EXHIBIT 4.4
EXCHANGE AND REPAYMENT AGREEMENT
By this Agreement dated as of January 31, 2002, the undersigned parties
agree as follows:
RECITALS
The parties entered into a Merger Agreement and Plan of Reorganization
("Merger Agreement") dated December 15, 2000, and related agreements
(collectively with the Merger Agreement, the "Transaction Agreements"). All
capitalized terms not otherwise defined in this agreement shall have the same
meaning or definition as in the Merger Agreement.
The Shareholders acquired common stock, Series B Preferred Stock and
Series C Preferred Stock (collectively, "Capital Stock") of National Auto
Credit, Inc. ("NAC"). The Series B Preferred Stock was subsequently converted by
its terms to common stock. By this Agreement, the Shareholders, including Xxxxxx
X. Xxxxxx ("Xxxxxx"), agree to transfer all of the Capital Stock owned by them
back to NAC in satisfaction of a contingent obligation set forth in the Merger
Agreement. Now, therefore, the parties hereby agree as follows:
1. The parties agree with the decision of management of NAC and New
ZoomLot to terminate the business and operations of, and wind up, New ZoomLot,
and that the First Objective and Second Objective have not and will not be met.
Accordingly, all Forfeitable Shares are deemed forfeited and are being returned
and surrendered to NAC simultaneously with the execution of this agreement.
2. The parties agree that pursuant to its terms, the Series C Preferred
Stock constitutes a liability of NAC in the amount of $935,700 that would become
due on December 31, 2003, and that the discounted current value of the Series C
Stock as of the date hereof is $854,875.
3. Pursuant to Section 1.12 of the Merger Agreement, certain
Shareholders and Xxxxxx are contingently liable to NAC for repayment of the
"Cygnet Payable", as that term is defined in the Merger Agreement. The parties
agree that the amount that Xxxxxx is contingently liable to repay to NAC
pursuant to Section 1.12 of the Merger Agreement as of the date hereof is
$5,690,335 (the "Repayment").
4. In full satisfaction all obligations of Cygnet and the Xxxxxx
Shareholders to make the Repayment:
x. Xxxxxx and/or the Xxxxxx Shareholders hereby convey
and transfer to NAC 2,077,004 shares of NAC common
stock, at a mutually agreed upon value of $1.25 per
share, or $2,596,255 in the aggregate, together with
duly executed stock powers. The Shareholders other
than Xxxxxx and/or the Xxxxxx Shareholders hereby
agree to deliver
and convey to NAC, within five (5) days from the date
hereof, 1,002,526 shares of NAC common stock, at a
mutually agreed value of $1.25 per share, or
$1,253,157 in the aggregate, together with duly
executed stock powers.
x. Xxxxxx and/or the Xxxxxx Shareholders hereby convey
and transfer to NAC 39,299 shares of NAC Series C
Stock at a mutually agreed value of $538,566 in the
aggregate, together with duly executed stock powers.
The Shareholders other than Xxxxxx and/or the Xxxxxx
Shareholders hereby agree to deliver and convey to
NAC, within five (5) days from the date hereof,
23,081 shares of NAC Series C Stock, at a mutually
agreed value of $316,309 in the aggregate, together
with duly executed stock powers.
c. As a consequence of and subject to the timely
transfers set forth in paragraphs 4(a) and 4(b)
hereof, the balance of the Repayment due to NAC shall
be $986,048. Xxxxxx agrees to repay the foregoing
balance of the Repayment obligation on or before
January 30, 2003, together with interest thereon at
4% per annum through the date of repayment, in cash
or in NAC common stock at the agreed value of $1.25
per share, or a combination of cash and NAC common
stock. In the event that the Shareholders other than
Xxxxxx or the Xxxxxx Shareholders fail to timely
convey NAC capital stock as required by Section 4(a)
or 4(b) above, then the amount due by Xxxxxx
hereunder shall be increased to the extent of such
default.
5. Each party represents and warrants to the other party that:
a. The party has the requisite power and authority to
enter into and perform all of such party's
obligations under this Agreement.
b. This Agreement has been duly and validly executed and
delivered by the party and constitutes the valid and
binding agreement of such party, enforceable against
it in accordance with its terms (except that
enforceability may be subject to bankruptcy or
similar laws, or principles of equity). No broker or
similar person is entitled to any fee or commission
on behalf of such party arising out of this
Agreement.
6. NAC represents and warrants that it has adopted the
resolutions annexed hereto as Exhibit A with respect to
exempting Xxxxxx from the provisions of Section 16(b) of the
Securities Exchange Act as to NAC securities transferred to
NAC pursuant to this agreement. NAC is not currently aware of
any claims against Xxxxxx arising out of the Merger Agreement,
and Xxxxxx is not aware of any claims against NAC arising out
of the Merger Agreement (other
than for the indemnification of Xxxxxx under Section 7.3(a) in
connection with currently pending or threatened lawsuits
arising out of the Merger Agreement).
7. In the event any third party should assert any action in the
name of or on behalf of NAC against Xxxxxx on account of any
actual or alleged illegality or impropriety of this agreement
or the consummation of the transactions contemplated hereby,
other than on account of any breach or misrepresentation by
Xxxxxx or the Xxxxxx Shareholders hereunder, NAC agrees that
it will bear the reasonable legal defense costs (i.e.,
reasonable attorney's fees and disbursements, and expert
witness fees and expert witness costs) arising from the
defense of such claims, provided that such legal defense is
provided by the same law firm that is also representing NAC or
NAC's directors in connection with such defense. Xxxxxx agrees
to execute such conflict waivers as the law firm may
reasonably require. In the event such law firm determines that
it cannot represent Xxxxxx, or in the event Xxxxxx determines
to engage defense counsel of his own choosing to defend such
claims as a result of NAC's counsel, or NAC's directors'
counsel's, failure to competently represent him, he may engage
counsel of own choosing, provided such counsel is reasonably
satisfactory to NAC, and NAC shall bear the reasonable
attorney's fees incurred by Xxxxxx. NAC shall not have either
the authority or the obligation to settle any such claims
asserted against Xxxxxx or the Shareholders.
8. NAC, Xxxxxx, and the Xxxxxx Shareholders hereby agree that
upon the delivery to NAC of the NAC Securities described in
paragraphs 4(a) and 4(b) hereof, the Registration Rights
Agreement and the Lock-Up, Standstill and Voting Agreement are
deemed terminated and all rights, obligations and claims
arising under those agreements are deemed released.
9. Subject to the timely delivery to NAC of the NAC Securities
described in paragraphs 4(a) and 4(b) hereof, on May 03, 2002,
all rights, obligations and claims arising under the Merger
Agreement are deemed terminated and released, except for (1)
claims arising under the Merger Agreement that are asserted by
one party against the other prior to May 3, 2002; and (2) the
right of indemnity set forth in the final sentence of Section
7.3(a) of the Merger Agreement.
10. Xxxxxx and the Xxxxxx Shareholders represent and warrant that
they own (or will own at the time of transfer to NAC) the
shares of Capital Stock to be transferred hereunder, free and
clear of all liens, security interests or claims.
11. This Agreement constitutes the entire agreement with respect
to the subject matter hereof and supersedes all other prior or
contemporaneous agreements, written or oral, among the
parties.
This Agreement shall be binding upon the successors and
assigns, heirs and legatees of the parties. This Agreement
shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to conflict of
law principles thereof. Each party shall bear its own costs
and expenses in connection with the negotiation of this
Agreement. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original, but
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement as of the date set forth above.
NATIONAL AUTO CREDIT, INC., a Delaware
corporation
By: /s/ Xxxxx X. XxXxxxxx
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Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
CYGNET CAPITAL CORPORATION, an Arizona
corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Secretary
VERDE REINSURANCE COMPANY, LTD., a Nevis
Island corporation
By: /s/ Xxxxxx X. Xxxxxx, XX
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Name: Xxxxxx X. Xxxxxx, XX
Title: Managing Director
XXXXX XXXXXX III 2000 TRUST
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Trustee
XXXXX XXXXXX 2000 TRUST
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Trustee
EJMS INVESTORS LIMITED PARTNERSHIP,
an Arizona limited partnership
By: SMJE INVESTORS, LLC, an Arizona limited
liability company, the General Partner
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Managing Member
/s/ Xxxxxx X. Xxxxxx, XX
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XXXXXX X. XXXXXX, XX
/s/ Xxx Xxxxx
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XXX XXXXX
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
/s/ Xxxx Xxxxxx
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/s/ Xxxxx Xxxxxxxxx
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XXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX
/s/ Xxxx Xxxxxx
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XXXX XXXXXX
/s/ Xxxxx Xxxxxx
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