ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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TRAVELZOO INC | AZZURRO CAPITAL INC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: New York Date: 10/5/2009
Industry: Computer Services Law Firm: Armstrong Teasdale;Bryan Cave Sector: Technology

Exhibit 10.2

ASSET PURCHASE AGREEMENT

by and among

TRAVELZOO INC.,

TRAVELZOO (ASIA PACIFIC) LIMITED,

AZZURRO CAPITAL INC.

And

A Buyer Entity to be Designated by

AZZURRO CAPITAL INC.

Dated September 30, 2009

TABLE OF CONTENTS

		Page

Article I DEFINITIONS		1

1.1	“Acquisition Proposal”	1
1.2	“Affiliate”	1
1.3	“Agreement”	2
1.4	“Asia Pacific Business”	2
1.5	“Assumed Contracts”	2
1.6	“Assumed Liabilities”	2
1.7	“Arbitrator”	2
1.8	“Accounting Firm”	2
1.9	“Business”	2
1.10	“Business Day”	2
1.11	“Buyer”	2
1.12	“Closing”	2
1.13	“Closing Balance Sheet”	2
1.14	“Closing Date”	2
1.15	“Code”	3
1.16	“Contract”	3
1.17	“Effective Time”	3
1.18	“Employee”	3
1.19	“Encumbrances”	3
1.20	“Excluded Assets”	3
1.21	“Excluded Liabilities”	3
1.22	“Excluded Party”	3
1.23	“GAAP”	3
1.24	“Hosting Agreement”	3
1.25	“Indemnifying Party”	3
1.26	“Indemnity Basket”	3
1.27	“Indemnity Cap”	3
1.28	“Injured Party”	3
1.29	“Intellectual Property”	3
1.30	“IRS”	4
1.31	“Japan Affiliate”	4
1.32	“Japan Purchase Agreement”	4
1.33	“Japan Purchased Assets”	4
1.34	“Law” or “Laws”	4
1.35	“License Agreement”	4
1.36	“Loss” or “Losses”	4
1.37	“Material Adverse Effect”	4
1.38	“Net Working Capital”	4
1.39	“Notice of Claim”	4
1.40	“Notice of Dispute”	4
1.41	“Notice of Intent to Exercise”	4
1.42	“Notice Period”	4

1.43	“Option Agreement”	4
1.44	“Ordinary Course”	5
1.45	“Party”	5
1.46	“Person”	5
1.47	“Permitted Encumbrances”	5
1.48	“Post-Closing Periods”	5
1.49	“Pre-Closing Periods”	5
1.50	“Purchase Price”	5
1.51	“Purchased Assets”	5
1.52	“Referral Agreement”	5
1.53	“Records”	5
1.54	“Representatives”	5
1.55	“Seller”	5
1.56	“Seller Subsidiaries”	6
1.57	“Solicitation Period End-Date”	6
1.58	“Straddle Period”	6
1.59	“Superior Proposal”	6
1.60	“Tax” or “Taxes”	6
1.61	“Tax Returns”	6
1.62	“Territory”	6
1.63	“Total Current Assets”	6
1.64	“Total Current Liabilities”	6
1.65	“Transition Services Agreement”	6
1.66	“Travelzoo”	6
1.67	“Voting Agreement”	7

Article II PURCHASE AND SALE OF THE BUSINESS		7

2.1	Transfer of Assets and Liabilities	7
2.2	Consideration	7
2.3	Closing	7
2.4	Purchase Price Adjustment	7
2.5	Taxes	9
2.6	Allocation of Purchase Price	10
2.7	Completion of Transfers	10
2.8	Excluded Liabilities	11
2.9	Further Assurances	11

Article III REPRESENTATIONS AND WARRANTIES OF SELLER AND TRAVELZOO		11

3.1	Seller and Seller Subsidiaries Existence and Power	11
3.2	Seller Valid and Enforceable Agreement; Authorization	12
3.3	Ownership and Capitalization of Seller Subsidiaries	12
3.4	Taxes	12
3.5	Litigation	13
3.6	Condition of Real and Personal Property	13
3.7	Contracts	13

3.8	Title	13
3.9	Licenses and Permits	14
3.10	Compliance with Laws	14
3.11	Labor Matters	14
3.12	Intellectual Property Matters	14
3.13	Brokers, Finders	14
3.14	Travelzoo Existence and Power	14
3.15	Travelzoo Valid and Enforceable Agreement; Authorization	15
3.16	No Other Representations or Warranties	15

Article IV REPRESENTATIONS AND WARRANTIES OF BUYER		15

4.1	Existence and Power	15
4.2	Valid and Enforceable Agreement; Authorization	16
4.3	Brokers, Finders	16
4.4	Litigation	16
4.5	Funds	16
4.6	No Knowledge of Breach of Seller Representation	16
4.7	No Other Representations or Warranties	17

Article V REPRESENTATIONS AND WARRANTIES OF AZZURRO		17

5.1	Existence and Power	17
5.2	Valid and Enforceable Agreement; Authorization	17
5.3	Brokers, Finders	18
5.4	Litigation	18
5.5	Funds	18
5.6	No Knowledge of Breach of Seller Representation	18
5.7	No Other Representations or Warranties	18

Article VI ADDITIONAL COVENANTS OF THE PARTIES		18

6.1	Conduct of Business Until Closing	18
6.2	Access Pending Closing	19
6.3	Books and Records	19
6.4	Confidentiality; Announcements	19
6.5	Advertiser and Subscriber Information	21
6.6	Filings; Cooperation	21
6.7	Obligations with Respect to Employees	21
6.8	Acquisition Proposals	22

Article VII CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND AZZURRO		26

7.1	Accuracy of Representations and Warranties and Performance of Obligations	26
7.2	Consents and Approvals	27
7.3	No Contrary Judgment or Litigation	27
7.4	Japan Purchase Agreement	27

iii

7.5	Deliveries	27
7.6	No Material Adverse Effect	28
7.7	Due Diligence and Disclosure Schedules	28
7.8	Formation of Buyer	28
Article VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER		29
8.1	Accuracy of Representations and Warranties and Performance of Obligations	29
8.2	Consents and Approvals	29
8.3	No Contrary Judgment	29
8.4	Deliveries	29
8.5	Japan Purchase Agreement	30
8.6	Expiration of the Solicitation Period End-Date	30
Article IX INDEMNIFICATION		30
9.1	Indemnification by Seller	30
9.2	Indemnification by Buyer	31
9.3	Notice and Payment of Losses	31
9.4	Defense of Third-Party Claims	32
9.5	Survival of Representations and Warranties	32
9.6	Limitation on Indemnification	33
9.7	Characterization of Indemnity Payments	34
9.8	Exclusive Remedy	35
Article X MISCELLANEOUS PROVISIONS		35
10.1	Notice	35
10.2	Termination; Termination Fee	36
10.3	Entire Agreement	37
10.4	Severability	37
10.5	Assignment; Binding Agreement	37
10.6	Expenses	37
10.7	Counterparts	37
10.8	Headings; Interpretation	38
10.9	Governing Law	38
10.10	Arbitration	38
10.11	Disclosure Generally	39
10.12	No Third Party Beneficiaries or Other Rights	39
10.13	Knowledge	39
10.14	Travelzoo Guarantee	39

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is entered into as of this 30 ^th day of September, 2009, by and between TRAVELZOO, INC., a Delaware corporation (“Travelzoo”), TRAVELZOO (ASIA PACIFIC) LIMITED, a company organized under the laws of Hong Kong and a wholly-owned subsidiary of Travelzoo (“Seller”), and AZZURRO CAPITAL INC., a Cayman Islands corporation (“Azzurro”), for itself and for the benefit of a subsidiary of Azzurro to be formed for the purpose of completing the transactions described herein (“Buyer”) (provided, that Buyer shall execute, deliver and become a party to this Agreement at Closing). Capitalized terms are defined in Article I.

RECITALS

A. The Buyer desires to purchase the Purchased Assets from Seller and to assume the Assumed Liabilities, on the terms and conditions set forth herein; and

B. Seller desires to sell the Purchased Assets and to assign the Assumed Liabilities to Buyer, on the terms and conditions set forth herein; and

C. Azzurro, for the benefit of a company organized under the laws of Japan which will be a wholly-owned subsidiary of Azzurro (the “Japan Affiliate”), is entering into an Asset Purchase Agreement (the “Japan Purchase Agreement”), dated as of the date hereof, pursuant to which the Japan Affiliate will acquire the Purchased Assets referred to therein (the “Japan Purchased Assets”) and will assume the Assumed Liabilities referred to therein; and

D. Travelzoo, which is the parent company of the Seller, will enter into additional agreements, as of Closing, with Azzurro, the Buyer and the Japan Affiliate, relating to the transactions provided for herein and in the Japan Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants, representations, warranties, conditions, and agreements hereinafter expressed, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Without limiting the effect of any other terms defined in the text of this Agreement, the following words shall have the meaning given them in this Article I:

1.1 ““ Acquisition Proposa l” has the meaning set forth in Section 6.8(a).

1.2 “ Affiliate ” means, with respect to any Person, any Person which is controlling, controlled by, or under common control with, directly or indirectly through any Person, the Person referred to, and, if the Person referred to is a natural person, any member of such Person’s immediate family. The term “control” (including, with

correlative meaning, the terms “controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

1.3 “ Agreement ” means this Agreement as executed on the date hereof and as amended or supplemented in accordance with the terms hereof, including all Schedules and Exhibits hereto, as attached hereto at the time of signing and as subsequently updated or amended by Travelzoo, subject to approval, in their sole discretion, by Azzurro or the Buyer of such updates or amendments.

1.4 “ Asia Pacific Business ” means the Business referred to herein and the Business referred to in the Japan Purchase Agreement, collectively.

1.5 “ Assumed Contracts ” means those Contracts to which Seller is a party or by which it is bound as of the Effective Time and which are exclusively related to the Business. For the avoidance of doubt, the Assumed Contracts include all of those Contracts listed on Section 1.5 and Section 3.7 of the Disclosure Schedules.

1.6 “ Assumed Liabilities ” means all of the debts, liabilities and obligations of Seller as of the Effective Time listed on Section 1.6 of the Disclosure Schedules or arising out of or pertaining to the Assumed Contracts.

1.7 ““ Arbitrator ” shall have the meaning Section 10.9.

1.8 “ Accounting Firm ” shall have the meaning Section 2.4(c).

1.9 “ Business ” means the business of publishing travel and entertainment offers from various travel and entertainment companies by means of the internet, email newsletter and alert services and similar media, in the Territory, as such business has been conducted by Seller and the Seller Subsidiaries, but not including the business related to the fly.com website and domain name.

1.10 “ Business Day ” means any day which is not a Saturday, Sunday or a legal holiday in the State of New York, United States of America.

1.11 “ Buyer ” has the meaning set forth in the preamble.

1.12 “ Closing ” means the consummation of the transactions contemplated by this Agreement, as provided for in Section 2.3.

1.13 “ Closing Balance Sheet ” has the meaning set forth in Section 2.4(a).

1.14 “ Closing Date ” means such date as shall be mutually agreed upon by the Parties (which shall in any event be within five (5) Business Days from the satisfaction or waiver of all applicable conditions to Closing set out herein).

1.15 “ Code ” means the United States Internal Revenue Code of 1986, as amended.

1.16 “ Contract ” means any contract, agreement, lease, indenture, mortgage, deed of trust, evidence of indebtedness, binding commitment or instrument to which Seller or the Seller Subsidiaries (in respect of the Business) is a party or by which it is bound.

1.17 “ Effective Time ” means the effective time of the Closing, which shall be deemed to be as of 11:59 p.m. Hong Kong Time on the Closing Date.

1.18 “ Employee ” means any person that is a full-time employee of the Business working for Seller or the Seller Subsidiaries on the Closing Date.

1.19 “ Encumbrances ” means mortgages, liens, charges, claims, security interests, easements or other encumbrances.

1.20 “ Excluded Assets ” means all of the assets, properties, rights and interests of Seller listed in Section 1.20 of the Disclosure Schedule.

1.21 “ Excluded Liabilities ” means those debts, liabilities and obligations of Seller listed on Section 1.21 of the Disclosure Schedules.

1.22 “ Excluded Party ” has the meaning set forth in Section 6.8(b).

1.23 “ GAAP ” means generally accepted accounting principles in the United States.

1.24 “ Hosting Agreement ” has the meaning set forth in Section 7.5(d).

1.25 “ Indemnifying Party ” has the meaning set forth in Section 9.3.

1.26 “ Indemnity Basket ” has the meaning set forth in Section 9.6(a).

1.27 “ Indemnity Cap ” has the meaning set forth in Section 9.6(c).

1.28 “ Injured Party ” has the meaning set forth in Section 9.3.

1.29 “ Intellectual Property ” means patents, inventions, designs, models, know-how, trade secrets, trademarks, trade dress, service marks, copyrights, business names, source codes, domain names and other material business identifiers, registrations and applications and all renewals of the foregoing and rights to apply for any of the foregoing, and all the goodwill associated therewith, and rights to sue or take any other action with respect to any past or future infringement, misappropriation, dilution or other violation of any rights with respect to the foregoing. This term does not include non-proprietary information, know-how or processes otherwise available to the industry or public, or rights obtained pursuant to licenses associated with software and

other intellectual property generally made available for purchase or use by industry or the public.

1.30 “ IRS ” means the United States Internal Revenue Service.

1.31 “ Japan Affiliate ” has the meaning set forth in the Recitals.

1.32 “ Japan Purchase Agreement ” has the meaning set forth in the Recitals.

1.33 “ Japan Purchased Assets ” has the meaning set forth in the Recitals.

1.34 “ Law ” or “ Laws ” means any statute, law, ordinance, decree, order, injunction, rule, directive, or regulation of any government or quasi-governmental authority, and includes rules and regulations of any regulatory or self-regulatory authority compliance with which is required by law, in effect on the date hereof in the Territory.

1.35 “ License Agreement ” has the meaning set forth in Section 7.5(b).

1.36 “ Loss ” or “ Losses ” means each and all of the following items to the extent actually paid or incurred: losses, liabilities, damages, judgments, fines, costs, penalties, amounts paid in settlement and reasonable out-of-pocket costs and expenses incurred in connection therewith (including, without limitation, costs and expenses of suits and proceedings, and reasonable fees and disbursements of counsel), but net of any insurance proceeds received or receivable by the Injured Party with respect to such Losses, and net of any tax benefit received or receivable by the Injured Party in respect of such Losses. Notwithstanding anything to the contrary herein, in no event shall special, speculative, incidental, punitive, indirect or consequential damages or damages for lost profits be deemed to be “Losses”, except that the foregoing exclusion shall not apply to the extent such items are included in a third-party claim.

1.37 “ Material Adverse Effect ” means a material adverse effect on the assets, business, financial condition or results of operations of the Business taken as a whole.

1.38 “ Net Working Capital ” has the meaning set forth in Section 2.4(a).

1.39 “ Notice of Claim ” has the meaning set forth in Section 9.3.

1.40 “ Notice of Dispute ” has the meaning set forth in Section 2.4(b).

1.41 “ Notice of Intent to Exercise ” has the meaning set forth in Section 5.9(d).

1.42 “ Notice Period ” has the meaning set forth in Section 6.8(e).

1.43 “ Option Agreement ” means the Option Agreement, dated this date, between Azzurro and Travelzoo, relating to, among other things, the Purchased Assets and the Buyer.

1.44 “ Ordinary Course ” means, with respect to the Business, the ordinary course of commercial operations customarily engaged in by Seller or the Seller Subsidiaries with respect to the Business and consistent with past or current practice.

1.45 “ Party ” means Seller or the Buyer, and “ Parties ” means both of them.

1.46 “ Person ” means an individual, general or limited partnership, corporation (including any non-profit corporation), business trust, limited liability company, limited liability partnership, joint stock company, estate, trust, association, organization, unincorporated association, joint venture or other entity.

1.47 “ Permitted Encumbrances ” means, collectively, (a) Encumbrances that are disclosed in the Disclosure Schedules, (b) liens for Taxes, fees, levies, duties or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings, (c) liens for mechanics, materialmen, laborers, employees, suppliers or similar liens arising by operation of Law which are not material to the Business as a whole, (d) rights or liens of any lessors with respect to any of the leased real property or leased personal property and (e) in the case of real property, and only to the extent such items do not materially and adversely impact the operation of such real property in the Ordinary Course, any matters, restrictions, covenants, conditions, limitations, rights, rights of way, encumbrances, encroachments, reservations, easements, agreements and other matters of record, such state of facts of which an accurate survey or inspection of the property would reveal, and the provisions of any Law.

1.48 “ Post-Closing Periods ” means all taxable periods of Seller commencing after the Effective Time and the portion of any Straddle Period ending after the Effective Time.

1.49 “ Pre-Closing Periods ” means all taxable periods of Seller ending on or before the Effective Time and the portion of any Straddle Period commencing prior to the Effective Time.

1.50 “ Purchase Price ” has the meaning set forth in Section 2.2.

1.51 “ Purchased Assets ” means the assets owned by Seller listed in Section 1.51 of the Disclosure Schedules, and all other assets of the Seller other than the Excluded Assets.

1.52 “ Referral Agreement ” has the meaning set forth in Section 7.5(e).

1.53 “ Records ” has the meaning set forth in Section 6.3.

1.54 “ Representatives ” means directors, officers, employees, Affiliates, investment bankers, attorneys, accountants and other advisors or representatives.

1.55 “ Seller ” has the meaning set forth in the preamble.

1.56 “ Seller Subsidiaries ” means, collectively, the following entities, all of which are direct or indirect wholly-owned subsidiaries of Seller, and whose shares and other equity ownership interests are included within the Purchased Assets hereunder: (i) Travelzoo (Australia) Pty Limited; (ii) Travelzoo (Hong Kong) Limited; (iii) Travelzoo China Limited; and (iv) Beijing Travelzoo Travel Information Technology Limited.

1.57 “ Solicitation Period End-Date ” has the meaning set forth in Section 6.8(a).

1.58 “ Straddle Period ” means any taxable period of Seller that begins before and ends after the Effective Time.

1.59 “ Superior Proposal ” has the meaning set forth in Section 6.8(c).

1.60 “ Tax ” or “ Taxes ” means all material taxes, charges, fees, levies, or other like governmental assessments applicable to the Business in the countries in which it operates, including, without limitation, all material federal, possession, state, city, county and foreign (or governmental unit, agency, or political subdivision of any of the foregoing) income, profits, employment (including unemployment insurance and employee income tax withholding), franchise, gross receipts, sales, use, transfer, stamp, occupation, property, capital, severance, premium, windfall profits, tariff, customs, duties, ad valorem, value-added and excise taxes, and any other governmental charges of the same or similar nature; and all penalties, additions to tax and interest relating to any such taxes, premiums or charges. Any one of the foregoing Taxes shall be referred to sometimes as a “Tax”.

1.61 “ Tax Returns ” means all returns, reports, estimates, declarations, claims for refund, information returns or statements relating to, or required to be filed in connection with any Taxes, including any schedule or attachment thereto, and including any amendment or supplement thereof.

1.62 “ Territory ” means all countries located in those time zones that are more than five (5) hours ahead of Greenwich Mean Time, based on Standard time, including, without limitation, India and Pakistan, but excluding Russia.

1.63 “ Total Current Assets ” means “total current assets” plus “deposits, less current portion” as such line items are defined and reported on Seller’s consolidated balance sheet in the Ordinary Course and determined in accordance with GAAP.

1.64 “ Total Current Liabilities ” means “total current liabilities” plus “deferred rent” plus “commitments and contingencies” as such line items are defined and reported on Seller’s consolidated balance sheet in the Ordinary Course and determined in accordance with GAAP.

1.65 “ Transition Services Agreement ” has the meaning set forth in Section 7.5(g).

1.66 “ Travelzoo ” has the meaning set forth in the preamble.

1.67 “ Voting Agreement ” has the meaning set forth in Section 7.5(f).

ARTICLE II

PURCHASE AND SALE OF THE BUSINESS

2.1 Transfer of Assets and Liabilities . Upon the terms and subject to the conditions of this Agreement, at the Closing and as of the Effective Time:

(a) Seller shall sell, assign, transfer and convey to the Buyer, and the Buyer shall purchase, acquire and accept from Seller, all of Seller’s right, title and interest in and to the Purchased Assets, free and clear of all Encumbrances other than Permitted Encumbrances; and

(b) Buyer shall assume all of the obligations of Seller in respect of the Assumed Liabilities.

2.2 Consideration . The consideration that the Buyer shall pay Seller for the Purchased Assets and other rights of the Buyer hereunder shall be Two Million Dollars(US$2,000,000.00)(the “ Purchase Price ”), subject to adjustment as provided in Section 2.4 of this Agreement.

2.3 Closing . The Closing shall take place at 9:00 a.m., United States Central Time, on the Closing Date at the offices of Bryan Cave LLP, in St. Louis, Missouri, or at such other place or time, or in such other method (including via email or other electronic transmission), as the Parties may agree in writing. At Closing, Seller shall deliver or cause to be delivered to the Buyer possession of the Purchased Assets and the documents and other items identified in Article VII, and the Buyer shall deliver to Seller (a) by wire transfer of immediately available funds, in accordance with the wire transfer instructions set forth on Schedule 2.3 , the Purchase Price and (b) the documents and other items identified in Article VIII.

2.4 Purchase Price Adjustment .

(a) Promptly after the Closing Date, and in any event not later than thirty (30) calendar days following the Closing Date, Buyer shall prepare, or cause to be prepared, and deliver to Seller a consolidated balance sheet of Seller and the Seller Subsidiaries as of the Effective Time (the “ Closing Balance Sheet ”). Such Closing Balance Sheet shall be accompanied by a statement calculating the “ Net Working Capital ,” which shall be the Total Current Assets of the Business minus the Total Current Liabilities of the Business.

(b) Buyer shall permit Seller and its accountants to review promptly upon request all accounting records, work papers and computations used by Buyer in the preparation of such Closing Balance Sheet and the computation of Net Working Capital. If Seller disputes the Net Working Capital as calculated by Buyer, not more than forty-five (45) calendar days after the date Seller receive Buyer’s calculation thereof, Seller shall deliver to Buyer a notice of its objection to the Closing Balance

Sheet (such notice to contain a statement of the basis of Seller’s objection) (a “ Notice of Dispute ”). Seller hereby waives the right to assert any objection with respect to the Closing Balance Sheet that is not asserted in the Notice of Dispute delivered to Buyer by Seller within forty-five (45) calendar days after the delivery of the Closing Balance Sheet. If Seller fails to deliver a Notice of Dispute within such forty-five (45) calendar day period, Seller shall be deemed to have accepted the Closing Balance Sheet as prepared by Buyer.

(c) Upon receipt of a Notice of Dispute, Buyer shall promptly consult with Seller in good faith with respect to their specified points of disagreement in an effort to resolve the dispute. If any such dispute cannot be resolved by Buyer and Seller within thirty (30) calendar days (or longer, as mutually agreed by the Parties) after Buyer receives the Notice of Dispute, the Parties shall refer the dispute to a national accounting firm in the United States, as agreed by the Parties (the “ Accounting Firm ”), as an arbitrator to finally determine, as soon as practicable, and in any event within twenty (20) calendar days after such reference, all points of disagreement with respect to the calculation of the Net Working Capital. If the Parties fail to select an Accounting Firm within the thirty (30) calendar day period or any Accounting Firm selected by them shall not have agreed to perform the services called for hereunder, the Accounting Firm shall thereupon be selected in accordance with the International Rules of the American Arbitration Association, with preference being given to any independent, national accounting firm in the United States that has no material relationship with any of the Parties. For purposes of such arbitration, each Party shall submit a proposed calculation of the Net Working Capital. The Accounting Firm shall decide only those matters in dispute, and may not assign a value to any item in dispute which is either higher or lower than the respective calculations for such item submitted by the parties. The Accounting Firm shall apply the terms of Section 2.4 of this Agreement, and shall otherwise conduct the arbitration under such procedures as the Parties may agree or, failing such agreement, under then prevailing International Rules of the American Arbitration Association. The fees and expenses of the arbitration and the Accounting Firm incurred in connection with the calculation of the Net Working Capital shall be shared equally by the Parties; provided, that such fees and expenses shall not include, so long as a Party complies with the procedures of this Section 2.4, the other Party’s outside counsel or accounting fees. All determinations by the Accounting Firm shall be final, conclusive and binding with respect to the calculation of the Net Working Capital in the absence of fraud or manifest error.

(d) The Purchase Price shall be adjusted as follows, based on (i) the Net Working Capital set forth on the Closing Balance Sheet finally determined under this Section 2.4 and (ii) the Net Working Capital set forth on the Closing Balance Sheet finally determined under Section 2.4 of the Japan Purchase Agreement: Seller shall pay to Buyer the amount by which the total Net Working Capital set forth on both Closing Balance Sheets is less than Twenty Five Thousand Dollars (US$25,000), or Buyer shall pay to Seller the amount by which the total Net Working Capital set forth on both Closing Balance Sheets is greater than Seventy Five Thousand Dollars (US$75,000); provided that any such payment shall be allocated 55.6% to the Purchase Price hereunder and the remainder shall be allocated to the Purchase Price under the

Japan Purchase Agreement. Any payment so required to be made by Buyer or Seller shall be by transfer of immediately available funds not more than five (5) Business Days after final determination thereof.

2.5 Taxes .

(a) All customs, sales, use, value-added, gross receipts, registration, stamp duty or other similar transfer Taxes incurred in connection with the transfer and sale of the Purchased Assets as contemplated by the terms of this Agreement, including all recording or filing fees, notarial fees and other similar costs of Closing, that may be imposed upon, or payable, collectible or incurred, shall be borne by the Buyer. The parties agree to furnish or cause to be furnished to each other, upon request, as promptly as practical, such information (including reasonable access to books and records) and assistance as is reasonably necessary in an effort to allow Buyer to minimize all such Taxes.

(b) Except as provided in Section 2.5(a), any Taxes with respect to the Purchased Assets or the Business for any Pre-Closing Periods shall be borne by Seller. The Buyer shall be responsible for any Taxes with respect to the Purchased Assets or the Business for any Post-Closing Periods and for any Taxes to the extent set forth in Section 2.5(a). All Taxes collected by Seller from third parties prior to the Effective Time, including, but not limited to, sales and use Taxes and all payroll withholding Taxes, including both employee and employer portions, shall be paid by Seller to the appropriate governmental authority.

(c) Property Taxes covering any Straddle Period shall be pro-rated between Seller and the Buyer based upon the number of days in the Straddle Period ending as of the Effective Time and number of days in the Straddle Period ending after the Effective Time, respectively. The portion of such Tax that relates to the portion of such Tax period ending as of the Effective Time shall be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending as of the Effective Time and the denominator of which is the number of days in the entire Tax period.

(d) The Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practical, such information (including reasonable access to books and records) and assistance as is reasonably necessary for the filing of any Tax Return, the conduct of any Tax audit, and for the prosecution or defense of any claim, suit or proceeding relating to any Tax matter. The Buyer and Seller shall cooperate with each other in the conduct of any Tax audit or other Tax proceedings and each shall execute and deliver other documents as are reasonably necessary to carry out the intent of this Section 2.5(d). Any Tax audit or other Tax proceeding shall be deemed to be a third party claim subject to the procedures set forth in Section 9.4 of this Agreement.

(e) The Buyer shall promptly pay or shall cause prompt payment to be made to Seller of all refunds of Taxes and interest thereon received by, or credited

against any Tax liability of the Buyer or any Affiliate of the Buyer attributable to Taxes paid by Seller or its Affiliates with respect to any Pre-Closing Period. Seller shall promptly pay or shall cause prompt payment to be made to Buyer of all refunds of Taxes and interest thereon received by, or credited against any Tax liability of Seller or any Affiliate of the Seller attributable to Taxes paid by Buyer or its Affiliates with respect to any Post-Closing Period.

2.6 Allocation of Purchase Price . Within ninety (90) calendar days following the Closing, the Parties shall mutually agree to an allocation of the Purchase Price among the Purchased Assets. Seller and the Buyer shall report the acquisition of the Purchased Assets for all Tax purposes in a manner consistent with such allocation, and shall take no position inconsistent therewith or contrary thereto, unless required by Law. The allocation may not be amended or changed without the mutual written consent of the Parties. The Buyer and Seller hereby agree and acknowledge that such allocation shall be made in accordance with Section 1060 of the Code and the regulations thereunder.

2.7 Completion of Transfers .

(a) The entire beneficial interest in and to, and the risk of loss with respect to, the Purchased Assets, shall, regardless of when legal title thereto shall be transferred to the Buyer, pass to the Buyer at Closing as of the Effective Time. All operations of the Business shall be for the account of Seller up to and including the Effective Time and shall be for the account of the Buyer thereafter. In the event legal title to any of the Purchased Assets or the Assumed Liabilities is not transferred at Closing, Seller shall hold such Purchased Assets or Assumed Liabilities as nominee for the Buyer until completion of such transfers.

(b) In the event that the legal interest in any of the Purchased Assets or the Assumed Liabilities to be sold, assigned, transferred or conveyed pursuant to this Agreement, or any claim, right or benefit arising thereunder or resulting therefrom cannot be sold, assigned, transferred or conveyed hereunder as of the Closing Date because any waiting or notice period has not expired or any consents or approvals required for such sale, assignment, transfer or conveyance have not been obtained or waived, then the legal interest in such Purchased Assets or Assumed Liabilities shall not be sold, assigned, transferred or conveyed unless and until such waiting or notice period shall have expired or until approval, consent or waiver thereof is obtained. In such event, Seller, at its expense, and the Buyer shall and shall cause its designated Affiliates, at their expense, to use commercially reasonable efforts to cooperate in obtaining such consents or approvals as may be necessary to complete such transfers as soon as practicable. Except as provided in Section 7.2, the failure of Seller to obtain any required consents or approvals prior to Closing shall not affect the Buyer’s obligations to close under this Agreement or to pay, or cause to be paid, the Purchase Price. Nothing in this Agreement shall be construed as an attempt to assign to the Buyer any legal interest in any of the Purchased Assets or the Assumed Liabilities which, as a matter of Law or by the terms of any legally binding contract, engagement

or commitment to which Seller is subject, is not assignable without the consent of any other Party, unless such consent shall have been given.

(c) Pending the assignments, conveyances and transfers referred to in Section 2.7(b), Seller shall hold any such non-assigned, non-conveyed and non-transferred Purchased Assets or Assumed Liabilities for the benefit and at the risk of the Buyer and shall cooperate with the Buyer in any Lawful and reasonable arrangements designed to provide the benefits of ownership thereof to the Buyer.

2.8 Excluded Liabilities . Seller acknowledges that the Excluded Liabilities are the obligations of Seller and not of the Buyer, and the Buyer is not assuming any of the Excluded Liabilities under the terms of this Agreement.

2.9 Further Assurances . From and after the Closing, the Parties shall do such acts and execute such documents and instruments as may be reasonably required to make effective the transactions contemplated hereby.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER AND TRAVELZOO

Seller hereby makes the representations and warranties set forth in Sections 3.1 through 3.13, each of which is true and correct on the date hereof and as of the Closing Date, and which shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein. Travelzoo hereby makes the representations and warranties set forth in Sections 3.13 through 3.15, each of which is true and correct on the date hereof and as of the Closing Date, and which shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein.

3.1 Seller and Seller Subsidiaries Existence and Power .

(a) Seller has the corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. Seller has the corporate power and authority to transfer the Purchased Assets and to consummate the transactions contemplated hereby.

(b) Seller is duly organized, validly existing and in good standing under the laws of Hong Kong. The Seller Subsidiaries are each duly organized, validly existing and in good standing under the laws of their respective jurisdictions of formation or organization, and are duly qualified in each jurisdiction where the conduct of their Business so requires except where the failure to be so qualified would not have a Material Adverse Effect.

(c) Seller and the Seller Subsidiaries are not a party to, subject to or bound by any material Contract (including the Assumed Contracts), Encumbrance, Law or organizational document (i.e. articles, charters, bylaws, operating agreements,

shareholders agreements and other similar agreements, documents and instruments) which would (i) be breached or violated or their obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) in any material respect by the execution or delivery by Seller of this Agreement or the performance by Seller of the transactions contemplated by this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as set forth on Section 3.1 of the Disclosure Schedule or otherwise provided for herein, no permit, consent (including any consent with respect to the Assumed Contracts), waiver, approval or authorization of, or declaration to or filing or registration with, any governmental or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by Seller or the consummation by Seller of the transactions contemplated hereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain does not have and will not have a Material Adverse Effect. The transactions contemplated hereby will not result in the creation of any material Encumbrance against the Purchased Assets.

(d) Seller and the Seller Subsidiaries each has the power and authority to own, lease and use its assets and to transact the business in which it is engaged, and each holds all material authorizations, franchises, licenses and permits required therefor.

3.2 Seller Valid and Enforceable Agreement; Authorization . This Agreement has been duly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally, and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary corporate action on the part of Seller.

3.3 Ownership and Capitalization of Seller Subsidiaries . Seller directly or indirectly owns all of the issued and outstanding stock or other equity interests of the Seller Subsidiaries, all of which stock or other equity interests are duly authorized, validly issued, fully paid and non-assessable, and all of which are solely owned beneficially and of record by Seller (provided, that Beijing Travelzoo Travel Information Technology Limited is solely owned beneficially and of record by Travelzoo China Limited). There are no options, warrants, calls, commitments, convertible securities (debt, equity or otherwise), rights (including conversion, preemptive, participation or stock appreciation rights) or agreements relating to the stock or other equity interests of the Seller Subsidiaries. Seller has no other subsidiaries, other than the Seller Subsidiaries as described herein.

3.4 Taxes . Except as set forth on Section 3.4(a) of the Disclosure Schedules, all Tax Returns in respect of Pre-Closing Periods required to be filed with respect to the Purchased Assets or the Seller Subsidiaries have been filed in a timely manner (taking into account all extensions of due dates) and all Taxes for Pre-Closing Periods affecting

the Purchased Assets or the Seller Subsidiaries (other than Excluded Liabilities), that are due and payable have been paid. No deficiencies for any Taxes (including penalties and interest) in respect of Purchased Assets or the Seller Subsidiaries have been asserted or assessed in writing which remain unpaid and which would have a Material Adverse Effect.

3.5 Litigation . Except as set forth on Section 3.5 of the Disclosure Schedules, there are no material actions, suits or proceedings pending or, to Seller’s knowledge, threatened against Seller or the Seller Subsidiaries (in respect of the Business). Seller and the Seller Subsidiaries (in respect of the Business) are not subject to any order, judgment, writ, injunction or decree of any court or governmental or regulatory authority or body (excluding any such matters of general applicability or applicable to entities situated similarly to Seller or the Seller Subsidiaries rather than to them specifically).

3.6 Condition of Real and Personal Property .

(a) All of the leased real property which are material to the conduct of the Business have been maintained in reasonable condition in the Ordinary Course in a manner consistent with past maintenance practices of the Business.

(b) All tangible personal property which is material to the conduct of the Business has been maintained in reasonable operating condition and repair, in the Ordinary Course in a manner consistent with past maintenance practices of the Business.

3.7 Contracts .

(a) Section 3.7 sets forth a list (including all amendments) of all (i) Assumed Contracts and (ii) Contracts of the Seller Subsidiaries, which require payments by Seller, the Seller Subsidiaries or another party thereto in excess of $10,000 during any calendar year or which are otherwise material to the Business (such listed Contracts being referred to as the “ Material Contracts ”).

(b) The terms of all Material Contracts have been complied with in all material respects by Seller, the Seller Subsidiaries and, to Seller’s knowledge, by the other parties to such Material Contract. The Material Contracts are in full force and effect, and Seller and the Seller Subsidiaries have not waived any of their material rights thereunder.

(c) Neither the Seller nor the Seller Subsidiaries have given or received any written notice of any intention to terminate, repudiate or disclaim any Material Contract.

3.8 Title . Seller is the sole owner of all right, title and interest in and to the Purchased Assets. Each of the Seller Subsidiaries is the sole owner of all right, title and interest in and to the assets, rights and properties that it purports to own.

3.9 Licenses and Permits . Except as set forth on Section 3.9 of the Disclosure Schedules, Seller and the Seller Subsidiaries (in respect of the Business) have all governmental permits, licenses and authorizations necessary under Law for the conduct of the Business as presently conducted in the Ordinary Course, and all such permits, licenses and authorizations are valid and in full force and effect in all material respects. Seller and the Seller Subsidiaries are, and at all times have been, in compliance in all material respects with the terms and requirements of all such permits, licenses and authorizations. Neither Seller nor and the Seller Subsidiaries have received any notice of any revocation or non-renewal of such permits, licenses and authorizations.

3.10 Compliance with Laws . Except as set forth on Section 3.10 of the Disclosure Schedules, Seller and the Seller Subsidiaries (in respect of the Business) are in compliance in all material respects with all applicable Laws, rules and regulations currently in effect.

3.11 Labor Matters .

(a) Except as set forth on Section 3.11 of the Disclosure Schedule, there are no material controversies existing, pending or, to Seller’s knowledge, threatened with any association or union or collective bargaining representative of the Employees of the Business.

(b) Except as set forth on Section 3.11 of the Disclosure Schedule, there is no charge or complaint relating to unfair labor practice pending against Seller or the Seller Subsidiaries (in connection with its operation of the Business), nor is there any labor strike, work stoppage, grievance or other labor dispute pending or, to Seller’s knowledge, threatened against Seller or the Seller Subsidiaries in relation to the Business.

3.12 Intellectual Property Matters . All domain names and web site addresses included in the Intellectual Property have been registered in the name of Seller or the Seller Subsidiaries, as applicable, and are in compliance in all material respects with all formal legal requirements.

3.13 Brokers, Finders . No finder, broker, agent, or other intermediary acting on behalf of Seller or Travelzoo is entitled to a commission, fee, or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby.

3.14 Travelzoo Existence and Power .

(a) Travelzoo has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

(b) Travelzoo is duly organized, validly existing and in good standing under the laws of the State of Delaware, United States of America.

(c) Travelzoo is not a party to, subject to or bound by any material Contract, Encumbrance, Law or organizational document which would (i) be breached or violated or its obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) in any material respect by the execution or delivery by it of this Agreement or the performance by Seller of the transactions contemplated by this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as set forth on Section 3.14 of the Disclosure Schedule or otherwise provided for herein, no permit, consent, waiver, approval or authorization of, or declaration to or filing or registration with, any governmental or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by Travelzoo.

3.15 Travelzoo Valid and Enforceable Agreement; Authorization . This Agreement has been duly executed and delivered by Travelzoo and constitutes a legal, valid and binding obligation of Travelzoo, enforceable against Travelzoo in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally, and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary corporate action on the part of Travelzoo.

3.16 No Other Representations or Warranties . Except for the representations and warranties contained in this Article III, neither Seller, Travelzoo nor any other Person, makes any other express or implied representation or warranty on behalf of Seller, Travelzoo or any other Affiliate of Seller or Travelzoo with respect to the Business, the Purchased Assets, the Assumed Liabilities or otherwise with respect to the subject matter of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

The Buyer hereby makes the following representations and warranties to Seller, each of which is true and correct as of the Closing Date, and which shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein.

4.1 Existence and Power .

(a) The Buyer has the corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

(b) The Buyer is duly incorporated, validly existing and in good standing under the laws of Hong Kong.

(c) The Buyer is not a party to, subject to or bound by any material Contract, Encumbrance, Law or organizational document (i.e. articles, charters, bylaws,

operating agreements, shareholders agreements and other similar agreements, documents and instruments) which would prevent Buyer from performing its obligations hereunder or consummating the transactions contemplated hereby. Except as set forth on Section 4.1 of the Disclosure Schedules or otherwise provided for herein, no permit, consent, waiver, approval or authorization of, or declaration to or filing or registration with, any governmental or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by the Buyer or the consummation by the Buyer of the transactions contemplated hereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain does not have and will not have a material adverse effect on Buyer’s ability to perform its obligations hereunder or consummate the transactions contemplated hereby.

4.2 Valid and Enforceable Agreement; Authorization . This Agreement constitutes a legal, valid and binding obligation of the Buyer, enforceable against it in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary action on the part of the Buyer. The Buyer has full authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

4.3 Brokers, Finders . No finder, broker, agent, or other intermediary acting on behalf of the Buyer is entitled to a commission, fee, or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby.

4.4 Litigation . There are no actions, suits, proceedings, orders or investigations pending or threatened against the Buyer or any of the Buyer’s Affiliates, at Law or in equity, which if adversely determined would have a material adverse effect on the Buyer’s performance under this Agreement or the consummation of the transactions contemplated hereby. There are no injunctions, decrees or unsatisfied judgments outstanding against or related to the Buyer which would have a material adverse effect on the Buyer’s performance under this Agreement or the consummation of the transactions contemplated hereby.

4.5 Funds . The Buyer has, and at all times will have, sufficient funds on hand or available pursuant to unconditional commitments to pay the Purchase Price and any adjustment thereof.

4.6 No Knowledge of Breach of Seller Representation . As of the Closing, Buyer has no knowledge of any current, material breach by Seller of Seller’s representations or warranties contained in this Agreement or any other agreements contemplated hereby. For purposes of this provision, Buyer’s knowledge means the actual knowledge at Closing of Ralph Bartel.

4.7 No Other Representations or Warranties . Except for the representations and warranties contained in this Article IV, neither the Buyer, nor any other Person, makes any other express or implied representation or warranty on behalf of the Buyer.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF AZZURRO

Azzurro hereby makes the following representations and warranties to Seller, each of which is true and correct on the date hereof and as of the Closing Date, and which shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein.

5.1 Existence and Power .

(a) Azzurro has the corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

(b) Azzurro is duly incorporated, validly existing and in good standing under the laws of the Cayman Islands.

(c) Azzurro is not a party to, subject to or bound by any material Contract, Encumbrance or Law or organizational document (i.e. articles, charters, bylaws, operating agreements, shareholders agreements and other similar agreements, documents and instruments) which would prevent Azzurro from performing its obligations hereunder or consummating the transactions contemplated hereby. Except as set forth on Section 5.1 of the Disclosure Schedules or otherwise provided for herein, no permit, consent, waiver, approval or authorization of, or declaration to or filing or registration with, any governmental or regulatory authority or third party is required in connection with the execution, delivery or performance of this Agreement by Azzurro or the consummation by Azzurro of the transactions contemplated hereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain does not have and will not have a material adverse effect on Azzurro’s ability to perform its obligations hereunder or consummate the transactions contemplated hereby.

5.2 Valid and Enforceable Agreement; Authorization . This Agreement constitutes a legal, valid and binding obligation of Azzurro, enforceable against it in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary action on the part of Azzurro. Azzurro has full authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

5.3 Brokers, Finders . No finder, broker, agent, or other intermediary acting on behalf of Azzurro is entitled to a commission, fee, or other compensation in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby.

5.4 Litigation . There are no actions, suits, proceedings, orders or investigations pending or threatened against Azzurro or any of Azzurro’s Affiliates, at Law or in equity, which if adversely determined would have a material adverse effect on Azzurro’s performance under this Agreement or the consummation of the transactions contemplated hereby. There are no injunctions, decrees or unsatisfied judgments outstanding against or related to Azzurro which would have a material adverse effect on Azzurro’s performance under this Agreement or the consummation of the transactions contemplated hereby.

5.5 Funds . The Buyer has, and at all times will have, sufficient funds on hand or available pursuant to unconditional commitments to pay the Purchase Price and any adjustment thereof. Additionally, Azzurro will cause the Buyer and the Japan Affiliate to have, at the Closing Date, sufficient funds on hand, in an aggregate amount no less than Eight Million Dollars (US$8,000,000.00), to execute their business plans with respect to the Purchased Assets and the Japan Purchased Assets.

5.6 No Knowledge of Breach of Seller Representation . As of the Closing, Azzurro has no knowledge of any current, material breach by Seller of Seller’s representations or warranties contained in this Agreement or any other agreements contemplated hereby. For purposes of this provision, Azzurro’s knowledge means the actual knowledge at Closing of Ralph Bartel.

5.7 No Other Representations or Warranties . Except for the representations and warranties contained in this Article V, neither Azzurro, nor any other Person, makes any other express or implied representation or warranty on behalf of the Buyer.

ARTICLE VI

ADDITIONAL COVENANTS OF THE PARTIES

6.1 Conduct of Business Until Closing . Except as set forth on Schedule 6.1 or otherwise provided in this Agreement, or as Azzurro may otherwise consent to or approve in writing on and after the date hereof and prior to the Closing Date with respect to the Business, which consent shall not be unreasonably withheld, Seller agrees (in respect of the Business):

(a) (i) to conduct its business, operations, activities and practices in all material respects in accordance with past practice and (ii) to use commercially reasonable efforts to preserve its current business organization and existing business relationships and prospects in all material respects;

(b) neither to (i) change the overall character of the business, operations, activities and practices in any material way; nor (ii) except in the Ordinary

Course, sell, lease, or grant any option to sell or lease, give a security interest in or otherwise create any Encumbrance (other than a Permitted Encumbrance) on any material part of its assets;

(d) not to enter into any binding agreement or arrangement with the IRS (or any similar Tax authority), with respect to the Business, which relates to any period or periods after the Effective Time; or

(e) not to enter into any agreement (conditional or otherwise) to do any of the actions prohibited or restricted by any of the foregoing.

6.2 Access Pending Closing . Seller shall, at all reasonable times prior to Closing, make its facilities, properties, books and records (each in respect of the Business) available during normal business hours to the Buyer and Azzurro, their representatives, financial and legal advisors, lenders and auditors, and to furnish or cause to be furnished to such persons during such period all such information and data concerning the same as such persons may reasonably request. Notwithstanding the above, Seller may limit such access to the extent it reasonably deems necessary to avoid disruption of the Business.

6.3 Books and Records . From and after the Closing, the Buyer shall provide Azzurro, Seller and their Affiliates and their representatives with reasonable access, subject to customary restrictions and confidentiality obligations, for any reasonable purpose, including but not limited to (a) preparing Tax Returns or (b) defending any claim in respect of which a Notice of Claim has been served on Seller, during normal business hours, to all books and records related to the Purchased Assets, including, but not limited to, accounting and Tax records, sales and purchase documents, notes, memoranda, and any other electronic or written data (“ Records ”) pertaining or relating to the period prior to the Effective Time. To the extent deemed necessary by Seller and its Affiliates with respect to their other business operations, Seller and its Affiliates may retain copies of such Records prior to providing the originals to the Buyer, or, as soon as practicable after Closing, the Buyer shall provide to Seller and its Affiliates copies of all or any portion of such Records as requested by Seller and its Affiliates. Unless otherwise consented to in writing by Seller, the Buyer shall not, for a period of ten (10) years following the date hereof or such longer period as retention thereof is required by applicable Law, destroy, alter or otherwise dispose of (or allow the destruction, alteration or disposal of) any of the Records without first offering to surrender to Seller such Records.

6.4 Confidentiality; Announcements .

(a) The Buyer and Azzurro acknowledge that, in the course of their investigations of the Business, they and their representatives have and will become aware of confidential information and documents of the Business, and that their use of

such confidential information and documents, or communication of such information to third parties, prior to Closing, could be detrimental to Seller or the Business. Each of the Buyer and Azzurro covenants that prior to Closing all information and documents concerning the Business reviewed by them or their representatives in connection with this Agreement or the transactions contemplated hereby and, following either Closing or termination of this Agreement, all such information and documents to the extent related to any of the Excluded Assets or the Excluded Liabilities and any confidential information known to the Buyer or Azzurro (including through any employee) with respect to other businesses operated by Seller or any of its Affiliates, shall be maintained in confidence and shall not be disclosed or used by the Buyer, Azzurro or their representatives without Seller’s prior written consent, unless they can demonstrate that such information is (i) otherwise publicly available, (ii) required to be disclosed pursuant to judicial order, regulation or Law, or (iii) required to be disclosed by the rules of a securities exchange on which the Buyer or Azzurro may from time to time be listed, or (iv) disclosed to any Person that proposes to finance, in whole or in part, the Purchased Assets, solely for the purpose of permitting such party to evaluate the advisability of providing such financing. With respect to information and documents related to the Business, at Seller’s request in the event that the Closing shall not occur, and, with respect to information and documents related to the Excluded Assets, the Excluded Liabilities or other businesses operated by Seller or any of its Affiliates, as soon as practicable following Closing, (i) the Buyer and Azzurro shall, and shall cause their representatives to (to the extent reasonably practicable with respect to information and documents related to Excluded Assets, the Excluded Liabilities or other businesses operated by Seller or any of its Affiliates should the Closing occur), promptly destroy all information and documents concerning the Business, the Excluded Assets, the Excluded Liabilities or other businesses operated by Seller or any of its Affiliates, as the case may be (including any copies thereof or extracts therefrom), and (ii) the Buyer and Azzurro shall keep confidential and shall not use any such information or documents unless required to disclose such information or documents pursuant to judicial order, regulation or Law. In the event that the Buyer, Azzurro or any of their representatives becomes legally compelled to disclose any such information or documents as referred to in this paragraph, the Buyer shall provide Seller with prompt written notice before such disclosure, sufficient to enable Seller either to seek a protective order, at its expense, or other appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section 6.4 or both.

(b) Following the Closing, Seller shall maintain, and shall cause its Affiliates to maintain, in confidence any information it or they may have in relation to the Business, other than with respect to the Excluded Assets and the Excluded Liabilities, and such information shall not be disclosed or used by Seller or its Affiliates without the Buyer’s prior written consent, unless such information is (i) otherwise publicly available (except as a result of a breach hereof by Seller or its affiliates), (ii) required to be disclosed pursuant to judicial order, regulation or Law or (iii) required to be disclosed by the rules of the NASDAQ Global Select Market or any other applicable exchange or quotation system. In the event that Seller or any of its Affiliates or representatives become legally compelled to disclose any such information or documents as referred to in this paragraph, Seller shall, to the extent reasonably practicable, provide the Buyer

with prompt written notice before such disclosure, sufficient to enable the Buyer either to seek a protective order, at its expense, or other appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section 6.4.

6.5 Advertiser and Subscriber Information .

(a) As promptly as reasonably practicable following the Closing, Seller shall make available, and shall cause its Affiliates to make available, to Buyer information relating to advertisers, subscribers and Web site visitors pertaining to the Territory (“ Client Information ”) to the extent permitted by applicable Law. Seller or its Affiliates may withhold any Client Information to the extent it reasonably believes (based on the opinion of legal counsel) that providing such could violate applicable Law or the terms of any agreement to which Seller or any of its Affiliates is a party. Seller represents and warrants that it is not currently aware of any Laws or agreements which would prevent Seller from providing such Client Information.

(b) Buyer shall not use any Client Information in any way that could violate the privacy policies of Seller or its Affiliates as in effect as of the Closing Date. Buyer further agrees to comply with all applicable data protection and privacy Laws in connection with the use of such Client Information.

6.6 Filings; Cooperation .

(a) Prior to the Closing, the Parties shall take such commercially reasonable actions as may be necessary to satisfy the conditions to Closing set forth in Article VII and Article VIII.

(b) On or after the Closing Date, the Parties shall, on request, cooperate with one another by furnishing any additional information, executing and delivering any additional documents and instruments and doing any and all such other things as may be reasonably required by the Parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement. In connection with the Excluded Liabilities, the Buyer shall, and shall cause its Affiliates and employees to, reasonably aid, cooperate with and assist Seller in its defense of such Excluded Liabilities, at Seller’s cost and expense, by, among other things, providing Seller with full access to pertinent Records at such times as such other Party may reasonably request.

6.7 Obligations with Respect to Employees .

(a) Seller shall be responsible for all employment-related liabilities incurred or accrued prior to the Closing with respect to all Employees and other employees or former employees of the Business, including without limitation any liabilities in connection with all salaries, wages, bonuses, business expenses, retirement allowance and other reimbursements, termination pay, wrongful dismissal claims, employment insurance premiums, workers’ compensation payments, income tax and applicable pension plan deductions and other payments to be made to or on behalf of

such individuals or otherwise, whether such claims are asserted before or after the Effective Time; provided, however, that Seller shall not be responsible for obligations to Employees for any earned and accrued but unpaid vacation leave. Buyer shall be responsible for all such employment-related liabilities incurred or accrued after the Closing with respect to the Employees in their capacity as employees of Buyer.

(b) Buyer will treat the period of employment with the Seller of the Employees as employment or engagement with the Buyer for all purposes. Coverage for Employees under Buyer’s compensation and employee plans and other programs shall commence as of the date provided in such plans and programs, provided, however, that each Employee shall receive credit under Buyer’s employee vacation policy for each such Employee’s period of service with Seller through the Closing Date. As of his or her first day of employment with Buyer, an Employee shall be permitted to take with Buyer any unused vacation time that has accrued with Seller and was credited as of Closing.

6.8 Acquisition Proposals .

(a) Notwithstanding any other provision of this Agreement to the contrary, during the period beginning on the date hereof and continuing until 11:59 p.m. (Eastern Time) on the thirtieth (30th) calendar day thereafter, or such earlier date as shall be specified by the Seller (the “ Solicitation Period End-Date ”), Seller and its Representatives shall have the right to directly or indirectly: (i) initiate, solicit and encourage Acquisition Proposals, including by way of providing access to non-public information pursuant to (but only pursuant to) one or more confidentiality agreements, provided that Seller shall promptly provide to Buyer any non-public information relating to the Business that is provided to any Person given such access which was not previously provided to or made available to Buyer; and (ii) enter into and maintain discussions or negotiations with respect to potential Acquisition Proposals or otherwise cooperate with or assist or participate in, or facilitate, any such inquiries, proposals, discussions or negotiations.

As used herein, the term “ Acquisition Proposal ” means any inquiry, offer or proposal made by a Person or group at any time relating to any (i) direct or indirect acquisition of more than 50% of the assets of the Asia Pacific Business, taken as a whole, (ii) direct or indirect beneficial ownership of more than 50% of the aggregate outstanding equity securities of Seller and its affiliate which is party to the Japan Purchase Agreement (the “Seller Japan Affiliate”), or (iii) any merger, consolidation or other business combination, recapitalization or similar transaction, including any single or multi-step transaction or series of related transactions involving Seller and the Seller Japan Affiliate.

(b) Subject to Section 6.8(c) and except with respect to any Person who made an Acquisition Proposal received by Seller prior to the Solicitation Period End-Date with respect to which the requirements of Sections 6.8(c)(i), 6.8(c)(iii) and 6.8(c)(iv) have been satisfied as of the Solicitation Period End-Date and thereafter continuously through the date of determination, from the Solicitation Period End-Date

until the Effective Time or, if earlier, the termination of this Agreement in accordance with Section 10.2, Seller shall not, and shall cause its Representatives not to, directly or indirectly: (i) initiate, or solicit or knowingly facilitate or encourage (including by way of providing information) the making, submission or announcement of any inquiries, proposals or offers that constitute or may reasonably be expected to lead to, any Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise knowingly cooperate with or knowingly assist or participate in, or knowingly facilitate or knowingly encourage any such inquiries, proposals, discussions or negotiations or (ii) approve, endorse or recommend, or publicly propose to approve or recommend, an Acquisition Proposal or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement relating to an Acquisition Proposal or enter into any agreement or agreement in principle requiring Seller to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder or propose or agree to do any of the foregoing. Except with respect to any Acquisition Proposal received on or prior to the Solicitation Period End-Date with respect to which the requirements of Section 6.8(c)(i), 6.8(c)(iii) and 6.8(c)(iv) have been satisfied as of the Solicitation Period End-Date and continuously thereafter (any Person so submitting such Acquisition Proposal, an “ Excluded Party ”), as determined, with respect to any Excluded Party, by the board of directors of Seller no later than the later of (A) the Solicitation Period End-Date and (B) only if such Acquisition Proposal is received less than two (2) Business Days prior to the Solicitation Period End-Date, the second (2) Business Day following the date on which Seller received such Excluded Party’s Acquisition Proposal (it being understood that following the Solicitation Period End-Date until such time as the board of directors of Seller determines that a Person is an Excluded Party, Seller shall not be permitted to take any action with respect to such Person that it would not be permitted to take with respect to non-Excluded Parties pursuant to Section 6.8(c)), Seller shall immediately cease, and shall cause its Representatives to terminate, any solicitation, knowing encouragement, discussion or negotiation or knowing cooperation with or knowing assistance or participation in, or knowing facilitation or knowing encouragement of any such inquiries, proposals, discussions or negotiations with any Persons conducted theretofore by Seller or its Representatives with respect to any Acquisition Proposal, and shall request to be returned or destroyed all non-public information provided by or on behalf of Seller to such Person. Notwithstanding anything contained in Section 6.8 to the contrary, any Excluded Party shall cease to be an Excluded Party for all purposes under this Agreement with respect to any Acquisition Proposal immediately at such time as such Acquisition Proposal made by such Party is withdrawn, terminated or fails in the reasonable determination of the board of directors of Seller to satisfy the requirements of Sections 6.8(c)(i), 6.8(c)(ii), 6.8(c)(iii) and 6.8(c)(iv).

(c) Notwithstanding anything to the contrary contained in Section 6.8(b), if at any time following the date of this Agreement and prior to the Effective Time (i) Seller and the Seller Japan Affiliate have received a written Acquisition Proposal from a third party that the board of directors of Travelzoo believes in good faith to be bona fide, (ii) such Acquisition Proposal did not occur as a result of a breach of this Section 6.8 or the corresponding provision of the Japan Purchase Agreement, (iii) the board of

directors of Travelzoo determines in good faith, after consultation with its financial advisors and outside counsel, that such Acquisition Proposal constitutes or may reasonably be expected to result in a Superior Proposal and (iv) after consultation with its outside counsel, the board of directors of Travelzoo determines in good faith that the failure to take such actions or any of the actions described in the following clauses (A) and (B) would be inconsistent with its fiduciary duties to the stockholders of Travelzoo under applicable Law, then Seller may (A) furnish information (including non-public information) with respect to Seller and its subsidiaries to the Person making such Acquisition Proposal and (B) participate in discussions or negotiations with the Person making such Acquisition Proposal regarding such Acquisition Proposal; provided that Seller (x) gives Buyer written notice of the identity of such Person and of Seller’s intention to furnish information to, or enter into discussions with, such Person at least one (1) Business Day prior to furnishing any such information to, or entering into discussions with, such Person, (y) will not, and will not allow any of its subsidiaries or Representatives to disclose any non-public information to such Person without first entering or having entered into a confidentiality agreement and (z) contemporaneously with making available any such information to such Person provide to Buyer any information concerning Seller or its subsidiaries provided to such other Person which was not previously provided to or made available to Buyer. Notwithstanding anything to the contrary contained in Section 6.8(b) or this Section 6.8(c), prior to the Effective Time, Seller shall in any event be permitted to take the actions described in clauses (A) and (B) above with respect to any Excluded Party for so long as they are an Excluded Party.

As used herein, the term “ Superior Proposal ” means any bona fide Acquisition Proposal made in writing that (A) is on terms that the board of directors of Travelzoo has determined in good faith (after consultation with outside counsel and financial advisors) are more favorable to Travelzoo’s stockholders from a financial point of view than this Agreement and (B) which the board of directors of Travelzoo has determined in good faith (after consultation with outside counsel and financial advisors) is reasonably likely to be consummated.

(d) Within 24 hours following the Solicitation Period End-Date (or, with respect to any Excluded Party who is determined to be an Excluded Party following the Solicitation Period End-Date in accordance with Section 6.8(b)(B), within 24 hours of such determination), Seller shall notify Buyer in writing of the identity of each Excluded Party and of the material terms and conditions of the Acquisition Proposal received from such Excluded Party. From and after the Solicitation Period End-Date, in the event that Seller or its subsidiaries or Representatives receives any of the following, Seller shall promptly (but not more than one (1) Business Day after such receipt) notify Buyer thereof: (i) any Acquisition Proposal or written indication by any Person that would reasonably be expected to result in an Acquisition Proposal (and provide the material terms and conditions thereof); (ii) any request (other than from an Excluded Party, it being understood that Seller shall continue to comply with its obligations under Section 6.8(a)(i) with respect to such Excluded Party) for non-public information relating to the Business other than requests for information in the ordinary course of business and unrelated to an Acquisition Proposal; or (iii) any inquiry or request for (other than from or

by an Excluded Party) discussions or negotiations regarding any Acquisition Proposal. Without limitation of Section 6.8, following the Solicitation Period End-Date, Seller shall promptly (within one (1) Business Day) inform Buyer of any material changes, developments, discussions or negotiations relating to any Acquisition Proposal, indication, inquiry or request (including the material terms and conditions thereof and of any material modification thereto), and any material developments, discussions and negotiations, including furnishing copies of any material written inquiries and correspondence, in all cases whether in connection with an Excluded Party or third party pursuant to Section 6.8(c)(B). Without limiting the foregoing, Seller shall promptly (within one (1) Business Day) notify Buyer if it or any of its Affiliates determines to provide non-public information or to engage in discussions or negotiations concerning an Acquisition Proposal pursuant to Section 6.8(c) other than with an Excluded Party, in each case after the Solicitation Period End-Date. Seller shall not, and shall cause its subsidiaries not to, enter into any confidentiality agreement with any Person subsequent to the date of this Agreement that prohibits Seller from providing such information to Buyer. Seller shall not, and shall cause its of subsidiaries not to, terminate, waive, amend or modify any provision of, or grant permission or request under, any standstill or confidentiality agreement to which they or any of their subsidiaries is a party, and Seller shall, and shall cause its subsidiaries, to enforce the provisions of any such agreement; provided, however, that Seller may permit a proposal to be made under a standstill agreement if Travelzoo’s board of directors determines in good faith, after consultation with outside counsel, that Seller’s failure to do so would be inconsistent with the fiduciary duties of the board of directors to the stockholders of Travelzoo under applicable Law.

(e) Notwithstanding anything in Section 6.8(b)(ii) to the contrary, if Seller or any of its Affiliates receives an Acquisition Proposal which the board of directors of Seller or any of its Affiliates concludes in good faith, after consultation with outside counsel and its financial advisors, constitutes a Superior Proposal after giving effect to all of the adjustments to the terms of this Agreement which may be offered by Buyer, including pursuant to clause (ii) below, the board of directors of Seller or any of its Affiliates may at any time prior to the Effective Time, if it determines in good faith, after consultation with outside counsel, that the failure to take such action or any of the actions described below would be inconsistent with the fiduciary duties of the board of directors to the stockholders of Seller or any of its Affiliates under applicable Law, (i) approve or recommend such Superior Proposal, and/or (ii) terminate this Agreement to enter into a definitive agreement with respect to such Superior Proposal; provided, however, that the board of directors of Seller or any of its Affiliates may not approve or recommend such Superior Proposal pursuant to the foregoing clause (i) or terminate this Agreement pursuant to the foregoing clause (ii) (it being agreed that any such purported termination shall be null and void and of no effect) unless such (A) Superior Proposal did not result from a breach by Seller of this Section 6.8, (B) with respect to clause (ii) above, the Company pays the applicable termination fee pursuant to Section 10.2, (C) the Seller shall also terminate the Japan Purchase Agreement pursuant to the corresponding provisions of that agreement and (D):

(i) Seller shall have provided prior written notice to Buyer, of its intention to take any action contemplated in Section 6.8(d) with respect to a Superior Proposal at least four (4) Business Days in advance of taking such action (the “ Notice Period ”), which notice shall set forth the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal); and

(ii) prior to Seller’s approval or recommendation of such Superior Proposal or termination of this Agreement to enter into a proposed definitive agreement with respect to such Superior Proposal, Seller shall provide Buyer the opportunity to submit an amended written proposal or to make a new written proposal to the board of directors of Seller during the Notice Period and shall itself and shall cause its Representatives to, during the Notice Period, negotiate in good faith with Buyer (to the extent Buyer so requests in writing) to make such adjustments to the terms and conditions of this Agreement so that such Superior Proposal ceases to constitute a Superior Proposal. In the event of any subsequent material revisions to such Superior Proposal, Seller shall deliver a new written notice to Buyer and comply with the requirements of this Section 6.8(d), and the Notice Period shall recommence.

(f) Nothing contained in this Agreement (including, without limitation, this Section 6.8) shall prohibit the board of directors of Travelzoo from disclosing the fact that the board of directors of Travelzoo has received an Acquisition Proposal and the terms of such proposal, if the board of directors of Travelzoo determines, after consultation with its outside legal counsel, that the failure to take any such actions would be inconsistent with its fiduciary duties under applicable Law or to comply with obligations under federal securities Laws or the NASDAQ Global Select Market or the rules and regulations of any U.S. securities exchange upon which the capital stock of Travelzoo is listed.

ARTICLE VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND AZZURRO

The obligation of the Buyer and Azzurro to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part by the Buyer or Azzurro:

7.1 Accuracy of Representations and Warranties and Performance of Obligations . All representations and warranties made by Seller and Travelzoo in this Agreement shall be true and correct in all material respects (or, to the extent such representations and warranties are already qualified by materiality, such representations and warranties shall be true and correct in all respects) on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to an earlier date, and except to the extent of any

change permitted by the terms of this Agreement or consented to by the Buyer, and Seller and Travelzoo shall have performed or complied in all material respects with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. Seller and Travelzoo shall deliver to the Buyer at the Closing a certificate of an officer of Seller certifying that the conditions stated in this Section 7.1 have been fulfilled.

7.2 Consents and Approvals . The filings with government authorities or any other third parties described on Section 3.1 or Section 7.2 of the Disclosure Schedules shall have been made and any necessary authorizations, consents or approvals required from such authorities or third parties set forth on Section 3.1 or Section 7.2 of the Disclosure Schedules, shall have been obtained and shall be in full force and effect.

7.3 No Contrary Judgment or Litigation . On the Closing Date there shall exist no valid judicial order which prohibits the consummation of the transactions contemplated by this Agreement. On the Closing Date there shall exist no pending litigation which seeks to prohibit the consummation of the transactions contemplated by this Agreement.

7.4 Japan Purchase Agreement . The Japan Purchase Agreement shall have been executed and delivered by the parties thereto, and the closing thereunder shall occur substantially simultaneously with the Closing hereunder.

7.5 Deliveries . Seller shall have made or tendered, or caused to be made or tendered, delivery to the Buyer of the following documents:

(a) a bill of sale with respect to the Purchased Assets, duly executed by Seller;

(b) an assignment and assumption agreement with respect to the Assumed Contracts, duly executed by Seller;

(c) a license agreement (the “ License Agreement ”), in the form attached hereto as Exhibit A , pursuant to which Travelzoo shall grant Buyer a perpetual fully paid-up license for use of certain Intellectual Property in the Territory as provided therein, duly executed by Travelzoo;

(d) a Hosting Services Agreement (the “ Hosting Agreement ”), in the form attached hereto as Exhibit B , pursuant to which Travelzoo shall agree to host and manage the software used to run and manage Seller’s e-mail subscriber and advertiser databases, Web sites, e-mail newsletter and alert services, and intranet site, as implemented by the Buyer, duly executed by Travelzoo;

(e) a Referral Agreement (the “ Referral Agreement ”), in the form attached hereto as Exhibit C , pursuant to which the Parties shall agree to share revenues generated from the publishing fees described therein, duly executed by Seller;

(f) a Voting Agreement (the “ Voting Agreement ”), in the form attached hereto as Exhibit D , duly executed by the principal shareholder of Travelzoo;

(g) a Transition Services Agreement (the “ Transition Services Agreement ”), in the form attached hereto as Exhibit E , pursuant to which Travelzoo shall agree to provide certain transition services to Buyer following the Closing Date as described therein, duly executed by Travelzoo;

(h) the Option Agreement, duly executed by Travelzoo;

(i) the certificates required by an officer of Seller and Travelzoo pursuant to Section 7.1;

(j) original stock certificates (or other appropriate documents or instruments evidencing Seller’s equity ownership therein) for the Seller Subsidiaries (except with respect to Beijing Travelzoo Travel Information Technology Limited), duly endorsed (or accompanied by stock powers or other appropriate assignment documents) for transfer to Buyer; and

(k) such other customary documents, instruments or certificates as shall be reasonably requested by the Buyer and as shall be consistent with the terms of this Agreement.

7.6 No Material Adverse Effect . Between the date hereof and the Closing Date, there shall not have occurred any fact, event, circumstance or effect which has had, or is reasonably likely to have, a Material Adverse Effect on the Purchased Assets, the Business, the financial condition or results of operations of the Business, or the assets, properties and rights utilized in the Business, taken as a whole. For purposes of this Section, “Material Adverse Effect” shall not be deemed to include any changes resulting from general economic, regulatory or political conditions, circumstances that affect the industries in which the Business operates generally, or the announcement or pendency of the transactions provided for in this Agreement.

7.7 Due Diligence and Disclosure Schedules . Buyer and Azzurro shall have completed their legal, operational, business, regulatory and other due diligence investigation with respect to the Purchased Assets, the Assumed Liabilities, the Seller Subsidiaries, the Business and the transactions contemplated herein, and the results of such investigation shall be satisfactory to Buyer and Azzurro in their sole discretion. Seller shall have delivered final Disclosure Schedules to Buyer and Azzurro, which shall be satisfactory to Buyer and Azzurro in their sole discretion.

7.8 Formation of Buyer . Azzurro shall have formed and appropriately qualified Buyer for purposes of closing of the transactions contemplated herein.

ARTICLE VIII

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

The obligation of Seller to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part by Seller:

8.1 Accuracy of Representations and Warranties and Performance of Obligations . All representations and warranties made by the Buyer and Azzurro in this Agreement shall be true and correct in all material respects (or, to the extent such representations and warranties are already qualified by materiality, such representations and warranties shall be true and correct in all respects) on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to an earlier date, and except to the extent of any change permitted by the terms of this Agreement or consented to by Seller, and the Buyer shall have performed or complied in all material respects with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. The Buyer shall deliver to Seller at the Closing a certificate of an officer of the Buyer certifying that the conditions stated in this Section 8.1 have been fulfilled.

8.2 Consents and Approvals . The filings with government authorities or any other third parties listed on Section 8.2 of the Disclosure Schedules shall have been made and any necessary authorizations, consents or approvals required from such authorities or third parties set forth on Section 8.2 of the Disclosure Schedules shall have been obtained and shall be in full force and effect.

8.3 No Contrary Judgment . On the Closing Date there shall exist no valid judicial order which prohibits the consummation of the transactions contemplated by this Agreement.

8.4 Deliveries . The Buyer shall have made or tendered, or caused to be made or tendered, delivery to Seller of the Purchase Price in accordance with Section 2.3 and the following documents:

(a) this Agreement, duly executed by Buyer;

(b) an assignment and assumption agreement with respect to the Assumed Contracts, duly executed by Buyer;

(d) the Hosting Agreement, duly executed by the Azzurro, the Buyer and the Japan Affiliate;

(e) the Referral Agreement, duly executed by the Buyer;

(f) the Voting Agreement, duly executed the principal shareholder of Travelzoo;

(g) the Transition Services Agreement, duly executed by Azzurro, the Buyer and the Japan Affiliate;

(h) the Option Agreement, duly executed by Azzurro; and

(i) the certificate required by an officer of the Buyer pursuant to Section 8.1;

(j) such other customary documents, instruments or certificates as shall be reasonably requested by Seller and as shall be consistent with the terms of this Agreement.

8.5 Japan Purchase Agreement . The Japan Purchase Agreement shall have been executed and delivered by the parties thereto, and the closing thereunder shall occur substantially simultaneously with the Closing hereunder.

8.6 Expiration of the Solicitation Period End-Date . The Solicitation Period End-Date shall have expired or been terminated by the Seller.

ARTICLE IX

INDEMNIFICATION

9.1 Indemnification by Seller . Subject to the limitations set forth in this Article IX, Seller shall indemnify and hold harmless the Buyer against and in respect of any and all Losses arising from:

(a) any breach or violation of any of the provisions of this Agreement by Seller or any of its Affiliates (other than with respect to any of the representations and warranties made in Article III by Seller and/or Travelzoo which shall be covered by Section 9.1(b));

(b) any breach of any of the representations and warranties made in Article III by Seller and/or Travelzoo;

(c) the ownership, use or possession of the Purchased Assets, or the conduct or operation of the Business, occurring prior to the Effective Time;

(d) the ownership, use or possession of the Excluded Assets;

(e) the Excluded Liabilities; or

(f) any claim relating to or arising out of Seller’s use of Client Information prior to the Effective Time.

Any indemnification provided for under this Section 9.1 shall be deemed also to extend to directors, shareholders, officers and employees (in their capacity as such) of the Buyer.

9.2 Indemnification by Buyer . The Buyer shall indemnify and hold harmless Seller against and in respect of any and all Losses arising from:

(a) any breach or violation of the covenants made in this Agreement by the Buyer or any of its Affiliates;

(b) any breach of any of the representations or warranties made in Article IV by the Buyer;

(c) the ownership, use or possession of the Purchased Assets, or the conduct or operation of the Business, occurring at or after the Effective Time (except, in each such case, to the extent that the Buyer is entitled to be indemnified pursuant to Section 9.1); or

(d) any claim relating to or arising out of Buyer’s use of Client Information after the Effective Time.

Any indemnification provided for under this Section 9.2 shall be deemed also to extend to directors, shareholders, officers and employees (in their capacity as such) of Seller and its Affiliates.

9.3 Notice and Payment of Losses . Upon obtaining knowledge of any Loss, the Party entitled to indemnification (the “ Injured Party ”) shall promptly notify the Party liable for such indemnification (the “ Indemnifying Party ”) in writing of such Losses which the Injured Party has determined have given or could give rise to a claim under Section 9.1 or 9.2 (such written notice being hereinafter referred to as a “ Notice of Claim ”); provided, however, that failure of an Injured Party timely to give a Notice of Claim to the Indemnifying Party shall not release the Indemnifying Party from its indemnity obligations set forth in this Article IX except to the extent that such failure adversely affects the ability of the Indemnifying Party to defend such claim or increases the amount of indemnification which the Indemnifying Party is obligated to pay hereunder, in which event the amount of indemnification which the Injured Party shall be entitled to receive shall be reduced to an amount which the Injured Party would have been entitled to receive had such Notice of Claim been timely given. The Injured Party shall use commercially reasonable efforts to mitigate any continuing Losses (including without limitation by using its commercially reasonable efforts to obtain any applicable insurance proceeds) and to obtain or use any Tax savings, benefit, relief, deduction or credit available to the Injured Party. The Injured Party shall not make any admission of liability, agreement or compromise with any Person in relation to a Loss without prior consultation with the Indemnifying Party. If the Injured Party settles or compromises any third party claims, or initiates action which is for the purpose in whole or in part of causing a claim to be asserted, prior to giving a Notice of Claim to the Indemnifying Party, the Indemnifying Party shall be released from its indemnity obligation. A Notice

of Claim shall specify in reasonable detail, to the extent known by the Injured Party, the nature and, to the extent reasonably calculable, estimated amount of any such claim giving rise to a right of indemnification. The Indemnifying Party shall satisfy its obligations under Section 9.1 or 9.2, as the case may be, within sixty (60) Business Days of its receipt of a Notice of Claim; provided, however, that for so long as the Indemnifying Party is disputing its liability or defending a third-party claim in good faith pursuant to Section 9.4, its obligations to indemnify the Injured Party with respect thereto shall be suspended until a final unappealable judgment of a court of competent jurisdiction is given in relation to such claim. The Indemnifying Party shall have thirty (30) Business Days (or such shorter period of time that the Injured Party may be required to respond to any suit or governmental action) after receipt of a Notice of Claim to notify the Injured Party (a) whether or not it disputes its liability to the Injured Party with respect to such Notice of Claim and (b) whether it elects to defend a third-party claim pursuant to Section 9.4.

9.4 Defense of Third-Party Claims . With respect to any action or any claim set forth in a Notice of Claim relating to a third-party claim, the Indemnifying Party may defend, in good faith and at its expense, any such claim or demand, and the Injured Party, at its expense, shall have the right, but not the obligation, to participate (but not control) at its expense in the defense of any such third-party claim. So long as the Indemnifying Party assumes and thereafter diligently defends any such third-party claim, the Injured Party shall not settle or compromise such third-party claim without the consent of the Indemnifying Party. If such claim is settled by the Injured Party without the Indemnifying Party’s consent, the Injured Party shall be deemed to have waived all rights hereunder for money damages arising out of such claim. The Indemnifying Party may settle or compromise such third-party claim without the consent of the Injured Party solely for monetary damages with no admission of fault on the part of the Injured Party, unless there has not been a complete release of the Injured Party, in which case the Indemnifying Party may not settle or compromise such third-party claim without the consent of the Injured Party, which consent shall not be unreasonably withheld. The Injured Party shall make available to the Indemnifying Party or its representatives all records and other materials reasonably required for use in contesting any third-party claim.The Injured Party shall cooperate fully with the Indemnifying Party in the defense of all such claims. If the Indemnifying Party elects not to defend any such third-party claims, or elects to defend such claims but thereafter fails to diligently pursue such defense, the Injured Party shall have no obligation to do so, but may defend, settle or compromise any such third-party claim at the risk and expense of the Indemnifying Party. The Indemnifying Party will not, however, be responsible for any Losses if and to the extent that they arise from action taken or omitted to be taken by the Injured Party in bad faith, fraudulently, negligently or as a result of a breach of this Agreement by the Injured Party.

9.5 Survival of Representations and Warranties . All of the representations and warranties made by any Party in Article III and Article IV shall survive for a period of twelve (12) months following the Closing Date and thereafter to the extent a Notice of Claim is made prior to such expiration with respect to any breach of such representation or warranty occurring prior to such expiration and set out in such Notice of Claim;

provided that the representations and warranties of the parties set forth in Sections 3.1, 3.2, 3.3 and 3.8, with respect to Seller, Sections 3.14 and 3.15, with respect to Travelzoo, Sections 4.1 and 4.2, with respect to Buyer, and Sections 5.1 and 5.2, with respect to Azzurro (collectively for all parties, the “Fundamental Representations”), shall survive the Closing Date indefinitely. No party shall be entitled to indemnification for breach of any representation and warranty set forth in Article III and Article IV unless a Notice of Claim of such breach has been given to the Indemnifying Party within the period of survival of such representation and warranty as set forth herein.

9.6 Limitation on Indemnification .

(a) The provisions for indemnity under Sections 9.1(b) and 9.2(b), as the case may be, shall be effective only when the aggregate amount of any single Loss (or series of related Losses) for which indemnification is sought from Seller or the Buyer, under Sections 9.1(b) or 9.2(b), respectively, when added to the amounts for which indemnification is sought under the corresponding provisions of the Japan Purchase Agreement, exceeds Ten Thousand Dollars (US$10,000.00) in the aggregate, but then to the full extent of such Losses (including the first $10,000.00 of such Losses).

(b) The provisions for indemnity under Sections 9.1(b) and 9.2(b), as the case may be, shall be effective only when the aggregate amount of all Losses, for which indemnification is sought from Seller or the Buyer, under Sections 9.1(b) or 9.2(b), respectively (excluding Losses for which indemnification would not be available as a result of clause (a) above), when added

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