SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE TO
--
TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
AUTOLEND GROUP, INC.
(Name of Issuer; "Subject Company")
PRINOVA CAPITAL GROUP, LLC
(Name of Person(s) Filing Statement; "Offeror")
Five-year unsecured non-interest-bearing debt obligations
---------------------------------------------------------
(aggregate principal face value $196,500)
under the terms of AutoLend's Third Amended Plan of Reorganization
made effective March 5, 1999.
(Title of Class of Securities)
(none)
(CUSIP Number of Class of Securities)
Robert G. Cates, Esq.
Cates & Quintana, Attorneys
600 Central Avenue SW, Suite 300
Albuquerque, NM 87102
Tel. No.: (505) 767-9993
Fax No.: (505) 837-9427
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
--------------------------------------------
CALCULATION OF FILING FEE
-------------------------------------------------------------------------------
TRANSACTION VALUATION US$9,825 (a) AMOUNT OF FILING FEE: $1.97 (b)
--------------------------------------------------------------------------------
(a) Calculated as the aggregate maximum purchase price to be paid for
$196,500 aggregate principal face value, per the offer.
(b) Calculated as 1/50 of 1% of the Transaction Valuation.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2), and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing:
Amount Previously Paid:---------------------- Not Applicable
Form or Registration No.:-------------------- Not Applicable
Filing Party:-------------------------------- Not Applicable
Date Filed:---------------------------------- Not Applicable
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer. Check the appropriate boxes
below to designate any transactions to which the statement relates:
[X] third-party tender offer subject to Rule 14d-1
1
[ ] issuer tender offer subject to Rule 13e-4
[ ] going-private transaction subject to Rule 13e-3
[ ] amendment to Schedule 13D under Rule 13d-2
--------------------------------------------------------------------------------
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
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ITEM 1. SUMMARY TERM SHEET.
------------------
Reference is hereby made to the Summary Term Sheet of the Offer to Purchase,
which is attached as exhibit (a)(1)(i) and is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION
---------------------------
The name of the issuer is AutoLend Group, Inc., a Delaware corporation,
headquartered in Albuquerque, New Mexico ("AutoLend" or the "Company"). The
Company's name was changed to "CapX Corporation" effective February 1992, and
then to "AutoLend Group, Inc." effective January 1995. The principal executive
offices of the Company are located at 600 Central Avenue SW, 3rd Floor,
Albuquerque, NM 87102. The Company's telephone number is (505) 768-1000, and the
fax number is (505) 768-1111.
The title of the securities being sought is the five-year unsecured
non-interest-bearing debt obligations of the Company originated in, and pursuant
to, the Company's Third Amended Plan of Reorganization, as made effective by
court order March 5, 1999 (the "Debt"). As of November 15, 2001, there was
$196,000 face value outstanding, excluding the portion already held by the
filing party, and excluding any imputed accounting discount thereon. The Debt is
not, and should not be confused with, the Company's 9.5% convertible
subordinated debentures, which were originated in 1990 and had been due in
September 1997.
The Securities that are the subject of this Tender Offer (i.e. the five-year
unsecured non-interest-bearing Debt obligations) have no known market and there
are no known historical prices other than the Prinova purchase described herein.
The Company's Common Shares, which are not the subject of this Tender Offer,
trade on an infrequent basis on the Over-The-Counter "Pink Sheets" and utilizes
the ticker symbol "ALEN."
(d) (e) (f) Not Applicable.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
----------------------------------------
(a) and (b) The name of the filing person is Prinova Capital Group, LLC (a New
Mexico limited liability company referred to herein as the "Offeror" or
"Prinova"). Prinova Capital Group, LLC is an investment and asset management
company. The principal executive offices of the Offeror are located at 600
Central Avenue, SW, Albuquerque, NM 87102. The telephone number is (505)
881-0808 and the fax number is (505) 837-9427. Prinova Capital Group, LLC became
a majority shareholder in the Company effective October 12, 2000. Mr. Vincent J.
Garcia is the Managing Member of Prinova. Mr. Garcia became an outside Director
of the Company on October 13, 2000 and resigned that position on January 24,
2002. Mr. Garcia's business address and telephone number is the same as
Prinova's.
(c) Vincent J. Garcia:
(1) and (2) During the past 3 years, Mr. Garcia has served as Managing
Member of Prinova Capital Group, LLC.
(3) Mr. Garcia has not been the subject of any criminal proceedings.
(4) During the past five years, Mr. Garcia was not a party to any judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violations of such laws. Mr. Garcia is
presently a director of AutoLend Group, Inc., whose Board of Directors
2
unanimously authorized Mr. John D. Emery, Acting President of AutoLend Group,
Inc., to execute an Offer of Settlement with the United States Securities and
Exchange Commission on January 8, 2001 and subsequent imposition of a Cease and
Desist Order. See June 30, 2001 10-Q
(5) Mr. Garcia is a citizen of the United States.
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
-----------------------------------------------------------------------------
ITEM 4. TERMS OF THE TRANSACTION.
(a) (1) The Offeror is seeking tenders for up to all of the presently
outstanding and remaining five-year non-interest-bearing Debt not already held
by the Offeror, which outstanding amount could total up to a principal face
value (exclusive of any imputed accounting discount) of $196,500 US, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 15, 2002 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together constitute the "Offer"). A copy of each of the Offer to
Purchase and the Letter of Transmittal are attached hereto as Exhibit (a)(1)(i)
and Exhibit (a)(1)(iii), respectively, each of which is incorporated herein by
reference.
Offeror had previously filed a Tender Offer under generally the same terms
as contained herein on December 7, 2001 and as a result of that filing opened
communications with debt holders regarding terms for sale of the outstanding
five-year debt instruments. That Tender Offer period expired on December 27 with
no purchases of outstanding debt having been made. See TO-A statement of Prinova
Capital Group. Although the terms of this Tender Offer are highly similar to the
Tender Offer of December 7, 2001 there have been changes in the management of
the Company as reported by 8-K and 10-Q filings entered of record since December
27, 2001. Debt Holders should not assume that this Tender Offer is identical to
the Tender Offer of December 7, 2001 nor that the conditions of the Company are
identical and should carefully review all the terms of this statement and the
accompanying Summary Term Sheet.
(b) Not applicable.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
---------------------------------------------------------
Reference is hereby made to Section 9 "Interest of Offeror and Related
Parties; Transactions and Arrangements Concerning the Debt and Common Stock" of
the Offer to Purchase.
(a) and (b) On October 12, 2000, Prinova acquired a majority-interest
block of the Company's Common Stock together with the largest block of the
Company's Debt for US$75,000. On October 13, 2000 Prinova installed a new
Board of Directors at the Company, including Mr. Vincent J. Garcia as a
Director. Vincent J. Garcia is the Managing Member of Prinova Capital Group,
LLC, the Offeror. Mr. Garcia resigned as a Director of AutoLend effective
January 24, 2002.
Except as set forth in the Offer to Purchase, the Offeror knows of no
contract, transaction, negotiation or agreement relating to the Offer between
the Offeror, its predecessor, any of the Offeror's executive officers or
principals, any person controlling the Offeror, or any officer or director of
any corporation ultimately in control of the Offeror, and any person with
respect to any securities of the Company.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
--------------------------------------------------
3
Reference is hereby made to the Offer to Purchase, and more specifically,
Section 6 "Purpose of the Offer,"; Section 7 "Plans or Proposals of the
Offeror,"; Section 10 "Certain Effects of the Offer" and Section 11 "Source and
Amount of Funds" therein. The Affiliates of the Offeror regularly purchase and
sell asset and debt instruments in the ordinary course of business.
(a) and (b) On October 12, 2000, Prinova acquired a majority-interest
block of the Company's Common Stock together with the largest bock of the
Company's Debt for $75,000. The Offeror replaced the Company's Board of
Directors, who, in turn, appointed a new acting principal executive officer, and
terminated certain of the Company's prior legal
SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
--------------------------------------------------------------------------------
counsel and executive vice president. The Offeror's present intentions
include the possibility of further substantive changes in the Company.
Such possible changes include: 1) sale of assets between the Company and
Prinova or its affiliates; 2) liquidating and closing the Company; 3)
cleaning-up and selling the Company as a "shell'. A significant factor
influencing the choice of which course to pursue is resolution of the Company's
five-year Debt obligations (which is the subject of this Tender Offer). The
Offeror's preferred course of action is the sale of assets to the Company, which
depends in large measure on favorable consolidation of the debt.
If Prinova or its affiliates sells assets to the Company, then Prinova
would likely make material changes consistent with its business purpose,
including adding new Directors to the Board, appointing additional corporate
officers, executives, management and staff; raising additional equity capital,
and any other actions that may be appropriate under such circumstances.
(c ) While no specific plan has yet been decided upon - and the following
list of possibilities is not intended to be or is represented as exhaustive and
complete - Offeror could implement or develop other plans or proposals
including:
(1) the acquisition or disposition of additional securities of the Company;
(2) an extraordinary transaction involving the Company; such as a merger,
reorganization or liquidation;
(3) a sale or transfer of a material amount of assets of the Company;
(4) additional changes in the present Board of Directors or management of the
Company; including the possibility of changing the number and/or terms of
the Directors;
(5) a material change in the present indebtedness or capitalization of the
Company;
(6) other material changes in the Company's structure or business;
(7) changes in the Company's By-Laws or instruments corresponding thereto,
and/or separate unrelated actions designed to impede the acquisition or
control of the Company by another person;
(8) Listing or de-listing a class of equity securities by a national securities
exchange;
(9) Termination or registration of a class of securities;
(10) Suspension of the Company's obligation to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934; or
(11) The creation of additional classes of securities.
(d) The filer of this Tender Offer is Prinova and not the subject company
AutoLend Group, Inc., even though Prinova has acquired a majority of the voting
stock and outstanding five year debt instruments of Autolend.
ITEM 7: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-----------------------------------------------------------
4
(a) The total cost to the Offeror of purchasing US$196,500 of the Company's
Debt pursuant to the Offer will be approximately US$9,825 (based on a price of
5% of the face value), which funds will come only form Prinova's cash on hand,
or a Prinova designee other than the Company.
(b) Not applicable.
(c) The expenses incurred by the Offeror will be usual and ordinary
professional and administrative expenses required to present the Offer to the
Debt Holders. The Company has not paid and will not be responsible for any
payment of any expense incurred in the Offer.
(d) Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
----------------------------------------------
As of February 15, 2002, Offeror beneficially holds 634,026 shares of
common stock, representing approximately 58% of the total outstanding, and also
holds $412,500 of
SEC SCHEDULE T.O PRINOVA TENDER OFFER FOR AUTOLEND DEBT
--------------------------------------------------------------------------
the Debt (out of a total of $609,000 outstanding). Mr. Vincent J. Garcia is
the Managing Member and (together with his wife) is majority interest-holder of
the Offeror. He effectively controls the 58% interest in the Company and a
$412,500 block of Debt.
Mr. Garcia's holdings in the Offeror are as a joint tenant with rights of
survivorship with his wife, Maria Patricia Garcia. Mr. Garcia was a Director of
the Company from October 2000 to January 2002. Mrs. Garcia is a part-time,
temporary employee of the Company. No other executives, directors, officers,
employees or consultants of the Offeror or its affiliates, nor any immediate
family relatives of Mr. or Mrs. Garcia, hold any additional stock or Debt in the
Company. Similarly, no executives, directors, officers, employees, or
consultants of the Company or its affiliates hold any additional stock or Debt
in the Company.
Some of the current members of the Board of Directors of AutoLend Group,
Inc. hold preferred, non-voting shares in Prinova Capital Group, Inc. Prinova
Capital Group, Inc. is a separate entity from Prinova Capital Group, LLC (the
Offeror), however, both companies have a majority of their voting shares
controlled by Vincent J. Garcia and Maria P. Garcia as joint tenants.
Prinova Capital Group, Inc. may sell assets to AutoLend Group, Inc. in
exchange for stock in the Company but neither company has made a formal proposal
of sale and neither has, as of the date of this Tender Offer, entered into a
letter of understanding to permit preliminary due diligence on any such sale of
assets. Prinova requires satisfactory consolidation or reduction of
outstanding debt obligations of AutoLend before it can consider the stock of the
Company to be of sufficient value to consider it valuable consideration for sale
of Prinova assets.
Except as set forth in the accompanying Offer to Purchase, neither the
Offeror nor, to the best of the Offeror's knowledge, any of its Directors or
executive officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating to the Offer with respect to any
securities of the Company; nor has any Director or officer of the Company, in
those capacities, effected any transaction in the Company's shares or the Debt
during the sixty business day period prior to the date hereof.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
------------------------------------------------------
No persons have been employed, retained or are to be compensated by or on
behalf of the Offeror or the Company to make solicitations or recommendations in
connection with the Offer.
ITEM 10. FINANCIAL INFORMATION.
---------------------
5
(a) and (b) Reference is hereby made to the Financial Statements of
AutoLend Group, Inc., included as part of the Offer to Purchase as Exhibit
(a)(1)(i).
ITEM 11. ADDITIONAL INFORMATION.
----------------------
(a) As of March 15, 2002, Offeror beneficially holds 634,026 shares of
common stock, representing approximately 58% of the total outstanding, and also
holds $412,500 of the Debt (out of a total of $609,000 outstanding). Mr.
Vincent J. Garcia is the Managing Member and (together with his wife) is
majority interest holder of the Offeror. He effectively controls the 58%
interest in the Company and the $412,500 block of Debt.
Mr. Garcia's holdings in the Offeror are as a joint tenant with rights of
survivorship with his wife, Maria Patricia Garcia. Mr. Garcia was a Director of
the Company from October 2000 to January 2002. Mrs. Garcia is a part-time,
temporary employee of the Company. No other executives, directors, officers,
employees or consultants of the Offeror or its affiliates, nor any immediate
family relatives of Mr. or Mrs. Garcia, hold any additional stock or Debt in the
Company. Similarly, no executives, directors, officers, employees, or
consultants of the Company or its affiliates hold any additional stock or Debt
in the Company.
SEC Schedule T.O Prinova Tender Offer for AutoLend Debt
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No material agreements, arrangement, understanding, or relationship between
the Offeror and any of its executive officers, directors, controlling persons,
or subsidiaries exists or has been made that affects or touches on this Tender
Offer.
Offeror knows of no pending legal or regulatory proceeding relating to this
Tender Offer. The Board of Directors of AutoLend Group, Inc., of which Mr.
Vincent J. Garcia was at the time a member, unanimously authorized Mr. John D.
Emery, Acting President of AutoLend Group, Inc. to execute an Offer of
Settlement with the United States Securities and Exchange Commission on January
8, 2001, which led to the imposition of a Cease and Desist Order. See AutoLend
Group, Inc. June 30, 2001 10Q.
Offeror previously filed on December 6, 2001 a Tender Offer containing the
same terms as proposed in this Offer and expiring December 26, 2001. No holders
of debt instruments accepted, or requested an extension of time to accept, the
terms of that prior Tender Offer. The filing of the December 6, 2001 Tender
Offer did result in the commencement of negotiations with holders of debt
instruments. See TO-A filed January 24 , 2002. As a result, this Tender Offer
contains terms Offeror is confident will appeal to the majority of current
holders of outstanding five-year debentures.
(b) The Offer to Purchase is referenced and incorporated by this
statement, including all exhibits thereto.
ITEM 12. EXHIBITS.
--------
(a)(1)(i) Offer to Purchase (including Financial Statements).
(a)(1)(ii) Form of Letters to Debt holders who have requested Offer to
Purchase.
(a)(1)(iii) Form of Letter of Transmittal (including Guidelines for
Certification of Taxpayer ID Number).
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5)(i) Affirmation of Debt, executed by the Company October 2, 2000.
(a)(5)(ii) Excerpts from the Company's Third Amended Plan of Reorganization
and Disclosure Statement. Filed July 28, 1998 and August 18 1998 and made
effective by court order March 5, 1999.
6
(a)(5)(iii) Lease revision proposal and counter-proposal, dated November 13,
2000 and January 19, 2001.
(b) Not applicable.
(c) Not applicable.
(d)(1) Schedule 13D - filed by Prinova LLC on October 31, 2000.
(d)(2) Form 8-K -- filed by the Company October 19, 2000.
(e), (f), (g), (h) Not applicable.
SIGNATURE
---------
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
PRINOVA CAPITAL GROUP, LLC
/s/ Vincent J. Garcia
-------------------------
Vincent J. Garcia,
Managing Member
March 15, 2002
--------------------------------------------------------------------------------
7
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
--------------------------------------------------------------------------------
SUMMARY TERM SHEET
------------------
OFFER TO PURCHASE FOR CASH:
FIVE-YEAR UNSECURED NON-INTEREST-BEARING DEBT OBLIGATIONS
OF AUTOLEND GROUP, INC.
AS OFFERED BY PRINOVA CAPITAL GROUP, LLC.
THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION IN THIS OFFER TO PURCHASE. TO
UNDERSTAND THE OFFER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF
THE OFFER, YOU SHOULD READ CAREFULLY THIS ENTIRE OFFER TO PURHCASE AND THE
RELATED LETTER OF TRANSMITTAL. WE HAVE INCLUDED PAGE REFERENCES PARENTHETICALLY
TO DIRECT YOU TO A MORE COMPLETE DESCRIPTION OF THE TOPICS IN THIS SUMMARY.
WHAT SECURITIES IS PRINOVA CAPITAL GROUP, LLC OFFERING TO PURCHASE? (Page 12)
-----------------------------------------------------------------------------
Prinova Capital Group, LLC ("Prinova" or the "Offeror") is offering to
purchase all of the presently outstanding five-year unsecured
non-interest-bearing debt obligations (the "Debt") incurred by AutoLend Group,
Inc. (the "Company"), and which was issued pursuant to the Company's Third
Amended Plan of Reorganization, which was made effective March 5, 1999. The
Debt is not, and should not be confused with, the Company's 9.5% convertible
subordinated debentures, which were originated in 1990 and had been due in
September 1997.
The Offeror currently holds a majority of the Debt, and the remaining
portion outstanding totals $196,500 US in principal face value (exclusive of any
interest or discount). The Offer is contingent upon the tender of all debt held
on a per individual Debt holder basis. The Offer is not contingent upon all
Debt holders agreeing to tender.
HOW MUCH AND IN WHAT FORM WILL THE OFFEROR PAY ME FOR MY DEBT? (Page 12)
The Offeror will pay cash for your Debt tendered in proper form. The
purchase price will equal five percent (5%) of the principal face value of the
Debt.
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
No.
DOES THE OFFEROR HAVE THE FINANCIAL RESOURCES TO PAY ME FOR MY SHARES? (Page 15)
Yes. If the Offeror purchases all $196,500 face value of the Debt, its cost
will be $9,822.50 US. (Exclusive of fees and expenses incurred in connection
with the offer.)
WHEN DOES THE OFFER EXPIRE? CAN THE OFFEROR EXTEND THE OFFER AND, IF SO, HOW
WILL I BE NOTIFIED? (Page 19)
The offer expires on the 15th day of April , 2002 at 12:00 midnight,
Mountain Standard Time, unless the Offeror extends the Offer. The Offeror may
extend the offer period prior to the actual expiration of time at any period, at
its sole discretion. A request to extend time must be received by Offeror prior
to 12:00 midnight on the 15th day of April, 2002.
If the offer period is extended, the Offeror will make a public
announcement of the extension no later than 9:00 a.m. on the next business day
following the previously scheduled expiration date.
8
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
--------------------------------------------------------------------------------
HOW DO I TENDER MY DEBT? (Page 12)
If you decide to tender you debt:
- You may contact Robert G. Cates, Esq. and request that your debt be
tendered to the Trust Account of Cates & Quintana, Attorneys (email:
quincates@aol.com)
-----------------
- If you do tender, you must:
a) complete and sign in proper form the Letter of Transmittal
accompanying this Offer to Purchase; and
b) send the Letter of Transmittal, and any other required documents
to Robert G. Cates, Esq., Cates & Quintana, Attorneys, postmarked
before the expiration date. Please send a confirming email to
quincates@aol.com or directly contact Attorney Robert G. Cates at
-----------------
telephone number 505-767-9993; facsimile number 505-837-9427.
CAN I WITHDRAW TENDERED DEBT? (Page 13)
Once tendered, you may not withdraw your debt unless the Offeror has not
accepted your tendered Debt for payment by 12:01 a.m. on April 15, 2002. In the
case of such non-acceptance, you may withdraw your offer at any time thereafter.
IN SUCH A CASE, HOW WOULD I WITHDRAW TENDERED DEBT? (Page 13)
Contact Robert G. Cates, Esq. and submit written notice to the law firm of
Cates & Quintana, Attorneys: Address: 600 Central Avenue SW Suite 300,
Albuquerque, NM 87102 or facsimile to number 505-837-9427. Please send a
confirming email with any facsimile transmission to quincates@aol.com.
-----------------
WILL THERE BE ANY TAX CONSEQUENCES TO TENDERING MY DEBT? (Page 19)
The Offeror is not able to comment on the tax consequences of tendering
debt or to provide tax advice under the laws of any jurisdiction. Please
consult your tax advisor as to any possible tax consequences for you.
WHAT IS THE PURPOSE OF THE OFFER? (Page 13)
The offer seeks to consolidate Debt of the Company that is held by persons
or entities other than the Offeror. If the Debt is consolidated, affiliates of
the Offeror may decide to merge into the Company or sell assets to the Company.
The Company may be deemed financially unsatisfactory for such an asset sale, and
the consolidation of Debt could materially change this view. The Offeror,
however, makes no assurances or representations that an asset sale will occur,
or if it were to occur, that it would be worthwhile, or that certain results of
the Tender Offer operate as a condition precedent for an asset sale.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? (Page 13)
Prinova foresees no circumstances that condition the Tender Offer, and it
hopes the debt holders tender. But the Offeror has the right to terminate the
Tender Offer, amend its terms, reject the Debt tendered for payment, and decline
to proceed with the Tender Offer, purchase or payment under circumstances that
Prinova believes, in the exercise of its sound business judgment, results in
negative consequences to Prinova. In particular, Prinova requires that any Debt
Holder tendering debt also advise of any pledge, liens or other encumbrances on
the Debt instruments.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY DEBT? (Page 15)
If the holders do not tender their debt, affiliates of Prinova may decide
not to affect an asset sale, in which case, given the current financial
situation of the Company, the probability of repayment is difficult to
9
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
--------------------------------------------------------------------------------
assess. If affiliates of Prinova do affect an asset sale with the Company, no
guarantee or assurance is offered that such action will be successful enough to
permit repayment of the Debt.
IS THERE A DIFFERENCE BETWEEN THE FACE VALUE OF THE DEBT AND THE AMOUNT ON THE
COMPANY'S PUBLISHED FINANCIAL STATEMENTS?
Yes. The aggregate amount shown on the Company's Balance Sheet is less
than the aggregate face value of the Debt. The difference is an imputed
discount required by the Company's auditors in order for the Company's records
to conform to Generally Accepted Accounting Principles. This imputed discount
has no effect on the actual amount legally owed to holders of the Debt, and has
no effect on this Offer.
WHO DO I CONTACT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
For additional information or assistance, you may contact Robert G. Cates,
Esq. at (505) 767-9993, or by facsimile at (505) 837-9427, or by email at
quincates@aol.com, or by mail to Cates & Quintana, Attorneys, 600 Central Avenue
-----------
SW, Suite 300, Albuquerque, NM 87102.
10
OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
--------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Summary Term Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Offer to Purchase
Section 1. Price; Amount of Debt. . . . . . . . . . . . . . . . . . . 12
Section 2. Procedure for Tendering Debt . . . . . . . . . . . . . . . 12
Section 3. Withdrawal Rights. . . . . . . . . . . . . . . . . . . . . 13
Section 4. Payment for Debt . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Certain Conditions of the Offer. . . . . . . . . . . . . . 13
Section 6. Purpose of the Offer . . . . . . . . . . . . . . . . . . . 13
Section 7. Plans or Proposals of the Offeror. . . . . . . . . . . . . 14
Section 8. Price Range of Debt; Interest. . . . . . . . . . . . . . . 15
Section 9. Interest of Offeror and Related Parties; Transactions and
Arrangements Concerning the Debt and Common Stock. . . . 15
Section 10. Certain Effects of the Offer. . . . . . . . . . . . . . . . 15
Section 11. Source and Amount of Funds. . . . . . . . . . . . . . . . . 15
Section 12. Certain Information about the Company . . . . . . . . . . . 15
Section 13. Certain Information about the Offeror . . . . . . . . . . . 18
Section 14. Additional Information. . . . . . . . . . . . . . . . . . . 19
Section 15. Certain Federal Income Tax Consequences . . . . . . . . . . 19
Section 16. Extension of Tender Period, Termination; Amendments . . . . 19
Section 17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 19
Attachments
Latest Company Financial Statements - as of
Audited Company Financial Statements as of
Form 8-K - filed by the Company October 19, 2000.
Schedule 13D - filed October 31, 2000.
Affirmation of Debt - executed by the Company October 2, 2000.
RISK FACTORS
------------
A. Debt Holders Tendering All of Their Debt Are Subject to Certain Risks:
----------------------------------------------------------------------
Purchase Price May Be Less Than Fair Market Value and/or Liquidation
Value.
The Debt is not traded on any known or recognized exchange or
trading market. A readily identifiable, liquid market for the Debt
does not exist and is not likely to exist in the near future.
Accordingly, it is difficult to establish a fair market value of the
Debt. The Offeror did purchase a block of $412,500 in face value of
the Debt on October 12, 2000, along with 63,028 shares of the
Company's common stock (representing approximately 58% of the
Company's shares) for a combined price of $75,000 US.
If affiliates of Prinova sell assets to the Company, a possible course
of action, the Company would seek to honor any outstanding debt under
present or re-negotiated terms. If the Company liquidates, another
possible course of action, Debt holders could receive a distribution
from the liquidation, although there is no assurance that any funds
would be available after satisfaction of all other obligations of the
Company. The Offeror has not obtained an opinion from an independent
third party regarding the Purchase Price, nor an appraisal of the
Company's Debt in establishing the Purchase Price. The principal risk
to holders of Debt who tender is that the Company under certain
circumstances could succeed as presently configured and pay off the
Debt.
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B. Debt Holders Who Do Not Tender Their Debt Are Subject To Certain
Risks:
The Company May Liquidate.
While Debt holders could receive a distribution if the Company
liquidates, they also could receive little or nothing. The Company
presently (1) has a negative net equity (i.e., a deficit), (2) no
significant source of revenue or income, (3) is rapidly expending its
remaining small amount of cash, (4) has warned in its Form 10-K and
10-Q filings that it does not believe that it will have sufficient
cash to last beyond the present fiscal year (ending March 31, 2002),
and (5) has a "going-concern" opinion issued by its auditors.
The Company has stated in its 10-K and 10-Q filings that it
believes that its landlord and obligations under its lease would have
precedence over Debt holders in any liquidation distribution, such
obligations currently total $323,600. The Company has not yet made any
repayment on the Debt, and missed the first such anticipated payment
in March 2000. The Company has made no indication in its filings, or
otherwise to the knowledge of the Offeror, of when, if ever, it might
make annual repayments. The principal risk to holders of Debt who do
not tender is that the Company will fail and pay out nothing.
THE OFFER TO PURCHASE
---------------------
1. PRICE; AMOUNT OF DEBT. The Offeror will, upon the terms and subject to the
conditions of the Offer, accept for purchase $196,500 or such lesser amount
of the Company's five-year unsecured non-interest-bearing debt that is
properly tendered (and not withdrawn in accordance with Section 3) prior to
12:00 a.m. midnight, Mountain Daylight Savings Time, on April 15, 2002
("Initial Expiration date"). The Debt was originally issued under the terms
of AutoLend Group Inc.'s Third Amended Plan of Reorganization, which was
made effective March 5, 1999. The total aggregate Debt outstanding is
$609,000, of which the Offeror already holds $412,500; this Offer is for
the balance not presently held by the Offeror. The Debt is not, and should
not be confused with the Company's 9.5% convertible subordinated
debentures, which were originated in 1990 and had been due in September,
1997.
The Offeror reserves the right to extend the Offer to the later of the
Initial Expiration Date or the latest time and date to which the Offer is
extended (hereafter called the "Expiration Date") See Section 16.
The Purchase Price o the Debt will be 5% of the face value of the Debt
tendered. The Offeror will not pay interest on the Purchase Price.
The Offer is being made to all holders of the Debt and is not conditioned
upon any minimum amount of Debt being tendered. The Offer is conditioned,
however, on the requirement that any individual Debt Holder must tender all
Debt held by that Debt holder. The Offeror will, upon the terms of this
Offer, purchase all the Debt held by a given Debt Holder.
2. PROCEDURE FOR TENDERING DEBT.
A. Proper tender of Debt. Delivery of originals of all debt instruments,
powers of attorney And other documents evidencing title or claim to
AutoLend Group, Inc.'s five-year non-interest-bearing debt
certificates or instruments issued as a result of the Company's March
5, 1999, Third Amended Plan of Reorganization. Each tender must
include any statement or documentation demonstrating any claim, grant,
pledge or lien by third parties to the tendered Debt instruments.
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B. Signature guarantees and method of delivery. Delivery of original of
all debt instruments that Offeror has agreed to purchase by certified
mail, or courier, return receipt requested, to the offices of Cates &
Quintana, Attorneys; Robert G. Cates, Esq. as agent for Prinova
Capital Group, LLC.
C. Determination of Validity. All questions as to validity, form,
eligibility (including time of receipt) and acceptance of tenders will
be determined by the Offeror, in the sole discretion of its principal
officers, whose determination shall be final and binding. The Offeror
reserves the right to reject tenders determined by Offeror not to be
in the format described for Proper tender of Debt or in which the
documents provided fail to demonstrate good and unemcumbered title to
the Debt instruments sought by this Offer. The Offeror reserves the
right to waive conditions of the Offer, or defects or irregularities
in a tender at its sole discretion. Unless waived, defects in the
documentation required to properly tender Debt must be cured by the
Expiration Date or during any period of extension agreed to by the
Offeror. No person shall be liable for a failure to give notice to a
Debt holder of a defect in the documentation supporting tendered Debt.
3. WITHDRAWAL RIGHTS.
Tenders of Debt made pursuant to the Offer will be irrevocable, save in the
event that tendered Debt not accepted by Offeror by 12:00 a.m. midnight on
April 15, 2002, may be withdrawn by the tendering party at that party's
option.
4. PAYMENT FOR DEBT.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment (and thereby purchased) tendered Debt when Offeror instructs Robert
G. Cates, Esq. to accept the Debt for payment under the terms of the Offer.
Offeror undertakes to pay promptly after the Expiration Date accepted Debt
from funds held in trust by Robert G. Cates Esq. and Cates & Quintana,
Attorneys at Law.
5. CERTAIN CONDITIONS OF THE OFFER.
Offeror is not required to accept for payment, or to purchase or pay for
any Debt tendered. Offeror may terminate, or amend the Offer, or may
postpone the acceptance for payment of, the purchase of, and payment for
Debt tendered, if at any time at or before the Expiration Date, events
occur that in the judgment of the Offeror make it inadvisable to proceed
with purchase.
If the Offeror decides to amend the Offer or to postpone the acceptance for
payment of Debt tendered, it will, to the extent necessary, extend the
period of time during which the Offer is open. See Section 15.
6. PURPOSE OF THE OFFER.
In addition to the Debt, the Offeror holds a majority of the Company's
common stock. The Offer seeks to consolidate Debt of the Company presently
held by entities other than the Offeror. If the offer results in
consolidation of the Debt, affiliates of Offeror intend to consider sales
of assets from themselves to the Company. The Offeror makes no
representations that such an asset sale will occur, or if it were to occur,
that it would be worthwhile.
NEITHER THE OFFEROR NOR THE COMPANY NOR THE COMPANY'S BOARD OF DIRECTORS
MAKE ANY RECOMMENDATIONS TO ANY DEBT HOLDER AS TO WHETHER TO TENDER OR
REFRAIN FROM THE TENDERING OF DEBT HOLDER'S DEBT, AND HAS NOT AUTHORIZED
ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. DEBT HOLDERS ARE URGED TO
EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS, AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
DEBT.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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7. PLANS OR PROPOSALS OF THE OFFEROR.
Affiliates of the Offeror are in the business of purchasing and selling
assets and debt instruments in the ordinary course of their business. On
October 12, 2000, the Offeror acquired a majority interest block of the
Company's Common Stock together with the largest block of the Company's
Debt. The $75,000 US purchase was made as an investment.
The Offeror's present intentions include the possibility of changes,
following assessment of the internal Condition of the Company. Such
possible changes include selling assets of affiliates of Prinova to the
Company; liquidating and closing the Company; or cleaning up and selling
the Company as a public "shell". Significant factors influencing the choice
of which course to pursue include: consolidation of the Company's
outstanding five-year debt obligations and subsequent valuation of the
Company stock as a reasonable basis for exchange with the assets of
Prinova's affiliates or other company.
Some other potential changes the Offeror may consider include disposing of
certain assets, pursuing potential legal claims, and re-negotiating the
Company's office lease. If the asset sale is pursued, the Offeror would
likely make additional changes in Company operations. Such changes could
include new management, appointment of new Directors, raising of additional
equity capital and other sources of debt or equity financing for future
business activities. If the possible asset sale is affected and the Company
subsequently restructured, the value of the Company and its shares could
increase, but there is no guarantee, assurance, or representation that this
will happen.
The Offeror intends to review its equity and debt interests in the
Company on a continuing basis. Depending on the Offeror's evaluation of the
Company's business and prospects, the Offeror reserves the right to acquire
additional shares of Common Stock, to dispose of shares of Common Stock or
to formulate other investment strategies regarding its holdings in the
Company.
While no specific plan has yet been decided upon, the Offeror and its
affiliates have or are studying, among other possibilities the following:
1) The acquisition or disposition of additional securities in the
Company;
2) An extraordinary corporate transaction involving the Company, such as
a merger, reorganization or liquidation;
3) A sale or transfer of a material amount of the Company's assets;
4) Additional changes in the present Board of Directors or management of
the Company, including changing the number or terms of Directors;
5) A material change in the present indebtedness or capitalization of the
Company;
6) Other material changes to the Company's organization structure or area
of business activity;
7) Changes to the Company's By-Laws and\or separate policies to impede
acquisition or control of the Company by another person;
8) Listing or De-listing a class of equities from a national securities
exchange.
9) Registering a class of equities to become eligible for registration
under the Securities Exchange Act of 1934;
10) The suspension of the Company's obligations to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934;
11) The creation of additional classes of securities.
The Company at present pays no dividends and has paid none for the past
several years. Offeror foresees no material change in the present dividend
rate or policy, or any changes in the Company's By-Laws that would impede
the acquisition of control of the Company by any person.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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8. PRICE RANGE OF DEBT; INTEREST.
The Offeror is unaware of any previous transactions involving the sale or
purchase of the Debt, other than the Offeror's own acquisition of the Debt.
In the singular case of the Offeror's acquisition of its present holding of
the Debt, the Debt was acquired in a bundled deal that also included the
acquisition by the Offeror of a controlling block of the Company's stock.
The combined price for 634,026 shares of common stock (representing
approximately 58% of the total outstanding) plus $412,500 in face value of
the Debt was $75,000 US in cash as paid by the Offeror on October 12, 2000.
There is no interest or dividends associated with the Debt.
9. INTEREST OF OFFEROR AND RELATED PARTIES; TRANSACTION AND ARRANGEMENTS
CONCERNING THE DEBT AND COMMON STOCK.
As of March 8, 2002, the Offeror beneficially holds for 634,026 shares of
common stock (representing approximately 58% of the total outstanding) plus
$412,500 in face value of the Debt, out of $609,000 outstanding. Mr.
Vincent J. Garcia is the Managing Member and, together with his wife,
majority interest holder of the Offeror. Mr. Garcia effectively controls
58% of the Company. Mr. Garcia's holdings in the Offeror are as a joint
tenant with rights of survivorship with his wife, Maria Patricia Garcia.
Mr. Garcia was a Director of the Company from October, 2000 to January,
2002. No other executives, directors, officers, employees or consultants of
the Offeror or its affiliates, nor any immediate relatives of Mr. or Mrs.
Garcia, hold any additional stock or Debt in the Company. Similarly, no
such persons of the Company hold membership units or other investments in
Prinova. Members of the Board of Directors of the Company do hold preferred
non-voting stock in Prinova Capital Group, Inc., an affiliate of the
Offeror, Prinova Capital Group, LLC, and one of the companies from which
assets could be negotiated for purchase by the Company.
10. CERTAIN EFFECTS OF THE OFFER.
The Offeror in no way conditions acquiring Debt upon considering the sale
of assets discussed herein, but Prinova views acquisition of outstanding
debt a significant factor in being able to justify an asset sale,
particularly since the Company will likely be able to purchase assets only
for value of its stock. If another course of action is chosen, such as
liquidation, holders of Debt may have increased risk tht their holdings
will result in little or no return after payment of Company debts. See
"Five-year Debt" in Section 12. The risks may change, however, in the face
of an asset sale and Debt holders who do not tender pursuant to this Offer
could possibly receive more for their Debt than is offered here. Debt
holders who tender under this offer are, of course, free to retain any
stock that they may hold, and if an asset sale occurs, and the resulting
new business activity is successful, such stock could improve in value.
Successful consolidation of the outstanding Debt is a key factor in
Prinova's analysis regarding whether to sell assets for Company stock. See
also Risk Factors section of this Offer to Purchase.
11. SOURCE AND AMOUNT OF FUNDS.
The total cost to the Offeror of purchasing $196,500 of the Company's Debt
pursuant to the Offer will be approximately $9,825.00 US (based on a price
of 5% of face value) in addition to professional and administrative
expenses, which funds will come only from Prinova's cash on hand.
12. CERTAIN INFORMATION ABOUT THE COMPANY.
The information in this Section, except as specifically noted, is taken
from publicly available information, as filed by the Company with the
Securities Exchange Commission ("SEC"). AutoLend Group, Inc.'s offices are
located at 600 Central Avenue, SW Suite 300, Albuquerque, New Mexico 87102.
Phone (505) 768-1000 and fax (505) 768-1111.
STRUCTURE AND SUBSIDIARIES. The Company is a publicly traded Delaware
corporation (Over the Counter or "Pink Sheets", present ticker symbol ALEN,
former symbol AUTL), and is in the form of a holding company headquartered
in Albuquerque, New Mexico. The Company is currently winding down two of
its businesses. The Company primarily operates through its wholly-owned
subsidiaries. They are:
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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AutoLend Corporation, which maintains a residual portfolio of
--------------------
sub-prime consumer used-car loan contracts purchased from used-car dealers
(the "Loans"). AutoLend Corporation ceased purchasing these Loans in
December 1995. This portfolio has now been sold and AutoLend Corporation
does not realize any monthly return from the Loan portfolio.
American Life Resources Group, Inc. and LB NM, Inc. which maintain
----------------------------------- -----
portfolios of unmatured life insurance policies purchased from persons with
life-threatening illnesses, a business generically referred to as "viatical
settlements". These subsidiaries generally ceased purchasing policies in
September 1994. The five remaining policies had an aggregate face value of
approximately $366,000 and a net book value of $36,000 on September 30,
2000.
AutoLend Group, Inc. is not affiliated with the website
www.autolend.com, nor is the Company affiliated with the Miami-based
----------------
business, AutoLend IAP.
OVERVIEW OF RECENT ACTIVITIES. For approximately three years, the Company's
activities concentrated on concluding its bankruptcy (see below), and
attempting to develop a gaming business, which attempt was terminated in
June 2000. Additionally, the Company has worked to complete its
Registration Statement (as required by the bankruptcy Plan of
Reorganization), which was made effective by the SEC in January 2000. Since
February 1999, the Company has been working to resolve an investigation by
the SEC regarding incidents that occurred prior to September 1997 (see
below). The Company until the date of the sale of this portfolio collected
amounts due from the residual Loan portfolio and the residual Policy
portfolio. Most recently, effective on or about October 12, 2000, there was
a complete change in control of the Company (see below).
PAST BANKRUPTCY. As a result of the Company's inability to make repayment
on (and subsequent default on) its convertible subordinated debentures due
September 19, 1997, (the "Debentures"), the Company filed for voluntary
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the District of New Mexico (the "Bankruptcy Court") on
September 22, 1997. The Bankruptcy Court confirmed a Plan of Reorganization
(the "Plan"), which became effective March 5, 1999, at which time the
Company was no longer classified as a "debtor-in-possession". On January
13, 2000, the Bankruptcy Court entered its final decree, thereby closing
the Company's Chapter 11 case.
SEC INVESTIGATION. On February 16, 1999, the Company was notified that it
was subject to an investigation by the SEC. Following this investigation,
on June 13, 2000, the Enforcement Staff of the SEC told the Company that
the Staff would recommend a civil injunctive action be brought against the
Company, as well as against its former chief executive officer, Nunzio P.
DeSantis, for alleged violations of federal securities laws. The Company
has stated in its 10-Q that it believes the activities under investigation
occurred prior to October , 1997. After the change of control, on November
1, 2000, the new Board of Directors through the company's new legal
counsel, sent correspondence to the SEC seeking a prompt resolution of the
matter. Following negotiations with the SEC, the Company accepted a
settlement offer on January 8, 2001 and a Cease and Desist Order requiring
the Company not to violate certain sections of the Securities Exchange Act
of 1934 and certain SEC rules was filed by the SEC on April 19, 2001. See
8-K. Although Nunzio P. DeSantis has reached subsequent agreements with the
SEC in connection with his activities as CEO or Director of the Company,
the current Board of Directors and management of the Company have had no
dealings with Mr. DeSantis since assuming control of the Company in
October, 2000.
TERMINATION OF FORMER CEO. Effective September 28, 2000, through an
executed agreement between the Company and its then-CEO Nunzio P. DeSantis,
Mr. DeSantis resigned as an employee and officer and is no longer
affiliated with Company in any manner. Mr. DeSantis had previously resigned
from the Board of Directors and has held no shares in the Company since
March, 1999.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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Agreements between the Company and Mr. DeSantis provide that he will not
acquire, possess, or assert, directly or indirectly, any interest of any
kind the Company.
LIQUIDITY / "GOING CONCERN". On March 31, 2000, the Company had net cash of
#12,912, and had a Negative net equity (i.e. a deficit) of $575,981, which
excludes the financial effect of a remaining lease Obligation due pursuant
to the Albuquerque office lease terms. The lease terms totaled
approximately $241,000 at November 13, 2000. The Offeror believes that,
based on the Company's recent published sources of cash receipts and its
past expense trends, that cash on hand as of the date of this Offering
isles than at September 30, 2000, and the net deficit is larger. During the
Company's latest fiscal year (ended March 31, 2001), the Company suffered
recurring losses from operations that have raised substantial doubt about
its ability to continue. Without either an infusion of capital, and/ the
infusion of a positive cash-flow business, and/or the sale or realization
of assets for cash at greater than net book value, the Company has reported
in its most recent Form 10-K that it will not be able to meet all its
presently outstanding obligations. The Company further reported that it
believes that it presently has insufficient cash necessary (even if
obligations currently due under the five-year unsecured debt are excluded)
to continue operating beyond the end of the current fiscal year (ending
March 31, 2002) without additional financing. The Company was previously
audited by Meyners + Company LLC, a BDO Seidman LLC Alliance member. The
Company recently retained Henderson, Black & Company upon the resignation
of Meyners + Company LLC in January, 2002. The Company is, and has been,
current on all its SEC filings.
LEASE OBLIGATIONS. The Company assumed a lease in February 1999, which
covers its office space at 600 Central Avenue SW in Albuquerque, New Mexico
where the Company has had its offices since August 1997. The lease
terminates on July 31, 2002, and the lease payments are presently $10,441
per month.
FIVE-YEAR DEBT. Emergence from bankruptcy led to elimination of the
Company's debenture debt. It also led to new, unsecured,
non-interest-bearing debt obligations, aggregating $609,000. The Company
incurred this new debt, effective March 5, 1999, pursuant to the terms of
the Company's Third Amended Plan of Reorganization in favor of former
Debenture holders who elected Option A under the Plan. The Offeror acquired
$412,500 of the Debt from a former Debenture holder, effective October 12,
2000, which leaves $196,500 in the possession of other parties.
The Debt was originally anticipated to be payable in five equal annual
payments of $121,000, and the first annual payment was originally scheduled
for March 5, 2000. The Company, on advice from it's former reorganization
counsel, did not make this payment. That counsel advised that the Company's
financial position in March, 2000 would not permit a payment and that other
debts, notably the lease agreement, took precedence under law. The Company
concluded that if the Company were to liquidate, any such Debt repayment
would likely be the subject of an adversary proceeding against the
recipients of repayments. (i.e., the Debt Holders). The Company has given
no indication of when or if such payment will ever be made and its
financial situation has not substantially improved since March, 2000. The
Offeror believes that a single annual payment would require cash in excess
of the total cash that the Company has on hand, and that the Company
appears to have little or no means in its present structure to obtain any
additional cash.
POTENTIAL RIGHTS. According to a Form 8-K filed with the SEC by
International Thoroughbred Breeders, Inc. ("ITB") on June 7, 2000, the
former El Rancho Hotel property in Las Vegas, Nevada was sold by ITB on May
22, 2000. AutoLend had earlier received certain indirect contingent rights
in the event this ITB property sold above a certain threshold amount. The
Company's rights thereunder, if any, may be up to $2.0 million. ITB's Form
10-K, filed approximately October 13, 2000, has stated that "no payments
are due as a result of the transaction." The Company is presently
investigating its legal options. Realization of any rights that may exist
with regard to this transaction would likely be costly, and may be beyond
the Company's means to attain.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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CHANGE IN CONTROL. Effective October 12, 2000, a block of 634,028 shares of
the Company's common stock, equal to approximately 58% of the total shares
outstanding, changed hands in a private sale between two third parties. The
buyer and new majority owner was Prinova Capital Group, LLC, the Offeror.
Prinova has no past or present ties or affiliations to any pre-bankruptcy
shareholder, director, or officer of the Company. Effective October 13,
2000, two new Directors were appointed to the Company's Board: John D.
Emery, 53 and Vincent J. Garcia, 50, both of Albuquerque. Mr. Emery was
appointed acting Chairman, acting President, and Secretary of the Company.
Mr. Garcia did not assume an officer's position in the Company. After the
appointment of Mr. Emery and Mr. Garcia to the Board, the only other
Director, Philip Vitale, MD, tendered his resignation from the Board of
Directors, which the Board accepted.
On January 8, 2002, John D. Emery tendered his resignation from the
Board of Directors and as President and Secretary of the Company. Luther W.
Reynolds was appointed to the Board and assumed the duties of acting
President. Also in January, 2002, Vincent J. Garcia resigned as a member of
the Board of Directors. Effective January 28, 2002 the Company's Board of
Directors consists of Luther W. Reynolds, of Albuquerque, NM ,Chairman;
Christobal "Chris" Baca, of Albuquerque and Werner Gellert, of Albuquerque.
A previous 8-K filing by the Company, dated January 28, 2002,
erroneously described Company Vice-President Jeff Ovington as having once
been a member of the Company Board of Directors. Mr. Ovington tendered his
resignation from the Company in December, 2000.
OTHER. The Company has, in the past, accumulated unused operating loss
carry-forwards and capital loss carry-forwards, which would ordinarily
provide for certain tax benefits. However, the requirements to utilize such
loss carry-forwards are strict, and the possibilities for usage are
extremely limited, particularly where there has been a major change of
control over the organization. Due to the substantial changes in ownership
effective October 12, 2000, these tax benefits may have been eliminated,
but are still subject to investigation by Prinova.
NOTE. Readers are referred to the public filings of the Company with the
SEC. Information gathered in this section about the Company is, largely,
excerpted from those filings. The Offeror believes the information stated
here about the Company is correct and objective. But, the SEC filings are
the controlling documents and those should be consulted by Debt holders
prior to accepting the Offer.
This Offer was subject to a prior Tender Offer extended for the period
December 7 to December 27, 2001. Although the terms of this Offer are
substantially the same as the prior tender offer, there are some changes to
these disclosures, particularly since there has been a change of management
of AutoLend since December, 2001. Although there is substantial similarity
with the prior offer, the Debt holder should not assume that the factual
disclosures of this tender offer are identical to those contained in the
tender offer dated December 7, 2001.
13. CERTAIN INFORMATION ABOUT THE OFFEROR.
Prinova Capital Group, LLC. (the Offeror) is a New Mexico limited liability
company. It holds 58% of the Company's common stock and $412,500 of the
Company's Debt. Its principal offices are located at:
600 Central Avenue SW Suite 300
Albuquerque, NM 87102
Phone: (505) 881-0808; Fax (505) 837-9427
The Offeror is an investment and asset management company. It became a
majority shareholder in the Company effective October 12, 2000. Mr. Vincent
J. Garcia is the Managing Member of Prinova. Mr. Garcia and his wife, Maria
Patricia Garcia, are also the majority interest holders in Prinova. Mr.
Garica became an outside Director of the Company on October 13, 2000 and
continued until his resignation from the Board in January, 2002. Mr.
Garcia's business address and telephone is the same as that of Prinova.
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OFFER TO PURCHASE Made by Prinova Capital Group, LLC For AutoLend Debt
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14. ADDITIONAL INFORMATION.
The Offeror has filed a statement on Schedule TO wit the SEC which includes
certain additional information relating to the Offer. Such information is
available on the EDGAR Database on the SEC's Internet site (www.sec.gov),
-----------
and copies of this information may be obtained, after paying a duplicating
fee, by electronic request at the following e-mail address:
publicinfo@sec.gov, or by writing the Public Reference Section of the SEC,
------------------
Washington, D.C. 20549-0102.
15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
Debt holders should consult their own tax advisors regarding any tax
consequences of a sale of Debt pursuant to the Offer, as well as the
effects of state, local and foreign tax laws.
16. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Offeror reserves the right to extend the Expiration Date by making a
public announcement thereof. During any such extension, all Debt previously
tendered and not purchased or withdrawn will remain subject to the Offer.
The Offeror also reserves the right, at any time prior to the Expiration
Date to (a) terminate the Offer and not to purchase or pay for any Debt or,
subject to applicable law, postpone payment for Debt upon the occurrence of
any of the conditions specified in Section 6; and (b) amend the Offer in
any respect by making a public announcement thereof. Such public
announcement will be issued no later than 9:00 a.m. Mountain Standard Time
on the next business day after the previously scheduled Expiration Date and
will disclose the approximate amount of Debt tendered as of that date.
Without limiting the manner in which the Offeror may choose to make a
public announcement of extension, termination or amendment, except as
provided by applicable law (including Rule 13d-4(e)(2), the Offeror shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement.
If the Offeror materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer,
the Offeror will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) of the SEC. These rules require that the
minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer
(other than a change in price or a change in percentage of securities
sought) will depend on the facts and circumstances, including the relative
materiality of such terms or information. If (i) the Offeror increases or
decreases the price to be paid for Debt, or the Offeror decreases the
amount of Debt being sought, and (ii) the Offer is scheduled to expire at
any time earlier than the expiration of a period ending on the tenth
business day from, and including, the date that notice of such increase or
decrease is first published, sent or given, the Offer will be extended at
least until the expiration of such period of ten business days.
17. MISCELLANEOUS
The Offer is not being made to, nor will the Offeror accept tenders from,
owners of Debt in any jurisdiction in which the Offer or its acceptance
would not comply with the securities laws or "blue sky" laws of such
jurisdiction. The Offeror is not aware of any jurisdiction in which the
making of the Offer to the tender of Debt would not be in compliance with
such laws. However, the Offeror reserves the right to exclude holders in
any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. So long as the Offeror makes a good-faith effort to comply with any
state law deemed applicable to the Offer, the Offeror believes that
purchase from holders residing in such jurisdiction is permitted under SEC
Rule 13e-4(f)(9).
ATTACHMENTS: Attached are the following documents:
Latest Company Financial Statements (unaudited)
Audited Company Financial Statements
Form 8-K - filed by the Company October 19, 2000, January 11, 2002 and
February 1, 2002
Schedule 13D - filed by the Offeror October 31, 2000
Affirmation of Debt - executed by the Company October 2, 2000.
19
EXHIBIT (a) (1) (i)
OFFER TO PURCHASE FOR CASH:
AUTOLEND GROUP, INC.
FIVE-YEAR UNSECURED NON-INTEREST-BEARING DEBT OBLIGATIONS
AT 5% OR PRINCIPAL (FACE) VALUE
--------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT MOUNTAIN DAYLIGHT SAVINGS TIME ON APRIL 15, 2002,
UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
To the Holders of Five-Year Non-interest -bearing Debt
(issued pursuant to the Third Amended Plan of Reorganization)
of AutoLend Group, Inc. made effective March 5, 1999) :
Prinova Capital Group, LLC, a New Mexico limited liability company located
in Albuquerque, New Mexico, USA, ("Prinova" or the "Offeror") offers to purchase
all of the five-year non-interest-bearing debt obligations (the "Debt") incurred
by AutoLend Group, Inc. ("AutoLend" or the "Company"), which was incurred
pursuant to the terms of the Company's Third Amended Plan of Reorganization,
which Plan was made effective March 5, 1999 by court order. The Offeror is
offering to purchase the Debt for case at a price (the "Purchase Price") equal
to 5% of the principal (face) value of the Debt. The offer, pro-ration period
and withdrawal rights will expire at 12:00 midnight Mountain Daylight Savings
time on April 15, 2002 (the "Initial Expiration Date"), unless extended (the
Initial Expiration Date or the latest date to which the Offer is extended, the
"Expiration Date"), upon the terms and conditions set forth in this Offer to
Purchase and the related Letter of Transmittal (which together constitute the
"Offer"). The Debt is not currently traded on an established trading market.
The Offer is conditioned upon the tender of all debt held by any individual Debt
Holder.
THIS OFFER IS BEING MADE TO ALL DEBT HOLDERS
AND IS CONDITIONED UPON THE TENDER OF ALL
DEBT HELD BY AN INDIVIDUAL DEBT HOLDER.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 5.
IMPORTANT
If you desire to tender all or any portion of your Debt, you may do so by
completing and signing the Letter of Transmittal and mailing or delivering it
along with any other required documents to Robert G. Cates, Esq., Cates &
Quintana, Attorneys, 600 Central Avenue SW, Suite 300, Albuquerque, New Mexico
87102.
20
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATIONS TO
ANY DEBT HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY
PORTION OF SUCH DEBT HOLDER'S DEBT. DEBT HOLDERS ARE URGED TO EVALUATE
CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX
ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER DEBT.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY OR THE OFFEROR AS TO WHETHER DEBT HOLDERS SHOULD TENDER DEBT PURSUANT TO
THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE OFFEROR.
Request for additional copies of this Offer to Purchase and the Letter of
Transmittal should be directed to Robert G. Cates, Esq., Cates & Quintana,
Attorneys, 600 Central Avenue SW, Suite 300, Albuquerque, New Mexico 87102,
attn: Robert G. Cates, Esq. Questions and requests for assistance may be
directed to Mr. Cates at (505) 767-9993.
March 15, 2002
PRINOVA CAPITAL GROUP, LLC.
21
EXHIBIT (a) (1) (ii)
FORM OF LETTER TO DEBT HOLDERS WHO HAVE REQUESTED OFFER TO PURCHASE
-------------------------------------------------------------------
Dear Debt Holder:
As you requested, we are enclosing a copy of the Prinova Capital Group,
LLC, (the "Offeror") Offer to Purchase up to $196,500 of the five-year unsecured
non-interest-bearing debt obligations (the "Debt") of AutoLend Group, Inc. (the
"Company") as incurred by the Company under the terms of AutoLend's Third
Amended Plan of Reorganization, made effective March 5, 1999. We are also
enclosing the related Letter of Transmittal (which together with the Offer to
Purchase constitute the "Offer"). The Offer is for cash at 5% of the face value
of the Debt tendered. The expiration date of the Offer is midnight, mountain
daylight savings time on April 15, 2002, unless extended as stated in the Offer.
Please read carefully the enclosed documents, which include the Company's most
recent financial statements.
If after reviewing the information set forth in the Offer, you wish to
tender Debt for purchase by the Offeror, Please follow the instructions
contained in the Offer to Purchase and Letter of Transmittal.
Neither the Offeror nor the Company nor the Company's Board of Directors
has made or is making any Recommendations to any holder of Debt as to whether to
tender the Debt. Each Debt holder is urged to consult his or her Financial
Advisor or tax professional before deciding whether to tender any Debt. The
Offeror is not Aware of any secondary market trading for the Debt.
Should you have any questions on the enclosed material, please do not
hesitate to call or email the Offeror's representative, Robert G. Cates, Esq.
at (505) 767-9993 during business hours or email him at quincates@aolcom.
-----------------
Sincerely yours,
/s/ Vincent J. Garcia, Managing Member
PRINOVA CAPITAL GROUP, LLC.
600 Central Avenue SW, Suite 300
Albuquerque, New Mexico 87102
Telephone: (505) 881-0808
Fax: (505) 837-9427
Email: quincates@aol.com
-----------------
22
EXHIBIT (a) (1) (iii)
FORM OF LETTER OF TRANSMITTAL
-----------------------------
(including Guidelines for Certification of Taxpayer Identification)
LETTER OF TRANMITTAL
Regarding the 5-YEAR NON-INTEREST-BEARING DEBT OBLIGATIONS OF
AUTOLEND GROUP, INC.
Tendered Pursuant to the Offer to Purchase Dated March 15, 2002
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT,
AND THIS LETTER OF TRANSMITTAL MUST BE RECEIVED BY THE PARTNERSHIP BY,
12:00 MIDNIGHT DAYLIGHT SAVINGS TIME, ON APRIL 15, 2002
(THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED BY OFFERORS.
Name of Debt Holder:_________________________ If applicable:
Street Address (or PO Box):__________________ Custodian name__________________
City, State, Zip (or Postal code):___________ Custodian Address_______________
Country:_____________________________________ City, State, Zip:_______________
Face value of Debt tendered:_________________ Account#:_______________________
Optional: Fax and/or phone #:________________ (in case of problems)
Tax I.D. #:_________________________
I am a Debt holder of AutoLend Group, Inc.'s debt obligations as issued in
AutoLend's bankruptcy proceedings (the five-year unsecured non-interest-bearing
debt which was made effective March 5, 1999), or the duly, authorized
representative or agent thereof. I hereby tender my Debt, or that of my
principal, interest, as described and specified below, to Prinova Capital Group,
LLC. (the "Offeror"), upon the terms and conditions set forth in the Offer to
Purchase, dated March 15, 2002 (collectively, the "Offer to Purchase" and
"Letter of Transmittal" constitute the "Offer").
THIS LETTER OF TRANSMITTAL IS SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH
IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE RIGHT OF THE
OFFEROR TO REJECT ANY AND ALL TENDERS DETERMINED BY IT, IN ITS SOLE DISCRETION,
NOT TO BE IN THE APPROPRIATE FORM.
I hereby represent and warrant that I have full authority to sell my interests,
or those of my principal, to the Offeror, and that the Offeror will acquire good
title, free and clear of any adverse claim. Upon request, I will execute and
deliver any additional documents necessary to complete the sale of my interests
in accordance with the terms of the Offer.
I hereby appoint Prinova Capital Group, LLC (without posting of a bond) as my
attorney-in-fact with respect to my interests, or those of my principal, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to : (1) transfer ownership of my
interests or those of my principal on the Company's books to the respective
Offeror, (2) change the address of record of my interests or those of my
principal prior to or after completing the transfer, (3) execute and deliver
lost certificate indemnities and all other transfer documents, (4) direct any
custodian or trustee holding record title to the interests to do what is
necessary, including executing and delivering a copy of this Letter of
Transmittal, and (5) upon payment by the respective Offeror of the purchase
price, to receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of my interests hereby tendered.
23
INSTRUCTIONS TO TENDER DEBT
Please complete the following steps to tender your Debt:
- Complete Part 1. by inserting the amount of Debt tendered.
- Complete Part 2. by providing your telephone and facsimile number(s).
- Complete Part 3. by providing the appropriate signature(s). (Note: if
your account is held by a Trustee of Custodian, sign below and forward
this form to the Trustee of Custodian at the address noted on the
first page of this Letter of Transmittal to complete the remaining
steps). All signatures must be notarized by a Notary Public or
equivalent.
- Return your original Certificate(s) of Ownership for the interests
with this form. If you are unable to locate your Certificate(s) of
Ownership, complete the Affidavit and Indemnification Agreement for
Missing Certificate(s) of Ownership.
PART 1. AMOUNT OF DEBT TO BE TENDERED:
[ ] I tender my entire interest or that of my principal if I am acting as
agent or custodian in the Debt of $_____________________ face value, for a
price of 5% of face value.
PART 2. TELEPHONE NUMBER(S):
My telephone numbers are: (__)_________[daytime] and (__)_________[evening].
PART 3. SIGNATURES:
FOR INDIVIDUAL/JOINT OWNERS:
_______________________________ __________________________________
Print Name of Debt holder If Joint, Print Name of Joint
Owner
___________________________________________
_______________________________ __________________________________
Signature of Debt holder If Joint, Signature of Joint
Owner
Sworn to me this __ day of ___, 2002 Sworn to me this ___day of ____,2002
_______________________________ __________________________________
Notary Public Notary Public
Return or Deliver: (1) this Letter of Transmittal; (2) your original
Certificate(s) of Ownership for the interests, or if you are unable to locate
your Certificate(s) of Ownership, the Affidavit and Indemnification Agreement
for Missing Certificate(s) of Ownership; and (3) the Substitute Form W-9 on or
before the Expiration Date to:
Mr. Robert G. Cates
Cates & Quintana, Attorneys
600 Central Avenue, SW Suite 300
Albuquerque, NM 87102
24
AFFIRMATION OF DEBT
AUTOLEND GROUP, INC., a Delaware corporation ("AutoLend") hereby affirms and
verifies to PRINOVA CAPITAL GROUP, LLC, a New Mexico limited liability company
("Prinova") that:
1. AutoLend is obligated (the "Obligation") and indebted to various persons
and entities under the terms of, and as described in, AutoLend's Third
Amended Plan of Reorganization and the associated Third Amended Disclosure
Statement (jointly, the "Plan"), as such Plan was filed in the Chapter 11
voluntary bankruptcy reorganization proceedings of AutoLend in the United
States Bankruptcy Court, District of New Mexico (the "Court"), Case No.
11-97-15499-MA. After proper notice and a hearing, the Plan was approved by
the Court on February 22, 1999, and was made effective as of March 5, 1999.
The Obligation consists of several five-year (starting March 5, 1999),
non-interest-bearing, uncollateralized debts, which in aggregate total
$609,000 (six hundred and nine thousand U.S. dollars), and which would
generally call for once-per-year principal payments. The first such
principal payment, originally anticipated approximately March 5,2000
(subject to the terms of the Plan), has not been made. The Obligation is
also described in AutoLend's audited Form 10-K for the fiscal year ended
March 31,2000, in Note 16, "Commitments and Contingencies," on pages F-24
and F-25. Likewise, the Obligation is described in AutoLend's Form 10-Q,
for the quarter ended June 30, 2000 (which was filed with the U.S.
Securities and Exchange Commission on or about August 10, 2000), in Note 4,
on page 8. No specific contractual document between AutoLend and any
individual obligee (i.e., a physical "note") has been generated by
----------
AutoLend. In case of any discrepancies between this Affirmation and the
Plan, the terms of the Plan shall prevail.
2. The Obligation is a valid and subsisting debt owed by AutoLend to the
obligees thereon, subject to the terms of the Plan. AutoLend has no
defenses, counterclaims, or offsets to the Obligation as against any holder
thereof or beneficial or interested party therein, except as may be
incorporated into the terms of the Plan.
3. One of AutoLend's former debenture creditors (pre-petition) exercised
certain choices under the Plan, and as a result of such choice and its
former holdings, became AutoLend's largest stockholder and simultaneously
the largest obligee under the Obligation. This party was initially
identified in the reorganization as nine numbered accounts at Bear Stearns,
and has since been identified by its representatives to AutoLend variously
as Smith Management, LLC, and/or Mendham Investments LP, both with offices
in New York City (collectively, "Mendharn"). The portion of the Obligation
for which Mendham has been the obligee totals $412,500 (four hundred twelve
thousand five hundred U.S. dollars). AutoLend has no evidence of any sale
or assignment from Mendham to any outside party; however, AutoLend cannot
assure that such has not occurred without AutoLend's knowledge.
4. AutoLend recognizes that Prinova wishes to acquire the interests of Mendham
under the Obligation, and that Prinova is paying valuable consideration to
Mendham to so acquire such interests. AutoLend has no objection to such
acquisition, and knows of no impediment to the acquisition, and will
cooperate to facilitate such acquisition.
5. Upon sale, transfer and assignment of any valid obligee's interests in the
Obligation, and upon AutoLend's receipt of adequate written evidence
thereof, AutoLend shall and hereby does consent to such assignment and
shall thereafter substitute such change of beneficial party as obligee in
AutoLend's books and records. As of the date of this Affirmation, AutoLend
has received no such written notice of any change in beneficial ownership
of any obligee's rights thereunder. However, AutoLend has no control of
(nor any present knowledge of) any obligee's potential private sale or
-------
assignment to some third party (without notice to AutoLend).
6. The undersigned officer of AutoLend is authorized to make and execute this
instrument on behalf of such corporation.
IN WITNESS WHEREOF, AutoLend Group, Inc. hereby executes the foregoing
Affirmation of Debt, this 2nd day of October, 2000.
AUTOLEND GROUP, INC.
By: /s/ Jeffrey Ovington
----------------------------------
Jeffrey Ovington, Exec. Vice-President
AUTOLEND GROUP, INC.
600 Central SW, 3rd Floor, Albuquerque, NM 87102
------------------------------------------------
Phone(505) 768-1000; Fax(505) 768-1111
--------------------------------------
November 13,2000
VIA FACSIMILE -(505) 820-9353 and FIRST CLASS MAIL
---------------------------------------------------------
Mr. Bruce Barna (Insert name of trust)
P.O. Box 22665
Santa Fe, NM 87502-2665
Dear Mr. Barna:
Pursuant to our recent conversation regarding the lease of AutoLend at the
Quickel building, we respectfully propose the following regarding modifications
to the lease. Each modification, if it so applies, shall be referred to as it is
numbered in the original lease.
II. Term of Lease (Shall be modified as follows):
-------------
Initial Term of Lease. The initial term of this lease shall be for a
period of seven years, commencing on August 1, 1997 and ending July 31,
2004.
III. Rent (Shall be modified as follows):
----
Notwithstanding any provision to the contrary contained herein, commencing
on December 1, 2000, the lease payments shall be paid as follows, in the
following amounts:
December 1,2000 through December 31,2001 -$6,500.00/month
January 1,2002 through July 31,2002 -$10,OOO.00/month
August 1,2002 through July 31,2003 -$11,OOO.OO/month
August 1,2003 through July 31,2004 -$13,500.00/month
Late Fee: A late charge equal to 5% of the amount that is late will be
charged for any payment past 10 days from the due date.
All rent shall be paid to Landlord at:
P.O. Box 22665
Santa Fe, NM 87502-2665
or such other place as Landlord may designate from time to time.
Mr. Bruce Barna
November 13,2000
Page 2 of 3
XI. Assignment and Subletting (Shall be modified as follows):
---------------------------
Landlord and Tenant hereby confirm the validity of AutoLend Group, Inc.,
E.S- the assignee and successor in interest of this lease and further
acknowledge that no option to assume this lease under the same terms and
conditions contained herein is valid or granted to Nunzio P. DeSantis
and/or assigns, and any reference thereto in this section is hereby null
and void and of no force and effect.
XVI. Bankruptcy and Condemnation (Shall be modified as follows):
-----------------------------
Landlord hereby confirms the validity of this lease notwithstanding the
provisions of this section regarding breaches by AutoLend Group, Inc.,
if any, due to its bankruptcy.
XXIV. Option to Renew (Shall be modified as follows):
-----------------
Landlord hereby grants Tenant five (5) each two (2) year options to
renew this lease under the same terms and conditions contained herein
except rent which shall commence at a base rate of $11,500.00 for the
period August 1, 2004 through July 31,2005, and shall be adjusted
annually thereafter by the percentage change in the Consumer Price Index
(CPI), All Urban Consumers, U.S. Cities Average, all items, between the
first and last months of the immediately proceeding adjustment period,
using the first twelve (12) month's period rent of $11,500.00 as the
base rent for all future adjustments. In no event shall the adjusted
rental amount during any subsequent twelve (12) month period in the
option period(s) be less than that of the immediately preceding twelve
(12) month period. At such time as the adjusted rent amount can be
determined, Tenant shall immediately pay to Landlord the additional rent
which has accrued under this adjustment provision, and thereafter pay
the adjusted amount as advance monthly rent. Tenant must notify Landlord
in Writing not less than sixty (60) days prior to the expiration of this
lease and any of its renewal terms, of Tenant's intent to exercise it's
option to renew the lease in accordance herewith.
XXV. Option to Purchase (New Section):
--------------------
Landlord hereby grants to Tenant the Option to Purchase the Quickel
building located at 600 Central A venue, NW, and its contiguous parking
facility and area located directly south of the Quickel building, on the
comer of Sixth and Gold Streets, SW, in Albuquerque, New Mexico ("The
Property").
The purchase price shall be equal to the documented net operating income
divided by a capitalization rate equal to Wall Street Journal prime rate
plus 150 basis points, or based on an appraisal provided by Landlord
--
which is produced by an M.A.I. appraiser, whichever is lower, upon terms
and conditions acceptable to Landlord and Tenant.
Mr. Bruce Barna
November 13,2000
Page 3 of3
XXV. (Cont'd)
Tenant understands that Landlord is desirous of selling The Property on
3 tax favored basis such as a Section 1031 tax deferred real estate
exchange, and Tenant agrees to transact this option to be in compliance
with Landlord's requirements thereunder.
XXVI. Rent Abatement for December and January (New Section)
--------------------------------------------
Under any circumstances, AutoLend is under severe financial pressure and
requests that you apply the deposit you now hold in the amount of Ten
Thousand Dollars ($10,000) towards paying our December and January
rents. Any shortfall between the Ten Thousand Dollars ($10,000) deposit
and our negotiated rent will be added to the back end of the lease.
Mr. Barna, other than new section numbered XXVI above regarding the application
of the security deposit to December and January rent, I believe this covers all
of the changes we proposed. We thank you for your patience and consideration.
Please inform us as soon as possible so that we may prepare the necessary
documentation if you approve these modifications. Please call us if you have any
questions, or if you would like to discuss any of these issues.
Respectfully,
/s/ John Emery
---------------------------------
John Emery, President
---------------------------------
Vincent J. Garcia, Director
LEASE
-----
THIS LEASE is dated and effective the 1st day of January, 2001, by and between
The Lynn Atkison Trust, "Landlord", P.O. Box 2265, Santa Fe, New Mexico, 87502,
and AutoLend Group, Inc., a Delaware corporation ,"Tenant", 600 Central Avenue
SW, Suite 300, Albuquerque, New Mexico, 87102. This Lease supercedes, cancels,
and nullifies any and all prior leases between the Landlord and Tenant whether
having been originally entered into by the Landlord and Tenant or having arisen
by virtue of assignment or sublease and whether or not such prior lease has been
completed as of the date of this lease. Upon execution of this lease, Tenant and
Landlord hereby release each other from any and all obligations to each other on
any such prior lease.
ARTICLE I
Leased Premises
---------------
The Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, the "Leased Premises" described as the commercial suite described as
Suite 300 (constituting the entire third floor) and located at the Quickel
Building, 600 Central Avenue SW, City of Albuquerque, County of Bernalillo,
State of New Mexico, containing approximately 9,935 Square feet. The actual
square footage and area is not warranted by the Landlord.
ARTICLE II
Term
----
The initial term of this lease shall be for three (3) years commencing
January 1, 2001 and terminating on the 31st day of December 2003. Additionally,
Tenant is granted two (2) options to extend the term of this lease for five
years each, commencing upon expiration of the initial term. Such option may be
exercised only if Tenant is not in default hereunder, by Tenant giving written
notice to the Landlord of the exercise thereof, at least ninety - (90) - days
prior to the end of the current term. During the option term, if the option
shall be exercised, this Lease shall continue in full force and effect as though
the term hereof extended through such option period. The option term or terms
shall be governed by the same terms and conditions of this lease.
ARTICLE III
Rent and Deposits
-----------------
1. Tenant agrees to pay to Landlord rentals of $7000.00 per month
($84,000.00 per year) for the initial year of this Lease. Tenant agrees to pay
to Landlord $12,325.00 per month ($147,900.00 per year) plus applicable Consumer
Price Index ("CPI") adjustment for the second year of this Lease. Tenant agrees
to pay to Landlord the same monthly and annual rent as that paid in the second
year of the lease plus applicable CPI adjustment for the third year of this
Lease. During the first option period, rent will be $11,000.00 per month
($132,000.00 per year) with annual CPI adjustments thereafter. During the second
option period, the rent will be the same monthly and annual rent as
TDE LA
2/28/01 2/26/01
that of the first option period, plus the applicable CPI adjustments which shall
be applied annually for each and every year of the second option term.
2. All rental shall be payable on or before the first day of each calendar
month. TIME IS OF THE ESSENCE. Payment shall be made by delivery of a local
draft to Landlord at Landlord's address set forth above. Alternatively, if
Landlord directs, payment shall be made by deposit of a local draft into
Landlord's local bank account.
3. Tenant has deposited with Landlord the additional sum of $10,000.00 as
security for the performance by Tenant of all things to be done by Tenant under
this Lease, which sum shall be returned to Tenant, without interest, upon the
expiration of this Lease if the premises are peacefully surrendered, free and
clear of damage other than reasonable wear and tear, and if such surrender shall
occur without the Tenant being in default at the time of surrender.
4. CPI adjustments of base rent shall be calculated uncompounded from All
Urban Consumers, U.S. Cities Average, all items, between the first and last
months of the immediately preceding adjustment period. In no event shall the
adjusted rental amount during any twelve (12) month period be less than that of
the immediately preceding twelve (12) month period. At such time as the adjusted
rent amount can be determined, Tenant shall immediately pay to Landlord the
additional rent, which has accrued under this adjustment provision, and
thereafter pay the adjusted amount as advance monthly rent.
ARTICLE IV
Charge for Late Payment of Rent
-------------------------------
1. If the Tenant fails to pay any rent by the fifth (5th) business day of
the month in which it is due, Tenant must add ten percent (10%) to that
installment as additional rent.
2. Landlord need not give any notice to be entitled to these charges, and
such additional charge shall in no way be construed to limit the Landlord's
remedies in the event of such default, which remedies shall in all cases be
deemed to be cumulative.
ARTICLE V
Taxes
-----
All ad valorem taxes with respect to the real estate shall be paid by
Landlord, except that Tenant shall pay all increases in ad valorem taxes due to
Tenant's construction of Leasehold improvements. All taxes on personal property,
inventory, furniture, fixtures and trade fixtures shall be paid by the Tenant.
TDE LA
2/28/01 2/26/01
2
ARTICLE VI
----------
Insurance
---------
1. The Landlord shall insure the Leased Premises against fire, normal
extended coverage perils, vandalism and malicious mischief Such insurance shall
be solely for Landlord's benefit and Tenant shall not be entitled to any
interest, direct or indirect, in the proceeds thereof
2. Throughout the terms of this Lease and any extension or renewal thereof,
the Tenant hereby agrees and covenants with Landlord to carry and maintain in
full force and effect at Tenant's expense, public liability insurance covering
bodily injury and property damage liability, in a form and with an insurance
company acceptable to Landlord, with single limit coverage of not less than
$1,500,000.00, for the benefit of both Landlord and Tenant as protection from
all liability claims arising from the Leased Premises, and Tenant shall cause
Landlord to be named as an additional-named insured on such policy of insurance
and shall deliver a copy thereof to Landlord. The Tenant shall carry and
maintain in effect sufficient insurance to cover Tenant's trade fixtures,
inventory, equipment, furnishings, leasehold improvements and glass, which
insurance shall protect against fire, normal extended coverage perils, vandalism
and malicious mischief
3. Tenant waives any right of subrogation, which its insurers may acquire
against Landlord, and will require all insurance policies required hereunder to
contain a waiver of subrogation rights.
4. All increases in insurance costs for the Quickel Building due to
Tenant's extraordinary activities shall be paid by Tenant as additional rent due
under the Lease Agreement and shall be due at the same time Landlord's insurance
premium(s) is due.
ARTICLE VU
Utilities
---------
Landlord and Tenant agree that the Leased Premises is offered on a "full
service" basis, including all utilities and janitorial service five (5) days
weekly, Monday through Friday, 7:00 a.m. to 7:00 p.m. If utility usage outside
of the above stated time periods becomes excessive, Landlord reserves the right
to assess reasonable charges for such use. Tenant hereby agrees and covenants
with Landlord to pay promptly other charges including but not limited to
telephone, television, computer internet, and other services which may be
incurred in connection with Tenant's use of the Leased Premises, and to save
harmless Landlord therefrom.
TDE LA
2/28/01 2/26/01
3
ARTICLE VIII
Parking
-------
Included in the monthly rental, Tenant shall have the exclusive use of
seven (7) parking spaces in the enclosed parking structure and seven (7) parking
spaces in the adjacent outdoor parking area, all as assigned by the Landlord.
ARTICLE IX
Landlord's Right to Subordinate Lease
-------------------------------------
This Lease may, at Landlord's option, be subject and subordinate to the
lien of any trust deed or deeds, mortgages, or liens resulting from any other
method of financing or refinancing herebefore or hereafter placed upon the
Leased Premises, and to all other amounts advanced thereunder or consolidations
and extensions thereof; provided, however, that in the event of any foreclosure
or other suit, sale or proceedings thereunder, Tenant, if not then in default
hereunder will not be made a party to any such suit or proceeding, and the same
shall not affect the rights of the Tenant under this Lease. Tenant agrees to
execute such instruments as may reasonably be requested by any beneficiary or
mortgagee to evidence and make a record of the fact that this Lease is to be
inferior to any such deed of trust or mortgage, but in no event shall Tenant be
obligated to any beneficiary or mortgagee for the obligations of Landlord or its
assigns. Tenant agrees to execute such agreements as may be reasonably requested
by any beneficiary or mortgagee to secure any pledge or assignment of rentals.
ARTICLE X
Tenant's Warranties and Covenants
---------------------------------
Tenant agrees and covenants:
1. To pay rents and all other payments promptly as herein provided to the
address of Landlord shown above or as hereafter designated in writing by
Landlord, and not to withhold payment of any payment due to Landlord, even if a
dispute exists between Tenant and Landlord as to any other issue.
2. To permit no concessionaire or licensee to occupy the Leased Premises.
3. To permit Landlord to advertise the Leased Premises for rent at a
reasonable time before the Lease expires or the tenancy otherwise terminates.
Signs or other devices of said purpose may be placed in or about the Leased
Premises no sooner than ninety (90) days prior to the expiration of the Lease.
In addition, upon reasonable advance notice, to permit Landlord to show the
Leased Premises to prospective tenants during said ninety (90) days period, but
only during regular business hours of the Tenant and only in such a manner so as
not to disrupt Tenant ' s business.
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4. To place signs or exterior additions upon the Leased Premises only after
the same have been approved as to style, number, location and manner of hanging
by the Landlord.
5. T o faithfully and promptly abide by this lease agreement and to perform
all duties of the Tenant required by this lease agreement.
ARTICLE XI
Condition of Premises
---------------------
1. Upon the commencement of the lease term, the Leased Premises shall be
provided by Landlord to Tenant in the same condition as the premises exist on
this date.
2. Tenant shall not make or permit to be made any alterations, additions or
changes to the Leased Premises without the Landlord's prior written consent,
which shall not be unreasonably withheld. All work with respect to permitted
alterations, additions and changes, including lighting fixtures, shelves,
carpeting, tile, mirrors, counters, and all other items attached to the Leased
Premises in any way, shall be done at Tenant's sole expense in a good and
workmanlike manner. All or any part of such alterations, additions or changes
shall be considered as improvements owned by Landlord which shall not be
removable by Tenant. Any such alterations shall comply with all ordinances and
regulations relating thereto. Upon termination of this Lease other than by
default of Tenant, and only if Tenant has faithfully performed all its
obligations to Landlord, Tenant may remove Tenant's removable trade fixtures
which are not affixed to the Leased Premises, provided that Tenant shall restore
the Leased Premises to their original condition, ordinary wear and tear
excepted.
3. Landlord shall not be responsible to make any improvements,
modifications or alterations to the Leased Premises in order to comply with any
governmental requirements, building or fire codes, ordinances, regulations or
laws.
4. At the end of the lease term, Tenant shall peaceably surrender the
Leased Premises in a clean and orderly condition clear and free of damage other
than reasonable wear and tear.
ARTICLE XII
Repair and Maintenance
----------------------
Landlord shall be responsible for and keep the structural members of the
building, the basic electrical, plumbing and other utility systems, and the
exterior walls of the building and the roof in good repair, except where such
repair is necessitated by the act, negligence, or omissions of Tenant or his
employees, customers, guests, agents, or contractors, in which case such repairs
shall be promptly made by Tenant at Tenant's sole expense. It is expressly
understood and agreed that Landlord shall have no obligation to maintain, paint,
clean, repair, or replace interior walls, floor coverings, doors, interior
glass, interior windows, or additions or alterations except where such repair or
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replacement is caused by Landlord's acts or omissions. It is further understood
and agreed that all other obligations of maintenance and repair of the Leased
Premises shall be the Tenant's including, but not by way of limitation, the
floor coverings, non- structural walls, floors and surfaces of all exposed
portions of the interior of the Leased Premises, the security systems, doors and
locks, and interior windows broken or otherwise damaged during the term hereof
Charges incurred in changing either security codes or locks and keys for the
Leased Premises shall be paid for by the Tenant. Tenant shall keep the Leased
Premises in first class condition. Any and all improvements and modifications to
the Leased Premises required by applicable governmental requirements, building
or fire codes, ordinances, regulations, or laws shall be the sole responsibility
of Tenant, and not Landlord.
ARTICLE XIII
Use of Premises
---------------
Tenant shall utilize the Leased Premises exclusively for general office
use, and for no other purpose. The Leased Premises shall not be used for any
other purpose without first obtaining the written consent of Landlord therefore.
Landlord shall not be required to keep other tenants from competing with Tenant.
Tenant shall not use or knowingly permit any part of the Leased Premises to be
used for any unlawful purpose, or for any purpose in violation of applicable
governmental laws, rules or regulations. Tenant shall not permit any act to be
done or any condition to exist on the Leased Premises or any article to be
brought thereon which may be offensive or dangerous, unless safeguarded as
required by law, or which may in law constitute a nuisance, public or private,
or which may make void or voidable any insurance then in force with respect to
the Leased Premises, or which will increase the fate of insurance on the Leased
Premises. Tenant shall not interfere with the business activities of any of the
other tenants of the Quickel Building, and shall at all times conduct Tenant's
business in a reasonable, peaceful and dignified manner, so as to enhance the
general business climate of the Quickel Building. Tenant shall not reside on the
Leased Premises or allow any other person to reside on the Leased Premises.
Absolutely no guard dogs or any pets, animals or birds shall be allowed on the
Leased Premises.
ARTICLE XIV
Pledge, Assignment and Subleasing
---------------------------------
Tenant shall not encumber, pledge or use as collateral in any fashion, any
portion of the Leased Premises. Tenant may not sublet the Leased Premises
without Landlord's written consent. Which consent shall not be unreasonably
withheld, utilizing reasonable commercial standards, provided however, that
Landlord is entering into this Lease Agreement based upon certain
representations made by Tenant, including but not limited to Tenant's intended
use of the Leased Premises, Tenant's proposed style and manner of doing
business, Tenant's financial abilities, and the need for balance and
diversification in the tenant mix. In no event may the Leased Premises be
occupied by multiple tenants, subtenants, licensees or permittees. The refusal
of Landlord to grant consents as aforesaid based on Landlord's need for balance
and diversification of tenants shall be
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deemed a reasonable cause for refusal of such consents. Tenant shall not assign
this Lease. In the event of assignment or sublease, whether authorized or not,
Tenant shall not be released from liability to perform the lease. Landlord
acknowledges that Tenant may sell all or part of its business during the lease
term, subject to the above considerations. In the event of such sale, Tenant
shall not be released from liability to perform the Lease without written
approval of Landlord.
ARTICLE XV
Holding Over
------------
If Tenant shall, with the knowledge and consent of Landlord, continue to
occupy the Leased Premises after the expiration of the term of this Lease,
Tenant shall become for such extension period a Tenant from month to month on
the same terms as herein stipulated for the last month of the former lease term,
plus ten percent (10%). If Tenant holds over after the expiration of the term of
this Lease without Landlord's consent, daily rent shall accrue at ten percent
(10%) of the last month's rent of the previous lease year.
ARTICLE XVI
Damage to Leased Premises by Catastrophe
----------------------------------------
Tenant agrees and covenants with Landlord that if at any time during the
term of this Lease, or any extension or renewal thereof, the said demised Leased
Premises shall be totally or partially destroyed by fire, earthquake, or other
calamity, then Landlord shall have the option to rebuild or repair the same,
provided such rebuilding or repairing shall be commenced within the period of
thirty days after notice in writing to Landlord of such destruction or damage,
and to rebuild or repair the same in as good condition as they were immediately
prior to such calamity. In such case, a just and proportionate part of the rent
herein specified shall be abated until such demised Leased Premises shall have
been rebuilt and repaired. In case, however, Landlord shall, within thirty days
following notice in writing to him of such damage, elect not to rebuild or
repair said Leased Premises, Landlord shall so notify Tenant and, thereupon,
this Lease shall terminate and become null and void.
ARTICLE XVII
Landlord's Liability and Tenant's
---------------------------------
Indemnification of Landlord
---------------------------
The tenant shall assume all liability and shall be solely responsible for
damages which may arise from any accident which occurs in or about the Leased
Premises while this Lease is in force except as otherwise provided by this
Lease, incident to Tenant's use of the Leased Premises. Tenant shall defend and
indemnify Landlord from all claims and suits against Landlord relative to
accidents which occur on or in the Leased Premises. The Tenant agrees to make no
claim against the Landlord for or on account of any loss or damage by reason of
fire, water damage, leakage, failure of heating, air conditioning, electrical or
plumbing systems, or other casualty (including utility breakage or malfunction)
except as provided in this Lease or as may be caused by a breach of any of
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the Landlord's agreements or duties. The Landlord shall not be liable, except
with respect to Landlord's intentional acts, for damage or personal injury or
property damage in or about the Leased Premises while this Lease or any renewal
or extension hereof is in force. This indemnification clause shall not be
construed to create any right of action or basis of claim on behalf of any third
party against either party hereto.
ARTICLE XVIII
Covenant of Quiet Enjoyment
---------------------------
1. So long as the Tenant is not in default hereunder during the base term
hereof and any renewal or extension hereof, the Landlord covenants that the
Tenant shall peaceably and quietly occupy and enjoy the Leased Premises subject
to the terms hereof, except that Landlord may engage in reasonable construction
activities on or near the Leased Premises. The Landlord warrants and agrees to
defend the title to the Leased Premises, and further warrants that he has full
authority to execute this Lease.
2. Tenant shall carefully monitor and control all activities on the Leased
Premises so as to insure that no unreasonable noise or odor from the Leased
Premises is transmitted to the adjacent space.
ARTICLE XIX
Waiver
------
No assent expressed or implied by either party to any breach of any one or
more of the covenants or agreements hereof by the other shall be deemed or
construed to be a waiver of any succeeding or other breach.
ARTICLE XX
Bankruptcy and Condemnation
---------------------------
Tenant hereby agrees and covenants with Landlord that should Tenant, or
anyone of them, make an assignment for the benefit of creditors or should be
adjudged a bankrupt, either by voluntary or involuntary proceedings, or if
otherwise a receiver should be appointed by any court of competent jurisdiction
for Tenant because of any insolvency, the occurrence of any such event shall be
deemed a breach of this Lease, and, in such event, Landlord shall have the
option to forthwith terminate this Lease and re- enter the demised Leased
Premises and take possession thereof, whereupon Tenant shall quit and surrender
peaceably the demised Leased Premises to Landlord. In no event shall this Lease
be deemed an asset of Tenant, or anyone of them, after adjudication in
bankruptcy, the appointment of a receiver, or the assignment for the benefit of
creditors. Further, Tenant hereby covenants and agrees with landlord that in the
event the demised Leased Premises, or any part thereof, are taken, damaged
consequentially or otherwise, or condemned by public authority, this Lease shall
terminate, as to the part so taken, as of the date title shall vest in the said
public authority, and the rent reserved shall be adjusted so that Tenant shall
be required to pay for the remainder of the term that portion of the rent
reserved in the proportion that the demised Leased Premises remaining after the
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taking, damaging, or condemnation bears to the whole of the demised Leased
Premises before the taking, damaging, or condemnation. All damages and payments
resulting from the said taking, damaging, or condemnation of the demised Leased
Premises shall accrue to and belong to Landlord, and Tenant shall have no right
to any part thereof If more than thirty percent (30%) of the demised Leased
Premises becomes unavailable for use for more than thirty (30) calendar days
from written notice due to fire, flooding, condemnation or other event causing
the demised Leased Premises to be uninhabitable, Tenant shall have the right to
cancel this Lease in its entirety with written notification to Landlord.
ARTICLE XXI
Default. Termination. and Remedies
----------------------------------
It is understood and agreed between Landlord and Tenant that if the rent
specified above, or any part thereof, shall be in arrears or unpaid five (5)
days after the first day of the month, then Tenant shall, without notice from
Landlord, be automatically deemed in default.
It is understood and agreed between Landlord and Tenant that if default
shall be made in any of the covenants or agreements contained in this Lease,
other than rent, Landlord will give Tenant thirty- (30) -days written notice
unless Landlord and Tenant mutually agree to extend such period, to cure such
default. If Tenant shall remain in possession of the Leased Premises after the
above required notice period, and such default has not been cured, it shall be
lawful for the Landlord to declare the said term ended and re-enter the Leased
Premises to expel, remove, or put out Tenant; and to repossess and enjoy the
same Leased Premises again as in its first and former state.
If at any time the term shall be declared ended at such election of
Landlord, Tenant agrees to surrender and deliver the Leased Premises peaceably
to the Landlord. If Tenant shall remain in possession of the Leased Premises
after the required notice period specified above, Tenant shall be deemed guilty
of a forcible entry and detainer of the Leased Premises under the laws of the
State of New Mexico and shall be subject to eviction and removal under due
process of law.
It is understood and agreed between Landlord and Tenant that at any time
after such termination the Landlord may re-lease the Leased Premises or any part
thereof, for such term and on such conditions as the Landlord, in his sole
discretion, may determine, and may collect and receive the rent thereafter. In
the event Landlord re-leases the Leased Premises, it is understood and agreed
that the term may be greater or lesser than the period which constituted the
term of this Lease, and the conditions may include free rent or other
concessions which may be reasonably required to induce another party to lease
the Leased Premises. Landlord agrees to work in good faith to re-lease the
Leased Premises to mitigate economic loss to Landlord and Tenant.
It is also understood and agreed that no such termination of this Lease
shall relieve Tenant of its liabilities and obligations under this Lease, and
such liabilities and
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obligations shall survive any such termination. In the event of any such
termination, whether or not the Leased Premises have been re-leased, the total
remaining balance of the rent which would be due and payable for the remainder
of the term of this Lease, less the net proceeds of any re-leasing effected by
the Landlord, shall become due and payable as liquidated damages of Tenant's
default. The net proceeds shall be calculated as the gross dollar amount of the
new lease less any expenses Landlord incurred in re-leasing the Leased Premises
including but not limited to all repossession costs, brokerage commissions,
legal and attorney's fees, alteration costs and expense of preparation for such
re-leasing.
ARTICLE XXII
Expenses of Default: Attorney's Fees
------------------------------------
It is further agreed by and between the parties hereto that Tenant shall
pay and discharge all costs, reasonable attorney's fees, and expenses that shall
arise from enforcing the covenants of this Lease by Landlord, Landlord's heirs,
executors, administrators, assigns or successors in interest. Should Landlord
engage an attorney for the purposes of writing Tenant a notice of default or
other demand, Tenant shall be required to pay Landlord's legal fees therefore in
the amount of two hundred and fifty dollars ($250.00), should Tenant actually be
in default. Also, if Landlord engages an attorney for any default of Tenant or
to review any request of Tenant, including a request to assign or sublet, Tenant
shall pay all Landlord's costs and reasonable attorney's fees thereby incurred.
ARTICLE XXIIII
Failure to Terminate
--------------------
Tenant agrees and covenants with Landlord that failure, neglect, or
omission of Landlord to terminate this Lease for anyone or more breaches of any
of the covenants hereof remaining unresolved, shall not be deemed a consent by
Landlord of such breach and shall not stop, bar, or prevent Landlord from
thereafter terminating this Lease, either for such violation, or for any
unresolved prior or subsequent violation of any covenant hereof.
ARTICLE XXIV
Notice
------
1. All notices to be given with respect to this Lease shall be in writing.
Each notice shall be sent by registered or certified mail, postage prepared and
return receipt requested, or hand delivered to the party to be notified at the
address set forth above, or at such other address as either party may from time
to time designated in writing.
2. Every notice shall be deemed to have been given at the time it shall be
deposited in the United States mail in the manner prescribed herein. Nothing
contained
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herein shall be construed to preclude personal service of any notice in the
manner prescribed for personal service of a summons or other legal process.
3. Notice to Landlord shall be addressed to Landlord at the address set
forth above, or at such other location as may be designated in writing by
Landlord to Tenant. Notice to Tenant shall be addressed to Tenant at the Leased
Premises or at such other location as may be designated in writing by Tenant to
Landlord.
ARTICLE XXV
Right of Landlord to Enter Premises
-----------------------------------
Landlord or its agents or employees may enter upon the Leased Premises for
any purpose at any reasonable times during Tenant's regular business hours or
otherwise during the term of this Lease with reasonable notice to Tenant, or
without such notice and at any time if it is deemed by Landlord to be necessary
for protection of the premises or of adjoining areas in the building Any such
entry or inspection shall be done in such a manner so as to be the least
disruptive to Tenant's business.
ARTICLE XXVI
Landlord's Contractual Security
-------------------------------
Interest and Landlord's Lien
----------------------------
In addition to all other statutory or common law landlord's liens, Landlord
shall at all times have both a valid contractual security interest and
Landlord's lien to secure payment of all rentals and other sums of money
becoming due hereunder from Tenant, and to secure payment of any damages or loss
which Landlord may suffer by reason of the breach by Tenant of any covenant,
agreement or condition contained herein, upon all goods, wares, equipment,
fixtures, furniture, improvements, inventory and all other personal property of
Tenant, presently, or which may hereafter be situated on the Leased
Premises, and all proceeds therefrom. Tenant shall at Landlord's request execute
such security agreements and financing statements as are required by Landlord to
perfect or document Landlord's security interest. Upon the occurrence of an
event of default, as defined in Article XXIII, by Tenant, Landlord may, in
addition to any other remedies provided herein, enter upon the Leased Premises
and take possession of any and all goods, wares, equipment, fixtures, inventory,
improvements and all other personal property of Tenant or any other party
situated on the premises without liability for trespass or conversion, and to
dispose of such items in a reasonable manner as provided for in the New Mexico
Uniform Commercial Code. Landlord's right of lien does not extend to personal
property within the demised Leased Premises.
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ARTICLE XXVII
Unenforceable Provisions
------------------------
If any provisions of this Lease shall be declared invalid or unenforceable,
the remainder of the Lease shall continue in full force and effect.
ARTICLE XXVIII
Genders
-------
Where necessary to carry out the meaning hereof, the singular shall mean
the plural, the singular, and any gender shall apply to all genders.
ARTICLE XXIX
Amendment
---------
The Lease constitutes the total understanding between the parties and no
modification hereof shall be effective except when in writing and signed by all
parties hereto. All previous representations and/or understandings of the
parties are merged into this lease.
ARTICLE XXX
Delays Beyond Landlord's Control
--------------------------------
Whenever Landlord or Tenant are responsible for any action under this
Lease, either shall not be liable or responsible for and there shall be excluded
from the computation of any period of time any delays due to strikes, riots,
acts of God, shortages of labor or materials, delay occasioned by contractors or
subcontractors, governmental laws, regulations or restrictions, or any other
causes of any kind whatsoever which are beyond the reasonable control of the
party, except for payment of rent or other sums owed by Tenant under this lease.
ARTICLE XXXI
Estoppel Certificate
--------------------
Tenant agrees to, from time to time, upon request by Landlord, execute and
deliver to Landlord a statement in recordable form certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as so modified).
ARTICLE XXXII
Headings
--------
The headings of the Articles of this Lease are for convenience only and
shall not limit or affect the enforceability of the terms of this Lease. They
shall not be utilized in interpreting this Lease.
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ARTICLE XXXIII
Sale
----
If Landlord sells the property, such sale shall be subject to all terms and
conditions of this Lease, and the Purchaser shall be required to assume and
perform Landlord's obligations in Landlord's name, place and stead. Landlord
shall be relieved of all liability to Tenant upon such sale. Prior to or after
Landlord's sale of the property, Tenant shall be required to execute an estoppel
letter in standard form to the purchaser, which estoppel letter must be signed,
if the statements contained therein are correct, within ten (10) working days of
presentment to Tenant. Failure to execute such estoppel letter within such time
will constitute an irrevocable acknowledgement that the statements contained in
the unsigned estoppel letter are true and binding upon Tenant.
ARTICLE XXXIV
Applicable Law
--------------
The applicable law governing this Lease and any proceeding resulting from
or arising out of this Lease shall be the law of the State of New Mexico. Any
arbitration or other legal proceeding resulting from or arising out of this
Lease shall be brought in the First Judicial District of Santa Fe County, Santa
Fe, New Mexico.
ARTICLE XXXV
Dispute Resolution
------------------
In any dispute between Landlord and Tenant arising out of this Lease,
Landlord and Tenant hereby agree that such dispute shall be submitted to binding
arbitration before an arbitrator approved by both Landlord and Tenant. If
Landlord and Tenant are unable to agree upon a mutually acceptable arbitrator,
each will appoint one arbitrator of its choice to a three-person arbitration
panel. The third arbitrator shall be selected by the two appointed arbitrators.
The prevailing party shall be entitled to recover from the non-prevailing party
its share of arbitration costs and expenses including reasonable attorney's
fees.
ARTICLE XXXVI
Binding Effect
--------------
This Lease and all agreements herein contained shall bind the parties
hereto and their heirs, personal representatives, successors and assigns.
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IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease effective
on the day and year first above written.
LANDLORD TENANT
/s/ The Lynn Atkison Trust /s/ AutoLend Group, Inc.
---------------------------- ----------------------------
The Lynn Atkison Trust AutoLend Group, Inc.
By: Lynn Atkison, Trustee By: John Emery
Its: Acting President
14