EXHIBIT
4.2
JANEL
WORLD TRADE LTD.
CERTIFICATE
OF DESIGNATION
OF
SERIES
B CONVERTIBLE
PREFERRED
STOCK
(Pursuant
to Section 78.1955 of the Nevada Private Corporations Law)
RESOLVED
,
that
the Board of Directors, pursuant to authority expressly vested in it by the
provisions of the Certificate of Incorporation of the Corporation, hereby
authorizes the issuance of Two Hundred Eighty Five Thousand (285,000) shares
of
Series B Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Share(s)”), of the Corporation, and hereby fixes the designation, preferences,
rights and the qualifications, limitations and restrictions thereof, in addition
to those set forth in the Certificate of Incorporation of the Corporation,
as
follows:
(1)
No
Voting Rights
.
Except
as otherwise provided herein, in the Certificate of Incorporation or as required
by law, the holders of the Preferred Shares (each a “Holder,” and collectively
the “Holders”) shall have no voting rights or powers to vote upon the election
of directors or upon any other matter, except that such holders shall have
the
right to notice of meetings and voting rights and powers to vote upon any matter
regarding the Series B Convertible Preferred rights and
preferences.
(2)
Stated
Value
.
Subject
to
Section 6
,
each
Preferred Share shall have a “
Stated
Value
”
equal
to fifty ($.50) cents.
(3)
Conversion
of Preferred Shares
.
Each of
the Preferred Shares shall be convertible into
Ten
(10)
shares
of the Company’s common stock, par value $0.001 per share (the “
Common
Stock
”)
at any
time or times on or after the expiration of two (2) years after the first date
of issuance of any Preferred Share (the “
Original
Issuance Date
”).
Any
Holder shall be entitled to convert all or a portion of such Holder’s Preferred
Shares into fully paid and non-assessable shares of Common Stock (each, a
“
Conversion
”),
in
accordance with this
Section 3(a)
,
Section
3(b)
and
Section 3(c)
.
The
Company shall not issue any fraction of a share of Common Stock upon any
conversion. All shares of Common Stock (including fractions thereof) issuable
upon conversion of more than one Preferred Share by a Holder thereof shall
be
aggregated for purposes of determining whether the conversion would result
in
the issuance of a fraction of a share of Common Stock. If, after the
aforementioned aggregation, the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall, in lieu of issuing
such
fractional share, pay to the Holder the fair value thereof in cash. The Company
shall pay any and all taxes that may be payable with respect to the issuance
and
delivery of Common Stock upon conversion of Preferred Shares, unless such taxes
result from the issuance of Common Stock upon conversion to a person other
than
the Holder.
(a)
Conversion
Price
.
Subject
to anti-dilution adjustment as provided in
Section 3(d)
,
upon a
Conversion pursuant to
Section
3(a)
herein,
the conversion price (the “
Optional
Conversion Price
”)
of
each Preferred Share shall equal $.50. Each Preferred Share will convert into
that number of shares of Common Stock determined by dividing the Stated Value
of
the Preferred Share by the Optional Conversion Price, as adjusted at the time
of
conversion.
(b)
Mechanics
of Conversion
.
To
convert Preferred Shares into Conversion Shares, pursuant to
Section
3(a)
on any
date (a “
Conversion
Date
”),
the
Holder thereof shall (i) transmit by facsimile (or otherwise deliver), for
receipt on or prior to 11:59 p.m. Eastern Time on such date, a copy of an
executed notice of conversion in the form attached hereto as
Exhibit I
(the
“
Conversion
Notice
”)
to the
Company, and (ii) surrender to a common carrier for delivery to the Company
within three (3) business days of such date the original certificates
representing the Preferred Shares being converted (or an indemnification
undertaking with respect to such shares in the case of their loss, theft or
destruction) (the “
Preferred
Stock Certificates
”).
On or
before the fifth (5
th
)
Business Day following the date of receipt of a Conversion Notice (the
“
Share
Delivery Date
”),
the
Company shall (x) issue and deliver to the address as specified in the
Conversion Notice, a certificate, registered in the name of the Holder or its
designee, for the number of shares of Common Stock to which the Holder shall
be
entitled, or (y) provided that the Common Stock is then publicly traded (or
quoted), the Company has a transfer agent (the “
Transfer
Agent
”),
and
the Transfer Agent is participating in The Depository Trust Company
(“
DTC
”)
Fast
Automated Securities Transfer Program, upon the request of the Holder, credit
such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder’s or its designee’s balance account with DTC through its
Deposit Withdrawal Agent Commission system. If the number of Preferred Shares
represented by the Preferred Stock Certificate(s) submitted for conversion
pursuant to this
Section 3(c)
is
greater than the number of Preferred Shares being converted, then the Company
shall, as soon as practicable and in no event later than five (5) business
days
after receipt of the Preferred Stock Certificate(s) (the “
Preferred
Stock Delivery Date
”)
and at
its own expense, issue and deliver to the Holder a new Preferred Stock
Certificate representing the number of Preferred Shares not converted. The
person or persons entitled to receive the shares of Common Stock issuable upon
a
conversion of Preferred Shares shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Conversion
Date.
(c)
Anti-Dilution
Provisions
.
The
Conversion Price in effect at any time and the number and kind of securities
issuable upon conversion of the Preferred Shares shall be subject to adjustment
from time to time upon the happening of certain events as follows:
(i)
Adjustment
for Stock Splits and Combinations
.
If the
Company at any time or from time to time on or after the Original Issuance
Date
effects a subdivision of the outstanding Common Stock, the Conversion Price
then
in effect immediately before that subdivision shall be proportionately
decreased, and conversely, if the Company at any time or from time to time
on or
after the Original Issuance Date combines the outstanding shares of Common
Stock
into a smaller number of shares, the Optional Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this
Section
3(d)(i)
shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
(ii)
Adjustment
for Certain Dividends and Distributions
.
If the
Company at any time or from time to time on or after the Original Issuance
Date
makes or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Conversion Price then
in
effect shall be decreased as of the time of such issuance or, in the event
such
record date is fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction (1) the numerator
of which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on
such
record date and (2) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
provided
,
however
,
that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefore, the Conversion
Price
shall be recomputed accordingly as of the close of business on such record
date
and thereafter the Conversion Price shall be adjusted pursuant to this
Section 3(d)(ii)
as of
the time of actual payment of such dividends or distributions.
(iii)
Adjustments
for Other Dividends and Distributions
.
In the
event the Company at any time or from time to time on or after the Original
Issuance Date makes, or fixes a record date for the determination of holders
of
Common Stock entitled to receive, a dividend or other distribution payable
in
securities of the Company other than shares of Common Stock, then and in each
such event provision shall be made so that the Holders of Preferred Shares
shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Company which they
would have received had their Preferred Shares been converted into Common Stock
on the date of such event and had they thereafter, during the period from the
date of such event to and including the conversion date, retained such
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this
Section 3(f)
with
respect to the rights of the Holders of the Preferred Shares.
(iv)
Adjustment
for Reclassification, Exchange and Substitution
.
In the
event that at any time or from time to time on or after the Original Issuance
Date, the Common Stock issuable upon the conversion of the Preferred Shares
is
changed into the same or a different number of shares of any class or classes
of
stock, whether by recapitalization, reclassification or otherwise (other than
a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this
Section 3(d)
),
then
and in any such event each Holder of Preferred Shares shall have the right
thereafter to convert such stock into the kind and amount of stock and other
securities and property receivable upon such recapitalization, reclassification
or other change, by holders of the maximum number of shares of Common Stock
into
which such Preferred Shares could have been converted immediately prior to
such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein.
(v)
Reorganizations,
Mergers, Consolidations or Sales of Assets
.
If at
any time or from time to time on or after the Original Issuance Date there
is a
capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this
Section 3(d)
)
or a
merger or consolidation of the Company with or into another corporation, or
the
sale of all or substantially all of the Company’s properties and assets to any
other person, then, as a part of such reorganization, merger, consolidation
or
sale, provision shall be made so that the Holders of the Preferred Shares shall
thereafter be entitled to receive upon conversion of the Preferred Shares the
number of shares of stock or other securities or property to which a holder
of
the number of shares of Common Stock deliverable upon conversion would have
been
entitled on such capital reorganization, merger, consolidation, or sale. In
any
such case, appropriate adjustment shall be made in the application of the
provisions of this
Section 3(d)
with
respect to the rights of the Holders of the Preferred Shares after the
reorganization, merger, consolidation or sale to the end that the provisions
of
this
Section 3(d)
(including adjustment of the Conversion Price then in effect and the number
of
shares purchasable upon conversion of the Preferred Shares) shall be applicable
after that event and be as nearly equivalent as is practicable.
(e)
No
Impairment
.
The
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company but will at all times in good faith assist
in
the carrying out of all the provisions of this
Section 3
and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the Holders of the Preferred Shares against
impairment.
(f)
Certificate as to Adjustments
.
Upon
the occurrence of each adjustment or readjustment of the Conversion Price
pursuant to this
Section 3
,
the
Company at its expense shall promptly compute such adjustment or readjustment
in
accordance with the terms hereof and furnish to each Holder of Preferred Shares
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Company shall, upon the written request at any time of any Holder of Preferred
Shares, furnish or cause to be furnished to such Holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) Conversion
Price at the time in effect, and (iii) the number of shares of Common Stock
and the amount, if any, of other property which at the time would be received
upon the conversion of the Preferred Shares.
(g)
Status
of Converted Stock
.
In the
event any Preferred Shares shall be converted pursuant to
Section 3
hereof,
the Preferred Shares so converted shall be canceled and shall not be reissued
as
Preferred Shares.
(h)
Stock
Purchase Rights
.
If at
any time or from time to time, the Company grants or issues to the record
holders of the Common Stock any options, warrants or rights (collectively,
“
Stock
Purchase Rights
”)
entitling any holder of Common Stock to purchase Common Stock or any security
convertible into or exchangeable for Common Stock or to purchase any other
stock
or securities of the Company, the Holders of Preferred Shares shall be entitled
to acquire, upon the terms applicable to such Stock Purchase Rights, the
aggregate Stock Purchase Rights which such Holders of Preferred Shares could
have acquired if they had been the record holder of the maximum number of shares
of Common Stock issuable upon conversion of their Preferred Shares on both
(x) the record date for such grant or issuance of such Stock Purchase
Rights, and (y) the date of the grant or issuance of such Stock Purchase
Rights.
(4)
Assumption
and Provision Upon Organic Change
.
Prior
to the consummation of any Organic Change (as defined below), the Company shall
make appropriate provision to ensure that each of the Holders of the Preferred
Shares will thereafter have the right to acquire and receive in lieu of or
in
addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the conversion of such Holder’s
Preferred Shares such shares of stock, securities or assets that would have
been
issued or payable in such Organic Change with respect to or in exchange for
the
number of shares of Common Stock which would have been acquirable and receivable
upon the conversion of such Holder’s Preferred Shares into Common Stock
immediately prior to such Organic Change.
The
following shall constitute an “
Organic
Change
:”
any
recapitalization, reorganization, reclassification, consolidation or merger,
sale of all or substantially all of the Company’s assets to another Person or
other transaction which is effected in such a way that holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common
Stock.
(5)
Reservation
of Authorized Shares.
The
Company shall, so long as any of the Preferred Shares are outstanding, take
all
action necessary to reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of effecting the conversion of
the
Preferred Shares, 100% of such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all of the Preferred
Shares then outstanding.
(6)
Liquidation,
Dissolution, Winding-Up.
In
the
event of any Liquidation (as defined below) of the Company, the Holders of
the
Preferred Shares shall be entitled to receive out of the assets of the Company
legally available for distribution therefrom (the “
Liquidation
Funds
”),
Parri
Passu with the holders of the Common Stock of the Company only after full
satisfaction of the liquidation rights of the holders of the Company’s
Series
A Convertible Preferred Stock
.
“
Liquidation
”
means
any of the following: (i) any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, (ii) filing for bankruptcy pursuant
to applicable federal and/or state laws, (iii) any actions that directly and/or
indirectly may be reasonably construed as steps in taking the Company private,
including, but not limited to, failure to file SEC Reports required by
applicable SEC rules and regulations in a timely fashion, the Company, any
affiliate of the Company and/or any person at the direct and/or indirect request
of the Company buying shares of issued and outstanding Company Stock (with
the
exception of such a transaction between the Company and James N. Jannello,
which
is not in excess of fifty percent (50%) of his holdings of Common Stock, in
the
event of the Company listing its securities on
the
London Stock Exchange Alternative Investment Market (
“AIM”
))
,
the
filing of a Form 15, the Common Stock no longer is eligible for quotation on
the
NASD Bulletin Board, the Company’s Board of Directors and/or shareholders
meeting and/or through resolutions, adopts or calls a meeting authorizing the
Company to undertake any of the above such actions (“
Going
Private Actions
”),
or
(iv) any Change of Control, p
rovided,
however, that transactions authorized by the Company’s Board of Directors or
shareholders with respect to causing the Company’s issued and outstanding Common
Stock, and the shares of Common Stock underlying the Preferred Shares, to be
listed on the
AIM
,
which
result in the filing of a Form 15, cessation of the filing of SEC Reports and
cessation of eligibility for quotation the
NASD
Bulletin Board,
will not
be construed to constitute Going Private Actions, Liquidation or a Change of
Control as defined herein.
“
Change
of Control
”
means
(i) a change in the voting control of the Company such that any one person,
entity or “group” (as contemplated by Rule 13d-5(b)(1) under the Securities
Exchange Act of 1934, as amended) acquires from the Company in one or more,
including a series of, transactions the right to cast greater than 50% of votes
eligible to be cast by all holders of capital stock of the Company in the
election of directors of the Company, provided that such transaction is approved
by the Board or (ii) any merger or consolidation of the Company with or
into another entity or any sale of all or substantially all of the assets of
the
Company.
(7)
Preferred
Rank
.
For so
long as any Preferred Shares remain outstanding, the Company shall not, without
the express written consent of Holders owning no less than a majority of the
aggregate Stated Value of the then issued and outstanding Preferred Shares
create or authorize any other class or series of capital stock, ranking
pari
passu
and/or
senior in any respect to the Preferred Shares.
(8)
Dividends;
Participation.
The
Preferred Shares do not carry any dividend rights, except as otherwise set
forth
herein.
(9)
Vote
to Issue, or Change the Terms of, Preferred Shares.
The
affirmative vote of the Holders owning not less than a majority of the aggregate
Stated Value of the then issued and outstanding Preferred Shares at a meeting
duly called for such purpose, or by the written consent without a meeting of
the
Holders of not less than a majority of the then outstanding Preferred Shares,
shall be required for any direct and/or indirect (i) Going Private Actions,
(ii)
Liquidation, and/or (iii) any amendment to this Certificate of Designation
of
Preferences, Rights and Limitations of Series B Convertible Preferred Stock
(“
Certificate
of Designation
”),
the
Company’s Certificate of Incorporation or Bylaws which would directly and/or
indirectly amend, alter, change, repeal or otherwise adversely affect any of
the
powers, designations, preferences and rights of the Preferred
Shares.
(10)
Lost
or Stolen Certificates.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of any Preferred Stock Certificates
representing the Preferred Shares, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company
in
customary form and, in the case of mutilation, upon surrender and cancellation
of the Preferred Stock Certificate(s), the Company shall execute and deliver
new
preferred stock certificate(s) of like tenor and date.
(11)
Notices.
Whenever
notice is required to be given under this Certificate of Designation, unless
otherwise provided herein, such notice shall be given in writing and will be
mailed by certified mail, return receipt requested, or delivered against receipt
to the party to whom it is to be given (a) if to the Company, at the Company’s
executive offices or (b) if to a Holder, at the address set forth on Company’s
books and records.
EXHIBIT
10.5
ASSET
PURCHASE AGREEMENT
This
Agreement is made on October 18, 2007 by and among JANEL WORLD TRADE, LTD.
("Janel"), a Nevada corporation, with its principle office at 150-14
132
nd
Avenue, Jamaica, New York, 11434; JANEL NEWCO, INC., a Nevada
corporation with its principle office at 150-14 132
nd
Avenue,
Jamaica, New York, 11434 (“Buyer@); and ORDER LOGISTICS, INC.
(“Seller”).
WHEREAS,
Seller desires to sell and Buyer desires to purchase assets of Seller in
exchange for consideration, and the assumption of certain liabilities of Seller,
all as set forth in this Agreement; and
WHEREAS,
the transaction contemplated hereby is intended to be accounted for as a
"purchase" in accordance with Generally Accepted Accounting Principles
("
GAAP
")
and
applicable Securities and Exchange Commission (“
SEC
”)
regulatory standards governing such a transaction.
In
consideration of the mutual promises contained herein, Buyer and Seller agree
as
follows:
1.
Seller
.
Seller
is engaged in the business of offering an internet-based collaborative logistics
management and tracking solution by providing a single, integrated technology
platform which enables customers to collaborate with logistics professionals
for
the planning, execution, management and tracking of shipments, and financial
settlement and control of their shipments to and from anywhere in the world
across the supply chain..
2.
Purchase
and Sale
.
Subject
to the terms and conditions set forth in this Agreement, the Seller will sell
to
Buyer and Buyer will purchase from Seller, on the Closing Date, the properties,
assets (tangible and intangible) and business of Seller as a going concern,
excluding only the assets set forth on the attached
Schedule
2
,
which
will be referred to as
A
Excluded
Assets
."
The
assets to be purchased are all the assets of Seller (other than Excluded Assets)
owned, leased, licensed or used by Seller in the conduct of its business. Buyer
will acquire and operate the business conducted by Seller as described in
Section
1
.
The
assets being purchased shall include, without limitation, all of the Seller’s
right, title and interest to:
2.1
the
computer software and hardware, title and/or licenses for the exclusive
ownership and use of all intellectual property required to own and use the
software, hardware, patents, copyright, trademarks and all property set forth
on
Schedule
2.1
,
and all
improvements thereon, and any other assets related thereto or in connection
therewith
;
2.2
accessory
equipment, set forth on
Schedule
2.2
;
2.3
all
other
personal property, including, but not limited to, machinery, equipment,
computers, software, source codes, furniture and fixtures, set forth on
Schedule
2.3
;
2.4
prepaid
expenses, set forth on
Schedule
2.4
,
related
to the assets, business and liabilities being acquired by the Buyer pursuant
to
this Agreement;
2.5
all
documentary and computerized records relating to the acquired
property;
2.6
books,
records, Financial Records, and marketing materials relating to the acquired
property;
2.7
the
name
“Order Logistics” and any other trade names, service marks, trademarks,
copyrights, patents, and other intellectual or proprietary property, and all
registrations and applications pertaining thereto, all set forth on
Schedule
2.7
attached, including, but not limited to, proprietary technology, know-how,
manuals, trade secrets, processes, and technical expertise, and the goodwill
thereof and of the business of Seller;
2.8
business
agreements, including, but not limited to, agreements for the sale, purchase,
lease or license of goods, services or property of any kind as well as debt
instruments, credit agreements, loans, notes and guarantees, set forth on
Schedule
2.8
;
2.9
customer
contracts and customer lists, set forth on
Schedule
2.9
;
2.10
employee
lists, including status, social security number and current compensation of
each
employee, and employment, consultant, independent contractor, union and
collective bargaining agreements, set forth on
Schedule
2.10
;
2.11
certain
insurance policies, set forth on
Schedule
2.11
;
and
2.12
permits,
authorizations, licenses, franchises, approvals or consents from any regulatory
or administrative body or organization, or governmental or quasi-governmental
body or agency, set forth on
Schedule
2.12
,
to the
extent that they are assignable or transferable.
The
transfer of all personal property and contracts, and the assumption of certain
liabilities and obligations, hereunder shall be deemed to take place on the
Closing Date. This Agreement constitutes the transferring of all right, title
and interest in the intellectual property described in this Agreement and
Section
2.1
,
Section
2.7
,
and as
set forth on
Schedule
2.1
and
Schedule
2.7
.
3.
Purchase
Price; Obligations to Janel; Expenses
.
3.1
Purchase
Price.
The
Purchase Price is Three Million Six Hundred Thousand Seven Hundred Dollars
($3,767,429). At the Closing, the Purchase Price shall be paid as
follows:
(a)
Cash
Consideration.
Consideration paid in cash will total Two Million Two Hundred Seventy Three
Thousand Seven Hundred Dollars ($2,342,429), and is comprised of the following
obligations of the Seller which will be assumed by the Buyer;
(i)
The
Seller’s obligation to the National Bank of South Carolina in the principal
amount of $648,000, provided that interest accrues at an interest rate no more
than the prime rate at J.P. Morgan Chase Bank, N.A., less 0.5%, of which
$148,000 of principal will be paid at Closing, together with $7,854.08 of
accrued and unpaid interest;
(ii)
Payment of the Seller’s obligation to Iron & Glass Bank of the principal
amount of $629,291.72, which will be paid at Closing;
(iii)
Payment of the Seller’s obligation to Marine Bank in the amount of $152,711.57
at Closing;
(iv)
Payment of the Seller’s obligation to Greater Bay Business Funding in the amount
of $140,000 at Closing;
(v)
Payment of $225,000 of the Seller’s overdue payroll taxes incurred by its JAT
subsidiary at Closing;
(vi)
Payment of $104,294.32 to satisfy certain of the Seller’s accounts payable at
Closing which are set forth on
Schedule
3.1(a)-(v)
;
and
(vii)
Payment of $148,000 for the Seller’s first and second fiscal quarter 2007
payroll taxes at Closing; and
(vii)
Payment of $239,277 to the Seller at Closing, and payment of $125,000 to Brian
Griffin on March 30, 2008.
(b)
Stock
Consideration.
Buyer
shall authorize an issue of 285,000 unregistered shares of $0.001 par value
Series B Convertible Preferred Stock (the "
Janel
Shares
"),
which
will be non-voting shares and will be convertible into Janel’s unregistered
shares of $0.001 par value Common Stock two (2) years after issuance, which
will
be issued at Closing as set forth on
Schedule
3(b)
,
all
subject to the applicable rules of the Securities and Exchange Commission
(“SEC”).
(c)
The
Janel
Shares
will be
valued at the closing price of Janel’s Common Stock in the public markets on the
day of the Closing as if they had already been converted into shares of Janel’s
Common Stock.
3.2
Obligations
Owed to Janel
.
Seller
is
currently indebted to Janel for services rendered in the sum of $152,533.10,
which must be paid in full on or before Closing, failing which Janel has the
right to reduce the amount of any of assumed Seller liabilities set forth in
Section 3.1(a) by the amount of the unpaid balance due, in Janel’s sole
discretion.
3.3
Other
Expenses
.
Each
party hereto shall pay and bear their respective fees and expenses incident
to
the negotiation, preparation, and execution of any documents or transactions
contemplated by this Agreement and any meeting of their respective boards or
shareholders, as applicable, other than as expressly provided for in
Section
3.2
.
3.4
Purchase
Price Adjustment
.
Seller
agrees that the Buyer has the right to a
downward
adjustment of the Purchase Price (the “
Purchase
Price Adjustment
”)
if
after the Closing the Buyer becomes obligated to pay any sales, use, value
added, excise, import, privilege, or other similar taxes, levies, or payments
in
lieu thereof, and accrued interest or penalties thereupon (collectively, the
“
Unpaid
Sales Taxes
”),
which
are imposed by any governmental authority and arise out of or in connection
with
Seller’s operations of its business prior to Closing including, but not limited
to, the sale of products or the performance of services by the Buyer. The amount
of the Unpaid Sales Taxes will be deducted parri passu from the Purchase Price
dollar-for-dollar, first by Janel’s cancellation of that number of Janel Shares
in the Stock Consideration at the issuance value of those Janel Shares, and
then
by reimbursement to Janel of the Cash Consideration, up to a sum equivalent
to
the amount of the Unpaid Sales Taxes.
3.5
Objections.
(a)
If
Buyer
or Seller object (the “
Objection
”)
to the
calculation of
the
Unpaid
Sales Taxes, either
of them
may make the Objection in a written request to the other parties hereto for
a
recalculation (a “
Request
”).
If
such a Request is made, and within five (5) business days of its receipt, at
least one authorized representative from each of the parties shall meet or
confer and make a good faith effort to resolve the Objection posed in the
Request.
(b)
If
the
Objection cannot be resolved within five (5) business days from the first
meeting or conference of the representatives, unless the delay is merely as
a
result of a scheduling conflict, (the “
Resolution
Period
”)
then,
within ten (10) business days after the expiration of the Resolution Period
(the
“
Selection
Period
”),
each
of Buyer and Seller shall select a certified public accountant (“
CPA
”),
and
one CPA shall be randomly selected from the members of the American Institute
of
Certified Public Accountants (“
AICPA
”)
who
provide such auditing or calculation services. Each CPA selected shall be a
duly
qualified CPA in good standing with respect to his certification in the State
of
New York
.
The
three CPAs so chosen shall recalculate the amount that is the subject of the
Objection by majority vote and, within thirty (30) days from the expiration
of
the Selection Period, furnish the parties with a writing, approved by a majority
of the CPAs, setting forth the recalculated amount and briefly describing the
manner in which it was determined. The amount that is arrived at by the majority
vote of the CPAs shall be the amount used as the
Unpaid
Sales Taxes
.
(c)
The
parties shall share equally all of the expenses and fees associated with
resolving the Objection
under
this Section. Any party hereto shall have the right to seek specific enforcement
or other equitable relief or remedies at law in court for any breach or
threatened breach of this Section
.
3.6
Allocation
of Purchase Price
.
Janel
and Buyer shall have the exclusive and sole right to allocate the Purchase
Price
among the acquired assets. Seller agrees that such allocation is the proper
allocation of the Purchase Price in accordance with the fair market value and
ownership of the assets. Seller and Buyer agree to report the federal, state
and
local income taxes and other tax consequences of the transactions contemplated
hereby, including the reporting of information required under Section 1060(b)
of
the IRC, in a manner consistent with such allocation. Seller and Buyer further
agree not to take any tax position inconsistent with such allocation in
connection with (a) the preparation of their respective Financial Records,
tax
returns, reports to shareholders, reports to governmental authorities or
otherwise, (b) any examination of their tax returns or any refund claims, or
(c)
any litigation, investigations or other proceedings involving any of their
tax
returns. Seller and Buyer each agree to furnish to the other a copy of IRS
Form
8594 (Asset Acquisition Statement under Section 1060 of the IRC) as filed with
the Internal Revenue Service by such party pursuant to Sections 755 and 1060
of
the IRC within thirty (30) days following such filing.
3.7
Sales
and Use Taxes; Recording Expenses
.
Buyer
agrees to pay any and all taxes payable in connection with the consummation
of
the transactions contemplated by this Agreement and the sale, conveyance or
assignment of the assets hereunder (other than
Unpaid
Sales Taxes, and
income
taxes incurred by Seller or resulting directly from such sale, which shall
be
borne by Seller), including sales and use taxes, and to prepare and file any
necessary tax returns in connection therewith. Buyer further agrees to pay
all
filing and recording fees relating to the filing and recording of any
instruments delivered by Seller to convey the assets to Buyer, if
any.
4.
Seller’s
Representations, Warranties and Covenants
.
The
Seller represents and warrants to Buyer and Janel that, as of the date hereof,
for the period of time until the Closing Date, if such date is later than the
date hereof, and on the Closing Date:
4.1
Organization
and Good Standing.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware with all requisite power and authority to own,
use, operate, lease and license its assets and to carry on its business as
now
being conducted with all requisite corporate power and authority to (a) execute,
deliver and perform its obligations under this Agreement and other agreements
contemplated hereby and (b) consummate the transactions contemplated hereby
and
thereby. Seller is duly qualified to do business and is in good standing in
each
jurisdiction where the conduct of its business or the ownership, usage,
operation, lease or license of its assets requires such
qualification.
4.2
Authorization.
The
execution and delivery by Seller of this Agreement, the performance by Seller
of
its and his obligations hereunder and the consummation by Seller of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms.
4.3
Consent;
Notice.
No
consent, notice, approval, exemption, permit, license, or authorization
(“
Consent
”)
is
required to be obtained by Seller, and no filing is required to be made with,
any person or entity, including, but not limited to, any creditors of Seller
(a)
in order for this Agreement to constitute a legal, valid and binding obligation
of Seller or, (b) to authorize or permit the consummation by Seller of the
transactions contemplated hereby or; (c) under or pursuant to any Consents
held
by or issued to Seller (including, without limitation, environmental, health,
safety and operating permits and licenses) by reason of this Agreement or the
consummation of the transactions contemplated hereby, except as set forth on
Schedule
4.3
attached. Buyer agrees to cooperate with Seller in seeking any required
Consents, except that if Consent is required, and such Consent cannot be
secured, Buyer will not have any liability to Seller with respect to such
agreement or document as to which such Consent cannot be secured.
4.4
Omitted
4.5
Environmental
Conditions.
Seller,
to its knowledge, has conducted its business operations in compliance with
all
applicable Environmental Laws, and to its knowledge, there is no event,
condition, circumstance, activity, practice, incident, action or plan which
interferes with or prevent its business operations from being in continued
compliance with any Environmental Law.
4.6
Personal
Property.
Seller
owns, leases, or licenses certain property set forth in
Sections
2.1, 2.2, 2.3, 2.7, 2.8, 2.11, 2.12, and 2.13
,
and
will own or have in effect valid, enforceable leases or licenses and good
marketable title to all such property. None of such property is or will be
subject to any (a) contracts of sale, leases, or licenses or (b) Liens of any
kind or character, other than as indicated on Schedule 4.6.
4.7
Intellectual
Property.
(a)
Seller
has and will have the right to use the name "Order Logistics," and all trade
names, service marks, patents, copyrights, trade marks, and other like
intellectual or proprietary property, and the goodwill pertaining to each and
to
the business of Seller, and all of said rights are, and will be, free and clear
of all royalty obligations, Liens, expenses, attorney’s fees for services, and
governmental, quasi-governmental, regulatory or administrative fees. There
are
no pending claims or known demands of infringements asserted by any person
or
entity. Seller has no knowledge of any conflicting use of any of such property
or rights. To Seller’s knowledge, Seller's use of said intellectual property and
any proprietary property or technology of Seller is not in violation of any
law
or regulation or breach of any agreement or instrument.
(b)
Seller
has no trade names, service marks, patents, copyrights, trademarks or other
intellectual or proprietary property other than as set forth on
Schedule
2.7
.
4.8
Employee
Plans.
Seller
has no employee benefit plans (as defined in section 3 (3) of the Employee
Retirement Income Security Act of 1974), except those set forth on
Schedule
2.11 (“Benefit Plans”)
.
4.9
Insurance.
All
policies of insurance of any kind maintained, owned or held by Seller are set
forth on
Schedule
2.11
and such
policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been paid, and
no
notice of cancellation or termination has been received with respect to any
such
policy which has not been replaced on substantially similar terms prior to
the
date of such cancellation or termination. The insurance policies to which Seller
is a party are sufficient for compliance with all requirements of applicable
laws and all agreements to which Seller is a party or by which Seller or its
assets are bound, and the coverage provided by said policies are sufficient
to
cover all risks insured against. Seller will maintain insurance coverage, in
amounts deemed adequate by Seller’s management, against all risks presently
insured against. In the event any such insurance policy is not acquired or
assumed by the Buyer or Janel by the Closing Date, Seller shall not be
responsible for the maintenance of any such insurance coverage after the Closing
Date, unless otherwise agreed between Buyer and Seller.
4.10
Permits;
Licenses.
Schedule
2.12
sets
forth all of the Consents and franchises which have been issued to or are held
or used by Seller, or for which Seller has applied. Seller has obtained all
of
the Consents and franchises which are necessary for the ownership and use of
the
Purchased Assets, the conduct of its business, and the consummation of the
transactions contemplated hereby. All such Consents and franchises are in full
force and effect, no violations exist or have been recorded in respect of any
thereof, and no proceeding is pending or threatened to revoke or limit any
thereof.
4.11
Financial
Records.
Seller's
Financial Records and tax returns have been prepared in the normal course of
business using normal good faith allocations and in accordance with GAAP,
consistently applied, and present fairly all the assets, liabilities and results
of operations of Seller for the periods specified. Janel shall have made a
review of Seller’s Financial Records, including for the years ended December 31,
2006 and 2005. The accounts and notes receivable reflected on the Financial
Records represent bona fide claims of Seller against debtors for sales or
advances made or services performed in the ordinary course of business and
have
been collected or are and will be good and collectible in the ordinary course
of
business. Except as set forth on
Schedule
4.11
attached, Seller has no knowledge of any such receivables that are
uncollectible, in controversy or subject to offset or counterclaim.
Schedule
4.11
also
sets forth (a) Seller's standard terms and conditions for sales and collections
and (b) a list of those customers to which such standard terms and conditions
do
not apply, if any, and a description of such non-standard terms on a customer
by
customer basis.
4.12
Tax
Matters.
All
required federal, state, county, town, city and village tax reports and returns
of Seller have been and will be properly and accurately filed, and all taxes
due
thereunder have been paid or adequate reserves therefore have been established.
Seller shall make available to Buyer and Janel such financial and tax
information and give access to Seller’s books and records as Buyer or Janel may
reasonably require for all diligence purposes, the preparation of Financial
Records, and for audits.
4.13
Capital
Expenditures.
Seller
has delivered a schedule of all monies disbursed on account of capital
expenditures made by it since December 31, 2006 to the date hereof (attached
hereto as
Schedule
4.13
)
in
excess
of $5,000. After the date hereof, no capital expenditures or commitments in
excess of $1,000 will be made by Seller for the business of Seller, except
with
Buyer’s prior written consent.
4.14
Absence
of Undisclosed Liabilities.
To the
knowledge of Seller, there are no liabilities (direct or contingent) of Seller
as to which a claim has been or may be made that would materially affect the
Purchased Assets or the business of Seller, except those expressly assumed
by
Buyer as set forth on
Schedule
4.14
.
4.15
No
Breach.
The
execution and delivery by Seller of this Agreement, the performance by Seller
of
its and his obligations hereunder, and the consummation by Seller of the
transactions contemplated hereby will not (a) conflict with, result in any
violation of, or constitute a default under, Seller's Certificate of
Incorporation or By-Laws, in each case as amended to date, (b) constitute a
default under, result in a violation or breach of, result in the cancellation
or
termination of, accelerate the performance required under, or result in the
creation of, any Lien upon any of the Purchased Assets pursuant to any
agreement, mortgage, guaranty, deed of trust, note, indenture, bond, lease,
license or other instrument to which Seller is a party or by which any of
Seller's assets are bound, or (c) result in to Seller’s knowledge a material
violation of or conflict with any law, ordinance, rule, regulation, order,
writ,
judgment, award, edict or decree applicable to Seller, its business or the
Purchased Assets.
4.16
Litigation.
Other
than as set forth on Schedule 4.16, there are no outstanding suits, actions,
proceedings, investigations, audits, claims, or awards pending or, to the best
knowledge of Seller, threatened against Seller, its business or the Purchased
Assets (collectively, "
Litigation
")
and,
to the best knowledge of Seller, there is no basis for any such Litigation.
There are no orders, judgments, writs or decrees outstanding against Seller,
its
business or the Purchased Assets.
4.17
Compliance
with Laws.
Seller
will remain in material compliance with all applicable federal, state, foreign
and local legal requirements, including, without limitation, Environmental
Laws
(as defined in
Section
4.5(k)
)
in each
of the jurisdictions in which Seller conducts business.
4.18
Conduct
of Business.
Seller
has since August 16, 2007, and shall from the date hereof (a) conduct its
business in the ordinary course only; (b) refrain from (i) materially altering
existing sales or collection practices, terms or conditions, (ii) deferring
payment of expenses, (iii) terminating the employment of any key employees,
or
(iv) hiring any new employee whose total compensation (on an individual basis)
exceeds $25,000 per annum, or change the compensation of any employee other
than
normally scheduled increases in the ordinary course without Janel or Buyer’s
prior written consent; (c) exert its best efforts and shall instruct its
employees, consultants and independent contractors to exert their best efforts
to (i) maintain good relationships with suppliers, customers, employees,
consultants and independent contractors, (ii) maintain and preserve intact
its
business organization and all agreements, (iii) maintain its books, accounts
and
records in the usual manner on a basis consistent with prior years, and (iv)
maintain all of its assets in customary repair, order and
condition.
4.19
Liens;
Indebtedness.
Seller
will not from or after the date hereof, (a) except in the ordinary course of
business consistent with past practices, mortgage, pledge or subject to a lien,
security interest or any other encumbrance any of its property or assets,
dispose of any of its property or assets or incur or cancel any obligation,
indebtedness or claims, (b) except in the ordinary course of business consistent
with past practices, incur, increase, renew, refinance or extend or agree or
commit to incur, increase, renew, refinance or extend any indebtedness for
borrowed money, any obligation which is evidenced by any note, bond, debenture,
instrument or security, or obligation with respect to any commercial or standby
letter of credit, or (c) guaranty the obligations of any other person or entity,
except for guarantees of collection in the ordinary course of business,
consistent with past practice.
4.20
Pension,
and Retirement Plans.
Seller
is not, and has never been, a party to any Collective Bargaining Agreement
between the Seller and any independent employees union
.
4.21
Non-Compete;
Non-Sollicitation; Non-Disclosure.
The
restrictive covenants contained herein are i
n
consideration of the obligations of Buyer and the consideration to be received
by Seller under this Agreement.
(a)
No
Competition.
Seller
shall not, and shall not directly or indirectly cause any officers, directors
or
managers to directly or indirectly and 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 Seller, Buyer or Janel, with the exception of the holding of
securities totaling less than one percent (1%) of the issued and outstanding
securities of a public company as a passive investment.
(b)
No
Solicitation.
Seller
shall not, and shall not directly or indirectly cause any person or entity
including, but not limited to, its officers, directors, employees, consultants,
and independent contractors, to, directly or indirectly and 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:
(i)
solicit for services or employ any person or entity that (1) was or is engaged
by Buyer, Janel or Seller and will be engaged by Buyer or Janel as of the
Closing Date or (2) was or is engaged by Buyer or Janel; or
(ii)
solicit any person or entity that was or is a customer of Seller, Buyer or
Janel
for business or the purchase of goods or services in competition with the
business of the Seller, Buyer or Janel; or
(iii)
interfere with or endeavor to cause any person or entity to interfere with
any
employment or engagement with Buyer or Janel in any manner; or
(iv)
induce or attempt to induce any person or entity to breach or interfere with
any
agreements or arrangements involving Buyer or Janel.
(c)
No
Disclosure.
Seller
shall not, and shall not directly or indirectly cause any person or entity
including, but not limited to, its officers, directors, employees, consultants,
and independent contractors to, directly or indirectly and 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:
(i)
disclose, reveal, publish or otherwise make known or available to any person
or
entity, including any governmental or quasi-governmental body (each a
"
Third
Party
"),
any
Confidential Information (as defined below); or
(ii)
use,
or permit any Third Party under Seller’s control or influence, to use any
Confidential Information for any reason or purpose whatsoever, except as
approved by Buyer and Janel or as required by applicable law. The term
"
Confidential
Information
"
shall
mean all confidential and proprietary documentation, information and materials
including, but not limited to, 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, relating to the business or financing activities
of Seller, Buyer or Janel, and, generally, without limiting the foregoing,
any
information not available to the public generally and pertaining to the
business, finances, or operations of Seller, Buyer or Janel. For purposes of
this Agreement, Confidential Information shall not include information which
is
in the public domain at the time it is received by Seller or which becomes
public through no fault or negligence of Seller.
(d)
Conflicting
Provisions
If
after
the Closing Date a conflict arises between the provisions of Section 4.21 of
this Agreement and the provisions of any employment agreement of any former
employee of the Seller, the provisions of this Agreement shall
govern.
(e)
Irreparable
Injury
.
Seller
acknowledge and agree that (i) Buyer and Janel will suffer irreparable injury
for which money damages are not sufficient, (ii) a remedy at law will be
inadequate for Buyer and Janel, and (iii) Buyer and Janel will be entitled
to
injunctive relief without proof of damages. Accordingly, Seller hereby consent
to the seeking by Buyer or Janel, and 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.
4.22
No
Misrepresentation
.
No
representation or warranty by Seller in this Agreement, on any Schedule hereto
or any certificate, document or materials delivered pursuant hereto, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained therein not misleading.
Seller will promptly notify Buyer if it or he receives any claim or notice
of
any violation or change with respect to the representations, warranties,
covenants, agreements, documents or materials hereunder or delivered pursuant
hereto.
4.23
True
and Complete Copies.
Copies
of any agreements, documents or materials delivered and to be delivered
hereunder are and will be true and complete copies of such agreements, documents
or materials. Neither Seller nor any agent of Seller is in default under any
such agreements, documentation or materials.
4.24
Books
and Records.
Janel,
Buyer and their representatives shall have full reasonable access to all of
the
books, records, properties, assets and personnel of Seller during normal
business hours from the date hereof and on the Closing Date.
4.25
Indemnification.
Seller
shall fully defend, indemnify and hold Buyer and Janel and their successors,
assigns and representatives harmless, without regard to rights of setoff, from
and against any liability, penalty, cost or expense incurred by or imposed
on
them, including reasonable attorneys fees, as a result of:
(a)
any
claim
by any employee, consultant or independent contractor, which is attributable
to
periods of employment with Seller, or as a result of termination of employment
from Seller; and
(b)
any
claim
or liability for product liability, service liability and Unpaid Sales Taxes
incurred by Seller.
5.
Representations
and Warranties of Buyer
.
Buyer
and Janel represent and warrant to Seller that, as of the date hereof, for
the
period of time until the Closing date, if such date is later than the date
hereof, and on the Closing Date:
5.1
Organization
and Good Standing.
Buyer
and Janel are corporations duly organized, validly existing and in good standing
under the laws of the State of Nevada with all requisite corporate power and
authority to (a) execute, deliver and perform their obligations under this
Agreement and other agreements contemplated hereby and (b) consummate the
transactions contemplated hereby and thereby. Buyer and Janel are duly qualified
to do business and are in good standing in each jurisdiction where the conduct
of their business requires such qualification.
5.2
Authorization.
The
execution and delivery by Buyer and Janel of this Agreement, the performance
by
Buyer and Janel of their obligations hereunder and the consummation by Buyer
and
Janel of the transactions contemplated hereby have been duly authorized by
all
necessary corporate action. This Agreement constitutes the legal, valid and
binding obligation of Buyer and Janel, enforceable against them in accordance
with its terms.
5.3
No
Breach.
The
execution and delivery by Buyer and Janel of this Agreement, the performance
by
Buyer and Janel of their obligations hereunder, and the consummation by Buyer
and Janel of the transactions contemplated hereby will not conflict with, result
in any violation of or constitute a default under Buyer and Janel's Certificate
of Incorporation or By-Laws, in each case as amended to date.
5.4
Securities
Compliance.
Janel
has timely filed all reports that are required to be filed by it with the SEC
and is current with such filings. The Janel Shares and Bonus Shares shall be
validly issued, fully paid and non-assessable. There are no subscriptions,
options, warrants, rights or other agreements outstanding to acquire the Janel
Shares or Bonus Shares. Seller will own the Janel Shares and Bonus Shares free
and clear of all Liens, except as described in
Sections
3.1
and
3.4
.
6.
Additional
Representations, Warranties and Covenants
.
6.1
Assistance
After Closing.
Each
party will execute after the Closing Date such further instruments of
assumption, assignment, transfer and conveyance and such other documents as
may
be reasonably requested by the other parties in connection with the carrying
out
of the transactions contemplated by this Agreement, including specifically,
but
not limited to, Seller enabling Janel and Buyer in the preparation and filing
of
all necessary materials and reports with the SEC which are necessary in the
judgment of Janel's or Buyer's counsel.
6.2
Brokers.
Neither
Seller, nor Buyer or Janel, or any of their officers, directors, employees,
accountants, agents or representatives has employed any broker or finder, or
incurred any liability for any fee, commission, or other compensation payable
to
any person or entity on account of alleged employment as a broker or finder,
or
performance of services as a broker or finder, in connection with or as a result
of this Agreement or the transactions contemplated hereby.
6.3
Key
Employees.
Upon
the
Closing Date, Buyer shall become the employer of Seller's employees
listed
on
Schedule
6.3
attached. Nothing herein contained shall be deemed to impose on Buyer or Janel
the obligation to retain any such employees, or to enter into any agreements
with any such employees, except to the extent set forth on
Schedule
6.3
attached
which lists principal employees with whom Buyer will enter into employment
or
management agreements.
6.4
Indemnification.
(a)
Seller
and its successors and assigns, hereby agree to defend, indemnify and hold
harmless Buyer and Janel from and against 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, costs of
preparation and investigation, costs incurred in enforcing this indemnity,
and
reasonable attorneys' fees and expenses (collectively, "Losses") that Buyer
and
or Janel may suffer, sustain, incur or become subject to arising out of any
breach of this Agreement and or acts or omissions of Seller, as a consequence
of
a breach of any representation, warranty, covenant or agreement by Seller,
or
any and all liabilities for obligations of Seller not assumed by Buyer at the
Closing Date.
(b)
Buyer
and
Janel, and their respective successors and assigns will, jointly and severally,
forever defend indemnify and hold harmless Seller from and against 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, costs of preparation and investigation, costs incurred in enforcing
this indemnity, and reasonable attorneys' fees and expenses (collectively,
"Losses") that Seller may suffer, sustain, incur or become subject to arising
out of any acts or omissions of Buyer or Janel from and after the date
hereof.
7.
Conditions
Precedent
.
7.1
Conditions
Precedent to Buyer’s Obligations.
All of
the obligations of Buyer and Janel hereunder are subject to the fulfillment
by
Seller, as applicable, of each of the following conditions on or before the
Closing Date:
(a)
All
representations and warranties of Seller contained in this Agreement and in
certificates, documents, schedules and materials delivered pursuant hereto
and
in connection with the transactions contemplated hereby and thereby shall be
true and correct in all material respects at and as of the Closing Date as
if
such representations and warranties had been made on the Closing Date. Seller
shall have furnished Buyer with all schedules required by this Agreement in
form
and substance reasonably satisfactory to Buyer.
(b)
All
covenants of Seller to be performed or complied with by the Closing Date
pursuant to the terms hereof shall have been duly performed or complied
with.
(c)
Seller
shall have furnished Buyer with copies of resolutions duly adopted by its board
of directors and sole stockholder approving the transactions contemplated by
this Agreement.
(d)
Seller
shall have furnished Buyer and Janel with a favorable opinion, dated the Closing
Date, of Seller’s corporate counsel, Donald P. Reed, Esq., of St. Petersburg,
Florida, in form and substance reasonably satisfactory to Buyer, Janel and
counsel to the effect that Seller is a Delaware corporation in good standing
and
has full power and authority to make and perform this Agreement, that this
Agreement has been duly authorized by proper corporate action of Seller and
its
stockholder, that this Agreement constitutes the valid and legally binding
obligation of Seller, subject to its terms, that the Bill of Sale, assignments,
and other instruments, documents and agreements delivered by Seller have been
duly authorized and executed and are effective to vest in Buyer good and
marketable title to Seller’s interest in and to the Purchased Assets and to
consummate the transactions contemplated hereunder.
(e)
If
so
requested by Janel, and at Janel’s cost and expense, Buyer and Janel shall be
entitled to a fairness opinion from such investment advisors selected by Janel
(to which Seller shall consent, which consent shall not be unreasonably
withheld).
(f)
Janel
shall have received approval from its primary lenders and investment bankers
and
financing from such institutions or bankers sufficient to cover the Cash
Consideration and any debt that was or will be incurred as a necessary incident
to this Agreement.
(g)
Seller
shall not have (i) suffered any material adverse change, and no such change
is
threatened, to its business, agreements, operations, properties, assets or
financial condition, or (ii) entered into any agreement or transaction out
of
the ordinary course of business or which would affect any such material adverse
change.
(h)
The
composition and amount of the assets and liabilities of Seller shall not have
materially changed since the execution of the Agreement, except as disclosed
to
Buyer prior to the Closing Date; and, in that event, Buyer and Janel shall
be
entitled to conduct such further due diligence and have prepared and executed
such documentation as they deem reasonably necessary such that they are
satisfied that the transaction can be consummated. Seller shall not incur any
guarantees or indebtedness for borrowed money not in the ordinary course of
business or in excess of $1,000, or increased the compensation or expense
allowance payable to any of its officers, employees, consultants or independent
contractors, or paid any bonus, whether or not accrued, without first obtaining
the written permission of Buyer and Janel,. Seller’s stockholder shall not have
received any monies from Seller by way of dividends, redemption, loans, or
advances.
(j)
Seller
each shall have delivered to Buyer and Janel a Certificate dated the Closing
Date signed the President and Secretary of Seller, respectively, to certify
to
the statements contained in clauses (a), (b), (i), and (j) in this
Section
7.1
.
(k)
The
employees of the Seller who are to be employed by the Buyer or Janel shall
have
executed and delivered to Buyer an employment agreement between Buyer and
themselves.
(l)
Seller
shall have delivered the documents set forth in
Sections
8.1 and 8.2
below.
7.2
Conditions
Precedent to Seller’s Obligations.
All of
the obligations of Seller hereunder are subject to the fulfillment of each
of
the following conditions on or before the Closing Date:
(a)
All
representations and warranties of Buyer and Janel contained in this Agreement
shall be true and correct in all material respects at and as of the Closing
Date
as if such representations and warranties had been made on the Closing
Date.
(b)
All
covenants of Buyer and Janel to be performed or complied with on or before
the
Closing Date pursuant to the terms hereof shall have been duly performed or
complied with.
(c)
Buyer
and
Janel shall have furnished Seller with copies of resolutions duly adopted by
their respective boards of directors and stockholders approving the transactions
contemplated by this Agreement.
(d)
Buyer
and
Janel shall have furnished Seller with a favorable opinion, dated the Closing
Date, of Buyer's and Janel’s counsel, Scheichet & Davis, P.C., in form and
substance reasonably satisfactory to Seller and its counsel to the effect that
Buyer and Janel are Nevada corporations in good standing and have full power
and
authority to make and perform this Agreement, that this Agreement has been
duly
authorized by proper corporate action of Buyer and Janel and their respective
stockholders, that this Agreement constitutes the valid and legally binding
obligation of Buyer and Janel, subject to its terms, and that the documents
and
agreements delivered by Buyer and Janel have been duly authorized and
executed.
(e)
Buyer
shall have delivered to Seller copies of documentation from investors or lenders
evidencing the availability to Buyer of the funds necessary to consummate this
transaction.
(f)
Buyer
shall have executed and delivered the employment agreements referred to in
Section 7.1(k).
8.
Conveyance
.
To
implement
Section
2
,
Seller
shall deliver the following:
8.1
Personal
Property.
The Bill
of Sale necessary to convey to Buyer all Seller's right, title and interest
in
the personal property set forth in Section 2.
8.2
Leases;
Licenses; Permits.
The
assignments necessary to transfer to Buyer all of Seller’s right, title and
interest in the property and agreements set forth in
Sections
2.1 through 2.3, 2.7, 2.8, and 2.11 through 2.13
,
and the
Schedules thereto, and each Consent thereto if required.
9.
Closing
.
9.1
Closing
Date.
The
Closing Date shall be the date hereof, or on such other date as the parties may
agree upon. At the option of Buyer, Janel or Seller, by notice to the other
parties, given not later than the tenth (10
th
)
day
preceding the scheduled Closing Date, the Closing Date may be adjourned for
a
period of five (5) days.
9.2
Place
of Closing.
The
Closing shall take place at the offices of Scheichet & Davis, P.C., 767
Third Avenue, 24
th
Floor,
New York, New York 10017, or at such other place in New York City as may be
designated by the parties.
10.
Notices
.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested
or
by FedEx, Express Mail, or similar overnight delivery or courier service or
delivered (in person or by facsimile) to the party to which it is to be given
at
the address or facsimile number of such party set forth below (or to such other
address or facsimile number as the party shall have furnished in writing in
accordance with the provisions of this
Section
10
).
If
to
Buyer:
Janel
Newco, Inc.
150-14
132nd Avenue
Jamaica,
New York 11434
Facsimile:
(718) 527-1689
If
to
Janel:
James
N.
Jannello, CEO
Janel
World Trade, Ltd.
150-14
132nd Avenue
Jamaica,
New York 11434
Facsimile:
(718) 527-1689
with
a
copy to:
William
J. Davis, Esq.
Scheichet
& Davis, P.C.
767
Third
Avenue - 24
th
Floor
New
York,
New York 10017
Facsimile:
(212) 371-7634
If
to
Seller:
Richard
Francis, C.E.O.
Order
Logistics, Inc.
#3
Crafton Square
Pittsburgh,
PA 15205
Facsimile:
(412) 920-1899
with
a
copy to:
Jeffery
B. Wampler, Esq.
Erwin,
Martinkus & Cole, Ltd.
411
W.
University Ave.
Champaign,
IL 61820
Facsimile:
(217) 351-4314 - fax
11.
Miscellaneous
.
11.1
Amendment.
This
Agreement may be amended only in writing by a document subscribed by Buyer,
Janel and Seller.
11.2
Choice
of Law; Assignment.
The
Agreement shall be governed by the laws of the State of New York without regard
to conflict of laws principles that might require the application of the laws
of
another jurisdiction, and shall be binding upon and shall inure to the benefit
of the parties hereto and their respective representatives, successors and
assigns; provided that neither Buyer nor Seller may assign all or any part
of
this Agreement without the prior written consent of the other. Any dispute,
action, suit, or proceeding arising out of, based on, or in connection with
this
Agreement, may be brought only in the federal and state courts of the State
and
County of New York, and each party covenants, waives and agrees not to assert
by
way of motion, as a defense, or otherwise, in any such dispute, action, suit,
or
proceeding, any claim that it is not subject personally to the jurisdiction
of
such courts if it has been duly served with process, that its property is exempt
or immune from attachment or execution, that the dispute, action, suit, or
proceeding is brought in an inconvenient forum, that the venue of the dispute,
action, suit, or proceeding is improper, or that this Agreement or the subject
matter hereof may not be enforced in or by any such courts. Each party hereto
consents to the personal jurisdiction of each such court and to the service
of
process by mail at its address to which notices are to be sent under
Section
10
in
connection with any such dispute, action, suit or proceeding.
11.3
Entire
Agreement.
No party
has made or makes any representations or warranties of any kind to the other
except those expressly set forth in this Agreement. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof and supersedes all other agreements and letters of intent previously
contemplated or entered into by and among the parties hereto with respect to
the
subject matter hereof, with the exception of any paragraphs of the LOI that
are
specifically referenced herein.
11.4
Severability.
If any
provision of this Agreement shall be held invalid or unenforceable for any
reason, such provision shall be reformed to the maximum extent permitted to
preserve the parties' original intent, failing which it shall be severed from
this Agreement with the balance of this Agreement continuing in full force
and
effect. Such occurrence shall not have the effect of rendering the provision
in
question invalid in any other jurisdiction or in any other case or circumstance,
or of rendering invalid any other provisions contained herein.
11.5
Survival.
The
covenants, agreements, representations and warranties of each party made in
this
Agreement, and the certificates delivered hereunder or pursuant hereto, shall
survive the Closing Date for the periods stated herein and, if no such period
is
stated, then until six (6) years after the Closing Date, except that the
provisions of Sections 4.21 (c), (d) and (e) shall have no expiration
date.
11.6
Waiver.
Any
waiver by any party of a breach, violation or default of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach, violation or default of that provision or of any other provision of
this
Agreement. The failure of a party to insist upon strict adherence to any
provision of this Agreement on one or more occasions will not be considered
a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that provision or any other provision of this Agreement. Any waiver
must be in writing and signed by the party to be charged with giving such
waiver.
11.7
Counterparts.
This
Agreement may be executed in any number of counterparts, including a confirmed
facsimile transmission, each of which shall be deemed to be an original but
all
of which shall be deemed to constitute a single instrument.
(This
space intentionally left blank)
(Signature
page follows)
IN
WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to
be executed as of the date first above written.
|
JANEL
NEWCO, INC.
|
|
ORDER
LOGISTICS, INC.
|
|
|
|
|
|
|
|
By:
|
/s/
James N. Jannello
|
|
By:
|
/s/
Richard S. Francis
|
|
Name:
|
James
N. Jannello
|
|
Name:
|
Richard
S. Francis
|
|
Title:
|
President
|
|
Title:
|
President
|
|
|
|
|
|
|
|
JANEL
WORLD TRADE, LTD.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
James N. Jannello
|
|
|
|
|
|
James
N. Jannello
|
|
|
|
|
Title:
|
Executive
Vice President and Chief Executive Officer
|
|
|
|
SCHEDULE
LIST
This
list
identifies the contents of all omitted schedules. The registrant agrees to
supplementally furnish the SEC with a copy of any omitted schedule upon
request.
Schedule
2 - Excluded Assets
Schedule
2.1 - Computer Software& Hardware
S
chedule
2.3 - Other Personal Property
Schedule
2.4 - Prepaid Expenses
Schedule
2.7 - Trade Names, Trademarks, Service marks
Schedule
2.8 - Business Agreements, Leases, Licenses, Notes
Schedule
2.9 - Customer Contracts and Customer Lists
Schedule
2.11 - Certain Insurance Policies
Schedule
3(b) - Share Allocation
Schedule
4.3 - Consent Required
Schedule
4.6 - Liens
Schedule
4.11 - Uncollectible Receivables
Schedule
4.13 - Capital Expenditures
Schedule
4.14 - Undisclosed Liabilities
Schedule
4.16 - Law Suits
Schedule
6.3 - Contract Employees