ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of January 28,
2006, is by and among OneTravel Holdings, Inc., a Delaware corporation ("OTV"),
FS SunTours, Inc., a Delaware corporation ("Seller"), and Crystal Hospitality
Group, Inc., a Delaware corporation ("Buyer").
RECITALS
A. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, upon the terms and conditions set forth below, substantially all of the
assets of Seller.
B. Seller desires to assign to Buyer, and Buyer desires to assume from
Seller, upon the terms and conditions set forth below, certain specified
liabilities of Seller.
C. Seller is a wholly-owned subsidiary of OTV, and OTV desires to make
certain agreements in order to facilitate the transactions contemplated herein.
AGREEMENT
In consideration of the premises and mutual covenants, agreements and
provisions of the parties set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 For purposes of this Agreement, the following terms have the meaning
set forth below:
"Affiliate" means, with respect to any Person: (i) any other Person
directly or indirectly controlling, controlled by or under common control with
the subject Person (including any partnership in which the subject Person serves
as a general partner, any corporation in which the subject Person owns greater
than 10% of the issued and outstanding voting capital stock or any limited
liability company or joint venture in which the subject Person owns greater than
10% of the equity interests of such limited liability company or joint venture);
(ii) any officer, director, trustee or general partner of the subject Person;
(iii) any individual which is a spouse, descendant (natural and adopted) or
ancestor (natural and adopted) of the subject Person, or (iv) any Person in
which more than 10% of the voting or beneficial interests are owned by a Person
who has a relationship with the subject Person described in clause (i), (ii) or
(iii) above; provided that, for the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean 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.
"Business" means the business of Seller, namely the design, advertisement,
sale and distribution of leisure travel products and services, including,
without limitation, charter and tour packages including transportation and/or
lodging.
"Buyer Indemnified Parties" means Buyer and its Affiliates and
Subsidiaries, and the officers, directors, shareholders, members, employees,
attorneys, agents and fiduciaries of any of the foregoing.
"COBRA" means the health care continuation requirements of Part 6 of
Subtitle B of Title I of ERISA or Section 4980B of the Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consent" means any consent, approval, authorization, waiver, permit,
grant, concession, exemption or order of, registration, certificate, declaration
or filing with, or report or notice to, any Person, including any Governmental
Body.
"Contract" means any agreement, contract, license, lease, obligation,
promise, or undertaking (whether written or oral and whether express or implied)
that is legally binding.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authorization" means any approval, consent, license, Permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body" means any:
(a) federal, state, county, municipal, city, town, village,
district, or other jurisdiction or government of any nature;
(b) governmental or quasi-governmental authority or any nature
(including any governmental agency, branch, department, official, or other
entity and any court or other tribunal); or
(c) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Legal Requirement" means any federal, state, local, municipal or other
constitution, ordinance, regulation, statute, rule or other law adopted,
enacted, implemented, or promulgated by or under the authority of any
Governmental Body or by the eligible voters of any jurisdiction, and any
agreement, approval, consent, injunction, judgment, license, Order, or Permit by
or with any Governmental Body or to which Seller is a party or by which any of
Seller or the Purchased Assets are bound.
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"Lien" means any mortgage, pledge, hypothecation, claim, security
interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
claim or interest, easement, encroachment, burden, title defect, title retention
agreement, voting trust agreement, interest equity, option, lien or right of
first refusal.
"Order" means any award, injunction, judgment, order, ruling, subpoena, or
verdict or other decision entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Organizational Documents" means (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person (e.g., a certificate of formation, articles of
organization or certificate of limited partnership) and any agreement governing
such Person (e.g., a limited liability company agreement, operating agreement or
partnership agreement); and (c) any amendment to any of the foregoing.
"Permits" means all permits, licenses, approvals and authorizations by or
of any Governmental Body or any other party.
"Permitted Lien" means (i) Liens for any Tax not yet due and payable, (ii)
Liens for any Tax which is being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on Seller's
books, (iii) mechanics, carriers, workers, repairers and other statutory liens
incurred in the ordinary course of business of Seller (consistent in amount and
kind with past practice) relating to obligations as to which there is no default
on the part of Seller; or (iv) Liens that are not individually or in the
aggregate, material to the operation of the Business and which , individually
and collectively, do not have a material adverse effect on the Business or
Buyer's ability to operate the Business after the Closing.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated association,
corporation, other entity or government (whether federal, provincial, state,
county, city or otherwise, including, but not limited to, any instrumentality,
division, agency or department thereof).
"Proceeding" means any claim, suit, litigation, arbitration, hearing,
audit, charge, investigation, or other action (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body, judge,
arbitrator or mediator.
"Proprietary Rights" means all intellectual property, confidential
information, and proprietary information owned by or licensed to Seller,
including, without limitation, registered company names and assumed names;
patents and patent applications (including all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof) and
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); trademarks, service marks, trade dress, trade names and
company names, together with the goodwill of Seller associated with and
symbolized by such trademarks, service marks, trade dress, trade names and
company names, in each case whether or not registered; registered and
unregistered statutory and common law copyrights; domain names; all
registrations, applications, extensions and renewals for any of the foregoing;
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trade secrets; lists of customers and potential customers; marketing and sales
data and research; computer software; business plans, ideas, formulae,
compositions, know-how, inventions, manufacturing and production processes and
techniques, research and development information, drawings, specifications, list
of suppliers, pricing and cost-information and records, blueprints, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, production methods, business and
marketing proposals, plans, improvements, works of authorship, proposals,
technical and computer data, databases, domain names, documentation and
software, financial, business and marketing plans, and related information and
other intellectual property, confidential information and proprietary rights,
including, without limitation, the intellectual property set forth on Schedule
1.1(a) hereto;
"Seller Indemnified Parties" means Seller, OTV and their respective
Affiliates and Subsidiaries, and the officers, directors, shareholders,
employees, attorneys, agents and fiduciaries of any of the foregoing.
"Statement of Fixed Assets" means the unaudited statement of tangible
assets in respect of the Business, a copy of which is attached hereto as
Schedule 1.1(b).
"Tax" means any and all federal, provincial, state, local or foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities relating to taxes, including taxes, assessments and other
governmental charges based on or measured by gross receipts, income, profits,
sales, use and occupation, and franchise, estimated, alternative minimum, add-on
minimum, sales, use, transfer, registration, value added, place of business,
excise, natural resources, capital, severance, stamp, occupation, premium,
windfall profit, environmental, customs, (or similar) duties, real or immovable
property, personal or movable property, intangible property, capital stock,
social security, employment, unemployment, disability, payroll, license,
deductions at source employee or other withholding, or other tax, of any kind
whatsoever, including any interest, penalties or additions to tax or additional
amounts in respect of the foregoing; whether disputed or not, and including any
transferee or secondary liability in respect of any tax (whether by law,
contractual agreement, or otherwise) and any liability in respect of any tax as
a result of being a member of any affiliated, consolidated, combined, unitary,
or similar group.
"Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information and any amendment thereof) filed or
required to be filed in connection with the determination, assessment or
collection of any Taxes of any party or the administration of any laws,
regulations or administrative requirements relating to any Taxes.
"Transaction Documents" means each agreement being executed and delivered
by a party to this Agreement pursuant hereto.
"WARN Act" means the Federal Worker Adjustment and Retraining Notification
Act of 1988, as amended, and any successor law.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchased Assets.
(a) Purchased Assets. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall sell, transfer, convey,
assign and deliver to Buyer, and Buyer shall purchase from Seller, all of
Seller's right, title and interest in and to all of the assets of Seller other
than the Excluded Assets, wherever located and whether or not all or any of said
assets appear on or are reflected upon Seller's books, records or financial
statements (collectively, the "Purchased Assets"), including, without
limitation:
(i) Cash. All cash and cash equivalents, including, but not
limited to, the OTV Cash Transfer Amount (as defined in Section 5.3);
(ii) Tangible Personal Property. All equipment, furniture,
computer hardware, computer software, printers, office furniture, supplies, and
equipment and other similar personal or movable property of Seller and all
related documentation;
(iii) Contracts. All Contracts of Seller together with all
rights and benefits that Seller may have under any Contract, except those
Contracts set forth on Schedule 2.1(b)(ii) hereto (the "Excluded Contracts"), to
the extent Consent to the assignment of such Contract has been obtained or is
not required by its terms, and all rights and benefits that Seller has in, to
and under all other Contracts, excluding the Excluded Contracts, as provided
under Section 8.1;
(iv) Proprietary Rights. All Proprietary Rights of Seller;
(v) Records. All books, records, papers and files (in all
media) of Seller, including, but not limited to, customer records, purchase
correspondence, supplier lists, books of account and copies of employment
records;
(vi) Permits and Approvals. All Permits of Seller, including,
without limitation, all Permits set forth on Schedule 2.1(a)(vi), together with
all rights and benefits that Seller may have in, under and to any Permit, to the
extent Consent to the assignment of such Permit has been obtained or is not
required by its terms, and all rights and benefits that Seller has in, to and
under all other Permits as provided under Section 8.1 hereto;
(vii) Real Property. All real property owned by Seller and all
improvements and fixtures on any real property leased by Seller;
(viii) Claims. To the extent relating to or arising from
matters occurring or claims existing prior to Closing, other than with respect
to or under any Excluded Asset, all causes of actions, claims, warranties,
guarantees, refunds, covenants, indemnities and the like, rights of recovery and
set-off of every kind and character of Seller with respect to its customers,
suppliers and vendors under any Purchased Asset;
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(ix) Prepaids. All vendor and supplier advances, deposits,
credits, and other similar assets and prepaid expenses of Seller;
(x) Goodwill. All goodwill associated with the business and
assets of Seller as determined by Buyer, in its sole discretion, as of the
Closing and set forth on Schedule 2.4, along with the right of Buyer to hold
themselves out as the successors of Seller in the conduct of the Business;
(xi) Employee Benefit Plans. All Employee Benefit Plans of
Seller, together with all rights and benefits that Seller may have in, under and
to any Employee Benefit Plan (including, without limitation, all money, rights
and other assets (including, without limitation, any insurance policy, annuity
contract or trust) maintained under, pursuant to, or in direct connection with,
any Employee Benefit Plan of Seller); and
(xii) Customer Property. The custody of all assets owned by a
customer and held by Seller on behalf of such customer.
(b) Excluded Assets. Notwithstanding the foregoing, the following
assets of Seller are retained by Seller and are expressly excluded from the
purchase and sale contemplated by this Agreement (collectively, the "Excluded
Assets"):
(i) Records. Seller's company Organizational Documents,
including their governing documents, minute books, equity interest ledgers and
other records relating to the organization of Seller, all of Seller's Tax
Returns, and all sales and customer records; provided, however, Buyer shall have
the right to make and keep copies of any such records at its expense;
(ii) Excluded Contracts. The Excluded Contracts set forth on
Schedule 2.1(b)(ii), together with all right, benefit, obligation and liability
under each Excluded Contract;
(iii) Real Property. All real property leased by Seller;
(iv) Rights Under this Agreement. All rights of Seller arising
under this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby; and
(v) Non-Assignable Assets. All Contracts (other than Excluded
Contracts and Permits which are by their terms not assignable to Buyer or for
which Consent for assignment is required and has not been obtained, but which
would be Purchased Assets if they were assignable or such Consent had been
obtained, provided they are nevertheless governed by Section 8.1, hereunder.
2.2 Assumption of Liabilities.
(a) Assumed Liabilities. On the terms and subject to the conditions
set forth in this Agreement, at the Closing, Buyer shall assume and agree to
fully and timely perform, pay, satisfy and discharge all the liabilities and
obligations of Seller arising under the Purchased Assets, and all liabilities of
Seller known to Buyer (which Buyer shall list on Schedule 2.2(a) at the date
hereof and shall update at and through the Closing), but excluding liabilities
or obligations expressly set forth under Section 2.2(b) below and no others
(collectively, the obligations and liabilities assumed under this Section
2.2(a), the "Assumed Liabilities").
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(b) Excluded Liabilities. Notwithstanding Section 2.2(a), Buyer
shall not assume, be or become liable for any claims, demands, liabilities or
obligations of Seller other than the Assumed Liabilities (the "Excluded
Liabilities"), including, without limitation, (i) any liability or obligation
under the Signature litigation, (ii) any liability or obligation for any Taxes
of Seller arising out of the transactions contemplated by this Agreement, (iii)
any liability or obligation relating to any Excluded Asset, (iv) any liability
or obligation set forth on Schedule 2.2(b) hereto, which, the parties
acknowledge may be amended from time to time prior to Closing by Buyer in its
sole discretion to include liabilities not known by Buyer on the date hereof and
not incurred in the ordinary course of business from the date hereof to the
Closing, and (v) any Environmental Liabilities.
2.3 Conveyance and Assumption. At the Closing, Seller and Buyer shall
execute and deliver a Bill of Sale, Assignment and Assumption Agreement in the
form reasonably acceptable to Buyer and Seller (the "Bill of Sale"), pursuant to
which Seller shall convey to Buyer the Purchased Assets and Buyer shall assume
from Seller the Assumed Liabilities.
2.4 Consideration and Allocation. The consideration for the transfer and
sale of the Purchased Assets by Seller shall be the assumption of the Assumed
Liabilities by Buyer. Such consideration shall be allocated for tax purposes
among the Purchased Assets and the other consideration provided by Seller in
accordance with the allocation set forth on Schedule 2.4. OTV, Buyer and Seller
(a) agree to be bound, and to cause their respective Affiliates to be bound, by
such allocation, (b) shall act, and cause their respective Affiliates to act, in
accordance with such allocation in the preparation, filing and audit of any Tax
Return and for all other tax and accounting purposes, and (c) shall not take any
position or action inconsistent with such allocation.
ARTICLE III
SEVERAL REPRESENTATIONS AND WARRANTIES OF SELLER AND OTV
As a material inducement to Buyer to enter into this Agreement, Seller
represents and warrants to Buyer with respect to Seller, the Business, the
Purchased Assets, the Excluded Assets, the Assumed Liabilities and the Excluded
Liabilities, as applicable, and OTV represents and warrants to Buyer solely with
respect to the representations and warranties contained in Sections 3.1(c),
3.1(d), 3.2, 3.3(b), 3.5(b), 3.7(b), 3.8(b), 3.12(b) and 3.13(b) (the
representations and warranties of Seller and OTV being several and not joint and
not joint and several), as follows:
3.1 Authority.
(a) Seller has the absolute and unrestricted right, power, authority
and capacity to execute and deliver, and to enter into and perform its
obligations under, this Agreement and each of the Transaction Documents to which
it is a party. The execution, delivery and performance of this Agreement and
each of the Transaction Documents by Seller and the consummation of the
transactions contemplated hereby by Seller have been duly and validly authorized
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by all requisite corporate action, and no other proceedings on the part of
Seller are necessary to authorize the execution, delivery and performance of
this Agreement and each of the Transaction Documents to which it is a party.
This Agreement has been duly executed and delivered by Seller. Each of the
Transaction Documents to which Seller is a party will, at Closing, be duly
executed and delivered by Seller.
(b) Upon due execution and delivery, this Agreement and each of the
Transaction Documents to which Seller is a party will constitute the valid and
binding obligation of Seller, enforceable against Seller in accordance with
their respective terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
(c) OTV has the absolute and unrestricted right, power, authority
and capacity to execute and deliver, and to enter into and perform its
obligations under, this Agreement and each of the Transaction Documents to which
it is a party. The execution, delivery and performance of this Agreement and
each of the Transaction Documents by OTV and the consummation of the
transactions contemplated hereby by OTV have been duly and validly authorized by
all requisite corporate action, and no other proceedings on the part of OTV are
necessary to authorize the execution, delivery and performance of this Agreement
and each of the Transaction Documents to which it is a party. This Agreement has
been duly executed and delivered by OTV. Each of the Transaction Documents to
which OTV is a party will, at Closing, be duly executed and delivered by OTV.
(d) Upon due execution and delivery, this Agreement and each of the
Transaction Documents to which OTV is a party will constitute the valid and
binding obligation of OTV, enforceable against OTV in accordance with their
respective terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
3.2 OTV Shareholder Authorization. The sale of the Purchased Assets
pursuant to this Agreement does not constitute all or substantially all of the
property and assets of OTV as such concept is defined under Delaware General
Corporation Law Section 271 and does not require the approval or consent of the
stockholders of OTV.
3.3 No Conflict.
(a) Neither the execution and delivery of this Agreement or any
Transaction Document by Seller nor the performance by Seller of the transactions
contemplated hereby or thereby will conflict with or result in (with or without
notice or lapse of time or both) a violation, breach, or default under, or
result in the acceleration of or give rise to any party the right to terminate,
modify or cancel under, or result in the loss of any rights, privileges, options
or alternatives under, or result in the creation of any Lien other than
Permitted Liens on any of the Purchased Assets as the case may be, of (i) any
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provision of Seller's Organizational Documents, (ii) any resolution adopted by
Seller's directors, (iii) any Legal Requirement or any Order to which Seller or
any of the Purchased Assets may be subject, or (iv) any Contract or other
agreement or instrument to which Seller is a party or by which Seller or any of
its properties or assets are bound, other than in the case of this clause (iv)
any such conflicts, violations or defaults that, individually or in the
aggregate, (A) have not had and could not reasonably be expected to have a
material adverse effect, and (B) have not impaired and could not reasonably be
expected to impair Seller's ability to perform its obligations hereunder. No
Governmental Authorization is required to be obtained or made by Seller in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby by Seller, other than any required
Consent in connection with the transfer of any Permit.
(b) Neither the execution and delivery of this Agreement or any
Transaction Document by OTV or Seller nor the performance by OTV or Seller of
the transactions contemplated hereby or thereby to be performed by OTV or
Seller, respectively, will conflict with or result in (with or without notice or
lapse of time or both) a violation, breach, or default under, or result in the
acceleration of or give rise to any party the right to terminate, modify or
cancel under, or result in the loss of any rights, privileges, options or
alternatives under, or result in the creation of any Lien other than Permitted
Liens on any of the Purchased Assets as the case may be, of (i) any Legal
Requirement or any Order to which OTV may be subject, or (ii) any Contract or
other agreement or instrument to which OTV is a party or by which OTV, or any of
its properties or assets other than the Seller or the properties or assets of
the Seller, are bound, other than in the case of this clause (ii) any such
conflicts, violations or defaults that, individually or in the aggregate, (A)
have not had and could not reasonably be expected to have a material adverse
effect, and (B) have not impaired and could not reasonably be expected to impair
OTV's ability to perform their respective obligations hereunder. No Governmental
Authorization is required to be obtained or made by OTV in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby by OTV. OTV is an "ultimate parent entity" within the
meaning of Section 801.1(a)(3) of the rules of the Federal Trade Commission
promulgated under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
3.4 Financial Statements. Schedule 3.4 contains the following financial
statements of Seller (the "Financial Statements"): (a) the unaudited balance
sheet as of June 30, 2005 and, and the related unaudited statements of income
and cash flows for the fiscal year then ended; (b) the unaudited balance sheet
as of October 31, 2005 (the "Baseline Balance Sheet"); (c) the Statement of
Fixed Assets, and (d) the related unaudited statements of income for the period
from July 1, 2005 through October 31, 2005. To Seller's knowledge, the Financial
Statements are complete and correct and fairly and accurately present Seller's
financial condition, assets and liabilities as of the respective dates and the
results of operations and cash flows for the periods related thereto in
accordance with GAAP consistently applied throughout the periods covered
thereby, except the unaudited Financial Statements lack the footnote disclosure
and normal recurring accruals otherwise required by GAAP.
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3.5 Litigation.
(a) Except as set forth on Schedule 3.5(a) hereto, there is no
pending Proceeding that has been commenced or threatened in writing by or
against Seller that (i) challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement, or (ii) is by or against or relating to Seller
in connection with the Purchased Assets or the Business seeking unspecified
damages, damages in excess of $10,000 or any injunctive or other equitable
relief. There are no judgments unsatisfied against Seller or consent decrees or
injunctions to which Seller or the Purchased Assets are subject.
(b) Except as set forth on Schedule 3.5(b) hereto, there is no
pending Proceeding that has been commenced or threatened in writing by or
against OTV that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement.
3.6 Title.
(a) Seller has the exclusive right to possess and convey, and,
subject to the terms hereof, upon the consummation of the transactions
contemplated by this Agreement, Seller will have conveyed and Buyer will be
vested with, good and marketable title and interest in, or a valid leasehold
interest in, and to the Purchased Assets free and clear of any and all Liens
other than Permitted Liens.
(b) The Purchased Assets comprise all of the assets, properties and
rights primarily used in the conduct of the Business as presently conducted by
Seller in the ordinary course, consistent with past practice, except to the
extent of the Excluded Assets. Seller does not own any real property.
3.7 Brokers or Finders.
(a) Other that in connection with that certain Consulting Agreement,
dated October 26, 2005, by and among Seller, OTV and Crystal Finance LLC, none
of Seller or any of its Affiliates or agents other than OTV has incurred and no
action taken by Seller or any of its Affiliates or agents other than OTV in
connection with this Agreement or the Transaction Documents or any transaction
contemplated hereby or thereby, could be reasonably expected to give rise to any
valid claim against Seller or its Affiliates other than OTV, or any obligation
or liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement or the
Transaction Documents or the transactions contemplated hereby and thereby.
(b) Other that in connection with that certain Consulting Agreement,
dated October 26, 2005, by and among Seller, OTV and Crystal Finance LLC, none
of OTV or any of its Affiliates or agents other than Seller has incurred and no
action taken by OTV or any of its Affiliates or agents other than Seller in
connection with this Agreement or the Transaction Documents or any transaction
contemplated hereby or thereby, could be reasonably expected to give rise to any
valid claim against OTV or its Affiliates other than Seller, or any obligation
or liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement or the
Transaction Documents or the transactions contemplated hereby and thereby.
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3.8 Due Incorporation.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller has full corporate
power and authority to carry on the Business as presently conducted and to own
or lease and to operate the properties of the Business presently owned or leased
and operated.
(b) OTV is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
3.9 Absence of Undisclosed Liabilities. Seller has no known existing
debts, claims, commitments, liabilities or obligations of any nature arising out
of or relating to the Business, except (a) as and to the extent reflected as a
liability on the June 30, 2005 unaudited balance sheet or the Baseline Balance
Sheet, (b) liabilities and obligations that were incurred after June 30, 2005 in
the ordinary course of the Business (consistent in amount and kind with past
practice) or that are set forth on Schedule 2.2(a), and (c) the Excluded
Liabilities.
3.10 Taxes. Except as set forth on Schedule 3.10 hereto, Seller has filed
all Tax returns that it was required to file and has paid all Taxes shown as
owing thereon. Seller has not extended or otherwise waived the benefit of any
applicable statute of limitations or agreed to any extension of time with
respect to a Tax assessment or deficiency.
3.11 Absence of Changes. Except as set forth in Schedule 3.11, since June
30, 2005, Seller has not in connection with or relating to the Business or the
Purchased Assets:
(a) suffered any event, circumstance, occurrence, fact, condition,
change or effect that is materially adverse to the business, operations, results
of operations, financial condition, prospects, properties, assets or liabilities
of the Business; provided that any adverse change, event, development or effect
arising from (a) general national economic, financial, political or business
conditions (to the extent such events do not have a disproportionate effect on
Seller relative to other entities operating businesses similar to the business
of Seller), or (b) conditions (including changes in economic, financial market,
regulatory or political conditions) affecting generally the industries in which
Seller operates (to the extent such events do not have a disproportionate effect
on Seller relative to other entities operating businesses similar to the
business of Seller) shall not be considered a breach of the representation and
warranty contained in this Article III;
(b) incurred, assumed, guaranteed or discharged any debt, claim,
commitment, obligation or liability, absolute, accrued, contingent or otherwise,
whether due or to become due (including any indebtedness for borrowed money),
except current liabilities for trade or business obligations incurred in
connection with the purchase of goods or services in the ordinary course of
business of the Business (consistent in amount and kind with past practice);
(c) mortgaged, pledged or subjected to any other Lien, any property,
business or assets, tangible or intangible other than Permitted Liens;
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(d) sold, transferred, leased to others or otherwise disposed of any
of the Assets, or canceled or compromised any debt, claim, commitment, liability
or obligation, or waived or released any right of substantial value;
(e) received any notice of termination of any Contract;
(f) suffered any damage, destruction or casualty loss (whether or
not covered by insurance), in any case or in the aggregate, in excess of
$10,000;
(g) transferred or granted any rights under, or entered into any
settlement regarding the breach, misappropriation, infringement or violation of,
any Proprietary Rights, or modified any existing rights with respect thereto;
(h) made any change in the rate of compensation, commission, bonus
or other direct or indirect remuneration payable, or paid or agreed or orally
promised to pay, conditionally or otherwise, any bonus, incentive, retention or
other compensation, retirement, welfare, fringe or severance benefit or vacation
pay, to or in respect of any employee, distributor or agent of the Business;
(i) made any change in the accounting, auditing or tax methods,
practices or principles of the Business;
(j) encountered any labor union organizing activity, had any actual
or threatened employee strikes, work stoppages, slowdowns or lockouts, or had
any material change in its relations with its employees, distributors, agents,
customers or suppliers;
(k) entered into any transaction, contract, arrangement, order,
license, lease, permit, instrument, agreement or commitment other than in the
ordinary course of business of Seller (consistent in amount and kind with past
practice), or paid or agreed to pay any brokerage or finder's fee;
(l) made any grant of credit to any customer or distributor on terms
or in amounts materially more favorable than had been extended to that customer
or distributor in the past; or
(m) taken any action or omitted to take any action that would result
in the occurrence of any of the foregoing.
3.12 Compliance with Laws; Governmental Approvals and Consents.
(a) To the knowledge of Seller, Seller has complied in all material
respects with all Applicable Laws required to be complied with by Seller
applicable to the Business or the Purchased Assets.
(b) To the knowledge of OTV, OTV has complied in all material
respects with all Applicable Laws required to be complied with by OTV applicable
to Seller's Business or the Purchased Assets.
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(c) Schedule 3.12 sets forth all written Governmental Authorizations
and other Consents necessary for, or otherwise material to, the conduct of the
Business as conducted by Seller. All such Governmental Authorizations and
Consents have been duly obtained and are in full force and effect, and Seller is
in material compliance in all material respects with each of such Governmental
Authorizations and Consents held by it with respect to the Purchased Assets and
the Business.
3.13 Assets.
(a) Seller has good and valid title to the Purchased Assets
(including all Proprietary Rights), free and clear of any and all Liens other
than Permitted Liens. The Purchased Assets (including all Proprietary Rights)
include all assets reasonably required for the conduct of the Business as now
being conducted or material to the financial condition or results of operations
of Seller, except for the Excluded Assets. The Purchased Assets do not include
stock of or other equity interests in any Person.
(b) Prior to the Closing, OTV has sold, transferred, set over,
conveyed, assigned and delivered to Seller all interest held by OTV, if any, in
any Purchased Assets, including, without limitation, all Proprietary Rights
comprising a portion of the Purchased Assets.
(c) All tangible property included in the Purchased Assets is in
good operating condition and repair (except for ordinary wear and tear), free
from any known defects (except such minor defects as do not interfere with the
use thereof in the conduct of the normal operations).
3.14 Contracts.
(a) Schedule 3.14 contains a true, complete and correct list of all
Contracts to which Seller is a party or by which it or any of its material
assets is bound which primarily relate to the Business, the Purchased Assets or
the Assumed Liabilities.
(b) Seller has furnished Buyer with access to all material
Contracts, together with all amendments thereto, set forth in Schedule 3.14.
(c) There does not exist under any Contract any event of default or
event or condition that, after notice or lapse of time or both, would constitute
a violation, breach or event of default thereunder on the part of Seller or, to
the knowledge of Seller, any other party thereto except for such events or
conditions that, individually and in the aggregate, (i) have not had or resulted
in, and could not reasonably be expected to result in the future in, a material
adverse effect, and (ii) have not materially impaired the ability of Seller to
perform its obligations under this Agreement. Each Contract is a legal, valid,
binding and enforceable obligation of Seller and, to the knowledge of Seller,
the other parties thereto. To the knowledge of Seller, no outstanding bid or
proposal (or series of related bids or proposals) of Seller was bid by Seller,
or if accepted would be made by Seller, at a loss.
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3.15 Proprietary Rights.
(a) None of the Proprietary Rights owned by Seller is subject to any
Lien in favor of any third party other than Permitted Liens. None of Seller's
rights in or to any of its Proprietary Rights shall be adversely affected by its
execution or delivery of this Agreement or by the performance of its obligations
hereunder. No claims with respect to any Proprietary Rights have been asserted
or, to Seller's knowledge, threatened by any Person (i) against Seller, or (ii)
to Seller's knowledge, against any other Person based on its use of any of the
Proprietary Rights. To the knowledge of Seller, no use of any of the Proprietary
Rights by any Person (including Seller) constitutes or has constituted an
unauthorized use, infringement, misappropriation or other violation of the
intellectual property or rights therein of any other Person and no valid grounds
exist for any bona fide claims against Seller or any such Person with respect to
any Proprietary Rights. Without limiting the generality of the foregoing, no
Person ever employed or otherwise engaged by Seller has asserted or, to Seller's
knowledge, threatened, any claim against Seller alleging infringement,
misappropriation or violation of any rights of such Person's intellectual
property or rights therein or alleging or claiming any right or interest in or
to the Proprietary Rights. To the knowledge of Seller, there has not been, nor
is there presently, any unauthorized use, infringement, misappropriation or
violation of any of the Proprietary Rights by any Person. Seller has the full
right to possess, use, copy, distribute, display, transfer and license all
Proprietary Rights used in the Business or covering any aspect of the Business.
(b) No Proprietary Rights are subject to any outstanding order,
award, decision, injunction, judgment, decree, stipulation or agreement in any
manner restricting the transfer, use, enforcement or licensing thereof by
Seller. Seller has not entered into any agreement to indemnify any other Person
against any charge of infringement of any Proprietary Rights, except in
connection with certain customer contracts made in the ordinary course of its
business. Seller has not entered into any agreement granting any third party the
right to bring infringement actions with respect to, or otherwise to enforce
rights with respect to, any of the Proprietary Rights.
(c) To the knowledge of Seller, Seller has paid all material fees,
annuities and all other payments which have heretofore become due to any
Governmental Body with respect to the Proprietary Rights.
(d) Seller has not transferred its title in or to any of the
Proprietary Rights. To the knowledge of Seller, no Proprietary Rights (including
any source code and any algorithm or documentation contained in or relating to
such source code) has been supplied by Seller to any Person except pursuant to a
binding license prohibiting further distribution and disclosure. All computer
programs and software which are owned, used or licensed by Seller, and all
computer programs and software transferred by Seller to its customers or any
other transferees, conform in all material respects with all specifications,
representations, warranties and other descriptions established by Seller or
conveyed thereby to its customers or other transferees.
(e) To the knowledge of Seller, all work performed by each of the
current employees, independent contractors and consultants of Seller, and each
of the former employees, independent contractors and consultants of Seller, was
a "work made for hire" within the meaning of and pursuant to 17 U.S.C. ss.101.
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(f) No event or circumstance has occurred, will occur, exists, will
exist or is contemplated (including, without limitation, by the authorization,
execution or delivery of this Agreement or the consummation of any of the
transactions contemplated hereby) that (with or without notice or the lapse of
time) will or could reasonably be expected to result in the release, disclosure
or delivery to any third party of any part of any source code (or any algorithm
or documentation contained in or relating to any source code) underlying any
Proprietary Rights.
3.16 Employees, Labor Matters, etc. Seller is not a party to or bound by
any collective bargaining agreement and there are no labor unions or other
organizations representing, purporting to represent or attempting to represent
any employees employed by Seller. There has not occurred or, to the knowledge of
Seller, been threatened any material strike, slowdown, picketing, work stoppage,
concerted refusal to work overtime or other similar labor activity with respect
to any employees employed by Seller. There are no labor disputes currently
subject to any grievance procedure, arbitration or litigation and there is no
representation petition pending or, to the knowledge of Seller, threatened with
respect to any employee employed in the operation of the Business. Schedule 3.16
contains a full and complete list of all current employees and independent
contractors of Seller.
3.17 Employee Benefit Plans and Related Matters.
(a) Schedule 3.17 lists each pension, retirement, profit-sharing,
deferred compensation, bonus, phantom stock, restricted stock plan, stock option
plan, stock purchase plan, deferred compensation arrangement, other incentive
plan, severance pay plan or policy, supplemental executive retirement plan or
policy, or other employee benefit program, arrangement, agreement or
understanding, or medical, vision, dental or other health plan, or life
insurance or disability plan, or any other employee benefit plan, including any
"employee benefit plan" as defined in Section 3(3) of ERISA, to which Seller
contributes or is a party or is bound and under which it may have liability and
under which employees or former employees of the Business (or their
beneficiaries) are eligible to participate or derive a benefit ("Employee
Benefit Plans"). Seller has delivered to Buyer true, correct and complete copies
of all documents, summary plan descriptions, insurance contracts, third party
administration contracts and all other documentation created to embody all
Employee Benefit Plans, plus descriptions of any Employee Benefit Plans that
have not been reduced to writing.
(b) No liability has been or is expected to be incurred by Seller
under or pursuant to the Code or Title I or IV of ERISA or the penalty, excise
tax or joint and several liability provisions of the Code or ERISA relating to
Employee Benefit Plans and, to the knowledge of Seller, no event, transaction or
condition has occurred or exists that could result in any such liability to the
Business or, following the Closing, Buyer or any such Employee Benefit Plan.
(c) No Employee Benefit Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA, a "multiple employer plan" within the
meaning of Section 413(c) of the Code, or a defined benefit plan within the
meaning of Section 3(35) of ERISA.
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3.18 Order Backlog. A true and complete list of all firm product and
service purchase orders and contracts for the sale of goods or the delivery of
services by Seller in connection with the Business (collectively, the "Backlog")
pending as of the latest practical date prior to the date of this Agreement is
set forth in Schedule 3.18.
3.19 Disclosure. Assuming the accuracy of the representation and warranty
of the Buyer contained in Section 4.6, this Agreement (including the Exhibits
and Schedules referred to herein) and the documents and instruments furnished to
Buyer in connection with the Closing of the transactions contemplated by this
Agreement, taken together as a whole, do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. Anything in this Agreement to the contrary
notwithstanding, Seller makes no representations or warranties with respect to
any projections, forecasts or other similar forward-looking statements.
3.20 No Retention Agreements, etc. There are no retention agreements,
severance agreements, change of control agreements and similar arrangements to
which Seller, on the one hand, and any employee, consultant or other Person, on
the other hand, are a party.
3.21 Real Property Holding Company. Seller is not a real property holding
company within the meaning of Section 897 of the Code.
3.22 Capital Assets. Schedule 3.22 sets forth a true, correct and complete
list of each capital asset of Seller included in the Purchased Assets on the
date hereof.
3.23 Insurance. The insurance plans and policies maintained by, or
otherwise benefiting, Seller or the Business (collectively, the "Insurance
Policies") are set forth on Schedule 3.23. The Insurance Policies are currently
and have been at all times during their respective policy periods in full force
and effect and such policies are and have been during all times of the operation
of the Business by Seller reasonably adequate and sufficient to protect the
operation and assets of the Business.
3.24 Transactions with Affiliates. Except as set forth in Schedule 3.24,
Seller is not a party to any Contract relating to the Business to which Seller,
on the one hand, and any of its Affiliates, on the other hand, are parties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to Seller to enter into this Agreement, Buyer
represents and warrants to, and covenants with, Seller as follows:
4.1 Authority.
(a) Buyer has the absolute and unrestricted right, power, authority
and capacity to execute and deliver, and to enter into and perform its
obligations under, this Agreement and each of the Transaction Documents to which
it is a party. The execution, delivery and performance of this Agreement and
each of the Transaction Documents by Buyer and the consummation of the
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transactions contemplated hereby by Buyer have been duly and validly authorized
by all requisite corporate action, and no other proceedings on the part of Buyer
are necessary to authorize the execution, delivery and performance of this
Agreement and each of the Transaction Documents to which it is a party. This
Agreement has been duly executed and delivered by Buyer. Each of the Transaction
Documents to which Buyer is a party will, at Closing, be duly executed and
delivered by Buyer.
(b) Upon due execution and delivery, this Agreement and each of the
Transaction Documents to which Buyer is a party will constitute the valid and
binding obligation of Buyer, enforceable against Buyer in accordance with their
respective terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
4.2 No Conflict. Neither the execution and delivery of this Agreement or
any Transaction Document by Buyer nor the performance by Buyer of the
transactions contemplated hereby or thereby will conflict with or result in
(with or without notice or lapse of time) a violation or breach, as the case may
be, of (a) any provision of Buyer's Organizational Documents, (b) any resolution
adopted by Seller's directors, or (c) any Legal Requirement or any Order to
which Buyer or any of the Purchased Assets may be subject.
4.3 Litigation. There is no pending Proceeding that has been commenced or
threatened in writing by or against Buyer that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the transactions contemplated by this Agreement.
4.4 Solvency. Based on the financial condition of Buyer as of the Closing
Date after giving effect to the purchase of the Purchased Assets and the
assumption of the Assumed Liabilities by Buyer and the financing arrangements
set forth on Schedule 4.4 hereto, (i) Buyer's assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by Buyer utilizing the Purchased Assets, and projected capital
requirements and capital availability thereof under the conditions Buyer knows
to exist on the date hereof; and (ii) Buyer believes in good faith that the
current cash flow of Buyer, together with the proceeds Buyer would receive, were
it to liquidate all of its assets (including the Purchased Assets), after taking
into account all anticipated uses of the proceeds of such liquidation (including
the satisfaction and payment of the Assumed Liabilities), would be sufficient to
pay all amounts on or in respect of its debt when such amounts are required to
be paid. Buyer does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be
payable on or in respect of its debt). Buyer has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.
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4.5 Brokers and Finders. None of Buyer or its Affiliates or agents has
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement or the Transaction Documents or the transactions contemplated
hereby.
4.6 Withholding of Information. To Buyer's knowledge after due
investigation, there are no Contracts, liabilities or other matters that are not
disclosed on a schedule to this Agreement, and there are no other violations of
Seller's or OTV's representations or warranties existing that could reasonably
be expected to give rise to Seller's or OTV's obligation to indemnify Buyer or
any other Buyer Indemnified Party pursuant to Article IX of this Agreement or
otherwise. In the event of any breach of this Section 4.6, (a) the matter, fact
or circumstance at issue omitted from one or more schedules to the Agreement (an
"Omitted Matter") shall be deemed for all purposes to have been disclosed as
required on one or more schedules hereto, including as an Assumed Liability on
Schedule 2.2(a) as appropriate, (b) neither Seller nor OTV shall have any
liability to indemnify any Buyer Indemnified Party pursuant to Article IX of
this Agreement or otherwise with respect to the Omitted Matter, and (c) Seller
and OTV shall not have a claim against Buyer for a breach of this Section 4.6.
ARTICLE V
PRE-CLOSING COVENANTS
During the period beginning on the date of this Agreement until the
earlier of Closing Date or the date of termination of this Agreement pursuant to
Section 5.5, Seller, OTV (solely with respect to the covenants that expressly
identify OTV) and Buyer respectively agree (severally and not jointly and
severally) that (except as expressly contemplated or permitted by this Agreement
or the Transaction Documents or to the extent that Seller and Buyer, as the case
may be, shall otherwise consent in writing):
5.1 No Transfer or Inconsistent Action. Seller shall operate the Business
in the ordinary course consistent with past practice and shall not sell,
transfer or otherwise dispose of or in any way encumber any of the Purchased
Assets or take any action inconsistent with the approval and consummation of
this Agreement or the Transaction Documents or the transactions contemplated
hereby and thereby.
5.2 Reasonable Efforts. Seller will use reasonable efforts, including full
cooperation with Buyer, to secure fulfillment of all of the conditions precedent
to Buyer's obligations hereunder, and Buyer will use reasonable efforts,
including full cooperation with Seller, to secure fulfillment of all of the
conditions precedent to Seller's obligations hereunder. Seller shall, and OTV
will use its reasonable efforts to cause Seller to, provide Buyer with access to
all documents, information and Persons reasonably requested by Buyer in
connection with its performance of and under this Agreement and the transactions
contemplated herein and therein.
5.3 My Travel Release. Buyer shall secure a release on behalf of Seller
and OTV with respect to any claim relating to or arising out of the guarantee by
OTV in favor of MyTravel USA Holdings, Inc. of the Purchase Price Note dated
October 31, 2003 in the amount of $5,000,000 from Seller in favor of MyTravel
USA Holdings, Inc. or any other obligations of OTV to MyTravel USA Holdings,
Inc.
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5.4 OTV Cash Transfer. From October 27, 2005 through the Closing Date, OTV
shall transfer at times determined by OTV an aggregate amount of $2,639,000 in
immediately available funds to Seller (which funds shall comprise a portion of
the Purchased Assets) less an amount mutually agreed to at Closing based upon
the amount of liabilities assumed and excluded by Buyer, in order to support the
continued operation thereof through the Closing Date and to serve as security
for the representations and warranties made by Seller in this Agreement, (the
"OTV Cash Transfer Amount"). Buyer acknowledges that, as of the date hereof, OTV
has transferred approximately $750,000.00 of the OTV Cash Transfer Amount, and
from the date hereof through the Closing Date, OTV shall transfer the additional
OTV Transfer Amount an amount agreed to at Closing.
5.5 Maintenance of Insurance Policies, Contracts and Permits. Through the
Closing Date, Seller shall maintain the Insurance Policies set forth on Schedule
3.23 hereto and Seller and OTV shall use their commercially reasonable efforts
to maintain all Contracts and Permits of Seller in full force and effect and
shall not willingly permit any such Contract or Permit to be terminated,
modified or encumbered in any manner to the detriment of Buyer.
5.6 Termination.
(a) Termination of Agreement. This Agreement may be terminated at
any time prior to the Closing under the following circumstances:
(i) upon the written consent of Seller, OTV and Buyer;
(ii) by Buyer (x) if the conditions set forth in Sections 6.1
and 6.2 shall not be fully satisfied (unless such failure to satisfy results
primarily from Buyer breaching any representation, warranty or covenant
contained in this Agreement) or waived in writing by Buyer by Closing, (y) Buyer
reasonably believes that it will not be able to fulfill the condition contained
in Section 6.3(e) with respect to financing and Buyer has used its commercially
reasonable efforts to satisfy such condition, or (z) if the Closing shall not
have occurred on or before February 10, 2006 (unless due to a default by Buyer
hereunder);
(iii) by Seller (x) if the conditions set forth in Sections
6.1 and 6.3 shall not be fully satisfied (unless such failure to satisfy results
primarily from Seller breaching any representation, warranty or covenant
contained in this Agreement) or waived in writing by Seller by Closing, 2006, or
(y) if the Closing shall not have occurred on or before February 17, 2006
(unless due to a default by Seller hereunder);
(iv) by either Buyer or Seller if either party shall not agree
to the addition of Excluded Liabilities set forth on any amendment to Schedule
2.2(b) hereto made by Buyer prior to Closing subsequent to the original Schedule
2.2(b) attached to this Agreement on the date of this Agreement; or
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(v) by either Seller or Buyer if the consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or Governmental Body having competent
jurisdiction.
(b) Effect of Termination. If any party terminates this Agreement
pursuant to this Section 5.6, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party,
except as specified below; provided, however, that the provisions contained in
Section 10.7 (Expenses), Section 10.9 (Consent to Jurisdiction; Forum Selection;
Governing Law; Waiver of Jury Trial) and Section 10.15 (Interpretive Matters)
shall survive termination of this Agreement. If this Agreement is terminated
pursuant to Section 5.6(a)(ii) or (a)(iii) above, such termination shall not be
exclusive of any other remedy under this Agreement that the terminating party
hereto may have against any other party hereto, or at law or in equity, by
reason of any breach or default giving rise to such right of termination. If
this Agreement is terminated as provided by this Section 5.6, Buyer will
redeliver to Seller all documents and other materials provided by Seller in
accordance with the transactions contemplated by this Agreement and the
Transaction Documents.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions to Each Party's Obligation. The respective obligation of
each party hereto to effect the transactions contemplated hereby shall be
subject to the satisfaction as of the Closing Date of the following conditions:
(a) no provision of any applicable law shall prohibit the consummation of the
Closing and no suit, action or Proceeding by any third party or Governmental
Body with respect to the transactions contemplated hereby shall be pending or
Threatened in writing and (b) no injunction, restraining order or Order of any
nature shall have been issued by or be pending before any court of competent
jurisdiction or any other Governmental Body challenging the validity or legality
of the transactions contemplated hereby or restraining or prohibiting the
consummation of such transactions.
6.2 Conditions to Obligation of Buyer. The obligation of Buyer to effect
the transactions contemplated hereby is subject to the fulfillment of the
following conditions on or prior to the Closing Date (unless otherwise waived in
writing by Buyer).
(a) Representations and Warranties. The representations and
warranties made by Seller herein that are qualified by materiality shall be true
and correct in all respects and the representations and warranties made by
Seller herein that are not qualified by materiality shall be true and correct in
all material respects, each on the date hereof and on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date, except to the extent that any such
representation and warranty is specifically made as of a certain date, in which
case such representation and warranty shall be true and correct in all respects
or in all material respects, as applicable, as of such date, and Seller shall
have delivered a certificate to Buyer executed by the President of Seller which
certifies to the foregoing;
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(b) Performance of Obligations of Seller. Seller shall have
performed or complied in all respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by Seller on or before the Closing, and at such time Seller shall
not be in default in the performance of or compliance with any of the provisions
of the Agreement or the Transaction Documents to which Seller is a party, and
Seller shall have delivered a certificate to Buyer executed by the President of
Seller which certifies to the foregoing (such certificates, together with the
certificates referred to in Section 6.2(a), the "Seller's Certificates");
(c) Delivery of Closing Documents. Buyer shall have received all
documents and other items to be delivered under Section 7.2;
(d) Governmental Approvals. There shall have been received all
necessary Governmental Authorizations required in connection with the
transactions contemplated hereunder;
(e) Material Adverse Change. There shall not have occurred any
event, circumstance, occurrence, fact, condition, change or effect that is
materially adverse to the business, operations, results of operations, financial
condition, prospects, properties, assets or liabilities of the Business;
provided that any adverse change, event, development or effect arising from (a)
general national economic, financial, political or business conditions, weather,
war or acts of terrorism (to the extent such events do not have a
disproportionate effect on Seller relative to other entities operating
businesses similar to the business of Seller), (b) conditions (including changes
in economic, financial market, regulatory or political conditions) affecting
generally the industries in which Seller operates (to the extent such events do
not have a disproportionate effect on Seller relative to other entities
operating businesses similar to the business of Seller), (c) changes in the
United States generally accepted accounting principles, or (d) changes in laws,
regulations, rules or other directives by any Governmental Authority, shall not
constitute a material adverse effect; and
(f) OTV Cash Transfer. The OTV Cash Transfer Amount shall have been
transferred by OTV by wire transfer of immediately available funds to Seller at
or prior to the Closing Date.
6.3 Conditions to Obligation of Seller. The obligation of Seller to effect
the transactions contemplated hereby are subject to the fulfillment of the
following conditions on or prior to the Closing Date (unless otherwise waived in
writing by Seller):
(a) Representations and Warranties. The representations and
warranties made by Buyer herein that are qualified by materiality shall be true
and correct in all respects and the representations and warranties made by
Seller herein that are not qualified by materiality shall be true and correct in
all material respects, each on the date hereof and on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date, except to the extent that any such
representation and warranty is specifically made as of a certain date, in which
case such representation and warranty shall be true and correct in all respects,
or in all material respects, as applicable, as of such date, and Buyer shall
have delivered a certificate to Seller executed by a senior executive of Buyer
to Seller which certifies to the foregoing;
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(b) Performance of Obligations of Buyer. Buyer shall have performed
or complied in all respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing, and at such time Buyer shall not be in default
in the performance of or compliance with any of the provisions of this Agreement
or the Transaction Documents to which Buyer is a party, and Buyer shall have
delivered a certificate executed by a senior executive of Buyer to Seller which
certifies to the foregoing (such certificate, together with the certificate
referred to in Section 6.3(a), the "Buyer's Certificates");
(c) Delivery of Closing Documents. Seller shall have received all
documents and other items to be delivered under Section 7.3;
(d) Governmental Approvals. There shall have been received all
necessary Governmental Authorizations required in connection with the
transactions contemplated hereunder; and
(e) Financing. Contemporaneous with the Closing (assuming the
consummation of the Closing), Buyer shall have received cash proceeds of at
least $2,000,000 of cash available to fund the operations of the Business and a
firm commitment for at least $3,000,000 in immediately available unconditional
cash proceeds from equity investments therein and at least $5,000,000 in
immediately available unconditional cash proceeds from debt issuances thereof.
ARTICLE VII
CLOSING
7.1 Closing. The transactions that are the subject of this Agreement shall
be consummated at a closing (the "Closing") which shall be held at the offices
of Proskauer Rose LLP, 1585 Broadway, New York, New York 10036 (or at such other
place or in such other manner as the parties may mutually agree) on a date
mutually satisfactory to all parties, but in no event later than two (2)
business days after satisfaction or waiver of the conditions set forth in
Article VI (other than the conditions that by their terms shall be or must
necessarily be satisfied at the Closing). The date of the Closing is sometimes
referred to herein as the "Closing Date".
7.2 Deliveries by Seller. At the Closing, Seller shall deliver to Buyer
the following (or the same shall be waived in writing by Buyer), all of which
shall be deemed to be delivered simultaneously:
(a) Instruments of Conveyance. The Bill of Sale duly executed by
Seller and instruments of conveyance for any Seller Proprietary Rights
reasonably requested by Buyer in form and substance reasonably satisfactory to
Buyer;
(b) Seller's Certificates. Duly executed Seller's Certificates;
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(c) Possession of Purchased Assets. Legal and actual possession of
the Purchased Assets;
(d) Payment of the OTV Cash Transfer Amount. OTV shall pay any
remaining portion of the OTV Cash Transfer Amount by wire transfer of
immediately available funds to Seller at Closing;
(e) Opinion of OTV's Delaware Counsel. An opinion from OTV's
Delaware legal counsel stating, subject to customary qualifications and
assumptions for an opinion with respect to such subject matter, that the
approval of the stockholders of OTV is not required in connection with the
transactions contemplated hereby.
(f) Delivery of Sublease. Seller shall deliver to Buyer a duly
executed copy of the Sublease Agreement agreed to by Buyer and Seller,
including, without limitation, the terms set forth on Exhibit B hereto; and
(g) Other Documents. Such other documents as Buyer may reasonably
request for the purpose of consummating the transactions contemplated by this
Agreement.
7.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to Seller the
following (or the same shall be waived in writing by Seller), all of which shall
be deemed to be delivered simultaneously:
(a) Instruments of Assumption. The Bill of Sale duly executed by
Buyer;
(b) Buyer's Certificates. Duly executed Buyer's Certificates; and
(c) Other Documents. Such other documents as Seller may reasonably
request for the purpose of consummating the transactions contemplated by this
Agreement.
ARTICLE VIII
COVENANTS AFTER CLOSING
8.1 No Assignment in Certain Circumstances. Notwithstanding anything
herein to the contrary, this Agreement shall not constitute an agreement to
sell, convey, assign, transfer or deliver any interest in any license,
instrument, commitment, lease, Permit or other Contract or arrangement or
Governmental Authorization or any claim, right or benefit arising thereunder or
resulting therefrom, if a sale, conveyance, assignment, transfer or delivery or
an attempt to make such a sale, conveyance, assignment, transfer or delivery
without the authorization, approval, consent or waiver of a third party would
constitute a breach or violation thereof or affect adversely the rights of
Seller thereunder; and any sale, conveyance, assignment, transfer or delivery to
Buyer of any interest under any such license, instrument, commitment, lease,
Permit or other Contract or arrangement or Governmental Authorization that
requires the authorization, approval, consent or waiver of a third party shall
be made subject to such authorization, approval, consent or waiver being
obtained. In the event that any such authorization, approval, consent or waiver
is not obtained on or prior to the Closing Date and Seller waives the condition
to its obligation to close the transaction set forth in Section 6.3, (i) Buyer
shall have the right, but not the obligation, to use its reasonable commercial
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efforts to obtain any such authorization, approval, consent or waiver following
the Closing, and (ii) Seller shall, to the greatest extent permitted by law and
any such agreement or instrument, commitment, lease, Permit or other Contract or
arrangement or Governmental Authorization (including by acting as an agent of
Buyer or its Affiliates) and under and subject to limitations arising under the
circumstances that Buyer will own the Purchased Assets and be operating the
Business, continue to comply with, maintain and hold such instrument,
commitment, lease or other Contract or arrangement or Governmental Authorization
or any claim, right or benefit arising thereunder or resulting therefrom in
trust for the benefit of Buyer or otherwise for the exclusive use and benefit of
Buyer such that Buyer receives the interest of Seller in the benefits therefrom
until the earlier of the nine month anniversary of the Closing Date or such time
as such authorization, approval, consent or waiver is obtained, but such
instrument, commitment, lease or other Contract or arrangement or Governmental
Authorization shall not be deemed to be included in the Purchased Assets unless
and until such authorization, approval, consent or waiver is obtained. Buyer
shall perform, as a subcontractor or on a similar basis, the obligations under
any such instrument, commitment, contract, lease, Permit or other agreement or
arrangement that Buyer wishes to include as a Purchased Asset or wishes Seller
to maintain hereunder.
8.2 Seller's Access to Information. After the Closing Date, Buyer will
give, or cause to be given, to Seller and its representatives, during normal
business hours, such reasonable access to the personnel, properties, titles,
contracts, books, records, files and documents included in the Purchased Assets
and, at Seller's expense, access to and copies of titles, contracts, books,
records, files and documents included in the Purchased Assets, in each case to
the extent reasonably necessary to allow Seller to obtain information in
connection with the preparation and any audit of Seller's Tax Returns and any
claims, demands, other audits, suits, actions or Proceedings by or against
Seller as the previous owners and operators of the Purchased Assets and the
Business.
8.3 Buyer's Access to Information. After the Closing Date, Seller (and OTV
will cooperate) to give to Buyer and its representatives, during normal business
hours, such reasonable access to the personnel, properties, titles, contracts,
books, records, files and documents of Seller not included in the Purchased
Assets and, at Buyer's expense, access to and copies of titles, Contracts,
books, records, files and documents not included in the Purchased Assets to the
extent reasonably necessary to allow Buyer to obtain information in connection
with the operation of the Business, the preparation and any audit of Buyer's Tax
Returns and any claims, demands, other audits, suits, actions or Proceedings by
or against Buyer as the owner and operator of the Purchased Assets and the
Business or as is reasonably necessary to enjoy the full benefit of any of the
Purchased Assets.
8.4 Liability for Taxes; Retention of Records. In accordance with Article
IX, Seller shall indemnify and hold Buyer harmless from and against all
liabilities for Taxes imposed upon, or incurred by, Seller at any time or
attributable to the operation of the business of Seller prior to the time of the
Closing which are not Assumed Liabilities. Buyer and Seller shall retain all
books, records and other data pertaining to Tax matters with respect to the
operation of the business of Seller and the Purchased Assets for all open
periods through the Closing Date. In particular, Buyer and Seller shall retain
all Tax Returns, schedules and work papers, and all material records and other
documents relating thereto with respect to the operation of the business of
Seller and the Purchased Assets prior to the Closing Date, until the expiration
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of the statute of limitations (and, to the extent notified by Buyer or Seller,
any extensions thereof) of the respective Tax periods, or for any longer periods
as may be required by any Governmental Authority or ongoing litigation, and
shall make such records reasonably available at reasonable times upon reasonable
notice to Seller, as may be reasonably required. Seller and OTV hereby grant
Buyer the right, but not the obligation, to settle any Proceeding relating to
any Tax to the extent such Tax is an Assumed Liability.
8.5 Employee Matters.
(a) Employee Benefit Plans. As of the Closing Date, Buyer shall
become the sponsor of the Employee Benefit Plans listed on Schedule 8.5(a) and
shall assume all duties and obligations associated with such sponsorship with
respect to all individuals entitled to benefits or other compensation under such
Employee Benefit Plans, whether or not such individuals become employed by
Buyer. Buyer further agrees that following the Closing Date, any and all
liability with respect to the Employee Benefit Plans set forth on Schedule
8.5(a) shall be the sole obligation of Buyer.
(b) Employees. On or before the Closing Date, Buyer shall offer
employment to all employees of Seller at the same location and at the same wage
or salary and with substantially the same benefits that each such employee had
with Seller immediately prior to the Closing, with such employment to commence
immediately upon Closing. Those employees of Sellers who accept an offer of
employment from Buyer and become employed by Buyer shall be referred to herein,
collectively, as "Transferring Employees." Except for termination for just
cause, Buyer will not terminate the employment of any of the Transferring
Employees until at least the 100th day after the Closing Date (the "100th
Date"), and will through the 100th Day, for so long as a Transferring Employee
remains employed by Buyer, maintain that employee's location of work, wage or
salary and benefits as described above in this Section 8.5(b). Until the 100th
Day, Buyer will not terminate any employee, including for just cause, if, as a
result of such termination, 50 or more employees will have suffered a
termination of employment during any 90-day period from 90 days prior to the
Closing Date to the 100th Day. Seller represents and warrants to Buyer that
Schedule 8.5(b) sets forth employees terminated by Seller within the 90 days
prior to the Closing Date. Buyer shall indemnify and hold Seller Indemnified
Parties harmless for any and all liability arising from Buyer's acts following
the Closing Date, including liability related to employee termination and
severances costs and expenses for Transferring Employees required under COBRA
and ERISA, and any liability under the federal WARN Act and any applicable state
or local plant closing notification or similar statute arising due to the acts
of Buyer including liability for Transferring Employees and any employees not
hired by Buyer. Seller shall indemnify and hold Buyer Indemnified Parties
harmless for any and all liability arising from or relating to the employment or
any related action of Seller with respect to each employee of Seller prior to
the Closing, to the extent not expressly assumed by Buyer as an Assumed
Liability under this Agreement.
(c) Wages. Seller agrees that all amounts of wages, bonuses,
commissions or other compensation (excluding vacation and sick leave pay) due to
its employees in respect of all periods ending on or prior to the Closing Date
shall be paid by Seller, without regard to the employment by Buyer of any of
Seller's employees after the Closing Date, including, without limitation, the
Transferring Employees.
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(d) Benefits. Buyer agrees, in applying its vacation and sick leave
policies, to credit each of the Transferring Employees with all vacation or sick
leave time he or she had accrued but not used as of the Closing Date under
Sellers' vacation and sick leave policies, and will not cause any such time to
be forfeited. Seller represents and warrants that a complete list of all such
time is set forth on Schedule 8.5(d) hereto Vacation and sick leave time after
the Closing Date will accrue as provided under Buyer's policies. Buyer shall
recognize all past time of employment of Transferred Employees with Seller for
purposes of calculating any benefits under Buyer's welfare or benefit plans and
corporate policies with respect to employees.
(e) Limitation. Except as specifically provided, no provision of
this Section 8.5 shall be construed to create any right or entitlement
whatsoever in any Transferred Employee or any beneficiary or dependent thereof,
including without limitation a right to continued employment or to any benefit
under a plan or any other compensation.
(f) Cooperation. Seller and Buyer shall use their commercially
reasonable efforts to cooperate with one another in making any communications
with employees following the public announcement of this Agreement, including
without limitation any communications regarding any employee benefit plans or
employee arrangements.
(g) COBRA. Buyer shall be responsible for the continuation of health
plan coverage, in accordance with the requirements of COBRA, for any employee or
qualified beneficiary under any Employee Benefit Plan who is already receiving
COBRA benefits or who loses health coverage in connection with the transactions
contemplated by this Agreement.
8.6 Letters of Credit. Seller shall cause the letters of credit for the
benefit of Seller listed on Schedule 8.6 to remain in full force and effect for
the benefit of Buyer following the Closing until the earlier of (a) the date on
which such letters of credit terminate by their respective terms, or (b) the one
(1) year anniversary of the Closing Date. Buyer shall use commercially
reasonable efforts to replace such letters of credit with letters of credit of
substantially similar value on or prior to the one (1) year anniversary of the
Closing Date.
8.7 Buyer Products and OTV Bulk Rate Contracts. Each of OTV and Buyer
hereby covenants and agrees to negotiate in good faith following the Closing a
commission-based marketing and sales agreement with respect to the products and
services provided by Buyer. Each of OTV and Buyer hereby covenants and agrees to
negotiate in good faith following the Closing the provision of access to Buyer
to the bulk rate air and hotel contracts available to OTV.
8.8 Insurance. From and after the Closing Date, Seller shall maintain each
Insurance Policy as necessary to allow the recovery of any pending or current
claim under any such Insurance Policy.
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ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Seller. Subject to the other provisions of this
Article IX, from and after the Closing, Seller agrees to indemnify, defend and
save Buyer Indemnified Parties harmless from and against, and to promptly pay to
Buyer Indemnified Party or reimburse Buyer Indemnified Party for, any and all
liabilities (whether contingent, fixed or unfixed, liquidated or unliquidated,
or otherwise), obligations, deficiencies, demands, claims, suits, actions, or
causes of action, assessments, losses, costs, expenses, interest, fines,
penalties, actual or punitive damages or costs or expense of any and all
investigations, Proceedings, judgments, environmental analysis, remediations,
settlements and compromises (including reasonable fees and expenses of
attorneys, accountants and other experts) (individually and collectively, the
"Losses") sustained or incurred by such Buyer Indemnified Party relating to,
resulting from, arising out of, or otherwise by virtue of, any of the following:
(a) any breach of a representation or warranty made herein by
Seller;
(b) any non-compliance with or breach by Seller of any of the
covenants or agreements contained in this Agreement to be performed by Seller;
(c) any liability or obligation of Seller or any assertion against a
Buyer Indemnified Party, arising out of or relating, directly or indirectly, to
any of the Excluded Liabilities or Excluded Assets;
(d) the ownership, operation or use of the Purchased Assets prior to
the time of the Closing other than with respect to or in connection with (i) the
Assumed Liabilities, and (ii) payment and performance obligations that arise
after the time of the Closing under any Contracts transferred to Buyer pursuant
to this Agreement;
(e) any claim for payment of fees and/or expenses as a broker or
finder in connection with the origin, negotiation, execution or consummation of
this Agreement based upon an alleged agreement between claimant and Seller, or
any of its respective Affiliates; and
(f) any failure by Seller to comply with any bulk sales laws
applicable to the transactions contemplated hereby.
9.2 Indemnification by OTV. Subject to the other provisions of this
Article IX, from and after the Closing, OTV agrees to indemnify, defend and save
Buyer Indemnified Parties harmless from and against, and to promptly pay to
Buyer Indemnified Party or reimburse Buyer Indemnified Party for, any and all
Losses sustained or incurred by such Buyer Indemnified Party relating to,
resulting from, arising out of, or otherwise by virtue of, any of the following:
(a) any breach of a representation or warranty made herein by OTV;
(b) any non-compliance with or breach by OTV of any of the covenants
or agreements contained in this Agreement to be performed by OTV; and
(c) any claim for payment of fees and/or expenses as a broker or
finder in connection with the origin, negotiation, execution or consummation of
this Agreement based upon an alleged agreement between claimant and OTV, or any
of its respective Affiliates.
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9.3 Indemnification by Buyer. Subject to the other provisions of this
Article IX, from and after the Closing, Buyer agrees to indemnify, defend and
save Seller Indemnified Parties harmless from and against, and to promptly pay
to each Seller Indemnified Party or reimburse each Seller Indemnified Party for,
any and all Losses sustained or incurred by such Seller Indemnified Party
relating to, resulting from, arising out of, or otherwise by virtue of, any of
the following:
(a) any breach of a representation or warranty made herein by Buyer;
(b) any non-compliance with or breach by Buyer of any of the
covenants or agreements contained in this Agreement to be performed by Buyer;
(c) any liability or obligation of Buyer or any assertion against a
Seller Indemnified Party, arising out of or relating, directly or indirectly, to
any of the Assumed Liabilities;
(d) the ownership, operation or use of the Purchased Assets
following the Closing other than with respect to or in connection with the
Excluded Liabilities. For purposes of clarification and not limitation, Buyer
shall not be liable under this Section 9.3 or otherwise for any Losses arising
from or relating to the use or ownership of the Purchased Assets prior to the
Closing to the extent the same are not expressly Assumed Liabilities under this
Agreement; and
(e) any claim for payment of fees and/or expenses as a broker or
finder in connection with the origin, negotiation, execution or consummation of
this Agreement based upon an alleged agreement between claimant and any of Buyer
or its Affiliates.
9.4 Indemnification Procedure for Third Party Claims.
(a) In the event that subsequent to the Closing any Person entitled
to indemnification under this Agreement (an "Indemnified Party") asserts a claim
for indemnification or receives notice of the assertion of any claim or of the
commencement of any action or Proceeding by any Person who is not a party to
this Agreement or an Affiliate of a party to this Agreement (including, but not
limited to, any domestic or foreign court or Governmental Body) (a "Third Party
Claim") against such Indemnified Party, relating to a matter for which a party
to this Agreement is required to provide indemnification under this Agreement
(an "Indemnifying Party"), the Indemnified Party shall give written notice
regarding such claim (and attaching a copy of all papers served with respect to
such claim) to the Indemnifying Party within thirty (30) days after learning of
such claim (the "Claim Notice"). The Indemnifying Party shall have the right,
upon written notice to the Indemnified Party (the "Defense Notice") within
thirty (30) days after receipt from the Indemnified Party of the Claim Notice,
to conduct at its expense the defense against such claim in its own name, or, if
necessary, in the name of the Indemnified Party. Notwithstanding the foregoing,
the Indemnifying Party shall not be entitled to assume control of a Third Party
Claim and shall pay the reasonable fees and expenses of counsel retained by the
Indemnified Party if the Third Party Claim (i) seeks injunctive or other
equitable relief, or (ii) involves criminal allegations against the Indemnified
Party.
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(b) In the event that the Indemnifying Party shall fail to give the
Defense Notice within the time period described above, it shall be deemed to
have elected not to conduct the defense of the subject claim, and in such event
the Indemnified Party shall have the right to conduct such defense in good faith
and to compromise and settle the claim without prior consent of the Indemnifying
Party and such Indemnifying Party will be liable for all reasonable costs and
expenses paid or incurred in connection therewith. The Indemnified Party may not
settle the Third Party Claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld, if such settlement
would lead to any liability or create any other obligation of the Indemnifying
Party.
(c) In the event that the Indemnifying Party does deliver a Defense
Notice within the time period described above and thereby elects to conduct the
defense of the subject claim, the Indemnifying Party shall diligently conduct
such defense and the Indemnified Party will cooperate with and make available to
the Indemnifying Party such assistance and materials as it may reasonably
request, all at the expense of the Indemnifying Party, and the Indemnified Party
shall have the right at its expense to participate in the defense assisted by
counsel of its own choosing.
(d) The Indemnifying Party may enter into any settlement of any
Third Party Claim; provided, however, the Indemnifying Party may not enter into
any settlement of any Third Party Claim without the prior written consent of the
Indemnified Party if pursuant to or as a result of such settlement injunctive or
other equitable relief would be imposed against the Indemnified Party.
(e) Any final judgment entered or settlement agreed upon in the
manner provided herein shall be binding upon the Indemnifying Party, and shall
conclusively be deemed to be an obligation with respect to which the Indemnified
Party is entitled to prompt indemnification hereunder.
(f) Each party shall cooperate, and cause their respective
Affiliates to cooperate, in the defense or prosecution of any Third Party Claim
and shall provide reasonable access upon reasonable notice at reasonable times
to properties and individuals as reasonably requested and furnish or cause to be
furnished records, information and testimony, all at the expense of the
Indemnifying Party.
9.5 Direct Claims. It is the intent of the parties hereto that all direct
claims by an Indemnified Party against a party hereto not arising out of Third
Party Claims shall be subject to and benefit from the terms of this Section 9.5.
Any claim under this Section 9.5 by an Indemnified Party for indemnification
other than indemnification against a Third Party Claim (a "Direct Claim") will
be asserted by giving the Indemnifying Party written notice thereof (a "Direct
Claim Notice"), and the Indemnifying Party will have a period of thirty (30)
days within which to satisfy such Direct Claims, except for injunctive or
equitable relief, which the Indemnified Party may pursue at any time. The
Indemnifying Party shall only be deemed to reject such claim if it sends notice
thereof to the Indemnified Party within such thirty (30) day period, in which
event the Indemnified Party will be free to pursue such remedies as may be
available to the Indemnified Party under this Article IX or otherwise. If the
Indemnifying Party does not so respond within such thirty (30) day period, the
Indemnifying Party will be deemed to have accepted such claim.
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9.6 Failure to Give Timely Notice. A failure by an Indemnified Party to
give timely, complete or accurate notice as provided in this Article IX will not
affect the rights or obligations of the Indemnifying Party hereunder except and
only to the extent that, as a result of such failure, any party entitled to
receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise materially damaged as a result of
such failure to give timely notice.
9.7 Survival of Representations and Warranties. All of the representations
and warranties set forth in this Agreement or in any of the other Transaction
Documents shall survive the execution and delivery of this Agreement and the
consummation of the transactions until they expire and terminate on the date one
(1) year after the Closing Date, except the representations and warranties
contained in Sections 3.1(a), 3.1(c), 3.2, 3.6(a) and 4.1(a) which shall survive
indefinitely, and Section 3.10 which shall survive until the expiration of the
applicable statute of limitations.
9.8 Adjustment to Purchase Price. Any indemnification received under
Sections 8.4 or 8.5 or this Article IX shall be, to the extent permitted by law,
an adjustment to the Purchase Price.
9.9 Certain Limitations. Notwithstanding anything to the contrary set
forth in this Agreement (but subject to the terms of this Section 9.9), other
than Losses arising out of fraud or willful misconduct of a party hereto, the
obligation hereunder of any Indemnifying Party shall not include any special,
punitive or consequential damages.
ARTICLE X
MISCELLANEOUS
10.1 Notices, Consents, etc. Any notices, consents or other communication
required to be sent or given hereunder by any of the parties shall in every case
be in writing and shall be deemed properly served (a) when personally delivered,
(b) one (1) business day following delivery by sender to a nationally-recognized
overnight courier service for pre-paid delivery on the succeeding business day,
and (c) upon facsimile transmission (provided such facsimile machine emits a
transmission confirmation), if such transmission occurs prior to 5:00 pm
recipient's time on a business day so long as such notice is also sent by
nationally recognized overnight courier for the following business day, or on
the next succeeding business day if such transmission occurs at or after 5:00 pm
recipient's time on a business day or on a day other than a business day so long
as such notice is also sent by nationally recognized overnight courier for the
following business day, in each case to the respective mailing addresses of each
party hereto as provided below:
(a) If to Buyer:
Crystal Hospitality Group, Inc.
641 Shunpike Road, Suite 333
Chatham, New Jersey 07928
Attn: Fabrizzio P. Busso-Campana
Fax: (908) 349-3043
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with a copy to (which shall not constitute notice):
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Attn: Sheldon I. Hirshon, Esq.
Fax: (212) 969-2900
(b) If to Seller or OTV:
5775 Peachtree Dunwoody Road
Building G, Suite 300
Atlanta, Georgia 30346
Attention: Marc E. Bercoon
Fax No.: (404 943-1094]
with a copy to (which shall not constitute notice):
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661-3693
Attention: Matthew S. Brown, Esq.
Mark D. Guidubaldi, Esq.
Fax No.: (312) 902-1061
10.2 Public Announcements. No party hereto shall make any public
announcement or filing with respect to the transactions provided for herein
without the prior written consent of the other parties hereto (which consent
shall not be unreasonably withheld or delayed), except as required by any Legal
Requirement (including, but not limited to rules and regulations of the
Securities Exchange Commission or the American Stock Exchange). Buyer
acknowledges that upon each of the execution of this Agreement and the Closing
OTV will issue a press release announcing the transactions contemplated herein,
and the terms thereof, and file this Agreement and the Transaction Documents as
publicly-available exhibits to a Current Report on Form 8-K with the Securities
Exchange Commission.
10.3 Severability. The unenforceability or invalidity of any provision of
this Agreement shall not affect the enforceability or validity of any other
provision.
10.4 Amendment and Waiver. This Agreement, or any provision hereof may be
amended or waived; provided that any such amendment or waiver will be binding on
Buyer only if such amendment or waiver is set forth in a writing executed by
Buyer; provided further that any such amendment or waiver will be binding upon
Seller only if such amendment or waiver is set forth in a writing executed by
Seller; provided further that any such amendment or waiver will be binding upon
OTV only if such amendment or waiver is set forth in a writing executed by OTV.
The waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other breach.
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10.5 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other.
10.6 Delivery by Facsimile. This Agreement, the Transaction Documents and
each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects and for all purposes as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
10.7 Expenses. Except as otherwise expressly set forth herein, each of
Seller and OTV, on the one hand, and Buyer, on the other hand, shall pay all
costs and expenses incurred or to be incurred by it in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement.
10.8 Headings. The subject headings of Articles and Sections of this
Agreement are included for purposes of convenience of reference only and shall
not affect the construction or interpretation of any of its provisions.
10.9 Governing Law; Venue. This Agreement shall be construed and enforced
in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the
internal laws of the State of Delaware, without giving effect to provisions
thereof regarding conflict of laws. The parties hereto hereby irrevocably submit
to the jurisdiction of the state and federal courts located in the State of
Delaware.
10.10 Waiver of Jury Trial. Each of the parties hereto hereby irrevocably
waives any and all right to trial by jury of any claim or cause of action in any
legal proceeding arising out of or related to this Agreement or the transactions
or events contemplated hereby or any course of conduct, course of dealing,
statements (whether verbal or written) or actions of any party hereto. The
parties each agree that any and all such claims and causes of action shall be
tried by the court without a jury. Each of the parties further waives any right
to seek to consolidate any such legal proceeding in which a jury trial has been
waived with any other legal proceeding in which a jury trial cannot or has not
been waived.
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10.11 Assignment. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but will not be assignable or delegable by any party without the prior
written consent of the other party, which shall not be unreasonably withheld or
delayed; provided, however, that each of Buyer, Seller and OTV shall be allowed
to assign its rights and benefits hereto to an Affiliate thereof so long as such
Affiliate assumes all obligations hereunder of Buyer or Seller and OTV, as
applicable; and provided, further, that OTV shall be allowed to assign its
rights and benefits hereto to any acquirer (by purchase, merger or otherwise) of
substantially all of the common stock or assets of OTV, provided that such
successor assumes all obligations of OTV hereunder.
10.12 Intentionally Deleted
10.13 Third Parties. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any Person, other than the parties
to this Agreement and their respective permitted successors and assigns, any
rights or remedies under or by reason of this Agreement, other than Buyer
Indemnified Parties and Seller Indemnified Parties pursuant to and in accordance
with Article IX hereof.
10.14 Interpretative Matters. Unless the context otherwise requires, (a)
all references to Articles, Sections or Schedules are to Articles, Sections or
Schedules in this Agreement, (b) words in the singular or plural include the
singular and plural, pronouns stated in either the masculine, the feminine or
neuter gender shall include the masculine, feminine and neuter and (c) the term
"including" shall mean by way of example and not by way of limitation. The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement. If an ambiguity or questions of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement.
10.15 Further Assurances. Each of Buyer and Seller shall from time to time
after the Closing, at the other party's reasonable request, promptly execute and
deliver or cause to be executed and delivered such instruments of transfer,
conveyance and assignment (in addition to those delivered at the Closing), and
take or cause to be taken such other action, as such party may reasonably
require, to effect, consummate, confirm, or evidence the transactions
contemplated hereby or to more effectively transfer, convey and assign to, and
put Buyer in actual possession and control of, each of the Purchased Assets, and
to more effectively evidence the assumption by Buyer of or to permit Buyer to
more effectively perform the Assumed Liabilities. Seller and Buyer will also do
such acts as are reasonably necessary to perform their covenants and agreements
herein and to consummate the transactions contemplated hereby and in the
Transaction Documents.
10.16 Transfer Taxes. Buyer shall pay any and all sales, use, transfer,
stamp, conveyance, recording, value-added and other similar Taxes imposed under
any applicable laws and recording and filing fees, notarial fees and other
similar costs of Closing, with respect to the sale and transfer of the Purchased
Assets to Buyer or otherwise on account of this Agreement, or any of the
transactions contemplated hereby or thereby.
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10.17 Bulk Sales Laws. Buyer, Seller and OTV hereby waive compliance with
all relevant bulk sales laws respecting the sale and purchase of the Purchased
Assets, if any.
10.18 Confidentiality. Subject to Section 10.2 hereof, Seller and OTV
will, and will cause their respective Affiliates to, hold in strict confidence,
and will not use to the detriment of Buyer or any of its Affiliates, any
confidential, secret or proprietary information with respect to Buyer or its
Affiliates, the Business, Seller or the Purchased Assets. Notwithstanding the
foregoing, Seller and OTV may disclose such information (i) if compelled to
disclose the same by judicial or administrative process or by any other Legal
Requirement, (ii) if the same hereafter is in the public domain through no fault
of Seller or OTV, as applicable, or any of their respective Affiliates, as
applicable, or (iii) if the same is later acquired by Seller or OTV, from
another source neither Seller nor OTV, as applicable, nor any of their
respective Affiliates is aware that such source is under an obligation to
another Person to keep such information confidential.
10.19 Mail; Payments. After the Closing, Seller authorizes and empowers
Buyer to receive and open all mail and other communications received by Buyer
and to act with respect to such communications in such manner as Buyer may elect
if such communications relate to the Business (including the right to endorse
checks and other instruments of payment) other than the Excluded Assets or the
Excluded Liabilities, or, if such communications do not relate to the Business
or relate to the Excluded Assets or the Excluded Liabilities, to forward the
same promptly to Seller. Seller shall promptly deliver to Buyer any cash, checks
or other instruments of payment received by Seller from third parties to which
Buyer is entitled and shall hold the same in trust for the other until such
delivery. Seller will endorse and/or pay over to Buyer all checks or other
instruments of payment received by Seller to which Buyer is entitled hereunder.
[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first written above.
SELLER:
FS SUNTOURS, INC.
By: \s\ Matthew Holliday
-----------------------------
Name: Matthew Holliday
Its: President
OTV:
By: \s\ Marc E. Bercoon
-----------------------------
Name: Marc E. Bercoon
Its: President
BUYER:
CRYSTAL HOSPITALITY GROUP, INC.
By: \s\ Peter Gallic
-----------------------------
Name: Peter Gallic
Its: President
35