SETTLEMENT AGREEMENT AND GENERAL RELEASE
AND
GENERAL RELEASE
This
Settlement Agreement and General Release (“Agreement”) is entered into effective
this 14th day of October, 2005, by and between Global Capital Funding Group,
LP,
a Delaware limited partnership (“GCFG”), GCA Strategic Investment Fund Limited
(“GCA”), Xxxxxx Partners, LP, a Delaware limited partnership (“Xxxxxx”), and
Speedemissions, Inc., a Florida corporation (the “Company”). GCFG, GCA, Xxxxxx,
and the Company shall each be referred to as a “Party” and collectively as the
“Parties.”
RECITALS
WHEREAS,
GCFG is the holder and/or beneficial owner of that certain Speedemissions,
Inc.
Secured Promissory Note dated December 30, 2004, in the principal amount
of
$1,285,000 and in the name of State Inspections of Texas, Inc. (the “GCFG
Note”);
WHEREAS,
GCA is the current owner of the following: i) 2,500 shares of the Company’s
Series A Preferred Stock (the “Series A Preferred Stock”), ii) a warrant to
purchase 2,500,000 shares of the Company’s common stock dated January 26, 2005
(the “Existing Warrant”), and iii) three Speedemissions, Inc. promissory notes,
as follows: (a) a $350,000 principal amount promissory note dated
January
26, 2005 (the “$350,000 Note”), (b) a $300,000 principal amount promissory note
dated August 2, 2001 (the “$300,000 Note”), and (c) a $110,000 principal amount
promissory note dated August 7, 2004 (the “$110,000 Note”);
WHEREAS,
on or about June 30, 2005, pursuant to a Preferred Stock Purchase Agreement
between Xxxxxx and the Company (the “Stock Purchase Agreement”) Xxxxxx purchased
2,500,000 shares of the Company’s Series B Convertible Preferred Stock (the
“Series B Preferred Stock”);
WHEREAS,
after Xxxxxx’x purchase of the Series B Preferred Stock, a dispute arose between
the Parties as to whether the convertibility terms of the Series B Preferred
Stock altered the convertibility terms of the Series A Preferred Stock, and
whether any of the Parties were put on notice regarding the possible change
in
the convertibility terms of the Series A Preferred Stock (the
“Dispute”);
NOW,
THEREFORE, for good and adequate consideration, the receipt of which is hereby
acknowledged, without admitting or denying any wrongdoing by any Party hereto,
the Parties wish to resolve the Dispute in full and therefore, covenant,
promise
and agree as follows:
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AGREEMENT
1. Consideration
of GCFG.
As its
consideration under this Agreement, in full settlement of the Dispute, and
in
exchange for the other Parties’ consideration as set forth herein, upon the
issuance of the GCFG Stock (as defined below), GCFG agrees that all outstanding
amounts (principal and interest) that are due and owing to GCFG from the
Company
under the GCFG Note will be converted into the stock and warrants listed
in
Section 4(a), below, and that all amounts due under the GCFG Note will be
considered satisfied in their entirety. GCFG further agrees to forgo and
extinguish any and all interest payments due to GCFG under the GCFG Note.
As of
October 14, 2005, the Parties agree GCFG is owed a total of $1,409,288.25
($1,285,000 in principal and $124,288.25 in interest) under the GCFG Note.
The
form of the notice of conversion for the GCFG Note is attached hereto as
Exhibit
A
(the
“GCFG Note Notice of Conversion”).
2. Consideration
of GCA.
As its
consideration under this Agreement, in full settlement of the Dispute, and
in
exchange for the other Parties’ consideration as set forth herein, upon the
issuance of the GCA Stock (as defined below), GCA agrees that all outstanding
amounts that are due and owing to GCA from the Company under the following
promissory notes will be converted into the stock and warrants listed in
Section
4(b), below, and that all amounts due under the respective notes will be
considered satisfied in their entirety:
a. $350,000
Note.
As of
October 14, 2005, the Parties agree GCA is owed a total of $369,133.88 ($350,000
in principal and $19,133.88 in interest) under the $350,000 Note. The form
of
the notice of conversion for the $350,000 Note is attached hereto as
Exhibit
B
(the
“$350,000 Note Notice of Conversion”).
b. $300,000
Note.
As of
October 14, 2005, the Parties agree GCA is owed a total of $425,416.45 ($300,000
in principal and $125,416.45 in interest) under the $300,000 Note. The form
of
the notice of conversion for the $300,000 Note is attached hereto as
Exhibit
C
(the
“$300,000 Note Notice of Conversion”).
c. $110,000
Note.
As of
October 14, 2005, the Parties agree GCA is owed a total of $126,154.37 ($110,000
in principal and $16,154.37 in interest) under the $100,000 Note. The form
of
the notice of conversion for the $110,000 Note is attached hereto as
Exhibit
D
(the
“$110,000 Note Notice of Conversion”).
GCA
further agrees: i) to extinguish any and all security interests, whether
or not
they have been perfected, that relate to the above promissory notes; ii)
to the
changes in the rights and preferences of the Series A Preferred Stock, including
a new conversion price of $0.12 per share and no dividend rights, as set
forth
in the Amended Certificate of Designation for the Series A Preferred Stock
(the
“Amended Certificate of Designation”), a copy of which is attached hereto as
Exhibit
E;
iii)
that the issuance of the Series B Preferred Stock does not violate any rights
and preferences of the Series A Preferred Stock; and iv) to surrender the
Existing Warrant in exchange for the Amended Warrant, (as defined
below).
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3. Consideration
of Xxxxxx.
As its
consideration under this Agreement, in full settlement of the Dispute, and
in
exchange for the other Parties’ consideration as set forth herein, Xxxxxx
agrees, as the holder of the Series B Preferred Stock, to the changed terms
of
the Series A Preferred Stock as set forth in the Amended Certificate of
Designation, and that the issuance of the GCFG Shares and the GCA Shares
will
not violate the terms of the Stock Purchase Agreement or other Series B
Preferred Stock rights.
4. Consideration
of the Company.
As its
consideration under this Agreement, in full settlement of the Dispute, and
in
exchange for the other Parties’ consideration as set forth herein, the Company
agrees to the following:
a. Consideration
to GCFG.
In
exchange for GCFG agreeing to convert all amounts due and owing under the
GCFG
Note, the Company will issue GCFC 1,409 shares of Series A Preferred Stock
with
the rights and preferences outlined the Amended Certificate of Designation,
and
a warrant to purchase 24,000,000 shares of the Company’s common stock at an
exercise price of $0.12 per share, as set forth in the warrant attached hereto
as Exhibit
F
(the
“GCFG Warrant”).
b. Consideration
to GCA.
In
exchange for GCA agreeing to the amended rights and preferences of the Series
A
Preferred Stock as set forth in the Amended Certificate of Designation, and
to
convert all amounts due and owing under the $350,000 Note, the $300,000 Note
and
the $110,000 Note, the Company will: i) issue GCA 1,224 shares of Series
A
Preferred Stock with the rights and preferences outlined in the Amended
Certificate of Designation, ii) issue a warrant to purchase 16,000,000 shares
of
the Company’s common stock with an exercise price of $0.12 per share, as set
forth in the warrant attached hereto as Exhibit
G
(the
“GCA Warrant”); and iii) amend the terms of the Existing Warrant to change the
exercise price from $0.24 per share to $0.12 per share, as set forth in the
warrant attached hereto as Exhibit
H
(the
“Amended Warrant”).
c. Consideration
to Xxxxxx.
In
exchange for Xxxxxx agreeing to the issuance of the GCA Stock, the GCA Warrant,
the GCFG Stock and the GCFG Warrant, and to the amended rights and preferences
of the Series A Preferred Stock as set forth in the Certificate of Designation,
the Company will issue Xxxxxx a warrant to purchase 40,000,000 shares of
the
Company’s common stock as set forth in the warrant attached hereto as
Exhibit
I
(the
“Xxxxxx Warrant”).
d. Registration.
The
Company shall, immediately upon execution of this Agreement, undertake to
include the shares of common stock underlying the exercise of the GCFG Warrant,
GCA Warrant, and the Xxxxxx Warrant, and underlying the conversion of the
Series
A Preferred Stock, and will reasonably pursue effectiveness of the registration
statement as set forth in the Registration Rights Agreements entered into
with
GCFG and GCA as of the date hereof.
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5. General
Release.
Effective on the date hereof, the Parties and their respective agents,
affiliates, divisions, predecessors, successors and assigns, hereby release
the
other Parties, and each and all of their present and former agents, officers,
directors, attorneys, and employees, from and against any and all claims,
agreements, contracts, covenants, representations, obligations, losses,
liabilities, demands and causes of action which it may now or hereafter have
or
claim to have against that Party, as a result of the Dispute. This release
of
claims and defenses shall not alter the prospective duties between the Parties
under this Agreement.
6. Acknowledgment
of Effect of Release.
The
Parties acknowledge and agree that this release applies to all claims that
one
Party may have against another Party arising out of, or pertaining to, the
Dispute, including, but not limited to, causes of action, injuries, damages,
claims for costs or losses to a Party’s person and property, real or personal,
whether those injuries, damages, or losses are known or unknown, foreseen
or
unforeseen, or patent or latent. The Parties agree not to file any complaints,
causes of action, or grievances with any governmental, state or county entity
against the other Party arising out of, or pertaining to the
Dispute.
7.
Representations
and Warranties of GCFG.
(a) GCFG
is a
limited partnership duly organized, validly existing and in good standing
under
the laws of the State of Delaware. GCFG has all requisite power and authority
to
carry out the provisions of this Agreement.
(b) All
actions on the part of GCFG, its partners and officers, necessary for the
authorization of this Agreement, the performance of all obligations of GCFG
hereunder, and the authorization to extinguish the GCFG Note, as set forth
herein, have been taken. The Agreement, when executed and delivered, will
create
valid and binding obligations of GCFG enforceable in accordance with their
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, and (b) general principles of equity that
restrict the availability of equitable remedies.
(c) GCFG
acknowledges and represents that
in
executing this Agreement, it has not relied on any inducements, promises,
or
representations made by any Party or any party representing or serving such
Party, unless expressly set forth herein.
(d) GCFG
acknowledges that it is the beneficial owner of the GCFG Note and has the
sole
authority to make decisions regarding the GCFG Note.
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8.
Representations and Warranties of GCA.
(a) GCA
is a
corporation duly organized, validly existing, and in good standing under
the
laws of Bermuda. GCA has all requisite power and authority to enter into
and
carry out the provisions of this Agreement.
(b) All
action on the part of GCA, its partners and officers, necessary for the
authorization of this Agreement, the performance of all GCA’s obligations under
this Agreement, and the authorization to allow the amendments to the rights
and
preferences to the Series A Preferred Stock contained in the Amended Certificate
of Designation and to extinguish the $350,000 Note, the $300,000 Note, and
the
$110,000 Note, as set forth herein have been taken. The Agreement, when executed
and delivered, will create valid and binding obligations of GCA, enforceable
in
accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights, and (b) general
principles of equity that restrict the availability of equitable
remedies.
(c) GCA
acknowledges and represents that
in
executing this Agreement, it has not relied on any inducements, promises,
or
representations made by any Party or any party representing or serving such
Party, unless expressly set forth herein.
(d) GCA
acknowledges that it is the holder of the $350,000 Note, the $300,000 Note
and
the $110,000 Note and has the sole authority to make decisions regarding
those
promissory notes.
9.
Representations
and Warranties of Xxxxxx.
(a) Xxxxxx
is
a limited partnership duly organized, validly existing, and in good standing
under the laws of the State of Delaware. Xxxxxx has all requisite power and
authority to enter into and carry out the provisions of this
Agreement.
(b) Xxxxxx
is
a Delaware limited partnership and all action on the part of Xxxxxx, its
partners and officers, necessary for the authorization of this Agreement,
the
performance of all Xxxxxx’x obligations under this Agreement, and the
authorization to allow the issuance of the GCFG Shares, the GCA Shares, and
the
amendments to the rights and preferences to the Series A Preferred Stock
contained in the Amended Certificate of Designation, pursuant to the terms
set
forth herein have been taken. The Agreement, when executed and delivered,
will
create valid and binding obligations of Xxxxxx, enforceable in accordance
with
their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, and (b) general principles of equity that
restrict the availability of equitable remedies.
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(c) Xxxxxx
acknowledges and represents that
in
executing this Agreement, it has not relied on any inducements, promises,
or
representations made by any Party or any party representing or serving such
Party, unless expressly set forth herein.
10.
Representations
and Warranties of the Company.
(a) The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Florida. The Company has all requisite corporate
power and authority to enter into and carry out the provisions of this
Agreement.
(b) All
corporate action on the part of the Company, its officers and directors,
necessary for the authorization of this Agreement, the performance of all
the
Company’s obligations under this Agreement, and the authorization to issue the
GCFG Shares, the GCA Shares, and allow the amendments to the rights and
preferences to the Series A Preferred Stock contained in the Amended Certificate
of Designation, pursuant to the terms set forth herein have been taken. The
Agreement, when executed and delivered, will create valid and binding
obligations of the Company, enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors’ rights, and (b) general principles of equity that restrict the
availability of equitable remedies.
(c) The
Company acknowledges and represents that
in
executing this Agreement, it has not relied on any inducements, promises,
or
representations made by any Party or any party representing or serving such
Party, unless expressly set forth herein.
11. Confidentiality.
Each
Party hereto will hold and will cause its agents, officers, directors,
attorneys, employees, consultants and advisors to hold in strict confidence,
unless compelled to disclose by judicial or administrative process or, in
the
opinion of its counsel, by other requirements of law, the terms of this
Agreement and all other documents and information concerning any other Party
furnished it by such other Party or its representatives in connection with
the
subject matter hereof or the underlying Dispute (except to the extent that
such
information can be shown to have been (i) previously known by the
Party to
which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) later lawfully acquired from other sources by the Party to
which
it was furnished), and each Party will not release or disclose such information
to any other person, except its auditors, attorneys, financial advisors,
bankers
and other consultants and advisors in connection with this Agreement. Each
Party
shall be deemed to have satisfied its obligation to hold confidential
information concerning or supplied by the other Party if it exercises the
same
care as it takes to preserve confidentiality for its own similar information.
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12. No
Admission of Liability.
This
Agreement pertains to a disputed claim and does not constitute an admission
of
liability by any Party for any purpose, except as otherwise provided
herein.
13. Survival
of Representations and Warranties.
The
representations and warranties contained in this Agreement are deemed to
and do
survive the execution hereof.
14. Amendments.
This
Agreement may not be amended, canceled, revoked or otherwise modified except
by
written agreement subscribed by all of the Parties to be charged with such
modification.
15. Successors.
This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto and their respective partners, employees, agents, servants, heirs,
administrators, executors, successors, representatives and assigns.
16. Attorney’s
Fees.
All
Parties hereto agree to pay their own costs and attorneys’ fees except as
follows:
(a) In
the
event of any action, suit or other proceeding instituted to remedy, prevent
or
obtain relief from a breach of this Agreement, arising out of a breach of
this
Agreement, involving claims within the scope of the releases contained in
this
Agreement, or pertaining to a declaration of rights under this Agreement,
the
prevailing Party shall recover all of such Party’s attorneys’ fees and costs
incurred in each and every such action, suit or other proceeding, including
any
and all appeals or petitions therefrom.
(b) As
used
herein, attorneys’ fees shall be deemed to mean the full and actual costs of any
legal services actually performed in connection with the matters involved,
calculated on the basis of the usual fee charged by the attorneys performing
such services.
17. Material
Terms.
The
Parties agree and stipulate that each and every term and condition contained
in
this Agreement is material, and that each and every term and condition may
be
reasonably accomplished within the time limitations, and in the manner set
forth
in this Agreement.
18. Time
is of the Essence.
The
Parties agree and stipulate that time is of the essence with respect to
compliance with each and every item set forth in this Agreement.
19. Integration.
This
Agreement sets forth the entire agreement and understanding of the Parties
hereto and supersedes any and all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement
or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no Party
hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set
forth.
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20. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which when
executed and delivered shall be an original, and all of which when executed
shall constitute one and the same instrument.
[remainder
of page intentionally left blank; signature page to follow]
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IN
WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute
this
Agreement upon the date first set forth above.
|
“GCFG”
|
“GCA”
|
||
|
Global
Capital Funding Group, L.P,
|
GCA
Strategic Investment Fund Limited,
|
||
|
a
Delaware limited partnership
|
a
Bermuda corporation
|
||
| /s/ Xxxxx X. Xxxxxx | /s/ Xxxxx X. Xxxxxx | ||
|
By: Xxxxx X. Xxxxxx, President of |
By:
Xxxxx
X. Xxxxxx
|
||
|
Global
Capital Management Services,
Inc.
(General
Partner of GCFG)
|
Its:
Director
|
|
“Xxxxxx”
|
“Company”
|
||
|
Xxxxxx
Partners, LP
|
Speedemissions,
Inc.
|
||
|
a
Delaware limited partnership
|
a
Florida corporation
|
||
| /s/ Xxxxxx Xxxxxx Xxxxxx | /s/ Xxxxxxx Xxxxxxxxxxx | ||
|
By: Xxxxxx Xxxxxx Xxxxxx |
By:
Xxxxxxx
Xxxxxxxxxxx
|
||
| Its: President |
Its:
President
|
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Exhibit
A
GCFG
Note Notice of Conversion
Exhibit
B
$350,000
Note Notice of Conversion
Exhibit
C
$300,000
Note Notice of Conversion
Exhibit
D
$110,000
Note Notice of Conversion
Exhibit
E
Amended
Certificate of Designation
Exhibit
F
GCFG
Warrant
Exhibit
G
GCA
Warrant
Exhibit
H
Amended
Warrant
Exhibit
I
Xxxxxx
Warrant
