STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (the "Agreement")
is
made and entered into as of 9:00 a.m. on June 30, 2005 (the "Effective
Time"),
by
and between SPEEDEMISSIONS, INC., a Florida corporation maintaining an address
at 0000 Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx Xxxx, Xxxxxxx 00000
(the
"Purchaser"),and
Mr. Sticker, Inc. a company organized and existing under the laws of the
State
of Texas, maintaining business offices, at, 0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx
Xxxxxxx, Xxxxx 00000 (the "Company")
and
Xxxxx X. Xxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxx (collectively, the "Shareholder")
(hereinafter the Company and Shareholder are sometimes referred to, and
collectively as the ("Company
Parties").
BACKGROUND
INFORMATION
Company
is in the business of providing vehicle emissions testing and vehicle
safety services
(the "Business"),
and
the Shareholder is the owner of all of the capital stock in Company. This
Agreement sets forth the terms and conditions upon which Purchaser is acquiring
Company from Company Parties and Company Parties are selling and delivering
Company to Purchaser.
OPERATIVE
PROVISIONS
In
consideration of the mutual covenants and conditions hereinafter set forth,
and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, Company Parties and Purchaser hereby mutually agree
as
follows:
1. SALE
AND TRANSFER OF SHARES; CLOSING.
1.1. Upon
the
terms and subject to the conditions set forth in this Agreement, at the Closing
(hereinafter defined), Shareholder shall sell, convey, assign, transfer and
deliver to Purchaser, and Purchaser shall purchase and acquire from Shareholder,
all of the outstanding shares of Company (the "Shares") which represent all
of
the issued and outstanding capital stock of Company
1.2. Excluded
Assets.
Notwithstanding anything to the contrary contained in Section 1.1 or elsewhere
in this Agreement, the following assets of Company (collectively, the
"Excluded
Assets")
are
not part of the sale and purchase contemplated hereunder, are excluded from
the
Assets and shall remain the property of Shareholder after the Effective
Time.
1.2.1 2001
- ¾
ton Dodge Ram 2500 diesel w/4-wheel drive
1.2.2 2003
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ton Dodge Ram 2500 diesel w/4-wheel drive
1.2.3 The
real
property and improvements located at:
00000
Xxxxxxx Xxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
1.2.4 The
real
property and improvements located at:
0000 XX 0000, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
1.3. Consideration.
The
consideration for the Shares (the "Purchase
Price")
will
be Three Million One Hundred Thousand and no/100 U.S. Dollars ($3,100,000.00)
to
be paid immediately after closing of this transaction with funds being sent
to
Shareholder via bank wire transfer.
1.4. Liabilities.
At the
Closing, Purchaser shall assume and agree to discharge only the obligations
of
Company, as hereinafter defined (the "Assumed
Liabilities").
Except for the Assumed Liabilities, Purchaser shall not assume any Liabilities
of the Shareholder; and Company shall pay, perform and discharge all of such
Liabilities in accordance with their terms. For purposes of this Agreement,
the
term "Liabilities"
means
any existing , obligation, debt, account payable, lease obligation, contract,
agreement, duty or commitment of Company or Shareholder of any kind, character
or description, whether known or unknown, absolute or contingent, accrued
or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not the
same is
required to be accrued on the financial statements of the Shareholder.
1.5. Closing.
The
closing (the "Closing")
of the
transactions contemplated by this Agreement (the "Contemplated
Transactions")
shall
take place contemporaneously with the execution of this Agreement in the
offices
of the Purchaser. At
the
Closing the parties shall deliver the following documents:
1.5.1 Selling
Parties' Deliveries at the Closing.
The
Shareholder shall deliver to Purchaser at the Closing the following
items:
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(i)
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All
certificates representing the Shares, duly endorsed in blank as
assigned
to Purchaser;
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(ii)
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The
Company's corporate minute book and all company records, books,
and
materials;
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(iii)
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A
copy of the resolutions duly adopted by Company's Board of Director
and
Shareholder authorizing the execution, delivery, and performance
of this
Agreement and the consummation of the Contemplated Transactions,
certified
by an officer of Company;
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(iv)
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Unaudited
financial statements and management reports for year end 2004 and
financial period subsequent to June 1, 2005 and prior to the Effective
Time;
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(v)
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The
Certificate of the Secretary of the Company certifying as true
and correct
a copy of the Articles of Incorporation and bylaws, and all amendments
thereto, of the Company, dated as of the date of
Closing;
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(vi)
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A
certified copy of the Articles of Incorporation of the Company
and a
certificate of good standing as to the Company, issued not more
than
fifteen (15) days prior to the Closing by the Secretary of State
of the
State of Texas;
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(vii)
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The
written resignations of all directors and officers of the Company
effective as of the Closing;
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(viii)
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Signature
cards for all bank and investment accounts of the Company removing
the
current signatories and adding the signatories specified by
Purchaser;
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(ix)
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All
other documents or instruments required by this Agreement or reasonably
required by Purchaser's counsel to consummate the Contemplated
Transactions.
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1.5.2 Purchaser's
Deliveries at the Closing.
Purchaser shall deliver to Company Parties at the Closing, the following
items:
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(i)
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A
copy of the resolutions duly adopted by the Board of Directors
of
Purchaser authorizing the execution, delivery, and performance
of this
Agreement and the consummation of the Contemplated Transactions,
certified
by an officer of Purchaser; and
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(ii)
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All
other documents or instruments required by this Agreement or reasonably
required by Purchaser's counsel to consummate the Contemplated
Transactions.
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2. REPRESENTATIONS
AND WARRANTIES OF THE SHAREHOLDER.
The
Shareholder, jointly and severally, represent and warrant to Purchaser as
follows, which representations and warranties shall survive the consummation
of
the Contemplated Transactions:
2.1. Organization;
Power; Authority.
Company
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Texas, with full power and authority to carry
on
the Business as now being conducted and to own, operate and lease (as the
case
may be) the Assets
and to
perform all of its obligations. Company
has the corporate power and authority to sell, assign, transfer, convey and
deliver to Purchaser the Assets as contemplated by this Agreement, and the
execution, delivery and performance of this Agreement and the Contemplated
Transactions have been properly and duly authorized by Company. Shareholder
has
the authority to enter into this Agreement and consummate the Contemplated
Transactions. This Agreement and all other agreements executed in connection
with the Contemplated Transactions constitute, or will constitute upon
execution, the legal, valid and binding obligations of Company and Shareholder,
enforceable in accordance with their respective terms.
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2.2. No
Conflict or Violation;
Approvals.
The
execution, delivery and performance of this Agreement and the Contemplated
Transactions will not (a) violate or conflict with Company's articles of
incorporation or by-laws; (b) cause a breach of, or a default under, or create
any right for any party to accelerate, terminate, modify or require notice
under
or cancel, any contract, permit, authorization or concession that Company
or the
Shareholder is a party or by which any of the Assets are bound; (c) violate
by
Company or Shareholder any law, rule, regulation, constitution, injunction,
judgment, order, decree, ruling or other restriction of any government,
government agency or court; or (d) impose any encumbrance, restriction or
charge
on the Business or on any of the Assets. No consent, approval or authorization
of, or declaration, filing or registration with, any authority, or any other
person or entity, is required to be made or obtained by Company or Shareholder
in connection with the execution, delivery and performance of the Agreement
and
the Contemplated Transactions, except
as
have been received by Company or Shareholder prior to the Closing.
2.3. Capitalization.
The
Shares represent 100% of the outstanding capital stock of Company, and are
owned
by Shareholder free and clear of all Liens (as defined below). No other person
has a contract right, whether by issuance, sale, transfer, or otherwise to
any
capital stock of Company. Company has no subsidiaries.
2.4. Financial
Statements.
Company
will have delivered to the Purchaser complete and correct copies of unaudited
financial statements of Company for the two month period ended May 31, 2005
(the
"Financial
Statements").
The
Financial Statements were prepared in accordance with GAAP consistently applied
throughout the periods indicated; are consistent with the books and records
of
the Business; and present fairly the financial condition and results of
operations of the Business as of the date thereof and the period then ended.
There has not been any substantive change in the assets, liabilities, financial
condition or operations of Company from that reflected in the Financial
Statement for the period ending May 31, 2005 (the "Current
Financial Statement"),
Except to the extent reflected or reserved against or noted in the Current
Financial Statement, Company had, as of the date thereof, no material
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise, including without limitation tax liabilities, whether incurred
in
respect to or measured by Company's income for any period prior to the date
of
such Current Financial Statement, or arising out of transactions entered
into,
or any set of facts existing prior thereto. There exists no basis for the
assertion against Company or the Business as of the date hereof or as of
the
date of the Current Financial Statement, of any material liability of any
nature
or in any amount not fully reflected or reserved against or noted in the
Current
Financial Statement.
2.5. Title.
Company's
assets, real, personal or mixed, tangible and intangible, of every kind and
description, wherever located as specifically are set forth on Exhibit
A
(the
"Assets"),
but
excluding the Excluded Assets. Company
has good and marketable title to all of the Assets, free and clear of all
liens,
assignments, security interests, claims, mortgages, encumbrances or charges
of
any kind or nature ("Liens").
As of
the Effective Time, Purchaser shall acquire good and marketable title to
all of
the Assets free and clear of all Liens. The Assets constitute all of the
assets
(tangible and intangible, and including, but not limited to, all intellectual
property assets) reasonably necessary to operate the Business in the manner
presently operated by Company and
each of
the Assets and the Premises, disclosed in Schedule
2.5,
is in
good operating condition and repair, normal wear and tear excepted. Without
limitation the Assets include all of Company's right, title, and interest
in and
to the following (in each case except for the Excluded Assets), wherever
located:
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2.5.1 All
of
Company's
emissions testing, oil change and safety inspection equipment (collectively,
the "Equipment"),
including, without limitation, the Equipment disclosed in Schedule
2.5.1.
2.5.2 All
inventories of the Company and all goods and supplies, in each case to the
extent used directly or indirectly in or otherwise relating primarily to
the
Business (the "Inventory").
All
items included in the Inventory consist of a quality and quantity usable
and,
with respect to finished goods, saleable, in the ordinary course of business
of
Company except for obsolete items and items of below-standard quality, all
of
which have been written off or written down to net realizable value in the
Financial Statements, as the case may be.
2.6 Material
Contracts.
Company
is not a party to any contract under which Company paid (a)
$10,000 or more during the 12 month period ending May 31, 2005, (b) received
$10,000 or more during the 12 month period ending May 31, 2005, or (c) would,
absent this Agreement and the Contemplated Transactions, reasonably expect
to
pay or receive $10,000 or more for the 12 month period immediately following
the
Effective Time.
The
Company
Parties' are not subject to any contract: (i) that contains covenants limiting
the freedom of Company Parties' nor the Shareholder to compete in any line
of
business in any geographic area; (ii) that requires Company Parties' to share
any profits, or requires any payments or other distributions based on profits,
revenues or cash flows; (iii) pursuant to which third parties have been provided
with products that can be returned to Company in the event they are not sold
and
which could involve products valued at $10,000 or more (invoice price) in
the
aggregate; or (iv) that has had or, assuming that Purchaser complies with
its
obligations there under, may in the future have a material adverse effect
upon
the business, earnings, financial condition, or prospects of
Purchaser.
2.7 Litigation.
There
are no claims, actions, suits, proceedings or investigations pending or,
to the
knowledge of the Company Parties', threatened against or affecting the Company
or Company's assets of the operation of the Business before any foreign,
federal, state, local or other governmental authority or agency.
2.8 Compliance
with Laws.
The
operations of the Company, the Business and the Assets conform to the
requirements of all applicable laws, rules, orders, ordinances, decrees and
regulations of all governmental agencies, whether national, state or local,
having jurisdiction there-over, and no material claim alleging nonconformity
or
noncompliance with respect to such matters has been made or threatened against
Company and/or the Assets or, to the Company Parties knowledge, may in the
foreseeable future be made by any such agency.
2.9 Employee
Benefit Plans.
Company
has no formal or informal health, dental, vision, life, retirement, profit
sharing, deferred compensation, pension, stock options, sick leave or sick
time
employee benefit plans in effect.
2.10 Employee
Matters.
2.10.1 List
of Personnel.
Schedule
2.10.1
contains
a true and complete list of the names and current compensation levels of
all
active employees involved in the Business. Since March 31, 2005 there has
been
no increase in the compensation of the employees of Company.
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2.10.2 Employee
Relations.
There
is no labor strike, dispute, slowdown, stoppage, or similar activity pending
or,
to the knowledge of the Shareholder, threatened against Company pertaining
to
the Business or the employees involved in the Business. There are no charges,
investigations, administrative proceedings, or formal complaints of
discrimination (including discrimination based upon sex, age, marital status,
race, national origin, sexual preference, handicap or veteran status) pending
or, to the knowledge of the Shareholder, threatened before the Equal Employment
Opportunity Commission or any federal, state, or local agency or court against
Company or the Shareholder pertaining to the Business or the employees of
the
Business, and, to the knowledge of the Shareholder, no basis for any such
charge, investigation, administrative proceeding, or complaint
exists.
2.10.3 No
Liabilities or Obligations.
Except
as reflected on the Financial Statements, Company has no liabilities or
obligations to any beneficiaries, governmental authorities, or any other
parties
arising out of or relating to any employee claims.
2.10.4 Worker's
Compensation Insurance Coverage and Claims. Company
has in full force and effect worker's compensation coverage in each jurisdiction
in which Company is required to maintain such coverage by applicable state
law.
Company has paid or accrued all workers' compensation premiums required to
be
paid in each jurisdiction in which Company is required to maintain such coverage
by applicable state law.
2.11 Taxes.
The
Company Parties have filed, as of the effective time all required tax returns
in
connection with the operation of the Company and the operation of the Business.
All tax returns filed by Company or the Shareholder in connection with the
Assets and the operation of the Business are true, correct, and complete.
The
Company Parties have, as of the effective time paid, or made provision for
the
payment of, all taxes that have or may have become due pursuant to tax returns
that are or were required to be filed by Company or the Shareholder in
connection with the Assets and the operation of the Business, or pursuant
to any
assessment received by Company or the Shareholder. There exists no proposed
tax
assessment against Company or Shareholder of the Company in connection with
the
Assets and the operation of the Business. All taxes that Company or the
Shareholder is required to withhold or collect in connection with the operation
of the Assets and the Business have been duly withheld or collected and,
to the
extent required, have been paid to the proper governmental body or other
person.
2.12 Environmental
Matters.
The
Company does not currently, nor has ever operated any business at any currently
leased or owned premises related to hazardous substances such as petroleum,
petroleum by-products, and any other chemicals, materials, substances or
wastes
which are currently defined or regulated as "hazardous" substances, hazardous
materials, hazardous wastes, toxic pollutants, toxic air pollutants or
contaminants. Therefore, to the best of the Shareholder's
knowledge, there are no material environmental matters.
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2.13 Broker's
or Finder's Fees.
Neither
of the Company
Parties has incurred, nor will either of them incur, directly or indirectly,
any
liability for brokerage or finders' fees or any similar charges in connection
with this Agreement or the Contemplated Transactions.
2.14 Material
Misstatements or Omissions.
No
representations or warranties by the Company Parties in this Agreement, nor
any
document, exhibit, statement, certificate or schedule furnished to Purchaser
pursuant hereto, contains, or with respect to other documents to be delivered
by
the Company Parties at Closing, will contain any untrue statement of a material
fact, or omits to state any material fact necessary to make the statements
or
facts contained therein not misleading.
2.15 Information;
Suitability.
The
Shareholder,
along
with their advisors, have such knowledge and experience in financial and
business matters that the Shareholder
are
capable of evaluating the merits and risks of the Purchase Price consideration
and the Contemplated Transactions, and the Shareholder
have
sought such accounting, legal and tax advice as the Shareholder
has
considered necessary to make an informed decision with respect to the
Contemplated Transactions and have determined that the Purchase Price
Consideration and other terms and conditions of the Contemplated Transaction
are
fair and reasonable to the Shareholder.
2.16 Intention.
The
Shareholder
has
not
entered into this Agreement or agreed to complete the Contemplated Transactions
with the actual intent to hinder, delay, or defraud any creditor of the Company
Parties.
2.17 Value
of Assets.
The
Shareholder
has
received reasonably equivalent value in exchange for the obligations to be
undertaken pursuant to the Contemplated Transactions. Giving effect to the
Contemplated Transactions, the fair market value of the Company's assets
exceeds
the Company's' total liabilities, whether accrued, absolute, contingent or
otherwise. Giving effect to the Contemplated Transactions, the fair market
value
of the assets of the Company exceeds total liabilities, whether accrued,
absolute, contingent or otherwise. The Company's assets do not and, immediately
following the Contemplated Transactions, will not, constitute unreasonably
small
capital to carry out the Company's business as conducted or as proposed to
be
conducted. The assets of the shareholders or equity owners of the Company
do not
and, immediately following the Contemplated Transactions, will not, constitute
unreasonably small capital to carry out the business of the shareholder of
the
Company as conducted or as proposed to be conducted.
2.18 No
Bankruptcy.
No
petition in bankruptcy has been filed against either the Company or the
Shareholder or any affiliate of either of them during the last seven years,
and
neither the Company, the Shareholder nor any affiliate of either of them
in the
last seven years has ever made an assignment for the benefit of creditors
or
taken advantage of any insolvency act for the benefit of debtors. Neither
the
Company Parties nor any affiliate of the Company Parties is contemplating
the
filing of a petition under any state or federal bankruptcy or insolvency
laws.
None of the Company Parties has any knowledge of any person contemplating
the
filing of any such petition against it or an affiliate of the Company
Parties.
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3. REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Shareholder as follows:
3.1 Organization
and Power.
Purchaser is a duly organized and validly existing Florida corporation.
Purchaser has the power and authority to carry on its business as now being
conducted and to own, operate and lease its properties in the places where
such
business is now conducted and where such properties are now owned, leased
or
operated.
3.2 Authorization.
The
execution, delivery and performance of this Agreement by Purchaser and the
consummation of the Contemplated Transactions by the Purchaser have been
duly
authorized by the Purchaser. This Agreement constitutes the legal, valid
and
binding obligation of Purchaser, enforceable in accordance with its
terms.
3.3 Broker's
or Finder's Fees.
Purchaser
has not incurred, nor will it incur, directly or
indirectly,
any liability for brokerage or finders' fees or any similar charges in
connection with this Agreement or the Contemplated Transactions.
4. COVENANTS.
4.1 Non-Compete
Agreement.
The
Shareholder severally, covenants and agrees that for a period of two years
following the Effective Time, the Shareholder shall not individually or through
any other Person or Affiliate of the Shareholder, engage directly or indirectly
in any Competitive Business anywhere in the Restricted Territory, whether
such
engagement be as an employer, officer, director, owner, investor, employee,
partner, consultant or other participant in any Competitive Business. For
purposes of this Agreement, "Person"
shall
mean a corporation, partnership, trust, limited liability company, association,
or other business entity or an individual. "Affiliate"
shall
mean another Person controlled by, controlling, or under common control with
the
Shareholder.
"Competitive
Business"
means
any
business that is similar to the Business.
"Restricted
Territory"
shall
mean the 5 county Houston trade area for emissions testing and safety
inspections as defined by the Texas Department of Public Safety ,which is
where
Company's facilities and employees and the majority of the Company's customers
are located. The Company Parties acknowledge and agree that, given the nature
of
Company's business, the restrictions set forth in this Section 4 are necessary
and reasonable in terms of the activities restricted, as well as the geographic
and temporal scope of such restrictions. The Shareholder
further
acknowledge and agree that if any of the provisions of this Section 4 shall
ever
be deemed to exceed the time, activity, geographic, or other limitations
permitted by applicable law, then such provisions shall be and hereby are
reformed to the maximum time, activity, geographic, or other limitations
permitted by applicable law. The provisions of Paragraph 4.1 shall continue
in
effect so long as the Purchaser continues to operate the state inspection
business as defined by the Texas Department of Public Safety, on the real
property described herein in paragraphs 1.2.3 and 1.2.4. In the event Purchaser
ceases to operate said business within a period of two (2) years after close,
of
this transaction, this provision is no longer effective.
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4.2 Non-Solicitation.
For a
period of two years following the Effective Time (a) the Shareholder
shall
not
individually or through any other Person or Affiliate of the Shareholder,
solicit
for employment or hire any employee of the Purchaser without the prior written
consent of the Purchaser, or (b) solicit Competitive Business from any entity
who was an active or prospective customer of the Purchaser during the first
two
years following the Effective Time. In the event Purchaser discontinues
operations of a state inspections business as defined by the Texas Department
of
Public Safety on the real property described in paragraphs 1.2.3 and 1.2.4,
within a period of two (2) years after close of this transaction, this provision
is no longer effective.
4.3 Confidentiality.
The
Shareholder
shall
not
divulge or appropriate for its or their own use any Trade Secrets of the
Purchaser or the Company, during or after the Effective Time, for as long
as the
information remains a Trade Secret, and shall not make any unauthorized
disclosure of Confidential Information about the Purchaser or Company for
a
period of three years after the Effective Time. Notwithstanding the foregoing,
(a) the Shareholder
may
make
any copies of, distribute, or use any such Confidential Information as necessary
to prepare for the completion of the Contemplated Transactions, and (b) the
Shareholder
may
disclose Confidential Information and Trade Secrets to the extent disclosure
is
mandated by the legal requirements of the Shareholder
and
to
professional advisors, directors, and senior executives as reasonably necessary.
This Agreement may also be disclosed to third parties if reasonably necessary
to
secure consents or approvals to consummate the Contemplated Transactions.
"Trade
Secrets"
shall
mean any information of the Company or Purchaser (including but not limited
to
technical or non-technical data, a formula, a pattern, a compilation, a program,
a device, a method, a technique, a drawing, a process, financial data, financial
plans, product plans, or a list or actual or potential customers or suppliers)
which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and is the subject
of
efforts that are reasonable under the circumstances to maintain its secrecy.
For
purposes of this Agreement, "Confidential
Information"
means
any valuable, non-public, competitively sensitive information (other than
Trade
Secrets) concerning the Company or the Purchaser's financial position, results
of operations, annual and long-range business plans, product or service plans,
marketing plans and methods, training, educational and administrative manuals,
client lists and employee lists obtained by the Shareholder
during
their employment with or ownership of the Company; provided, however, that
Confidential Information shall not include information to the extent that
it is
or becomes publicly known or generally utilized (other than because of the
unauthorized disclosure of such information by the Shareholder
or
their
affiliates) by others engaged in the same business or activities in which
the
Company or Purchaser utilized, developed or otherwise acquired such information.
This provision is deemed not effective in the event Purchaser discontinues
operations of a state inspections business as defined by the Texas Department
of
Public safety at the real property defined in paragraphs 1.2.3 and 1.2.4,
within
a period of two (2) years after the close of this transaction.
4.4 Cooperation.
The
Shareholder,
on the
one hand, and Purchaser, on the other hand, shall cooperate fully with each
other and their respective employees, legal counsel, accountants and other
representatives and advisers in connection with the steps required to be
taken
as part of their respective obligations under this Agreement; and shall,
at any
time and from time to time after the Effective Time, upon the request of
the
other, do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney, receipts, acknowledgments,
acceptances and assurances as may be reasonably required to satisfy and perform
the obligations of such party hereunder, and to allow Purchaser to operate
the
Business after Closing in substantially the same the manner in which it was
operated before the Closing. Without limiting the foregoing, the Shareholder
agrees
to
work with Purchaser on a full-time basis for a period of up to 90 days following
the Closing at no cost to assist with the transition of the Business to
Purchaser, and the Shareholder agrees to work with Purchaser following this
90
day period on a consulting basis as reasonably agreed to by the Purchaser
and
the Shareholder.
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4.5 Funds
Received After Closing.
Any and
all funds received by Company after the Closing in respect of the Business,
other than amounts received in respect of the Excluded Assets, shall be remitted
to the Purchaser immediately upon receipt. Any and all funds received by
the
Purchaser after Closing in respect of the Excluded Assets shall be remitted
to
the Shareholder immediately upon receipt.
4.6 Emissions
Testing Equipment.
For a
period of two (2) years following the Effective Time, Shareholder shall not
directly or indirectly, use any operational emission analyzers or dynamometers
in the conduct of any business within the Restricted Territory. The restrictive
provisions in paragraphs 4.1, 4.2 and 4.3 are deemed non-enforceable as per
the
stipulations in above noted paragraphs.
4.7 Liabilities.
All
liabilities with respect to the operation of the Business not otherwise provided
for herein which are paid or become payable after the Closing (hereinafter
defined) shall be allocated between Purchaser and Company according to the
accounting period to which they relate. Items relating to a time prior to
the
Effective Time shall be paid by Company and those relating to a time thereafter
shall be paid by Purchaser. Obligations for taxes, rent, utilities, telephone
service and other items which relate to a period prior to and after the
Effective Time, will be prorated as of the Effective Time between Purchaser
and
Company.
4.8 Certain
Employment Related Matters.
Prior
to the Closing, Purchaser will meet with Xxxxx Xxxx to finalize an arrangement
to maintain his employment. Purchaser will retain all employees as of day
of
close. All employees are employed by the Purchaser on an "at-will" basis
and may
be terminated at any time with our without cause.
4.9 Tax
Matters.
4.9.1 The
Shareholder shall pay all taxes of whatsoever kind or nature imposed by the
United States or by any state, municipality, subdivision or instrumentality
of
the United States or by any other tax authority (including all applicable
penalties and interest, "Taxes") arising from or relating to the Contemplated
Transactions if any, due as a result of the purchase, sale or transfer of
the
Shares in accordance herewith whether imposed by law on the Shareholder.
Shareholder shall indemnify, reimburse and hold harmless the Purchaser in
respect of the liability for payment of or failure to pay any such Taxes
or the
filing of or failure to file any reports required in connection
therewith.
4.9.2 Shareholder
on the one hand, and Purchaser, on the other hand, agree to furnish or cause
to
be furnished to each other, upon request, such information and assistance
(including access to books and records) relating to Company and the Purchaser
as
is reasonably necessary for the preparation of any return, claim for refund
or
audit, and the prosecution or defense of any claim, suit or proceeding relating
to any proposed adjustment.
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5. INDEMNIFICATION.
5.1 Survival
of Representations.
Each
representation, warranty, covenant and agreement made by any party within
this
Agreement or pursuant hereto shall survive the Closing forever. All statements
contained herein and in any certificate, schedule, list and other document
described pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties within the meaning
of this
Section.
5.2 Indemnification
of Purchaser.
The
Shareholder, jointly and severally, shall indemnify and hold harmless Purchaser
against and in respect of all demands, claims, actions, liabilities, damages,
losses, judgments, assessments, costs and expenses (including without limitation
interest, penalties and attorney fees) (individually a "Claim"
and
collectively the "Claims")
asserted against, resulting to, imposed upon or incurred by Purchaser, directly
or indirectly, and arising out of or resulting from (a) a breach of any
representation, warranty, covenant or agreement made or to be performed by
the
Shareholder under this Agreement, (b) any requirement that Purchaser satisfy
or
perform any Liability of Company or the Shareholder that is not an Assumed
Liability, (c) any fraud or willful misconduct by the Shareholder in connection
with this Agreement or the Contemplated Transactions.
5.3 Notification.
Purchaser if seeking indemnification hereunder shall hereinafter be referred
to
as the "Indemnified
Party"
and the
Shareholder shall hereinafter be referred to as the "Indemnifying
Parties".
The
Indemnified Party shall, upon becoming aware or being put on notice of the
existence of a Claim with respect to which the Indemnifying Parties may be
entitled to indemnification pursuant to this Section 5, promptly notify the
Indemnifying Parties in writing of such matter. The failure of the Indemnified
Party to notify the Indemnifying Parties of any Claim with respect to which
the
Indemnified Party may be entitled to indemnification hereunder will not relieve
the Indemnifying Parties of any liability that it may have to the Indemnified
Party except to the extent the Indemnifying Parties are materially prejudiced
thereby; provided, that the Indemnified Party shall be deemed to have notified
the Indemnifying Party by giving written notice of any such Claim to the
Shareholder.
5.4 Settlement
and Defense of Claims.
Except
as hereinafter provided, upon receiving notice thereof in accordance with
the
provisions of Section 5.3 hereof, the Indemnifying Parties shall have the
right
to settle at its own cost and expense all Claims which are susceptible of
being
settled or defended, and to defend, through counsel of its own choosing and
at
its own cost and expense, any third party action which may be brought in
connection therewith; provided, that the Indemnifying Parties shall be required
to keep the Indemnified Party fully and currently informed of all settlement
negotiations and of the progress of any litigation; and provided further
that
the Indemnified Party shall have the right to fully participate in the defense
or settlement of any Claim at its own expense, except for its reasonable
attorneys fees which shall be paid by the Indemnifying Parties, if a third
legal
counsel chosen by the legal counsel of the Indemnified Party determines that:
(a) there are or may be legal defenses available to such Indemnified Party
that
are different from or additional to those available to Indemnifying Parties
and
which could not be adequately advanced by counsel chosen by the Indemnified
Party, or (b) a conflict or potential conflict exists between Indemnifying
Parties and such Indemnified Party that would make such separate representation
advisable. The Indemnifying Parties shall not, without the prior written
consent
of the Indemnified Party, which consent shall not unreasonably be withheld,
settle or compromise or consent to the entry of any judgment in any pending
or
the threatened claim, action or proceeding to which such Indemnified Party
is a
party.
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5.5 Cooperation
of Indemnified Party.
The
Indemnified Party shall cooperate with the Indemnifying Parties in connection
with the settlement or defense of any Claim. In addition, except as hereinafter
provided, the Indemnified Party shall not pay or voluntarily permit the
determination of any Claim while the Indemnifying Party is negotiating the
settlement thereof or litigating the Claim, except with the prior written
consent of the Indemnifying Party.
5.6 Assumption
by Indemnified Party.
Notwithstanding anything contained herein to the contrary, the Indemnified
Party
may, by releasing the Indemnifying Party from liability to him or it with
respect to such Claim, take over and assume the settlement and defense of
any
Claim.
5.7 Purchaser
Indemnification.
In no
event shall the Purchaser have any liability whatsoever to the Company Parties
in connection with Section 5 of this Agreement or otherwise.
6. General
Provisions.
6.1 Expenses.
Each
party shall pay its own legal, accounting and other expenses.
6.2 Headings.
Headings are for convenience and are not admissible as to
construction.
6.3 Notices.
All
notices or other communications required or permitted to be given pursuant
to
this Agreement shall be in writing and shall be considered as properly given
or
made if hand delivered, mailed from within the United States by certified
or
registered mail, or sent by overnight courier or delivery service or facsimile
transmission to the applicable address appearing in the preamble to this
Agreement, or to such other address as either party may have designated by
like
notice forwarded to the other party hereto. All notices, except notices of
change of address, shall be deemed given three business days after they have
been mailed by certified of registered mail, one business day if they have
been
mailed by overnight courier or delivery service, or immediately if they have
been hand delivered or faxed, and notices of change of address shall be deemed
given when received. Notice shall be sent to the following addresses, unless
otherwise changed as set forth herein:
If
to
Shareholder: Xxxxx
X.
Xxxxx
______________________
______________________
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If
to
Purchaser:
Speedemissions,
Inc.
Attn: Xxxx Xxxxxxxxxxx
0000
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxx, Xxxxxxx 00000
6.4 Severability.
Every
provision of this Agreement is intended to be severable. If any term or
provision hereof is illegal or invalid for any reason whatever, such illegality
or invalidity shall not affect the validity of the remainder of this
Agreement.
6.5 Application
of Law.
This
Agreement, and the application or interpretation thereof, shall be governed
exclusively by its terms and by the laws of the State of Texas.
6.6 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
6.7 Arbitration.
Any
controversy or claim arising out of or relating to this Agreement or any
related
agreement shall be settled by arbitration in accordance with the following
provisions:
6.7.1 The
agreement of the parties to arbitrate covers all disputes of every kind relating
to or arising out of this Agreement or any of the Contemplated Transactions.
Disputes include actions for breach of contract with respect to this Agreement,
as well as any claim based upon tort or any other causes of action relating
to
the Contemplated Transactions, such as claims based upon an allegation of
fraud
or misrepresentation and claims based upon a federal or state statute. In
addition, the arbitrators selected according to procedures set forth below
shall
determine the arbitrability of any matter brought to them, and their decision
shall be final and binding on the parties, and judgment upon the award may
be
entered in any court of competent jurisdiction in the United States. The
forum
for the arbitration shall be Houston, Texas and the governing law for the
arbitration shall be the law of the State of Texas, without reference to
its
conflicts of laws provisions. There shall be three arbitrators, unless the
parties are able to agree on a single arbitrator. In the absence of such
agreement within 10 days after the initiation of an arbitration proceeding,
Shareholder shall select one arbitrator and Purchaser shall select one
arbitrator, and those two arbitrators shall then select, within 10 days,
a third
arbitrator. If those two arbitrators are unable to select a third arbitrator
within such 10 day period, a third arbitrator shall be appointed by the
commercial panel of the American Arbitration Association. The decision in
writing of at least two of the three arbitrators shall be final and binding
upon
the parties. Each party shall bear its own fees and expenses with respect
to the
arbitration and any proceeding related thereto and the parties shall share
equally the fees and expenses of the American Arbitration Association and
the
arbitrators.
6.7.2 The
arbitration shall be administered by the American Arbitration Association.
The
rules of arbitration shall be the Commercial Arbitration Rules of the American
Arbitration Association, as modified by any other instructions that the parties
may agree upon at the time, except that each party shall have the right to
conduct discovery in any manner and to the extent authorized by the Federal
Rules of Civil Procedure as interpreted by the federal courts. If there is
any
conflict between those rules and the provisions of this section, the provisions
of this section shall prevail.
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6.7.3 The
arbitrators shall be bound by and shall strictly enforce the terms of this
Agreement and may not limit, expand or otherwise modify its terms. The
arbitrators shall not have power to award damages in connection with any
dispute
in excess of actual compensatory damages and shall not multiply actual damages
or award consequential or punitive damages.
6.8 No
Third-Party Beneficiaries.
Nothing
expressed or referred to in this Agreement will be construed to give any
person
or entity other than the parties to this Agreement any legal or equitable
right,
remedy or claim under or with respect to this Agreement or any provision
of this
Agreement.
6.9 Legal
Fees and Costs.
If a
legal action is initiated by any party to this Agreement against another,
arising out of or relating to the alleged performance or non-performance
of any
right or obligation established hereunder, or any dispute concerning the
same,
each party shall
pay
its own legal
fees and
costs.
6.10 Binding
Agreements; Non Assignability.
Each of
the provisions and agreements herein contained shall be binding upon and
inure
to the benefit of the personal representatives, heirs, devisees and successors
of the respective parties hereto; but none of the rights or obligations
attaching to either party hereunder shall be assignable, unless specifically
noted.
6.11 Entire
Agreement; Waiver.
This
Agreement of the parties hereto with respect to the subject matter hereof,
and
no amendment, waiver, modification or alteration of the terms hereof shall
be
binding unless the same be in writing, dated subsequent to the date hereof
and
duly approved and executed by each party. No failure or delay by any party
in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other
or
further exercise thereof of the exercise of any other right, power or privilege.
The rights and remedies herein shall be cumulative and not exclusive of any
right or remedies provided by law.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement effective as of the day and year first
above written.
| "PURCHASER" | "COMPANY" |
| SPEEDEMISSIONS, INC. | MR. STICKER, INC. |
| By: /s/ Xxxx Xxxxxxxxxxx | /s/ Xxxxx X. Xxxxx |
|
Xxxx
Xxxxxxxxxxx, President/CEO
|
Xxxxx X. Xxxxx, President |
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| "SHAREHOLDER" | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
|
Xxxxx Xxxxx |
||
| "SHAREHOLDER" | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxx | |
|
Xxxxxxx Xxxxx |
||
| "SHAREHOLDER" | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxx | |
|
Xxxxx X. Xxxxx |
||
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LIST
OF SCHEDULES
| Schedule 1.2 |
Excluded
Assets
|
(enclosed) |
| Schedule 2.5 | Premises | (received and on file) |
| Schedule 2.5.1 | Equipment | (received and on file) |
| Schedule 2.10.1 | Personnel | (received and on file) |
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SCHEDULE
1.2
EXCLUDED
ASSETS
| 1.2.1 |
¾
ton Dodge Ram diesel w/4-wheel drive - VIN 0X0XX00000X000000 /
Texas
License No. 4WGR59
|
| 1.2.2 |
¾
ton Dodge Ram diesel w/4-wheel drive - VIN 3DFKVU28683G734179 /
Texas
License No. 7YRK72
|
| 1.2.3 |
Property
located at 00000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxx
00000
|
|
Property
is 0.33554 acres of a 3.14896 tract of land in the X. Xxxxxxx
Survey,
A.645 of Xxxxxx
County
|
| 1.2.4 |
Property
located at 0000 XX 0000, Xxxxxxx, Xxxxx
00000
|
|
Property
is 0.4782 acres of land out of the T.B. unrestricted Reserve
("A")
jurisdiction of Xxxxxx
County
|
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