Document:

Speede Parlontieri Employment Agreement

SPEEDEMISISONS, INC. 

EMPLOYMENT AGEEMENT 

This EMPLOYMENT AGREEMENT (this "Agreement") is made by and between Speedemissions, Inc. a Florida corporation (the "Employer"), and Richard A. Parlontieri, an individual resident of Georgia (the "the Employee"), as of this 15 th day of September, 2003 ("Effective Date"). 

The Employer presently employs the Employee as its President and Chief Executive Officer (CEO). The Employer recognizes that the Employee’s contribution to the growth and success of the Employer is substantial. The Employer desires to provide for the continued employment of the Employee and to make certain changes in the Employee’s employment arrangements which the Employer has determined will reinforce and encourage the continued dedication of the Employee to the Employer and will promote the best interests of the Employer and its shareholders. The Employee is willing to continue to serve the Employer on the terms and conditions herein provided. 

In consideration of the forgoing, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that on the Effective Date: 

1.  Employment. 

(a)       The Employer shall continue to employ the Employee, and the Employee shall continue to serve the Employer, as President and Chief Executive Officer upon the terms and conditions set forth herein. The Employee shall have such authority and responsibilities as are consistent with his position and which may be set forth in this Agreement or assigned by the Board of Directors from time to time. The Employee shall devote his full business time, attention, skill and efforts to the performance of his duties hereunder, except during periods of illness or periods of vacation and leaves of absence consistent with the Employer’s policies. The Employee may devote reasonable periods of time to perform charitable and other community activities and to manage his personal investments; provided, however, that such activities will not materially interfere with the performance of his duties hereunder and will not be in conflict or competitive with, or adverse to , the interests of the Employer. Under no circumstances will the Employee work for any competitor or have any financial interest in any competitor of the Employer; provided, however, that the Employee may invest up to 1% of the publicly traded-stock or securities of any company whose stock or securities are traded on a national exchange. 

	 
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(b)        The Employee shall not be required to relocate from the metropolitan Atlanta, Georgia area. 

2.    Term. Unless earlier terminated or as provided herein, the Employee’s employment under this Agreement shall be for a term (the "Term") of three years, which shall be extended automatically (without further action of the Employer or the Employee) 30 days prior to the end of each term for an additional one year unless, prior to any such automatic extension, either party shall deliver written notice upon the other of its intention that this Agreement shall not be so extended, in which case the Agreement shall continue through its remaining Term but shall not be extended absent written agreement by both the Employer and the Employee. 

3.  Compensation and Benefits . 

(a)       The Employer shall pay the employee a salary at a rate of $180,000 per annum (the "Base Salary") in accordance with the salary practices of the Employer. Commencing as of the first anniversary of the Effective Date, and thereafter on each subsequent anniversary of the Effective Date during the Term, the Base Salary shall be increased, but not decreased, by an amount equal to the greater of (i) such amount as shall be determined by the Compensation Committee of the Board of Directors of the Employer; or (ii) three percent (3%). 

(b)      The Employee shall participate in any retirement, welfare, deferred compensation, life, health, disability insurance, and other benefit plans or programs paid by the Employer now or hereafter applicable to the Employee. The Employer shall pay (or reimburse the Employee for) the actual cost of the Employee’s health /dental insurance (for himself and his wife), life insurance and disability insurance as and when due and payable to the Employee’s health insurance company, life insurance company and disability insurance company until the Employer adopts and puts into effect a benefits program providing health, life and disability insurance for its executive employees, which at such time will be paid by the Employer. This subsection (b) shall not be construed to required the Employer to establish any such plans or programs or to prevent the Employer from modifying or terminating any such plans or programs, and no such action or failure thereof shall affect this Agreement; provided, however, that in the event of any reduction in the group medical and hospitalization benefits provided to the Employee, the salary payable to the Employee shall be increased, as of the effective date of such reduction, by that amount necessary to enable the Employee to supplement the benefits provided by the Employer to maintain the level of benefits then provided to the Employee. 

	 
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(c)       The Employee shall receive four (4) weeks of paid vacation for each calendar year during the Term. Scheduling of vacation shall be subject to the prior approval of the Employer, which approval shall not be unreasonably withheld. Vacation time shall not accrue, and if the Employee prior to the end of any calendar year shall not use all of his vacation time for such year, such vacation time shall be forfeited. 

(d)       The Employer shall continue to reimburse the Employee for reasonable travel and other expenses, including a monthly car allowance of $600.00, related to the Employee’s duties which are incurred and accounted for in accordance with the Employer’s standard business practices. 

(e)      The Employee shall receive a cellular phone allowance of $200.00 per month. 

(f)        The Employer shall reimburse the Employee for dues paid by the Employee for membership in such professional organizations and eating clubs as shall, from time to time, be approved by the Compensation Committee of the Board of Directors. 

(g)       Employee shall be eligible to receive cash bonuses based on the Employee’s achievement of specified goals and criteria. These goals and criteria may include both annual and long-term goals, may provide for vesting over a specified time period, and shall be established annually by the Compensation Committee of the Board of Directors and attached to and made part of this Agreement (the "Bonus Plan"). Unless provided otherwise in any particular Bonus Plan, the Compensation Committee shall determine whether the Employee has achieved the goals and criteria for the applicable quarter and, if so the amount of the quarterly bonus to be paid to the Employee, as soon as practical after the operating and financial results of the Employer for the relevant quarter are made know to the Board. Any bonus so determined by the Compensation Committee will vest in favor of the Employee as of the last day of the quarter to which such bonus relates. Each quarterly cash bonus shall be paid to the Employee as soon as practicable after the Compensation Committee’s final determination. For the purposes of this Section 3(b), (i) the Employer shall establish the bonus criteria for 2004 not later than December 1, 2003, and (ii) the first calendar quarter to be considered for a bonus payment shall cover the months of January, February and March 2004 (the "First Quarter") (and thereafter, every calendar quarter during the Term). 

	 
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(h)        The Employee is hereby granted options (in the aggregate, the "Options") to subscribe for and purchase from the Employer four hundred thousand (400,000) shares of the Company’s Common Stock (in the aggregate, the "Option Stock") at a price per share equal to the Fair Market Value of the of the Option Stock as of the date hereof. "Fair Market Value" shall mean two dollars ($2.00) per share. The Options may be exercised by the Employee or members of his immediate family. Upon the execution of this Agreement one-fourth, or 100,000, of the Options are fully vested. The remaining 300,000 Options will vest in three equal parts of 100,000 Options on each of October 1, 2004; October 1, 2005; and October 1, 2006. Upon a Change of Control (as hereinafter defined), or termination Without or With Cause (as hereinafter defined), all Options remaining unvested shall be automatically vested and may be immediately exercised. All other terms and conditions relating to the Options shall be set forth in a separate Option Agreement between the Employee and Employer; provided, however, that the terms and conditions of the Option Agreement shall not conflict with this subsection (h). 

(i)        All payments by the Employer to the Employee pursuant to this Agreement shall be subject to applicable withholding rules, regulations and requirements. 

4.         Termination . 

(a)        The Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows: 

(i)         upon the death of the Employee; 

(ii)        upon the Disability of the Employee for which reasonable accommodation is unavailable. For the purposes of this Agreement, "Disability" shall conclusively be deemed to have occurred with respect to the Employee (i) if the Employee shall be receiving payments pursuant to a policy of long-term disability income insurance; (ii) if the Employee shall have no long-term disability income coverage then in force and any insurance company insuring the Employee’s life shall agree to waive the premiums due on such policy pursuant to a long-term disability waiver of premium provision in the contract of life insurance; or (iii) if the Employee shall have no long-term disability waiver of premium provision in any contract of life insurance, then if the Employee shall be receiving long-term disability benefits from or through the Social Security Administration; provided, however, that in the event the Employee’s disability shall, otherwise and in good faith, come into question (and, for purposes of this proviso, "disability" shall mean the permanent and continuous inability of the Employee to perform substantially all of the duties being performed immediately prior to his disability coming into question), and a dispute shall arise with respect thereto, then the Employee (or his personal representatives) shall appoint a medical doctor, the Employer shall appoint a medical doctor, and said two (2) doctors shall, in turn, appoint a third party medical doctor who shall examine Employee to determine the question of disability and whose determination shall be binding upon all parties to this Agreement. For purposes of this Agreement, a "reasonable accommodation" is one that does not impose undue hardship on the Employer; 

	 
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(iii)        upon the determination of Cause for termination, in which event such employment may be terminated by written notice at the election of the Employer. For purposes of this Agreement, "Cause" shall consist of any of (A) the commission by the Employee of a willful act (including, without limitation, a dishonest or fraudulent act) or a grossly negligent act, or the willful or grossly negligent omission to act by the Employee, which is intended to cause, causes, or is reasonably likely to cause material harm to the Employer (including harm to its business reputation), (B) the indictment of the Employee for the commission or perpetration by the Employee of any felony or any commission or perpetration by the Employee of any felony or any crime involving dishonesty, moral turpitude or fraud, (C) the material breach by the Employee of this Agreement that, if susceptible of cure, remains uncured ten days following written notice to the Employee of such breach, (D) the exhibition by the Employee of a standard of behavior within the scope of his employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance or alcohol abuse) to a level which, in the Board of Directors’ good faith and reasonable judgment, is materially detrimental to the Employer’s best interest, that if susceptible of cure, remains uncured ten days following written notice to the Employee of such specific in appropriate behavior, or (E) the failure of the Employee to render the services hereunder in accordance with a reasonable performance standard determined by the Board of Directors; or 

(iv)       upon 30 days written notice thereof to the Employee from the Employer (termination "Without Cause"), provided that in the event of any such termination Without Cause, Section 4(e) shall be applicable thereto. 

(b)        If the Employee’s employment is terminated because of the Employee’s death, the Employee’s estate shall receive (i) any sums due him as Base Salary and reimbursement of expenses through the end of the month during which death occurred, (ii) any bonus earned or accrued under the quarterly Bonus Plan through the date of death (including any amounts awarded for previous years but which were not yet vested), and (iii) a pro rata share of any annual bonus with respect to the current fiscal year which had been earned as of the date of the Employee’s death. 

	 
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(c)        During the period of any disability leading up to the termination of the Employee’s employment as a result of Disability, the Employer shall continue to pay the Employee his full Base Salary at the rate in effect and all perquisites and other benefits (other than any bonus) until the Employee becomes eligible for benefits under the long-term disability plan or insurance program maintained by the Employer, provided that the amount such payments to the Employee shall be reduced by the sum of the amounts, if any, payable to the Employee for the same period under any disability benefit or pension plan of the Employer or its subsidiaries. Furthermore, the Employee shall receive (i) any bonus earned or accrued under the Bonus Plan through the date of incapacity (including any amounts awarded for previous years but which were not yet vested) and (ii) a pro rata share of any annual bonus with respect to the current fiscal year which had been earned as of the date of the Employee’s Disability. 

(d)        If the Employee’s employment is terminated by the Employer for Cause as provided above, or if the Employee resigns (except for a termination of employment pursuant to Section 4(f) or a termination of employment by the Employee pursuant to subsection (i) below), the Employee shall receive (i) any sums due him as Base Salary and reimbursement of any expenses, (ii) any bonus earned or accrued under the Bonus Plan through the date of termination and, and (iii) a pro rata share of any annual bonus with respect to the current fiscal year which had been earned as of the date of such termination or resignation; provided, however, that any Options not yet vested as of the date of such termination or resignation shall lapse as of such date of termination or resignation. 

(e)       If the Employee’s employment is terminated by the Employer Without Cause, the Employer shall pay to the Employee (i) severance compensation in an amount equal to 100% of his then–current Base Salary, which amount shall be paid in 12 equal monthly installments commencing on the 1 st day of the month following such termination; (ii) any bonus earned or accrued under the Bonus Plan through the date of termination, and (ii) a pro rata share of any annual bonus with respect to the current fiscal year which had been earned as of the date of the Employee’s termination; provided, however, that Section 4(f) shall apply instead of this Section 4(e) to any termination Without Cause after a Change in Control. 

	 
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(f)        Upon a Change in Control, the Employee may terminate his employment hereunder for any reason upon delivery of notice to the Employer within a 90-day period beginning upon the occurrence of a Change in Control. If the Employee terminates his employment pursuant to this Section 4(f) or if the Employer terminates the Employee Without Cause after a Change in Control, the restrictive covenants contained in Section 9 shall apply and, in addition, the Employee shall be entitled to the following: (i) the Employer shall pay the Employee in cash within 15 days of such termination any sums due him as base salary and/or reimbursement of expenses through the date of such termination, plus any bonus earned or accrued under the Bonus Plan through the date of termination (including any amounts awarded for previous years but which were not yet vested) and a pro rata share of any bonus with respect to the current fiscal year which had been earned as of the date of the Employee’s termination and (ii) the Employer shall pay the Employee in cash within 15 days of such termination date one lump sum payment in an amount equal to the Employee’s then current annual base salary multiplied by three. 

(g)        With the exceptions of the provisions of this Section 4, and the express terms of any benefit plan under which the Employee is a participant, upon termination of the Employee’s employment, the Employer shall have no obligation to the Employee for, and the Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). At the time of termination of the employment, the Employee shall enter into a form of release acknowledging such remaining obligations and discharging the Employer, as well as the Employer’s officers, directors and employee with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Employee’s employment by the Employer, including the circumstances of such termination. 

(h)        In the event that the Employee’s employment is terminated for any reason and the Employee serves as a Director of the Employer or of any subsidiary of the Employer, the Employee shall (and does hereby) tender his resignation from such positions effective as of the date of termination. 

(i)        If the Employee shall terminate his employment as a result of (i) any failure to elect or reelect, or appoint or reappoint, the Employee to the position of President and CEO, unless agreed to by Employee by writing; (ii) any material change by the Employer in the Employee’s function, duties, responsibility, importance or scope from the position and attributes thereof described in this Agreement, unless agreed to by Employee in writing; (iii) any requirement that the Employee perform substantially all of his duties outside the metropolitan Atlanta, Georgia area; (iv) the liquidation, dissolution, consolidation or merger of the Employer other than in a Change of Control transaction; or (v) any other material breach of this Agreement by the Employer which shall not be cured within 30 days after receipt of written notice of the same from the Employee, then the Employee shall be paid the amounts determined pursuant to subsection (f) above. 

	 
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(j)        The parties intend that the severance payments and other compensation provided herein are for reasonable compensation for the Employee’s service to the Employer and shall not constitute "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code of 1986 and any regulations thereunder. In the event that the Employer’s independent accountants acting as auditors for the Employer on the date of a Change in Control determine that the payments provided herein constitute "excess parachute payments", then the Employee’ compensation payable hereunder shall be decreased so as to equal an amount that is $1.00 less than three times the Employee’s "base amount", as that term is defined in Section 280G(b) of the Internal Revenue Code, if, and only if, reducing the Employee’s compensation will put the Employee in a better after-tax position than if the Employee’s compensation was not reduced. 

5.         Ownership of Work Product . 

The Employer shall own all Work Product arising during the course of the Employee’s employment (prior, present or future). For purposes hereof, "Work Product" shall mean all intellectual property rights, including all Trade Secrets, U.S. and international copyrights, patent rights, and other intellectual property rights in any programming, documentation, technology, work of authorship or other work product that relates to the Employer, its business or its customers and that Employee conceives, develops, or delivers to the employer hereunder, at any time during his employment, during or outside normal working hours, in or away from the facilities of the Employer, and whether or not requested by the Employer. The Employee agrees to take such actions and execute such further acknowledgments and assignments as the Employer may reasonably request to give effect to this provision. 

6.         Protection of Trade Secrets . 

The Employee agrees to maintain in strict confidence, except as necessary to perform his duties for the Employer, and the Employee agrees not to use or disclose, any Trade Secrets of the Employer during or after his employment. For the purposes hereof, "Trade Secret" means information, including, without limitation, technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a process, a drawing, financial data, financial plans, product plans, information on customers or suppliers, which (i) derives economic value, actual or potential, from not being generally know to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 

	 
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7.         Protection of Other Confidential Information . 

In addition, the Employee agrees to maintain in strict confidence and, except as necessary to perform his duties for the Employer, not to use or disclose any Confidential Business Information of the Employer during his employment and for a period of 24 months following termination of the Employee’s employment. "Confidential Business Information" shall mean any internal, non-public information (other the Trade Secrets already addressed above) concerning the Employer’s financial position and results of operations (including revenue, assets, net income, etc.); annual and long-range business plans; product or service plans; marketing plans and methods; site plans, training, educational and administrative manuals; customer and supplier information and purchase histories; and employee lists. The provisions of Sections 6 and 7 above shall also apply to protect Trade Secrets and Confidential Business Information of third partied provided to the Employer under an obligation of secrecy. 

8.         Return of Materials . 

The Employee shall surrender to the Employer, promptly upon its request and in any event upon termination of the Employee’s employment, all media, documents, notebooks, computer programs, handbooks, data files, models, samples, price lists, drawings, customer lists, prospect data, or other material in the Employee’s possession or control, including all copies thereof, relating to the Employer, its business, or its customers. 

9.         Restrictive Covenants, and Covenant of Non-Disparagement and Cooperation . 

 

(a)        No Solicitation of Customers . During the Employee’s employment with the Employer and for a period of 24 months thereafter, the Employee shall not (except on behalf of or with the prior written consent of the Employer), either directly or indirectly, on the Employee’s own behalf or in the service or on behalf of others, solicit or attempt to solicit Customers to induce or encourage them to acquire or obtain from anyone other than the Employer or its subsidiaries any product or service competitive with or substitute for any of the Employer’s Products. For purposes of this Section, "Customer" refers to any person or group of persons with whom the Employee had direct material contact with regard to the selling, delivery, or support of the Employer’s products, including servicing such person’s or group’s account, during the period of 12 months preceding the solicitation date. The "Employer’s Products" refers to the products and services that the Employer or any of its subsidiaries or affiliates or franchisees offered or sold within six months of the solicitation date. This restriction does not apply after a Change in Control. 

	 
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(b)        No Recruitment of Personnel . During the Employee’s employment with the Employer and for a period of 24 months thereafter, the Employee shall not, either directly or indirectly, on the Employee’s own behalf or in the service or on behalf of others, solicit or induce any employee of the Employer or any of its subsidiaries or affiliates to leave his or her position with the Employer (or the subsidiary or affiliate), or recruit or attempt to recruit such persons to accept employment or any other position with another business. This restriction does not apply after a Change in Control. 

(c)        Independent Provisions . The provisions in each of the above Sections 9(a) and 9(b) are independent, and the lack of enforceability of any one provision shall not affect the enforceability of any other provision. 

(d)       Covenant Of Non-Disparagement And Cooperation . The Employee agrees that he shall not at any time during or following the Term make any remarks disparaging the conduct or character of the Employer or the Employer’s current or former agents, employees, officers, directors, successors or assigns. In addition, the Employee agrees to cooperate with the Employer, at no extra cost, in any litigation or administrative proceedings (e.g., EEOC charges) involving any matters with which the Employee was involved during the Employee’s employment with the Employer. The Employer shall reimburse the Employee for travel expenses approved by the Employer incurred in providing such assistance. This Section 9(d) shall survive the termination or expiration of this Agreement. 

10.        Successors, Binding Agreement .     

This Agreement shall be binding upon and shall inure to the benefit of the Employer and its successors and assigns. Neither this Agreement nor any right or interest hereunder shall be assigned or transferred by the Employee, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal personal representative. 

11.        Notice . 

For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective address last given by each party to the other; provided, however, that all notices to the Employer shall be directed to the attention of the Employer with a copy to the Secretary of the Employer. All notices and communication shall be deemed to have been received on the date of delivery thereof. 

 

	 
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12.        Governing Law . 

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia without giving effect to the conflict of law principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Georgia. 

13.        Waiver . 

Failure or delay of either party to insist upon compliance with any provision hereof shall not operate as, and is not to be construed as, a waiver or amendment of such provision. Any express waiver of any provision of this Agreement shall not operate and is not to be construed as a waiver of any subsequent breach, whether occurring under similar or dissimilar circumstances. 

14.        Enforcement . 

The Employee agrees that in the event of any breach or threatened breach by the Employee of any covenant contained in Sections 6, 7, 9(a), or 9(b) hereof, the resulting injuries to the Employer would be difficult or impossible to estimate accurately, even though injury or damages may result. Accordingly, an award of legal damages, if without relief, may be inadequate to protect the Employer. The Employee, therefore, agrees that in the event of any such breach, the Employer shall be entitled to obtain from a court of competent jurisdiction an injunction to restrain the breach or anticipated breach of any such covenant, and to obtain any other available legal, equitable, statutory, or contractual relief. 

15.        Saving Clause .    

The provisions of this Agreement shall be deemed severed and the invalidity or lack of enforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held by any court or other tribunal of competent jurisdiction to be illegal, void, or not enforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void, or not enforceable because of the duration, area, or matter of such provision, and, in its reduced form, such provision shall be enforceable. 

 

	 
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16.    Certain Definitions . 

(a)        " Change in Control " shall mean the occurrence during the Term of any of the following events, unless such event is a result of a Non-Control Transaction. 

(i)        The individuals who, as of the date of this Agreement, are members of the Board of Directors of the Employer (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of the Employer; provided however, that if the election, or nomination for election by the Employer’s shareholders, of any new director was approved in advance by a vote of at least a majority of the Incumbent Board, such new director shall, for purpose s of this Agreement, be considered as a member of the Incumbent Board. 

(ii)        An acquisition (other that directly from the Employer) of any voting securities of the Employer (the "Voting Securities") by any "Person" (as the term "person" is used for purposed of Section 13 (d) or 14(d) of the Securities Exchange Act of 1934) immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of the Employer’s then outstanding Voting Securities. 

(b)        " Non-Control Transaction " shall mean a transaction described below: 

(i)        the shareholders of the Employer, immediately before such merger, consolidation or reorganization, own, directly or indirectly, immediately following such merger, consolidation or reorganization, at least 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such merger, consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization; and 

(ii)        immediately following such merger, consolidation or reorganization, the  number of directors on the board of directors of the Surviving Corporation who were members of the Incumbent Board shall at least equal the number of directors who were affiliated with or appointed by the other party to the merger, consolidation, or reorganization. 

	 
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17.                   Entire Agreement . 

This Agreement, and the agreements contemplated by this Agreement, constitute the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. 

18.                   Officer’s Indemnification Agreement . 

In order to provide to the Employee assurances with respect to the protection provided against liabilities that he may incur in the performance of his duties to the Employer, the Employer agrees to provide to the Employee, within 10 days after the date of this Agreement, an Indemnification Agreement in form and substance satisfactory to the Employee. 

19.                   Counterparts . 

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 

IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed and its seal to be affixed hereunto by its officers and/or directors duly authorized, and the Employee has signed and sealed this Agreement, effective as of the date of first above written. 

	
SPEEDEMISISONS, INC.    

 

 

By: /s/ Bahram Yusefzadeh 

 

Name: Bahram Yusefzadeh

Title: Director

 

[CORPORATE SEAL] 
	
EMPLOYEE 

 

 

 

/s/ Richard A. Parlontieri 

Richard A. Parlontieri 

 

[SEAL] 

	
 

	 	- 13 -Form GCA Promissory Note

PROMISSORY NOTE 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

 

SPEEDEMISSIONS, INC. 

 

No. __                                                                                                                                                                                                   $__________ 

PROMISSORY NOTE 

 

Speedemissions, Inc., a Georgia corporation (together with its successors, the "Company"), for value received hereby promises to pay to: 

 

GCA Strategic Investment Fund Limited 

 

(the "Holder") and registered assigns, the principal sum of ______________________ Dollars ($__________) or, if less, the principal amount of this Promissory Note (the "Note") then outstanding, on the Maturity Date by wire transfer of immediately available funds to the Holder in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest which shall begin to accrue on the date of this Note, quarterly in arrears, on (i) the last day of March, June, September and December of each year until the Maturity Date, commencing ____________, ____ (unless such day is not a business day, in which event on the next succeeding business day) (each an "Interest Payment Date"), (ii) the Maturity Date and (iii) the date the principal amount of this Note shall be declared to be or shall automatically become due an payable, on the principal sum thereof outstanding in like coin or currency at the Interest Rate set forth below, from the most recent Interest Payment Date on which interest has been paid on this Note, or if no interest has been paid on this Note, from the date of this Note until payment in full of the principal sum hereof has been made. 

 

This Note shall bear interest at a rate of ten percent (10%) per annum ("Interest Rate"), except upon an Event of Default, as hereafter defined, at which time this Note will accrue interest at the rate of 18% per annum or, if less, the maximum rate permitted by applicable law. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30 day months. All payments of principal and Interest hereunder shall be made for the benefit of the Holder. 

	 
	 	 	 
	

	 

 

This Note is secured by a Deed to Secure Debt and Security Agreement (the "Deed") of even date herewith made by the Company and Holder creating a security interest in favor of Holder in certain of the Company’s real properties described in the Deed. 

 

The Deed contains certain additional agreements among the parties with respect to the terms of this Note, including, without limitation, provisions which (A) specify voluntary and mandatory repayment, prepayment and (B) specify Events of Default following which the remaining balance due and owing hereunder may be accelerated. All such provisions are an integral part of this Note and are incorporated herein by reference. This Note is transferable and assignable to one or more Persons. 

 

1.  Certain Terms Defined. All terms defined in the Deed and not otherwise defined herein shall have for purposes hereof the meanings provided for in the Deed. 

 

2.  Payment of Principal. The Company shall repay the remaining unpaid balance of this Note on ________, ____ (the "Maturity Date"). 

 

3.  Mandatory Prepayments. 

 

(a) Upon (i) the occurrence of a Change in Control (as defined below) of the Company, (ii) a transfer of all or substantially all of the assets of the Company to any Person (as defined below) in a single transaction or series of related transactions, (iii) a consolidation, merger or amalgamation of the Company with or into another Person in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of common stock solely into shares of common stock) 

 

(b) "Change in Control" means (i) after the date of this Note, any person or group of persons other than Holder shall have acquired beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended) of 33 a % or more of the outstanding shares of common stock of the Company without the prior written consent of Holder; (ii) any sale or other disposition (other than by reason of death or disability) to any Person of more than 10,000 shares of common stock of the Company by any executive officers and/or employee directors of the Company without the prior written consent of Holder; (iii) individuals constituting the Board of Directors of the Company on the date hereof (together with any new Directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of at least 50.1% of the Directors still in office who are either Directors as of the date hereof or whose election or nomination for election was previously so approved), cease for any reason to constitute at least two-thirds of the Board of Directors of the Company then in office. 

	 
	 	2	 
	

	 

 

(c) "Person" means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock Company, government (or any agency or political subdivision thereof) or other entity of any kind. 

 

4.  Affirmative Covenants. 

 

The Company hereby agrees that, from and after the date hereof for so long as this Note remains outstanding and for the benefit of Holder: 

 

(a) Information : The Company will deliver to the Holder of this Note: 

 

1. within two (2) days after any officer of the Company obtains knowledge of a Default or Event of Default, or that any Person has given any notice or taken any action with respect to a claimed Default hereunder, a certificate of the chief financial officer of the Company setting forth the details thereof and the action which the Company is taking or proposed to take with respect thereto; 

 

2. promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed and any other document generally distributed to shareholders; 

 

3. at least two (2) business days prior to the consummation of any financing or other event requiring a repayment of this Note, notice thereof together with a summary of all material terms thereof and copies of all documents and instruments associated therewith; and 

 

4. promptly following the commencement thereof, notice and a description in reasonable detail of any litigation or proceeding to which the Company or any subsidiary is a party in which the amount involved is $100,000 or more and not covered by insurance or in which injunctive or similar relief is sought. 

 

(b) Payment of Obligations . The Company will pay and discharge, at or before maturity, all their respective material obligations, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings and will maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same. 

 

(c) Maintenance of Property; Insurance . The Company will keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted. In addition, the Company will maintain insurance in at least such amounts and against such risks as it has insured against as of the date of this Note. 

 

(d) Maintenance of Existence . The Company will continue to engage in business of the same general type as now conducted by the Company, and will preserve, renew and keep in full force and effect its respective corporate existence and its respective material rights, privileges and franchises necessary or desirable in the normal conduct of business. 

	 
	 	3	 
	

	 

 

(e) Compliance with Laws . The Company will comply, in all material respects, with all federal, state, municipal, local or foreign applicable laws, ordinances, rules, regulations, municipal by-laws, codes and requirements of governmental authorities (including, without limitation, environmental laws and the rules and regulations thereunder) except (i) where compliance therewith is contested in good faith by appropriate proceedings or (ii) where non-compliance therewith could not reasonably be expected, in the aggregate, to have a material adverse effect on the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company. 

 

(f) Inspection of Property, Books and Records . The Company will keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to their respective businesses and activities; and will permit, during normal business hours, a representative of the Holder, to visit and inspect any of their respective properties, upon reasonable prior notice, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective executive officers and independent public accountants (and by this provision the Company authorizes its independent public accountants to disclose and discuss with Holder the affairs, finances and accounts of the Company in the presence of a representative of the Company; provided, however, that such discussions will not result in any unreasonable expense to the Company, without Company consent), all at such reasonable times. 

 

(g) Compliance with Terms and Conditions of Material Contracts . The Company will comply, in all respects, with all terms and conditions of all material contracts to which it is subject. 

 

5. Negative Covenants. 

 

The Company hereby agrees that after the date of this Note for so long as this Note remains outstanding and for the benefit of Holder of this Note: 

 

(a) Limitations on Debt and Issuance of Equity Securities . The Company will not create, incur, issue, assume or suffer to exist (i) any Debt (as defined hereafter) except (x) Debt incurred in a Permitted Financing (as defined hereafter), (y) Debt incurred in connection with equipment leases to which the Company is a party incurred in the ordinary course of business; and (z) Debt incurred in connection with trade accounts payable, imbalances and refunds arising in the ordinary course of business and (ii) any equity securities (including derivative securities) (other than those securities that are issuable (x) under or pursuant to stock option plans, warrants or other rights programs that exist as of the date hereof, and (y) in connection with the acquisition (including by merger) of a business or of assets otherwise permitted under this Note), unless the Company obtains the prior written consent of the Holder of this Note. As used herein, "Debt" shall mean debt of any Person, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments issued by such Person, (iii) all obligations of such Person as lessee which (y) are capitalized in accordance with GAAP or (z) arise pursuant to sale-leaseback transactions, (iv) all reimbursement obligations of such Person in respect of letters of credit or other similar instruments, (v) all Debt of others secured by a lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person and (vi) all Debt of others guaranteed by such Person; and "Permitted Financing" shall mean transactions, which would include any form (1) of debt or equity financing which is followed by the payment of this Note in full and of all related fees and expenses; (2) project financing which provide for the issuance of recourse debt instruments in connection with the operation of the Company's business as presently conducted or as proposed to be conducted; and (3) other financing transactions specifically consented to in writing by the Holder of this Note. 

	 
	 	4	 
	

	 

 

(b) Transactions with Affiliates . The Company will not, directly or indirectly, pay any funds to or for the account of, make any investment (whether by acquisition or stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, and Debt, or otherwise) in, lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with any joint enterprise or other joint arrangement with, any affiliate. 

 

(c) Merger or Consolidation . The Company will not, in a single transaction or a series of related transactions (i) consolidate with or merge with or into any other Person, or (ii) permit any other Person to consolidate with or merge into it, unless the Company shall be the survivor of such merger or consolidation and (x) immediately before and immediately after given effect to such transaction (including any indebtedness incurred or anticipated to be incurred in connection with the transaction), no Default or Event of Default shall have occurred and be continuing; and (y) the Company has delivered to Holder an officer’s certificate stating that such consolidation, merger or transfer complies with this Note, and that all conditions precedent in this Note relating to such transaction have been satisfied. 

 

(d) Limitation on Asset Sales . The Company will not consummate an Asset Sale (as defined hereafter) of material assets of the Company without the prior written consent of Holder, which consent shall not be unreasonably withheld. As used herein, "Asset Sale" means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) or sales or dividends of capital stock of a subsidiary (other than directors’ qualifying shares), property or other assets (each referred to for the purpose of this definition as a "disposition"), including any disposition by means of a merger, consolidation or similar transaction other than a disposition of property or assets at fair market value in the ordinary course of business. 

 

6. Events of Default. 

 

If one or more of the following events (each an "Event of Default") shall have occurred and be continuing: 

	 
	 	5	 
	

	 

(a)  failure by the Company to pay or repay when due, all or any part of the principal on this Note; 

 

(b)  failure by the Company to pay (i) within five (5) Business Days of the due date thereof any interest on this Note or (ii) within five (5) Business Days following the delivery of notice to the Company of any fees or any other amount payable (not otherwise referred to in (a) above or this clause (b)) by the Company under this Note or the Deed; 

 

(c)  failure on the part of the Company to observe or perform any covenant contained in Sections 3, 4, or 5 of this Note or any covenant contained in the Deed; 

 

(d)  the Company has commenced a voluntary case or other proceeding seeking liquidation, winding-up, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, moratorium or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or has consented to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or has made a general assignment for the benefit of creditors, or has failed generally to pay its debts as they become due, or has taken any corporate action to authorize any of the foregoing; 

 

(e)  an involuntary case or other proceeding has been commenced against the Company seeking liquidation, winding-up, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, moratorium or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days, or an order for relief has been entered against the Company or any Subsidiary under the federal bankruptcy laws as now or hereafter in effect; 

 

(f)  default in any provision (including payment) or any agreement governing the terms of any Debt of the Company in excess of $200,000, which has not been cured within any applicable period of grace associated therewith; 

 

(g)  judgments or orders for the payment of money which in the aggregate at any one time exceed $500,000 and are not covered by insurance have been rendered against the Company by a court of competent jurisdiction and such judgments or orders shall continue unsatisfied and unstayed for a period of 60 days; or 

 

(h)  any representation, warranty, certification or statement made by the Company in this Note or the Deed or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Note shall prove to have been untrue in any material respect when made; 

	 
	 	6	 
	

	 

 

then, and in every such occurrence, the Holder of this Note may, with respect to an Event of Default specified in this Section 6, by notice to the Company, declare this Note to be, and this Note shall thereon become immediately due and payable; provided that in the case of any of the Events of Default specified in paragraph (d) or (e) above with respect to the Company, then, without any notice to the Company or any other act by Holder of this Note, the entire amount of this Notes shall become immediately due and payable, provided , further , if any Event of Default has occurred and is continuing, and irrespective of whether this Note has been declared immediately due and payable hereunder, the Holder of this Note may proceed to protect and enforce the rights of Holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. 

 

7. Miscellaneous. This Note shall be deemed to be a contract made under the laws of the State of Georgia, and for all purposes shall be governed by and construed in accordance with the laws of said State. The parties hereto, including all guarantors or endorsers, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein, and asset to extensions of the time of payment, or forbearance or other indulgence without notice. The Company hereby submits to the exclusive jurisdiction of the United States District Court for the Middle District of Georgia and of any Georgia state court sitting in Atlanta for purposes of all legal proceedings arising out of or relating to this Note. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. The Company hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Note. 

 

The Holder of this Note by acceptance of this Note agrees to be 

bound by the provisions of this Note which are expressly binding on such Holder. 

 

[Signature page follows] 

	 
	 	7	 
	

	 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

Dated: ______________________ 

 

SPEEDEMISSIONS, INC. 

 

	
By: 
	
 

		

	
Name: 
	
 

		

	
Title: 
	
 

		

	

	 	8	 
	

	

ANNEX A 

 

REPAYMENT LEDGER 

	
Date 
	
Principal Balance 
	
Interest Paid 
	
Principal Paid 
	
New Principal Balance 
	
Issuer Initials 
	
Holder Initials 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

	

	

	

	

	

	

	

 

	 	9

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