ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (“Agreement”)
is
made this ____ day of July, 2005, by and between Xxxxxxxxxxxx.xxx, Inc. (the
“Buyer”)
and
Allamuchy Transport, Inc. (“Seller”).
WITNESSETH:
WHEREAS,
Seller is engaged in the business of selling and delivering No. 2 fuel oil
to
retail customers and providing services to such customers’ heating systems
("Business");
and
WHEREAS,
Buyer desires to purchase from Seller, and Seller desires to sell to Buyer,
certain of Seller's assets used in the Business upon the terms and conditions
hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
1.
BASIC
TRANSACTION.
1.1. Purchase
and Sale of Assets.
Subject
to the terms and conditions hereinafter set forth, Seller agrees to sell,
assign, transfer and convey to Buyer, and Buyer agrees to purchase from Seller,
on the Closing Date (as hereafter defined), all of the right, title and interest
of Seller in the following assets related to the Business (collectively, the
“Assets”)
free
and clear of any liabilities, obligations, adverse claims, security interests,
liens and encumbrances except as explicitly permitted herein:
(a)
Customer
Contracts.
Those
outstanding delivery, sale and service agreements and purchase orders between
Seller and its customers as described in and attached hereto as Schedule
1.1(a),
if any.
Seller and Buyer shall execute an Assignment and Assumption Agreement for the
Customer Contracts in substantially the same form and content as Exhibit
1.1(a).
(b)
Customer
Information.
All
customer lists and customer data, and sales and promotional material and other
sales-related material relating to, or used in connection with the operation
of,
the Business, including, without limitation, contact information for all
customers and pricing information (collectively, the “Customer
Information”);
(c)
Name. The
exclusive right to use the name Allamuchy Oil or variations thereof in
connection with the operation of the Business. Seller shall cease use of the
name Allamuchy Oil, and shall not use any similar name except that it may use
“Allamuchy Fuel” or “Allamuchy Transport” with respect to its diesel fuel
business. Seller cancel all registered fictitious names containing the term
Allamuchy Oil.
(d)
Phone
Number.
All
phone and fax numbers of Seller used in connection with the Business, including
the number 000-000-0000. For a period of two years after Closing, Buyer shall
refer to Seller, by giving the caller a new phone number supplied by Seller,
all
calls requesting diesel fuel sales or service received through one of Seller’s
former phone numbers. After two years, Buyer may continue to refer such calls
for diesel, and shall receive the fees specified in Section 5.5 of this
Agreement for such referrals.
1.2. No
Assumption of Liabilities.
Buyer
is acquiring the Assets hereunder without any assumption of Seller's debts,
obligations, liabilities, accounts payable, or commitments of Seller, whether
accrued now or hereafter, whether fixed or contingent, or whether known or
unknown, except as explicitly provided in this Section 1.2. Seller will deliver
products and provide services under the Customer Contracts on or after the
Closing Date pursuant to the terms and conditions of the Transport Agreement
to
be entered into between the parties at Closing. Notwithstanding the foregoing,
Buyer will respond to all customer complaints without question as to the time
period in which the complaint arose, provided that Buyer will not assume any
liability due to defective service or delivery caused by Seller or spillage
caused by Seller, and Buyer will not honor any commitments by Seller to provide
service, repair or remedy, except at Buyer’s customary charges.
1.3.
Excluded
Assets.
Buyer
is not acquiring any assets of Seller except for those described in this
Agreement. Without limiting the generality of the foregoing sentence, Buyer
is
not acquiring the customer information, customer contracts, goodwill and other
assets related solely to the Seller’s diesel fuel business. In addition, Seller
may continue selling No. 2 fuel oil to the customers listed on Schedule 1.3
hereof, provided such customers are on the date hereof also customers of
Seller’s diesel oil business and Seller discontinues using the name Allamuchy
Oil with such customers.
2.
PURCHASE
PRICE.
2.1. Price.
The
purchase price for the Assets shall be as follows (collectively, the "Purchase
Price"):
(a)
Payment
at Closing.
Buyer
shall pay Seller the amount of $156,000 (fixed price) by wire transfer or
certified check on the Closing Date. The fixed price will be reduced by the
purchase price of any No. 2 fuel oil prepaid to Seller but not delivered as
of
Closing. In addition, at Closing the fixed price will be reduced by the then
outstanding amount of the credit previously provided to Seller by Buyer. On
the
date of this Agreement, such amount was approximately $24,000. The Buyer and
Seller shall mutually agree upon the outstanding amount at Closing.
(b)
Deferred
Payment.
Buyer
shall pay an amount equal to (i) $.30 multiplied by the number of gallons of
fuel oil sold to Seller’s customers in the period beginning one day after the
Closing Date and ending on the first anniversary of the Closing Date, less
(ii)
$156,000. This amount shall be paid within fifteen (15) days after the first
anniversary of the Closing Date. Payment will be accompanied by a statement
showing calculation of the payment certified by the Chief Financial Officer,
or
equivalent officer, of Buyer. No payment shall be made if the amount calculated
in clause (i) does not exceed $156,000. In the event that any undisputed or
otherwise definitively proven amount of the deferred purchase price in excess
of
$2,500 is not paid within ten (10) days after demand by Seller, Seller, upon
30
days’ notice to Buyer, in addition to any and all other remedies available at
law or in equity, shall be entitled to use the name Allamuchy Oil and Buyer
shall cease use of the name Allamuchy Oil.
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(c)
Assumption
and Performance.
On the
Closing Date, Buyer shall assume and accept assignment of the Customer Contracts
listed on Schedule
1.1(a)
and
shall use its commercially reasonable efforts to timely and diligently perform
all of its duties and obligations thereunder arising after the Closing Date.
The
obligations and liabilities assumed by Buyer under customer contracts shall
be
subject to the provisions of Section 1.2.
2.2.
The
Closing.
Subject
to fulfillment of the conditions set forth in Section 6 of this Agreement,
the
closing of the transaction contemplated herein ("Closing")
shall
be held at the offices of Buyer on July 18, 2005, or at such other place or
such
later date as the parties hereto may mutually establish ("Closing
Date").
2.3.
Transactions
at Closing.
At the
Closing, the following transactions shall occur, all of which shall be deemed
to
occur simultaneously:
(a)
Seller
shall deliver or cause to be delivered to Buyer, each in form reasonably
satisfactory to Buyer and its counsel:
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(i)
|
A
xxxx of sale (“Xxxx
of Sale”)
conveying and transferring to Buyer the Assets, in the form attached
hereto as Exhibit
A;
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(ii)
|
An
Assignment and Assumption of Contracts in the form attached hereto
as
Exhibit
B;
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|
(iii)
|
A
Certificate of Good Standing with respect to Seller from the state
of
Seller’s incorporation, and in not incorporated in New Jersey, a
Certificate of Good Standing as a foreign corporation in New
Jersey.;
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(iv)
|
A
copy of the resolutions of the directors of Seller authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated herein;
|
|
(v)
|
A
copy of the consent of the sole shareholder of Seller authorizing
the
execution, delivery and performance of this Agreement and the transactions
contemplated herein;
|
|
(vi)
|
Such
other documents as may be reasonably requested by Buyer or Buyer’s
attorney in order to complete the transactions contemplated by this
Agreement; and
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3
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(vi)
|
The
Buyer’s standard Transport Agreement, on the terms referenced in Section
5.4 of this Agreement.
|
(b)
Buyer
shall deliver or cause to be delivered to Seller each in form reasonably
satisfactory to Seller and its counsel:
|
(i)
|
The
portion or the Purchase Price payable at Closing, as set forth in
Section
2.1(a) of this Agreement;
|
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(ii)
|
A
copy of the resolutions of the directors of Buyer authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated herein;
|
| (iv) |
The
Assignment and Assumption of
Contracts;
|
|
(v)
|
Such
other documents as may be reasonably requested by Seller or Seller’s
attorney in order to complete the transactions contemplated by this
Agreement; and
|
|
vi)
|
The
Buyer’s standard Transport Agreement, on the terms referenced in Section
5.4 of this Agreement.
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3.
REPRESENTATIONS
AND WARRANTIES OF SELLER.
To
induce Buyer to enter into this Agreement and perform its obligations hereunder,
Seller represents and warrants to Buyer as follows:
3.1. Organization
and Standing.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of New Jersey.
3.2.
Authorization
of Transaction.
Seller
has full power and authority (including corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder.
The
board of directors and shareholders of Seller have duly authorized the
execution, delivery, and performance of this Agreement by Seller. This
Agreement, constitutes a valid and legally binding obligation of Seller,
enforceable in accordance with its terms.
3.3. Title
to Assets; Encumbrances.
Seller
has good and marketable title to each and all of the Assets, free and clear
of
any liabilities, obligations, adverse claims, security interests, liens and
encumbrances (collectively, "Claims"),
other
than Claims set forth on Schedule 3.3 hereof. All of the Claims set forth on
Schedule 3.3 shall be satisfied at Closing or the claimants shall provide
releases or other written assurances reasonably acceptable to Buyer that neither
the Buyer nor the Assets shall be subject to such claims, in a form and manner
reasonably acceptable to Buyer. Seller will convey to Buyer at the Closing
good
and marketable title to all the Assets, free and clear of Claims of any third
party.
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3.4. Customer
Contracts.
Seller
has no written or oral agreement with any customer regarding the sale of No.
2
fuel oil or related service except as set forth on Schedule 3.4. Schedule 3.4
also contains a schedule of any No. 2 fuel oil which has been paid for by a
Customer but has not been delivered and will not be delivered before Closing.
No
Material Customers (defined in the next sentence) have notified Seller within
the past 120 days of their intent to cease to do business with Seller. “Material
Customers” means customers whose No. 2 fuel purchases since January 1, 2004
represent 10% or more of Seller’ total No. 2 fuel sales during that period, as
measured in gallons.
3.5. Brokers
or Finders.
Seller
has not incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other like payment in
connection with this Agreement.
3.6.
No
Material Adverse Changes.
Except
as disclosed by Seller to Buyer in writing, since September 30, 2004 as there
has been no material adverse change in Seller’s financial condition or its
seasonal fuel sales.
3.7.
Customer
Relations.
Seller
has not in the past three months received materially more customer complaints
regarding its No. 2 fuel oil business or related services, on a percentage
of
customers basis, than its average historical amount of customer complaints.
3.8.
Representations
Regarding Sales.
The
written sales information provided by Seller to Buyer attached hereto as
Schedule 3.8 is true and correct in all material respects. Since the date of
the
information provided on Schedule 3.8, there has been no material reduction
in
periodic sales by gallon in comparable periods.
3.9.
Taxes.
Except
as set forth on Schedule 3.9, Seller has paid all taxes which may be imposed
on
it related to its income, operations, existence, sales, assets, employees and
otherwise which have become due before the date hereof, including without
limitation all sales and other taxes collected from customers for the benefit
of
taxing authorities. Except as set forth on Schedule 3.9, Seller has properly
withheld or collected and paid over to the appropriate authorities all taxes
and
other charges it is required to withhold or collect from customers or employees.
As to taxes which are not yet due, Seller agrees to pay such taxes on or before
the due date. Except as set forth on Schedule 3.9, Seller has timely and
properly filed all tax returns of any type during the previous five years.
All
matters disclosed on Schedule 3.9 will be satisfied or remedied, or Buyer shall
have been provided reasonably acceptable releases or other written assurances
that neither Buyer nor the Assets will be subject to any such matters, on or
before Closing.
3.10.
Legal
Proceedings.
Except
as set forth on Schedule 3.10, there are no (and, during the five years
preceding the date hereof, there have not been any) actions, suits, proceedings,
orders or investigations pending or, to the knowledge of Seller, threatened
against or affecting the Seller, the Assets or the Business at law or in equity,
or before any arbitrator, or before or by any federal, state, municipal or
other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and there is no reasonable basis known to Seller for any
of
the foregoing. Except as set forth on Schedule 3.10, Seller is not subject
to or
bound by any outstanding orders, judgments or decrees of any court or
governmental entity with respect to the Business or Assets.
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3.11.
Environmental
and Permit Matters.
To the
knowledge of Seller, Seller is in compliance in all material respects with
all
federal, state, and local statutes, ordinances, guides having the effect of
law,
rules and regulations, all court orders and decrees and arbitration awards,
which pertain to environmental matters or contamination of any type whatsoever
(“Environmental Laws”). A description of any outstanding notice, citation,
inquiry or complaint which Seller has received of any alleged violation of
any
Environmental Law or permit relating to the Business or the Assets known to
Seller has been provided to Buyer in writing. (As used in the preceding
sentence, the term “outstanding” refers to any notice, citation, inquiry or
complaint that pertains to a matter that has not been corrected or otherwise
resolved.) Seller possesses all permits of any type which are currently required
for the operation of the Business, and to Seller’s knowledge is in compliance in
all material respects with the provisions of all such permits. Other than spill
or leaks occurring in the ordinary course of business which have been resolved,
there has been no generation, storage, disposal, treatment or transportation
of
any Hazardous Materials (as herein defined) by Seller, or to Seller’s knowledge
on behalf of Seller in violation of, or which could give rise to any liability
or obligation of Seller under, any Environmental Laws.
4.
REPRESENTATIONS
AND WARRANTIES OF BUYER.
To
induce Seller to enter into this Agreement and perform its obligations
hereunder, Buyer represents and warrants to Seller as follows:
4.1. Organization
and Standing.
Buyer
is a corporation duly organized, validly existing and in good standing under
the
laws of the jurisdiction of its incorporation.
4.2.
Authorization
of Transaction.
Buyer
has full power and authority (including corporate power and authority, if
applicable) to execute and deliver this Agreement and to perform its`
obligations hereunder. The board of directors has, to the extent required,
duly
authorized the execution, delivery, and performance of this Agreement by Buyer.
This Agreement, constitutes a valid and legally binding obligation of Buyer
and
Seller, enforceable in accordance with its terms.
4.5. Brokers
or Finders.
Buyer
has not incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other like payment in
connection with this Agreement.
5.
POST-CLOSING
COVENANTS.
5.1.
Non-Competition.
(a)
For
a
period commencing on the Closing Date and concluding on the seventh anniversary
of the Closing Date,("Post-Closing
Period"),
Seller and Xxxxx Xxxxxxxxxx agree that none of Seller nor Xxxxx Xxxxxxxxxx
will,
in the Territory (as defined below), (i) directly or indirectly engage in or
have a financial interest in, as an owner, partner, member, stockholder,
officer, director, manager, employee, agent, contractor, consultant or
otherwise, or provide any services to, any Competing Business, (ii) solicit,
divert or appropriate or attempt to solicit, divert or appropriate, directly
or
indirectly, for or on behalf of itself or any other person, any business
relating to the Business from any person who is at the time of the solicitation,
or has at any time within five (5) years prior to the date of such action been,
a customer or supplier of the Business; or (iii) solicit or attempt to solicit
for hire any person who is an employee of Buyer. “Competing
Business”
means
the retail sale of No. 2 fuel oil or any services related thereto. “Territory”
means
the area within a 75 mile radius of the Seller’s primary office on the date of
this Agreement. Notwithstanding the foregoing, Seller may continue to sell
No. 2
fuel oil to the customers listed on Schedule 1.3 hereto, under the conditions
set forth in Section 1.3.
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(b)
If
the
final judgment of a court of competent jurisdiction declares that any term
or
provision of this Section is invalid or unenforceable, the parties agree that
the court making the determination of invalidity or unenforceability shall
have
the power to reduce the scope, duration, or area, to delete specific words
or
phrases, or to replace any invalid or unenforceable term or provision with
a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and
this Agreement shall be enforceable as so modified.
5.2.
Audit
Rights.
Seller
shall have the right to examine the sales records of Buyer as the same relate
to
the calculation of the payment due under paragraph 2.1(b), in order to verify
the number of gallons sold to Seller’s customers. If an audit reveals a
deficiency in an amount paid to Seller, Buyer shall pay such deficiencies to
Seller within ten (10) calendar days notice thereof (a “Notice”).
If
the aggregate deficiencies in payment found by such examination exceeds 3%
of
the reported sales in excess of 520,000 gallons, Buyer shall also pay to Seller
the amount of the actual reasonable costs and expenses incurred by Seller
(including, without limitation, the cost of independent accountants) in
connection with such audit, not to exceed the amount of such deficiency.
5.3.
Confidentiality.
During
the Post-Closing Period, the Buyer and the Seller will maintain in confidence,
and cause each of their directors, officers, employees, agents and advisors
to
maintain in confidence, and not disclose to any third party, or use for the
benefit of itself or any third party, any written, oral or other information
obtained in confidence from the other party to this Agreement in connection
with
this Agreement or the transactions contemplated hereby (the “Confidential
Information”)
(unless such information (i) was already known to such party prior to receiving
it from the delivering party, or (ii) was or becomes part of the public
knowledge or literature other than by breach of this Agreement, or (iii) was
received from a source not bound by a duty of confidentiality to the delivering
party, or (iv) is developed by the receiving party independently of any
Confidential Information received by the receiving party from the delivering
party, or (v) is necessary to enforce the rights of a party under this
Agreement), unless the use of such Confidential Information is necessary or
appropriate in making any filing or obtaining any consent or approval required
for the consummation of this Agreement or the transactions contemplated hereby
or unless the furnishing of such Confidential Information is required by law.
After Closing, all customer information relating to the Business shall be the
Confidential Information of Buyer.
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5.4.
Transport
Agreement.
Seller
shall provide oil delivery services for sales of No. 2 fuel oil to its former
customers and others on behalf of Buyer for a five year period following
Closing, at the rate of $.12 per gallon for deliveries out of the Royal terminal
in Netcong, NJ and $.15 per gallon for deliveries out of the Port of Newark
terminal, and upon the terms and conditions contained in Buyer’s standard
transport agreement to be executed at Closing. The transport agreement shall
provide that Seller shall be entitled to collect a service fee from customers
for deliveries of less than 150 gallons. The amount of the service fee shall
be
mutually agreed between Seller and Buyer.
5.5
Referral
Fees.
Buyer
shall pay Seller referral fees for any new customers first referred by Seller
to
Buyer as follows:
(a)
For
homeowner customers, Buyer will pay Seller $35 upon the customer’s execution of
an oil delivery contract.
(b)
For
commercial customers who execute oil delivery contracts for a minimum of one
year or 100,000 gallons, Buyer will pay Seller $.02 per gallon for all purchases
by such customers, for so long as they remain customers of Buyer. Such referral
fee shall be paid only after receiving payment from the customer. Referral
fees
under paragraphs (a) and (b) will be paid monthly, accompanied by a statement
containing reasonable detail.
A
customer shall be considered a new customer for purposed of thus section 5.5
only if the customer was not a customer of Seller at closing or at any time
within 12 months prior to Closing, and was not a customer of Buyer at the time
the referral was made or at any time within 12 months prior to Seller’s making
the referral.
Should
Buyer refer new diesel customers to Seller after the second anniversary of
Closing, as discussed in paragraph 1.1(d), above, Seller shall pay Buyer
referral fees in the same amount and manner as specified above for referral
fees
paid to Seller by Buyer.
6.
CONDITIONS
TO CLOSING.
6.1. Seller's
Conditions of Closing.
The
obligations of Seller hereunder shall be subject to and conditioned upon the
satisfaction at the Closing of each of the following conditions:
(a)
All
representations and warranties of Buyer contained in this Agreement and the
Schedules hereto shall be true and correct in all material respects at and
as of
the Closing Date.
(b)
Buyer
shall have performed all agreements and covenants and satisfied all conditions
on each of their part to be performed or satisfied by the Closing Date pursuant
to the terms of this Agreement.
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(c)
No
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain, prohibit, or obtain substantial damages
in
respect of, or which is related to, or arises out of, this Agreement or the
consummation of the transactions contemplated hereby, or which is related to
or
arises out of Buyer or Seller, if such action, proceeding, investigation,
regulation or legislation would make it inadvisable to consummate such
transactions.
6.2.
Buyer's
Conditions of Closing.
The
obligations of Buyer hereunder shall be subject to and conditioned upon the
satisfaction at the Closing of each of the following conditions:
(a)
All
representations and warranties of Seller contained in this Agreement and the
Schedules hereto shall be true and correct in all material respects at and
as of
the Closing Date.
(b)
Seller
shall have performed all agreements and covenants and satisfied all conditions
on its part to be performed or satisfied by the Closing Date pursuant to the
terms of this Agreement.
(c)
There
shall have been no material adverse change in the condition (financial or
otherwise) of the Seller since the execution of this Agreement.
(e)
No
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain, prohibit, or obtain substantial damages
in
respect of, or which is related to, or arises out of, this Agreement or the
consummation of the transactions contemplated hereby, or which is related to
or
arises out of Buyer or Seller, if such action, proceeding, investigation,
regulation or legislation would make it inadvisable to consummate such
transactions.
6.3 Mutual
Conditions to Closing.
The
obligations of each of Buyer and Seller hereunder shall be subject to and
conditioned upon (i) Seller’s obtaining a release of the security interest on
the Assets held by Skylands Community Bank prior to or simultaneous with the
Closing, and (ii) Seller’s obtaining a release of the Assets and Buyer from all
liens and other potential liability relating to Seller’s and Xxxxx Xxxxxxxxx’x
obligations to the State of New Jersey for taxes, or other arrangements shall
have been made satisfactory to Buyer, in its sole discretion, with respect
to
the obligations to the taxing authorities. Seller shall use its best efforts
to
obtain the satisfaction of the conditions set forth in this Section 6.3,
provided, however, that this shall not be construed to require Seller to pay
any
liability it disputes in good faith or to make aggregate payments in excess
of
the amount to be paid by Buyer at Closing.
In
the
event the conditions set forth in this Section 6.3 are not satisfied on or
before August 31, 2005, either party may terminate this agreement by written
notice to the other, without liability for such termination; provided however,
that such termination shall not relieve either party from liability for breach
of any covenant, representation or warranty contained in this
Agreement.
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7.
INDEMNIFICATION.
7.1. Indemnification
by Seller.
From
and after the date of this Agreement, Seller shall indemnify, defend and hold
harmless Buyer and its agents, employees, representatives, attorneys,
stockholders, officers, directors, successors and assigns (severally and
collectively, the "Indemnified
Buyer")
against and from all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, judgments, settlements, out-of-pocket costs, expenses
and disbursements (including reasonable costs of investigation, and reasonable
attorneys, accountants, expert witnesses fees and other costs of defense),
of
whatsoever kind and nature, which the Indemnified Buyer shall incur or suffer
as
a result of (i) the inaccuracy of any representation or warranty of Seller,
(ii)
the breach of any covenant or agreement of Seller set forth herein or of Xxxxx
Xxxxxxxxxx set forth in Section 5.1 hereof, or (iii) any liability of Seller
and
any liability relating to or arising from the operation of the Business or
ownership of the Assets prior to the Closing Date except for liabilities
explicitly assumed in this Agreement. Indemnified Buyer’s rights under this
indemnity, and its reliance on the representations and warranties of the Seller,
shall not be affected by any investigation or lack of investigation by the
Buyer
or knowledge of the Buyer prior to the Closing Date.
7.2. Indemnification
by Buyer and Seller.
From
and after the date of this Agreement, Buyer shall indemnify, defend and hold
harmless Seller and its agents, employees, representatives, attorneys,
stockholders, officers, directors, successors and assigns (severally and
collectively, the "Indemnified
Seller")
against and from all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, judgments, settlements, out-of-pocket costs, expenses
and disbursements (including reasonable costs of investigation, and reasonable
attorneys, accountants, expert witnesses fees and other costs of defense),
of
whatsoever kind and nature, which the Indemnified Seller shall incur or suffer
as a result of (i) a material inaccuracy of any representation or warranty
of
Buyer, (ii) a material breach of any covenant or agreement set forth herein
of
Buyer, (iii) the operation of the Business of after the Closing Date.
7.3. Survival;
Limitations.
The
representations and warranties in this Agreement and the Schedules and Exhibits
attached hereto or delivered in any writing delivered by any party to any of
the
other parties in connection with this Agreement shall survive the Closing.
No
claim may be brought for indemnification hereunder unless a notice of claim
or
potential claim is given by the party seeking indemnification as follows: (i)
any claim for intentional misrepresentation or fraud may be brought at any
on or
before the second anniversary of the Closing date; (ii)any claim relating to
a
breach of representation, warranty or covenant relating to taxes may be made
at
any time prior to the expiration of the applicable limitations period for the
taxing entity to bring any related claim; (iii) any claim for breach of a
covenant which is to be performed after closing may be made at any time within
one year after the breach occurs, and any claim with respect to the deferred
payment discussed in section 2.1(b) may be made on or before the second
anniversary of the Closing Date; and (iv) any other claim shall be made on
or
before the first anniversary of the Closing date. No claim for indemnity shall
be made hereunder unless and until the Indemnified Seller or Indemnified Buyer,
as the case may be, has incurred $15,000 of actual damages and related expenses,
and then such claim may be made only for such amounts in excess of $15,000.
The
foregoing damage limitation shall not apply to the Deferred Payment defined
in
Section 2.1; Seller shall be entitled to bring a claim against Buyer for any
deficiency in the Deferred Payment.
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7.4. Notice
of Claims and Potential Claims.
Any
claim for indemnity shall be made by written notice to a party ("Indemnifying
Party")
specifying in reasonable detail the amount and the basis of the claim. The
Indemnified Seller or Buyer agree to give prompt written notice to the
Indemnifying Party of the receipt by the Indemnified Seller or Buyer of notice
of any claim by a third party against the Indemnified Seller or Buyer which
might give rise to a claim against the Indemnifying Party stating the nature
and
basis of such claim and, if ascertainable, the amount thereof. In connection
with any such third party claim, the Indemnifying Party may, at its election
and
expense, have the right to participate in the defense of such third party claim
and no such third party claim shall be settled without the consent of the
Indemnifying Party which consent shall not be unreasonably withheld or
delayed.
8. MISCELLANEOUS.
8.1. Right
to Assign.
Neither
party may assign its rights and obligations under this Agreement without the
written consent of the other party, except that Buyer may assign its rights
and
obligations to its parent company, an entity controlled by its parent company
or
any purchaser of all or substantially all of Buyer’s business, after the
deferred payment described in Section 2.1 (b) has been paid in
full.
8.2. Notices.
All
notices, requests, demands, claims, and other communications hereunder shall
be
in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given when received by the intended recipient and shall
be
sent by Federal Express, or by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth
below:
If
to the
Seller:
000
Xxxxxxxxx Xxxxxx
Xxxxx,
XX
00000
Phone:
Fax:
With
a
copy to:
Xxxxxxx
and Xxxxxxx
Attn:
Xxxxxx Xxxxxx, Esq.
000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Phone:
(000)000-0000
Fax:
(000)000-0000
11
If
to the
Buyer:
Xxxxxxxxxxxx.xxx,
Inc.
000
Xxxxx
Xxxxxxxx Xxxxxx
Xxxxx
Xxxxxx, Xxx Xxxx, 00000
Phone:
000-000-0000
Fax:
000-000-0000
With
a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Xxxxxxx, LLC
Attn:
Xxxx X. Xxxxxx, Esq..
0000
Xxxxxx Xx., 0xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Phone:
(000)000-0000
Fax:
(000)000-0000
8.3. Interpretation.
In all
references herein to any parties, persons, entities or corporations, the use
of
any particular gender, or the plural or singular number is intended to include
the appropriate gender and number as the text of the within Agreement may
require. The captions used herein are inserted for convenience of reference
only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
8.4. Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
8.5. Parties
in Interest.
This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their permitted successors and assigns.
8.6. Risk
of Loss.
The
risk of loss or damage to the Assets by fire or other casualty between the
date
hereof and the Closing Date shall be borne by Seller.
8.7. Amendment.
This
Agreement may not be amended except by an instrument signed in writing on behalf
of each of the parties hereto.
8.8. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties hereto and
supersedes all other agreements, written and oral, among the parties or any
of
them with respect to the subject matter hereof.
8.9 Counterparts.
This
Agreement may be executed in one or more facsimile counterparts all of which
shall together constitute one and the same instrument.
8.10. Further
Assurances.
In
connection with the transaction contemplated under this Agreement, the parties
agree to fully cooperate with each other in furtherance of the consummation
of
this Agreement, and to execute and deliver such further instruments or take
such
further actions as may be reasonably necessary and proper to effectuate and
carry out the transaction contemplated hereunder.
[signatures
contained on following page]
12
Signature
Page to Asset Purchase Agreement
IN
WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement
as of the date first set forth above.
| SELLER: | As to Section 5.1: | |||
| Allamuchy Transport, Inc. | ||||
| By: | ||||
| Name: |
Xxxxx Xxxxxxxxxx |
Xxxxx
Xxxxxxxxxx, Individually
|
||
| Title: | ||||
| BUYER | ||
| Clickable Xxx.xxx, Inc. | ||
| By: | ||
|
Xxx Xxxxxx |
||
13
EXHIBIT
A
XXXX
OF SALE
THIS
WARRANTY XXXX OF SALE (the "Xxxx of Sale") is made as of _______________ 2005,
by Allamuchy
Transport, Inc.
(
"Transferor"),
pursuant to the terms of the Asset Purchase Agreement (the "Agreement") dated
February ________, 2005 by and between Transferor and Xxxxxxxxxxxx.xxx,
Inc. (“Transferee”)
All
capitalized terms not otherwise defined herein shall have the respective
meanings ascribed thereto in the Agreement.
FOR
CONSIDERATION duly paid to Transferor, the receipt of which is hereby
acknowledged, intending to be legally bound, Transferor hereby sells, transfers,
assigns and delivers to Transferee the Assets identified in Exhibit
A-1
hereto.
TO
HAVE
AND TO HOLD the same unto Transferee, its successors and assigns, forever.
Transferor,
for itself, it successors and assigns hereby warrants, and will forever defend,
the present good and clear title to the Assets, free and clear of all security
interests, liens, claims or other encumbrances.
Transferor
hereby constitutes Transferee and its successors and assigns as Transferor's
true and lawful attorney-in-fact, with full power of substitution, in the name
of Transferor but for the benefit of Transferee (a) to institute and prosecute
all proceedings which Transferee may deem proper in order to collect, assert
or
enforce any claim, right or title of any kind in and to the Assets, to defend
or
compromise any and all actions, suits or proceedings in respect of any of the
Assets, and to do all such acts and things in relation thereto as Transferee
shall deem advisable; and (b) to take all actions which Transferee may deem
proper in order to provide for Transferee the benefit under any and all claims,
agreements, permits, contracts, licenses, leases, commitments, sales orders
or
purchase orders which are included among the Assets where any required consent
of another party to the assignment thereof to Transferee has not yet been
obtained. Transferor acknowledge that the foregoing powers are coupled with
an
interest and shall be irrevocable by Transferor for any reason whatsoever.
14
Transferor
represent and warrant to Transferee that Transferor have the right, power,
legal
capacity and authority to execute and deliver this Xxxx of Sale and to transfer
the Assets pursuant hereto.
IN
WITNESS WHEREOF, the undersigned as duly executed and delivered this Xxxx of
Sale, effective as of __________________________, 2005.
| TRANSFEROR: | ||
| Allamuchy Transport, Inc. | ||
| By: | ||
|
Name: Xxxxx Xxxxxxxxxx, President |
||
15
STATE
OF
:
:
ss
COUNTY
OF
:
On
this,
the ______ day of ______________, 2005, before me, a Notary Public in and for
the State and County aforesaid, the undersigned officer, personally appeared
Xxxxx Xxxxxxxxxx, who acknowledged himself to be the President of Allamuchy
Transport, Inc., a corporation (the “Corporation”), and that he as such
President, being authorized to do so, executed the foregoing instrument for
the
purposes therein contained by signing the name of the Corporation by himself
as
a duly authorized officer.
IN
WITNESS WHEREOF, I hereunto set my hand and official seal.
|
Notary Public |
||
| My Commission Expires: | ||
16
EXHIBIT
A-1
TO
XXXX OF SALE
AMENDMENT
NO. 1
TO
THIS
AMENDMENT NO. 1 TO Asset Purchase Agreement (“this Amendment”)
is
made this ____ day of October 2005, by and between Xxxxxxxxxxxx.xxx, Inc. (the
“Buyer”)
and
Allamuchy Transport, Inc. (“Seller”)
This
Amendment relates to an Asset Purchase Agreement between the parties dated
as of
July 15, 2005 (the “Purchase Agreement”). Capitalized terms used but not defined
herein shall have the meanings given in the Purchase Agreement.
In
consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties agree to
the
following modifications and amendments to the Purchase Agreement:
I.
Section 1.1(a) of the Purchase Agreement is hereby amended to provide in its
entirety as follows
(a) Customer
Contracts.
Those
outstanding delivery, sale and service agreements and purchase orders between
Seller and its customers as described in and attached hereto as Schedule
1.1(a),
if any.
Buyer shall assume and perform the Customer Contracts as specified in sections
2.1(c) and 1.2. At Closing, Seller and Buyer will execute a form of letter
proposed by Buyer and reasonable acceptable to Seller introducing Buyer to
the
customers.
II.
Section 2 of the Purchase Agreement is hereby amended to provide in its entirety
as follows:
2. PURCHASE
PRICE.
2.1. Price.
The
purchase price for the Assets shall be as follows (collectively, the "Purchase
Price"):
(a)
Payment
at Closing.
Buyer
shall pay the amount of $124,942.87 (“Fixed Price”) on the Closing Date. The
Fixed Price will be paid as follows: (i) $100,000 shall be paid to the New
Jersey Division of Taxation on account of Seller’s obligations for New Jersey
taxes and (ii) $24,942.87 will be paid directly to Skylands Community Bank
for
Seller’s account, to repay all obligations of Seller to such bank.
(b)
Deferred
Payment.
Buyer
shall pay an amount equal to (i) $.30 multiplied by the number of gallons of
fuel oil sold to Seller’s customers in the period beginning one day after the
Closing Date and ending on the first anniversary of the Closing Date, less
(ii)
the Fixed Price (the “Deferred Payment”). The Deferred Payment shall be paid
within fifteen (15) days after the first anniversary of the Closing Date. The
Deferred Payment will be paid first to the New Jersey Division of Taxation
on
account of Seller’s obligations for New Jersey taxes which remain as of the
first anniversary of the Closing Date. If the Deferred Payment exceeds the
amount owed for New Jersey taxes, any excess will be paid to Seller. At the
time
of payment of the Deferred Payment, Buyer will provide Seller a statement
showing calculation of the payment certified by the Chief Financial Officer,
or
equivalent officer, of Buyer. No payment shall be made if the amount calculated
in clause (i) does not exceed the Fixed Price. In the event that any undisputed
or otherwise definitively proven amount of the deferred purchase price in excess
of $2,500 is not paid as set forth above within ten (10) days after demand
by
Seller, Seller, upon 30 days’ notice to Buyer, in addition to any and all other
remedies available at law or in equity, shall be entitled to use the name
Allamuchy Oil and Buyer shall cease use of the name Allamuchy Oil.
(c) Assumption
and Performance.
On the
Closing Date, Buyer shall assume and accept assignment of the Customer Contracts
listed on Schedule
1.1(a)
and
shall use its commercially reasonable efforts to timely and diligently perform
all of its duties and obligations thereunder arising after the Closing Date;
provided that Buyer will not assume, accept assignment of or perform any
contract to the extent customers have prepaid Seller for product. The
obligations and liabilities assumed by Buyer under customer contracts shall
be
subject to the provisions of Section 1.2.
III. Section
5.4 of the Purchase Agreement is herby amended to provide in its entirety as
follows:
5.4.
Transport
Agreement and Continuing Responsibilities of Seller.
(a)
Seller
shall provide oil delivery services for sales of No. 2 fuel oil to its former
customers and others on behalf of Buyer for a five year period following
Closing, at the rate of $.12 per gallon for deliveries out of the Royal terminal
in Netcong, NJ or any other location designated by Buyer which is within 5
miles
of Seller’s current location in Dover, NJ, and $.15 per gallon for deliveries
out of the Port of Newark terminal, and upon the terms and conditions contained
in Buyer’s standard transport agreement to be executed at Closing. The transport
agreement shall provide that Seller shall be entitled to collect a service
fee
from customers for deliveries of less than 150 gallons. The amount of the
service fee shall be mutually agreed between Seller and Buyer.
(b) Prior
to
the date hereof, Buyer provided a total of 16,153 gallons of No. 2 fuel oil
to
Seller on credit. Subsequently and separately, Seller delivered 10.958.2 gallons
to customers of Buyer, for Buyer’s account. The first 5,194.8 gallons of No. 2
fuel oil delivered by Seller for Buyer’s account pursuant to paragraph 5.4(a)
shall be purchased and paid for by Seller. Once Seller has delivered 5,194.8
gallons paid for by Seller but delivered and sold for Buyer’s account, Seller
shall have no further obligations to Buyer for the 5,194.8 gallons. If Seller
does not deliver 5,194.8 gallons
which it has paid for on or before October 31, 2005, at Buyer’s option Seller
shall be obligated to pay in cash an amount equal to Buyer’s then current cost
of 5,194.8 gallons less the number of gallons actually delivered by Seller.
(c) Exhibit
8(a)
hereto
contains a full and complete list of all product for which customers have
prepaid Seller which have not been delivered prior to the Closing. Seller
shall
purchase, pay for and deliver all product under all prepaid agreements and
arrangements of Seller, whether or not listed on Exhibit
8(a). Buyer
does not assume any responsibility or liability to deliver product to customers
with whom Seller has any pre-paid agreement or arrangement. If Seller does
not
purchase, pay for and deliver any product to customers under pre-paid
arrangements, Buyer, at Buyer’s sole option, may purchase and cause such product
to be delivered to the customers, and in such event Seller shall immediately
reimburse Buyer for the purchase price and all reasonably related costs.
Seller
represents it does not have any fixed price agreements other than pre-paid
agreements. The provisions of section 5.1 of this Agreement shall not apply
to
Seller’s delivery of oil pursuant to the pre-paid accounts, but shall otherwise
apply to those customers.
2
At
Closing, Seller shall execute a form of letter prepared by Buyer, reasonably
acceptable to Seller, addressed to the customers under pre-paid arrangements,
explaining that while Seller has sold the bulk of its business, it has retained
its prepaid accounts, and that Seller and not Buyer will be responsible for
honoring the prepaid contracts.
IV. Section
6.3 of the Purchase Agreement is herby amended to provide in it entirety as
follows:
6.3
Other
Conditions to Closing.
The of
Buyer hereunder shall also be subject to and conditioned upon Seller’s obtaining
a payoff statement or similar instrument from Skylands Bank.
V. A
new Section 8 is hereby added to the Purchase Agreement, to provide as
follows:
8.
CUSTOMER
PREPAYMENTS AND ACCOUNTS RECEIVABLE.
The
parties agree that Buyer will be collecting all payments and accounts receivable
from Seller’s former No. 2 oil customers from the Closing date forward. Funds
which will be collected include the accounts receivable of Seller which are
not
being sold to Buyer under this Agreement in addition to payments owing to Buyer.
For this purpose, Buyer will set up an accounts receivable ledger on its books.
As Seller’s former customers make payments, the funds will be applied: first to
reimburse Buyer for any amounts owed under Sections 5.4(b) or 5.4(c), next
to
Seller’s outstanding accounts receivable, and thereafter, once Seller’s
receivable from a customer has been fully paid, the remaining sums from such
customer shall be paid to Buyer. Each month, until Seller shall have been paid
all funds payable to it under this paragraph, a detailed list of funds received
from Buyer’s former customers will be provided to the Seller and all monies
payable to Seller will be paid at such time. These accountings and payments
will
be made on the tenth
day
of each month, beginning November 10, 2005, with respect to the funds received
in the previous month.
All
other terms and conditions of the Purchase Agreement remain unchanged and in
force.
[signatures
contained on following page]
3
Signature
Page to Amendment
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date
first set forth above.
| SELLER: | Acknowledged: | |||
| Allamuchy Transport, Inc. | ||||
| By: | ||||
| Name: |
Xxxxx Xxxxxxxxxx |
Xxxxx
Xxxxxxxxxx, Individually
|
||
| Title: | ||||
| BUYER | ||
| Clickable Xxx.xxx, Inc. | ||
| |
|
|
| By: | ||
|
Xxx Xxxxxx |
||
4
