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
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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
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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
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Jeffrey Ovington, Exec. Vice-President