EXHIBIT 2.1
ACQUISITION AGREEMENT
By and Among
PACIFIC HOLDINGS GROUP,
PACIFIC FINANCIAL GROUP, INC.,
AUTOCORP EQUITIES, INC.,
and
AUTOCORP ACQUISITION PARTNERS
Dated as of August 18, 2004
TABLE OF CONTENTS
ARTICLE I THE TRANSACTION......................................................2
SECTION 1.01 THE TRANSACTION...............................................2
SECTION 1.02 ADDITIONAL ACTIONS............................................5
SECTION 1.03 POST CLOSING COOPERATION......................................6
SECTION 1.04 FAIR VALUE....................................................6
ARTICLE II THE CLOSING.........................................................6
SECTION 2.01 THE CLOSING...................................................6
SECTION 2.02 DELIVERIES BY THE SELLERS TO PURCHASER........................6
SECTION 2.03 DELIVERIES BY THE COMPANY.....................................7
SECTION 2.04 DELIVERIES BY THE PURCHASER...................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS......................8
SECTION 3.01 POWER AND CAPACITY............................................8
SECTION 3.02 NO CONFLICTS..................................................8
SECTION 3.03 OWNERSHIP OF THE SHARES.......................................9
SECTION 3.04 TRANSFERS OF SHARES/ASSETS OF THE COMPANY.....................9
SECTION 3.05 BINDING EFFECT................................................9
SECTION 3.06 BOARD AND SHAREHOLDER ACTIONS.................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER........................10
SECTION 4.01 POWER AND CAPACITY OF PURCHASER..............................10
SECTION 4.02 NO CONFLICTS.................................................10
SECTION 4.03 CONSENTS AND APPROVALS.......................................10
SECTION 4.04 INVESTMENT PURPOSES..........................................10
SECTION 4.05 INDEPENDENT INVESTIGATION....................................10
SECTION 4.06 BINDING EFFECT...............................................11
SECTION 4.07 SOLVENCY.....................................................11
SECTION 4.08 NO UNDISCLOSED EXCLUDED ASSETS...............................11
ARTICLE V OTHER OBLIGATIONS OF THE PARTIES....................................11
SECTION 5.01 CONDUCT OF THE COMPANY'S BUSINESS............................11
SECTION 5.02 ACCESS TO BOOKS AND RECORDS..................................13
SECTION 5.03 CONSENTS.....................................................13
SECTION 5.04 GOVERNMENTAL FILINGS.........................................13
SECTION 5.05 COVENANT TO SATISFY CONDITIONS...............................14
SECTION 5.06 CONFIDENTIALITY..............................................14
ARTICLE VI CONDITIONS PRECEDENT...............................................14
SECTION 6.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF HOLDINGS
AND FINANCIAL................................................14
SECTION 6.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.........15
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ARTICLE VII TERMINATION OF AGREEMENT..........................................16
SECTION 7.01 TERMINATION OF AGREEMENT.....................................16
SECTION 7.02 PROCEDURE UPON TERMINATION...................................16
ARTICLE VIII INDEMNIFICATION..................................................17
SECTION 8.01 INDEMNIFICATION BY THE SELLERS...............................17
SECTION 8.02 INDEMNIFICATION BY PURCHASER.................................17
SECTION 8.03 INDEMNIFICATION BY THE COMPANY...............................17
SECTION 8.04 INDEMNIFICATION CLAIMS.......................................17
ARTICLE IX MISCELLANEOUS......................................................18
SECTION 9.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................18
SECTION 9.02 COMMISSIONS..................................................18
SECTION 9.03 DEFINITION OF KNOWLEDGE......................................18
SECTION 9.04 EXPENSES, TAXES, ETC.........................................18
SECTION 9.05 SUCCESSORS AND ASSIGNS.......................................19
SECTION 9.06 NO THIRD-PARTY BENEFIT.......................................19
SECTION 9.07 ENTIRE AGREEMENT; AMENDMENT..................................19
SECTION 9.08 REFORMATION AND SEVERABILITY.................................19
SECTION 9.09 NOTICES......................................................19
SECTION 9.10 NUMBER AND GENDER............................................20
SECTION 9.11 GOVERNING LAW................................................20
SECTION 9.12 COUNTERPARTS.................................................20
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement"), dated as of August 18,
2004, is made and entered into by and among Pacific Holdings Group, a Nevada
corporation ("Holdings"), Pacific Financial Group, Inc., a Delaware corporation
("Financial" and, together with Holdings, the "Sellers"), AutoCorp Equities,
Inc., a Nevada corporation (the "Company"), and AutoCorp Acquisition Partners, a
Texas general partnership ("Purchaser").
INTRODUCTORY STATEMENTS
Pacific Electric Wire & Cable Co., Ltd., is a company limited by shares
formed under the laws of the Republic of China ("Pacific Electric"). Pacific
Electric owns, directly or indirectly, 100% of Pacific USA Holdings Corp., a
Texas corporation ("PUSA"). PUSA owns 100% of both Holdings and Financial.
Holdings owns 94,000,000 shares of Common Stock of the Company, par
value $.001 per share ("Common Stock"), of which 35,000,000 shares are pledged
to Far East National Bank ("FENB") to secure a loan made to Holdings and its
affiliate, Pacific American Distribution Company.
In addition, Holdings owns 4,086,856 shares of Series A Cumulative
Convertible Preferred Stock, par value $.001 per share, of the Company (the
"Series A Preferred Stock"), which is convertible, at any time, at the option of
the holder, into 40,868,560 shares of Common Stock.
Financial is an affiliate of Holdings and owns 1,621,642 shares of
Series B Non-Cumulative Convertible Preferred Stock, par value $.001 per share,
of the Company (the "Series B Preferred Stock"), which is convertible, at any
time, at the option of the holder, into 1,621,642 shares of Common Stock.
By virtue of the Common and Preferred Stock owned by the Sellers,
Pacific Electric owns indirectly approximately 90.42% of the voting power of the
Company on a fully diluted basis.
Pacific Electric, through various subsidiaries, has advanced funds to
the Company, the outstanding balance of which is currently approximately $3.8
million. In addition, Pacific Electric has guaranteed a $10 million revolving
loan from FENB to AFCO Receivables Funding Corp., a wholly owned subsidiary of
the Company (the "FENB" Loan).
Due to the magnitude of the losses, Pacific Electric has determined to
discontinue funding the operations. As a result, the Company can no longer
continue in business. Pacific Electric is prepared to terminate all operations,
if the Transaction is not consummated.
Purchaser has an oral commitment from a new source of financing for the
Company, and believes it can modify the Company's business model and operate it
profitably with this new financing, if it can gain control of the Company.
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The financing source has also said it is willing to substitute its $10
million guaranty for that of Pacific Electric on the FENB Loan. FENB has
indicated it is willing to accept the new guaranty by the Purchaser's financing
source in substitution and release Pacific Electric from its $10 million
guaranty.
Purchaser is a Texas general partnership. It has two general partners;
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇. ▇▇. ▇▇▇▇▇▇ is currently the President and
Chief Executive Officer of the Company, and ▇▇. ▇▇▇▇▇▇ is the Executive Vice
President of the Company.
In view of the foregoing, the Sellers desire to sell to Purchaser, and
Purchaser desires to purchase, all the equity securities of the Company, of any
kind, owned by the Sellers, on the terms and conditions set forth in this
Agreement.
Accordingly, for and in consideration of the foregoing and the mutual
agreements, representations, warranties, covenants and conditions herein set
forth, and other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
THE TRANSACTION
Section 1.01 The Transaction.
The transaction (the "Transaction") shall consist of the following:
(1) The Sellers will sell, assign and transfer to Purchaser any and all
equity securities of the Company owned by them, including, without limitation
94,000,000 shares of Common Stock, 4,086,856 shares of Series A Preferred Stock,
and 1,621,642 shares of Series B Preferred Stock (collectively, the "Shares")
free and clear of all liens or encumbrances of any kind. The Sellers shall
secure the full, complete and unconditional release of 35 million shares of
Company Common Stock (which are included in the 94,000,000 shares owned by
Holdings) held as collateral by FENB in connection with a loan made to Holdings
and Pacific American Distribution Company.
(2) Holdings will cancel, or assign and transfer to the Company all its
right, title and interest in and to, any and all liabilities and obligations, in
any and all forms, owing as at July 31, 2004 from the Company or any subsidiary
of the Company whose financial statements are consolidated with those of the
Company (the "Company Subsidiaries") to Holdings or to any affiliate of Holdings
that is not a Company Subsidiary (including, without limitation, all
intercompany payables due to the Sellers from the Company, such as the current
balances at the Closing of the "Accounts Payable-affiliates" ($28,589) and
"Long-Term Debt due to affiliated entity" ($3,440,197) items reflected on the
Company's consolidated balance sheet at December 31, 2003).
(3) Holdings shall assume all obligations of American Finance Company
Inc. with respect to that certain Residual Interest Purchase Agreement with
Coastal Capital Corporation dated as of May 21, 2003.
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(4) Holdings shall cause the Company to pay or make provision for
payment of the following:
(a) Payroll in the amount of $88,817.84, representing (i)
payroll for AutoCorp Financial Services, Inc. in the amount of
$23,891.52 for the pay period July 17, 2004 through July 31, 2004 and
the amount remaining unpaid for the pay period July 01, 2004 through
July 16, 2004 for ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; (ii) payroll for
American Finance Company, Inc. in the amount of $11,537.08 for the pay
period July 17, 2004 through July 31, 2004; (iii) payroll for the
Company in the amount of $29,525.34 for the pay period July 01, 2004
through July 16, 2004 for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ and the pay
period July 17, 2004 through July 31, 2004 for ▇▇▇▇▇ ▇▇▇▇▇▇; and (iv)
payroll for the Company for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ in the
amount of $23,863.90 for the pay period July 17, 2004 through July 31,
2004. The Sellers shall not be responsible or liable, in any way, for
any other payment, however characterized, arising from or associated
with the employment of any employee by the Company or any of the
Company Subsidiaries, including, without limitation, wages, salary,
accrued and unpaid vacation, sick leave, health benefits, other
benefits or termination expenses.
(b) Unpaid withholding taxes, payroll taxes, employee benefits
and expenses incurred by employees on behalf of the Company in an
amount not to exceed $85,033.82 and the Sellers shall not be
responsible or liable, in any way, for any other payment or obligation
in respect of such taxes, benefits or expenses.
(5) Holdings will deposit the sum of $56,000 to JPMorgan Chase Bank,
account number 637004474867 in the name of AutoCorp Equities, Inc. (the
"JPMorgan Chase Collection Account"), to reimburse such account for monies
previously borrowed by the Company.
(6) The Sellers will deliver to the Company possession of any and all
property of the Company in their possession (including property on their
premises and property located in offsite warehouses) other than property or
assets that constitute Excluded Assets.
(7) The current Board of Directors of the Company, consisting of
designees of Holdings, will at the Closing elect persons designated by Purchaser
(to the extent allowed under Nevada law and the certificate of incorporation and
by-laws of the Company) to the Board of Directors and will then resign from the
Board upon compliance by the Company with Section 14(f) of the Securities
Exchange Act of 1934, as amended and the expiration of the required notice
period or upon provision of a legal opinion of counsel to the Company or the
Purchaser to such directors that such resignations are in compliance with all
applicable laws. Holdings shall be responsible for reasonable expenses incurred
in connection with compliance with Section 14(f) and mailing of the required
notice to shareholders of the Company.
(8) Purchaser agrees that on or prior to the Closing, the Company will,
or will cause the relevant Company Subsidiary to, transfer to Holdings or its
designee, the following (the "Excluded Assets"):
(a) All cash balances in any and all bank accounts of the
Company at Closing, including, without limitation, the following
accounts:
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Company Financial Institution Account #
------- --------------------- ---------
American Finance Company, Inc. Bank of America 004790755331
American Finance Company, Inc Far East National Bank 0641054208
American Finance Company, Inc. Interstate NetBank 500500006999
AutoCorp Equities, Inc. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 637004474865
AFCO Receivables Funding Corp. Far East National Bank 0641055719
But excluding the following:
(i) Balances in accounts at FENB held as reserve
as collateral by FENB in accordance with
that the terms of that certain Revolving
Loan and Security Agreement dated as of
November 24, 2003, between FENB and AFCO
Receivables Funding Corporation ("AFCORF"),
an indirect wholly-owned subsidiary of the
Company; and
(ii) Balances held in trust in the ▇.▇. ▇▇▇▇▇▇
Chase Collections Account for the owners of
certain auto loan receivable portfolios.
(b) all right, title and interest of the Company or the
Company Subsidiaries in all residual interests created pursuant to (i)
the Trust Agreement dated as of March 1, 1997 between PSB Receivables
II Corp., as depositor, and PSB Receivables III Corp., as the company,
(ii) the Trust Agreement dated as of June 1, 1997 between PSB
Receivables IV Corp., as depositor, and PSB Receivables V Corp., as the
company, (iii) the Trust Agreement dated as of September 1, 1997
between Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc., as depositor, and
PSB Receivables V Corp., as the company, and (iv) the Trust Agreement
dated as of December 1, 1997 between Bear ▇▇▇▇▇▇▇ Asset Backed
Securities, Inc., as depositor, and PSB Receivables IV Corp., as FHA
insurance holder, which residual interests are currently listed as an
asset on the consolidated Company balance sheet in an amount of
$2,000,000; and any other related or similar assets that have been
contributed, loaned, assigned, granted or otherwise conveyed to the
Company or the Company Subsidiaries by the Sellers or any affiliate of
the Sellers at any time, whether or not recorded on the Company's
balance sheet;
(c) that certain 1993 Lexus SC coupe, VIN: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
transferred to ACE Motor Co. from PUSA;
(d) all receivables, in any form, due from Holdings or any
Affiliate of Holdings (other than the Company or the Company
Subsidiaries).
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(e) all other, if any, tangible or intangible assets or rights
not directly associated with the Company's primary business of
automobile sub-prime loan acquisition, holding and sale properties
including but not limited to:
(i) Interest in vacant land,
(ii) Residual interest in commercial or
residential real properties, excluding
leasehold,
(iii) Cash deposited at undisclosed bank accounts
as of the Closing Date, or cash-equivalent
bonds, treasury bills, insurance policies,
certificate of deposits or the like,
(iv) Portfolio investment of any sort,
(v) Automobile loan-related account receivables
which were written off but are recovered
subsequent to the Closing, and
(vi) Any accounts receivable other than
automobile loan-related.
(9) Purchaser agrees to obtain the release from FENB of the Pacific
Electric guaranty of the Note issued by AFCORF under the FENB Loan Agreement.
(10) Holdings and the Company will terminate at the Closing their
Standstill Agreement dated June 30, 2003.
(11) Holdings will use its commercially reasonable efforts to cause all
right, title and interest to the ILAP software currently subject to a
sale/leaseback with Illinois Union to be transferred to the American Finance
Company Inc. in consideration for $1.00 upon such software being reconveyed to
Pacific USA Holdings Corp. ("PUSA") and after the effective date of the plan of
reorganization of PUSA.
(12) Holdings will assume all responsibility to handle and all
liability relating to those certain claims of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (claim # 04
010892-0) and ▇. ▇▇▇▇▇ ▇▇▇▇▇ (claim # 04 010864-0) for unpaid commissions filed
with the Texas Workforce Commission.
Section 1.02 Additional Actions. If, at any time after the Closing, any
party (the "Requesting Party") shall consider or be advised that any deeds,
bills of sale, assignments, assurances, or any other actions or things are
necessary or desirable to vest, perfect or confirm, of record or otherwise, in
it its right, title or interest in, to or under any of the rights, properties or
assets acquired by or to be acquired by it as a result of, or in connection
with, the Transaction or otherwise to carry out this Agreement, whether as a
result of an audit or inventory conducted in accordance with Section 1.03 below
or otherwise, each of the parties shall take such further action (including the
execution and delivery of such further instruments and documents) as the
Requesting Party reasonably may request, all the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification
therefor under Article VIII below) and the officers and directors of the party
requested to provide such documentation or action (the "Delivering Party") shall
be authorized to, and shall promptly, execute and deliver, in the name and on
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behalf of the Delivering Party, all such deeds, bills of sale, assignments and
assurances and shall take and do, in the name and on behalf of the Delivering
Party, or otherwise, all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and interest in,
to and under such rights, properties or assets in the Requesting Party or
otherwise to carry out this Agreement.
Section 1.03 Post Closing Cooperation. The Purchaser and the Company
shall allow the Sellers and their counsel, accountants, auditors, lenders and
other representatives reasonable access, upon reasonable notice during normal
business hours, to all of the plants, offices, properties, books and records,
contracts and commitments of the Company and the Company Subsidiaries, whether
such are located at the offices of the Company, the offices of the Company
Subsidiaries, or offsite from the offices of any of them for a period of up to
three Business Days no later than January 31, 2005 and for a period of up to two
calendar weeks during the period the financial auditors of the Company are
conducting the audit of the Company's books and records for the period ending
December 31, 2004, which is expected to be between the Closing and March 31,
2005 (or if no such audit is conducted, no later than June 30, 2005), in each
case to conduct a due diligence review, at the Sellers' own expense, in respect
of identifying any Excluded Assets of the Company that have not previously been
transferred to Holdings as required by this Agreement. The Purchaser shall, and
shall cause the Company and the Company Subsidiaries to, cooperate with the
Sellers and their professional advisers as may be requested by the Sellers in
connection with such reviews and will make personnel of the Company and the
Company Subsidiaries available to the Sellers in connection therewith.
Section 1.04 Fair Value. The Purchaser, the Company and the Sellers
agree that the value of the obligations and liabilities of the Company and the
Company Subsidiaries listed in Section 1.01 to be assumed by the Sellers is at
least equal to the value of the Excluded Assets to be transferred to the Sellers
and that the transfers contemplated by this Agreement are not being undertaken
with any intent to hinder, delay or defraud creditors of the Company.
ARTICLE II
THE CLOSING
Section 2.01 The Closing. The Closing of the Transaction (the
"Closing") shall, subject to the provisions of Article VI hereof, take place on
or about August 20, 2004 at the offices of Holdings or at such other date, time
and place as the parties mutually agree. The date on which the Closing actually
occurs is referred to herein as the "Closing Date."
Section 2.02 Deliveries by the Sellers to Purchaser. Unless previously
delivered, at the Closing, the Sellers shall deliver, or cause to be delivered,
to Purchaser, for its own account, or to the Company (or to Purchaser for the
benefit of, and post-Closing delivery to, the Company where appropriate) the
following:
(a) certificates duly endorsed for transfer, evidencing the
stock specified in Section 1.01(1) (other than the 35,000,000 shares
pledged to FENB) and evidence of payment of the loan to FENB with an
acknowledgement by FENB that it will be releasing the shares pledged
(to be delivered to Purchaser).
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(b) instruments canceling, or assigning and transferring, the
liabilities and obligations of the Company and the Company Subsidiaries
described in Section 1.01(2) hereof, including the intercompany
payables described therein.
(c) Evidence of payment to the party to whom payment is owed,
of the amounts described in Section 1.01(4) hereof.
(d) Evidence of payment to the collection account of the
amount specified in Section 1.01(5) hereof.
(e) Possession (and, where appropriate, signed documents
evidencing title to) the properties described in Section 1.01(6)
hereof.
(f) A copy of resolutions adopted by the current Board of
Directors of the Company, as of the Closing Date, electing the
designees of the Purchaser to the Board of Directors of the Company (as
required by Section 1.01(7) hereof).
(g) Original, signed resignations of each of the members of
the current Directors of the Company, undated and delivered to Coudert
Brothers LLP as escrow agent to be released upon completion of
procedures required by Section 1.01(7) hereof.
(h) any consents or approvals of third parties required to be
obtained by the Sellers pursuant to Section 5.03 hereof.
(i) an executed counterpart of a document terminating the
Standstill Agreement referred to in Section 1.01(10) hereof.
(j) all other previously undelivered documents, instruments
and writings required to be delivered by the Sellers to the Company or
Purchaser at or prior to the Closing, pursuant to this Agreement, or
otherwise required in connection herewith.
Section 2.03 Deliveries by the Company. At the Closing, the Company
shall deliver, or cause to be delivered, to the Sellers (unless delivered
previously) the following:
(a) any executed documents necessary or appropriate to
transfer to Holdings the account balances described in Section
1.01(8)(a) hereof.
(b) an executed document or documents transferring to Holdings
the asset of the Company described in Section 1.01(8)(b) hereof.
(c) executed documents transferring to Holdings the assets or
properties, if any, described in Sections 1.01(8)(c), (d) ,(e) and (f)
hereof.
(d) any consents or approvals of third parties required to be
obtained by the Company pursuant to Section 5.03 hereof.
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(e) all previously undelivered documents, instruments and
writings required to be delivered by the Company to the Sellers, at or
prior to the Closing, pursuant to this Agreement, or otherwise required
in connection herewith.
Section 2.04 Deliveries by the Purchaser. At the Closing, the Purchaser
shall deliver, or cause to be delivered, to the Sellers (unless delivered
previously) the following:
(a) the release by FENB of the Pacific Electric Guaranty
referred to in Section 1.01(9) hereof.
(b) an executed counterpart of the terminating document
described in Section 1.01(10) hereof.
(c) any consents or approvals of third parties required to be
obtained by the Purchaser pursuant to Section 5.03 hereof.
(d) all previously undelivered documents, instruments and
writings required to be delivered by Purchaser to the Sellers, at or
prior to the Closing, pursuant to this Agreement, or otherwise required
in connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of Holdings and Financial hereby represents and warrants to
Purchaser, as to itself only and not as to any other party, as follows:
Section 3.01 Power and Capacity.
(a) It is a corporation duly organized, validly existing and
has full power and authority to enter into, execute, deliver and
perform this Agreement, and to sell, assign and transfer the Shares
owned by it to the Purchaser. It has obtained all approvals, if any,
necessary to perform its obligations under this Agreement and to sell,
assign and transfer the Shares owned by it to the Purchaser.
Section 3.02 No Conflicts. The execution, delivery and performance of
this Agreement by Holdings or Financial, and the consummation of the Transaction
will not:
(a) violate, conflict with, affect acceleration of, or result
in termination, cancellation or modification of, or constitute a
default under (i) any contract, agreement or other instrument to which
either Holdings or Financial is a party or by which Holdings or
Financial or its respective assets is bound or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, contract,
commitment, understanding, arrangement, agreement or restriction of any
kind or character to which Holdings or Financial is a party or by which
Holdings or Financial may be bound or affected,
(b) violate any statute or Law or any judgment, decree, order,
writ, injunction, regulation or rule of any court or any local, state
or federal governmental or regulatory authority, or
(c) result in a violation or breach of or constitute a default
under any term or provision of its Articles of Incorporation or its
Bylaws.
Section 3.03 Ownership of the Shares.
(a) Holdings and Financial are the lawful owners, beneficially
and of record, of the Shares, free and clear of all liens, claims,
charges, encumbrances, restrictions, rights, options to purchase or
commitments of every kind and description except for the security
interest of FENB in 35,000,000 shares of Common Stock owned by Holdings
(and pledged as collateral to secure a loan made by FENB to Holdings'
affiliate, Pacific American Distribution Company), the release of which
security interest Holdings will obtain prior to the Closing.
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(b) The sale of the Shares and any of the underlying assets
and properties owned or used by the Company are to be conveyed at the
Closing, "as is, where is", and, except as otherwise set forth herein,
the Sellers expressly disclaim any warranty or guarantee of quality or
condition thereof.
Section 3.04 Transfers of Shares/Assets of the Company. Except for the
pledge by Holdings of 35,000,000 shares of Common Stock by Holdings, neither
Holdings nor Financial, nor to the best of their knowledge (which does not
include the knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇) the Company, has sold,
transferred, issued, pledged or conveyed since June 30, 2003 (i) any stock of
any class of the Company to any other person, or (ii) any assets of the Company
or Company Subsidiaries relating to the Company's auto loan business, in each of
case (i) and (ii) that have not been reflected in the books and records of the
Company. This representation shall survive for a period of six (6) months from
the Closing.
Section 3.05 Binding Effect. This Agreement constitutes its valid and
binding obligation enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, fraudulent transfer and
conveyance, voidable preference, moratorium, receivership, conservatorship,
arrangement or similar laws, and related regulations and judicial doctrines,
from time to time in effect affecting creditors' rights and remedies generally.
Section 3.06 Board and Shareholder Actions. The Sellers have delivered,
or caused to be delivered to the Secretary of the Corporation, copies of minutes
of all meetings, or actions taken by written consent, in each case from June 11,
2004 until the Closing, of the directors of the Company and the Company
Subsidiaries appointed by Holdings as majority shareholder by action on June 11,
2004 and minutes of all meetings, or actions taken by written consent, of the
shareholders of the Company and the Company Subsidiaries from June 11, 2004
until the Closing.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Sellers as follows:
Section 4.01 Power and Capacity of Purchaser. Purchaser is a general
partnership under the laws of the State of Texas and has all requisite power and
authority to enter into, execute and deliver this Agreement and to and perform
its obligations hereunder. Purchaser has obtained all approvals, if any,
necessary to perform its obligations under this Agreement.
Section 4.02 No Conflicts. The execution, delivery and performance of
this Agreement by Purchaser, and the consummation of the Transaction will not:
(a) violate, conflict with, affect acceleration of, or result
in termination, cancellation or modification of, or constitute a
default under (i) any contract, agreement or other instrument to which
Purchaser is a party or by which Purchaser or its assets is bound or
(ii) any note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Purchaser is a party or
by which Purchaser may be bound or affected,
(b) violate any statute or Law or any judgment, decree, order,
writ, injunction, regulation or rule of any court or any local, state
or federal governmental or regulatory authority, or
(c) violate its partnership agreement.
Section 4.03 Consents and Approvals. Purchaser is not required to
obtain, transfer or cause to be transferred any consent, approval, license,
permit or authorization of, or make any declaration, filing or registration
with, any third party or any public body or authority in connection with (a) the
execution and delivery by Purchaser of this Agreement, or (b) the consummation
of the Transaction, or (c) the future conduct by the Company or any of the
Company Subsidiaries of their business, other than those that may be required
solely by reason of Purchaser's or the Company's participation in the
Transaction.
Section 4.04 Investment Purposes. Purchaser is purchasing the Shares
solely for investment with no present intention to distribute any of the Shares
to any person, and Purchaser will not sell or otherwise dispose of any of the
Shares, except in compliance with the registration requirements or an exemption
therefrom under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and any other applicable securities laws.
Section 4.05 Independent Investigation. In making the decision to
purchase the Shares, Purchaser has relied upon an independent investigation made
by it and/or its representatives and has not relied on any information or
representations made by third parties or on any oral or written representations
or assurances from the Sellers or the Company or any representative or agent of
the Sellers or the Company other than as set forth in this Agreement. The
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general partners of the Purchaser are actively involved in the day-to-day
management of the Company, are knowledgeable about the business of the Company,
have had access and opportunity to examine all material books and records of the
Company and have had a reasonable opportunity to obtain all information they
believe necessary or appropriate to evaluate the suitability of the Purchaser's
investment in the Shares.
Section 4.06 Binding Effect. This Agreement constitutes its valid and
binding obligation enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, fraudulent transfer and
conveyance, voidable preference, moratorium, receivership, conservatorship,
arrangement or similar laws, and related regulations and judicial doctrines,
from time to time in effect affecting creditors' rights and remedies generally.
Section 4.07 Solvency(1) . Purchaser is not insolvent as of the date of
this Agreement and will not be rendered insolvent as a result of the transaction
contemplated herein.
Section 4.08 No Undisclosed Excluded Assets. To the best of its
knowledge and the best knowledge of its partners, there are no Excluded Assets
owned by, or due or to become due (with the giving of notice or the passage of
time) to the Company or the Company Subsidiaries, or in which the Company or any
Company Subsidiary has an ownership interest, that have not been expressly
disclosed in Section 1.01(8)(a) through (d) of this Agreement. This
representation shall survive until the expiration of the period of ▇▇▇▇ ▇▇▇▇▇▇
has to conduct its due diligence review under Section 1.03 hereof.
ARTICLE V
OTHER OBLIGATIONS OF THE PARTIES
Section 5.01 Conduct of the Company's Business. From the date hereof to
the Closing, except as otherwise expressly set forth in this Agreement, the
Company and each Company Subsidiary, the Purchaser and the partners of the
Purchaser shall conduct the business, operations, activities and practices of
the Company and the Company Subsidiaries only in the ordinary course, unless
they have received the prior written consent of Holdings and the Purchaser. The
Purchaser acknowledges that Holdings, Financial and Pacific Electric are under
no obligation or commitment to fund further loans or capital contributions to
the Company or the Company Subsidiaries and the Board of Directors of the
Company and the Company Subsidiaries must make business decisions in light of
current financial circumstances. Therefore, the Company will attempt to minimize
the costs and expenses incurred by the Company and will not undertake any
commitment in excess of $15,000. Further, the Company will until the Closing,
pursue any other inquiries it receives to purchase assets of the Company or
otherwise maximize recovery to the shareholders of value from the Company,
subject to the restrictions set forth herein. Without limiting the generality of
the foregoing, from the date hereof to the Closing, except as expressly
contemplated herein, without the prior written consent of Holdings and the
Purchaser or as otherwise required by law or regulation, the Company and the
Company Subsidiaries shall not:
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(a) incur any liabilities or obligations of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due), including but not limited to purchases
or agreements to purchase prime or sub-prime auto loans, other than
liabilities or obligations in the ordinary course of business and not
exceeding $15,000;
(b) increase or change any assumptions underlying, or methods
of calculating, any bad debt, contingency or other reserves;
(c) pay, discharge or satisfy any claim, encumbrance,
liability or obligation (whether absolute, accrued, contingent or
otherwise and whether due or to become due), other than the payment,
discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities and obligations, or prepay
any liability or obligation having a fixed maturity of more than 90
days from the date such liability or obligation was issued or incurred;
(d) permit, allow or suffer any of the Company Assets to be
subjected to any new or additional mortgage, pledge, lien, encumbrance,
restriction or charge of any kind (except for liens arising as a result
of Taxes not yet owing);
(e) cancel any amount of indebtedness or waive any claims or
rights of value;
(f) sell, transfer or otherwise dispose of any of the Company
Assets;
(g) grant any increase in the compensation payable to any
employee (including, without limitation, any increase or change
pursuant to any bonus, pension, profit-sharing, retirement or other
plan or commitment);
(h) pay, loan or advance any amount to, or sell, transfer or
lease any of the Company Assets to, or enter into any agreement or
arrangements with, any of the officers, directors, stockholders or
employees of the Company or any Company Subsidiary;
(i) enter into any employment agreement or collective
bargaining or labor agreement;
(j) make any capital expenditures or commitments for any
purpose;
(k) make any change in any method of accounting or accounting
practice or policy;
(l) enter into any agreement or contract or commitment of any
kind;
(m) terminate or amend in any material respect any contract,
lease, license, or other agreement to which the Company or any Company
Subsidiary is a party;
(n) exercise any option to renew any Lease or any option to
purchase any property;
12
(o) issue any additional shares of capital stock of the
Company or any Company Subsidiary, or options, warrants, rights
(including, without limitation, stock appreciation rights and phantom
stock rights) or other securities exercisable for, convertible into or
exchangeable for shares of capital stock of any of them, or pay any
dividend (or make any other distribution) to the holders of the capital
stock of any of them;
(p) take any other action not in the ordinary course of
business and consistent with prudent business practice considering the
present financial condition and operations of the Company and the
Company Subsidiaries, or otherwise provided for in this Agreement; or
(q) agree, whether in writing or otherwise, to do any of the
foregoing.
Section 5.02 Access to Books and Records. In order that Purchaser may
have full opportunity to make investigations of the Company and the Company
Subsidiaries in connection with the actions contemplated by this Agreement, the
Sellers and the Company shall permit Purchaser and its counsel, accountants,
auditors, lenders, environmental consultants and other representatives
reasonable access, upon reasonable notice during normal business hours, to all
of the plants, offices, properties, books and records, contracts and commitments
of the Company from the date hereof through the Closing Date, whether such are
located at the offices of the Company, the offices of the Sellers, or offsite
from the offices of any of them.
Section 5.03 Consents. The Purchaser, Holdings, Financial and the
Company each agrees to use its reasonable efforts to obtain prior to the Closing
all consents necessary to consummate the Transaction, provided that Holdings,
Financial and the Company shall not be required to incur any material cost in
connection with obtaining such consent, but will cooperate with the Purchaser to
obtain such consent at the expense of the Purchaser. All such consents shall be
in writing and in form and substance reasonably satisfactory to Purchaser, and
executed counterparts thereof shall be delivered to Purchaser promptly after
receipt thereof by the Sellers or the Company, but in no event later than the
Closing. The Purchaser recognizes that the sale of shares contemplated hereunder
will result in a change in control of the Company and the Company Subsidiaries.
The Sellers make no representation or warranty as to contractual arrangements of
the Company or the Company Subsidiaries that may be affected by such change in
control.
Section 5.04 Governmental Filings. As soon as practicable, each of the
parties shall make any and all filings and submissions to any governmental
agency that are required to be made by them in connection with the Transaction.
They shall each furnish to the other such information and assistance as the
other party or parties may reasonably request in connection with the preparation
of any such filings or submissions. As between the Purchaser and the Sellers,
the Purchaser shall be solely responsible for causing the Company to comply with
applicable securities laws, make any necessary filings with the Securities and
Exchange Commission and notify other shareholders of the Transaction; provided
that Purchaser shall and shall cause the Company to, obtain the prior written
consent of the Sellers to any public announcement regarding the Transaction that
mentions the Sellers or Pacific Electric, which consent shall not be
unreasonably withheld or delayed.
13
Section 5.05 Covenant to Satisfy Conditions. Each party shall use its
reasonable efforts to insure that the conditions set forth in hereof are
satisfied, insofar as such matters are within its control.
Section 5.06 Confidentiality. The parties agree that all information
concerning this Agreement and the Transaction, and any and all information
learned by one party about another during these proceedings shall be
confidential. No party shall release any information regarding this Agreement or
the Transaction without the prior written consent of each other party hereto
except as may be required to be disclosed by law.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Conditions Precedent to Obligations of Holdings and
Financial. The obligations of the Sellers and the Company under this Agreement
are subject to the satisfaction or, unless prohibited by Law, the waiver by
Holdings and/or Financial, as the case may be, at or before the Closing, of each
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser contained herein shall be true, complete and
accurate as of the date when made and at and as of the Closing Date as
though such representations, warranties and statements were made at and
as of such date.
(b) Performance. Purchaser shall have performed and complied
with all agreements, obligations and conditions required by this
Agreement to be so performed or complied with by it at or prior to the
Closing.
(c) No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction restraining
or prohibiting the consummation of the Transaction.
(d) No Litigation. There shall not be threatened, instituted
or pending any suit, action, investigation, inquiry or other proceeding
by or before any court or governmental or other regulatory or
administrative agency or commission requesting or looking toward an
order, judgment or decree that restrains or prohibits the consummation
of the Transaction.
(e) Officers' Certificate. Purchaser shall have delivered to
the Sellers a certificate, dated the Closing Date, executed by each of
its general partners, and certifying the fulfillment of the conditions
specified in Sections 6.01(a) and (b) hereof.
(f) Secretary's Certificate. Purchaser shall have delivered to
the Sellers a certificate, dated the Closing Date, executed by each of
its general partners, and certifying as to its governing documents, if
any, enabling actions, if any, the incumbency of its partners, and
other reasonably related matters.
14
(g) Consents and Approvals. All licenses, permits, consents,
approvals and authorizations of all third parties and governmental
bodies and agencies (other than approvals from Purchaser's partners,
which are provided for elsewhere in this Agreement) shall have been
obtained, which are necessary, in the reasonable determination of
counsel to the Sellers, in connection with (a) the execution and
delivery by each of the parties, as appropriate, of this Agreement, (b)
the consummation by each of the parties of the Transaction, or (c) the
conduct by the Company of its business.
(h) Documents. All documents to be delivered to the Sellers at
the Closing shall be duly executed and in form and substance reasonably
satisfactory to Holdings and Finance.
(i) Other. The Sellers shall have each received such other
documents or certificates as the Sellers may reasonably have requested.
Section 6.02 Conditions Precedent to Obligations of the Purchaser. The
obligations of Purchaser under this Agreement are subject to the satisfaction
or, unless prohibited by Law, the waiver by Purchaser at or before the Closing,
of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Sellers and the Company contained herein shall be
true, complete and accurate as of the date when made and at and as of
the Closing Date as though such representations and warranties were
made at and as of such date.
(b) Performance. The Sellers and the Company shall have
performed and complied with all agreements, obligations and conditions
required by this Agreement to be so performed or complied with by them
at or prior to the Closing.
(c) No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction restraining
or prohibiting consummation of the Transaction.
(d) No Litigation. There shall not be threatened, instituted
or pending any suit, action, investigation, inquiry or other proceeding
by or before any court or governmental or other regulatory or
administrative agency or commission requesting or looking toward an
order, judgment or decree that restrains or prohibits the consummation
of the Transaction.
(e) Officers' Certificates. Each of Holdings and Finance shall
have delivered to Purchaser a certificate, dated the Closing Date and
executed by an executive officer, and certifying the fulfillment of the
conditions specified in Sections 6.02(a) and (b) hereof.
(f) Secretary's Certificates. Each of Holdings and Finance
shall have delivered to Purchaser a certificate, dated the Closing
Date, executed by its Secretary or Assistant Secretary and certifying
as to its Articles of Incorporation, bylaws, the incumbency of its
officers, and other related matters.
15
(g) Consents and Approvals. All licenses, permits, consents,
approvals and authorizations of all third parties and governmental
bodies and agencies (other than approvals from Holdings' and Finance's
Boards of Directors and sole stockholder, which are provided for
elsewhere in this Agreement) shall have been obtained which are
necessary, in the reasonable determination of counsel to the Purchaser,
in connection with (a) the execution and delivery by each of the
parties, as appropriate, of this Agreement, (b) the consummation by
each of the parties of the Transaction or thereby.
(h) Documents. All documents to be delivered by each of
Holdings and Finance to Purchaser at the Closing shall be duly executed
and in form and substance reasonably satisfactory to Purchaser.
(i) Other. Purchaser shall have received such other documents
or certificates as Purchaser may reasonably have requested.
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.01 Termination of Agreement. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual agreement of the Sellers and Purchaser;
(b) by the Sellers on or after August 30, 2004, if any of the
conditions provided in Section 6.01 hereof of this Agreement have not
been met or, to the extent permitted by applicable law, have not been
waived in writing by the Sellers prior to such date; or
(c) by Purchaser, on or after August 20, 2004, if any of the
conditions provided in Section 6.02 hereof have not been met or, to the
extent permitted by applicable law, have not been waived in writing by
Purchaser prior to such date.
Section 7.02 Procedure Upon Termination. In the event of termination by
any party pursuant to Section 7.01 hereof, written notice thereof shall promptly
be given to the other parties and the Transaction shall be terminated, without
further action by any party. If the Transaction is terminated as provided
herein, then:
(a) The terminating party shall return all documents, work
papers and other material of any other party relating to the
Transaction, whether so obtained before or after the execution hereof,
to the party furnishing the same; and
(b) all confidential information received by any party to this
Agreement with respect to the business of any other party, or its
subsidiaries or affiliates, shall be treated in accordance with Section
5.06 hereof, and Section 5.06 hereof shall remain in full force and
effect notwithstanding the termination of this Agreement.
16
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Indemnification by the Sellers. The Sellers jointly but
not severally, agree to indemnify, defend and hold Purchaser harmless from and
in respect of any and all losses, that Purchaser may incur arising out of or due
to (i) any inaccuracy of any representation or warranty of the Sellers contained
in this Agreement or the breach of any other material agreement or covenant of
the Sellers contained in this Agreement, (ii) any liability arising from a claim
brought by any person for actions taken by the Sellers which exceeded their
rights as shareholders under Nevada law, and (iii) any liability arising in
respect of salary, benefits, severance or other employment related expenses for
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ or any cost incurred in connection
with transferring such employees from the payroll of the Company or the Company
Subsidiaries to Holdings as of August 1, 2004.
Section 8.02 Indemnification by Purchaser. Purchaser agrees to
indemnify, defend and hold the Sellers, their officers, directors and
affiliates, harmless from and in respect of any and all losses, damages, costs
and reasonable expenses (including, without limitation, reasonable expenses of
investigation and defense fees and disbursements of counsel and other
professionals) that the Sellers may incur arising out of or due to any
inaccuracy of any representation or warranty of Purchaser contained in this
Agreement and the breach of any other material agreement or covenant of
Purchaser contained in this Agreement.
Section 8.03 Indemnification by the Company. The Company agrees to
indemnify, defend and hold each of the Purchaser and the Sellers, and each of
their officers, directors, employees and affiliates (each an "Indemnified
Party"), harmless from and in respect of any and all losses that such
Indemnified Party may incur arising out of or due to any claim, liability, loss,
damage or other cost or expense relating to the business of the Company or the
Company Subsidiaries that is brought against, names or joins such Indemnified
Party from and after the date of this Agreement, whether or not it relates to
circumstances in existence before or after the date of this Agreement,
including, without limitation (i) any claim or action by any current or former
officers, directors or employees of the Company relating to the operation of the
Company, their employment by the Company, or the termination thereof, or the
terms of this Transaction, and (ii) any and all claims, suits or actions
(including those already pending) brought or asserted by ▇▇▇ ▇▇▇▇▇▇▇ and his
family relating any of their employment by the Company, loans thereto or
investments therein; provided, however, that the Company's obligations hereunder
shall not include indemnification for (x) any liability arising from a claim
brought by any person against the Sellers for actions taken by the Sellers which
exceeded their rights as shareholders under Nevada law, (y) the claims referred
in Section 1.01 (12) and (z) any liability arising in respect of salary,
benefits, severance or other employment related expenses for ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ or any cost incurred in connection with transferring
such employees from the payroll of the Company or the Company Subsidiaries to
Holdings as of August 1, 2004.
Section 8.04 Indemnification Claims. If there occurs an event which a
party hereto asserts is an indemnifiable event pursuant to Section 8.01, 8.02 or
8.03, such party (the "Indemnified Party") shall notify the other party (the
"Indemnifying Party") promptly. If such event involves (i) any claim or (ii) the
commencement of any action or proceeding by a third person, the Indemnified
17
Party will give such Indemnifying Party prompt written notice of such claim or
the commencement of such action or proceeding. Such notice shall be a condition
precedent to any liability of the Indemnifying Party hereunder; provided,
however, that the failure to provide prompt notice as provided herein will
relieve the Indemnifying Party of its obligations hereunder only to the extent
that such failure prejudices the Indemnifying Party hereunder. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate therein and, to the extent that it shall wish, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party and, after notice from the Indemnifying Party to the Indemnified Party of
such election so to assume the defense thereof, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses of other counsel or
any other expenses subsequently incurred by such party in connection with the
defense thereof. The Indemnified Party agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
liability. The Indemnified Party shall have the right to participate at its own
expense in the defense of such asserted liability. No Indemnifying Party shall
consent to the entry of any judgment or enter into any settlement without the
consent of the Indemnified Party (A) if such judgment or settlement does not
include as an unconditional term thereof the giving by each claimant or
plaintiff to each Indemnified Party of a release from all liability in respect
to such claim, (B) if such judgment or settlement would result in the finding or
admission of any violation of law, or (C) if as a result of such consent or
settlement injunctive or other equitable relief would be imposed against the
Indemnified Party or such judgment or settlement could interfere with or
adversely affect the business, operations or assets of the Indemnified Party.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Survival of Representations and Warranties. Unless
explicitly stated otherwise, representations, warranties, covenants and
agreements shall expire at the Closing.
Section 9.02 Commissions. No party hereto has employed any investment
banker, broker, finder or similar agent in connection with any transaction
contemplated by this Agreement.
Section 9.03 Definition of Knowledge. For the purpose of this
Agreement, the phrases "to the best knowledge" of any party and "known" and
words of like effect shall mean to the best knowledge of such party and each
officer or partner of such party.
Section 9.04 Expenses, Taxes, Etc. Except as otherwise provided herein,
in the event of the termination of this Agreement prior to Closing, each of the
parties hereto shall pay all fees and expenses incurred by it or any of its
affiliates in connection with the transactions contemplated by this Agreement.
18
Section 9.05 Successors and Assigns. No party shall have the right to
assign all or any part of its interest in this Agreement without the prior
written consent of the other parties, and any attempted transfer without such
consent shall be null and void.
Section 9.06 No Third-Party Benefit. Nothing in this Agreement shall be
deemed to create any right or obligation in any Person not a party hereto and
this Agreement shall not be construed in any respect to be a contract or
agreement in whole or in part for the benefit of or binding upon any Person not
a party hereto.
Section 9.07 Entire Agreement; Amendment. This Agreement, the Exhibits,
the Appendices and the Disclosure Schedule hereto constitute the entire
agreement among the parties hereto with respect to the transactions contemplated
herein and supersede all prior oral and written agreements, memoranda,
understandings and undertakings between the parties hereto relating to the
subject matter hereof. This Agreement may not be modified, amended, altered or
supplemented except by a written instrument executed and delivered by each of
the parties hereto.
Section 9.08 Reformation and Severability. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof and such illegality, invalidity or
unenforceability does not result in a material failure of consideration, then;
(a) in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable; and
(b) the legality, validity and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
Section 9.09 Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed (registered or
certified mail, postage prepaid, return receipt requested) as follows:
If to Holdings or Financial (or to the Company prior to the closing):
Pacific Holdings Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
Coudert Brothers LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Okoshi, Esq.
19
If to Purchaser:
AutoCorp Acquisition Partners
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ General Partner
If to the Company subsequent to the Closing:
AutoCorp Equities, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
Section 9.10 Number and Gender. When the context in which words are
used in this Agreement indicates that such is the intent, words in the singular
number shall include the plural and the masculine gender shall include the
neuter or female gender as the context may require.
Section 9.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 9.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto on the date first above written.
HOLDINGS:
PACIFIC HOLDINGS GROUP
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇
------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇
Title: General Manager
FINANCIAL:
PACIFIC FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇
------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇
Title: General Manager
THE COMPANY:
AUTOCORP EQUITIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
PURCHASER:
AUTOCORP ACQUISITIONS PARTNERS
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ General Partner
21
