AUTOINFO, INC.
December 7, 1998
Xxxxxxx X. Xxxxx, III, Chairman
Xxxxxxxx & Xxxxxxxxx
Norfolk Southern Towers, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Re: Exchange Agreement With Respect to Subordinated Notes of
CarLoanCo, Inc.
Dear Xx. Xxxxx:
Reference is made to the $4.9 million dollars principal amount of senior
subordinated promissory notes of CarLoanCo, Inc. ("CarLoanCo") currently due May
1, 1999 and held by eight investors for whom you are acting as representative
(the "Senior Subordinated Notes") and the $3.3 million dollars of junior
subordinated notes of CarLoanCo due December 1, 2000 held by ten investors for
whom you are acting as representative (the "Junior Subordinated Notes"). In
furtherance of our discussions and the term sheet we exchanged on or about
August 6, 1998, this letter sets forth the understanding we have reached with
respect to the exchange of the outstanding notes for newly issued subordinated
promissory notes of AutoInfo, Inc. (AutoInfo").
We have agreed as follows:
1. On the closing date, you shall use your best efforts to deliver, as
representative of the holders of the Senior Subordinated Notes and Junior
Subordinated Notes (collectively, the "Notes") each of such notes against
delivery to you, on behalf of such holder, of a replacement note in the form of
Exhibit A (Senior Subordinated Note) or Exhibit B (Junior Subordinated Note)
(collectively, the "New Notes").
2. In consideration for the exchange of the Notes, AutoInfo hereby agrees
that upon the closing it shall elect three designees of Xxxxxxx X. Xxxxx, III to
be members of a six
member Board of Directors of AutoInfo for so long as fifty (50%) percent of the
original principal amount of the New Notes remain outstanding, AutoInfo shall
ensure that such designees continue to be included on management's slate of
directors for all subsequent meetings of the shareholders of AutoInfo, and
AutoInfo shall use its best efforts to cause the election of such designees. The
closing of the exchange of the Notes will not be deemed to have been completed
until all actions necessary to comply with the first sentence of this paragraph
have taken place.
3. Upon the closing, AutoInfo shall reimburse you, as representative of
the Noteholders, for your reasonable legal expenses incurred in connection with
the note exchange, which are presently estimated to be approximately $14,000
plus out-of-pocket expenses.
The foregoing, together with the terms and provisions of the New Notes,
sets forth the entire understanding between the parties with respect to the
subject matter hereof, and may not be modified, amended or superceded except by
a writing signed by both parties.
Sincerely,
AUTOINFO, INC.
By:
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Xxxxx Xxxxxx, President
AGREED TO AND ACCEPTED:
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Xxxxxxx X. Xxxxx, III as
Representative of the Note Holders
