MASTER AGREEMENT
This Master Agreement (the "Agreement") is made and entered into as of
the 30th day of December, 1998, by and among AutoPrime, Inc., a Delaware
corporation, ("AutoPrime"), AutoCorp Equities, Inc., a Nevada corporation
("AutoCorp"), Consumer Investment Corporation, an Arizona corporation ("CIC"),
Lenders Liquidation Centers, Inc., an Arizona corporation ("LLCI"), Xxxxxxx X.
Xxxxxxx, ("Xxxxxxx"), Xxxxxx X. Xxxxxx,("Xxxxxx"), Xxxxxx X. Xxxxx, ("Xxxxx"),
Xxxxxxx X. Xxxxxxxx, ("Xxxxxxxx"), Xxxxx XxXxxx ("XxXxxx") and Xxxxxx Xxxx,
("Xxxx") (Merritt, Miller, Kacic, Bustillo, Xxxx and XxXxxx are sometimes
collectively referred to in this Agreement as the "Xxxxxxx Group"). In addition
to this Master Agreement, the parties have agreed to execute and deliver various
"Additional Documents" defined as any and all documents, instruments and
agreements to be delivered in connection with the consummation of this
Agreement, whether prior to, at, or subsequent to the execution and delivery of
this Agreement including, without limitation, the documents listed on Exhibit
"A" attached hereto.
R E C I T A L S
A. The authorized capital of AutoCorp consists of 110,000,000 shares of
Common Stock, $0.001 par value, and 10,000,000 shares of Preferred Stock, $0.001
par value. Of the 110,000,000 shares of Common Stock, based upon the
Stockholder's List supplied by AutoCorp's transfer agent dated December 10, 1998
(the "Shareholder's List"), 5,498,348 shares are issued and outstanding
(including 20,000 shares held by Consumer Insurance Company, an affiliate), and
563,000 shares are issued but held in the treasury of AutoCorp. No shares of
Preferred Stock have been designated or issued. However, the Board of Directors
of AutoCorp has the authority to designate and set the terms of any series of
Preferred Stock, and shall designate and set the terms of 6,428,776 shares of
series A Preferred Stock and issue the same as a part of this Transaction.
B. Based on the Shareholder's List the Xxxxxxx Group owns or controls
3,605,500 shares (approximately 65.6%) of the 5,498,348 outstanding Shares of
Common Stock of AutoCorp, a portion of which was purchased in 1997, by Xxxxxxx
and Xxxxxx from Xxxxxxxx, Xxxx and XxXxxx pursuant to certain Stock Purchase
Agreements and related Promissory Notes.
C. AutoCorp is the parent corporation of CIC and LLCI. The Xxxxxxx
Group also controls the Board of Directors and Management of AutoCorp, but, as a
part of this Agreement, shall resign as directors, officers and employees of
AutoCorp. As such, prior to closing they also control CIC and LLCI, and,
following closing, will continue to control CIC and LLCI (as well as the other
"Companies", as defined in a certain Xxxx of Sale and Assignment of even date),
but shall no longer have control of AutoCorp.
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D. AutoCorp, CIC and LLCI (the "Makers") are indebted to AutoPrime on
three (3) promissory notes (the "Notes") aggregating $3,428,550.14 in unpaid
principal amount. The Notes are as follows:
(1) That certain Promissory Note effective October
31, 1997, in the principal amount of $100,000, wherein the
Makers are AutoCorp Equities, Inc., Lenders Liquidation
Centers, Inc. and Consumer Investment Corporation, and the
Payee is AutoPrime, Inc., which note has a current
principal balance of $69,374.96.
(2) That certain Secured Line of Credit Note
effective October 31, 1997, in the principal amount of
$450,000, wherein the Makers are AutoCorp Equities, Inc.,
Lenders Liquidation Centers, Inc. and Consumer Investment
Corporation, and the Payee is AutoPrime, Inc., which note has
a current
principal balance of $416,464.69.
(3) That certain Promissory Note effective October
31, 1997, in the principal amount of $3,000,000, wherein the
Makers are AutoCorp Equities, Inc., Lenders Liquidation
Centers, Inc. and Consumer Investment Corporation, and the
Payee is AutoPrime, Inc., which note has a current principal
balance of $2,878,550.14.
(4) Accrued interest, at December 30, 1998, on all
three notes is $137,044.13.
E. The Notes are collaterally secured pursuant to that certain Security
Agreement effective October 31, 1997, between the Makers and AutoPrime (the
"1997 Security Agreement").
F. The Xxxxxxx Group has guaranteed the Notes by a Guaranty dated
October 31, 1997 (the "Xxxxxxx Group Guaranty").
G. The Xxxxxxx Group has pledged 600,000 shares of AutoCorp Common
Stock to AutoPrime to secure the Notes. Such pledge was made pursuant to a
Pledge Agreement dated October 31, 1997 (the "Xxxxxxx Group Pledge Agreement"),
which Pledge Agreement shall be terminated and rescinded.
H. AutoCorp is indebted as a guarantor, to AutoPrime for at least
$1,787,709.11 of cash advances and expenditures, as well as "repurchase debt"
arising out of transactions by which, prior to December 30, 1998, numerous
retail installments contracts secured by motor vehicles which have become
delinquent and whose repurchase have been guaranteed by AutoCorp and its
subsidiaries, AutoCorp shall unconditionally tender, contemporaneously with
closing, 1,787,709 shares of its Series A Preferred Stock in full satisfaction
of such debt.
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I. CIC and LLCI are indebted to AutoPrime for at least $2,000,000 of
cash advances, expenditures and other "repurchase obligations" (separate and
apart from those obligations described in the foregoing Recital H which are also
guaranteed by AutoCorp.), as well as other obligations arising and to arise from
past and future business relationships. AutoCorp, for the benefit of CIC and
LLCI, shall unconditionally tender, contemporaneously with closing, 1,290,776
shares of its Series A Preferred Stock and 1,091,113 shares of its Common Stock
in satisfaction of $2,000,000 of such debt. Such tender shall be accepted by
AutoPrime upon AutoPrime's receipt of approvals from the Office of Thrift
Supervision and any other governmental agency having jurisdiction and/or
supervision over approval of the receipt of securities by a bank-controlled
subsidiary. In the event such approval is not received by AutoPrime on or before
June 1, 1999, AutoPrime shall notify AutoCorp, CIC and LLCI that the tender is
rejected, and the debt presently satisfied by AutoCorp's stock tender shall be
reinstated on the books of CIC, LLCI and AutoPrime, and shall thereupon be
immediately due and payable with interest at eight percent (8%) per annum, by
CIC and LLCI to AutoPrime.
J. CIC is indebted to certain debenture holders in an aggregate
principal amount of approximately $2,400,000.00, plus accrued interest of
approximately $450,000.00. An Exchange Trust is being created for two separate
purposes: one for the purpose of making available to the debenture holders
Common Stock of AutoCorp to be used by CIC to exchange for such debentures on
the basis of one (1) share of AutoCorp Common Stock for each $4.00 of principal
amount of debenture debt, and the other purpose being to hold 1,290,776 shares
of AutoCorp Series A Preferred Stock and the 1,091,113 shares of AutoCorp Common
Stock tendered by AutoCorp to AutoPrime subject to the "Unconditional Tender of
AutoCorp Preferred and Common Stock" listed on Exhibit "A" attached hereto.
X. Xxxxxxxx, Xxxx and XxXxxx shall release Xxxxxxx and Xxxxxx from
their respective purchase money obligations arising from the completed and
irrevocable prior sale of AutoCorp stock to Xxxxxxx and Xxxxxx.
L. All parties understand and acknowledge the attributes and conversion
provisions pertaining to the Series A Preferred Stock are detailed in the
Certificate of Designation included in the Additional Documents.
M. Due to the complexity of the transaction, and the numerous
obligations which will continue to be owed to AutoCorp, and will arise in the
future, CIC and LLCI shall ratify their existing and future obligations and
shall generally indemnify AutoCorp against any and all losses or damages.
N. Because AutoPrime is relying upon the represented $3,500,000.00
value of the Series A Preferred Stock as a material inducement to AutoPrime's
participation in the Transaction, AutoCorp has agreed to maintain that value
pursuant to an Agreement to Issue Additional Preferred Stock, one of the
Additional Documents.
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O. Finally, ACE Motor Company and AutoCorp Financial Services, Inc.,
subsidiaries of AutoCorp which are being retained by AutoCorp and which are not
being transferred to Xxxxxx and Xxxxxxx, contemporaneously with the closing of
the Transaction, as defined below, are purchasing certain assets of one of the
Companies, Lenders Auto Resale Centers of Texas, Inc., upon the terms and
conditions specified under the heading "Austin Documents" in the Additional
Documents listed on Exhibit "A" attached hereto.
The parties are entering into the transaction described herein (the
"Transaction") for the purpose of realigning variety of business, corporate and
debt relationships, all for their mutual benefit.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained in this Agreement, the parties agree as follows:
ARTICLE 1
ELEMENTS OF THE TRANSACTION
1.1 Redemption of Xxxxxxx Group Stock. Xxxxxxx and Xxxxxx hereby sell,
transfer and assign to AutoCorp, and AutoCorp shall redeem from them, free and
clear of all Liens, an aggregate of 2,653,500 shares of Common Stock of AutoCorp
(the "Xxxxxxx Stock"). In addition, Xxxxxxx and Xxxxxx shall, and do hereby,
sell, transfer and assign to AutoCorp, free and clear of all Liens, any other
equity securities of AutoCorp, including, without limitation, any claims they
may have to receive any additional shares of capital stock of AutoCorp through
options, warrants, earnouts or any other mechanism, save and except (i) 300,000
shares of the Common Stock to be retained by Xxxxxxx out of the Common Stock
presently registered in his name, and (ii) 300,000 shares of Common Stock to be
acquired by Xxxxxx from (a) CIC Fund V, Inc. (200,000 shares) and (b) Xxxx
Xxxxxxxx (100,000 shares). As used in this Agreement, the term "Lien" means any
mortgage, deed of trust, lien, security interest, pledge, conditional sales
contract, claim, right of first refusal, option, charge, agreement, easement,
right-of-way, limitation, reservation, restriction and other encumbrance of any
kind.
1.2 AutoCorp shall quitclaim to Xxxxxxx and Xxxxxx all of its right,
title and interest in and to the issued and outstanding shares of common stock
of CIC, LLCI, and Consumer Insurance Services, Inc., and other specifically
named subsidiaries (the "Companies" described in the Additional Document
entitled "Xxxx of Sale and Assignment"), save and except only stock issued and
to be issued by AutoCorp and any of its subsequently created or acquired
subsidiaries and affiliates The common stock being quitclaimed to Xxxxxx and
Xxxxxxx pursuant to the xxxx of Sale and Assignment is collectively referred to
herein as the "CIC Stock". This transfer is to be made on a quitclaim basis
without any representation or warranty whatsoever.
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1.3 By separate document, AutoPrime shall release AutoCorp from the
Notes described in Recital D, above.
1.4 AutoCorp shall issue to CIC and LLCI and CIC and LLCI shall pledge
to AutoPrime 3,500,000 shares of Series A Non-Cumulative Convertible Preferred
Stock ("Series A Preferred").
1.5 CIC and LLCI shall deliver to AutoCorp a General Indemnity
Agreement of even date herewith.
1.6 AutoCorp shall establish and issue an aggregate of 3,117,000 shares
of Common Stock from its treasury to Xxxxxxx Xxxxxx, as Trustee under Voting
Trust Agreement I, Voting Trust Agreement II and Exchange Trust Agreement,
pursuant to, and for the benefit of those beneficiaries named in said Trust
Agreements, as follows:
(j) to Voting Trust I - 350,000 shares
(k) to Voting Trust II - 350,000 shares
(l) to Exchange Trust - 2,517,000 shares
1.7 Contemporaneously with the December 30, 1998, closing of this
Transaction, AutoCorp shall unconditionally tender to AutoPrime 1,091,113 shares
of its Common Stock and 1,290,776 shares of its Series A Preferred Stock in
exchange for a release of its of $2,000,000 ($709,224 attributed to the Common
Stock at $0.65/share and $1,290,776 attributed to the Series A Preferred at
$1.00/share) owned by LLCI and CIC and arising from advances, expenditures and
a"repurchase indebtedness" (and described in Recital I above), and guaranteed by
AutoCorp. Such tender (i) may be accepted by AutoPrime in whole or in part at
any time on or before December 31, 1999, or (ii) shall be accepted by AutoPrime
upon AutoPrime's receipt of approvals from the Office of Thrift Supervision and
any other governmental agency having jurisdiction and/or supervision over
approval of the receipt of securities by a bank-controlled subsidiary. In the
event, (i) such approval is not received by AutoPrime on or before December 31,
1999 and (ii) AutoPrime elects not to accept AutoCorp's tender, then, AutoPrime
shall notify AutoCorp, CIC and LLCI that the tender is rejected, and the debt
presently satisfied by AutoCorp's stock tender shall be reinstated on the books
of CIC, LLCI and AutoPrime, and shall thereupon be immediately due and payable,
with interest at eight percent (8%) per annum from December 31, 1998, by CIC and
LLCI to AutoPrime. This "repurchase indebtedness" is separate from the Notes and
other indebtedness arising from the Master Servicing Agreement pertaining to
contracts originated by Lipshy Motorcars, Inc.
AutoPrime shall immediately release AutoCorp from its related guaranty,
all as evidenced by an Additional Document entitled "Release of AutoCorp
Guaranty of $2,000,000 Debt", and all being subject to the terms of the
"Unconditional Tender of AutoCorp Preferred and Common Stock" listed on Exhibit
"A" attached hereto.
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1.8 CIC and LLCI each covenant and agree to use their best efforts to
effect an exchange of CIC's outstanding Debentures for as many shares of the
1,425,887 shares of AutoCorp Common Stock held for that specific purpose in the
Exchange Trust as may be needed up to December 31, 1999, at which time any
shares unneeded for such conversion shall be released from the Exchange Trust
and delivered free and clear of all Liens and trust restrictions as AutoPrime
shall direct in writing. The exchange rate for conversion of Debentures into
Common Stock shall be $4.00 of the principal amount of Debenture debt for each
one (1) share of Common Stock.
1.9 Xxxxxxx and Xxxxxx shall pledge the CIC Stock to AutoPrime pursuant
to a certain Pledge Agreement of even date. The pledge is made to secure (a) all
debts and obligations of Miller, Merritt, CIC, and LLCI to AutoPrime, (b) any
guaranty by Xxxxxx or Xxxxxxx of debts or obligations of CIC or LLCI to
AutoPrime, and (c) the representations and warranties of Xxxxxxx and Xxxxxx made
in paragraph 2 of this Agreement. "CIC Stock" is defined as those shares of
stock being assigned by AutoCorp to Xxxxxxx and Xxxxxx pursuant to paragraph
1.2, above.
1.10 At closing, Xxxxxxx and Xxxxxx shall resign as officers and
employees of AutoCorp and Xxxxxx shall resign as director.
1.11 Contemporaneously with the December 30, 1998, closing of this
Transaction and by separate document, AutoPrime shall acknowledge its release of
AutoCorp's guaranty of $1,787,709.11 "repurchase debt"owed by LLCI and CIC as
described in an Additional "document subtitled "Release of AutoCorp Guaranty of
$1,787,709.11 Debt", and, in exchange, AutoCorp shall unconditionally tender and
deliver to AutoPrime 1,787,709 shares of AutoCorp Series A Preferred Stock
subject to the terms and conditional in the "Unconditional Tender of AutoCorp
Preferred and Common Stock" list on Exhibit "A" attached hereto.
1.12 By a certain "Agreement to Issue Additional Preferred Stock" of
even date herewith, AutoCorp shall covenant and agree to issue jointly to CIC
and LLCI such additional shares of Series A Preferred Stock as may be necessary
from time to time to maintain $3,500,000 in value, as described in such
agreement, all of which Series A Preferred Stock shall be immediately pledged to
AutoPrime to secure all debts owed and to be owed by CIC and LLCI to AutoPrime.
Such covenant is made on the terms and conditions set forth in such agreement.
1.13 By separate document, AutoPrime shall release the Xxxxxxx Group
from the Xxxxxxx Group Pledge Agreement and shall direct the return to Xxxxxxx
and Xxxxxx of the certificates evidencing the 600,000 shares of pledged Common
Stock of AutoCorp, which 600,000 shares of Common Stock shall be transferred and
assigned by Xxxxxxx and Xxxxxx to AutoCorp as a part of the transaction
described in paragraph 1.1 above.
1.14 In that certain Ratification of Obligations of even date herewith,
CIC and LLCI shall ratify all their debts and obligations to AutoPrime.
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1.15 In that certain Pledge Agreement of even date herewith, CIC and
LLCI shall pledge to AutoPrime 3,500,000 shares of Series A Preferred and CIC
shall pledge to AutoPrime the Certificate of Beneficial Interest in the Exchange
Trust , all to secure their co-maker obligations under the Notes and any other
obligations they, or either of them, may now or hereafter owe to AutoPrime.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF XXXXXXX GROUP
2.1 General. CIC, LLCI and Xxxxxxx Group jointly and severally
represent and warrant to AutoCorp and AutoPrime that the representations and
warranties set out in this Article 2 are true and correct on and as of the date
of this Agreement.
2.2 Title to the Xxxxxxx Stock. Xxxxxxx, Xxxxxx and AutoCorp each have
good, absolute and marketable title in and to all securities being issued
pursuant to this Agreement and hold the same free and clear of all Liens. Each
issuer hereunder has complete and unrestricted right, power and authority to
sell, transfer and assign the securities described in this Agreement. The
delivery of the Xxxxxxx Stock to AutoCorp, as herein contemplated, will vest in
AutoCorp good, absolute and marketable title to all the Xxxxxxx Stock, free and
clear of all Liens. This Agreement constitutes the legal, valid and binding
obligation of the Xxxxxxx Group.
After transferring the Xxxxxxx Stock, except for an additional 600,000
shares of Common Stock of AutoCorp being retained by Xxxxxxx and Xxxxxx as
hereinabove described, neither Xxxxxxx nor Xxxxxx have any rights or claim of
any kind to any equity securities of any kind of AutoCorp. Specifically, neither
Xxxxxxx nor Xxxxxx have any claim to now or hereafter directly or indirectly
own, claim or receive any additional shares of capital stock of AutoCorp by or
through trusts, third parties holdings, options, warrants, rights, convertible
securities, earnouts or any other mechanism or device.. In addition, neither
Xxxxxxx nor Xxxxxx know of any other person or entity who has any claim to
receive any additional shares of capital stock of AutoCorp by any mechanism or
device, save and except those shares specifically described in this Agreement
(and Additional Documents) and for only the number of shares stated, or as
shown, as registered owners of AutoCorp common stock, on the shareholder list
(the "Shareholder List") dated December 10, 1998, which Shareholder List is
incorporated herein.
2.3 Authorizations. The Xxxxxxx Group, and each of them, has the
requisite power and authority to enter into this Agreement, as well all other
Additional Documents. This Agreement and the Additional Documents have been duly
executed and delivered by the Xxxxxxx Group and constitute a legal, valid and
binding obligation of the Xxxxxxx Group, enforceable against the Xxxxxxx Group
in accordance with their terms, except as may be limited by bankruptcy,
reorganization,
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insolvency and similar laws of general application relating to or affecting the
enforcement of rights of creditors.
2.4 Power of Attorney. Each of the Xxxxxxx Group hereby names Xxxxxxx
Xxxxxx as their respective attorney-in-fact for the specific and limited purpose
of consummating, completing and implementing this Agreement. To that end, he is
hereby given the authority and direction to execute and deliver all documents
and other writings, including the Additional Documents, and to take any and all
actions which may be necessary or useful in consummating, completing or
implementing this Agreement.
2.5 Consents. Each party hereto may execute, deliver and perform this
Agreement and the transactions contemplated by it, including without limitation,
execution, delivery and performance of the Additional Documents to which each of
them is a party, without the necessity of obtaining any consent, approval,
authorization or waiver or giving any notice or make any filing or declaration.
2.6 Binding Effect. The execution, delivery and performance of this
Agreement and the Additional Documents by any party hereto does not and will not
(a) constitute a violation of any statute, judgment, order, decree or regulation
or rule of any governmental body applicable or relating to the them, or (b)
conflict with, or constitute a breach or default under, or give rise to any
right of termination, cancellation or acceleration under, any term or provision
of any contract, agreement, lease, mortgage, deed of trust, commitment, license,
franchise, permit, authorization or any other instrument or obligation to which
any of them is a party or by which their respective assets are bound, or an
event which with notice, lapse of time, or both, would result in any conflict,
breach, default or right or other than those breaches, defaults or violations
which the any party shall have cured on or before the Closing.
2.7 Litigation, Investigations, Etc. There are no pending or threatened
claims, actions, suits or proceedings, whether in equity or in law, or
governmental or administrative investigations pending, or to the best knowledge
and belief of any party hereto which would have any effect on this Agreement or
the transactions contemplated by this Agreement
2.8 Taxes and Tax Liens. There are no federal, state or local tax liens
or related notices filed against any of CIC, LLCI and the Xxxxxxx Group, and
none of CIC, LLCI and the Xxxxxxx Group have not been notified of any fact or
circumstance which would give any federal, state or local taxing authority the
right to file any such lien or notice.
2.9 Accuracy of Information. No representation or warranty by CIC, LLCI
and the Xxxxxxx Group contained in this Agreement or the Additional Documents,
and no statement contained in any certificate or other instrument delivered or
to be delivered by any of them to AutoCorp or AutoPrime pursuant to this
Agreement or in connection with the transactions contemplated by this
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Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary in order to make the
statements contained in this Agreement not misleading.
2.10 Books and Records. CIC, LLCI and the Xxxxxxx Group, and each of
them, represent that each has previously delivered to AutoCorp all AutoCorp
books, records, financial information, corporate documents, and other materials
in their possession or under their control.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CIC AND LLCI
3.1 General. CIC and LLCI jointly and severally represent and warrant
to AutoCorp and AutoPrime that the representations and warranties set out in
this Article 3 are true and correct on and as of the date of this Agreement.
3.2 Corporate Standing. CIC and LLCI are each corporations duly
organized, validly existing and in good standing under the laws of the State of
Arizona, and each has all requisite corporate power and authority to carry on
its business as the same is now being conducted and to own its property as the
same is now used.
3.3 Authorizations. CIC and LLCI each have all the requisite corporate
power and authority to enter into this Agreement, as well as the Additional
Documents, and to carry out their obligations under this Agreement and the
Additional Documents. This Agreement and the Additional Documents have been duly
authorized, executed and delivered by CIC and LLCI and constitute legal, valid
and binding obligations of CIC and LLCI, enforceable against them in accordance
with their terms, except as may be limited by bankruptcy, reorganization,
insolvency and similar laws of general application relating to or affecting the
enforcement of rights of creditors.
3.4 Litigation, Investigations, Etc. There are no actions, suits,
proceedings or claims filed or, pending or threatened, governmental or
otherwise, against any of the Xxxxxxx Group, CIC or LLCI which would prevent the
carrying out of this Agreement or any of the transactions contemplated by this
Agreement or declare the same unlawful or cause the rescision thereof and to the
best knowledge and belief of each of the Xxxxxxx Group, CIC and LLCI there is no
basis for any such action, suit, proceeding or claim.
3.5 Conflict with Other Documents. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not violate, with or
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without the giving of notice or the lapse of time, any provision of law, federal
or state or otherwise, applicable to any of the Xxxxxxx Group, CIC and LLCI and
will not conflict with, or result in a breach or termination of any provision
of, or constitute a default under, the Articles of Incorporation or Bylaws of
CIC or LLCI, or pursuant to any loan agreement, indenture, mortgage, lease,
contract or other agreement or instrument to which any of the foregoing is a
party or by which any of them or their assets and properties may be bound.
3.6 Consents. No consent, approval, authorization, filing or
declaration of any third party or any governmental authority is required of any
of the Xxxxxxx Group, CIC or LLCI in connection with the execution of this
Agreement or the consummation of the transactions contemplated by this
Agreement.
ARTICLE 4
CLOSING DOCUMENTS
4.1 Closing Documents to Purchaser. At the Closing, the Sellers and the
Companies shall deliver or cause to be delivered to the Purchaser the following
instruments and documents, duly executed by the Companies, Sellers or Persons or
entities required by the Purchaser, as the case may be, unless otherwise
indicated:
(a) Stock certificates evidencing the Xxxxxxx Stock, duly endorsed for
transfer or with duly executed stock powers attached, and such other documents
as AutoCorp or AutoPrime may reasonably request to effect the transfer and
assignment of the Xxxxxxx Stock free and clear of all Liens.
(b) Additional Documents including those described on Exhibit "A"
attached hereto.
(c) All pertinent records, files, documents and papers relating to the
Companies and their operations and businesses required to be delivered to
Purchaser under this Agreement, or later reasonably requested by AutoCorp or
AutoPrime.
(d) Such other instruments and documents relating to the transactions
contemplated by this Agreement as may reasonably be requested by AutoCorp or
AutoPrime.
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ARTICLE 5
RELEASE
Release. The Xxxxxxx Group, CIC and LLCI, and each of them hereby
releases, acquits and forever discharges AutoPrime, AutoCorp, and all of their
respective directors, officers, shareholders, affiliates, employees,
professionals, agents, servants and employees and all persons, natural or
corporate, in privity with them, from any and all claims or causes of action of
any kind whatsoever, at common law, statutory, or otherwise, that any of the
foregoing or any of them has or might have, known or unknown, arising prior to
or on the date hereof, or directly or indirectly related to this Transaction, it
being intended to release all such claims of any kind arising prior to the date
hereof which the Xxxxxxx Group might have against those hereby released, save
and except only claims directly related to any material breach by AutoPrime or
AutoCorp of their respective contractual obligations under this Agreement and
the Additional Documents.
ARTICLE 6
BROKERS, COUNSEL AND FEES
6.1 Brokers. None of the parties to this Agreement has used a finder or
broker in connection with this Agreement or the transactions contemplated by
this Agreement or agreed to pay a finders fee or brokerage commission or fee, or
any other compensation to any intermediary for acting or serving as a finder,
broker or other intermediary in connection with this transaction.
6.2 General. All parties to this Agreement have each engaged, or had
the opportunity to engage separate legal firms to assist them with this
Agreement and the transactions contemplated by this Agreement. Each party
acknowledges that each has read and fully understands this Agreement and its
legal effect, that each has executed this Agreement freely and without coercion,
and that each has the ability, legal capacity and intention to fully perform all
duties and obligations required under this Agreement and the Additional
Documents.
6.3 Fees. All fees and other related costs incurred in connection with
the authorization and consummation of this Agreement shall be borne solely by
the respective party who incurred them, and the other parties shall have no
liability for such fees and costs, and the party who incurred such fees and
costs shall indemnify and hold harmless the other party against liabilities for
such fees and costs in the manner provided in Article 7.
ARTICLE 7
MISCELLANEOUS
7.1 Issuances of Securities. All shares of securities which are to be
issued pursuant to this Agreement shall only be issued at such time or times and
in such manner as are permissible. under all applicable laws and regulations,
including state and federal securities laws. All parties
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hereto agree to co-operate and use their best efforts to expedite the issuance
of all such securities. The inability or failure to issue securities shall not
affect the consummation of this Agreement which the parties acknowledge is
consummated effective as of December 30, 1998. To the extent that any required
securities are not issued and delivered on or before January 1, 2002, the
parties agree to quantify, in dollars, the value of such unissued securities and
the non-issuing party shall pay the quantified amount to the intended recipient
party. In the event of disagreement as to value, the affected parties shall each
designate an informal arbitrator and the amount in dispute shall be the average
of their respective determinations.
7.2 Further Actions. From time to time, as and when requested by any
party to this Agreement, each party shall execute and deliver, or cause to be
executed and delivered, such documents and instruments and shall take or cause
to be taken, such further or other actions as may be reasonably necessary to
consummate and effect the various transactions expressly required to be
performed by any party to this Agreement, including, without limitation, the
Additional Documents..
7.3 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants in this Agreement shall survive
Closing..
7.4 Waivers and Consents. No waiver of compliance with any term,
provision or condition of this Agreement and no consent provided for in this
Agreement shall be effective unless evidenced by an instrument in writing duly
executed by the party hereto sought to be charged with such waiver or consent.
No waiver of any breach of any representation, warranty or covenant or the term
or provision of this Agreement shall be deemed to be a waiver of any preceding
or succeeding breach of the same or any other representation, warranty,
covenant, term or provision. No extension of time for or consent to the
performance of any obligation or act shall be deemed to be an extension of the
time for or consent to the performance of any other obligation or act.
7.5 Construction and Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Texas,
regardless of the jurisdiction in which litigation relating to the subject
matter hereof shall be initiated or continued. Venue for any such action shall
be any court of competent jurisdiction of the State of Texas located in Dallas
County, Texas.
7.6 Entire Agreement. This Agreement, together with the attached
Exhibit, the Additional Documents and those documents referred to in the
foregoing sub-paragraph 7.2, contain the entire agreement between the parties
with respect to the transactions contemplated hereby and supersede all prior
agreements, arrangements and understandings among them with respect to the
Transaction. Neither this Agreement nor the Additional Documents may be amended,
modified or changed in any respect except by an instrument in writing signed by
all of the parties hereto. Notwithstanding anything herein to the contrary, any
representation, warranty or disclosure made herein for one purpose shall also be
deemed to be made for all other purposes as are appropriate.
7.7 Third Party Rights. Notwithstanding any other provision of this
Agreement, this Agreement shall not create benefits on behalf of any Person who
is not a party to this Agreement and this Agreement shall be effective only as
between the parties hereto, their successors and permitted assigns.
Master Agreement Page 12
7.8 Access to Books and Records. After Closing, each party shall afford
any other party and its representatives, at their expense, reasonable access
during normal business hours to all records and books of account of CIC, LLCI,
and the Companies, Voting Trusts I and II and the Exchange Trust (including
without limitation all books and records maintained by any of them prior to
Closing and delivered to another party pursuant to this Agreement) and furnish
each other party and its representatives with copies of any of the foregoing and
all information concerning the business and affairs of each party and its
representatives as it may reasonably request as being needed in the preparation
of its federal income tax returns or its audited or unaudited financial
statements, or for any other reasonable purpose. Prior to destroying any records
which may be relevant to this provision, each party shall notify the others and
allow the others to obtain those records at the other's cost and expense.
7.9 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
7.11 Legal Fees and Costs. If any party shall breach any provision of
this Agreement, or fail to timely and promptly perform as required hereunder,
the breaching party shall be liable to all other parties for all damages
directly or indirectly arising from or related to such breach, including, as
damages, all attorneys fees, costs and expenses paid or incurred by the
non-breaching party(ies) in the protection, preservation or prosecution of any
rights or benefits directly or indirectly arising under or related to this
Agreement.
7.12 Assignability. This Agreement shall not be assignable by any party
to this Agreement without the prior written consent of AutoCorp and AutoPrime,
and any purported assignment by any party without such prior written consent
shall be void.
7.13 Controlling Document. If there shall be any conflict between the
language or effect of any Additional Document and this Master Agreement, the
terms of this Master Agreement shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed on their behalf by a duly authorized officer or
representative, as of the day and year first above written.
AUTOPRIME, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------
Xxxxxx X. Xxxxx
President
AUTOCORP EQUITIES, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Xxxxxxx Xxxxxx
President
Master Agreement Page 13
CONSUMER INVESTMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: President
---------------------------
LENDERS LIQUIDATION
CENTERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: President
---------------------------
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
Excludes from release paragraph;
Financial Consulting Agreement
dated 6/18/98 plus approximately
1.5 months of wages and
consulting fees.
/s/ Xxxxx XxXxxx
--------------------------------
Xxxxx XxXxxx
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxx
---------------------------------
Xxxxxx Xxxx
Master Agreement Page 14
