Exhibit 10.1
ASSET
PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT is made this 21 st
day of March, 2008, by and among TL ACQUISITION GROUP
LLC, a Delaware limited liability company (the “
Buyer
”), AMERICAN LEISURE EQUITIES
CORPORATION d/b/a TRAVELEADERS, INC., a Florida
corporation (the “ Seller
”), and AMERICAN LEISURE
HOLDINGS, INC. , a Nevada corporation, being the sole
shareholder of the Seller (the “ Shareholder
”).
RECITALS
The
Seller is engaged in the business of providing business and
vacation travel services (as conducted by the Seller, the
“ Business
”). The Buyer desires to purchase, and the
Seller desires to sell, the Business and substantially all of
the non-cash assets of the Seller upon the terms and
conditions herein set forth.
NOW,
THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged,
IT
IS HEREBY AGREED AS FOLLOWS:
AGREEMENT
COMMONLY USED DEFINITIONS
As
used in this Agreement, the following terms shall have the
following meanings:
“ ALG
”
shall mean American Leisure Group,
Ltd. the majority shareholder of Shareholder.
“ ALG
Guaranty
”
shall mean the Guaranty of ALG in favor of Buyer in the form
attached hereto and incorporated herein as Exhibit
A .
“ Bank
Loan ” means that
certain loan, dated September 26, 2007, from Regions Bank to
Seller.
“ Breach
”
shall mean any breach of, or any inaccuracy in, any representation
or warranty or any breach of, default under or conflict with, or
failure to perform or comply with, any covenant, provision, term
or other obligation, in or of the Transaction Documents
or any Contract, Laws, Order, License, or any event which with the
passing of time or giving of notice, or both, would constitute such
a breach, default, conflict or failure.
“ Closing
Date ” shall mean
March 21, 2008 or such other date on which the Closing occurs, as
mutually agreed by Buyer and Seller.
“ Code
”
shall mean the Internal Revenue Code of 1986, as
amended.
“
Consent
” shall mean any consent listed in Schedule 4.3(c) of
the Disclosure Schedule.
“ Contemplated
Transactions ” shall mean all
of the transactions contemplated by the Transaction
Documents.
“ Contracts
”
shall mean, collectively, all written contracts, agreements,
instruments, documents, leases, indentures, insurance policies,
undertakings, understandings or other obligations, entered into by
the Seller and which relate to the Business.
“ Disclosure
Schedule ” shall mean the
disclosure schedule attached hereto and incorporated herein,
delivered by the Seller and the Shareholder to the
Buyer.
“ Encumbrances
”
shall mean any charge, claim, community or other marital property
interest, condition, equitable interest, lien, option, pledge,
security interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or similar
restriction, including any restriction on use, voting (in the case
of any security or equity interest), receipt of income or exercise
of any other attribute of ownership.
“ Environmental
Laws ” shall mean,
collectively, the federal Clean Air Act, the federal Clean Water
Act, the federal Resource Conservation and Recovery Act, the
federal Comprehensive Environmental Response, Compensation and
Liability Act, the federal Toxic Substances Control Act, principles
of common law and any other federal, state or local laws, including
rules and regulations thereunder, regulating or otherwise affecting
or relating to human health or the environment.
“ Environmental
Materials ” shall mean,
collectively, any material, substance, chemical, waste, contaminant
or pollutant, including petroleum and petroleum products, which is
regulated, listed, defined as or determined to be hazardous,
extremely hazardous, toxic, dangerous, restricted or a nuisance
under any Environmental Laws.
“ Financial
Statements ” shall mean,
collectively, the financial
statements (including balance sheets and statement of earnings,
stockholders’ equity and cash flow) of the Seller as of and
for each of its fiscal years ending December 31, 2005, 2006, and
2007 and the financial statements (including balance sheets and
statements of earnings and cash flow) of the Seller for the
two-month period ending February 29, 2008.
“ Governmental
Authority ” shall mean the
government of the United States or any foreign jurisdiction, any
state, county, municipality or other governmental or
quasi-governmental unit, or any agency, board, bureau,
instrumentality, department or commission (including any court or
other tribunal) of any of the foregoing.
“
Hazardous
Substances ” means
hazardous substances as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. §9601, et seq., similar state laws, and all
regulations promulgated thereunder.
“ Indemnifiable
Damages ” shall mean all
losses, claims, damages, Liabilities, costs, expenses or
deficiencies (including but not limited to reasonable
attorneys’ fees and other costs and expenses of Proceedings
or the defense or settlement of any claim or claims) arising out of
the matters set forth in Sections 10.1 or 10.2, as
applicable.
“ IRS
”
shall mean the Internal Revenue Service.
“ Knowledge
of the Seller ” shall mean,
with respect to each of Malcolm Wright, Fred Pauzar, Mark Elias,
Omar Jimenez, Jeff Scott, the actual conscious knowledge of any
such individual.
“ Latest
Balance Sheet ” shall mean the
balance sheet of the Seller as of the Latest Balance Sheet
Date.
“ Latest
Balance Sheet Date ” shall mean
February 29, 2008.
“ Laws
”
shall mean, collectively, all federal, state, local, municipal,
foreign or international (including multi-national) constitutions,
laws, statutes, ordinances, rules, regulations, codes, treaties or
principles of common law.
“ Liabilities
” or,
individually, “ Liability
”
shall mean, with respect to any Person, any debt liability or
obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due,
vested or unvested executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on
the financial statements of such Person.
“ Licenses
”
shall mean, collectively, governmental, regulatory, administrative
and non-governmental licenses, permits, approvals, certifications,
accreditations, notices and other authorizations.
“ Material
Adverse Effect ” shall mean, any
material and adverse change in the business, properties, assets or
condition (financial or otherwise) of the Business, taken as a
whole; provided ,
however , that
for purposes of this Agreement none of the following shall be
deemed to constitute, and none of the following shall be taken into
account in determining whether there has been or there is
reasonably likely to be, a Material Adverse Effect (except to the
extent that any of the following has a disproportionate impact on
the business, assets of condition of the Business): (i)
any adverse change, event, development or effect arising from or
relating to (A) general business or economic conditions, even if it
disproportionately affects the travel business generally, (B)
national or international political or social conditions, including
the engagement by the United States in hostilities, whether or not
pursuant to a declaration of a national emergency or war, or the
occurrence of any military or terrorist attack, (C) financial
banking, or securities markets (including any disruption thereof
and any decline in the price of any security or market index, (D)
changes in GAAP or (E) changes in law, rules, relations, orders or
other binding directives issued by any Governmental Authority, or
(ii) any adverse change applicable to the travel business
generally.
“ Noncompetition
Agreement ” shall mean the
Noncompetition Agreement attached hereto and incorporated herein as
Exhibit
C .
“ Notice
of Claim ” shall mean a
certificate signed by the Indemnitee or its authorized
representative: (i) stating that the Indemnitee has paid
or accrued (or intends to pay or accrue) Indemnifiable Damages to
which it is entitled to indemnification pursuant to Article X and
the amount thereof (to the extent then known), and (ii) specifying
to the extent possible (A) the individual items of loss, damage,
Liability, cost, expense or deficiency included in the amount so
stated, (B) the date each such item was or will be paid or accrued
and (C) the basis upon which Indemnifiable Damages are
claimed.
“ Notice
of Objection ” shall mean a
written notice of objection by the Indemnitor which shall set forth
the grounds upon which the objection is based and state whether the
Indemnitor objects to all or only a portion of the matter described
in the Notice of Claim.
“ Orders
”
shall mean all decisions, injunctions, writs, guidelines, orders,
arbitrations, awards, judgments, subpoenas, verdicts or decrees
entered, issued, made or rendered by any Governmental
Authority.
“ Ordinary
Course ” shall mean, an
action taken by a Person that: (i) generally is
consistent in nature, scope, frequency and magnitude with the past
practices of such Person and is taken in the ordinary course of the
normal, day-to-day operations of such Person; and (ii) does not
require authorization by the board of directors or shareholders of
such Person (or by any Person or group of Persons exercising
similar authority).
“ Permitted
Encumbrances ” with respect to
Real Property shall mean municipal and zoning ordinances, recorded
easements, covenants and restrictions, provided the same do not
prohibit or materially interfere with the present use, or
materially affect the present value of the Leased Real Estate, and
general Taxes levied on or after January 1, 2008, and not yet due
or payable.
“ Person
”
shall mean an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture or
other entity or a Governmental Authority.
“ Strategic
Alliance Agreement ” shall mean the
Strategic Alliance Agreement in the form attached hereto and
incorporated herein as Exhibit
D .
“ Prime
Rate ” shall mean the
prime rate of interest quoted from time to time in The Wall Street
Journal , which may not be the lowest rate at with banks
lend money to customers. For purposes of this Agreement,
the Prime Rate shall change on the first Business Day after the
announcement of a change in the Prime Rate in The Wall Street
Journal .
“ Proceeding
”
shall mean any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative,
judicial, or investigative, whether formal or informal, whether
public or private) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or
arbitrator.
“ Real
Property ” shall mean,
collectively, the Leased Real Estate, and any other real property
heretofore owned or used by the Seller in the conduct of the
Seller’s Business.
“ Related
Party ” shall mean with
respect to a particular individual:
|
|
(a)
|
each
other member of such individual’s Family;
|
|
|
(b)
|
any
Person that is directly or indirectly controlled by any one or more
members of such individual’s Family;
|
|
|
(c)
|
any
Person in which members of such individual’s Family hold
(individually or in the aggregate) a Material Interest;
and
|
|
|
(d)
|
any
Person with respect to which one or more members of such
individual’s Family serves as a director, officer, manager,
member, partner, executor or trustee (or in a similar
capacity).
|
|
|
With
respect to a specified Person other than an
individual:
|
|
|
(a)
|
any
Person that directly or indirectly controls, is directly or
indirectly controlled by or is directly or indirectly under common
control with such specified Person;
|
|
|
(b)
|
any
Person that holds a Material Interest in such specified
Person;
|
|
|
(c)
|
each
Person that serves as a director, officer, partner, executor or
trustee of such specified Person (or in a similar
capacity);
|
|
|
(d)
|
any
Person in which such specified Person holds a Material Interest;
and
|
|
|
(e)
|
any
Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar
capacity).
|
For
purposes of this definition (a) “control”
(including “controlling,” “controlled
by,” and under common control with”) means the
possession, direct or indirect, or the power to direct or
cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is
used in the rules promulgated under the Securities Act of
1933, as amended; (b) the “Family” of an
individual includes (i) the individual, (ii) the
individual’s spouse, and (iii) any other natural person
who is related to the individual or the individual’s
spouse within the second degree; and (c) “Material
Interest” means direct or indirect beneficial ownership
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of voting securities or other voting
interests representing at least ten percent (10%) of the
outstanding voting power of a Person or equity securities or
other equity interests representing at least ten percent (10%)
of the outstanding equity securities or equity interests in a
Person.
“ Software
”
shall mean all computer software and subsequent versions thereof,
including source code, object, executable, or binary code, objects,
comments, screens, user interfaces, report formats, templates,
menus, buttons, and icons and all files, data, materials, manuals,
design notes, and other items and documentation related thereto or
associated therewith.
“ Subsidiaries
” or,
individually, “ Subsidiary
”
shall mean any entity in which the Seller owns stock, other
securities or any other ownership interest (other than ownership of
less than three percent (3%) of the stock or securities of a
corporation, partnership, limited liability company or other entity
whose shares are listed on a nationally recognized securities
exchange or are traded over-the-counter, and which stock or
securities are held by the Seller solely as an investment) and any
other investment by the Seller in any corporation, limited
liability company, joint venture, partnership or other business
enterprise.
“ TAG
Guaranty
”
shall mean the Guaranty of TAG II, Inc., a Delaware corporation and
the sole member of Buyer (“ TAG II
”) in favor of Seller in the form attached hereto and
incorporated herein as Exhibit
H .
“ Tax
”
shall mean any income, gross receipts, payroll, employment, excise,
severance, documentary stamp, intangible, property, environmental,
windfall profit, customs, capital stock, franchise,
employees’ income withholding, social security, unemployment,
disability, sales, use, transfer, value-added, alternative, add-on
minimum and other Tax, fee, assessment, levy, tariff, charge or
duty of any kind whatsoever and any interest, penalty, addition or
additional amount thereon imposed, assessed or collected by or
under the authority of any Governmental Authority or payable under
any tax-sharing agreement or any other Contract.
“ Tax
Return ” shall mean any
return (including any information return), report, statement,
schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to
be filed with or submitted to, any Governmental Authority in
connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Laws
relating to any Tax.
“ Third
Party ” shall mean a
Person that is not a party to this Agreement.
“ Transaction
Documents ” shall mean this
Agreement and any other Contract entered into by the parties in
connection with the Contemplated Transactions.
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1
Purchased
Assets . Subject to the terms and conditions
herein set forth, the Buyer shall purchase on the Closing
Date, and the Seller shall sell and transfer to the Buyer,
free and clear of any Encumbrances other than Permitted
Encumbrances, the Business and all of the Seller’s
assets and properties of every kind and description, real,
personal and mixed, tangible and intangible, and wherever
situated and relating to the Business, except the assets
excluded pursuant to Section 1.2 hereof, all as the foregoing
may exist as of the Closing Date (hereinafter, all of such
assets and properties are referred to as the “
Purchased
Assets ”). The Purchased Assets shall
include, without limitation, the following to the extent
related to the Business:
(a) All
inventories of whatever kind, including, without limitation,
finished goods, work-in-process and raw materials (the “
Inventories
”);
(b)
All trade and other accounts receivable, and all other amounts
receivable except as set forth in Section 1.2(d) (the “
Receivables
”);
(c) All
prepaid expenses, advance commissions, payments and
deposits;
(d) All
equipment (building or office), furniture, fixtures and fixed
assets, including, without limitation, those items listed on
Schedule
1.1(d) attached hereto (the “ Equipment
”);
(e)
All rights of the Seller pursuant to Contracts except as
excluded in Section 1.2(d);
(f)
All right, title and interest (including the right to sue for
past infringements) in and to the Intellectual Property Assets
of Seller, including but not limited to the mark
“TraveLeaders”;
(g) All
Licenses relating to the Business;
(h) All
office and other supplies;
(i) All
warranty rights, guaranty rights, causes of actions, judgments
and claims and similar rights of the Seller relating to the
Business and which are transferable (whether choate or
inchoate, known or unknown) against vendors, suppliers,
designers, architects, engineers or other
Persons;
(j) All
lists of customers, suppliers, vendors and sources; all books,
records, journals, computer software and files, except as set
forth in Section 1.2(c); all information, drawings, sales and
promotional materials, and telephone and telecopier numbers
and listings, all as relate to the Business; and
(k) All
Insurance benefits, including rights and proceeds, arising
from or relating to the Business, unless expended in
accordance with this Agreement.
1.2
Excluded
Assets . The Purchased Assets shall not
include, and the Seller shall retain, the following assets
(the “ Excluded
Assets ”):
(a) Cash
and cash equivalents;
(b) The
Seller’s rights under this Agreement and the other
Transaction Documents;
(c) The
Seller’s minute books, stock record books and corporate
franchise and Tax records and returns (including rights to Tax
refunds);
(d)
Seller’s Benefit Plans; and
(e) Any
assets relating exclusively to an Excluded
Liability.
1.3
Closing
. The closing, (the “ Closing
”) of the purchase and sale of the Business and the
Purchased Assets shall take place at 10:00 a.m., local time,
on the Closing Date, at the offices of Foley & Lardner,
LLP, 111 North Orange Avenue, Suite 1800, Orlando, Florida
32801, or at such other time and place as may be mutually
agreed to by the Buyer and the Seller, including, but not
limited to, Closing via mail or facsimile. The
Closing shall be effective as of 12:01 a.m. on the Closing
Date. If the Closing has not occurred by March 25,
2008, this Agreement shall terminate and be of no further
force or effect, except that such termination shall not
relieve any party from Liability for any Breach of the
Transaction Documents.
1.4
Certain
Transitional Matters . Except
for the Required Consents, which shall be obtained prior to
Closing, Buyer shall assume all risk of loss arising from or
relating to any failure to obtain any of the Consents and
shall indemnify and hold harmless Seller from and against
any Liability arising out of or relating to such failure
(but only to the extent that such Liability is suffered or
incurred by reason of such failure). At the request of
Buyer, Seller agrees to use reasonable commercial efforts
(at no cost to Seller) to cooperate with with Buyer in
obtaining any such Consents.
ARTICLE II
CONSIDERATION FOR TRANSFER
2.
Purchase
Price . The purchase price for the Purchased
Assets shall be Fourteen Million Dollars ($14,000,000) (as
adjusted, the “ Purchase
Price ”).
2.1
Payment of
Purchase Price . The Purchase Price shall be payable at
the Closing as provided herein, consisting of the assumption
of liability set forth in (a) below, the cash payment set
forth in (b) below, and delivery of the promissory note set
forth in (c) below, all payable as follows, and subject to
adjustment pursuant to Sections 2.2 and 2.3:
(a)
Assumption
. At the Closing, the Buyer will execute and deliver to the
Seller the Assumption Agreement in the form of Exhibit
E hereto, pursuant to which the Buyer will assume the
Assumed Liabilities described in Section 3.1.
(b)
Cash . At
the Closing, the Buyer will pay the Seller, by wire transfer
of immediately available funds to such account as is
designated by the Seller, an amount equal to Six Million
Dollars ($6,000,000) minus (x) the actual amount of the
Assumed Liabilities (other than accounts payable) as of the
Closing Date and minus (y) any deduction based on the
Seller’s Net Payables pursuant to Section 2.3
below.
(c)
Promissory
Note . At the Closing, the Buyer will deliver a
Promissory Note in the form attached hereto as Exhibit
B payable to the Seller in the initial principal amount
of Eight Million Dollars ($8,000,000) plus or minus the amount
of the EBITDA Price Adjustment (the “Note”),
payable as follows: (i) on the date which is five (5) Business
Days after the date on which the EBITDA Price Adjustment is
finally determined pursuant to Section 2.2 below (the
“First Payment Date”), an amount equal to Two
Million Dollars ($2,000,000), without interest, shall be due
and payable under the Note, minus the amount the amount (not
to exceed $2,000,000) of any reduction (if any) to the
Purchase Price pursuant to Section 2.2(a); (ii) on each of the
dates which are three months, six months, nine months and
twelve months after the First Payment Date, an amount equal to
all accrued but unpaid interest on the remaining principal
balance under the Note shall be due and payable under the
Note; (iii) on the date which is the first anniversary of the
First Payment Date (the “Second Payment Date”), an
amount shall be due and payable under the Note which is equal
to Four Million Dollars ($4,000,000) minus all prior principal
payments under the Note (or such lesser amount as shall then
be outstanding under the Note); (iv) on each of the dates
which are three months, six months, nine months and twelve
months after the Second Payment Date, an amount equal to all
accrued but unpaid interest on the remaining principal balance
under the Note shall be due and payable under the Note; and
(v) on the date which is the first anniversary of the Second
Payment Date, all remaining principal amounts due under the
Note shall be due and payable. Beginning on the
First Payment Date, interest shall accrue on the outstanding
principal amount of the Note at a rate equal to seven percent
(7%) per annum, simple interest, which interest shall accrue
daily calculated on the basis of a 360-day year.
(d)
Assistance with
Tax Lien Discharge . In order to assist the Seller to
have tax liens against the Purchased Assets discharged, the
Buyer shall pay the Seller, in addition to the Purchase Price,
the lesser of (i) $100,000 or (ii) 3.0% of the amount needed
to discharge the tax liens, payable at the time that the
Seller pays the IRS in full to discharge the tax liens. The
Buyer’s payment is an incentive for the Seller to
cooperate with the IRS and not an admission of liability of
the Buyer or Seller to the IRS. The Seller agrees to
indemnify, defend, and hold harmless the Buyer from and
against any third party (including the IRS) claims, losses and
damages asserted against Buyer as a result of or related to
the amount paid under this paragraph and any tax liens against
the Purchased Assets.
2.2.
Post
Closing Adjustment to Purchase Price .
(a)
EBITDA Price
Adjustment . The Purchase Price will be reduced or
increased by four times the amount by which the First Year
EBITDA (as defined below) is less than or is
greater than $3,500,000 (the “ EBITDA Price
Adjustment ”). Notwithstanding
the foregoing, in no event will the EBITDA Price Adjustment
cause the Purchase Price (including the amount deducted at the
Closing under Section 2.3 below) to be less than $6,000,000,
before taking into account any claims for indemnification
pursuant hereto.
(b)
Notice and
Payment . Prior to May 15, 2009, the Buyer
will deliver a written notice of the EBITDA Price Adjustment
to the Seller, which notice shall contain all details and
supporting data necessary to the Buyer’s determination
of the First Year EBITDA and the EBITDA Price
Adjustment. The Seller will have 30 days from the
receipt of said notice to notify the Buyer that the Seller
disputes the EBITDA Price Adjustment. If the Buyer
has not received notice of such a dispute within such 30-day
period, the Buyer will, at the end of said 30-day period,
deliver the first payment on the Note (minus the EBITDA Price
Adjustment and any other deductions permitted by this
Agreement) to the Seller, provided that if the first payment
due under the Note exceeds the amount in controversy, then so
much as is not in controversy shall be due under the
Note. Otherwise, the first payment under the Note
will be due within five (5) days after the final determination
of the disputed EBITDA Price Adjustment.
(c)
Dispute
Resolution . If, however, the Seller has delivered
notice of such a dispute to the Buyer within such 30-day
period, then, during said 30-day period, the parties will meet
and confer in an effort to resolve their dispute. At the end
of the 30-day period, if the dispute has not been resolved,
the Buyer’s CPA firm will select an independent
accounting firm of nationally recognized standing that has not
represented any of the parties hereto within the preceding two
(2) years to review the records used to calculate the EBITDA
Price Adjustment. The Seller will ratify such
independent accounting firm within five business days of its
selection unless there is an actual conflict of interest as
reasonably determined by Seller. The independent accounting
firm will make its determination of the EBITDA Price
Adjustment, if any, within 60 days of its
selection. The determination of the independent
accounting firm will be final and binding on the parties
hereto, and upon such determination, payment will be disbursed
as set forth in Section 2.1(c). The fees and costs of the
independent accounting firm will be borne either by (i) the
Buyer in the event that any Purchase Price reduction based on
the EBITDA Price Adjustment is reduced by the independent
accounting firm by five percent (5%) or more from the amount
initially set forth in Buyer’s notice or (ii) the Seller
in all other cases.
(d)
Certain
Definitions and Related Matters .
(i) For
purposes of this Agreement, the term “ First Year
EBITDA ” means the EBITDA of the Business during
the period beginning on December 30, 2007 and ending on
December 27, 2008 (the “ Determination
Period ”). The term “
EBITDA
” means the earnings of the Business (as such earnings
are determined in accordance with GAAP on a basis consistent
with Seller’s past practice) for the Determination
Period plus (in each case only to the extent deducted in
determining the earnings of the Business for the
Determination Period) the sum of (i) the interest, tax,
depreciation, and amortization expense for such period, (ii)
any capital lease expense for capital assets acquired by the
Business on or subsequent to the Closing Date, (iii) any
non-cash expenses, extraordinary expenses, asset write-offs,
or impairment expense incurred, accrued, or recognized with
respect to the Determination Period (but only to the extent
any such items are not incurred in the ordinary course of the
Business on a basis consistent with Seller’s past
practice), and (iv) any fee, charge, or expense payable by
the Business to any other business unit of Buyer or Affiliate
of Buyer other than (A) the overhead allocation permitted by
the first sentence of Section 2.2(d)(ii) below and (B) fees,
charges, or expenses for services incurred in the ordinary
course of the Business on a basis consistent with
Seller’s past practice for a price that is no less
favorable to the Business than the price for which such
services could be obtained from a vendor that is a
non-Affiliate of Buyer.
(ii) Subject
to the limitation set forth in the second sentence of this
paragraph, the parties agree that the costs and expenses of
the Business which are applied in the calculation of First
Year EBITDA may include appropriate charges for shared
overhead expenses from Buyer or any Affiliate of
Buyer. Buyer agrees that the costs and expenses
applied in the calculation of the First Year EBITDA shall not
in any event exceed the amount which bears the same
proportion to the revenues of the Business during the
Determination Period as ninety five percent (95%) of the
proportion by which the costs and expenses of the Business
(to the extent such costs and expenses would be used in
calculating EBITDA, as defined above) for the 2007 calendar
year bear to the revenues of the Business during the 2007
calendar year, as reported by Seller to Buyer.
(iii) Buyer
agrees that, at all times during the Determination Period,
the Buyer shall maintain separate books of account and
records for the Business as shall be reasonably necessary to
enable the determination of the EBITDA Price
Adjustment. After the Closing, Seller and its
representatives shall have reasonable access during normal
business hours to all books and records of Buyer necessary to
verify and confirm Buyer’s determination of the EBITDA
Price Adjustment, provided that the Seller shall inform the
Buyer of its intention to seek such access and the matters
sought to be reviewed
at least 24 hours in advance and, further, that the access
requested shall not interfere unreasonably with the Business,
properties or operations of the Buyer.
(iv) At
all times during the Determination Period, (A) Buyer will not
(i) terminate, eliminate or cease to
conduct any material lines of business within the
Business, (ii) materially reduce the sales and marketing
efforts in support of the Business, or (iii) terminate the
employment of Mark Elias, other than for cause, or materially
reduce the management team reporting to Mark Elias, except to
the extent any such reductions are offset by addition to
Elias' staff which are approved by Elias; (B) Buyer will not
divert business from customers of the Business to any other
Affiliate of Buyer; and (C) Buyer will in good faith exercise
its commercially reasonable efforts to maximize the EBITDA of
the Business during the Determination Period and will not
take any intentional action or make any intentional omission
that Buyer believes, or reasonably should believe, will have
a material adverse impact on the EBITDA of the Business
during the Determination Period.
2.3.
Adjustments at
the Closing .
(a)
Adjustment to
Closing Payment . Five days prior to the
Closing, the Seller and the Buyer will estimate the amount of
the Seller’s accounts payable that will exist as of the
Closing (the “Estimated Payables”) and will deduct
from such amount Seller’s Receivables as of the Closing
(excluding doubtful accounts). The net amount will be called
the “ Seller’s
Net Payables ”. At the Closing, the
amount of cash payable pursuant to Section 2.1(b) will be
reduced by the amount of the Seller’s Net
Payables. Pursuant to the Closing, Buyer will
assume, and thereafter pay, all such accounts payable as they
become due and will purchase, and thereafter use commercially
reasonable efforts to collect, such
Receivables. Any Receivables not collected six (6)
months after the Closing will be transferred back to the
Seller, and the Seller will, within 10 days after such
transfer, pay the Buyer the face amount thereof.
(b) Seller
Deliveries . At the Closing, the
Seller will deliver to the Buyer:
(i)
All customer deposits held by Seller which Seller has not yet
paid over to the supplier or refunded, as
applicable.
(ii)
Rebates accrued up to Closing, the cash or face value of free
tickets, and the cash value of gift certificates accrued or
promised by Seller up to Closing; provided that, if there are
rebates, free tickets, or gift certificates that accrue before
Closing, but cannot be calculated until afterwards, Buyer may
deduct their cash or face value from any payments to Seller as
accrued.
(c)
Buyer
Reimbursement . At the Closing, Buyer
will reimburse Seller for the deposits and advances paid to
travel suppliers by Seller out of Seller’s own funds for
which Seller has not yet received payment from a client (e.g.,
speculative group deposits and prepaid expenses that will
benefit Buyer).
2.4.
Strategic
Alliance Agreement . At the Closing, Buyer
and Seller will enter into the Strategic Alliance Agreement in
the form attached hereto as Exhibit
D .
2.5
[Reserved]
2.6
Purchase Price
Allocation . The parties acknowledge and
agree that the Purchase Price was negotiated and concluded on
the basis of the component prices set forth on Schedule
2.6 attached hereto in accordance with the respective
fair market values of the Purchased Assets. The
parties agree to report and allocate for Tax purposes
(including IRS Form 8594), the Purchase Price as so allocated
and will not take any inconsistent or contrary position
therewith for any other purpose.
ARTICLE III
LIABILITIES
3.1
Assumed
Liabilities . At the Closing, the Buyer
shall, pursuant to the Assumption Agreement attached as
Exhibit
E hereto, assume and agree to discharge only the
following Liabilities of Seller (the “ Assumed
Liabilities ”):
(a) Any
Liability to the Seller’s customers incurred by the
Seller in the Ordinary Course of the Business for
nondelinquent orders outstanding as of the Closing Date
reflected on the Seller’s books;
(b) Any
executory Liability arising and accruing after the Closing
Date under Contracts of the Seller described in Schedule
4.12
attached hereto, including any updates thereto pursuant to
Section 6.21 (other than any Liability arising out of or
relating to a Breach that occurred on or prior to the Closing
Date); and
(c)
Seller’s accounts payable.
3.2
Non-Assumed
Liabilities . The Non-Assumed Liabilities
shall remain the sole responsibility of, and shall be retained
and paid, performed and discharged when and as due solely by,
the Seller. “ Non-Assumed
Liabilities ” shall mean every Liability of the
Seller other than the Assumed Liabilities, including without
limitation:
(a) Any
Liability arising out of or relating to transactions prior to
the Closing Date other than to the extent assumed under
Section 3.1;
(b) Any
Liability under any Contract assumed by the Buyer pursuant to
Section 3.1 that arises after the Closing Date but that arises
out of or relates to any Breach that occurred prior to the
Closing Date;
(c) Any
Liability for Taxes, including (i) any Taxes arising as a
result of the Seller’s operation of the Business or
ownership of the Purchased Assets prior to the Closing Date,
(ii) any Taxes that will arise as a result of the sale of the
Purchased Assets pursuant to this Agreement, and (iii) any
deferred Taxes of any nature;
(d) Any
Liability under any Contract not assumed by the Buyer under
Section 3.1, including any Liability arising out of or
relating to the Seller’s credit facilities or any
security interest related thereto;
(e) Any
Liability under Environmental Laws arising out of or relating
to the operation of the Business or the Seller’s
leasing, ownership or operation of real property;
(f)
Any Liability arising out of or relating to any Benefit Plans
(as defined in Section 4.20 hereto);
(g) Any
Liability under any employment, severance, retention or
termination agreement with any employee of the Seller or a
Related Party of the Seller;
(h) Any
Liability arising out of or relating to any employee grievance
whether or not the affected employees are hired by the
Buyer;
(i) Any
Liability to indemnify, reimburse or advance amounts to any
officer, director, employee or agent of the
Seller;
(j) Any
Liability arising out of any Orders either pending as of the
Closing Date or commenced after the Closing Date and arising
out of or relating to any occurrence or event happening prior
to the Closing Date;
(k) Any
Liability arising out of or resulting from the Seller’s
compliance or non-compliance with any Laws;
(l) Any
Liability of the Seller to any of its Affiliates, except as
set forth in Section 3.1(c);
(m) Any
Liability of the Seller under the Transaction
Documents;
(n)
Any Liability of the Seller based upon the Seller’s acts
or omissions occurring after the Closing Date;
and
(o) Any
Liability to the Seller’s customers under written
agreements prior to the Closing Date other than those set
forth in Section 3.1(a) hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND
SHAREHOLDER
In
order to induce the Buyer to enter into this Agreement, Seller
and Shareholder, jointly and severally, make the following
representations and warranties to the Buyer. Each
Section of this Article IV is considered by the parties to
this Agreement to be, will be treated as, and shall be
effective and enforceable as an express warranty, irrespective
of any particular reliance, or lack thereof, by the Buyer
thereon as to the truth of the warranted fact. The
Buyer’s Knowledge of any Breach of any Section,
regardless of when, how or from what source said Knowledge is
acquired, shall not be deemed a waiver of any representation
and warranty or any of the Buyer’s rights under this
Agreement. Any matter described on the Disclosure
Schedule shall be set forth with reference to each separate
Section of this Agreement to which the matter relates,
provided that any matter or information disclosed in one
section of the Disclosure Schedule shall also be deemed to be
disclosed in (and for purposes of) every other section of the
Disclosure Schedule with respect to which it is reasonably
apparent that such matter or information is applicable, and
shall be deemed to qualify any other representation or
warranty in this Agreement (whether or not it contains an
explicit reference to the Disclosure Schedule), where it is
reasonably apparent that such matter or information would be
relevant. The Disclosure Schedule shall not vary,
change, expand, or alter the language of the representations
and warranties contained in this Agreement. In the
event of any inconsistency between the statements in this
Agreement and those on the Disclosure Schedule (other than an
exception permitted by this Agreement to be expressly set
forth as such on the Disclosure Schedule with respect to a
specifically identified Section of this Agreement) the
statements in this Agreement will control.
4.1
Subsidiaries
. The Seller has no Subsidiaries.
4.2
Ownership,
Organization and Qualification . The
Shareholder owns all of the issued and outstanding shares of
capital stock of the Seller. The Seller is a
corporation duly organized and validly existing and its status
is active under the Laws of the State of Florida.
The Seller is qualified to transact business as a
foreign corporation or organization in the jurisdictions set
forth on the Disclosure Schedule,
and the Seller is not otherwise required to be so qualified in
any other jurisdiction, except for those jurisdictions where
the failure to be so qualified would not have a Material
Adverse Effect.
4.3
Contemplated
Transactions General Compliance .
(a)
Enforceability;
Authority . Assuming due authorization,
execution and delivery of the Transaction Documents by the
Buyer, the Transaction Documents, upon the execution and
delivery thereof, will be the valid and binding obligations of
the Seller and the Shareholder, respectively, enforceable
against them in accordance with their terms, except as such
enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors’
rights generally and for limitations imposed by general
principles of equity. The Seller and the
Shareholder have the absolute and unrestricted right, power
and authority to execute and deliver the Transaction Documents
to which each is a party and to perform their obligations
under the Transaction Documents. The execution and
delivery of the Transaction Documents, and the performance by
the Seller and the Shareholder of each of their respective
obligations contained herein, have been duly approved by the
Seller’s Board of Directors and shareholders and the
Shareholder’s Board of Directors, as
applicable.
(b)
No
Conflict . Except as would not reasonably be
expected to have a Material Adverse Effect and assuming that
all consents, approvals, authorizations and other actions
described in the Disclosure Schedule have been obtained and
all filings and notifications listed in the Disclosure
Schedule have been made, the execution and delivery of the
Transaction Documents do not, and the consummation or
performance of any of the Contemplated Transactions will not:
(i) conflict with or violate any provisions of the articles of
incorporation or bylaws of the Seller; (ii) Breach any
provisions of or result in the maturation or acceleration of,
any obligations under any Contract, Order, License or Law, to
which the Seller or the Shareholder is subject or to which the
Seller or the Shareholder is a party; or (iii) violate any
restriction or limitation, or result in the termination or
loss of any right (or give any Person, other than the Seller,
the right to cause such termination or loss), of any kind to
which the Seller or the Shareholder is bound or
has.
(c)
Consents
. Except as set forth on the Disclosure Schedule,
neither the Seller nor any Shareholder is required to give any
notice to or obtain any consent from any Person in connection
with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated
Transactions.
4.4
Organizational
Documents . True, correct and complete
copies of the articles of incorporation and bylaws of the
Seller have been made available to the Buyer.
4.5
Financial
Statements . Attached to the Disclosure
Schedule are complete copies of the Financial
Statements. The Seller’s books and records of
accounts accurately reflect all of the assets, Liabilities,
transactions and results of operations of the Seller, and the
Financial Statements have been prepared based upon and in
conformity therewith. The Financial Statements have
been prepared in accordance with generally accepted accounting
principles maintained and applied on a consistent basis
throughout the indicated periods (except as may be indicated
in the notes thereto), and fairly present the financial
condition and results of operation of the Seller at the dates
and for the relevant periods indicated, subject, in the case
of the Latest Balance Sheet, to normal recurring year-end
adjustments (the effect of which will not, individually or in
the aggregate, have a Material Adverse Effect) and the absence
of notes. True and correct copies have been made
available to the Buyer of all written reports submitted to the
Seller or the Shareholder by the Seller’s auditors since
January 1, 2005 relating to the findings of audits or
examination of the books and records of the
Seller. During the six months prior to the Closing
Date, Seller has not changed accounting methods.
4.6
Real
Property . The Seller owns no real property. The
Disclosure Schedule sets forth a true and complete list of all
real properties leased or rented by the Seller (the “
Leased Real
Estate ”). The Seller has good and
marketable leasehold title to all Leased Real Estate
(including buildings, structures and fixtures thereon or
affixed thereto), free and clear of all Encumbrances, except
for Permitted Encumbrances. To Seller’s
Knowledge, all buildings, structures and other improvements on
the Leased Real Estate are in reasonably good condition and
repair (normal wear and tear excepted). Except as
set forth on the Disclosure Schedule, each parcel of the
Leased Real Estate is the subject of a written lease
agreement, and Seller is in compliance with all material terms
of each such agreement.
4.7
Purchased
Assets; Title and Condition . The Seller
owns good and marketable title to all of the Purchased Assets,
free and clear of all Encumbrances, except for Permitted
Encumbrances and as otherwise set forth on the Disclosure
Schedule. All of the Purchased Assets are located
upon the Seller’s premises, except as otherwise set
forth on the Disclosure Schedule, and (except for Inventory
acquired or disposed of in the Ordinary Course of the Business
since the date of the Latest Balance Sheet) is reflected on
the Latest Balance Sheet. To the Knowledge of the
Seller, all tangible Purchased Assets are in reasonably good
condition and repair (normal wear and tear excepted) and free
from latent defect. Set forth in the Disclosure
Schedule is a complete and correct list of all assets
currently owned or used by the Seller which were acquired by
the Seller from Around the World Travel, Inc. Other
than the assets described in the immediately preceding
sentence, there are no assets of the Seller which are subject
to any tax liens.
4.8
All Necessary
Assets; Capital Expenditures and Repairs
. The Purchased Assets constitute all of the assets
which are necessary for the conduct of the Business, as
presently conducted. Except as set forth on the
Disclosure Schedule, the Seller has no present plan to
purchase or lease any other real estate or tangible personal
property so as to be able to continue the Business as
presently conducted. Except as set forth on the
Disclosure Schedule, no applicable Governmental Agency or
insurer has required the Seller to make any capital
expenditures or remediations relating to the Business in the
next twelve (12) months in an amount exceeding $100,000 in the
aggregate. The Disclosure Schedule contains
information regarding the quantity of ARC paper ticket stock
currently owned by Seller.
4.9
Intellectual
Property Assets .
(a) The
term “ Intellectual
Property Assets ” means all intellectual property
owned or licensed (as licensor or licensee) by the Seller,
throughout the world, in which the Seller has a proprietary
interest, along with all goodwill associated with any such
intellectual property, including:
(i) The
Seller’s name, all assumed fictional business names,
trade names, registered and unregistered trademarks, service
marks and applications (collectively, “ Marks
”);
(ii) all
registered and unregistered copyrights in both published works
and unpublished works (collectively, “ Copyrights
”);
(iii) all
rights in mask works;
(iv) all
know-how, trade secrets, confidential or proprietary
information, customer lists, Software, technical information,
data, process technology, plans, drawings and blue prints
(collectively, “ Trade
Secrets ”); and
(v) all
rights in internet web sites, web pages, URLs, domain names,
directory names, other computer addresses, Internet files,
HTML files, image files (including but not limited to jpeg,
gif, tif, pdf, and java code), links, hyperlinks, and other
files, pages, sites, names or addresses
located on an on-line global computer network presently used
by the Seller (collectively, “ Net Names
”).
(b) The
Disclosure Schedule sets forth a complete and accurate list
and summary description, including any royalties paid or
received by the Seller, and the Seller has made available to
the Buyer accurate and complete copies, of all the Seller
Contracts relating to the Intellectual Property Assets and
material to the Business, except for commercially available
off-the-shelf computer software licensed pursuant to
shrink-wrap or click wrap licenses that is not material to the
Business, any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available Software
programs with a value of less than $1,000 under which the
Seller is the licensee.
(c) (1) Except
as set forth on the Disclosure Schedule, the Intellectual
Property Assets are all those necessary for the operation of
the Business as it is currently conducted. The
Seller is the owner or licensee of all right, title and
interest in and to each of the Intellectual Property Assets,
free and clear of all Encumbrances, except for Permitted
Encumbrances, and has the right to use without payment to a
Third Party all of the Intellectual Property Assets, other
than in respect of licenses listed on the Disclosure Schedule
or not material to the Business.
(ii) Except
as set forth on the Disclosure Schedule, all former and
current employees of the Seller have executed written
Contracts with the Seller that assign to the Seller all rights
to any inventions, improvements, discoveries or information
relating to the Business.
(d) Seller
owns no interest in any patents, patent applications or
inventions which may be patentable.
(e) (i)
The Disclosure Schedule sets forth a complete and
accurate list and summary description of all
Marks.
(ii) All
Marks have been registered with the United States Patent and
Trademark Office, are currently in compliance with all formal
Laws (including the timely post-registration filing of
affidavits of use and incontestability and renewal
applications), are valid and enforceable and are not subject
to any maintenance fees or Taxes or actions falling due within
ninety (90) days after the Closing Date.
(iii) No
Mark has been or is now involved in any opposition,
invalidation or cancellation Proceeding and, to the Knowledge
of the Seller, no such action is threatened with respect to
any of the Marks.
(iv) To
the Knowledge of the Seller, there is no potentially
interfering trademark or trademark application of any other
Person.
(v) No
Mark is infringed or has been challenged or threatened in
writing. None of the Marks used by the Seller is
alleged in writing to infringe any trade name, trademark or
service mark of any other Person.
(vi)
All products and materials containing a Mark bear the proper
federal registration notice where permitted by
law.
(f) (i) The
Disclosure Schedule sets forth a complete and accurate list
and summary description of all Copyrights.
(ii) All
of the registered Copyrights are currently in compliance with
formal Laws, are valid and enforceable and are not subject to
any maintenance fees or Taxes or actions falling due within
ninety (90) days after the Closing Date.
(iii) To
the Knowledge of the Seller, no Copyright is infringed or has
been challenged or threatened in any way. None of
the subject matter of any of the Copyrights is alleged in
writing to infringe any copyright of any Third Party or to be
a derivative work based upon the work of any other
Person.
(iv) All
works encompassed by the Copyrights have been marked with the
proper copyright notice.
(g) (i) With
respect to each Trade Secret, the documentation relating to
such Trade Secret is current, accurate and sufficient in
detail and content to identify and explain it and to allow its
full and proper use without reliance on the knowledge or
memory of any individual.
(ii) The
Seller has taken commercially reasonable precautions to
protect the secrecy, confidentiality and value of all Trade
Secrets (including the enforcement by the Seller of a policy
requiring each employee or contractor to execute proprietary
information and confidentiality agreements substantially in
the Seller’s standard form, and all current and former
employees and contractors of the Seller have executed such an
agreement).
(iii) The
Seller has good title to and an absolute right to use the
Trade Secrets. The Trade Secrets are not part of
the public knowledge or literature and, to the Knowledge of
the Seller, have not been used, divulged or appropriated
either for the benefit of any Person (other than the Seller)
or to the detriment of the Seller. No Trade Secret
has been challenged or threatened in writing or, to the
Knowledge of the Seller, infringes any intellectual property
right of any other Person.
(h) (i) The
Disclosure Schedule sets forth a complete and accurate list
and summary description of all Net Names.
(ii)
All Net Names have been registered in the name of
the Seller and are in compliance with all formal
Laws.
(iii) No
Net Name is now involved in any dispute, opposition,
invalidation or cancellation Proceeding and, to the Knowledge
of the Seller, no such action is threatened with respect to
any Net Name.
(iv) To
the Knowledge of the Seller, there is no domain name
application pending of any other person which would or would
potentially interfere with or infringe any Net
Name.
(v) No
Net Name has been challenged or threatened in
writing. To the Knowledge of the Seller, no Net
Name infringes, interferes with or is alleged to interfere
with or infringe the trademark, copyright or domain name of
any other Person.
4.10
Insurance
.
(a)
General
. The Disclosure Schedule lists each policy of
insurance owned or held by the Seller or Shareholder in
relation to the Business as currently in effect (including
without limitation, policies for fire and casualty,
liability, worker’s compensation, business
interruption, umbrella coverage, products liability, medical,
disability and other forms of insurance) specifying the
insurer, amount of coverage,
type of insurance, whether claims made or occurrence, policy
number, deductible limits and any pending claim in excess of
$1,000, whether or not covered by insurance (the “
Insurance
”). True and complete copies of each policy
of Insurance have been previously made available to the
Buyer. All premiums with respect to the Insurance
covering all periods up to and including the date hereof have
been paid, and no written notice of cancellation or
termination has been received by the Seller with respect to
any such policy. There are no provisions in such
Insurance policies providing for or allowing retroactive or
retrospective premium adjustments. The Insurance
is sufficient for compliance with all requirements of Law and
with all agreements to which the Seller is a
party. To the Knowledge of the Seller, there has
not occurred any act or omission of the Seller which could
result in cancellation of any such policy prior to its
scheduled expiration date. The Seller has not
received any notice from or on behalf of any insurance
carrier issuing any such policy that: (i) insurance rates
will hereafter be substantially increased; (ii) that there
will hereafter be no renewal of any such policy; or (iii)
that alteration of any personal or real property or purchase
of additional equipment, or modification of any method of
doing business, is required or suggested. None of
such policies will in any material way be affected by, or
terminate or lapse by reason of, the Contemplated
Transactions.
(b)
Self-Insurance
. The Disclosure Schedule sets forth (i) any
self-insurance arrangement by or affecting the Seller,
including any reserves established thereunder, (ii) any
Contract or arrangement, other than a policy of insurance,
for the transfer or sharing of any risk to which the Seller
is a party or which involves the Business, and (iii) all
obligations of the Seller to provide insurance coverage to
Third Parties (for example, under leases or service
agreements) and identifies the policy under which such
coverage is provided.
(c)
Denials of
Coverage . Since January 1, 2005, the
Seller has not been refused any insurance with respect to the
Seller’s assets or operations, nor has the dollar
amount of any coverage that has been previously in effect or
requested by the Seller been limited or decreased by any
insurance carrier to which it has applied for or with which
it has carried insurance.
(d)
Claims
. The Disclosure Schedule sets forth a summary of
information pertaining to all claims (other than workers
compensation claims) of property damage and personal injury
or death against the Seller which are currently pending or
were made since January 1, 2005. Except as set
forth on the Disclosure Schedule, all of such claims are
fully satisfied or are being defended by an insurance
carrier.
4.11
Licenses
. The Disclosure Schedule sets forth a complete and
accurate list of each License that is held by Seller necessary
to the Business. Each License listed or required to
be listed is valid and in full force and effect.
(a)
Except as set forth in the Disclosure
Schedule: (i) Seller has not received,
at any time since January 1, 2005 any written notice or other
communication from any Governmental Authority or any other
Person regarding (A) any actual, alleged, possible or
potential violation of or failure to comply with any term or
requirement of any License, or (B) any actual, proposed,
possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any License;
and (ii) all applications required to have been filed for the
renewal of the Licenses listed or required to be listed in
the Disclosure Schedule have been duly filed on a timely
basis with the appropriate granting authority, and all other
filings required to have been made with respect to such
License have been duly made on a timely basis with the
appropriate granting authority.
(b) The
Licenses listed in the Disclosure Schedule collectively
constitute all of the Licenses (including, without
limitation, occupancy permits for real estate and permits
required pursuant to Environmental
Laws) as are necessary to conduct and operate its Business in
the manner in which the Seller currently conducts and
operates the Business.
4.12
Material
Contracts and Other Descriptions and Lists
. The Disclosure Schedule identifies and briefly
describes the following:
(a)
List
.
(i)
Leases
. All leases of real or personal property,
including the leases described in Section 4.6
hereof;
(ii)
Certain Personal
Property . All items of the Purchased Assets
which have a book value or estimated current market value in
excess of $1,000.
(iii)
Purchase and
Sale Orders . A list of written agreements
relating to the purchase or sale of the Seller’s
services other than individual purchase or sales orders or
customer contracts issued in the Ordinary Course of the
Business for which the Receivable (transaction fee versus
gross travel spend) in each case is not in excess of $1,000
individually or $5,000 in the aggregate of all such orders
with the same or related parties;
(iv)
Certain
Agreements . A list of the following
described types of Contracts or documents: (A)
preferred supplier, dealership, distributorship, sales
representative, independent contractor, revenue sharing or
similar Contracts; (B) license, royalty or similar Contracts;
(C) service or maintenance Contracts; (D) protective services
or security Contracts; (E) commission or other contingent
Contracts pursuant to which the Seller’s obligation to
make payments is in excess of $25,000 per year, or pursuant to
which the Seller’s obligation to make contingent
payments is dependent upon sales, revenues, income, success or
other performance standard; and (F) all oral agreements which
may require the Seller to pay or expend more than $10,000 in
any single instance or $50,000 in the aggregate of all such
instances with the same or related parties.
(v)
Other Financial
Obligations . A list of any other Contract
which requires the Seller to pay or expend, after the Closing
Date, more than $10,000 in any single instance or $50,000 in
the aggregate of all such instances with the same or related
parties;
(vi)
Personnel
. A list of: (A) all officers and
directors of the Seller; (B) the names and current annual
salary rates (and bonus, incentive or commission arrangements)
of all present employees and agents of the Seller who receive
aggregate cash remuneration at an annual base rate of $25,000
or more; (C) all loans made by the Seller to its employees and
a statement of the terms thereof; and (D) a list of all the
Seller’s employees who are currently on parental,
disability or other leave; and (E) a list of all retired
employees and directors of the Seller, or their dependents,
who have received or are scheduled to receive benefits from
the Seller and a description of the type and amount of all
such benefits;
(vii)
Employment
Contracts . A list of all employment, bonus,
incentive compensation, profit sharing, retirement, pension,
salary-continuation, post-retirement benefit, death benefit,
vacation or other fringe benefit Contracts in effect, or under
which any amounts remain unpaid, on the date of this Agreement
or to become payable or effective after the date of this
Agreement;
(viii)
Accrued Vacation
Pay . A list of all employees who are
expected, as of the Closing Date, to have earned but unused
vacation and sick days (or earned but unpaid vacation pay in
lieu thereof), together with an estimate of the dollar amount
thereof;
(ix)
Terminated and
Terminating Employees and Independent Contractors
. A list of all employees earning base salary at an
annual rate of $25,000 or more who have terminated employment
since January 1, 2005, or who have announced in writing their
intention to terminate employment with the Seller or not to
accept employment with the Buyer; and a list of all
independent contractors who have announced their intention in
writing to terminate their relationship with the Seller or not
to accept an independent contractor relationship with the
Buyer.
(x)
Loans and
Borrowing Agreements . A list of each
written or oral (i) loan, credit or borrowing arrangement or
Contract, or (ii) Contract by which the Seller or any
Shareholder has guaranteed or otherwise became liable or
contingently liable for the debt of another;
(xi)
Bank
Accounts . The name of each bank or savings
and loan association, or commodities or securities firm, in
which the Seller has an account or safe deposit box, the
numbers of each such account or box, and the names of all
Persons having power to borrow, discount debt obligations,
cas
