SHARE EXCHANGE AGREEMENT
THIS
SHARE EXCHANGE AGREEMENT
(the
“Agreement”)
dated
this 20th
day of
August, 2007, by and among
AMERICAN RACING CAPITAL, INC., a
Nevada
corporation (“ARC”),
and
MILLENNIUM MOTORSPORTS OF PENNSYLVANIA, a
Pennsylvania company (the
“Company”),
and
the Shareholder of the Company listed on Exhibit
A
attached
hereto (the “Company
Shareholder”).
RECITALS:
A. The
Company Shareholder owns all of the outstanding capital stock of the Company.
The authorized capital stock of the Company consists of One Thousand (1,000)
shares of common stock, par value $1.00 per share, of which Four Hundred (400)
of these shares are issued and outstanding (the “Company
Common Stock”).
B. The
Company Shareholder desires to transfer and exchange 196 shares of the Company
Common Stock in exchange for Thirteen Million Three Hundred-Fifty Thousand
(13,350,000) shares of common stock, par value $0.001 per share, and One Million
shares of preferred stock, par value $0.001of ARC (the “ARC
Common Stock”
and
“ARC
Preferred Stock”
on
the
terms and conditions set forth herein and ARC desires to consummate such
transfer and exchange pursuant to the terms and conditions set forth
herein.
AGREEMENT:
NOW,
THEREFORE,
in
consideration of the mutual promises herein set forth and certain other good
and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
| 1. |
THE
SHARE EXCHANGE AND RELATED
TRANSACTIONS.
|
1.1. Share
Exchange.
In
accordance with the provisions of this Agreement, the Nevada Revised Statutes
(the “NRS”)
and
other applicable law, on the Closing Date (as defined below), the Company
Shareholder shall exchange with, and deliver to, ARC, the Company Common Stock,
and in exchange therefore, ARC shall issue, and deliver, to the Company
Shareholder in the denominations set forth opposite the name of each Company
Shareholder on Schedule A
attached
hereto, Thirteen Million Three Hundred Fifty Thousand (13,350,000) restricted
shares of ARC Common Stock and One Million (1,000,000) shares of Preferred
Stock, par value $0.001 per share (the “ARC
Preferred Stock”),
(the
exchange transaction is referred to herein as the “Share
Exchange”).
The
total number of shares of ARC Common Stock and ARC Preferred Stock to be issued
to the Company Shareholder shall be equal to Fourteen Million Three
Hundred-Fifty Thousand shares. The shares of ARC Common Stock and the ARC
Preferred Stock to be issued as part of the Share Exchange is referred to herein
as the “ARC
Shares,”
also
sometimes referred to hereinafter as the “Exchange
Consideration.”
In
return, the Company shareholder shall exchange 196 shares of the Company Common
Stock.
1.2. Closing.
ARC,
with the cooperation of the Company shall file Articles of Exchange (as defined
below) pursuant to the NRS, cause the Share Exchange to become effective
and consummate the other transactions contemplated by this Agreement (the
“Closing”) no
later than August _, 2007; provided, in no event shall the Closing occur prior
to the satisfaction of the conditions precedent set forth in Sections 6, 7
and 8
hereof. The date of the Closing is referred to herein as the “Closing
Date.”
The
Closing shall take place at the offices of counsel to ARC, or at such other
place as may be mutually agreed upon by ARC and the Company Shareholder. At
the
Closing, (i) the Company Shareholder shall deliver to ARC the original
stock certificates representing 196 shares of the Company Common Stock, together
with stock powers duly executed in blank; and (ii) ARC shall deliver to the
Company Shareholder stock certificates representing the ARC Shares.
1.3. Plan
of Exchange; Articles of Share Exchange.
The
parties to this Agreement shall cause ARC and the Company to enter into a plan
of exchange on the date hereof, substantially in the form attached hereto as
Exhibit
“B”
(the
“Plan
of Exchange”),
and,
at the Closing, to execute the Articles of Exchange, substantially in the form
attached hereto as Exhibit
“C”
(the
“Articles
of Exchange”).
The
Articles of Exchange shall be filed with the Secretary of State of Nevada on
or
shortly after the Closing Date in accordance with the NRS.
1.4. Approval
of Share Exchange.
By
execution of this Agreement, the Company Shareholder and ARC, shall hereby
ratify, approve and adopt the Share Exchange and the Plan of Exchange for all
purposes under the NRS. On or before the execution of this Agreement, the
respective Boards of Directors of ARC and the Company shall have approved this
Agreement, the Plan of Exchange and the transactions contemplated hereby and
thereby.
| 2. |
ADDITIONAL
AGREEMENTS.
|
2.1. Access
and Inspection, Etc.
Each
party to this Agreement has allowed and shall allow the other party and its
authorized representatives full access during normal business hours from and
after the date hereof and prior to the Closing Date to all of its properties,
books, contracts, commitments and records for the purpose of making such
investigations as the other party may reasonably request in connection with
the
transactions contemplated hereby, and shall cause the other party to furnish
such information concerning its affairs as reasonably requested. Each party
to
this Agreement has caused and shall cause its personnel to assist the other
party in making such investigation and shall use his best efforts to cause
its
counsel, accountants, and other non-employee representatives to be reasonably
available to the other party for such purposes.
2.2. Confidential
Treatment of Information.
From
and after the date hereof, the parties hereto shall and shall cause their
representatives to hold in confidence all data and information obtained with
respect to the other parties or their business, except such data or information
as is published or is a matter of public record, or as compelled by legal
process. In the event this Agreement is terminated pursuant to Section 10
hereof, each party shall promptly return to the other(s) any statements,
documents, schedules, exhibits or other written information obtained from them
in connection with this Agreement, and shall not retain any copies
thereof.
2.3. Public
Announcements.
After
the date hereof and prior to the Closing, none of the parties hereto shall
make
any press release, statement to employees or other disclosure of this Agreement
or the transactions contemplated hereby without the prior written consent of
the
other parties, except as may be required by law. Neither the Company nor the
Company Shareholder shall make any such disclosure unless ARC shall have
received prior notice of the contemplated disclosure and has had adequate time
and opportunity to comment on such disclosure, which shall be satisfactory
in
form and content to ARC and its counsel.
2
2.4. Securities
Law Compliance.
The
issuance of the ARC Shares to the Company Shareholder hereunder shall not be
registered under the Securities Act of 1933, as amended, by reason of the
exemption provided by Section 4(2) thereof, and such shares may not be
further transferred unless such transfer is registered under applicable
securities laws or, in the opinion of ARC’s counsel, such transfer complies with
an exemption from such registration. All certificates evidencing the ARC Shares
to be issued to the Company Shareholder shall be legended to reflect the
foregoing restriction. ARC hereby accepts all responsibility for insuring that
ARC has, followed all necessary NRC, Securities, and all federal and state
statutes, rules and regulations with respect to ARC’s securities and corporate
law obligations in connection with this Agreement.
2.5. Best
Efforts.
Subject
to the terms and conditions provided in this Agreement, each of the parties
shall use its best efforts in good faith to take or cause to be taken as
promptly as practicable all reasonable actions that are within its power to
cause to be fulfilled those conditions precedent to its obligations or the
obligations of the other parties to consummate the transactions contemplated
by
this Agreement that are dependent upon its actions.
2.6. Further
Assurances.
The
parties shall deliver any and all other instruments or documents required to
be
delivered pursuant to, or necessary or proper in order to give effect to, the
provisions of this Agreement, including, without limitation, all necessary
stock
powers and such other instruments of transfer as may be necessary or desirable
to transfer ownership of the Company Common Stock and to consummate the
transactions contemplated by this Agreement.
2.7. Certain
Tax Matters.
(a) Cooperation
on Tax Matters.
(i) ARC,
the
Company and the Company Shareholder shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of tax
returns pursuant to this Section 2.7 and any audit, litigation or other
proceeding with respect to taxes. Such cooperation shall include the retention
and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Company and the Company Shareholder agree (A) to retain all
books and records with respect to tax matters pertinent to the Company relating
to any taxable period beginning before the Closing Date until the expiration
of
the statute of limitations (and, to the extent notified by ARC or the Company
Shareholder, any extensions thereof) of the respective taxable periods, and
to abide by all record retention agreements entered into with any taxing
authority, and (B) to give the other party reasonable written notice prior
to transferring, destroying or discarding any such books and records and, if
the
other party so requests, the Company or the Company Shareholder, as the case
may
be, shall allow the other party to take possession of such books and
records.
3
(ii) ARC
and
the Company Shareholder further agree, upon request, to use their commercially
reasonable efforts to obtain any certificate or other document from any
governmental authority or any other person as may be necessary to mitigate,
reduce or eliminate any tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
2.8. Release
of Claims By the Company Shareholder.
Effective as of the Closing Date, and except for any obligations arising out
of
this Agreement, the Company Shareholder, and its successors, predecessors,
assigns, agents, advisors, legal representatives, partners and all persons
acting by, through or under it, hereby release the Company and each of their
successors, predecessors, assigns, agents, advisors, officers, directors,
employees, legal representatives, partners and all persons acting by, through
or
under each of them, from any and all claims, obligations, causes of action,
actions, suits, contracts, controversies, agreements, promises, damages,
demands, costs, attorneys’ fees and liabilities of any nature whatsoever from
the beginning of time up to and including the Closing Date, in law or at equity,
whether known now or on the Closing Date, anticipated or unanticipated,
suspected or claimed, fixed or contingent, liquidated or unliquidated, arising
out of, in connection with or relating to any matter, cause or thing
whatsoever.
| 3. |
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF THE COMPANY AND THE COMPANY
SHAREHOLDER.
|
To
induce
ARC to enter into this Agreement and to consummate the transactions contemplated
hereby, the Company, and the Company Shareholder jointly and severally represent
and warrant to and covenant with ARC as follows:
3.1. Organization;
Compliance.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Pennsylvania. The Company is: (a) entitled to own or
lease its properties and to carry on its business as and in the places where
such business is now conducted, and (b) duly licensed, in good standing and
qualified in all jurisdictions where the character of the property owned by
it
or the nature of the business transacted by it makes such license or
qualification necessary, except where the failure to do so would not result
in a
material adverse effect on the Company. Schedule 3.1
lists
all locations where the Company has an office or place of business and the
nature of the ownership interest in such property (fee, lease, or
other).
3.2. Capitalization
and Related Matters of the Company.
(a) The
authorized capital stock of the Company consists One Thousand (1,000) shares
of
common stock, par value $1.00 per share, of which Four Hundred (400) of these
shares are issued and outstanding. No shares of the Company Common Stock
(i) were issued in violation of the preemptive rights of any shareholder,
or (ii) are held as treasury stock. All of the shares of the Company Common
Stock to be delivered under the terms of this Agreement are owned of record,
legally and beneficially by the Company Shareholder. The shares of the Company
Common Stock are free and clear of any and all security interests, encumbrances,
and rights of any kind or nature whatsoever (collectively, “Encumbrances”),
and
upon delivery of the Company Common Stock hereunder, ARC and its assigns will
acquire title thereto, free and clear of any and all Encumbrances. Other than
voting rights, redemption rights and such other rights conferred by the
Company’s charter documents and by applicable Pennsylvania statutes, there exist
no Securities Rights (as defined herein) with respect to the Company Common
Stock. All rights and powers to vote the shares of the Company Common Stock
are
held exclusively by the Company Shareholder. All of the Company Common Stock
is
validly issued, fully paid and nonassessable, were not issued in violation
of
the terms of any agreement or other understanding, and were issued in compliance
with all applicable federal and state securities or “blue
sky”
laws
and regulations. The certificates representing the Company Common Stock to
be
delivered to ARC at the Closing are, and the signatures and endorsements thereof
or stock powers relating thereto will be, valid and genuine. For the purposes
of
this section, “Securities
Rights”
means,
with respect to the Company Common Stock (whether issued or unissued) or
any other securities convertible into or exchangeable for the Company Common
Stock, and includes all written or unwritten contractual rights relating to
the
issuance, sale, assignment, transfer, purchase, redemption, conversion,
exchange, registration or voting of the Company Common Stock and all rights
conferred by the Company’s governing documents and by any applicable
agreement.
4
(b) There
are
not outstanding any securities convertible into capital stock of the Company
nor
any rights to subscribe for or to purchase, or any options for the purchase
of,
or any agreements providing for the issuance (contingent or otherwise) of,
or any calls, commitments or claims of any character relating to, such capital
stock or securities convertible into such capital stock. The Company:
(i) is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any of its capital stock; or
(ii) has no liability for dividends or other distributions declared or
accrued, but unpaid, with respect to any capital stock.
3.3. Subsidiaries.
Except
as set forth on Schedule 3.3 attached hereto, the Company owns (a) no
shares of capital stock of any other corporation, including any joint stock
company, and (b) no other proprietary interest in any company, partnership,
trust or other entity, including any limited liability company.
3.4. Execution;
No Inconsistent Agreements; Etc.
(a) This
Agreement is a valid and binding agreement of the Company and the Company
Shareholder, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy or similar laws affecting the
enforcement of creditors’ rights generally, and the availability of equitable
remedies. The Company and the Company Shareholder have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the documents to be delivered by them in connection with the
Closing and to perform their obligations under this Agreement.
(b) The
execution and delivery of this Agreement by the Company and the Company
Shareholder does not, and the consummation of the transactions contemplated
hereby will not, constitute a breach or violation of the charter or bylaws
of
the Company, or a default under any of the terms, conditions or provisions
of
(or an act or omission that would give rise to any right of termination,
cancellation or acceleration under) any note, bond, mortgage, lease,
indenture, agreement or obligation to which the Company or the Company
Shareholder is a party, pursuant to which the Company or the Company Shareholder
otherwise receives benefits, or to which any of the properties of the Company
or
the Company Shareholder is subject, or violate any judgment, order, decree,
statute or regulation applicable to the Company or the Company Shareholder
or by
which any of them may be subject.
5
3.5. Articles
of Incorporation and By-Laws.
The
Company has heretofore made available and delivered to ARC a complete and
correct copy of the Articles of Incorporation and the By-laws of the Company.
Such Articles of Incorporation and By-Laws are in full force and effect and
have
not been amended or modified.
3.6. Corporate
Records.
The
statutory records, including the stock register and minute books of the Company
fully reflect all issuances, transfers and redemptions of its capital stock,
currently show and will correctly show the total number of shares of its capital
stock issued and outstanding on the date hereof and on the Closing Date, the
charter or other organizational documents and all amendments thereto, the bylaws
as amended and currently in force. To the best knowledge of the Company
Shareholder, the books of account, minute books, stock record, books, and other
records of the Company all of which have been made available to ARC, are
complete and correct and have been maintained in accordance with sound business
practices. The minute books of the Company contain accurate and complete records
of all meetings held of, and corporate action taken by, the Company Shareholder,
the Board of Directors, and committees of the Boards of Directors of the Company
and no meeting of any such Company Shareholder, Board of Directors, or committee
has been held for which minutes have not been prepared and are not contained
in
such minute books. At the Closing, all of those books and records will be in
the
possession of the Company.
(a) Liabilities.
Except
as set forth on Schedule
3.7,
the
Company has no debt, liability or obligation of any kind, whether accrued,
absolute, contingent or otherwise.
3.7. Absence
of Changes.
Except
as disclosed on Schedule
3.8,
through
the date of this Agreement:
(a) there
has
not been any adverse change in the business, assets, liabilities, results of
operations or financial condition of the Company; and
(b) there
has
not been any: (i) change in the Company’s authorized or issued capital
stock; (ii) a declaration or payment of any dividend or other distribution
or payment in respect of shares of capital stock; or (iii) amendment to the
Articles of Incorporation or Bylaws of the Company.
3.8. Title
to Properties.
The
Company has good and marketable title to all of its properties and assets,
real
and personal, free and clear of all encumbrances, liens or charges of any kind
or character.
3.9. Compliance
With Law.
The
business and activities of the Company has at all times been conducted in
accordance with their respective Articles of Incorporation and Bylaws and any
applicable law, regulation, ordinance, order, License (as defined in
Section 3.18), permit, rule, injunction or other restriction or ruling of
any court or administrative or governmental agency, ministry, or body, except
where the failure to do so would not result in a material adverse effect on
the
Company.
6
3.10. Taxes.
Except
as stated on Schedule
3.12,
the
Company has duly filed all federal, provincial, and material local and foreign
tax returns and reports, and all returns and reports of all other governmental
units having jurisdiction with respect to taxes imposed on it or on its income,
properties, sales, franchises, operations or employee benefit plans or trusts,
all such returns were complete and accurate when filed, and all taxes and
assessments payable by the Company has been paid to the extent that such taxes
have become due. All taxes accrued or payable by the Company for all periods
through the date of this Agreement, have been accrued or paid in full, whether
or not due and payable and whether or not disputed. Each of the Company has
withheld or collected and paid over to the appropriate governmental
authorities (or is properly holding for such payment) all Taxes
required by law to be withheld or collected, except for amounts which would
not,
individually or in the aggregate, have a material adverse effect on the Company.
For purposes of this Agreement, “Tax”
or
“Taxes”
means
any and all taxes, fees, levies, duties, tariffs, imposts and other charges
of
any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any government
or taxing authority, including, without limitation: taxes or other charges
on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers’ compensation, unemployment compensation, or net worth; taxes or other
charges in the nature or excise, withholding, ad
valorem,
stamp,
transfer, value added or gains taxes, license, registration and documentation
fees, and custom duties, tariffs and similar charges.
3.11. Assets.
(a) The
Company owns, leases or has the right to use all the properties and assets,
including, without limitation, the real property and personal property, used
in
the conduct of its business or otherwise owned, leased, or used, and, with
respect to contract rights, is a party to and enjoys the right to the benefits
of all contracts, agreements and other arrangements used or intended to be
used
by the Company or in or relating to the conduct of its business (all such
properties, assets and contract rights being the “Assets”).
The
Company has good and marketable title to, or, in the case of leased or subleased
Assets, valid and subsisting leasehold interests in, all the Assets, free and
clear of all encumbrances.
(b) The
Assets constitute all the properties, assets and rights forming a part of,
used
or held in, and all such properties, assets and rights used in the conduct
of,
the business of the Company and the Company’s subsidiaries as it is currently
conducted. All of the Assets are in good operating condition and repair, normal
wear and tear excepted.
3.12. Contingencies.
Except
as disclosed on Schedule 3.13,
there
are no actions, suits, claims or proceedings pending, or to the knowledge of
the
Company Shareholder threatened against, by or affecting, the Compamy in any
court or before any arbitrator or governmental agency that may have a material
adverse effect on the Company or which could materially and adversely affect
the
right or ability of the Company Shareholder to consummate the transactions
contemplated hereby. To the knowledge of the Company Shareholder, there is
no
valid basis upon which any such action, suit, claim, or proceeding may be
commenced or asserted against the Company. There are no unsatisfied judgments
against the Company and no consent decrees or similar agreements to which the
Company is subject and which could have a material adverse effect on the
Company.
7
3.13. Employee
Benefit Matters.
There
are no employee benefit plans (as defined in Section 3(3) of
ERISA), bonus, stock option, stock purchase, restricted stock, incentive,
deferred compensation, retiree medical or life insurance, supplemental
retirement, severance or other benefit plans, programs or arrangements to which
the Company is a party, with respect to which the Company has any obligation,
or
which are maintained, contributed to, or sponsored by the Company for the
benefit of any current or former employee, officer, or director of the
Company.
3.14. Intellectual
Property.
The
Company and the is the owner of the entire, title and interest in and to the
intellectual property used by them in the conduct of their businesses, free
and
clear of all Encumbrances, and has the right to use, all such intellectual
property in the continued operations of the Company.
3.15. Possession
of Franchises, Licenses, Etc.
Each of
the Company: (a) possess all material franchises, certificates, licenses,
permits and other authorizations (collectively, the “Licenses”) from
governmental authorities, political subdivisions or regulatory authorities
that
are necessary for the ownership, maintenance and operation of its business
in
the manner presently conducted; (b) are not in violation of any provisions
thereof; and (c) have maintained and amended, as necessary, all Licenses
and duly completed all filings and notifications in connection therewith.
Schedule
3.16
sets
forth a list of all of the Company’s Licenses.
3.16. Agreements
and Transactions with Related Parties.
Except
as disclosed on Schedule 3.17,
the
Company is not a party to any contract, agreement, lease or transaction with,
or
any other commitment to, (a) any ARC Shareholder, (b) any person
related by blood, adoption or marriage to any ARC Shareholder, (c) any
director or officer of the Company, (d) any corporation or other entity in
which any of the foregoing parties has, directly or indirectly, at least five
percent (5.0%) beneficial interest in the capital stock or other type
of equity interest in such corporation or other entity, or (e) any
partnership in which any such party is a general partner or a limited partner
having a five percent (5%) or more interest therein (any or all of the
foregoing being herein referred to as a “Related
Party”
and,
collectively, as the “Related
Parties”).
3.17. Litigation.
Except
as disclosed on Schedule
3.18,
there
is no suit, action or proceeding pending, and no person has overtly-threatened
in a writing delivered to the Company or the Company Shareholder to commence
any
suit, action or proceeding, against or affecting the Company, nor is there
any
judgment, decree, injunction, or order of any governmental entity or arbitrator
outstanding against, or, to the knowledge of the Company, pending investigation
by any governmental entity involving, the Company or the Company’s
Shareholder.
3.18. Material
Contracts.
Schedule 3.19
contains
a complete list of all contracts of the Company, which involve consideration
in
excess of the equivalent of $10,000 or have a term of one year or more (the
“Material
Contracts”).
The
Company has delivered to ARC a true, correct and complete copy of each of the
written contracts, and a summary of each oral contract, listed on Schedule 3.19.
Except
as disclosed in Schedule 3.19:
(a) the Company has performed all material obligations to be performed by
it under all such contracts, and is not in material default thereof, and
(b) no condition exists or has occurred which with the giving of notice or
the lapse of time, or both, would constitute a material default or accelerate
the maturity of, or otherwise modify, any such contract, and (c) all such
contracts are in full force and effect. No material default by any other party
to any of such contracts is known or claimed by the Company or any ARC
Shareholder to exist.
8
3.19. Employment
and Labor Matters.
Schedule 3.2
sets
forth the name, position, employment date, and current compensation (base and
bonus) of each employee of the Company. The Company is not a party to any
collective bargaining agreement or agreement of any kind with any union or
labor
organization.
3.20. Environmental
Matters.
The
Company is not in violation, in any material respect, of any Environmental
Law
(as defined herein); the Company has received all permits and approvals with
respect to emissions into the environment and the proper collection, storage,
transport, distribution or disposal of Wastes (as defined herein) and other
materials required for the operation of its business at present operating
levels; and they are not liable or responsible for any clean up, fines,
liability or expense arising under any Environmental Law, as a result of the
disposal of Wastes or other materials in or on the property of the Company
(whether owned or leased), or in or on any other property, including property
no
longer owned, leased or used by the Company. As used herein,
(a) “Environmental
Laws”
means,
collectively, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization
Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances
Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as
amended, any other “Superfund”
or
“Superlien”
law
or
any other federal, or applicable state or local statute, law, ordinance, code,
rule, regulation, order or decree (foreign or domestic) regulating,
relating to, or imposing liability or standards of conduct concerning, Wastes,
or the environment; and (b) “Wastes”
means
and includes any hazardous, toxic or dangerous waste, liquid, substance or
material (including petroleum products and derivatives), the generation,
handling, storage, disposal, treatment or emission of which is subject to any
Environmental Law.
3.21. Full
Disclosure.
No
representation or warranty of the Company Shareholder contained in this
Agreement, and none of the statements or information concerning the Company
contained in this Agreement and the Schedules attached hereto, contains or
will
contain as of the date hereof and as of the Closing Date any untrue statement
of
a material fact nor will such representations, warranties, covenants or
statements taken as a whole omit a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
| 4. |
REPRESENTATIONS
AND WARRANTIES OF ARC.
|
To
induce
the Company Shareholder to enter into this Agreement and to consummate the
transactions contemplated hereby, ARC represents and warrants to and covenants
with the Company Shareholder as follows:
9
4.1. Organization.
ARC is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. ARC is entitled to own or lease its properties
and
to carry on its business as and in the places where such business is now
conducted, and ARC is duly licensed and qualified in all jurisdictions where
the
character of the property owned by it or the nature of the business transacted
by it makes such license or qualification necessary, except where such failure
would not result in a material adverse effect on ARC.
4.2. Capitalization
and Related Matters.
(a) ARC
has
an authorized capital stock consisting of Five Hundred Million (500,000,000)
shares of common stock, par value $0.001 per share, of which Thirty Three
Million One Hundred Eighty-Five Thousand Three Hundred Ninety-Eight (33,185,398)
shares are issued and outstanding. Additionally, ARC has authorized the issuance
of Ten Million (10,000,000) shares of preferred stock, $0.001 per share, of
which One Million (1,000,000) are issued and outstanding.
(b) Except
as
disclosed in documents filed by ARC with the Securities and Exchange
Commission (the “SEC
Documents”),
and
except for employee stock options to purchase shares of the ARC Common Stock,
ARC does not have outstanding any securities convertible into capital stock,
nor
any rights to subscribe for or to purchase, or any options for the purchase
of,
or any agreements providing for the issuance (contingent or otherwise) of,
or any calls, commitments or claims of any character relating to, its capital
stock or securities convertible into its capital stock.
(c) The
shares of the ARC Common and Preferred Stock that are being conveyed to
Company’s Shareholder are free and clear of any and all security interests,
encumbrances, and rights of any kind or nature whatsoever (collectively,
“Encumbrances”),
and
upon delivery of the ARC Common and Preferred Stock hereunder, the Company
Shareholder and its assigns will acquire title thereto, free and clear of any
and all Encumbrances, except as created by the Company Shareholder.
4.3. Execution;
No Inconsistent Agreements; Etc.
(a) The
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Board of Directors of ARC and this Agreement is a valid and binding agreement
of
ARC enforceable against ARC in accordance with its terms, except as such
enforcement may be limited by bankruptcy or similar laws affecting the
enforcement of creditors’ rights generally, and the availability of equitable
remedies.
(b) The
execution and delivery of this Agreement by ARC does not, and the consummation
of the transactions contemplated hereby will not, constitute a breach or
violation of the charter or bylaws of ARC or a default under any of the terms,
conditions or provisions of (or an act or omission that would give rise to
any
right of termination, cancellation or acceleration under) any material
note, bond, mortgage, lease, indenture, agreement or obligation to which ARC
or
any of its Company’s subsidiaries is a party, pursuant to which any of them
otherwise receive benefits, or by which any of their properties may be
bound.
10
4.4. Financial
Statements.
ARC has
delivered to the Company the consolidated audited balance sheets of ARC as
of
December 31, 2006, the consolidated audited statement of income for the fiscal
year ended December 31, 2006, and the consolidated unaudited balance sheet
as of
March 31, 2007, collectively, the “ARC
Financial Statements”).
The
ARC Financial Statements have been prepared in accordance with GAAP, applied
on
a consistent basis (except that the unaudited statements do not contain all
the
disclosures required by GAAP), and fairly reflect in all material respects
the
consolidated financial condition of ARC and its subsidiaries as at the dates
thereof and the consolidated results of ARC’s operations for the periods then
ended. Since December 31, 2006, or as disclosed in the SEC Documents or press
releases issued by ARC, there has been no material adverse change in the assets
or liabilities, in the business or condition, financial or otherwise, of ARC,
or
in its results of operations.
4.5. Liabilities.
Except
as disclosed in the SEC Documents or press releases issued by ARC or
Schedule
4.5,
ARC nor
any of its subsidiaries has any material debt, liability or obligation of any
kind, whether accrued, absolute, contingent or otherwise, except (a) those
reflected on the ARC Financial Statements, including the notes thereto, and
(b) liabilities incurred in the ordinary course of business since December
31, 2006, none of which have had or will have a material adverse affect on
the
financial condition of ARC and its subsidiaries taken as a whole.
4.6. Contingencies.
Except
as disclosed on Schedule
4.6
or the
SEC Documents, there are no actions, suits, claims or proceedings pending or,
to
the knowledge of ARC’s management, threatened against, by or affecting ARC or
any of its subsidiaries in any court or before any arbitrator or governmental
agency which could have a material adverse effect on ARC or its subsidiaries
or
which could materially and adversely affect the right or ability of ARC to
consummate the transactions contemplated hereby. To the knowledge of ARC, there
is no valid basis upon which any such action, suit, claim or proceeding may
be
commenced or asserted against ARC or its subsidiaries. There are no unsatisfied
judgments against ARC and no consent decrees or similar agreements to which
ARC
or its subsidiaries is subject and which could have a material adverse effect
on
ARC or its subsidiaries or which could materially and adversely affect the
right
or ability of ARC to consummate the transactions contemplated
hereby.
4.7. Full
Disclosure.
No
representation or warranty of ARC contained in this Agreement, and none of
the
statements or information concerning ARC contained in this Agreement and the
Schedules attached hereto, contains or will contain as of the date hereof and
as
of the Closing Date any untrue statement of a material fact nor will such
representations, warranties, covenants or statements taken as a whole omit
a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
| 5. |
INTENTIONALLY
NOT USED.
|
| 6. |
CONDITIONS
TO OBLIGATIONS OF ALL PARTIES.
|
The
obligation of the Company, the Company Shareholder and ARC to consummate the
transactions contemplated by this Agreement are subject to the satisfaction,
on
or before the Closing, of each of the following conditions; any or all of which
may be waived in whole or in part by the joint agreement of ARC, the Company
and
the Company Shareholder:
11
6.1. Absence
of Actions.
No
action or proceeding shall have been brought or threatened before any court
or
administrative agency to prevent the consummation or to seek damages in a
material amount by reason of the transactions contemplated hereby, and no
governmental authority shall have asserted that the within transactions (or
any
other pending transaction involving ARC, any of its subsidiaries, the Company
Shareholder or the Company when considered in light of the effect of the within
transactions) shall constitute a violation of law or give rise to material
liability on the part of the Company Shareholder, the Company or ARC or its
Subsidiaries.
6.2. Consents.
The
parties shall have received from any suppliers, lessors, lenders, lien holders
or governmental authorities, bodies or agencies having jurisdiction over the
transactions contemplated by this Agreement, or any part hereof, such consents,
authorizations and approvals as are necessary for the consummation hereof,
including, without limitation, the consents listed on Schedule 6.2.
| 7. |
CONDITIONS
TO OBLIGATIONS OF ARC.
|
All
obligations of ARC to consummate the transactions contemplated by this Agreement
are subject to the fulfillment and satisfaction of each and every of the
following conditions on or prior to the Closing, any or all of which may be
waived in whole or in part by ARC:
7.1. Representations
and Warranties.
The
representations and warranties contained in Section 3 of this Agreement and
in any certificate, instrument, schedule, agreement or other writing delivered
by or on behalf of the Company and the Company Shareholder in connection with
the transactions contemplated by this Agreement shall be true, correct and
complete in all material respects (except for representations and
warranties which are by their terms qualified by materiality, which shall be
true, correct and complete in all respects) as of the date when made and
shall be deemed to be made again at and as of the Closing Date and shall be
true, correct and complete at and as of such time in all material respects
(except for representations and warranties which are by their terms qualified
by
materiality, which shall be true, correct and complete in all
respects).
7.2. Compliance
with Agreements and Conditions.
The
Company Shareholder and the Company shall have performed and complied with
all
material agreements and conditions required by this Agreement to be performed
or
complied with by the Company Shareholder and/or by the Company prior to or
on
the Closing Date.
7.3. Absence
of Material Adverse Changes.
No
material adverse change in the business, assets, financial condition, or
prospects of the Company shall have occurred, and no event shall have occurred
which has had or will have a material adverse effect on the business, assets,
financial condition or prospects of the Company.
7.4. Certificate
of the Company Shareholder.
The
Company Shareholder shall have executed and delivered, or caused to be executed
and delivered, to ARC one or more certificates, dated the Closing Date,
certifying in such detail as ARC may reasonably request to the fulfillment
and
satisfaction of the conditions specified in Sections 7.1 through 7.3
above.
12
| 8. |
CONDITIONS
TO OBLIGATIONS OF THE COMPANY
SHAREHOLDER.
|
All
of
the obligations of the Company Shareholder to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any
or
all of which may be waived in whole or in part by the Company
Shareholder:
8.1. Representations
and Warranties.
The
representations and warranties contained in Section 4 of this Agreement and
in any certificate, instrument, schedule, agreement or other writing delivered
by or on behalf of ARC in connection with the transactions contemplated by
this
Agreement shall be true and correct in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all
respects) when made and shall be deemed to be made again at and as of the
Closing Date and shall be true at and as of such time in all material respects
(except for representations and warranties which are by their terms qualified
by
materiality, which shall be true, correct and complete in all
respects).
8.2. Compliance
with Agreements and Conditions.
ARC
shall have performed and complied with all material agreements and conditions
required by this Agreement to be performed or complied with by ARC prior to
or
on the Closing Date.
8.3. Absence
of Material Adverse Changes.
No
material adverse change in the assets or financial condition, of ARC and its
Company’s subsidiaries, taken as a whole, shall have occurred and no event shall
have occurred which has had, or will have a material adverse effect on the
assets or financial condition of ARC and its Company’s subsidiaries, taken as a
whole.
8.4. Certificate
of ARC.
ARC
shall have delivered to the Company Shareholder a certificate, executed by
an
executive officer and dated the Closing Date, certifying to the fulfillment
and
satisfaction of the conditions specified in Sections 8.1 through 8.3
above.
| 9. |
INDEMNITY.
|
9.1. Indemnification
by Company Shareholder.
Subject
to Section 9.5, the Company Shareholder (hereinafter, collectively, called
the
“Shareholder
Indemnitors”) shall
jointly and severally defend, indemnify and hold harmless ARC and its direct
and
indirect Company’s subsidiaries (including the Company after
Closing) and affiliates, their officers, directors, employees and agents
(hereinafter, collectively, called “ARC
Indemnitees”) against
and in respect of any and all loss, damage, liability, fine, penalty, cost
and
expense, including reasonable attorneys’ fees and amounts paid in settlement
(collectively, “ARC
Losses”),
suffered or incurred by any ARC Indemnitee by reason of, or arising out of:
(a) any
misrepresentation, breach of warranty or breach or non-fulfillment of any
agreement of the Company and/or the Company Shareholder contained in this
Agreement or in any certificate, schedule, instrument or document delivered
to
ARC by or on behalf of the Company Shareholder or the Company pursuant to the
provisions of this Agreement (without regard to materiality thresholds contained
therein); and
13
(b) any
liabilities of the Company of any nature whatsoever (including tax
liability, penalties and interest), whether accrued, absolute, contingent or
otherwise, (i) existing as of the date of the Balance Sheet, and required
to be shown therein in accordance with applicable GAAP, to the extent not
reflected or reserved against in full in the Balance Sheet; or (ii) arising
or occurring between June 30, 2007 and the Closing Date, except for liabilities
arising in the ordinary course of business, none of which shall have a material
adverse effect on the Company.
9.2. Indemnification
by ARC.
Subject
to Section 9.5, ARC (hereinafter called the “ARC
Indemnitor”) shall
jointly and severally defend, indemnify and hold harmless the Company
Shareholder (hereinafter called “Shareholder
Indemnitees”) against
and in respect of any and all loss, damage, liability, fine, penalty, cost
and
expense, including reasonable attorneys’ fees and amounts paid in settlement
(collectively, “Shareholder
Losses”),
suffered or incurred by any Shareholder Indemnitees by reason of, or arising
out
of:
(a) any
misrepresentation, breach of warranty or breach or non-fulfillment of any
material agreement of ARC contained in this Agreement or in any other
certificate, schedule, instrument or document delivered to the Company
Shareholder by or on behalf of ARC pursuant to the provisions of this Agreement
(without regard to materiality thresholds contained therein); and
(b) any
liabilities of the Company of any nature whatsoever (including tax
liability, penalties and interest), whether accrued, absolute, contingent or
otherwise, arising from ARC’s ownership or operation of the Company after
Closing, but only so long as such liability is not the result of an act or
omission of the Company or the Company Shareholder occurring prior to the
Closing. ARC Losses and Shareholder Losses are sometimes collectively referred
to as “Indemnifiable
Losses.”
(c) indemnify
and hold harmless, the Company Shareholder from any and all loss, damage,
liability, fine, penalty, cost and expense, including reasonable attorneys’ fees
and amounts paid in settlement (collectively, “Shareholder
Losses”),
in
connection with ARC’s failure to follow all rules, regulations and statutes,
Federal or State, including all Securities and Exchange Commission and NRS
rules
and regulations in connection with this Share Exchange Agreement.
9.3. Defense
of Claims.
(a) Each
party seeking indemnification hereunder (an “Indemnitee”):
(i) shall provide the other party or parties (the “Indemnitor”) written
notice of any claim or action by a third party arising after the Closing Date
for which an Indemnitor may be liable under the terms of this Agreement, within
ten (10) days after such claim or action arises and is known to Indemnitee,
and (ii) shall give the Indemnitor a reasonable opportunity to participate
in any proceedings and to settle or defend any such claim or action. The
expenses of all proceedings, contests or lawsuits with respect to such claims
or
actions shall be borne by the Indemnitor. If the Indemnitor wishes to assume
the
defense of such claim or action, the Indemnitor shall give written notice to
the
Indemnitee within ten (10) days after notice from the Indemnitee of such
claim or action, and the Indemnitor shall thereafter assume the defense of
any
such claim or liability, through counsel reasonably satisfactory to the
Indemnitee, provided that Indemnitee may participate in such defense at their
own expense, and the Indemnitor shall, in any event, have the right to control
the defense of the claim or action.
14
(b) If
the
Indemnitor shall not assume the defense of, or if after so assuming it shall
fail to defend, any such claim or action, the Indemnitee may defend against
any
such claim or action in such manner as they may deem appropriate and the
Indemnitees may settle such claim or litigation on such terms as they may deem
appropriate but subject to the Indemnitor’s approval, such approval not to be
unreasonably withheld; provided, however, that any such settlement shall be
deemed approved by the Indemnitor if the Indemnitor fails to object thereto,
by
written notice to the Indemnitee, within fifteen (15) days after the
Indemnitor’s receipt of a written summary of such settlement. The Indemnitor
shall promptly reimburse the Indemnitee for the amount of all expenses, legal
and otherwise, incurred by the Indemnitee in connection with the defense and
settlement of such claim or action.
(c) If
a
non-appealable judgment is rendered against any Indemnitee in any action covered
by the indemnification hereunder, or any lien attaches to any of the assets
of
any of the Indemnitee, the Indemnitor shall immediately upon such entry or
attachment pay such judgment in full or discharge such lien unless, at the
expense and direction of the Indemnitor, an appeal is taken under which the
execution of the judgment or satisfaction of the lien is stayed. If and when
a
final judgment is rendered in any such action, the Indemnitor shall forthwith
pay such judgment or discharge such lien before any Indemnitee is compelled
to
do so.
9.4. Waiver.
The
failure of any Indemnitee to give any notice or to take any action hereunder
shall not be deemed a waiver of any of the rights of such Indemnitee hereunder,
except to the extent that Indemnitor is actually prejudiced by such
failure.
9.5. Limitations
on Indemnification.
Notwithstanding anything to the contrary contained in this
Agreement:
9.5.1. Time
Limitation.
No
party shall be responsible hereunder for any Indemnifiable Loss unless the
Indemnitee shall have provided such party with written notice containing a
reasonable description of the claim, action or circumstances giving rise to
such
Indemnifiable Loss within three (3) years after the Closing Date (the
“Indemnity
Notice Period”);
provided, however, that:
(a) with
respect to any Indemnifiable Loss resulting or arising from any breach of a
representation or warranty of the Company Shareholder relating to taxes, or
any
tax liability of the Company arising or relating to periods prior to the Closing
Date, the Indemnity Notice Period shall extend for the full duration of the
statute of limitations; and
(b) there
shall be no limit on the Indemnity Notice Period for indemnity claims:
(i) against the Company Shareholder for Indemnifiable Losses arising or
resulting from a breach of a representation or warranty relating to
Environmental Laws, or any liability which relates to the handling or disposal
of Wastes or the failure to comply with any Environmental Law; and
(ii) against any party based on fraud or intentional breach or
misrepresentation.
15
9.5.2. Caps
on Losses.
The
aggregate liability of the Company Shareholder after the Closing for ARC Losses
shall not exceed an amount equal to ___ Dollars (US $______), which represents
the value of the Exchange Consideration paid to the Company Shareholder as
of
the Closing Date. The aggregate liability of ARC after the Closing for
Shareholder Losses shall not exceed ____ Dollars (US $___), which represents
the
value of the Exchange Consideration paid to the Company Shareholder as of the
Closing Date.
9.5.3. Basket.
No
party shall have any liability hereunder for Indemnifiable Losses after the
Closing, with respect to a breach of the representations and warranties
contained herein, until the aggregate of all Indemnifiable Losses for which
the
Shareholder or ARC as applicable, are responsible under this Agreement exceeds
Ten Thousand ($10,000) Dollars (the “Basket”);
provided that once such Basket is exceeded for the Company Shareholder or ARC
as
applicable, the responsible party or parties shall be responsible for all
Indemnifiable Losses, from the first dollar as if such Basket never existed;
and
further provided that this Section 9.5.3 shall not limit in any respect
indemnity claims: (a) based upon fraud or intentional breach or intentional
misrepresentation; (b) arising from a breach by the ARC Indemnitor of any
covenant contained in this Agreement; (c) arising from a breach by the
Company Shareholder of any representation or warranty contained in
Section 3.2 hereof; or (d) related to any tax or tax liability of the
Company for periods prior to the Closing Date.
| 10. |
TERMINATION.
|
10.1. Termination.
This
Agreement may be terminated at any time on or prior to the Closing:
(a) By
mutual
consent of ARC and the Company Shareholder; or
(b) At
the
election of ARC if: (i) the Company Shareholder have breached or failed to
perform or comply with any of his representations, warranties, covenants or
obligations under this Agreement; or (ii) any of the conditions precedent
set forth in Section 6 or 7 is not satisfied as and when required by
this Agreement; or (iii) the Closing has not been consummated
by.
(c) At
the
election of the Company Shareholder if: (i) ARC has breached or failed to
perform or comply with any of its representations, warranties, covenants or
obligations under this Agreement; or (ii) any of the conditions precedent
set forth in Section 6 or 8 is not satisfied as and when required by this
Agreement; or (iii) the Closing has not been consummated by.
10.2. Manner
and Effect of Termination.
Written
notice of any termination (“Termination
Notice”) pursuant
to this Section 10 shall be given by the party electing termination of this
Agreement (“Terminating
Party”) to
the other party or parties (collectively, the “Terminated
Party”),
and
such notice shall state the reason for termination. The party or parties
receiving Termination Notice shall have a period of ten (10) days
after receipt of Termination Notice to cure the matters giving rise to such
termination to the reasonable satisfaction of the Terminating Party. If the
matters giving rise to termination are not cured as required hereby, this
Agreement shall be terminated effective as of the close of business on the
tenth
(10th) day following the Terminated Party’s receipt of Termination Notice.
Upon termination of this Agreement prior to the consummation of the Closing
and
in accordance with the terms hereof, this Agreement shall become void and of
no
effect, and none of the parties shall have any liability to the others, except
that nothing contained herein shall relieve any party from: (a) its
obligations under Sections 2.2 and 2.3; or (b) liability for its
intentional breach of any representation, warranty or covenant contained herein,
or its intentional failure to comply with the terms and conditions of this
Agreement or to perform its obligations hereunder.
16
| 11. |
MISCELLANEOUS.
|
11.1. Notices.
(a) All
notices, requests, demands, or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given upon
receipt if delivered in person, or upon the expiration of four (4) days
after the date sent, if sent by federal express (or similar overnight courier
service) to the parties at the following addresses:
|
(i)
If
to ARC:
|
||
|
XX
Xxx 00000
|
||
|
Xxx
Xxxxx, XX 00000
|
||
|
Attn:
A. Xxxxxx Xxxxxxxxx
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000) 000-0000
|
||
|
with
a copy to:
|
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx, LLP
|
|
|
000
Xxxxx Xxxxxxxx Xxxx.
|
||
|
Xxxxx
0000, Xxxxx Xxxxxx
|
||
|
Xxxxx,
Xxxxxxx 00000
|
||
|
Attn: Xxxxxxx
X. Xxxxxx, Esq.
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000) 000-0000
|
||
|
(ii)
If
to the Company:
|
Millennium
Motorsports of Pennsylvania
|
|
|
Attn.
Xxxxxx Xxxxxxxx, III
|
||
|
with
a copy to:
|
Schulman,Treem,Kaminkow,Gliden&Ravenell
|
|
|
000
Xxxx Xxxxx Xxxxxx
|
||
|
Xxxxx
0000,
|
||
|
Xxxxxxxxx,
XX 00000
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000)-000-0000
|
||
|
(iii) If
to Company
|
Exhibit
A
attached hereto.
|
|
|
Shareholder:
|
||
17
(b) Notices
may also be given in any other manner permitted by law, effective upon actual
receipt. Any party may change the address to which notices, requests, demands
or
other communications to such party shall be delivered or mailed by giving notice
thereof to the other parties hereto in the manner provided herein.
11.2. Survival.
Except
as provided in the next sentence, the representations, warranties, agreements
and indemnifications of the parties contained in this Agreement or in any
writing delivered pursuant to the provisions of this Agreement shall survive
any
investigation heretofore or hereafter made by the parties and the consummation
of the transactions contemplated herein and shall continue in full force and
effect after the Closing, subject to the limitations of Section 9.5. The
representations, warranties and agreements of the Company contained in this
Agreement shall not survive the Closing.
11.3. Counterparts;
Interpretation.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, and all of which shall constitute one and the same
instrument. This Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof, and this
Agreement contains the sole and entire agreement among the parties with respect
to the matters covered hereby. All Schedules hereto shall be deemed a part
of
this Agreement. This Agreement shall not be altered or amended except by an
instrument in writing signed by or on behalf of all of the parties hereto.
No
ambiguity in any provision hereof shall be construed against a party by reason
of the fact it was drafted by such party or its counsel. For purposes of this
Agreement: “herein”, “hereby”, “hereunder”, “herewith”, “hereafter” and
“hereinafter” refer to this Agreement in its entirety, and not to any particular
section or paragraph. References to “including”
means
including without limiting the generality of any description preceding such
term. Nothing expressed or implied in this Agreement is intended, or shall
be
construed, to confer upon or give any person other than the parties hereto
any
rights or remedies under or by reason of this Agreement.
11.4. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Nevada. The parties hereto agree that any claim, suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby shall be submitted for adjudication exclusively in any
state
or federal court sitting in San Diego County, California, and each party hereto
expressly agrees to be bound by such selection of jurisdiction and venue for
purposes of such adjudication. Each party (a) waives any objection which it
may
have that such court is not a convenient forum for any such adjudication, (b)
agrees and consents to the personal jurisdiction of such court with respect
to
any claim or dispute arising out of or relating to this Agreement or the
transactions contemplated hereby and (c) agrees that process issued out of
such
court or in accordance with the rules of practice of such court shall be
properly served if served personally or served by certified mail or other form
of substituted service, as provided under the rules of practice of such
court.
11.5. Successors
and Assigns; Assignment.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, legal representatives, and
successors; provided, however, that no Shareholder may assign this Agreement
or
any rights hereunder, in whole or in part.
18
11.6. Partial
Invalidity and Severability.
All
rights and restrictions contained herein may be exercised and shall be
applicable and binding only to the extent that they do not violate any
applicable laws and are intended to be limited to the extent necessary to render
this Agreement legal, valid and enforceable. If any terms of this Agreement
not
essential to the commercial purpose of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it
is
the intention of the parties that the remaining terms hereof shall constitute
their agreement with respect to the subject matter hereof and all such remaining
terms shall remain in full force and effect. To the extent legally permissible,
any illegal, invalid or unenforceable provision of this Agreement shall be
replaced by a valid provision which will implement the commercial purpose of
the
illegal, invalid or unenforceable provision.
11.7. Waiver.
Any
term or condition of this Agreement may be waived at any time by the party
which
is entitled to the benefit thereof, but only if such waiver is evidenced by
a
writing signed by such party. No failure on the part of a party hereto to
exercise, and no delay in exercising, any right, power or remedy created
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy by any such party preclude any other
future exercise thereof or the exercise of any other right, power or remedy.
No
waiver by any party hereto to any breach of or default in any term or condition
of this Agreement shall constitute a waiver of or assent to any succeeding
breach of or default in the same or any other term or condition
hereof.
11.8. Headings.
The
headings as to contents of particular paragraphs of this Agreement are inserted
for convenience only and shall not be construed as a part of this Agreement
or
as a limitation on the scope of any terms or provisions of this
Agreement.
11.9. Expenses.
Except
as otherwise expressly provided herein, all legal and other costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by ARC or the Company Shareholder as each party incurs
such
expenses, and none of such expenses shall be charged to or paid by the
Company.
11.10. Finder’s
Fees.
ARC
represents to the Company Shareholder that no broker, agent, finder or other
party has been retained by it in connection with the transactions contemplated
hereby and that no other fee or commission has been agreed by the ARC to be
paid
for or on account of the transactions contemplated hereby. The Company
Shareholder represent to ARC that no broker, agent, finder or other party has
been retained by Shareholder or the Company in connection with the transactions
contemplated hereby and that no other fee or commission has been agreed by
the
Company Shareholder or the Company to be paid for or on account of the
transactions contemplated hereby.
11.11. Gender.
Where
the context requires, the use of the singular form herein shall include the
plural, the use of the plural shall include the singular, and the use of any
gender shall include any and all genders.
19
11.12. Acceptance
by Fax.
This
Agreement shall be accepted, effective and binding, for all purposes, when
the
parties shall have signed and transmitted to each other, by telecopier or
otherwise, copies of the signature pages hereto.
11.13. Attorneys
Fees.
In the
event of any litigation arising under the terms of this Agreement, the
prevailing party or parties shall be entitled to recover its or their reasonable
attorneys fees and court costs from the other party or parties.
11.14. Opportunity
to Hire counsel; Role of K&L Gates llp.
The
Company Shareholder and the Company acknowledge that they have been advised
and
have been given an opportunity to hire counsel with respect to this Agreement
and the transactions contemplated hereby. The Company Shareholder and the
Company further acknowledge that the law firm of Xxxxxxxxxxx & Xxxxxxxx
Xxxxxxx Xxxxx Xxxxx LLP, did not provide them any legal advice, including any
tax advice with respect to the transactions contemplated by this Agreement.
The
Company Shareholder further acknowledge that the law firm of Xxxxxxxxxxx &
Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP, has solely represented ARC in connection
with
this Agreement and the transactions contemplated hereby and no other
person.
11.15. Time
is of the Essence.
It is
understood and agreed among the parties hereto that time is of the essence
in
this Agreement and this applies to all terms and conditions contained
herein.
11.16. NO
JURY TRIAL.
THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF
THIS AGREEMENT.
[REMAINDER
OF THE PAGE INTENTIONALLY LEFT BLANK]
20
IN
WITNESS WHEREOF,
the
parties have executed this Agreement to be duly executed by their duly
authorized officers as of the day and year first above written.
| AMERICAN RACING CAPITAL, INC., | ||
| a Nevada corporation | ||
| By: |
/s/
A. Xxxxxx Xxxxxxxxx
|
|
| Name: |
A.
Xxxxxx Xxxxxxxxx
|
|
| Title: |
President
& Chief Executive Officer
|
|
| COMPANY SHAREHOLDER: | ||
| By: |
/s/
Xxxxxx Xxxxxxxx, III
|
|
| Name: |
Xxxxxx
Xxxxxxxx, III
|
|
| THE COMPANY: | ||
| MILLENIUM MOTORSPORTS OF PENNSYLVANIA, a Pennsylvania ______ | ||
| By: |
/s/
Xxxxxx Xxxxxxxx, III
|
|
| Name: |
Xxxxxx
Xxxxxxxx, III
|
|
| Title: |
President
|
|
21
