EXHIBIT B
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SUPPLEMENTAL AGREEMENT
This Supplemental Agreement ("Agreement") is made and entered into by
and between Pacific Financial Group, Inc. ("PFG"), AutoPrime, Inc. ("AP") and
AutoCorp Equities, Inc., ACE Motor Co., Inc. a Texas corporation, and AutoCorp
Financial Services, Inc., a Texas corporation (collectively "ACE") and is an
integral part of a certain Master Agreement by and between the parties dated as
of October 1, 2000 (the "Master Agreement") to which this Agreement attached as
Exhibit B.
For valuable consideration, the parties agree as follows:
1. Xxxxxx Road Lease. PFG hereby agrees to sublease from ACE, or to become
the primary tenant of the ACE office premises located at 000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxx, Xxxxx, as of October 1, 2000 (the "Xxxxxx Road
Premises") and, further, as of such date to (i) promptly pay, for the
benefit of ACE, all rentals, costs and expenses directly or indirectly
arising from or related to ACE's current lease of such premises
(collectively, the "Lease Costs"), (ii) indemnify, and does by this
Supplemental Agreement indemnify, ACE against and does hereby hold ACE
harmless from any and of such "Lease Costs".
2. Furniture and Equipment. ACE shall (i) promptly supply for PFG's use,
by either assignment, lease or sublease as PFG may determine, a list of
all furniture, fixtures, equipment and office supplies which are
designated in writing by PFG and agreed to by ACE on or before December
31, 2000, which, as of the Effective Date, are located at the Xxxxxx
Road Premises, and (ii) transfer, assign and deliver to ACE, at PFG's
sole cost and expense, all furniture, fixtures, equipment and office
supplies which are designated in writing by ACE and agreed to by PFG on
or before December 31, 2000, and which are located at 0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx, Xxxxx, all of (i) to be delivered to PFG and (ii) to
be delivered to ACE free and clear of all liens, claims, encumbrances
and taxes other than those which arise in connection with the related
lease or sublease.
3. Right of First Refusal. PFG and AP hereby grant to ACE the exclusive
right of first refusal with respect to any offer from any person or
entity to purchase any vehicle securing any contract (at a liquidation
value described in Section 8 herein) (i) listed on Exhibits E-2 and E-3
attached to the Master Agreement or (ii) described in the Servicing
Agreement attached as Exhibit H to the Master Agreement, which is
repossessed by (i) PFG or ACE at any time prior to, on or after October
1, 2000, or (ii) AP prior to or on October 1, 2000, or (iii) by ACE, as
servicing agent for either PFG or AP prior to, on or after October 1,
2000.
4. Repossession Expense Reimbursement. PFG shall, promptly upon receiving
a written request from ACE which includes adequate supporting
documentation, reimburse ACE for all costs and expenses paid or
incurred by ACE in the repossession of (i) any collateral securing any
vehicle or contract described on Exhibits E-1, E-2 or E-3 attached to
the Master Agreement, or (ii) any retail installment contract being
serviced by ACE pursuant to the Servicing Agreement attached to the
Master Agreement as Exhibit H.
Supplemental Agreement 1
5. Technical Assistance. PFG shall, promptly and from time to time, at
ACE's written request provide, at PFG's expense, all reasonable
technical support with respect to the use of the computer equipment
described on Exhibit G attached to the Master Agreement, and all
improvements, replacements and substitutions thereof, during the period
commencing on the Effective Date and ending October 1, 2001.
6. ACE Business Plan.
(a) ACE shall use its best efforts to implement its business plan,
which business plan, includes the following:
(i) ACE will purchase at least a 25% ownership option in
an Oklahoma Chevrolet and Oldsmobile dealership for an amount
not to exceed $275,000. (NOTE: it is anticipated that the
addition of a new car franchise to the ACE dealer group will
permit all of the ACE affiliated dealers to have access to a
number of point of sale lenders).
(ii) Xxxx Xxxxxxx (a partial guarantor of the ACE debt to
AP) will contribute his interest in various Oklahoma used car
dealerships to ACE, at ACE's and PFG's discretion, upon terms
acceptable to ACE.
(iii) ACE intents to obtain a letter of intent from a
nationally recognized automobile company for new car franchise
within the first nine months of operations.
(iv) ACE has obtained from new investors verbal
commitments for up to $500,000 of new capital to acquire
interests in and to capitalize new car franchises. ACE and the
new investors will agree that these funds shall be used for
this purpose only.
(v) ACE intents to obtain a line of credit commitment
reasonably acceptable to PFG from a responsible lender prior
to or within a reasonable time following closing of the
transactions described in the Master Agreement.
(b) In connection with ACE's implementation of its business plan,
PFG agrees to use its best efforts to assist ACE in its efforts, to the
extent that ACE may request such assistance, in writing.
7. Vehicle Storage. ACE agrees to store all vehicles which it repossesses
and in which PFG or AP has a valid and enforceable security interest,
on a space available basis, at no cost to PFG or AP, for up to
forty-five (45) days after the date of each such repossession. In
addition, ACE agrees to provide insurance for such stored vehicles at
its expense subject to reimbursement of such expense by PFG promptly
following PFG's receipt of written requests(s) for such reimbursement.
8. Purchase of Repossessed Vehicles. ACE shall have the right to purchase,
and PFG agrees to sell to ACE, all of PFG's rights, liens, title and
interests in and to any repossessed vehicle (i) securing any contract
listed on Exhibits E-2 and E-3 and (ii) recurring any contract being
serviced by ACE pursuant to the Servicing Agreement attached to the
Master Agreement as Exhibit H, by paying to PFG 50% of the agreed
liquidation value of each such repossessed vehicle, less 100% of all
repossession costs and expenses. If PFG and ACE cannot agree on the
liquidation value of any repossessed vehicle, then three (3) appraisers
shall be selected, one by PFG, one by ACE, and one by the two
appraisers so selected, and the average of their appraisals shall be
determinative. PFG and ACE agree that the liquidation value shall be
determined within ten (10) days of the repossession date by ACE.
Supplemental Agreement 2
9. Financial Information. ACE shall deliver to PFG from time to time,
copies of, profit and loss statements, balance sheets and other
financial information, that ACE has filed with the Securities and
Exchange Commission.
10. Collection Services. ACE shall, with reasonable promptness, provide for
PFG's benefit the following collection services for the following fees
payable to ACE:
(i) ACE will provide collection services for a collection fee of
26.25% on all active AP accounts 0-29 days past due, until all
of such accounts are sold or otherwise disposed of by AP.
(ii) As detailed in the Servicing Agreement attached to the Master
Agreement as Exhibit I, on all active accounts 30-59 days past
due, PFG and ACE agree that collections or recoveries will be
divided between the parties as they may agree but not less
than 75% to ACE and 25% to PFG up to an amount not to exceed
$300,000 (or the difference between final ACE inventory book
value and $600,000, whichever is less). Once the $300,000
amount has been received by ACE, ACE shall be thereafter
entitled to a 26.25% collection fee on the remaining active
accounts in the 30-59 days past due category. From time to
time, ACE shall provide PFG with a schedule of collection fee
percentages by month which will support the above-mentioned
amount. PFG reserves the right to sell or sub-service these
accounts once the $300,000 amount has been collected by ACE.
(iii) PFG and ACE agree that active accounts which are or become
more than 60 days past due shall be promptly transferred by
PFG to ACE (with full title, free and clear of all liens,
claims, encumbrances and taxes) for which ACE shall be
entitled to 100% of all collections. Such accounts shall be
specifically designated upon by the parties as of the
Effective Date and described in a writing to be delivered to
each of them at the closing of the transaction described in
the Master Agreement.
(iv) Repossessions after the Effective Date on active accounts over
60 days past due will be valued at "actual cash value", agreed
upon by the parties at time of repossession or, if there is
disagreement, as determined by the appraisal method described
in the foregoing Paragraph 8. PFG will be entitled to 50% of
the actual cash value on such repossessions after directly
paying or reimbursing ACE for the cost(s) of repossession.
11. Indemnity from PFG.
PFG shall indemnify ACE against, and shall hold ACE harmless from those
claims, and upon those terms, described in a separate, mutually
acceptable indemnity agreement to be executed by PFG and ACE and
delivered to each of them at the closing of the transaction described
in the Master Agreement.
Supplemental Agreement 3
12. Indemnity from ACE.
ACE shall indemnify PFG against, and shall hold PFG harmless from those
claims, and upon those terms, described in a separate, mutually
acceptable indemnity agreement to be executed by PFG and ACE and
delivered to each of them at the closing of the transaction described
in the Master Agreement.
13. Equipment Leases. ACE shall assume all lease payments due to equipment
lessors from and after October 1, 2000 for the computer equipment
described on Exhibit G attached to the Master Agreement.
14. Included Parties. Wherever "PFG", "AP" or "ACE" is used in Paragraphs
11 and 12 in this Agreement, the terms include the respective officers,
directors, shareholders, agents, representatives, employees and
professionals of each of the parties.
15. Effect of Master Agreement. In addition to the provisions of this
Agreement, the provisions of the Master Agreement shall be valid and
binding upon the parties. In the event of a conflict between the
provisions of this Agreement and those of the Master Agreement, the
Master Agreement provisions shall control.
Executed as of October 1, 2000.
PACIFIC FINANCIAL GROUP, INC.
By:___________________________
Xxxx Xxxxxxx
President
AUTOPRIME, INC.
By:___________________________
Xxxxx Xxxx
Chief Executive Officer
APPROVED AND ACCEPTED:
AUTOCORP EQUITIES, INC.
By:__________________________
Xxxxxxx Xxxxxx, President
Supplemental Agreement 4
