ACQUISITION AGREEMENT
AGREEMENT dated as of July 6, 2005 (the "Agreement") by and among XXXXX
WORLD TRADE, LTD. ("Xxxxx"), a Nevada corporation with its principal place of
business at 000-00 000xx Xxxxxx, Xxxxxxx, XX 00000, FREIGHT WINGS, INC.
("Freight Wings"), a New York corporation, with its principal place of business
at 000 Xxxx Xxxxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000, and Xxxxxxxxx X. Xxxxx,
residing at 00 Xxx Xxxxx Xxxx, Xxxxx Xxxxx, XX 00000, who is the owner of all of
the issued and outstanding shares of Freight Wings equity securities (the
"Freight Wings Shareholder").
W I T N E S S E T H :
WHEREAS, both Xxxxx and Freight Wings are in the freight logistics
business; and
WHEREAS, the capitalization of Xxxxx consists of 225,000,000 authorized
shares of Xxxxx common stock, $.001 par value per share (the "Xxxxx Common
Stock"), of which not more than 16,843,000 shares are issued and outstanding;
and
WHEREAS, Freight Wings is authorized to issue 400 shares of common stock,
no par value per share (the "Freight Wings Common Stock"), of which 260 shares
are issued and outstanding (the "Freight Wings Shares") and are held by the
Freight Wings Shareholder;
WHEREAS, the parties desire that Freight Wings will be acquired as a
wholly-owned subsidiary of Xxxxx in a stock-for-stock exchange of Freight Wings
Shares for shares of Xxxxx Common Stock (the "Acquisition"); and
WHEREAS, Xxxxx, Freight Wings and the Freight Wings Shareholder believe
the Acquisition to be in the best interests of the parties and the respective
shareholders of Xxxxx and Freight Wings;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
ACQUISITION
Section 1 (a) The Acquisition. The purchase price for the Freight Wings
Shares consists of unregistered shares of Xxxxx Common Stock (the "Xxxxx
Shares") for delivery at the Closing to the Freight Wings Shareholder in
exchange for all 260 Freight Wings Shares, on the basis of the formula set forth
below in Section 1(c)(i). Subject to the terms and conditions of this Agreement,
Freight Wings will then become a wholly-owned subsidiary of Xxxxx.
(b) Closing. The closing of the Acquisition contemplated by this Agreement
(the "Closing") shall take place at the offices of counsel for Xxxxx, Scheichet
& Xxxxx, P.C. in New York, NY, commencing at 10:00 a.m. on the business day
following the satisfaction or waiver of all conditions to the obligations of the
parties to consummate the Acquisition contemplated hereby.
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(c) Consideration. The consideration being paid by Xxxxx to the Freight
Wings Shareholder shall be comprised of the Xxxxx Shares.
(i) The number of Xxxxx Shares to be issued and delivered for
distribution at the Closing to the Freight Wings Shareholder shall be computed
based upon the total Net Sales of Freight Wings for its 2004 fiscal year as
derived from its audited financial statements prepared in compliance with the
provisions of Section 6.2(g) (the "Net Sales," as defined in Section 6.2(g)).
The number of Xxxxx Shares shall be computed as follows:
The total Net Sales for Freight Wings 2004 fiscal year are reduced
by $50,000 and then multiplied by 0.6. The result is then multiplied by 4. The
number resulting from that computation (the "Closing Net Sales") is then divided
by the average of the high bid and low asked prices for the Xxxxx Common Stock
on the OTC Bulletin Board on the day of Closing (the "Closing Share Price"), and
the product of that computation will be the number of Xxxxx Shares to be issued
and delivered to the Fright Wings Shareholder. This computation method is
referred to herein as the "Share Formula." (e.g. Applying the Share Formula - if
the total Net Sales are $600,000, reduced by $50,000 to $550,000, multiplied by
0.6, and then multiplied by 4, the result is $1,320,000. If the Closing Share
Price is $.50 per share, then 2,640,000 Xxxxx Shares would be issued and
delivered to the Freight Wings Shareholder.)
(ii) The Xxxxx Shares issued and delivered to the Freight Wings
Shareholder shall be subject to a Lock Up Agreement in the form set forth as
Exhibit B to this Agreement, pursuant to which the Freight Wings Shareholder may
not sell, hypothecate or otherwise distribute or deliver the Xxxxx Shares for a
period of up to four (4) years after the Closing, provided, however, that if the
Net Sales accumulated after the Closing as of the end of any quarterly or annual
financial period of Xxxxx (the "Post-Closing Net Sales") cumulatively amounts to
not less than the Closing Net Sales (the "Lock Up Release Net") at any time
during that four-year period, the Lock Up Agreement will thereupon expire and
the Freight Wings Shareholder will be permitted to sell, hypothecate or
otherwise transfer those shares, so long as such sale, hypothecation or other
transfer is accomplished as required by applicable rules and regulations of the
SEC after the registration of the Xxxxx Shares with the SEC, or as required by
the requirements of Rule 144 under the Securities Act of 1933, as amended (the
"1933 Act"). In the event the Lock Up Release Net has not been achieved at the
expiration of four (4) years after the Closing date, the Xxxxx Shares paid to
the Freight Wings Shareholder shall be reduced by the cancellation and
contribution back into the capital of Xxxxx of the number of shares of Xxxxx
Common Stock equal to the amount of the shortfall multiplied by 0.6 and that
number then divided by the Closing Share Price, and the remaining Xxxxx Shares
shall then be released from the Lock Up Agreement. In the event the Post-Closing
Net Sales during the four (4) year period following the Closing exceeds the Lock
Up Release Net, Xxxxx will issue additional unregistered Xxxxx Shares to the
Freight Wings Shareholder (the "Bonus Shares") no later than ninety (90) days
after the close of the fiscal year quarter which included the fourth anniversary
of the Closing in an amount equal to the difference between the Post-Closing Net
Sales and the Lock Up Release Net multiplied by 0.6, and divided by the Closing
Share Price.
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(iii) If the most recent audited or interim Freight Wings Financial
Statements meeting, the requirements of to Section 6.2(g), provided to Xxxxx as
of the Closing date reflect a shareholders equity deficit, then fifty percent
(50%) of that deficit will be applied to further reduce the amount of the
Post-Closing Net Sales in the computations provided for in Section 1(c)(ii).
(iv) If the Closing Net Sales total less than $600,000, Xxxxx shall
have the right to terminate this Agreement and the Acquisition. If this
Agreement is not so terminated by Xxxxx, Freight Wings and the Freight Wings
Shareholder shall have the option to utilize either the actual number of Closing
Net Sales for the computation of and compliance with the Share Formula, or they
may utilize the number of $600,000 as the Closing Net Sales for the computation
of the Share Formula for compliance with the provisions of the this Agreement
and the Lock Up Agreement.
(d) Actions at the Closing. The following actions will be taken at the
Closing in the sequence set forth below:
(i) The parties will complete and sign the Subscription Agreement,
Exhibit A;
(ii) Xxxxxxxxx X Xxxxx will sign the Lock-Up Agreement, Exhibit B;
(iii) Xxxxx will issue and deliver the Xxxxx Shares to the Freight
Wings Shareholder solely in exchange for the 260 Freight Wings Shares as
provided for in this Agreement;
(iv) The Freight Wings Shareholder will deliver all 260 Freight
Wings Shares to Xxxxx in exchange for Xxxxx delivering to the Freight Wings
Shareholder the Xxxxx Shares;
(v) Xxxxx and Xxxxxxxxx X Xxxxx will sign the Employment Agreement,
Exhibit E;
(vi) Xxxxxxxxx X Xxxxx, shall be elected a director of Xxxxx; and
(vii) Freight Wings will be a wholly-owned subsidiary of Xxxxx.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx represents and warrants to Freight Wings as follows:
Section 2.1 Organization and Qualification. Xxxxx is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. It has the corporate power and authority to own or lease and operate all
of its properties and assets and to carry on its business as such business is
now being conducted. It is each duly licensed or qualified to do business in all
jurisdictions in which the nature of its business or the character or location
of the properties and assets owned or leased by Xxxxx makes such licensing or
qualifications necessary.
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Section 2.2 Capitalization of Xxxxx. The authorized capital stock of Xxxxx
prior to closing will consist of 225,000,000 shares of Xxxxx Common Stock, of
which 16,843,000 shares will be issued and outstanding. As provided in Janel's
Articles of Incorporation, the Xxxxx Common Stock carries with it the right to
one vote per share. All outstanding shares of Xxxxx Common Stock are validly
issued, fully paid for and non-assessable, with no personal liability attaching
to the ownership thereof, free of pre-emptive rights and free and clear of all
liens, claims and encumbrances. Except as may be set forth in the materials
which Xxxxx has publicly filed with the SEC prior to the date of this Agreement,
there are no shares of Xxxxx capital stock issued or outstanding except as
referred to above, and there are no calls, subscriptions, warrants, rights,
agreements or commitments of any character obligating Xxxxx, contingently or
otherwise, to issue shares of its capital stock or to register shares of Xxxxx
Common Stock under the 1933 Act, or any other applicable federal or state
securities laws.
Section 2.3 Authority. Xxxxx has the full power and authority to enter
into this Agreement and to carry out obligations hereunder. Other than approval
by a majority of its shareholders and by its board of directors, no proceedings
on the part of Xxxxx are necessary to authorize this Agreement or the
Acquisition contemplated hereby. This Agreement constitutes the legal, valid and
binding obligation of Xxxxx, enforceable in accordance with its terms.
Section 2.4 No Violations. The execution and delivery of this Agreement by
Xxxxx will not violate any provisions of its certificate of incorporation or
by-laws, or conflict with any law, rule, statute or regulation to which it is
subject or violate or result in a default under any agreement to which it is a
party or by which it is bound.
Section 2.5 Consents and Approvals. Other than as set forth in Schedule
2.6, no permit, consent, approval or authorization of, or declaration, filing or
registration with any public body or authority or other person, firm or entity
is necessary in connection with the execution and delivery by Xxxxx of this
Agreement or the consummation of the transactions contemplated hereby.
Section 2.6 Compliance with Law.
(a) Xxxxx holds all licenses, franchises, permits and authorizations
necessary for the lawful conduct of its businesses, and has complied and is in
compliance with all applicable statutes, laws, ordinances, rules and regulations
of all federal, state, local and foreign governmental bodies, agencies and
subdivisions having, asserting or claiming jurisdiction over it or over any part
of its operations.
(b) In connection with the sale of its securities, and in connection
with the approval of its shareholders required to the Acquisition, Xxxxx has
complied and will comply with all applicable provisions of the 1933 Act, the
Securities Exchange Act of 1934 Act, as amended (the "1934 Act"), all applicable
rules and regulations of the SEC and the applicable laws, rules and regulations
of each state having jurisdiction thereof.
(c) Xxxxx has filed, or will file prior to Closing, all annual,
quarterly and periodic reports and financial statements required to be filed
pursuant to and in full compliance with the applicable provisions of the 1933
Act, the 1934 Act and all applicable rules and regulations of the SEC.
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Section 2.7 Financial Statements. Freight Wings acknowledges access to and
review of the audited financial statements of Xxxxx and the unaudited quarterly
financial statements of Xxxxx filed with the SEC. The aforesaid financial
statements represent (a) the financial position, results of operations, cash
flows and changes in financial position of Xxxxx, as of the respective dates and
for the respective periods indicated, and (b) have been prepared in accordance
with generally accepted accounting principles ("GAAP") consistently applied.
Section 2.8 Existing Condition. Since September 30, 2004, and except as
disclosed in the materials which Xxxxx has publicly filed with the SEC prior to
the date of this Agreement, Xxxxx has not:
(a) incurred any liabilities out of the ordinary course of business;
(b) sold, encumbered, assigned or transferred any assets;
(c) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease under which Xxxxx is a lessee, or
canceled, modified or waived any significant debts or claims held by it or
waived any rights of significant value, whether or not in the ordinary course of
business;
(d) suffered any damage, destruction or loss, whether or not covered
by insurance;
(e) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise);
(f) made commitments or agreements for capital expenditures;
(g) changed any of the accounting principles followed by them or the
methods of applying such principles; or
(h) entered into any transaction other than in the ordinary course
of business consistent with past practice, or a transaction that would serve to
reduce outstanding liabilities.
Section 2.9 Title to Properties; Leasehold Interests. Except as set forth
in Schedule 2.9, Xxxxx has good and valid tide to all properties and assets,
real and personal, free and clear of all mortgages, liens, pledges, security
interests, charges, claims, restrictions and other encumbrances and defects of
title of any nature whatsoever, except for liens for taxes not yet due and
payable.
Section 2.10 Condition of Tangible Assets. All material items of tangible
personal property are in good condition and repair, subject to normal wear and
tear, and are usable in the regular and ordinary course of business of Xxxxx.
Section 2.11 Books of Account. The books, records and accounts of Xxxxx
maintained with respect to its business accurately and fairly reflect, in
reasonable detail, all transactions and all assets and liabilities. Xxxxx has
not engaged in any transaction, maintained any bank account or used any funds
except for transactions, bank accounts and funds which have been and are
reflected in their normally maintained books and records.
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Section 2.12 Litigation. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
best of its knowledge, is threatened against Xxxxx, other than as disclosed in
the materials which Xxxxx has publicly filed with the SEC prior to the date of
this Agreement. Xxxxx is not a party to or subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which may materially and
adversely affect its respective business or assets.
Section 2.13 Contracts and Commitments. Each of the agreements, contracts,
commitments, leases, plans and other instruments, documents and undertakings
referenced in the materials which Xxxxx has publicly filed with the SEC prior to
the date of this Agreement is valid and enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting the rights of creditors generally. Xxxxx is
not in default of the performance, observance or fulfillment of any material
obligations, covenants or conditions contained therein; and no event has
occurred which, with or without the giving of notice or lapse of time, or both,
would constitute a default thereunder. Furthermore, except as may be disclosed
in the materials which Xxxxx has publicly filed with the SEC prior to the date
of this Agreement, no such agreement, contract, commitment, lease, plan or other
instrument, document or undertaking, contains any contractual requirement with
respect to which there is a likelihood that Xxxxx would be unable to comply.
Section 2.14 No Broker or Finder. Xxxxx has not dealt with or retained any
finder or broker whose fees or expenses have been paid by Xxxxx or for whose
fees or expenses it would be responsible in connection with this Agreement or
the transactions contemplated hereby.
Section 2.15 Completeness of Disclosure. No representation or warranty in
this Agreement or in the materials which Xxxxx has publicly filed with the SEC
prior to the date of this Agreement, or in any other certificate, exhibit,
statement, document or instrument furnished or to be furnished to Freight Wings
by Xxxxx pursuant to this Agreement, or in connection with the negotiation,
execution or performance of this Agreement, contains any untrue statement of a
material fact or omits to state a material fact required to be stated or
necessary to make any statement made, not misleading.
Section 2.16 Tax Matters. Xxxxx has filed or will file on a timely basis
(including all extensions) all tax returns which were required to have been
filed, or are hereafter required to be filed up to the Closing by it (including,
without limitation, all federal, state, county, local and foreign tax returns)
and such returns are complete and accurate in all material respects, and Xxxxx
has paid or provided for all taxes, interest or penalties which have been
incurred or are due and payable pursuant to such returns or pursuant to any
assessments received by either of them in connection with such returns. No
foreign, federal, state, local or other taxing authority has provided Xxxxx with
any notice of any questions relating to or claims asserted for taxes against
Xxxxx for which it may be liable.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FREIGHT WINGS
Freight Wings represents and warrants to Xxxxx as follows:
Section 3.1 Organization and Qualification of Freight Wings. Freight Wings
is a corporation duly incorporated, duly organized, validly existing and in good
standing under the laws of the State of New York. Freight Wings has the
corporate power and authority to own or lease and operate all of its properties
and assets and to carry on its business as such business is now being conducted
and is duly licensed or qualified to do business and is in good standing in all
jurisdictions in which the nature of its business or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualifications necessary and where the failure to qualify would not have a
material adverse effect on operations, properties, assets, liabilities, earnings
or business.
Section 3.2 Capitalization and Ownership of Freight Wings. The authorized
capital stock of Freight Wings prior to closing will consist of 400 shares of
common stock, no par value per share, of which 260 shares will be issued and
outstanding. All issued and outstanding shares of Freight Wings Common Stock are
validly issued and outstanding, fully paid and non-assessable with no personal
liability attaching to the ownership thereof, free of preemptive rights and are
owned free and clear of all liens, claims and encumbrances. No securities will
be issued or outstanding except for the aforementioned 260 shares of Freight
Wings Common Stock and, at Closing, there will be no options, calls,
subscriptions, warrants, rights, agreements or commitments of any character
obliging Freight Wings on a contingent basis or otherwise, to issue shares of
its common stock.
Section 3.3 Authority. Freight Wings has the full power and authority to
enter into this Agreement and to carry out its obligations hereunder. Other than
approval by its shareholders and by its board of directors, no proceedings on
the part of Freight Wings are necessary to authorize this Agreement or the
Acquisition contemplated hereby. This Agreement constitutes the legal, valid and
binding obligation of Freight Wings enforceable in accordance with its terms.
Section 3.4 No Violations. The execution and delivery of this Agreement by
Freight Wings will not violate any provisions of its certificate of
incorporation or by-laws, or conflict with any law, rule, statute or regulation
to which it is subject or violate or result in a default under any agreement to
which it is a party or by which it is bound.
Section 3.5 Investments. Freight Wings does not own capital stock or other
equity investments in any corporation, limited liability company or partnership.
Section 3.6 Consents and Approvals. Other than as set forth in Schedule
3.6, no permit, consent, approval or authorization of, or declaration, filing or
registration with any public body or authority or other person, firm or entity
is necessary in connection with the execution and delivery by Freight Wings of
this Agreement or the consummation by each of them of the transactions
contemplated hereby.
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Section 3.7 Compliance with Law. Freight Wings holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
businesses, and has complied and is in compliance with all applicable statutes,
laws, ordinances, rules and regulations of all federal, state, local and foreign
governmental bodies, agencies and subdivisions having, asserting or claiming
jurisdiction over it or over any part of its operations.
Section 3.8 Financial Statements. Freight Wings will promptly provide to
Xxxxx copies of the audited financial statements of Freight Wings for the fiscal
years ended December 30, 2004 and 2003, including balance sheet, statement of
operations, statement of cash flows, statement of changes in shareholders'
equity and the footnotes thereto. The aforesaid financial statements represent
(a) the financial position, results of operations and changes in financial
position of Freight Wings in accordance with GAAP as of the respective dates and
for the respective periods indicated, and (b) have been prepared in accordance
with GAAP, consistently applied.
Section 3.9 Existing Condition. Since the date of its most recent audited
financial statements, and except as disclosed in Schedule 3.9, Freight Wings has
not:
(a) incurred any liabilities outside of the ordinary course of
business;
(b) sold, encumbered, assigned or transferred any of its assets;
(c) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease under which Freight Wings is party, or
canceled, modified or waived any significant debts or claims held by it, or
waived any rights of significant value, whether or not in the ordinary course of
business;
(d) suffered any damage, destruction or loss, whether or not covered
by insurance;
(e) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or otherwise);
(f) made commitments or agreements for capital expenditures;
(g) hired any employees or increased the salaries or other
compensation of, or made any advance or loan to, any of its employees or
consultants, or made any increase in or any addition to other benefits to which
any of their employees or consultants may be entitled;
(h) changed any of the accounting principles followed by Freight
Wings or the methods of applying such principles; or
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(i) entered into any transaction other than in the ordinary course
of business consistent with past practice or a transaction that would serve to
reduce outstanding liabilities.
Section 3.10 Title to Properties; Leasehold Interests. Freight Wings has
good and valid title to all properties and assets, real and personal, free and
clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances and defects of title of any nature
whatsoever, except for liens for taxes not yet due and payable.
Section 3.11 Condition of Tangible Assets. All material items of tangible
personal property are in good condition and repair, subject to normal wear and
tear, and are usable in the regular and ordinary course of business of Freight
Wings
Section 3.12 Books of Account. The books, records and accounts of Freight
Wings maintained with respect to its business accurately and fairly reflect, in
reasonable detail, all their transactions and all their assets and liabilities.
Freight Wings has not engaged in any transaction, maintained any bank account or
used any of their funds except for transactions, bank accounts and funds which
have been and are reflected in their normally maintained books and records.
Section 3.13 Litigation. No litigation, including but not limited to any
arbitration, investigation or other proceeding of or before any court,
arbitrator or governmental or regulatory official, body or authority is pending
or, to the best of its knowledge, is threatened against Freight Wings and its
shareholders, other than as disclosed in the Schedule 3.13. Neither Freight
Wings nor its shareholders is a party to or subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which may materially and
adversely affect the business or assets of Freight Wings.
Section 3.14 Contracts and Commitments. Except as disclosed in Schedule
3.14, Freight Wings is not a party to any written or oral:
(a) agreement, contract or commitment with any present or former
employee or consultant or for the employment of any person, other than contracts
terminable at will without future liability;
(b) agreement, contract or commitment for the future purchase of, or
payment for, equipment, supplies or products, or for the performance of services
by a third party, except for any agreement, contract or commitment arising in
the ordinary course of business;
(c) agreement, contract or commitment to finance any acquisition of
or purchase any asset or to perform any service;
(d) note, debenture, bond, equipment trust agreement, letter of
credit agreement, loan agreement or is a party to any contract or commitment for
the borrowing or lending of money or agreement or arrangement for a line of
credit or guarantee, pledge or undertaking of the indebtedness of any other
person; or
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(e) warrant or option agreement where the holder has the right to
purchase equity shares of Freight Wings.
(f) Each of the agreements, contracts, commitments, leases, plans
and other instruments, documents and undertakings referenced in the books and
records of Freight Wings is valid and enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the rights of creditors generally. Freight Wings and its
shareholders are not in default of the performance, observance or fulfillment of
any material obligations, covenants or conditions contained therein; and no
event has occurred which, with or without the giving of notice or lapse of time,
or both, would constitute a default thereunder. Furthermore, except as may be
disclosed in Schedule 3.14, no such agreement, contract, commitment, lease, plan
or other instrument, document or undertaking, contains any contractual
requirement with respect to which there is a likelihood that Freight Wings would
be unable to comply.
Section 3.15 No Broker or Finder. Freight Wings has not dealt with or
retained any finder or broker whose fees or expenses have been paid by Freight
Wings or for whose fees or expenses it would be responsible in connection with
this Agreement or the transactions contemplated hereby.
Section 3.16 Employee Benefit Plans and Arrangements. Except as disclosed
in Schedule 3.16, Freight Wings has not sponsored, maintained or supported, or
otherwise been a party to, is in default under, or had any liability or accrued
obligations under, any plan, program, fund or arrangement, either qualified or
non-qualified for federal income tax purposes, relating to the employees of
Freight Wings or any of its subsidiaries, whether for the benefit of a single
individual or for more than one individual, and whether or not funded,
including, without limitation, any incentive or other benefit arrangement for
employees, their dependents and/or their beneficiaries and any "employee pension
benefit plan" or "employee welfare benefit plan", as such terms are defined in
Section 3 of the Employee Retirement income Security Act of 1974, as amended
("ERISA"). No employee benefit plan ("ERISA Plan") (or any trust created
thereunder) has engaged in a "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code, which could subject Freight
Wings or Xxxxx to any tax penalty on prohibited transactions and which has not
adequately been corrected. Each ERISA Plan is in compliance with all material
reporting, disclosure and other requirements of the Internal Revenue Code (the
"Code") and ERISA as they relate to any such ERISA Plan. Determination letters
have been received from the Internal Revenue Service with respect to each ERISA
Plan which is intended to comply with Code Section 401(a), stating that such
ERISA Plan and the attendant trust are qualified thereunder. Freight Wings has
not, at any time, maintained or contributed or been required to maintain or
contribute to any "Multi-Employer Plan" as such term is defined in Section 3(37)
of ERISA.
Section 3.17 Completeness of Disclosure. No representation or warranty in
this Agreement or in any other certificate, exhibit, statement, schedule,
document or instrument furnished or to be furnished to Xxxxx by Freight Wings or
its shareholders pursuant to this Agreement, or in connection with the
negotiation, execution or performance of this Agreement, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated or necessary to make any statement made, not misleading.
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Section 3.18 Tax Matters. Freight Wings has filed or will file on a timely
basis (including all extensions) all tax returns which were required to have
been filed, or are hereafter required to be filed up to the Closing by it
(including, without limitation, all federal, state, county, local and foreign
tax returns) and such returns are complete and accurate in all material
respects, and Freight Wings have paid or provided for all taxes, interest or
penalties which have been incurred or are due and payable pursuant to such
returns or pursuant to any assessments received by either of them in connection
with such returns. No foreign, federal, state, local or other taxing authority
has provided Freight Wings with any notice of any questions relating to or
claims asserted for taxes against Freight Wings for which either may be liable.
All taxes which Freight Wings are required by law to withhold or collect have
been duly withheld or collected and, to the extent required, have been paid over
to the proper governmental authorities.
Section 3.19 Intellectual Property.
(a) Freight Wings has and will have the right to use the names
"Freight Wings," (copy to come) and such trade names, service marks, patents,
copyrights, trade marks, and other like intellectual or proprietary property as
are set forth in Schedule 3.19, and the goodwill pertaining to each and to the
business of Freight Wings, and all of said rights are, and will be, free and
clear of all royalty obligations, security interests, liens, judgments, orders
expenses, attorney's fees for services, and governmental, quasi-governmental,
regulatory or administrative fees. There are no pending claims or demands of
infringements asserted by any person or entity. Neither Freight Wings nor the
Freight Wings Shareholder have knowledge of any conflicting use of any of such
property or rights. Freight Wings and the Freight Wings Shareholder use of said
intellectual property or proprietary property or technology is not in violation
of any law or regulation or breach of any agreement or instrument.
(b) Freight Wings has no trade names, service marks, patents,
copyrights, trademarks or other intellectual or proprietary property other than
as set forth on Schedule 3.19.
Section 3.20 Completeness of Disclosure. No representation or warranty in
this Agreement nor any certificate, exhibit, statements, document or instrument
furnished or to be furnished to Xxxxx by Freight Wings or its shareholders in
connection with the negotiation, execution or performance of this Agreement,
contains any untrue statement of a material fact or omits to state a material
fact required to be stated or necessary to make any statement made, not
misleading.
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ARTICLE IV
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 4 Survival of Representations and Warranties. The representations
and warranties made by the parties to this Agreement, or in any certificate,
exhibit, document or instrument furnished hereunder, shall survive for one year
from the Closing of the transactions contemplated hereby, except for matters not
disclosed or discoverable at the time of Closing, in which case, and as regards
to such matters, the representations and warranties shall survive for one year
from the time such matters are disclosed or are discoverable.
ARTICLE V
AGREEMENTS PENDING CLOSING
Section 5.1 Agreement Pending the Closing. Freight Wings and the Freight
Wings Shareholder covenant and agree that, pending the Closing and except as
otherwise agreed to in writing, they will:
(a) Business in the Ordinary Course. Conduct business solely in the
ordinary course.
(b) Maintenance of Physical Assets. Continue to maintain and service
the assets used in the conduct of the business in the same manner as has been
its consistent past practice.
(c) Employees and Business Relations. Continue to maintain its
business relations, and relations with its employees, in the same manner as has
been its consistent past practice.
(d) Compliance with Law, etc. Comply with all laws, ordinances,
rules, regulations and orders applicable to its operations, assets or properties
in respect thereof, the noncompliance with which might materially affect its
business or assets.
(e) Cooperation. Cooperate with the other parties to this Agreement
and use its or their best efforts to cause all of the conditions to the
obligations on its part to be performed under this Agreement to be satisfied
before or immediately after the Closing.
(f) Sales of Assets; Negotiations. Without the prior written consent
of Xxxxx, neither Freight Wings nor its shareholders will initiate or
participate in any discussions or negotiations with any other person, or enter
into any agreement with respect to any acquisition, merger, sale or encumbrance
or other disposition of all or any part of Freight Wings' assets, other that as
specifically provided for in this Agreement.
(g) Press Releases. No party to this Agreement shall give notice to
third parties or otherwise make any public statement or release concerning this
Agreement or the transactions contemplated hereby, except for such written
information as shall have been approved in writing by both parties as to form
and content.
12
ARTICLE VI
CONDITIONS PRECEDENT
CLOSING AND ADDITIONAL COVENANTS
Section 6.1 Conditions Precedent to the Obligations of Freight Wings. All
obligations of Freight Wings under this Agreement are subject to the fulfillment
or satisfaction by Xxxxx, prior to or at the Closing, of each of the following
conditions precedent:
(a) Representations and Warranties True as of the Closing. The
representations, warranties and undertakings of Xxxxx contained in this
Agreement, and in the materials which Xxxxx has publicly filed with the SEC
prior to the date of this Agreement shall be true on the date of this Agreement
without regard to any updates furnished by Xxxxx, shall be true after the date
of this Agreement and shall be true on the Closing with the same effect as
though such representations and warranties were made as of such date.
(b) Compliance with this Agreement. Xxxxx shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with prior to or at the Closing, including, but no limited
to:
(i) Xxxxx shall have authorized and effected each of the
actions which it is required to take pursuant to the provisions of Section 1(c)
of this Agreement; and
(ii) Xxxxx shall have acquired the approval of the Acquisition
and related transactions from the majority of the holders of Xxxxx Common Stock
in compliance with the applicable requirements of state law and the 1934 Act.
(c) No Threatened or Pending Litigation. On the Closing, no suit,
action or other proceeding, or injunction or final judgment relating thereto,
shall be threatened or be pending against Xxxxx before any court or government
or regulatory official, body or authority in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated hereby, and no
investigation that might result in any such suit, action or proceeding shall be
pending or threatened including, but not limited to, a claim for appraisal
rights pursuant to the laws regulating corporations in Nevada or New York .
(d) Consents and Approvals. All of the consents required to carry
out the transactions contemplated hereunder have been obtained by the Closing,
or will be obtained by the Closing including, but not limited to, resolutions of
the board of directors and stockholders of Xxxxx approving the entry into this
Agreement and the carrying out of transactions contemplated herein.
13
(e) Material Adverse Changes. There will have been no material
adverse change in the business, operations, assets or properties of Xxxxx.
(f) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to implement this
Agreement and all other related legal matters shall have been approved by
counsel for Xxxxx in the exercise of its reasonable judgment.
(g) Certificates. Xxxxx shall have delivered to Freight Wings such
other documents, instruments, certifications and further assurances as its
counsel may reasonably require.
(h) Election of Director. Xxxxxxxxx X. Xxxxx will have been elected
to be a director of ---------------------- Xxxxx.
(i) Opinion of Counsel. At the Closing, Xxxxx shall deliver to
Freight Wings a legal opinion of Scheichet & Xxxxx, P.C., counsel to Xxxxx,
which shall be reasonably acceptable to counsel for Freight Wings.
Section 6.2 Conditions Precedent to the Obligations of Xxxxx. All
obligations of Xxxxx under this Agreement are subject to the fulfillment or
satisfaction by Freight Wings and the Freight Wings Shareholder, prior to or at
the Closing, of each of the following conditions precedent:
(a) Representations and Warranties True at Closing. The
representations and warranties of Freight Wings and the Freight Wings
Shareholder contained in this Agreement or in any list, certificate or document
delivered by Freight Wings and the Freight Wings Shareholder to Freight Wings
pursuant to the provisions of this Agreement shall be true on the Closing with
the same effect as though such representations and warranties were made as of
such date.
(b) Compliance with this Agreement. Freight Wings and the Freight
Wings Shareholder shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by them
prior to or at the Closing, including, but no limited to the following:
(i) Freight Wings and the Freight Wings Shareholder shall have
authorized each of the actions which they are required to take pursuant to the
provisions of this Agreement.
(ii) Freight Wings shall have acquired the approval of the
Acquisition and related transactions from the Freight Wings Shareholder in
compliance with the applicable requirements of state law.
(c) No Threatened or Pending Litigation. On the Closing date, no
suit, action or other proceeding, or injunction of final judgment relating
thereto, shall be threatened or be pending against Freight Wings or the Freight
Wings Shareholder before any court or governmental or regulatory official, body
or authority in which it is sought to restrain or prohibit or to obtain damages
or other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby, and no investigation that might result in any
such suit, action or proceeding shall be pending or threatened.
14
(d) Material Adverse Changes. There shall have been no material
adverse changes in the business, operations, assets or properties of Freight
Wings since the date of its audited financial statements for the 2004 fiscal
year.
(e) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to implement this
Agreement and all other related legal matters shall have been approved by
counsel for Xxxxx in the exercise of its reasonable judgment.
(f) Certificates. Freight Wings and the Freight Wings Shareholder
shall have delivered to Xxxxx such other documents, instruments, certifications
and further assurances as its counsel may reasonably require.
(g) Financial Statements. Xxxxx shall have received the audited
financial statements of Freight Wings, prepared on the basis of Freight Wings
having operated as a "C" corporation during each such period, consistently
applying GAAP for each of the periods required by SEC Regulation S-X, Rule 3-05,
together with an unqualified opinion of the auditor, which Xxxxx expects to
encompass the Freight Wings fiscal years ended in 2004 and 2003, together with
unaudited quarterly financial statements for all interim periods since the close
of the most recent fiscal year of Freight Wings and the Affiliates, all of which
will have been prepared in accordance with GAAP applied on a consistent basis
for all periods (collectively the "Freight Wings Financial Statements") no later
than three weeks prior to closing. Xxxxx shall also receive at the same time a
computation of total "Net Sales" of Freight Wings for the 2004 fiscal year
prepared by its auditor and abstracted from the Freight Wings Financial
Statements (as used in this Agreement, "Net Sales" shall mean the revenues
generated from the customer file or transaction after the deduction of all out
of pocket expenses, such as direct commissions paid on those sales, actual
freight charges paid, duties paid, trucking costs paid, bond costs paid and any
other incidental expenses paid in connection with or relating to each such file
or transaction. No allowance or deduction shall be made for administrative
expenses, overhead expenses, salaries payable or any expenses other than those
expenses representing actual outlays for the fulfillment of the file or
transaction). Janel's auditors will have a period of 14 days to review the
computation of Net Sales before Xxxxx agrees to the computation.
(h) Personal Guarantees. Xxxxx shall have received fully executed
copies of the personal guarantee of the Freight Wings Shareholder in the form
set forth as Exhibit C to this Agreement.
(i) Accountants Letter. At the Closing, Freight Wings shall provide
to Xxxxx, in form acceptable to Paritz & Company, P.A., certified public
accountants to Xxxxx, a "cold comfort" letter from its certified public
accountant in the form annexed as Exhibit D.
15
(j) Opinion of Counsel. At the Closing, Freight Wings shall deliver
to Xxxxx the legal opinion of counsel to Freight Wings, which shall be
reasonably acceptable to counsel for Xxxxx.
Section 6.3 Indemnification. Freight Wings and the Freight Wings
Shareholder, jointly and severally, indemnify Xxxxx against, and hold Xxxxx
harmless from, any and all liabilities, obligations, losses, damages, penalties,
judgments, costs, expenses, claims, diminution in value, or disbursements of any
kind or nature whatsoever, including but not limited to, interest, penalties,
fines, judgments, settlements, any acts or omissions of Freight Wings and the
Freight Wings Shareholder from and after the date hereof, costs of preparation
and investigation, costs incurred in enforcing this indemnity and reasonable
attorneys' fees and expenses (collectively, "Losses") that Xxxxx may suffer,
sustain, incur or become subject to as a consequence of a breach of any
representation, warranty, covenant or agreement by Freight Wings or the Freight
Wings Shareholder, or any acts or omissions of Freight Wings and the Freight
Wings Shareholder from and after the date hereof up to the sum of one million
dollars ($1,000,000.00).
Section 6.4 Offer of Employment. Xxxxx agrees to offer employment to two
of Freight Wings' Entry Clerks, Xxxx Foo and Xxxxxx Xxxxxxxxxx (the
"Employees"), at the same salary as they are currently earning at Freight Wings.
Further, should the Employees accept such employment with, Xxxxx shall provide
the same benefits to them as are provided to other Xxxxx employees in comparable
positions, including but not limited to health insurance.
ARTICLE VII
FURTHER ASSURANCES
AND CONDITIONS SUBSEQUENT
Section 7.1 Acts to be Performed by Xxxxx. Following the Closing Xxxxx shall:
(a) take all actions necessary to qualify Freight Wings to transact
business in all other jurisdictions in which the nature of business conducted by
Freight Wings or the character or location of the properties and assets owned or
leased by it make such qualification necessary, except where the failure to so
qualify would not have a material adverse effect; and
(b) make the appropriate filings with the State of Nevada, and with
the SEC in compliance with the requirements of the 1934 Act, including but not
limited to the filing and distribution of information complying with the
requirements of SEC Form 8-K, to effectuate each of the actions required by this
Agreement.
Section 7.2 Further Assurances. After the Closing, Xxxxx and Freight Wings
agree to execute, acknowledge and deliver instruments of conveyance and transfer
and will take such other actions and execute and deliver such other documents,
certifications and further assurances as the other may reasonably require in
order to effectuate the Acquisition contemplated hereby. In addition, each of
the parties will cooperate by executing and delivering to the other such
additional instruments and documents and take such other actions as may be
reasonably requested from time to time by any other party necessary to carry
out, evidence and confirm the intended purposes of this Agreement.
16
Section 7.3 Restrictive Covenants. The restrictive covenants contained
herein are in consideration of the obligations of Xxxxx and the consideration to
be received by the Freight Wings Shareholder under this Agreement.
(a) No Competition. Following the Closing, for so long as the
Freight Wings Shareholder is employed by or under contract to Xxxxx or Freight
Wings, and for a period of (3) years after the termination of the employment or
contract, the Freight Wings Shareholder shall not, directly or indirectly cause,
assist or advise any person or entity, including, but not limited to, former
Freight Wings officers, directors, employees, attorneys, consultants,
independent contractors and family to, directly or indirectly, in any manner
whether as an employee, employer, consultant, independent contractor, agent,
principal, partner, manager, investor, lender, officer, or director, or in any
other capacity, engage in or become interested in any business that is
competitive with the business of Freight Wings or Xxxxx, with the exception of
the holding of securities totaling less than 4.9% of the issued and outstanding
securities of a public company as a passive investment.
(b) No Solicitation. The Freight Wings Shareholder shall not,
directly or indirectly, cause any person or entity, including, but not limited
to, former Freight Wings officers, directors, employees, consultants, attorneys,
independent contractors and family to, directly or indirectly, (i) solicit for
services or employ any person or entity that (1) was previously engaged by
Freight Wings or will be engaged by Xxxxx as of the Closing or (2) is engaged by
Freight Wings or Xxxxx from or after the date of this Agreement; (ii) call on or
solicit any person or entity that was or is or becomes a customer of Freight
Wings or Xxxxx, for business or for the purchase of goods or services in
competition with the business of Freight Wings or Xxxxx.
(c) No Disclosure. The Freight Wings Shareholder shall not, directly
or indirectly, cause any person or entity, including, but not limited to former
Freight Wings officers, directors, employees, consultants, attorneys,
independent contractors and family to, directly or indirectly, (i) disclose,
reveal, publish or otherwise make known to any person or entity, including but
not limited to any governmental or quasi-governmental body (each a "Third
Party") any Confidential Information or (ii) use, or permit any Third Party
subject to his control or influence, to use any Confidential Information for any
reason or purpose whatsoever, except in furtherance of the business of Freight
Wings or Xxxxx, or as may be required by applicable law. The term "Confidential
Information" shall mean all confidential and proprietary information, including,
but not limited to, documentation, materials, data, "know-how," plans, studies,
procedures, processes, trade secrets, records, record keeping techniques,
expansion plans, contemplated services or products, and customer, employee,
consultant, or independent contractor lists and data relating to the business or
financing activities of Freight Wings or Xxxxx, and, generally, without limiting
the foregoing, any information not available to the public generally and
pertaining to the business, finances, or operations of Freight Wings or Xxxxx.
For purposes of this Agreement, Confidential Information shall not include
information which is in the public domain at the time it is received by the
Freight Wings Shareholder or which becomes public through no fault or negligence
of the Freight Wings Shareholder.
(d) Equitable Relief. The Freight Wings Shareholder acknowledges and
agrees that (i) a remedy at law will be inadequate for Freight Wings and Xxxxx,
(ii) Freight Wings and Xxxxx will suffer irreparable injury for which money
damages are not sufficient, and (iii) Freight Wings and Xxxxx will be entitled
to injunctive relief without proof of monetary damages. Accordingly, the Freight
Wings Shareholder hereby consents to a Freight Wings or Xxxxx request for
injunctive relief, and the imposition of injunctive relief and any other
appropriate equitable relief in order to protect their rights hereunder. Such
relief shall be in addition to any other relief which may be available at law or
in equity.
17
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Termination.
(a) Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated by written notice at any time before the
Closing only as follows:
(i) by mutual consent of Xxxxx and Freight Wings;
(ii) by Freight Wings at any time, if the representations and
warranties of Xxxxx are found to have been materially incorrect when made or at
any time prior to the Closing;
(iii) by Xxxxx at any time, if the representations and
warranties of Freight Wings are found to have been materially incorrect when
made or at any time prior to the Closing; or
(iv) by either Xxxxx or Freight Wings if the transactions
contemplated by this Agreement do not close on or before September 30, 2005,
unless extended in writing by mutual agreement of the parties.
(b) In the event of the termination and abandonment of this
Agreement, this Agreement shall become void and shall have no effect, without
any liability on the part of any of the parties or their respective directors or
officers or stockholders.
Section 8.2 Brokers' and Finder's Fees. Each party represents and warrants
to the other that all negotiations relative to this Agreement have been carried
on by directly without the intervention of any person.
Section 8.3 Income, Sales, Transfer and Documentary Taxes; etc. Freight
Wings and the Freight Wings Shareholder shall pay all federal, state and local
income taxes, if any, due as a result of the Acquisition and assessable to
Freight Wings or the Freight Wings Shareholder.
Section 8.4 Expenses. Each party shall pay its own expenses incidental to
the preparation of this Agreement and the consummation of the Acquisition and
other transactions contemplated by this Agreement.
Section 8.5 Complete Agreement; Parties in Interest; etc. This Agreement
sets forth the entire understanding of the parties with respect to the
transactions contemplated by this Agreement. It shall not be amended or modified
except by written instrument duly executed by Xxxxx and Freight Wings. Any and
all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
18
Section 8.6 Assignment and Binding Effect. This Agreement may not be
assigned prior to the Closing by any party without the prior written consent of
the other parties.
Section 8.7 Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
Section 8.8 Notices. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally or sent by
air courier, delivery charges prepaid, or by registered or certified mail,
postage prepaid, or by facsimile transmission, confirmation received, as
follows:
If to Xxxxx, to: With a required copy to:
--------------- -----------------------
Xxxxx X. Xxxxxxxx, CEO Xxxxxxx X. Xxxxx, Esq.
Xxxxx World Trade, Ltd. Scheichet & Xxxxx, P.C.
150-14 132nd Avenue 000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxx, XX 00000 Xxx Xxxx, XX 000000
Fax (718) Fax (000) 000-0000
If to Freight Wings Shareholder, to: With a required copy to:
----------------------------------- -----------------------
Xxxxxxxxx X. Xxxxx Indie X. Xxxxx, Esq.,
00 Xxx Xxxxx Xxxx 00 Xxx Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
Fax (000) 000-0000 Fax (000) 000-0000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communications will be deemed to have been given as
of the date so delivered, telephoned or mailed.
Section 8.9 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of New York.
Section 8.10 No Benefit to Others. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the parties hereto.
Section 8.11 Section Headings. All section headings contained in this
Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement.
Section 8.12 Schedules and Exhibits. All Schedules and Exhibits referred
to herein are intended to be and hereby are specifically made a part of this
Agreement.
19
Section 8.13 Severability. Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions.
Section 8.14 Multiple Counterparts. This Agreement may be executed in any
number of counterparts and any party hereto may execute any such counterpart,
each of which when executed and delivered shall be deemed to be an original and
all of which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by all of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date first above written.
Xxxxx World Trade, Ltd.
ATTEST:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxx Xxxxx
--------------------------------- ----------------------------
Xxxxx X. Xxxxxxxx, President Xxxx Xxxxx, Secretary
Freight Wings, Inc.
/s/ Xxxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxxx X. Xxxxx, President and
Secretary
20
EXHIBIT A
XXXXX WORLD TRADE, LTD.
COMMON STOCK SUBSCRIPTION AGREEMENT
Xxxxx World Trade, Ltd.
000-00 000xx Xxxxxx
Xxxxxxx, XX 00000
Gentlemen:
1. The undersigned hereby subscribes for the number of shares of the $.001
par value common stock of Xxxxx World Trade, Ltd. set forth below (the
"Shares").
2. The undersigned hereby acknowledges, represents, warrants, covenants
and agrees as follows:
(a) He has become a consultant to the Company, and has acquired a
familiarity with its business;
(b) He has been given the opportunity to ask questions of and
receive answers from the Company concerning the terms and conditions of the
issuance of the Shares and other matters pertaining to an investment in the
Company, and has been given the opportunity to obtain such information necessary
to verify the accuracy of the information provided in order for him to evaluate
the merits and risks of the Shares to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense and has not
been furnished any;
(c) He has determined that the Shares are a suitable investment for
him in view of his presently anticipated financial needs and that he could bear
a loss of his investment at this time and for the foreseeable future;
(d) He is not relying on the Company, its officers, directors, other
employees, agents, investment bankers or attorneys with respect to individual
tax and other legal or economic considerations involved in this investment. He
has relied on his own knowledge and experience and that of his legal and
economic advisors regard to the tax and other legal or economic considerations
involved in this investment. He is capable of evaluating for himself the merits
and risks of this investment;
(e) He will not sell or otherwise transfer the Shares for a period
of two (2) years, and will not sell or otherwise transfer the Shares without
registration under the Securities Act of 1933 (the "Securities Act") and
appropriate state securities ("Blue Sky") laws or the availability of
appropriate exemptions therefrom, and fully understands and agrees that he must
bear the economic risks of his purchase for an indefinite period of time
because, among other reasons, the Shares have not been registered under the
Securities Act or under the Blue Sky laws of any state and, therefore, cannot be
resold, pledged, assigned, hypothecated or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable Blue
Sky laws or pursuant to available exemptions from such registration. He also
understands that the Company has no obligation to register the Shares on his
behalf;
21
(f) He is a citizen and a bona fide resident of the United States
and is at least twenty-one (21) years of age;
(g) The Shares he is subscribing for will be acquired solely for the
account of the undersigned, for investment purposes only and are not being
purchased for any distribution, subdivision or fractionalization thereof; the
undersigned has no contract, undertaking agreement or arrangement with any
person to sell, transfer or pledge any Shares to such person or anyone else and
the undersigned has no present plan to enter into any such contract,
undertaking, agreement or arrangement; and
(h) He has made the foregoing representations, warranties, covenants
and agreements knowing that they shall survive his purchase of Shares.
3. Investor Awareness. The undersigned acknowledges his complete
understanding of the following facts:
(a) No federal or state agency has passed upon the investment
quality of the Shares or made any finding or determination as to the fairness,
merits or risks of any investment in them.
(b) There are substantial risks of loss of the investment incident
to the purchase of Shares.
(c) The Shares have not been registered under the Securities Act or
any Blue Sky laws and must be held indefinitely unless they are subsequently so
registered or exemptions from such registration are available. The undersigned
has no right to require that the Shares be registered under the Securities Act
(except for the Registration Rights Provisions attached to this Agreement) and
the Shares cannot be sold without registration or other compliance with the
Securities Act and applicable Blue Sky laws. In summary, the undersigned
understands that the Shares have not been registered under the securities laws
of any jurisdiction, that the Company has no obligation to register them and
that all Shares acquired by him may not be transferred unless they are
registered or an exemption from such registration is otherwise available.
4. Modification. Neither this Agreement nor any provision hereof shall be
waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or
termination is sought.
5. Notices. Any notice, demand or other communication which any party
hereto may be required, or may elect, to give anyone interested hereunder shall
be sufficiently given if (a) deposited, postage prepaid, in a United States mail
letter box, registered or certified mail, return receipt requested, addressed to
such address as may be given herein, or (b) delivered personally at such
address, or (c) delivered by fax transmission to a fax number provided by such
person (who confirms receipt thereof).
22
6. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall, for all purposes, constitute
one agreement binding on all the parties.
7. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective heirs, executors, administrators, successors, legal representatives
and assigns. If the undersigned is more than one person, the obligation of the
undersigned shall be joint and several and the covenants, agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person.
8. Entire Agreement. This instrument contains the entire agreement of the
parties and there are no representations, warranties, covenants or other
agreements, except as stated or referred to herein.
9. Assignability. This Agreement is not transferable or assignable by the
undersigned except with the written consent of the Company.
10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
The undersigned has executed this Subscription Agreement on ____________,
2005.
Number of Shares
Subscribed For Subscriber Signature
---------------- ------------------------------------
Name
------------------------------------
Residence Address
------------------------------------
City State Zip Code
Tax Identification or Social Security Number_______________________________
Subscription Accepted as of
______________, 2005
Xxxxx World Trade, Inc.
By: _________________________
Xxxxxxx X. Xxxxxxxx, President
23
REGISTRATION RIGHTS PROVISIONS
1. Definitions. The following terms have the following meanings:
(a) "Act" means the Securities Act of 1933, "Exchange Act" means the
Securities Exchange Act of 1934, and the respective rules and regulations
promulgated under the Act and the Exchange Act.
(b) "Commission" means the United States Securities and Exchange
Commission.
(c) "Lock Up Agreement" means the Lock Up Agreement between the
Holder and Xxxxx World Trade, Inc. (the "Company") in the form annexed as
Exhibit B to the Acquisition Agreement among the Company, Freight Wings, Inc.
and the Holder dated July 6, 2005
(d) "Registrable Securities" means the Shares of the Company owned
by Xxxxxxxxx X. Xxxxx (the "Holder") as set forth in the subscription agreement
to which these provisions are attached.
(e) "Registration," "register" and like words mean compliance with
all of the laws, rules and regulations (federal, state and local), and
provisions of agreements and corporate documents pertaining to the public
offering of securities, including registration of any public offering of
securities on any form under the Act.
2. (a) Piggyback Registration. At any time prior to the Registration of
all of the Registrable Securities, the Company shall advise Holder by written
notice at least ten (10) days prior to the filing of any registration statement
under the Act by the Company (other than a registration statement on Form X-0,
Xxxx X-0 or subsequent similar forms), and will upon the provision of written
notice from Holder as described below include in any such registration statement
(the "Initial Registration") such information as may be required to permit a
public offering of the Registrable Securities desired to be registered by
Holder. If Holder desires to have Registrable Securities included in such
registration statement, the Holder must so advise the Company in writing within
ten (10) days after the date of receipt of the Company's notice of registration,
setting forth the amount of Registrable Securities for which registration is
requested; provided, however, that if the sole underwriter or managing
underwriters advise the Company that the inclusion in the offering of securities
proposed to be sold by Holder would adversely affect the ability of the Company
to complete the offering, then the Company shall have the right to reduce the
number of shares for which Holder is seeking Registration on a pro rata basis
with all other selling shareholders seeking Registration in any such
registration statement. The Company shall use its best efforts to cause such
registration statement to be filed and to become effective and, for a period of
six (6) consecutive months from the date such registration statement is declared
effective by the Commission and to keep current the prospectus included in such
registration statement, either through the filing of periodic reports under the
Exchange Act, or by filing post-effective amendments to the registration
statement, so as to permit the public sale of the Shares. Prior to executing any
sales of the Shares, Holder will confirm with the Company that the Prospectus
included in the Initial Registration is up-to-date and that such Shares may be
lawfully sold.
24
(b) Demand Registration Rights. In the event that (a) the Company
does not file the Initial Registration including the shares within nine (9)
months following the expiration of the Lock Up Agreement (the "Demand Date"), or
(b) the Shares are excluded from the Initial Registration, the Company will at
its own expense file a registration statement at the next earliest practicable
date not later than 90 days following the Demand Date, or the completion of the
offering registered in the Initial Registration, as the case may be, and include
the Shares (the "Demand Registration"). Such registration statement may be a
post-effective amendment, registration under Form S-3 (if that form is available
to the Company) or any other registration process available to it under the then
existing Commission guidelines. In the event the Demand Registration is not
filed by the 90th day following the completion of the offering included in the
initial registration, the Company agrees that it will then be in default under
the terms of this Agreement. The holder of the Shares shall have all rights and
remedies available to him to seek damages as well as to seek specific
performance.
3. Information to be Furnished by Holder. Holder shall furnish to the
Company in writing all information within its possession or knowledge required
by the applicable rules and regulations of the Commission and by any applicable
state securities or blue sky laws concerning Holder, the proposed method of sale
or other disposition of the shares of Common Stock being sold by Holder in such
offering, and the identity of and compensation to be paid to any proposed
underwriter or underwriters to be employed in connection with such offering.
4. Costs and Expenses. The Company shall pay all costs and expenses in
connection with the Registration; provided, however, that Holder shall bear the
fees and expenses of their own counsel and accountants and any selling expenses
relating to Registrable Shares registered on behalf of Holder in connection with
such offering, including without limitation, any transfer taxes, underwriting
discounts or commissions.
5. Notices. All notices and other communications must be in writing and
shall be deemed to have been given on the same day when personally delivered or
sent by confirmed facsimile transmission or on the next business day when
delivered by receipted courier service or on the third business day when mailed
with sufficient postage, certified mail, return receipt requested, to the
following addresses: (a) if to the Company, to Xxxxx World Trade, Ltd., 000-00
000xx Xxxxxx, Xxxxxxx, XX 00000, tel. (000) 000-0000, Attention Xxxxx X.
Xxxxxxxx, Executive Vice President; and (b) if to Holder, at his address as
provided by him in his subscription agreement, or to such other address as it
may be changed from time to time on the books of the Company by written notice.
Copies of all notices to the Company shall be simultaneously given to Xxxxxxx X.
Xxxxx, Esq., Scheichet& Xxxxx, P.C., 000 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx Xxxx, XX
00000, fax (000) 000-0000, e-mail xxxxxxx@xxxxxxxxxxxxxx.xxx. Each person
receiving notice may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in writing.
7. Governing Law. Registration Rights shall be governed by and construed
and enforced in accordance with the laws of the State of New York without giving
effect to the choice of law or conflict of laws principles. The New York state
and federal courts in New York shall have jurisdiction over any and all disputes
arising out of or relating to the Registration Rights.
25
EXHIBIT B
________________, 2005
Xxxxx World Trade, Ltd.
000-00 000xx Xxxxxx
Xxxxxxx, XX 00000
Re: Lock-Up Agreement for Shares of the $.001 Par Value Common Stock of
Xxxxx World Trade, Ltd. Owned by the Freight Wings Shareholder
Gentlemen:
Pursuant to the Acquisition Agreement dated as of July 6, 2005 (the
"Agreement") by and among Xxxxx World Trade, Ltd. ("Xxxxx"), a Nevada
corporation with its principal place of business at 000-00 000xx Xxxxxx,
Xxxxxxx, XX 00000, Jamaica, NY, Freight Wings Inc. ("Freight Wings"), a New York
corporation, with its principal place of business at 000 Xxxx Xxxxxxx Xxxx,
Xxxxxx Xxxxxx, XX 00000, and Xxxxxxxxx X. Xxxxx, who resides at 00 Xxx Xxxxx
Xxxx, Xxxxx Xxxxx, XX 00000, (the "Freight Wings Shareholder"), the undersigned
shareholder of the Xxxxx hereby agrees that for a period of four (4) years
following the date of Closing as defined in the Agreement (the "Lock-Up
Period"), and except as otherwise provided for herein, the undersigned will not,
directly or indirectly, offer, sell, transfer, pledge, assign, hypothecate or
otherwise encumber or dispose of (either pursuant to Rule 144 of the rules and
regulations issued under the Securities Act of 1933, or otherwise) any interest
in all shares of the $.01 par value common stock of Xxxxx ("Shares") which the
undersigned owns of record or beneficially as the Freight Wings Shareholder
referred to in the Agreement.
Notwithstanding the provisions of this Lock-Up Agreement, the undersigned
shall have the right to transfer Shares to family trusts and registered
charities provided that those transferred Shares (the "Transferred Shares")
remain subject to restriction from further sale, transfer or hypothecation until
the expiration of the Lock-Up Period.
In order to enable effective enforcement the provisions of this Lock-Up
Agreement, the undersigned hereby consents to the placing of appropriate
restrictive legends and stop-transfer instructions with the transfer agent of
Janel's securities with respect to the Shares subject to this Lock-Up Agreement.
This Lock-Up Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York without giving effect to
choice of law or conflict of laws principles.
--------------------------
Xxxxxxxxx X. Xxxxx
26
EXHIBIT C
UNCONDITIONAL GUARANTY
As inducement to and in consideration of Xxxxx World Trade, Ltd, a Nevada
corporation ("Xxxxx"), entering into an agreement dated July 6, 2005 (the
"Agreement") between and among Xxxxx, Freight Wings, Inc. ("Freight Wings"), a
New York corporation, and Xxxxxxxxx X. Xxxxx, who resides at 00 Xxx Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000 (collectively the "Seller") pursuant to which the Seller
is selling Freight Wings to Xxxxx in a stock-for-stock exchange of Freight Wings
shares of its common stock for shares of Xxxxx common stock as described in the
Agreement, Xxxxxxxxx X. Xxxxx (the "Guarantor") hereby guarantees all
representations, warrantees, covenants, conditions, agreements and the prompt
and timely performance of all other obligations of the Seller under the
Agreement in accordance with the terms thereof and all amendments,
modifications, renewals and extensions thereof and changes therein (collectively
the "Obligations") up to the sum of one million dollars ($1,000,000.00).
1. Before proceeding hereunder against the Guarantor, Xxxxx is not
required to: (a) proceed against the Seller or any Guarantor or party whether a
party to this guaranty or otherwise; (b) proceed against or exhaust any security
securing the Obligations; or (c) pursue any other remedy whatsoever.
2. The Guarantor shall not have any right of subrogation, reimbursement,
exoneration, contribution, indemnification or participation in any claim, right
or remedy of Xxxxx against the Seller or any security now or hereafter held by
Xxxxx until all Obligations have been performed or paid in full.
3. This guaranty is binding upon the successors and assigns of the
Guarantor.
4. The obligations of the Guarantor hereunder shall constitute a present
and continuing guaranty of performance and payment, and not of collect ability
only, shall be absolute and unconditional, shall not be subject to any
counterclaim, setoff, deduction or defense the Guarantor may at any time have
against Xxxxx or any other person, and shall remain in full force and effect
without regard to any event whatsoever (whether or not the Guarantor shall have
any knowledge or notice thereof or shall have consented thereto), including
without limitation:
(a) Any extensions, renewals or changes in the Agreement, any
assignment or transfer of any part thereof, any renewal, extension or
modification of or in the terms of payment provided in the Obligations or the
granting of time in respect of the performance or payment thereof, or any
furnishing or acceptance of security or any release of any security so furnished
or accepted for the Obligations;
(b) Any waiver, consent, extension, forbearance or other action or
inaction under or in respect of this guaranty or the Obligations, or any
exercise of or failure to exercise any right, remedy or power in respect hereof
or thereof;
27
(c) Any failure, neglect or omission of Xxxxx to protect, in any
manner, the performance or collection of the Obligations, or any portion
thereof, or any security given therefore;
(d) Any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceedings with respect to
the Seller or the Guarantor; or
(e) Any default by the Seller, the Guarantor, or any invalidity of,
unenforceability of, misrepresentation of, irregularity or other defect in, the
Obligations or this guaranty.
5. The Guarantors agree to pay all reasonable fees and expenses, including
but not limited to reasonable attorney fees, which may be incurred by Xxxxx in
enforcing or attempting to enforce this Guaranty, to obtain specific performance
or collection of the Obligations or to enforce any agreement granting a security
interest in collateral to secure performance or payment of the Obligations.
6. This guaranty may be signed in any number of counterparts and each
counterpart shall have the same force and effect as an original instrument and
as if all of the signers of the aggregate counterparts had signed the same
instrument.
Dated: July 6, 2005.
/s/ Xxxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxxx X. Xxxxx, Guarantor
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On July 6, 2005, before me, the undersigned, personally appeared Xxxxxxxxx
X. Xxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or person upon behalf of which
the individual acted, executed the instrument.
/s/_______________________
Notary Public
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EXHIBIT D
FORM OF FREIGHT WINGS AUDITORS COMFORT LETTER
Xxxxx World Trade, Ltd.
000-00 000xx Xxxxxx
Xxxxxxx, XX 00000
Re: Freight Wings Inc.
We are independent accountants with respect to the Company within the
meaning of the Securities Act of 1933 (the "Act") and the applicable Rules and
Regulations of the Securities and Exchange Commission ("SEC").
It is our opinion that the audited financial statements of the Company
provided to Xxxxx World Trade, Ltd. ("Xxxxx") pursuant to the Acquisition
Agreement between them dated July 6, 2005 comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations thereunder and that the Xxxxx may rely upon our opinion of with
respect to those financial statements and supporting schedules.
On the basis of a limited review, which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholder and
board of directors of the Company, consultations with officers and other
employees of the Company responsible for financial and accounting matters and
other specified procedures and inquiries, nothing has come to our attention
which would lead us to believe that (A) the unaudited financial statements, if
any, of the Company provided to Xxxxx do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements of the Company provided to Xxxxx, or
(B) at a specified date not more than five (5) days prior to the Closing, there
has been any change in the capital stock or debt of the Company, or any decrease
in the stockholders' equity or net current assets or net assets of the Company
as compared with amounts shown in the most recent audited balance sheet provided
to Xxxxx, other than as set forth in or contemplated by the Acquisition
Agreement.
We have also carried out certain specified procedures, not constituting an
audit, with respect to the Company's pro forma financial information provided to
Xxxxx and that nothing has come to our attention as a result of such procedures
that caused us to believe such unaudited pro forma financial information does
not comply in form in all respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of that
information.
We have not brought to the attention of any of the Company's management
any "weakness," as defined in Statement of Auditing Standard No. 60
"Communication of Internal Control Structure Related Matters Noted in an Audit,"
in any of the Company's internal controls. Nothing has come to our attention
which, in our judgment, would indicate that there have been any events,
transactions or changes in accounting principles which would have a material
effect upon, or require mention with respect to the financial statements of the
Company as of December 31, 2004 and 2003 and for the years then ended.
Very Truly Yours
29
EXHIBIT E
Xxxxx World Trade, Ltd.
000-00 000xx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel. 000.000.0000 Fax. 000.000.0000
_____________, 2005
Xxxxxxxxx X. Xxxxx
00 Xxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Re: Employment Agreement
Dear Xx. Xxxxx:
This letter will serve to confirm the terms of the employment agreement
(the "Agreement") between yourself and Xxxxx World Trade, Ltd., a Nevada
corporation, ("Xxxxx") regarding your engagement as a sales manager with respect
to the business generated for Xxxxx by the operations of Freight Wings, Inc.
("Freight Wings"), a New York corporation, as a wholly-owned subsidiary of
Xxxxx.
1. Term. Your employment under this Agreement shall be for a term
commencing as of the closing date of Janel's acquisition of all of the issued
and outstanding shares of Freight Wings common stock (the "Closing"), and
concluding as of the date that the business of customers of Freight Wings is no
longer exclusively provided to Xxxxx, subject to the provisions of Section 7
2. Duties. You have agreed to bring to Xxxxx, exclusively, your entire
book of business for service and handling, which includes all current customers
and prospective customers of Freight Wings during the term of this Agreement.
Your duties shall consist of soliciting, marketing, advertising and referring
all such business and customers, cooperating with Xxxxx with respect to
integrating those customers provided by Freight Wings into Janel's operations,
and informing Xxxxx of all of your business activities on its behalf or with
respect to each such customer.
You agree to fully disclose to Xxxxx for its approval in advance, all
payment terms and schedules being provided to customers on a regular basis and
will supply Xxxxx, on a current basis, all information concerning customers,
potential customers, the status of customer negotiations, contracts and orders.
Xxxxx has reviewed the payment terms and fees for all Freight Wings clients and
agrees to handle their business at the same fee schedule for a period of at
least two years from the date of this Agreement. Xxxxx will not propose or
discuss a fee increase with any clients of Freight Wings without first obtaining
the prior written consent of Freight Wings, and you will not offer any discounts
to customers without prior approval from Xxxxx. Xxxxx will provide services to
the clients of Freight Wings' in a professional manner, designating employees of
Xxxxx who are adequately qualified and able to provide the services contemplated
hereunder.
30
3. Best Efforts. You agree to devote your best efforts, attention, energy
and skill to the Freight Wings business of Xxxxx. You will use your best efforts
to establish and maintain customer relations, satisfaction and retention by
performing your business and sales functions to the best of your ability and
providing premium service, which includes, but is not limited to, maintaining
regular contact, inviting customers to events, if applicable, maintaining
customer contact and information lists, and providing service reports and price
schedules.
4. Commission. You will receive a commission with respect to the sales
generated by the Freight Wings business operated by Xxxxx after the Closing (the
"Monthly Commission") based upon "Net Sales." The Monthly Commission is paid in
lieu of all other compensation, auto expenses, travel and entertainment
expenses, medical insurance coverage and all other benefits or expense
reimbursement of every type and description. Net Sales will be determined for
each file or transaction and shall be defined to mean the net revenues generated
from the file or transaction after the deduction of all out-of-pocket expenses,
including but not limited to actual freight charges paid, duties paid, trucking
costs paid, bond costs paid and any other expenses of Xxxxx in connection with
or relating to each such file or transaction. No allowance or deduction shall be
made for general and administrative expenses, overhead expenses, salaries or any
other indirect expenses, other than expenses representing actual payment
obligations related to the file or transaction at issue.
The Monthly Commission will consist of the first $4,166 of Net Sales paid
by the Freight Wings customers during that month, and 40% of the balance of Net
Sales remaining after payment of the first $4,166.67. The Monthly Commission
shall be calculated as of the close of business on the last day of each month.
On the fifteenth (15th) day of the following month, Xxxxx will give you a
statement listing the invoices for which payment was received by Xxxxx from the
Freight Wings customers during the prior month from all accounts, together with
payment of the resulting Monthly Commission. Within one week of receiving the
statement, you will review and confirm to Xxxxx in writing the accuracy of the
information therein and the parties will promptly resolve any differences.
Should you fail to notify Xxxxx of inaccuracies in the statement within one week
after receipt, the statement and payment provided to you will be conclusive. No
Monthly Commission will be paid on any uncollected accounts.
5. Representations, Warranties and Covenants of Xxxxx. Xxxxx represents,
warrants, covenants and agrees with Freight Wings as follows.
(a) Xxxxx is a corporation duly organized, validly existing and in
good standing under the laws of Nevada, with full power and authority to enter
into this Agreement and perform its obligations.
(b) This Agreement has been duly and validly authorized, executed
and delivered on behalf of Xxxxx and is the valid, binding and enforceable
obligation of Xxxxx in accordance with its terms.
(c) No authorization, approval, consent or license of any regulatory
party or authority is required for the valid authorization, execution and
delivery of this Agreement or, if so required, all such authorizations,
approvals, consents or licenses have been obtained and are in full force and
effect.
31
6. Representations, Warranties and Covenants of Xxxxxxxxx X. Xxxxx. You
hereby represent, warrant, covenant and agree with Xxxxx as follows.
(a) You have not been engaged by any other person to provide the
services called for in this Agreement, and have full power and authority to
enter into this Agreement and perform its obligations.
(b) Your execution of this Agreement and subsequent employment with
Xxxxx does not and will not conflict with any obligations that you have to any
former employers, any other individual, corporation, partnership, association,
company, trust or any other entity or organization, including any
instrumentality of any government.
7. Termination of Employment.
(a) Termination for Cause. The Company may terminate your employment
at any time for Cause (a termination for "Cause") without further obligation to
you immediately upon giving you notice of such termination. For the purposes of
this Agreement, "Cause" shall mean:
(1) your failure to follow the directions of the Board of Directors
of Xxxxx or appropriate officers of Xxxxx, provided such directions are
reasonable, lawful and are not materially inconsistent with any of your stated
duties or responsibilities under this Agreement, which is not cured within five
(5) business days following delivery of written notice of the Cause;
(2) your violation of any lawful policy of Xxxxx that has been
disclosed to you, which is not cured within five (5) business days following
delivery written notice of the cause;
(3) your commission of an act of dishonesty, gross incompetence or
intentional or willful misconduct, which act occurs in the course of your
performance of your duties as an employee, which is not cured within five (5)
business days following delivery written notice of the cause; or
(4) your commission of any act of fraud, misappropriation or
embezzlement, or your conviction for a felony under Federal, State or Local
laws.
(b) Involuntary Termination.
(1) Xxxxx may terminate your employment due to your nonperformance of your
duties by reason of Incapacity, if such nonperformance continues for at least
180 days in any 365 day period. The term "Incapacity" shall mean any material
physical, mental or other disability rendering you incapable of substantially
performing his services hereunder. In the event of any dispute between you and
Xxxxx as to whether you are incapacitated, the determination of whether you are
incapacitated shall be made by an independent physician selected by Xxxxx (and
reasonably acceptable to you) and the decision of such physician shall be
binding.
32
(2) In addition, your employment shall terminate automatically upon your
death at any time during the term of this Agreement.
(c) Rights on Termination.
(1) Termination for Cause. If your employment is terminated for Cause,
Xxxxx shall pay the Monthly Commission to you or your estate, as the case may
be, until such time as the business of customers of Freight Wings is no longer
exclusively provided to Xxxxx.
(2) Involuntary Termination. If your employment is terminated pursuant to
an Involuntary Termination, Xxxxx shall pay the Monthly Commission to you or
your estate, as the case may be, until such time as the business of customers of
Freight Wings is no longer exclusively provided to Xxxxx.
(3) Limitation of Claims. Upon the termination of your employment, neither
you nor your estate shall have any rights or claims against Xxxxx under this
Agreement other than the rights or claims expressly provided by this Section 7.
You hereby waive, to the extent permitted by law, all other rights and claims
you or your estate now has or may have at law or in equity against Xxxxx and its
officers, directors, employees and agents for any reason.
Upon any termination of this Agreement or your services hereunder, the
party's respective rights and remedies, obligations and restrictions, pursuant
to Paragraphs 7, 8, 9, 11, 15, 17 and 18 shall remain in full force and effect.
8. Non-Disclosure of Confidential Information. "Confidential Information"
means any and all trade secrets and other intellectual property, proprietary and
other information, in any form, relating to Xxxxx or its affiliates, directors,
officers, or employees, other than information which is in the public domain
other than as a result of a willful or negligent act or omission or any breach
of the provisions of this Agreement, including, but not limited to, information
relating to the development, identity and description customers, operations,
pricing, prospects, marketing, finances, business proposals, and all other
aspects of Janel's or its affiliates' business. You have received or will
receive Xxxxx Confidential Information as a result of your dealings with Xxxxx
and its officers, directors, accountants, attorneys, advisors, representatives
and customers. Accordingly, you agree not to, directly or indirectly, at any
time and in any way, use, communicate, disclose or disseminate any Confidential
Information in any manner whatsoever. You shall use your best efforts and
exercise the utmost diligence to protect and safeguard all Confidential
Information.
9. Ownership of Proprietary Information. Xxxxx is, and shall remain during
the term of this Agreement and thereafter, the sole and exclusive owner of all
of its Confidential Information.
10. Non-Compete and Non-Solicitation. You agree that while you are
employed by Xxxxx, and in any event until the end of the term of this Agreement,
you will not, directly or indirectly (a) offer or provide any business services
to any other person or entity or (b) participate in, own, manage, operate, or
control any business which is in competition with Xxxxx or its affiliates.
Notwithstanding the foregoing, you and your affiliates may own collectively no
more than four and nine tenths percent (4.9%) of the issued and outstanding
capital stock of any publicly traded company. Moreover, you shall not, directly
or indirectly, cause any person or entity to (i) solicit for services or employ
any person or entity employed or engaged by Xxxxx or its subsidiaries, or (ii)
call on or solicit any person or entity that was or is a customer of Xxxxx or
its subsidiaries for business or for the purchase of goods or services in
competition with the business of Xxxxx.
33
11. Irreparable Harm. It is our mutual intent that the restrictions
contained in the Non-Disclosure and Non-Compete paragraphs herein will be
enforced to the fullest extent permissible under the laws and public policies of
each jurisdiction in which enforcement is sought. You agree that the
restrictions contained herein are reasonably necessary for the protection of
Xxxxx, that Xxxxx would be irreparably harmed by any breach or threatened breach
of these restrictions, that monetary damages alone would not be adequate, and
that Xxxxx would be entitled, in addition to any and all remedies at law, and
without the posting of a bond or other security, the right to an injunction,
specific performance or other equitable relief. You also agree that, if any one
or more of these restrictions are held by a court to be invalid or unenforceable
for any reason, the provisions will be construed by limiting and reducing them
so as to be enforceable to the greatest extent permissible.
12. No Representations. Neither of the parties to this Agreement, their
respective affiliates, or their directors, officers, or employees, or any other
person or entity has made any representations or warranties other than as
expressly set forth and designated in this Agreement as such, except for the
representations, warranties, covenants and agreements contained in the July 6,
2005 Acquisition Agreement between and among Xxxxx, Freight Wings and yourself,
which shall remain unimpaired by the provisions of this Agreement.
13. Assignment. You shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Xxxxx.
14. Binding Effect. This Agreement is binding upon the parties hereto and
their respective successors, assigns, heirs, executors or administrators.
15. Entire Agreement; Waivers; Severability. This Agreement contains the
entire understanding of the parties and no waiver or modification of any
provision of this Agreement shall be valid unless in writing and signed by the
party to be charged with such waiver. You have agreed that you hereby waive any
and all medical insurance or reimbursement coverage which may be provided by
Xxxxx to its employees. No waiver of any breach of this Agreement shall be
deemed a waiver of any subsequent breach or of a breach of any other provision
of this Agreement. If any provision of this Agreement is held to be invalid or
unenforceable, the remaining provisions shall not be affected.
16. Headings. The headings of the paragraphs herein are inserted for
convenience of reference only and shall not affect any interpretation of this
Agreement.
17. Governing Law; Jurisdiction. The provisions of this Agreement shall in
all respects be construed and governed by the laws of the State of New York
applicable to agreements entirely made and performed in New York. You
irrevocably and unconditionally submit to the exclusive jurisdiction for any
action, suit or proceeding relating to this Agreement of the courts of the State
of New York, New York County. Each party irrevocably and unconditionally waives
any objection it may have to the venue of any action, suit or proceeding brought
in such courts or to the convenience of the forum.
18. Notices. All notices and communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given, effective upon receipt, if mailed or transmitted by any
confirmed standard form of personal delivery, mail, courier, fax or e-mail to
the parties at their respective addresses as set forth on this Agreement or as
subsequently designated by them in writing. Copies of all notices shall be
simultaneously delivered to (a) Xxxxxxx X. Xxxxx, Esq., Scheichet & Xxxxx, P.C.,
000 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx Xxxx, XX 00000, fax (000) 000-0000, e-mail
xxxxxxx@xxxxxxxxxxxxxx.xxx and (b) Indie X. Xxxxx, Esq., 00 Xxx Xxxxx Xxxx,
Xxxxx Xxxxx, XX 00000, Fax (000) 000-0000, e-mail xxxxxxxxxx@xxx.xxx
19. Counterparts. This Agreement may be executed in any number of
counterparts, including confirmed fax transmission, each of which shall be
deemed to be an original, and all of which taken together shall be deemed to be
one and the same instrument.
If this letter conforms with your understanding of the Agreement it
evidences between you and Xxxxx, please so indicate by signing the enclosed copy
where indicated below and returning it to me immediately.
Very truly yours,
Xxxxx World Trade, Ltd.
By: ____________________________
Xxxxx X. Xxxxxxxx, President
Accepted and Agreed:
-----------------------
Xxxxxxxxx X. Xxxxx
34
