ASSET PURCHASE AGREEMENT
EXHIBIT
10.6
This
Agreement executed this 19th day of May, 2008 and effective July 1, 2008 (the
“Closing Date”) between Xxxxxxx International Logistics, Inc., a New Jersey
corporation with its principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxxxx (hereinafter “FIL”) and Xxxxx World Trade, Ltd., a Nevada corporation
with its principal place of business at 000-00 000xx
Xxxxxx,
Xxxxxxx, Xxx Xxxx 00000 (hereinafter “Xxxxx”).
WHEREAS,
FIL is the owner of, among other businesses, a Customs Brokerage business at
its
000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx premises (hereinafter “the
Business”).
WHEREAS,
FIL desires to sell certain specified assets constituting substantially all
of
the assets of the Business and Xxxxx wishes to acquire certain specified assets,
but no liabilities, claims or debts, of the Customs Brokerage Business of FIL
to
integrate into Janel's operations.
THEREFORE,
in consideration of the premises and the covenants contained herein, the Parties
agree as follows:
I. PURCHASE
AND SALE OF ASSETS
1.
FIL
agrees to sell, assign, transfer and deliver to Xxxxx all the books, records,
forms, manuals, internet access codes, goodwill, customer lists and customer
contact information, telephone, yellow page, trade journal listings pertaining
to FIL’s customs brokerage business.
2.
The
amounts allocated to each Asset in Exhibit A, all of which are included in
the
Purchase Price, shall be used by all of the Parties for reporting for federal
tax purposes. The necessary tax filings in order to comply with Internal Revenue
Code Section 1060 is attached as Exhibit J. Janel’s accountant shall complete
such form.
3.
Xxxxx
shall not assume responsibility for any Liabilities of any nature or type
related to, or due by, FIL, or the Business. Xxxxx is purchasing the Assets
free
and clear of all liens and encumbrances. The transaction described in this
section is referred to as the “Sale”. FIL expressly acknowledges that Xxxxx has
no responsibility for any Liabilities due to any suppliers to the Business
arising prior to the date of this Agreement.
4.
The
Sale shall not include FIL’s interests in any accounts receivable.
PURCHASE
PRICE
5.
FIL
represents that the Earnings before Interest, Taxes, Depreciation and
Amortization (“EBITDA”) of the business for fiscal year 2007 was $700,000 and
further represents its good faith belief that EBITDA of the business for fiscal
year 2008 will meet or exceed $700,000.
6.
Xxxxx
agrees to pay a total purchase price for the Sale of the Business of Two Million
One Hundred Thousand Dollars ($2,100,000.00). Prior to closing, FIL will make
available its financial books and records for inspection and audit by Xxxxx.
Subject to the provisions of Paragraphs 7 and 8 hereof, the total purchase
price
will be paid as follows:
a)
Six
Hundred Thousand Dollars ($600,000.00) payable in cash upon
closing;
b)
Six
Hundred Thirty Thousand Dollars ($630,000.00) payable in shares of Xxxxx World
Trade, Ltd. stock, valued at the closing market price of the stock on the Friday
immediately prior to the closing date (the “stock allocation”). The stock
allocation will be held by Xxxxx until three years following the closing date
and will be delivered to FIL, less any reduction pursuant to Paragraph 8
hereof.
c)
Four
Hundred Thirty-five Thousand Dollars ($435,000.00) payable in cash one year
following the closing date.
d)
Four
Hundred Thirty-Five Thousand Dollars ($435,000.00) payable in cash three years
following the closing date.
7.
In the
event the total EBITDA of the Business for the three years immediately following
the closing fails to equal Two Million One Hundred Thousand Dollars
($2,100,000.00), Xxxxx shall be entitled to a reduction of the Total Purchase
Price in an amount equaling three times the total three year EBITDA shortfall
(“shortfall repayments”) and the payment of the Total Purchase Price due to FIL
pursuant to Paragraph 6 d) shall be reduced by an amount equaling three times
the three-year EBITDA shortfall.
8.
In the
event any reduction, pursuant to Paragraph 7 hereof, of the payment of the
Total
Purchase Price pursuant to Paragraph 6 d) is insufficient to satisfy the
shortfall repayment, the stock allocation pursuant to Paragraph 6 b) shall
be
reduced in an amount equal to satisfy the shortfall and the stock so reduced
will be cancelled and returned to Janel’s authorized and unissued stock. For
purposes of satisfaction of any shortfall repayment, the stock allocation will
be valued at the closing market price on the third anniversary of the closing
date only for the purpose of calculating the number of stock allocation shares
to be cancelled. If the third anniversary date is a Saturday, Sunday or holiday,
the stock will be valued as of the closing price on the first business day
following the third anniversary.
9.
It is
understood between the parties that 2 persons presently employed by FIL will
become employed by Xxxxx on or after the closing date in the operation of the
Business. FIL agrees to furnish adequate office space, without charge, to Xxxxx
for the operation of the Business at FIL’s premises at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxxxx.
10.
Representations, Warranties and Covenants of Xxxxx
Xxxxx
represents, warrants, covenants and agrees with FIL 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
according with its terms.
11.
Representations, Warranties and Covenants of FIL
FIL
represents, warrants, covenants and agrees with Xxxxx as follows:
(a)
FIL
is a corporation duly organized, validly existing and in good standing under
the
laws of New Jersey, with full power and authority to enter into this Agreement
and perform its obligations.
(b)
This
Agreement has been validly and duly authorized, executed and delivered by FIL
and is a valid, binding and enforceable obligation upon it in accordance with
its terms.
(c)
FIL
shall at all times comply with all applicable federal and state laws in
connection with your activities pursuant to this Agreement, in particular the
rules and regulations of the SEC under the Securities Act of 1933 and the
Securities Exchange Act of 1934.
12.
No Other Representations
None
of
Xxxxx, its affiliates, or their directors, officers, or employees, or any other
person or entity has made any representations or warranties to FIL other than
as
expressly set forth and designated in this Agreement as such.
13.
Assignment
FIL
shall
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of Xxxxx, which consent shall not be unreasonably
withheld.
14.
Binding Effect
This
Agreement shall inure solely to the benefit of, and shall be binding upon,
the
parties and their respective successors and assigns and, except as otherwise
specifically provided for herein, no other person shall have or be construed
to
have any legal or equitable right, remedy or claim under or in respect of or
by
virtue of this Engagement Letter or any provisions herein
contained.
15.
Entire Agreement; Waiver; Severability
This
Agreement contains the entire understanding of the parties (with the exception
of the terms of the stock subscription agreement that conflict herewith, in
which case, the terms of the stock subscription agreement shall prevail) 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. No waiver
of
any breach 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.
Construction and Jurisdiction
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York without giving effect to choice of law or
conflicts of laws principles. The New York state and federal courts in New
York
county, and any arbitration or other alternative dispute resolution forum in
New
York County mutually selected by the parties, shall have jurisdiction over
any
and all disputes arising out of or related to this Agreement.
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 in this Agreement or as subsequently
designated by them in writing.
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 an original, and all of which taken
together shall be deemed to be one and the same instrument.
XXXXX
WORLD TRADE, LTD.
By:
/s/
Xxxxx
X Xxxxxxxx
Xxxxx
X. Xxxxxxxx
Executive
Vice President
XXXXXXX
INTERNATIONAL LOGISTICS, INC.
By:/s/
Xxxx
Xxxxxxx
Xxxx
Xxxxxxx, CEO
