GENERAL RELEASE AND
MEMBERSHIP INTEREST ISSUANCE AGREEMENT
This General Release and Membership Interest
Issuance Agreement (the “ Agreement ”) is made
and entered into as of July 8, 2008 (the “Effective
Date”) by and between Auto Acquisition Inc.,
a Delaware corporation (“ AAI ”), Brian
M. Wood , an individual (“ Wood ”), and
EV Rental Cars, LLC , a California limited
liability company (the “ Company ”)
(collectively, the “ Parties ”).
RECITALS
A. Wood is presently employed by AAI.
B. Pursuant to an agreement and plan of merger
being negotiated by and between the Company and IMMS, Inc., a
Nevada corporation (“ IMMS ”), the Company is
contemplating a reorganization whereby a wholly-owned subsidiary of
IMMS would be merged with and into the Company, with the Company
being the surviving entity and becoming a wholly-owned subsidiary
of IMMS (the “ Proposed Merger ”).
C. The Company is assembling a new senior
management team to manage IMMS after the closing of the Proposed
Merger and desires to secure Wood’s employment prior to the
closing of the Proposed Merger.
D. Wood desires to become employed by IMMS after
the closing of the Proposed Merger according to the terms and
conditions of the employment agreement attached as
Exhibit “ A
” hereto (the “ Employment Agreement
”).
E. AAI desires to release the Company, IMMS and
Wood from any and all obligations owed to AAI, including those
obligations arising from Wood’s employment with AAI, and from
any restrictions (contractual or otherwise) of Wood being employed
by IMMS, the Company, or any of their respective
affiliates.
F. In consideration of Wood’s execution of
the Employment Agreement, and the execution of this Agreement by
the Parties, the Company desires to issue limited liability company
membership interests to AAI.
NOW , THEREFORE , for and in
consideration of the mutual covenants and promises set forth herein
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1.
Execution of Employment
Agreement. Wood
shall execute the Employment Agreement concurrently with the
execution of this Agreement.
2.
Release. Subject to the execution of the Employment
Agreement by Wood, and except for any obligations created under
this Agreement, AAI, on behalf of itself, its assigns, agents,
insurers, employees, partners, members, shareholders,
representatives, accountants, attorneys, guarantors, predecessors,
successors and all other persons or entities acting by, through, or
in concert with it (the “ Releasing Parties ”),
hereby fully release and discharge the Company, IMMS and Wood of
and from any and all obligations owed to the Releasing Parties,
including those obligations arising from Wood’s employment
with AAI, and from any restrictions (contractual or otherwise) of
Wood being employed by IMMS, the Company, or any of their
respective affiliates, any actions, causes of action, in law or
equity, in contract or in tort, under the statutes or laws of the
United States or any state or other jurisdictions, lawsuits and all
necessary and indispensable counterclaims, debts, claims,
contracts, agreements, promises, liability, claims, demands,
obligations, or damages the Releasing Parties have against the
Company, IMMS and Wood as of the date of this Agreement. The
releases set forth in this paragraph are and shall be complete,
irrevocable and unconditional releases with respect to the matters
being released, including both known and unknown claims, and the
Releasing Parties hereby release all rights reserved to them under
statutes of any jurisdiction that might restrict or limit the
release of unknown claims.
3.
Waiver of California
Civil Code Section 1542. The Releasing Parties acknowledge that they have
been made aware of and expressly waive any and all rights under
Section 1542 of the California Civil Code, which provides as
follows:
“A general release does not extend to
claims which the creditor does not know or suspect to exist in his
or her favor at the time of executing the release, which if known
to him or her must have materially affected his or her settlement
with the debtor.”
The Releasing
Parties waive and release any rights that either may have under
Section 1542 to the full extent that all such rights may lawfully
be waived. The Releasing Parties each understand and acknowledge
that the significance and consequence of this waiver of Section
1542 is that (a) even if a Party should eventually suffer
additional damage, loss or injury arising out of the facts and
circumstances of this Agreement, Wood’s employment with the
Company or the termination of Wood’s employment with AAI, the
Releasing Parties will not be able to make any claim for those
damages, losses or injuries; and (b) the Releasing Parties will not
be able to make any claim for any damage, loss or injury which may
exist as of the date of this Agreement, but which the Releasing
Parties may not know or realize to exist and which if known, would
materially affect the Releasing Parties’ decision to execute
this Agreement, regardless of whether that lack of knowledge is the
result of ignorance, oversight, error, negligence or any other
cause.
4.
Voluntary
Release. This Agreement and the releases included
herein are freely and voluntarily executed by the Releasing
Parties, after having been apprised of all relevant information and
applicable law. The Releasing Parties, in executing this Agreement,
have not relied upon any inducements, promises or representations
made by any other Party, their representatives or their attorneys
or advisors which have not been specifically incorporated in
writing into the terms of this Agreement. The Releasing Parties
have read this Agreement and have had its terms and consequences
explained by their respective attorneys, or if they have not
consulted with an attorney, have waived this right and voluntarily
accept the Agreement, with its terms and consequences, as
written.
5.
Issuance of Company
Membership Interests. Provided that (i) Wood executes the Employment
Agreement, (ii) this Agreement has been executed by all Parties,
and (iii) the representations and warranties and other information
provided in paragraphs 6 through 9 below are true and accurate as
of the Effective Date and remain true and accurate as if the date
of the issuance by the Company of the membership interests, the
Company agrees to issue limited liability company membership
interests equivalent to 8.130081% of the Company (the “
Company Membership Interests ”) to AAI immediately
prior to the closing of the Proposed Merger. The releases, issuance
of the Company Membership Interests, execution of the Employment
Agreement by Wood and any other transactions contemplated by this
Agreement shall be deemed to have occurred immediately prior to the
closing of the Proposed Merger, if the closing of the Proposed
Merger shall occur. Notwithstanding anything to the contrary
contained herein, if the Proposed Merger shall not have closed by
July 31, 2008, this Agreement and the Employment Agreement shall be
null and void, and the Company shall not be obligated to issue the
Company Membership Interests to AAI. If and when the Proposed
Merger closes, it is the understanding of the Parties that the
Company Membership Interests would be substantially equivalent to
1,500,000 shares of restricted IMMS common stock; however, there
can be no assurance that the Proposed Merger will close and the
Company expressly makes no representations or warranties to
that effect.
6.
AAI Representations and
Warranties. AAI
represents and warrants to, and covenants with, the Company as
follows:
a. AAI has received and had the opportunity to
review documents containing current information on the Company, and
has been given access to full and complete information regarding
the Company, and has utilized such access to AAI’s
satisfaction for the purpose of obtaining such information
regarding the Company as the AAI has requested; and, particularly,
AAI has been given reasonable opportunity to ask questions of, and
receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Company Membership
Interests and to obtain any additional information, to the extent
available;
b. Except for information heretofore furnished to
AAI, no representations or warranties have been made to AAI by the
Company, any selling agent of the Company, or any agent, employee,
or affiliate of the Company or such selling agent;
c. AAI believes that an investment in the Company
Membership Interests is suitable for AAI based upon AAI’s
investment objectives and financial needs. AAI (i) has adequate
means for providing for AAI’s current financial needs and
personal contingencies; (ii) has no need for liquidity in this
investment; (iii) at the present time, can afford a complete loss
of such investment; and (iv) does not have an overall commitment to
investments which are not readily marketable that is
disproportionate to AAI’s net worth, and AAI’s
investment in the Company Membership Interests will not cause such
overall commitment to become excessive;
d. AAI has such knowledge and experience in
financial and business matters that AAI is capable of evaluating
the merits and risk of an investment in the Company Membership
Interests and has the net worth to undertake such risks;
e. AAI was not offered or sold the Company
Membership Interests, directly or indirectly, by means of any form
of general advertising or general solicitation, including, but not
limited to, the following: (1) any advertisement, article, notice
or other communication published in any newspaper, magazine, or
similar medium of or broadcast over television or radio; or (2) to
the knowledge of the undersigned, any seminar or meeting whose
attendees had been invited by any general solicitation or general
advertising;
f. AAI has obtained, to the extent AAI deems
necessary, AAI’s own personal professional advice with
respect to the risks inherent in the investment in the Company
Membership Interests, and the suitability of an investment in the
Company Membership Interests in light of AAI’s financial
condition and investment needs;
g. AAI recognizes that the Company Membership
Interests as an investment involves a high degree of
risk;
h. AAI understands that the Company’s
determination that the exemption from the registration provisions
of the Securities Act of 1933, as amended (the “ Act
”), which is based upon non-public offerings and applicable
to the offer and sale of the Company Membership Interests, is
based, in part, upon the representations, warranties, and
agreements made by AAI herein; and AAI consents to the disclosure
of any such information, and any other information furnished to the
Company, to any governmental authority, self-regulatory
organization, or, to the extent required by law, to any other
person;
i. AAI realizes that (i) the investment in the
Company Membership Interests is a long-term investment; (ii) AAI
must bear the economic risk of investment for an indefinite period
of time because the Company Membership Interests have not been
registered under the Act or under the securities laws of any state
and, therefore, the Company Membership Interests cannot be resold
unless they are subsequently registered under said laws or
exemptions from such registrations are available; (iii) there is
presently no public market for the Company Membership Interests and
AAI may be unable to liquidate AAI’s investment in the event
of an emergency, or pledge the Company Membership Interests as
collateral for a loan; and (iv) the transferability of the Company
Membership Interests is restricted and (A) requires conformity with
the restrictions contained in paragraph 7 below and (B) legends
will be placed on the instruments representing the Company
Membership Interests referring to the applicable restrictions on
transferability;
j. AAI was not organized for the specific purpose
of acquiring the Company Membership Interests;
k. This Agreement has been duly authorized by all
necessary action on the part of AAI, has been duly executed by an
authorized officer or representative of AAI, and is a legal, valid
and binding obligation of AAI enforceable in accordance with its
terms; and
l. AAI has such knowledge and experience in
financial and business matters so as to be capable of evaluating
the merits and risks of an investment in the Company Membership
Interests and protecting AAI’s own interests in this
transaction, and does not desire to utilize the services of any
other person in connection with evaluating such merits and
risks.
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