by AutoLend. Moreover, myself and my fellow officers
of AutoLend during my tenure have always, to my knowledge, honestly and
conscientiously fulfilled our fiduciary and employment responsibilities.
---------------------------
Steve Simon
Sworn to before me on this
day of _________, 1996
- --------------------------
Notary Public
- 2 -
EXHIBIT A
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- --------------------------------------------------
)
)
NUNZIO P. DESANTIS, COURTLANDT G. MILLER )
and VINCENT VILLANUEVA, )
)
Plaintiffs, )
)
v. )
)
STEVE SIMON, STEPHEN RAPHAEL and ELIE ) C.A. No. 17475
HOUSMAN, )
)
Defendants, )
)
and )
)
AUTOLEND GROUP, INC., a Delaware corporation, )
)
Nominal Defendant. )
)
- --------------------------------------------------
SCHEDULING ORDER
WHEREAS, all parties to the above captioned action (the "Action") have
entered into a Stipulation and Agreement of Compromise, Settlement and Release
dated __________ __, 1996 (the "Stipulation"), which, along with its Exhibits,
sets forth the terms and conditions for the proposed settlement of the Action
(the "Settlement") and which is subject to review and approval as a derivative
action settlement pursuant to Chancery Court Rule 23.1, and upon this Court's
review and consideration of
<PAGE>
the Stipulation and its Exhibits, and as a hearing on the proposed Settlement is
appropriate and necessary.
NOW, this ________ day of __________, 1996, upon application of the
parties, IT HEREBY IS ORDERED as follows:
1. The Action has been maintained as a derivative action pursuant to
Chancery Court Rule 23.1 on behalf of AutoLend Group, Inc. ("AutoLend") and its
stockholders, and it is found that the plaintiffs are adequately represented by
counsel and that plaintiffs will fairly and adequately protect the interests of
AutoLend and its stockholders.
2. A hearing (the "Settlement Hearing") pursuant to Chancery Court Rule
23.1 shall be held on ___________, 1996, at ___ __ __m. in the Court of Chancery
(the "Court"), before the Honorable Myron T. Steele, Vice Chancellor, at the
Daniel L. Herrmann Courthouse, 1000 King Street, Wilmington, Delaware to (a)
determine the fairness, reasonableness and adequacy of the Stipulation and the
Settlement and whether the Settlement is in the best interests of AutoLend and
its stockholders, (b) determine whether the Stipulation should be finally
approved by the Court and judgment entered thereon, (c) hear and determine any
objections to the Settlement, and (d) consider, if presented at the Settlement
Hearing (or at such time thereafter as the Court in its discretion deems
appropriate), the application of plaintiffs' counsel for an award of attorneys'
fees and expenses, as set forth in the Stipulation.
3. The Court reserves the right to adjourn the Settlement Hearing,
including consideration of the application of attorneys' fees and expenses,
without further
-2-
<PAGE>
notice to stockholders of AutoLend other than by announcement at
the Settlement Hearing or any adjournment thereof.
4. The Court reserves the right to approve the Settlement at or after the
Settlement Hearing with such modifications as may be consented to by the parties
to the Stipulation and without further notice to the stockholders of AutoLend.
5. The Court approves, in form and content, the "Notice of Pendency of
Derivative Action, Proposed Settlement of Such Action, Settlement Hearing and
Right to Appear" (the "Notice"), attached to the Stipulation as Exhibit B, and
finds that the giving of notice substantially in the manner set forth below
meets the requirements of Chancery Court Rule 23.1 and due process, is the best
notice practicable under the circumstances, and shall constitute due and
sufficient notice of the matters set forth therein for all purposes to all
persons entitled to such notice.
6. Within fifteen (15) days of the date of this Order, AutoLend shall mail
the Notice to the stockholders of AutoLend as shown on the stock records
maintained by or on behalf of AutoLend, by first-class mail. Furthermore,
AutoLend shall use reasonable efforts to give notice to the stockholders of
AutoLend (i) by mailing, at the expenses of AutoLend, additional copies of the
Notice to any record holder requesting the Notice for the purpose of
distribution to any beneficial owners of AutoLend common stock who are entitled
to notice, or (ii) at the request of such record holder, by mailing the Notice
directly to such beneficial owners at the addresses provided by such record
holder.
7. AutoLend shall, on or before the date of the Settlement Hearing directed
herein, file proofs of mailing of the Notice as directed herein.
- 3 -
<PAGE>
8. Any stockholder of AutoLend who objects to the Stipulation, the
Settlement, the judgment to be entered herein, and/or the application for
attorneys' fees and expenses, or who otherwise wishes to be heard, may appear in
person or by his, her, or its attorney at the Settlement Hearing and present any
evidence or argument that may be proper and relevant; provided, however, that no
person other than the plaintiffs and defendants and their counsel in this action
shall be heard, and no papers, briefs, pleadings or other documents submitted by
any such person shall be received and considered by the Court (unless the Court
in its discretion shall thereafter otherwise direct, upon application of such
person and for good cause shown), unless no later than ten (10) days prior to
the Settlement Hearing directed herein, (i) written notice of the intention to
appear, (ii) a detailed statement of all of such person's objections to any
matter before the Court, and (iii) all of the grounds therefor or the reasons
for such person's desiring to appear and to be heard, as well as all documents
and writings which such person desires the Court to consider, shall be filed by
such person with the Register in Chancery and, simultaneously with or before
such filing, shall be served by hand or first class mail, postage prepaid, upon
the following counsel of record:
R. Franklin Balotti
Thomas A. Beck
Matthew E. Fischer
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
- and -
- 4 -
<PAGE>
David C. McBride
Young, Conaway, Stargatt & Taylor
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, DE 19899
9. Any person who fails to object in the manner prescribed above shall be
deemed to have waived such objection and forever shall be barred from raising
such objection or otherwise contesting the Settlement in this or any other
action or proceeding.
10. Pending final determination of whether the Settlement provided for in
the Stipulation should be approved, all plaintiffs and stockholders of AutoLend,
or any of them, are barred and enjoined from commencing or prosecuting any
action in any court asserting against any of the plaintiffs, defendants or any
other persons or entities any claims, either directly, representatively,
derivatively or in any other capacity, which have been or could have been
asserted, or which arise out of, or relate in any way to, the claims described
in the Notice.
11. If the Settlement provided for in the Stipulation is approved by the
Court following the Settlement Hearing, a Final Order and Judgment shall be
entered as described in the Stipulation.
12. If the Stipulation, including any amendments thereto, is not approved
by the Court or is terminated or shall not become effective for any reason
whatever, this Action shall proceed, completely without prejudice to any party
as to any matter of law or fact, as if the Stipulation had not been made and had
not been submitted to the Court, and neither the Stipulation nor any provision
contained in the Stipulation, nor any action undertaken or document made
pursuant thereto or in connection therewith nor
- 5 -
<PAGE>
the negotiation thereof by any party shall be deemed an admission or offered or
received in evidence in any proceeding in this action or any other action or
proceeding.
13. Jurisdiction is hereby retained as to all matters relating to the
administration of the Notice and consummation of this Stipulation.
----------------------------------
Vice Chancellor
- 6 -
EXHIBIT B
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- --------------------------------------------------
)
)
NUNZIO P. DESANTIS, COURTLANDT G. MILLER )
and VINCENT VILLANUEVA, )
)
)
Plaintiffs, ) C.A. No 17475
)
v. )
)
STEVE SIMON, STEPHEN RAPHAEL and ELIE )
HOUSMAN, )
)
Defendants, )
)
and )
)
AUTOLEND GROUP, INC., a Delaware corporation, )
)
Nominal Defendant. )
)
- --------------------------------------------------
NOTICE OF PENDENCY OF DERIVATIVE ACTION,
PROPOSED SETTLEMENT OF SUCH ACTION,
SETTLEMENT HEARING AND RIGHT TO APPEAR
TO: ALL COMMON STOCKHOLDERS OF
AUTOLEND GROUP, INC.
PLEASE READ THIS NOTICE
CAREFULLY AND IN ITS ENTIRETY.
YOUR RIGHTS WILL BE AFFECTED
BY THE LEGAL PROCEEDINGS IN
THIS LITIGATION. IF YOU WERE
NOT THE BENEFICIAL HOLDER OF
AUTOLEND GROUP, INC. STOCK BUT
HELD AUTOLEND GROUP,
<PAGE>
INC. STOCK FOR A BENEFICIAL
HOLDER, PLEASE TRANSMIT THIS
DOCUMENT TO SUCH BENEFICIAL
HOLDER.
THIS NOTICE IS NOT AN
EXPRESSION BY ANY COURT AS TO
THE MERITS OF ANY OF THE
CLAIMS OR DEFENSES ASSERTED BY
ANY PARTY IN THE
ABOVE-CAPTIONED ACTION. THE
PURPOSE OF THIS NOTICE IS TO
ADVISE YOU OF THE PENDENCY OF
THE ABOVE- CAPTIONED ACTION,
THE PROPOSED SETTLEMENT OF
THIS ACTION AND YOUR RIGHTS IN
CONNECTION THEREWITH.
This notice of pendency of the above-captioned derivative action (the
"Action"), the proposed settlement of the Action, and the holding of a
settlement hearing (as described below) (the "Notice") is given pursuant to Rule
23.1 of the Rules of the Court of Chancery of the State of Delaware and pursuant
to an order dated _________________ __, 1996 (the "Scheduling Order") of the
Court of Chancery of the State of Delaware in and for New Castle County (the
"Court") in the Action to notify you of the proposed settlement of the Action,
and to give you notice of the hearing ("Settlement Hearing") and of your right,
among other things, to participate in the Settlement Hearing, to be held before
the Honorable Myron T. Steele, Vice Chancellor, at the Daniel L. Herrmann
Courthouse, Eleventh & King Streets, Wilmington, Delaware 19801 on __________
__, 1996, at __ ___ _.m. (the "Settlement Hearing"). The purpose of the
Settlement Hearing is to: (i) determine whether a Stipulation and Agreement of
Compromise, Settlement & Release dated __________ __, 1996 (the "Stipulation")
and the terms and conditions of the settlement proposed in the Stipulation and
its exhibits (the "Settlement") are fair, reasonable, adequate and in the best
interests of
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AutoLend Group, Inc. ("AutoLend") and the stockholders of AutoLend, (ii)
determine whether final judgment should be entered by the Court dismissing the
Action as to all parties, and (iii) in the event that the Court approves the
Stipulation and the Settlement and enters its final judgment, determine whether
it should award attorneys' fees and expenses in an amount not to exceed $100,000
to plaintiffs' attorneys, as set forth in the Stipulation.
The Court has reserved the right to adjourn the Settlement Hearing,
including consideration of the application for attorneys' fees and expenses, by
oral argument at such hearing or any adjournment thereof, and without further
notice of any kind. The Court also has reserved the right to approve the
Stipulation and the Settlement, with modifications (if such modifications are
consented to by the parties to the Stipulation), and to enter its final judgment
dismissing the above-captioned action with prejudice as against plaintiffs and
the stockholders of AutoLend, all without further notice of any kind.
THE FACTUAL BACKGROUND
A. Plaintiffs, Nunzio P. DeSantis ("DeSantis"), Courtlandt G. Miller
("Miller") and Vincent Villanueva ("Villanueva"), instituted the Action
asserting individual claims, and derivative claims on behalf of AutoLend against
defendants, Steven Simon ("Simon"), Stephen Raphael ("Raphael") and Elie Housman
("Housman").
B. Plaintiffs beneficially own in excess of 20 percent of the outstanding
voting stock of AutoLend and, at various times, each of the plaintiffs was a
director of AutoLend. DeSantis also previously served as Chairman of the Board
and Chief Executive Officer of AutoLend, and Miller was its Corporate Secretary.
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C. On or about October 10, 1991, AutoLend was incorporated in the State of
Delaware as CAPX Corporation ("CAPX"). CAPX was a wholly-owned subsidiary of
CapRx Corporation ("CapRx"), which was incorporated in Bermuda on May 23, 1989.
D. In 1991, CapRx sold $55,000,000 in aggregate principal amount of 9.5%
convertible subordinated debentures maturing on September 19, 1997 (the
"Debentures") which resulted in net proceeds of CapRx of $51.4 million. The
Debentures are convertible into common stock of AutoLend at a rate of one share
per $12.25 principal amount of Debentures.
E. In or about April 1991, CapRx entered the viatical settlements business,
when LB NM, Inc. ("LB NM"), its wholly-owned subsidiary, acquired certain assets
of Living Benefits Inc. ("LBI") and covenants not to compete from the former
owners of LBI. The viatical settlements business involves purchasing and
maintaining portfolios of life insurance policies from individuals facing
life-threatening illnesses for less than the face value, and then redeeming
those policies at full value upon the death of the insured.
F. On or about February 26, 1992, CapRx merged with CAPX (the "Merger") and
CAPX was the surviving corporation. (The surviving company is sometimes
hereinafter referred to as the "Company".) The Debentures became obligations of
the Company upon the merger in February, 1992, but are subordinated to any
current or future indebtedness of the Company.
G. The Company's common stock has been and is currently traded on the
Boston Stock Exchange and the Nasdaq SmallCap Market. There presently are
approximately 4,634,530 shares of common stock outstanding.
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H. On or about April 6, 1993, the Company, through its wholly-owned
subsidiary, American Life Resources Group, Inc. ("ALRG"), acquired certain
operating assets of American Life Resources, Inc. ("American Life"), which was
also engaged in the viatical settlements business. Defendant Simon and his wife
Helen Porter ("Porter") were the sole stockholders of American Life, with Simon
serving as its CEO and Porter as the Secretary and Treasurer.
I. In connection with the acquisition of American Life, ALRG entered into
five year employment agreements with Simon and Porter (the "Employment
Agreements"). Simon was employed as President, Chief Operating Officer and
director of ALRG at a minimum salary of $125,000 per year, adjusted annually.
Porter was employed as Executive Vice President of ALRG at a minimum salary of
$75,000 per year, adjusted annually. In May, 1993, Simon was elected as a
director of the Company and appointed its President. As of April 24,1996,
Simon's salary was $175,000 per year and Porter's was $150,000 per year.
J. The Initial Employment Agreements provided for the granting of an
aggregate 600,000 warrants to Simon and Porter to purchase the common stock of
the Company. In June, 1993, the 600,000 warrants were canceled and, in exchange,
Simon was granted options to purchase 350,000 shares of common stock of the
Company, exercisable at a price of $4.25 per share, the then market value, and
vesting over a four year period. In or about February, 1995, Porter was granted
options to purchase 300,000 shares of common stock of the Company, exercisable
at a price of $2.00 per share, the then market value, vesting over a two year
period.
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K. For the fiscal year ended March 31, 1993, the Company's net earnings
were $311,093 and its total stockholder equity was approximately $4,888,728.
L. In September, 1993, DeSantis resigned as Chief Executive Officer of the
Company and was replaced by Simon.
M. In March 1994, under Simon's direction, the Company formed AutoLend
Corporation (hereinafter "AC") to engage in the installment contract receivables
business, a specialty finance business, which entails purchasing, financing,
servicing and collecting retail installment loan contracts originated by
independent and franchised used automobile dealers. Simon was the initial
President and Chief Operating Officer of AC and Porter was the Vice President of
AC. Beginning in or about May, 1994, AC made several bulk purchases of used
automobile loan portfolios.
N. In May, 1994, DeSantis resigned from the Board of Directors of the
Company. In July, 1994, Miller resigned as Secretary of the Company and from its
Board of Directors and Villanueva resigned as a director of the Company.
O. In July, 1994, Simon was named Chairman of the Board to replace
DeSantis. Porter was named Executive Vice President and Chief Operating Officer.
P. To implement its plan to reduce its dependence on the viatical
settlement business, on or about July 29, 1994, the Company sold certain assets
of its viatical settlements business to National Capital Benefits Corporation
("NCBC"), a subsidiary of National Capital Management Corporation ("NCMC"). NCBC
paid $125,000 and issued 100,000 shares of the common stock of NCMC to the
Company for these assets. The Company has an option to sell these shares back to
NCMC within 24 months of the sale, at a price of $1.75 per share (subsequently
adjusted following a one for three reverse stock split).
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In addition, NCBC agreed to pay a royalty to the Company upon the maturing of
all policies purchased by NCBC during the next four years. Such royalty
agreement was modified after NCBC's stock split to provide for a discounted
payment prior to maturity of the policies. NCBC acquired the Company's
proprietary client management software system, all "work in process" and the
trade names of both LB NM and ALRG. Along with certain other assets, LB NM and
ALRG retained their existing accounts receivable and their inventory of owned
policies.
Q. On or about February 6, 1995, the Company changed its name to AutoLend
Group, Inc.
R. To further its automobile financing business, in February, 1995, the
Company commenced an "Inventory Assistance Program" ("IAP"), through its
wholly-owned subsidiary AutoLend IAP, Inc. ("AIAP"). The IAP program consisted
of providing exclusive short-term financing to selected used car dealers for
purchase of used automobiles at regional automobile auctions.
S. On May 8, 1995 and July 18, 1995, ALRG and LB NM entered into certain
agreements with Viaticus Inc. ("Viaticus"), a subsidiary of the CNA Insurance
Companies. ALRG and LB NM assigned to Viaticus certain insurance policies
carried on the Company's consolidated balance sheet. The policies assigned had a
total book value of approximately $18.5 million for which Viaticus is obligated
to pay to LB NM and ALRG a combined total of approximately $20.2 million.
Payment for each policy is to be made after Viaticus receives the insurer's
acknowledgment of the assignment of the policy to it prior to the insured's
death. As of April 24, 1996, Viaticus had fulfilled its payment obligations
under the agreements.
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T. In June, 1995, the Company hired Charley A. Pond ("Pond") as its
President and Chief Financial Officer. Mr. Pond was also elected as a Director.
U. At the 1995 annual meeting of the stockholders of the Company held on
September 15, 1995, the stockholders elected the directors nominated by
management. Those directors who were elected were Simon (serving as a director
since May, 1993), Raphael (serving as a director since March, 1995) and Housman
(serving as a director since June, 1995), as well as Pond (serving as a director
since June, 1995), Philip J. Vitale, M.D. ("Vitale") (serving as a director
since February, 1992), Marcel Fournier ("Fournier") (serving as a director since
March, 1995), Paul Gregory ("Gregory") (serving as a director since September,
1994) and Dan Porlyes ("Porlyes") (serving as a director since September, 1994).
V. For the first nine months of 1995, the Company experienced a $9,758,660
operating loss, compared with operating earnings of $2,411,252 for the first
nine months of 1994.
W. In the Quarterly Report on form 10-Q management of the Company filed
with the SEC for the quarter ended September 30, 1995, the Company reported that
it had increased its loss ratio on the automobile loan portfolios to 33%.
X. As of fiscal year end 1995, approximately 57.5% of the receivables in
the Company's auto finance business were 30 or more days past due, and,
consequently, AutoLend established reserves for potential credit losses of
$8,987.89.
Y. Herbert Sillman ("Sillman") (serving as a director since September,
1994) died in or about December 1995. By December 11, 1995, Pond, Fournier,
Porlyes and Gregory had resigned as directors of the Company, leaving as
directors Simon, Raphael, Housman and Vitale.
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Z. On or about December 12, 1995, Drew Sakson ("Sakson") and Robert Granoff
("Granoff") were appointed by the Board to fill the vacancies created by two of
the director resignations.
AA. On or about December 15, 1995, Raphael tendered his resignation from
the Board of Directors, and, on December 22, 1995, James Newman ("Newman") was
appointed by the remaining directors to fill the vacancy created by Raphael's
resignation.
BB. On or about December 27, 1995, Housman tendered his resignation from
the Board of Directors of the Company.
CC. DeSantis, Miller and Villanueva, as the largest group of shareholders
of the Company, became dissatisfied with the financial performance of the
automobile financing business including the increases in the loss ratios for the
installment contract receivables, the large number of director resignations and
plaintiffs' perception that the replacement directors were affiliated with
Simon. Plaintiffs believed that the Company should seek to develop alternative
lines of business.
DD. Plaintiffs concluded that immediate corrective action must be taken to
improve the Company's financial condition and threatened to initiate a proxy
contest.
EE. On or about December 20, 1995, DeSantis, Miller and Villanueva, as the
beneficial holders of in excess of 10% of the outstanding common stock of the
Company, demanded pursuant to Section 2 of the Company's Bylaws, that the Board
of Directors call a special meeting of the stockholders to consider and vote
upon the election of a new slate of directors.
FF. By the end of 1995, Simon had indicated to his fellow directors of the
Company that he was willing to acquire AIAP on terms to be negotiated.
Plaintiffs opposed
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the potential acquisition of AIAP by Simon so long as that acquisition was
negotiated by the existing Board of Directors, the majority of which had not
been elected by the shareholders.
GG. Additionally, existing management intended to continue repurchasing
outstanding Debentures. Existing management of the Company believed that
continued repurchases were in the interest of the Company and that prior
purchases had been favorable to the Company in that such repurchases were at
prices approximately 50% below their stated principal amount. Plaintiffs were
opposed to any further repurchases; they believed that the cash of the Company
being spent to repurchase Debentures should instead be used to fund operations
and to facilitate what it perceived to be the Company's necessary expansion into
an alternative business.
SUMMARY OF CLAIMS ASSERTED IN THE ACTION
HH. As plaintiffs believed that the Company might repurchase further
Debentures and sell AIAP to Simon before the stockholders' meeting they had
demanded could be held, on or about December 26, 1995, they commenced the Action
individually and derivatively on behalf of the Company, seeking to temporarily,
preliminarily and, if necessary, permanently enjoin management from repurchasing
Debentures and selling AIAP to Simon until a special meeting of the shareholders
could be held. In addition, plaintiffs sought to remove Simon as the voting
trustee of a Voting Trust, the creation of which the plaintiffs dispute, and to
bar Simon from voting plaintiffs' shares. Plaintiffs also sought damages in the
Action to the extent defendants proceeded with these actions before injunctive
relief could be obtained and for any breaches of fiduciary duty, gross
mismanagement and/or gross negligence that may have occurred.
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II. Defendants deny all claims of wrongdoing asserted in the Action. In
addition, Simon affirmatively claims to have taken steps during his tenure as
Chief Executive Officer to attempt to improve the Company's financial
performance in a difficult economic environment for the automobile finance
business. For example, Simon claims to have reduced substantial amounts of
overhead and to have retained a third party servicer with respect to the
Company's automobile loan portfolio, which retention, Simon asserts, proved very
favorable for the Company. Moreover, existing management claims that the
repurchase of Debentures was an appropriate and beneficial use of Company funds
and that Simon would purchase AIAP at a fair price.
SETTLEMENT NEGOTIATIONS
JJ. Soon after the filing of the Action, plaintiffs and defendants entered
into extensive, arms-length negotiations concerning a change in existing
management, the composition of the Board of Directors of the Company pending the
next annual stockholders' meeting and the resolution of all claims between the
parties, including the claims in the Action.
KK. Defendants agreed that they would not cause the Company to repurchase
any Debentures or sell AIAP to Simon during the course of the negotiations.
THE SETTLEMENT
As a result of these negotiations, the parties agreed to the Settlement,
which is embodied in the Stipulation and the exhibits thereto (the "Exhibits"),
and described herein. THE STIPULATION AND EXHIBITS ARE ON FILE WITH THE COURT
AND MAY BE INSPECTED AT THE OFFICE OF THE REGISTER IN CHANCERY OF THE COURT OF
CHANCERY OF THE STATE OF DELAWARE, DANIEL L. HERRMANN
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COURTHOUSE, ELEVENTH & KING STREET, WILMINGTON, DELAWARE 19801, DURING REGULAR
BUSINESS HOURS OF EACH BUSINESS DAY.
A. REASONS FOR THE SETTLEMENT
Plaintiffs through their attorneys, entered into the Stipulation because
(i) it provides for a change of management and the right to remove all of the
existing directors; (ii) no further repurchases of Debentures will occur until
such times as the Company's new management may determine appropriate; (iii) the
actions plaintiffs sought to enjoin will be prevented by the Stipulation with
AIAP being sold to Simon only after arms-length negotiations, utilizing an
independent appraisal of its fair value; (iv) it would not be appropriate to
pursue claims to recover damages for breach of fiduciary duties, gross
negligence or gross mismanagement as defendants did not, after the filing of the
complaint in the Action, proceed with the transactions plaintiffs sought to
enjoin and defendants will likely argue that their decisions were legitimate
exercises of business judgment; (v) plaintiffs were permitted to conduct a due
diligence investigation of the Company, over a period of five days, prior to
entering into the Stipulation and will be afforded the opportunity to conduct
another five days of confirmatory due diligence immediately prior to the closing
of this transaction (as described below); and (vi) Simon has made
representations in certain of the collateral documents which provide further
assurances to the Company and plaintiffs of the prudence of the Settlement.
Accordingly, plaintiffs, upon advice of their counsel, and after having
conducted a due diligence investigation, have concluded that the settlement as
reflected in the Stipulation is fair, reasonable and adequate and in the best
interests of the Company and its shareholders.
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Defendants vigorously deny any wrongdoing or liability with respect to any
and all of the facts and claims alleged in the Action but consider it desirable
that the Action be settled and dismissed because such settlement and dismissal
will avoid the substantial expense, inconveniences and distraction of continued
litigation, will avoid the possible expense and distraction of a proxy contest
between plaintiffs and defendants, will finally put to rest the claims raised or
which could have been raised in the Action and will facilitate the consummation
of a transaction that is in the best interests of the Company and its
shareholders.
B. THE TERMS OF THE SETTLEMENT
In consideration of the benefits afforded AutoLend and the current
stockholders of AutoLend, as described herein, and the other terms and
conditions of the Stipulation, as summarized below, the parties have agreed to
settle the Action upon the terms described in the Stipulation. If the
Stipulation and Settlement are approved by the Court, the Action and all claims
asserted therein will be dismissed with prejudice and all current stockholders
of AutoLend forever shall be barred from prosecuting any action against any or
all of the defendants arising out of or relating to the claims asserted in the
Action, as described above. 1. LETTER AGREEMENT: As an inducement to execute and
deliver the Stipulation, Simon, Porter, the Company and the plaintiffs agreed to
enter into a Letter Agreement, attached as Exhibit 1 to the Stipulation, which
further effectuates the terms and intent of the Stipulation and the various
exhibits attached thereto. 2. RELEASES: (a) On or after the date on which all
orders of the Court approving the Settlement become final and no longer subject
to appeal or review, whether by exhaustion of any possible appeal, lapse of time
or otherwise (the "Approval Date") and prior
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to the Closing Date (as defined in paragraph 14 below), the following parties
have agreed to execute releases as follows and then deliver the executed
releases at the Closing (as defined in paragraph 14 below) to Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel ("Kramer, Levin") at which time Kramer, Levin
will release to each such delivering party copies of all other releases
delivered pursuant to this Section 2:
(i) A general release by DeSantis, as attached to the Stipulation
as Exhibit 2;
(ii) A general release by Miller, as attached to the Stipulation as
Exhibit 3;
(iii) A general release by Villanueva, as attached to the
Stipulation as Exhibit 4;
(iv) A general release by Simon, as attached to the Stipulation as
Exhibit 5;
(v) A general release by Porter, as attached to the Stipulation as
Exhibit 6;
(vi) A general release by Raphael, as attached to the Stipulation
as Exhibit 7;
(vii) A general release by Housman, as attached to the Stipulation
as Exhibit 8;
(viii) A general release by AutoLend, as attached to the Stipulation
as Exhibit 9;
(ix) A general release by Newman, as attached to the Stipulation as
Exhibit 10;
(x) A general release by Sakson, as attached to the Stipulation as
Exhibit 11;
(xi) A general release by Granoff, as attached to the Stipulation
as Exhibit 12; and
(xii) A general release by Vitale, as attached to the Stipulation as
Exhibit 13.
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(b) Prior to or following the Approval Date, the following parties shall
execute releases as follows and shall deliver to them to Kramer, Levin at which
time Kramer, Levin shall release to each such delivering party copies of all
other releases delivered pursuant to this Section 2.
(i) A general release by Carmignani, as attached to the Stipulation as
Exhibit 14;
(ii) A general release by Fitzgibbons, as attached to the Stipulation as
Exhibit 15;
(iii) A general release by the estate of Sillman, as attached to the
Stipulation as Exhibit 16;
(iv) A general release by Gregory, as attached to the Stipulation as
Exhibit 17;
(v) A general release by Poryles, as attached to the Stipulation as
Exhibit 18; and
(vi) A general release by Fournier, as attached to the Stipulation as
Exhibit 19.
(c) The general releases described in Section 2 generally provide for the
release and discharge of AutoLend and those persons listed in this Section 2
from all actions, causes of actions, suits, damages, claims, etc., that the
releasor ever had, has or may have upon or by reason of any matter, cause or
thing whatsoever from the beginning of the world to the day the general releases
are executed, including all claims that were raised or could have been raised in
the Action or another pending action in a Florida state court captioned AutoLend
Group, Inc. v. DeSantis, Civil Action No. 95-23897-CA (23) (Fl. Cir. Ct.).
COPIES OF ALL GENERAL RELEASES CAN BE INSPECTED BY AUTOLEND STOCKHOLDERS, AS
DISCUSSED BELOW.
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3. REPURCHASE OF BONDS: AutoLend has agreed not to purchase any of the
Debentures prior to the Closing Date. DeSantis, Miller and Villanueva jointly
and not severally have agreed to hold harmless and indemnify the officers and
directors of the Company and the Company from any claims, actions, suits,
damages, losses, etc. resulting from not repurchasing the Company's outstanding
Debentures. Simon has represented and warranted to each of the Company,
DeSantis, Miller and Villanueva that the Company has not entered into any
agreement, whether written or oral, which currently or in the future obligates
the Company to purchase any Debentures.
4. RESIGNATIONS: Simon and Porter have agreed to deliver their letters of
resignation on the Closing Date in the form of Exhibits 20 and 21 to the
Stipulation resigning their directorships and officerships with the Company, and
with each of the Company's subsidiaries, other than AIAP, and those resignations
will be accepted.
5. CANCELLATION OF EMPLOYMENT CONTRACTS: The Company has agreed to pay to
Simon and Porter on the Closing Date the remaining sum due each of them
according to the terms of their respective employment agreements, $25,000 of
which payments shall be tendered by the Company on behalf of Simon and Porter to
the Escrow Agent (the "Escrow Agent") under that certain Escrow Agreement dated
as of the Closing Date among the Company, Simon, Porter and the Escrow Agent
(the "Tax Escrow Agreement") in the form of Exhibit 22 to the Stipulation, in
cancellation of their respective employment contracts, and Simon and Porter, in
consideration of such payments, have agreed to relinquish their rights under
such agreements. The Company will not withhold any taxes in respect of such
payments, and Simon and Porter have agreed to be responsible for any income
taxes due in respect of such payments and to indemnify the Company for any
penalties or interest assessed
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against the Company as a result of its not withholding taxes in respect of such
payments pursuant to the terms of the Indemnity Agreement in the form of Exhibit
23 to the Stipulation.
6. BOARD OF DIRECTORS: The Company's Board of Directors have agreed to
elect DeSantis as a Director, Chairman of the Board and Chief Executive Officer
of the Company on the Closing Date. Effective upon the Closing Date, each of the
remaining directors of AutoLend have agreed to provide letters of resignation,
the resignations of the directors Granoff, Newman, and Sakson will be accepted.
With the exception of the resignations of Simon and Porter, the resignation of
the other directors may be accepted or not.
7. NEW STOCK OPTIONS AND PUT ESCROW AGREEMENT: On the Closing Date, options
to purchase 400,000 and 125,000 shares of the Company's common stock shall be
granted to Simon and Porter, respectively, pursuant to Stock Option Agreements
in the form of Exhibits 24 and 25, respectively, to the Stipulation. Such grants
have been authorized by the Board of Directors of the Company. In addition, AIAP
has agreed to deposit $250,000 with the Escrow Agent pursuant to the Put Escrow
Agreement in the form of Exhibit 26 to the Stipulation.
8. VOTING TRUST: Simon and Porter have agreed to enter into a Voting Trust
on the Closing Date, in the form of Exhibit 27 to the Stipulation, in which
shall be deposited all shares of the common stock of the Company that Simon and
Porter now own, or may in the future acquire. The Voting Trust does not restrict
the sale of shares of the common stock of the Company at any time by Simon and
Porter to an unaffiliated purchaser. The Trustee of the Voting Trust shall be
selected by DeSantis.
9. CONSULTING AGREEMENTS: Simon and Porter have agreed to enter into
Consulting Agreements with the Company in the form of Exhibit 28 to the
Stipulation on the
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Closing Date. The Company has agreed to pay to Simon and Porter the entire sums
due Simon and Porter under their respective Consulting Agreements on the Closing
Date. The Company has acknowledged that Simon and Porter will serve as
independent contractors under the Consulting Agreements, that the consulting
payments received by Simon and Porter do not constitute wages, and that AutoLend
will not withhold taxes on such amounts.
10. AIAP STOCK: AIAP has agreed to issue to the Company forty shares of
preferred stock subject to the terms of a Certificate of Designation in the form
of Exhibit 29 to the Stipulation prior to the Closing Date. The Company, Simon,
Porter and an entity to be designated by Simon and Porter have agreed to enter
into a Stock Purchase Agreement in the form of Exhibit 30 to the Stipulation on
the Closing Date, pursuant to which all common stock of AIAP shall be sold to an
entity designated by Simon and Porter.
11. AIAP RECEIVABLES: Any outstanding receivables of AIAP from loans will
be paid to the Company on the Closing Date.
12. AIAP FINANCING AND EQUITY: AIAP shall be in receipt of, prior to the
Closing Date, commitments for $5 million in senior financing and at least $2
million in equity, such amounts to be funded at the Closing.
13. AIAP INTANGIBLES: The Company shall execute the assignment in the form
of Exhibit 31 to the Stipulation and the license in the form of Exhibit 32 to
the Stipulation on the Closing Date.
14. THE CLOSING: On the approval Date, documents and agreements in the
forms of the Exhibits to the Stipulation will be delivered to the parties for
execution. On the Approval Date, Kramer, Levin shall schedule after consulting
with counsel to Messrs. DeSantis, Miller and Villanueva as to such counsel's
availability, a closing of the transactions
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provided for under the Stock Purchase Agreement (the "Closing"), at its offices,
to be held absent a failure to satisfy any of the closing conditions set forth
in the Stock Purchase Agreement, no earlier than five days after the Approval
Date nor later than ten days therefrom, the date of such Closing being referred
to herein as the "Closing Date." At the Closing, the executed exhibits shall be
delivered, and the payments recited in paragraphs 5, 7, 9 and 15 will be made.
Simon has agreed to deliver to the Company his affidavit in the form of Exhibit
33 to the Stipulation which shall be dated as of the Closing Date.
15. ATTORNEYS' FEES: If the Settlement is approved by the Court at the
Settlement Hearing, or at such later time as the Court may direct, the attorneys
for plaintiffs in the Action intend to apply to the Court for an award of
attorneys' fees and expenses in an amount not to exceed $100,000, to be paid by
AutoLend as provided in the Stipulation. Defendants have agreed not to oppose
said application. The fees and expenses, if awarded by the Court, will be paid
by AutoLend to plaintiffs' attorneys at the closing.
RIGHT TO APPEAR AT SETTLEMENT HEARING
Any current AutoLend stockholder who objects to the Stipulation, the
Settlement, the Final Order and Judgment to be entered herein, and/or the
application for attorneys' fees and expenses (as described above), or who
otherwise wishes to be heard, may appear in person or by his attorney at the
Settlement Hearing and present any evidence or argument that may be proper and
relevant; provided, however, that no person (other than the plaintiffs and
defendants, and their respective counsel in the Action) shall be heard, and no
papers, briefs, pleadings or other documents submitted by any such person shall
be received or considered by the Court (unless the Court in its discretion shall
otherwise direct, upon application of such person and for good cause shown),
unless no later than ten (10) days prior
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to the Settlement Hearing, (i) a written notice of the intention to appear, (ii)
a detailed statement of such person's specific objections to any matter before
the Court, and (iii) all of the grounds therefor or the reasons why such person
desires to appear and to be heard, as well as all documents and writings which
such person desires the Court to consider, shall be served by hand-delivery or
overnight mail upon the following counsel of record and then filed with the
Register in Chancery, Daniel L. Herrmann Courthouse, Eleventh & King Streets,
Wilmington, Delaware 19801:
R. Franklin Balotti
Thomas A. Beck
Matthew E. Fischer
Richard, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
(302) 658-6541
Attorneys for Plaintiffs
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David C. McBride
Young, Conaway, Stargatt & Taylor
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6639
Attorneys for Defendants
Any person who fails to object in the manner prescribed above shall be
deemed to have waived such objection and shall be forever barred from raising
such objection in this or any other action or proceeding.
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INTERIM INJUNCTION
Pending final determination of whether the Settlement should be approved,
plaintiffs and the stockholders of AutoLend or any of them, and any of their
respective representatives, trustees, successors, heirs and assigns, are barred
and enjoined from commencing or prosecuting any action in any court or tribunal
(of this or any other jurisdiction) asserting against any of the parties to the
Action or any other persons or entities any claims, either directly,
representatively, derivatively, or in another capacity, which could have been
asserted, or which arise out of, or relate in any way to, the claims raised in
the Action and described in this Notice.
SCOPE OF THIS NOTICE
THIS NOTICE DOES NOT PURPORT TO BE A COMPREHENSIVE DESCRIPTION OF THE
ACTION, THE STIPULATION, THE EXHIBITS TO THE STIPULATION, THE TERMS OF THE
SETTLEMENT OR THE SETTLEMENT HEARING. For a more detailed statement of the
matters involved in this litigation, reference is made to the pleadings, the
Stipulation, the Exhibits to the Stipulation, the Orders entered by the Court
and other papers filed in the Action, which may be inspected at the Office of
the Register in Chancery of the Court of Chancery of the State of Delaware,
Daniel L. Herrmann Courthouse, Eleventh & King Streets, Wilmington, Delaware
19801, during regular business hours of each business day.
NOTICE TO PERSONS OR ENTITIES HOLDING
RECORD OWNERSHIP ON BEHALF OF OTHERS
Brokerage firms, banks and other persons or entities who are current
stockholders in their capacities as record owners, but not as beneficial owners,
are requested to send this Notice promptly to beneficial owners. Additional
copies of this notice for
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<PAGE>
transmittal to beneficial owners are available on request directed to AutoLend.
[insert address]
ENTERED BY ORDER OF:
-----------------------
Vice Chancellor
-----------------------
Register in Chancery
Dated ________ __, 1996
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EXHIBIT C
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- --------------------------------------------------------
)
) C.A. No. 17475
NUNZIO P. DESANTIS, COURTLANDT G. MILLER )
and VINCENT VILLANUEVA, )
)
Plaintiffs, )
)
v. )
)
STEVE SIMON, STEPHEN RAPHAEL and ELIE )
HOUSMAN, )
)
Defendants, )
)
and )
)
AUTOLEND GROUP, INC., a Delaware corporation, )
)
Nominal Defendant. )
)
- --------------------------------------------------------
FINAL ORDER AND JUDGMENT
A hearing having been held before this Court (the "Court") on
_____________, 1996 (the "Settlement Hearing"), pursuant to the Court's Order of
______________, 1996 (the "Scheduling Order"), upon a Stipulation and Agreement
of Compromise, Settlement & Release, dated ______________, 1996 (the
"Stipulation"), of the above-captioned action (the "Action"); it appearing that
due notice of said hearing has been given in accordance with the Scheduling
Order; the respective parties having appeared by their attorneys of record; the
Court having heard and considered evidence
<PAGE>
in support of the proposed Settlement, the attorneys for the respective parties
having been heard, opportunity to be heard having been given to all other
persons requesting to be heard in accordance with the Scheduling Order; the
Court having determined that notice to the stockholders of AutoLend Group, Inc.
("AutoLend") pursuant to the aforesaid Scheduling Order was adequate and
sufficient, and the entire matter of the proposed Settlement having been heard
and considered by the Court;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED this ____ day of ___________,
1996 that:
1. This Action is a derivative action brought on behalf of AutoLend and its
stockholders pursuant to Chancery Court Rule 23.1. Plaintiffs were adequately
represented by counsel and plaintiffs have fairly and adequately protected the
interests of AutoLend and its stockholders.
2. On ____________ __, 1996, the "Notice of the Pendency of Derivative
Action, Proposed Settlement of Such Action, Settlement Hearing and Right To
Appear" (the "Notice") was sent by first-class mail to stockholders of AutoLend
in compliance with and as provided for in the Scheduling Order. The form and
manner of the notice given in the Notice to the stockholders of AutoLend was the
best notice practicable under the circumstances, in compliance with due process
and Chancery Court Rule 23.1, and included individual notice to the current
stockholders of AutoLend who could be identified through reasonable effort.
3. The parties have fully complied with Chancery Court Rule 23.1. Due and
adequate notice of the Action, the Settlement and the Settlement Hearing has
been givento the stockholders of AutoLend. A full opportunity has been offered
to the stockholders of
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<PAGE>
AutoLend to participate in the Settlement Hearing. Accordingly, it is hereby
determined that all named plaintiffs and current stockholders of AutoLend are
bound by this Final Order and Judgment and by the Stipulation and the
Settlement.
4. The Stipulation and the terms of the Settlement are hereby approved as
being fair, reasonable and adequate as to and in the best interests of AutoLend
and the stockholders of AutoLend; the parties thereto are hereby authorized and
directed to consummate the Settlement in accordance with the terms and
conditions set forth in the Stipulation; and the Register in Chancery is
directed to enter and docket this Final Order and Judgment.
5. Plaintiffs' counsel are awarded attorneys' fees and reimbursement of
expenses in the amount of $________, which sum the Court finds to be fair and
reasonable, to be paid by AutoLend, in accordance with the terms set forth in
the Stipulation.
6. Without affecting the finality of this Final Order and Judgment in any
way, the Court hereby reserves jurisdiction over all matters relating to the
administration and effectuation of the Settlement.
7. The Action is hereby dismissed on the merits and with prejudice subject
to the consummation of the Settlement in accordance with the Stipulation.
___________________________
Vice Chancellor
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