EXHIBIT 6.30
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated this 26th day of February, 1999,
between ▇▇▇▇▇ ▇▇▇▇▇▇ Towing, Robert's Towing, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇
("Sellers"), and 1-800 AutoTow, Inc., a Delaware corporation ("ATOW") and ▇-▇▇▇
▇▇▇▇▇▇▇ Gulf Coast East, Inc., ("ATOW SUB"), a Florida corporation
("Purchasers"). Sellers desire to sell to Purchasers and Purchasers desire to
purchase from Sellers certain of the Assets (as defined below) of Sellers, upon
the terms and conditions set forth below.
Therefore, in consideration of the covenants, representations,
warranties and agreements contained in this Agreement, the receipt and
sufficiency of which are acknowledged, the parties intending to be legally
bound, covenant and agree as follows:
1. Definitions. The following words shall mean, when used in
this Agreement:
(a) "Assets" shall mean all of the rights and assets of the
Sellers, whether real, personal or mixed, tangible or
intangible, which are used in or relate to the vehicle towing
business of Sellers located and operated at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "premises"), excluding cash and
accounts receivable, and including but not limited to the
following: the goodwill associated with the business, all
permits, licenses, agreements and rights associated with the
premises, machinery and equipment, tools and tooling,
inventory including trucks, repair equipment and other related
products, office equipment and supplies, cash registers,
furniture and furnishings, telephone and other communication
systems, computer hardware and software systems, all contracts
and agreements made on behalf of Sellers pertaining to its
business and books of account, files, ledgers, vendor lists,
customer records, operations manuals, confidential
information, papers and records pertaining to its businesses
at the premises.
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(b) "Closing" shall mean the events which take place for the
purpose of the consummation of this Agreement, the same to
occur at the offices of ATOW on or before June 30, 1999.
2. Sale and Transfer of Assets. Upon the terms and subject to the
conditions set forth in this agreement, Sellers agree to sell, transfer, assign,
grant, convey and deliver to ATOW SUB, at Closing, free and clear of all
mortgages, liens, security interests, pledges, charges and other encumbrances
except those specifically set forth on attached Exhibit A, and ATOW SUB agrees
to purchase from Sellers, at Closing, all of Sellers' Assets, except those
Assets excluded above. The parties expressly agree that after the execution of
this agreement but prior to the final Closing, on or before, June 30, 1999, the
encumbrances listed on Exhibit A may change. Therefore, the encumbrances
scheduled with the final Closing documents will be the encumbrances assumed in
this transaction. The parties also expressly agree that the name ▇▇▇▇▇ ▇▇▇▇▇▇
Towing and Robert's Towing shall be assets transferred by Sellers to ATOW SUB.
3. Assumption of Liabilities or Obligations. Except for the obligations
which are specifically set forth on Exhibit A to this agreement and expressly
assumed by ATOW SUB, ATOW and ATOW SUB have not assumed, and are not assuming,
any liability or obligation of Sellers of any nature, known or unknown, existing
or contingent, including but not limited to any liabilities or obligations with
respect to any employees of Sellers other than as specifically provided in this
Agreement. All liabilities of Sellers other than those specified shall continue
to be the sole responsibility of Sellers, which shall pay and discharge all of
such liabilities as they come due. Sellers agree to indemnify and hold ATOW and
ATOW SUB harmless from and against any loss, liability, damage, cost or expense
in respect of any liabilities or obligations which have not been specifically
assumed by ATOW SUB pursuant to this Agreement. The parties expressly agree that
after the execution of this agreement but prior to the final closing, on or
before, June 30, 1999, the liabilities or obligations listed on Exhibit A may
change. Therefore, the liabilities or obligations scheduled with the final
Closing documents will be the liabilities or obligations assumed in this
transaction.
4. Payment for the Assets.
(a) The purchase price for the Assets shall be $550,000 less the
assumption of liabilities as set forth in Exhibit A, up to
$157,000.
(b) A non-refundable cash deposit of $25,000 to be paid on
February 26, 1999 upon both parties execution of this
agreement. See Exhibit 4 (b).
(c) The purchase price paid at Closing shall be $125,000 less the
deposit referenced in (b) above.
(d) ATOW shall also transfer to Sellers at Closing ATOW Common
Stock in an amount equal to $268,000.00 dollars at the average
closing stock price for the previous ten days trading prior to
executing this Agreement. The shares issued to the Sellers
will be restricted as to their sale to Rule 144.
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(e) The Purchase Price shall be allocated among the Assets by
Sellers and ATOW in accordance with attached Exhibit ▇.
▇▇▇▇▇▇▇ and ATOW agree that they will report the sale of the
Assets for income tax purposes in accordance with the
allocations set forth above.
(f) Any sales tax, use tax, excise tax, transfer tax, recording
fee or other tax or fee imposed upon the transfer of the
Assets from Sellers to ATOW SUB shall be paid by Sellers.
5. Instruments of Transfer. Sellers agree to execute and deliver to
ATOW such instruments of transfer, assignment and conveyance as shall be
necessary in the judgment of ATOW to vest in ATOW SUB good and marketable title
to the Assets free and clear of all mortgages, liens, security interests,
pledges, charges and other encumbrances except as specifically set forth in
Exhibit A except as specifically set forth in Exhibit A subject to the
provisions of (2) above. Such instruments of transfer shall include but not be
limited to a ▇▇▇▇ of Sale in the form of attached Exhibit C, a sub-lease
agreement (Exhibit D) for the premises. Further, ATOW and ATOW SUB agree that
▇▇▇ ▇▇▇▇▇▇▇ shall be employed by ATOW SUB pursuant to an employment agreement
attached hereto as Exhibit E.
6. Representations and Warranties of Sellers. Sellers represent,
warrant and agree to and with ATOW SUB as follows:
(a) Sellers have all requisite power and all necessary permits,
certificates, contracts, approvals and other authorizations
required by any and all federal, state, city, county or other
municipal bodies to own, lease, use and operate its properties
and to conduct its business in the manner in which such
business is presently conducted.
(b) The execution, delivery and performance of this Agreement have
been duly authorized by the Sellers, and Sellers have the
complete and unrestricted power and authority, and has taken
all action necessary, to enter into, execute and deliver this
Agreement and to perform all of its obligations hereunder.
(c) Upon execution and delivery of it on the part of Sellers and
ATOW SUB, this Agreement shall constitute the valid and
legally binding obligation of Sellers enforceable in
accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights. This Agreement does not
violate any law or regulation and does not conflict with any
other agreement affecting Sellers or the Assets.
(d) The representations made in Exhibit F hereto are correct and
accurately reflect the business conducted at the premises. The
Sellers understand that the Purchasers are relying on the
accuracy of these representations to evaluate the value of the
assets being acquired on a going concern basis and Sellers
warrant that this is a true and accurate statement of the
Sellers' financial history and condition. The Sellers agree
that they will pay, settle, or otherwise dispose of all their
liabilities, both current and contingent, not being assumed by
ATOW SUB, in such a manner as to not damage or diminish the
value of the assets being acquired including, but not limited
to trademarks, trademarks, contracts, and goodwill.
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(e) Sellers have good and marketable title to all of the Assets,
free and clear of all mortgages, liens, security interests,
pledges, charges or other encumbrances except those set forth
on Exhibit A subject to the provisions of (2) above. In the
event that any of Sellers' Assets are encumbered other than as
set forth on Exhibit A or otherwise modified in accordance
with the provisions of (2) above, payment of such encumbrances
shall be made by Sellers at Closing out of the proceeds
received from the sale of the Assets.
(f) Exhibit I contains a list of all agreements, commitments and
contracts, written or oral, pertaining to the Assets and to
which Sellers are a party, which (i) are not terminable on 30
days' notice or less without any obligation of Sellers, and
(ii) which are either individually or in the aggregate
material to Sellers.
(g) There is no action, suit, proceeding, inquiry or investigation
at law or in equity, or before any court, arbitrator, public
board or body, pending or threatened against Sellers in which
an unfavorable decision, ruling or finding would in any way
adversely affect the transaction contemplated by this
Agreement or the business, assets or financial condition of
Sellers.
(h) Sellers are not obligated under any contract or agreement or
subject to any charge or other restriction which materially
and adversely affects the business, assets or financial
condition of Sellers. Sellers are not in violation or default
under any indenture, contract, lease or agreement to which it
is a party or by which the Assets are bound or with respect to
any law, regulation, rule, order, writ, injunction or decree
of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, nor will the execution, delivery and
performance of this Agreement cause or result in any such
violation or default or result in the creation of any lien,
claim, pledge or encumbrance or any kind upon any of the
Assets of Sellers.
(i) Sellers have filed all federal, state and local income,
franchise, capital stock, sales or use, excise, property or
other tax returns which are required to be filed by Sellers
and has paid all taxes as shown on such returns and on any
assessment received by Sellers and all other taxes payable
without requiring the filing of any return. Such tax returns
are correct and complete and Sellers have not received any
notice of any proposed tax deficiency.
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(j) All of the Assets are adequately insured against loss and all
insurance policies relating to them will be assigned to ATOW
SUB, if ATOW SUB so requests.
(k) All tangible Assets of Sellers are in good order and repair
and in good operating condition, reasonable wear and tear
excepted, and suitable for the uses for which intended.
(l) Sellers are not subject to any order of any court or
governmental authority or agency, nor is there any legal
action, governmental proceeding or investigation pending or
threatened or known to Sellers to compel Sellers to make any
material change in the character or location of any of the
assets or that would materially and adversely affect the
assets or which could subject Sellers to any fine, forfeiture
or other sanction.
(m) With respect to the premises, Sellers have not engaged in, or
allowed third parties to engage in, any actions, and Sellers
have no knowledge of any fact or condition, which would
constitute a violation of the National Environmental Policy
Act, 42 USCA, Section 4321 et seq., the Resource Conservation
Recovery Act (RCRA) 42 USCA, Section 6901 et seq., the
Comprehensive Environmental Response Compensation and
Liability Act (CERCLA) 42 USCA, Section 6911 et seq., or any
regulations promulgated by the United States Environmental
Protection Agency pursuant to those Acts, or any applicable
state or local environmental law, regulation or order. Sellers
shall be solely responsible, and ATOW or ATOW SUB shall have
no liability, for any and all liability resulting from such
violation which occurs prior to the Closing, even if the
violations are not discovered until after the date of the
final Closing documents. Any such liability shall include but
not be limited to, any costs, penalties, assessments, expenses
or fees, including reasonable attorneys' fees, incurred by
ATOW or ATOW SUB in connection with bringing the premises into
full compliance with applicable environmental laws, statutes,
ordinances, rules and regulations.
(n) The only persons (including, but not limited to, governmental
authorities and agencies, creditors of Sellers, parties to
leases and subleases or any other instruments or agreements to
which Sellers are a party or by which it is bound) whose
approval or consent to the execution, delivery and performance
of this Agreement by Sellers is legally or contractually
required are specified on attached Exhibit G, and the
approvals and consents of all such persons will be duly
obtained by Closing, or alternatively, waived in writing by
ATOW SUB and obtained by Sellers promptly after Closing, in
which event the transfer under this Agreement relating to the
subject matter of such consent shall be deemed to be
conditional on receipt of such consent.
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(o) Neither this Agreement nor any Exhibit or financial statement,
certificate or other written material furnished by or on
behalf of Sellers contain any untrue statement of a fact or
omits to state a fact necessary in order to make the
statements contained in it not misleading. There is no fact
known to Sellers which materially and adversely affects the
business or financial condition of Sellers or the assets which
has not been set forth in this Agreement or in any Exhibit, or
financial statement, certificate or other written material
furnished pursuant to it.
(p) The parties agree that the terms and conditions of this
Agreement are highly confidential in nature and both the
Purchasers and Sellers agree not to disclose the terms and
conditions of this Agreement without the written consent of
the other, unless such disclosure is required by law.
Violation of this provision may, at the discretion of the
other party, be cause for termination and the non-disclosing
party shall be entitled to damages in an amount equal to the
costs of its due diligence including staff, attorney,
accounting, travel, and related expenses. The Sellers
recognize that this non-disclosure provision shall not extend
to regulatory requirements of the Security an Exchange
Commission or to any filing in connection with a Registration
Statement or other required filing.
(q) Except as contemplated in this Agreement, since the most
recent fiscal year end, the Sellers have conducted their
business only in the ordinary course of business and there
have not been any material changes with respect to the
Sellers. Without limiting the generality of the foregoing,
since that date, the Sellers have not:
(i) sold, assigned, transferred, mortgaged, pledged,
subjected to lien, or entered into any conditional
sale or other title retention agreement with respect
to any of the assets being purchased;
(ii) entered into any agreement with any labor union or
association representing any employee or made any
wage or salary increase or bonus, or increase in any
other direct or indirect compensation or employment
agreement, for any of its officers, directors or
employees.
7. Representations and Warranties of ATOW and ATOW SUB. ATOW and ATOW
SUB represent, warrant and agree as follows:
(a) ATOW and ATOW SUB are corporations duly organized, validly
existing and in good standing under the laws of the State of
Delaware and Florida respectively.
(b) ATOW and ATOW SUB have the power and authority, and have taken
all action necessary to enter into, execute and deliver this
Agreement and to perform all of its obligations under it.
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(c) Upon execution and delivery of it on the part of Sellers, ATOW
and ATOW SUB, this Agreement shall constitute the valid and
legally binding obligation of ATOW and ATOW SUB, enforceable
in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally. This Agreement
does not violate any law or regulation pertaining to ATOW and
ATOW SUB and does not conflict with any other agreement
affecting ATOW and ATOW SUB.
(d) ATOW SUB hereby assumes all liability, on the first business
day after the Closing, under the leases and subleases with
respect to the premises (subject to the provisions of Section
6), and ATOW SUB shall indemnify and hold harmless Sellers and
any of their officers, directors and shareholders who
personally guaranteed the performance of Sellers under them.
8. Survival of Representations; Indemnification. The representations,
warranties, covenants and agreements contained in this Agreement shall survive
Closing, regardless of any investigations made by or on behalf of, or knowledge
of, any of the parties. Sellers agree to indemnify ATOW and ATOW SUB, its
successors and assigns, against, and hold them harmless from and in respect of,
any loss, liability, damage, cost or expense accruing from or resulting by
reason of any falsity or breach of the representations, warranties, covenants or
agreements made or to be performed by Sellers pursuant to this Agreement. ATOW
and ATOW SUB agree to indemnify Sellers, their successors and assigns, against,
and hold them harmless from and in respect of, any loss, liability, damage, cost
or expense accruing from or resulting by reason of any falsity or breach of the
representations, warranties, covenants or agreements made or to be performed by
ATOW and ATOW SUB pursuant to this Agreement. For the purposes of this
indemnification, ATOW and ATOW SUB shall have the right to recoup any amount
paid to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ as a result of a non-assumed claim or
liability.
9. Compliance with Bulk Sales. Sellers and ATOW SUB agree to waive
compliance with any applicable laws of the State of Florida pertaining to Bulk
Transfers. In consideration of such waiver, and without limiting any provisions
of Section 8, Sellers agree to indemnify and hold harmless ATOW and ATOW SUB
from and against, and allow ATOW or ATOW SUB to set off against amounts due to
Sellers, any and all losses, liabilities, claims, damages or expenses, including
attorneys' fees, arising as a result of claims or demands by third parties
against Sellers in connection with its operation of its business prior to
Closing.
10. Non-Compete Agreement.
(a) Prohibited Activities. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall enter
into a non-competition agreement which shall be in
the form attached as Exhibit 10 A.
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(b) Damages. Because of the difficulty of measuring
economic losses to ATOW or ATOW SUB as a result of a
breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused
to ATOW and/or ATOW SUB for which it would have no
other adequate remedy, each individual agrees that
the foregoing covenant may be enforced by ATOW or
ATOW SUB, in the event of breach by such individual,
by injunctions and restraining orders.
(c) Reasonable Restraint. It is agreed by the Parties
hereto that the foregoing covenants in this section
impose a reasonable restraint on the individuals in
light of the activities and business of ATOW or ATOW
SUB on the date of the execution of this Agreement
and the current plans of ATOW and ATOW SUB; but it is
also the intent of ATOW, ATOW SUB and the Individuals
that such covenants be construed and enforced in
accordance with the changing activities and business
of ATOW and ATOW SUB throughout the term of this
covenant.
It is further agreed by the Parties hereto that, in
the event that any individual shall enter into a
business or pursue other activities not in
competition with the ATOW or ATOW SUB and/or any
subsidiary thereof, or similar activities or business
in locations the operation of which, under such
circumstances, does not violate clause Section 10(a),
and in any event such new business, activities or
location are not in violation of this Section 10 or
of such individual's obligations under this Section
10, if any, such individual shall not be chargeable
with a violation of this Section 10 if ATOW or ATOW
SUB shall thereafter enter the same, similar or a
competitive (i) business, (ii) course of activities
or (iii) location, as applicable.
(d) Severability; Reformation. The covenants in this
section are severable and separate, and the
unenforceability of any specific covenant shall not
affect the provisions of any other covenant.
Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable,
then it is the intention of the Parties that such
restrictions be enforced to the fullest extent which
the court deems reasonable, and the Agreement shall
thereby be reformed.
(e) Independent Covenant. All of the covenants in this
Section 10 shall be construed as an agreement
independent of any other provision in this Agreement,
and the existence of any claim or cause of action of
any individual against the ATOW or ATOW SUB whether
predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the ATOW
or ATOW SUB of such covenants. It is specifically
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agreed that the period of five (5) years stated at
the beginning of this Section 10, during which the
agreements and covenants of each individual made in
this Section 10 shall be effective, shall be computed
by excluding from such computation any time during
which such individual is in violation of any
provision of this Section 10. The covenants contained
in this Section 10 shall not be affected by any
breach of any other provision hereof by any Party
hereto, except that upon the ATOW or ATOW SUB's
admission in writing, or a final judicial
determination which is not the subject of appeal or
further appeal by the ATOW or ATOW SUB, that either
ATOW or ATOW SUB has materially breached ▇▇▇
▇▇▇▇▇▇▇'▇ Employment Agreement (if applicable), and
ATOW or ATOW SUB failure to cure such material breach
within 30 days of such admission or final judicial
determination, whichever is applicable, then the
covenants contained in this Section 10 with respect
to ▇▇▇ ▇▇▇▇▇▇▇ will expire. The covenants contained
in this Section 10 shall have no effect if the
transactions contemplated by this Agreement are not
consummated.
(f) Materiality. ATOW and the individuals hereby agree
that this covenant is a material and substantial part
of this transaction.
11. Miscellaneous.
(a) The parties understand that notwithstanding any other
representation to the contrary, the agreement is subject to
ATOW obtaining financing for this transaction prior to June
30, 1999. Should ATOW not obtain financing for this
transaction prior to June 30, 1999, this agreement shall be
null and void and neither party shall owe any amount to the
other, and the non-refundable deposit, referenced in Section
4(b) shall be the Sellers, unless the parties, in writing,
agree to extend this agreement.
(b) From and after the date of Closing, Sellers shall execute and
deliver to or cause to be executed and delivered to ATOW SUB
any such further instruments of transfer, assignment and
conveyance and shall take such other action as ATOW SUB may
reasonably require to carry out more effectively the sale,
transfer, assignment and conveyance to ATOW SUB of the assets
and to confirm and assure ATOW SUB's title to them.
(c) Each party covenants and agrees that it shall be responsible
for and shall bear its own legal and other costs and expenses
in connection with the negotiation, preparation and execution
of this Agreement, and performance of the transactions
contemplated by it.
(d) Neither party shall assign, in whole or in part, this
Agreement or its rights and obligations under it without the
express prior written consent of the other party.
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(e) In the event that any provision of this Agreement shall be
held invalid, illegal or unenforceable under applicable law,
the remainder of this Agreement shall remain valid and
enforceable unless such invalidity, illegality or
unenforceability substantially diminishes the rights and
obligations, taken as a whole, of Sellers or ATOW or ATOW SUB.
(f) This Agreement and the Exhibits contain the entire agreement
among the parties with respect to the sale and purchase of the
Assets and supersede all previous written or oral
negotiations, commitments and writings.
(g) This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(h) This Agreement may be amended only in writing executed by the
parties affected by such amendment.
(i) This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Florida.
(j) Any controversy or claim arising out of or relating to this
contract, of the breach thereof, shall be settled by
arbitration administered by the American Arbitration
Association (AAA), in its Miami, Florida branch office, under
its Commercial Arbitration rules, and judgement on the award
rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction within the State of Florida.
In witness, the parties have caused this Agreement to be duly executed
under seal as of the date written above.
ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------- ----------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Seller
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------- ------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Seller
▇-▇▇▇ ▇▇▇▇▇▇▇ GULF COAST EAST, INC.
ATTEST:
/s/ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------- ----------------------
▇. ▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
President
1-800 AUTOTOW, INC.
ATTEST:
/s/ ▇.▇. ▇▇▇▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------- ----------------------
▇.▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
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