ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "
Agreement
") is made and entered into as of 12:01 a.m. on December 30, 2004
(the "
Effective Time
"), by and between SPEEDEMISSIONS, INC., a Georgia corporation
maintaining an address at 1029 Peachtree Parkway North, Suite 310,
Peachtree City, Georgia 30269 (the "
Purchaser
"),and State Inspection of Texas, Inc. (“the Seller”) a
company organized and existing under the laws of the State of
Texas, maintaining business offices, at 5433 Westheimer Road,
Houston, Texas, ("
Seller
") and Debra Price(the "
Shareholder
") (hereinafter the Seller and the Shareholder are sometimes
referred to, individually as a "
Seller Party
" and collectively as the "
Seller Parties
").
BACKGROUND INFORMATION
Seller is in the business of providing
vehicle emissions testing, vehicle safety inspections
and oil change services (the "
Business
"), and the Shareholder is the owner of all of the capital stock in
Seller. Purchaser has recently acquired from Seller, its Atlanta,
Georgia based mobile vehicle emissions testing services business.
This Agreement sets forth the terms and conditions upon which
Purchaser is acquiring from Seller, and Seller is selling and
delivering to Purchaser.
OPERATIVE PROVISIONS
I
n 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, Seller, the
Shareholder and Purchaser hereby mutually agree as
follows:
1.
SALE AND TRANSFER OF ASSETS; CLOSING
.
1.1.
Assets
. Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (hereinafter defined), Seller shall sell,
convey, assign, transfer and deliver to Purchaser, and Purchaser
shall purchase and acquire from Seller, all of Sellers’
right, title, and interest in and to certain of Seller’s
property and assets, real, personal or mixed, tangible and
intangible, of every kind and description, wherever located as
specifically set forth on
Exhibit A
(the "
Assets
"), but excluding the Excluded Assets (hereinafter defined).
Notwithstanding anything herein to the contrary, the transfer of
the Assets pursuant to this Agreement will remain subject to the
Security Interest presently held by Global Capital Funding Group,
L.P.
1.2.
Excluded Assets
. Notwithstanding anything to the contrary contained in Section 1.1
or elsewhere in this Agreement, the following assets of Seller
(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
Seller after the Effective Time.
1.2.1
all minute books, stock records and corporate seals;
1.2.2
any equity securities of Seller held in treasury;
1.2.3
all personnel records and other records that Seller is required by
law to retain in its possession;
1.2.4
all rights in connection with and assets of any employee benefit
plans maintained by Seller;
1.2.5
cash and bank deposits of Seller as of the Effective
Time;
1.2.6
all rights of Seller under this Agreement; and
1.2.7
all assets, if any, specifically set forth on
Schedule 1.2
.
1.3.
Consideration
. The consideration for the Assets (the "
Purchase Price
") will be One Million Two Hundred Eighty Five Thousand Dollars
($1,285,000.00) to be paid pursuant to the terms of that certain
Promissory Note attached hereto as Exhibit B.
1.4.
Liabilities
. At the Closing, Purchaser shall assume and agree to discharge
only the obligations of Seller including the
Seller’s liabilities to Global Capital Funding Group
, as hereinafter defined (the "
Assumed Liabilities
"). Except for the Assumed Liabilities, Purchaser shall not assume
any Liabilities of Seller or the Shareholder; and Seller 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 or future liability, obligation, debt, account
payable, lease obligation, contract, agreement, duty or commitment
of Seller 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 Seller or the Shareholder.
1.5.
Allocation
. Seller and Purchaser agree that the allocation (the "
Purchase Price Allocation
") of the Purchase Price among the Assets shall be as set forth
on
Schedule 1.5
.
1.6.
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:
1.6.1
Selling Parties' Deliveries at the Closing
. Seller and the Shareholder shall deliver to Purchaser at the
Closing the following items:
|
(i) |
a Bill of Sale from Seller to Purchaser in form and substance
acceptable to Purchaser; |
|
(ii) |
a copy of the resolutions duly adopted by Seller'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
Seller; |
|
(iii) |
unaudited financial statements and management reports for each
monthly financial period subsequent to November 30, 2004 and prior
to the Effective Time; |
|
(iv) |
evidence that any and all security interests covering the Assets
have been released by Seller's lender; and |
|
(v) |
all other documents or instruments required by this Agreement or
reasonably required by Purchaser's counsel to consummate the
Contemplated Transactions. |
1.6.2
Purchaser's Deliveries at the Closing
. Purchaser shall deliver to Seller at the Closing, the following
items:
|
(i) |
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 |
|
(ii) |
all other documents or instruments required by this Agreement or
reasonably required by Purchaser's counsel to consummate the
Contemplated Transactions. |
2.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
PARTIES
. The Seller Parties, 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
.
Seller 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.
Seller 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 Seller. 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 Seller and Shareholder, enforceable in
accordance with their respective terms.
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
Seller’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 Seller or
the Shareholder is a party or by which any of the Assets are bound;
(c) violate by Seller 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
Seller or Shareholder in connection with the execution, delivery
and performance of the Agreement and the Contemplated
Transactions,
except as have been received by Seller or Shareholder prior to the
Closing.
2.3.
Capitalization
. The Shareholder owns 100% of the outstanding capital stock of
Seller free and clear of all encumbrances. No other person has a
contract right, whether by issuance, sale, transfer, or otherwise
to any capital stock of Seller. Seller has no
subsidiaries.
2.4.
Financial Statements
. Seller has delivered to the Purchaser complete and correct copies
of unaudited financial statements of Seller for the period ended as
of November 30, 2004 (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 change in the assets, liabilities, financial
condition or operations of Seller from that reflected in the
Financial Statement for the period ending November 30, 2004 (the
"
Current Financial Statement
"), except changes in the ordinary course of business that have not
been, individually or in the aggregate, materially adverse. Except
to the extent reflected or reserved against or noted in the Current
Financial Statement, Seller 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
Seller’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 Seller 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
. Seller 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) necessary to operate the Business in the manner presently
operated by Sellers and
each of the Assets and the Premises is in good operating condition
and repair, normal wear and tear excepted.
Without limitation the Assets include all of Seller’s right,
title, and interest in and to the following (in each case except
for the Excluded Assets), wherever located:
2.5.1
All of
Seller’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 Seller 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 Seller 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
.
Seller is not a party to any contract under which Seller
paid
(a) $10,000 or more during the 12 month period ending November 30,
2004, (b) received $10,000 or more during the 12 month period
ending November 30, 2004, 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
.
Neither the Seller nor the Shareholder is subject to any contract:
(i) that contains covenants limiting the freedom of Seller or the
Shareholder to compete in any line of business in any geographic
area; (ii) that requires Seller 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 Seller 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
thereunder, 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 Seller Parties,
threatened against or affecting the Assets or the operation of the
Business before any foreign, federal, state, local or other
governmental authority or agency.
2.8
Compliance with Laws
. T
he operation of 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 Seller and/or
the Assets or, to the Sellers’ Parties knowledge, may in the
foreseeable future be made by any such agency.
2.9
Employee Benefit Plans
. Seller 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
E
mployee 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 November 30, 2004, there has been no increase in the
compensation of the employees of Seller.
2.10.2
Employee Relations
. There is no labor strike, dispute, slowdown, stoppage,
similar activity pending or, to the knowledge of the Seller
Parties, threatened against Seller 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 Seller
Parties, threatened before the Equal Employment Opportunity
Commission or any federal, state, or local agency or court against
Seller or the Shareholder pertaining to the Business or the
employees of the Business, and, to the knowledge of the Seller
Parties, 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
Seller 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
.
Seller has in full force and effect worker’s compensation
coverage in each jurisdiction in which Seller is required to
maintain such coverage by applicable state law. Seller has paid or
accrued all workers’ compensation premiums required to be
paid in each jurisdiction in which Seller is required to maintain
such coverage by applicable state law.
2.11
Taxes
. The Seller Parties have filed all required tax returns in
connection with the Assets and the operation of the Business. All
tax returns filed by Seller or the Shareholder in connection with
the Assets and the operation of the Business are true, correct, and
complete. The Seller Parties have 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 Seller or the Shareholder in connection with the
Assets and the operation of the Business, or pursuant to any
assessment received by Seller or the Shareholder. There exists no
proposed tax assessment against Seller or any shareholder of the
Seller in connection with the Assets and the operation of the
Business. All taxes that Seller 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
. Seller has duly complied with, and the Business, the Premises and
all Assets are in compliance in all Environmental Laws (hereinafter
defined); there have been no citations, notices or orders of
noncompliance issued to Seller under any such Environmental Laws.
For the purposes of this Agreement, "
Environmental Law
" means any applicable law, order, regulation, decree, permit,
license, ordinance or other federal. State, county, provincial,
local or foreign governmental requirements in effect as of the
Effective Time relating to pollution, the protection of human
health and the environment, or the spill of any hazardous substance
in the environment. Environmental laws include, but are not limited
to, the following statutes (and their implementing
regulations);Compreh
