Exhibit 10.24
FIRST AMENDMENT OF
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ACQUISITION AGREEMENT
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This First Amendment of Acquisition Agreement (the "Amendment") is entered
into this December 27, 2005 by and among One Link 4 Travel, Inc., a Delaware
corporation ("OneLink"), The Call Center, LLC, a Delaware limited liability
company ("TCC"), Xxxx X. Xxxxxxxx, as Trustee of the Xxxx Xxxxxxxx Trust under
trust agreement dated July 2, 2001 as amended and restated November 26, 2003
("Xxxxxxxx Trust"), and Xxxx X. Xxxxxxxx ("Xxxxxxxx") (OneLink, TCC, the
Xxxxxxxx Trust and Xxxxxxxx are sometimes referred to together in this Amendment
as the "Parties") for the purpose of amending the Acquisition Agreement dated
April 8, 2005 entered into among the Parties (the "Original Agreement").
R E C I T A L S:
A. Following entry by the Parties into the Original Agreement on April 8,
2005 and the Closing of the transactions and delivery of consideration and
documents required under the Original Agreement on April 28, 2005, significant
changes have occurred in the business of TCC including a dramatic reduction and
change in the customer base of TCC. Xxxxxxxx'x involvement in TCC activities has
diminished, and Xxxxxxxx'x time available for activities involving TCC has
decreased. As a result of such changes, Xxxxxxxx and OneLink contemplate that:
(i) Xxxxxxxx'x involvement in future operations of TCC will be substantially
less than was contemplated at the time of Closing, and (ii) the future value of
the TCC business to OneLink will be increasingly dependent upon post-Closing
operations and will be less dependant on conditions and assets of the TCC
business which existed at the time of Closing.
B. Accordingly, the Parties have agreed to: (i) reduce the total
consideration payable to the Xxxxxxxx Trust for the Xxxxxxxx Trust's TCC
Membership Interest by reducing the maximum amount of Acquisition Consideration
provided in the Original Agreement, (ii) eliminate certain contingencies and
Repurchase Options applicable to portions of the reduced Acquisition
Consideration, (iii) adjust the payment schedule for certain portions of the
Acquisition Consideration, (iv) terminate certain obligations of Xxxxxxxx under
Xxxxxxxx'x Employment Agreement, and (v) make other appropriate related
adjustments, with all such adjustments to be made according to the terms of this
Amendment.
ONELINK, TCC, XXXXXXXX AND THE XXXXXXXX TRUST AGREE AS FOLLOWS:
1. Definitions. Unless otherwise defined in this Amendment, the
capitalized terms used in this Amendment shall have the meanings defined for
such terms in the Original Agreement.
2. Effect of Amendment. Except as expressly modified by this Amendment,
the terms and provisions of the Original Agreement and the Operating Documents
shall remain in full force and effect.
3. Reduction of Acquisition Consideration; Release of Escrow Shares;
Elimination of A Portion of the Contingent Consideration.
3.1 Escrow Shares. Of the 1,000,000 Escrow Shares provided for in
Section 2.2(b) of the Original Agreement, 500,000 are intended to be
released to the Xxxxxxxx Trust, and 500,000 are to be returned to OneLink
for cancellation. Accordingly, the following changes are hereby adopted in
the Original Agreement:
(a) Section 2.10 of the Original Agreement is amended and
restated in its entirety to read as follows:
"2.10 Escrow Shares. Five Hundred Thousand (500,000) of the
Escrow Shares shall be released from the Escrow and transferred
by the Escrow Agent to the Xxxxxxxx Trust on or before December
31, 2005. Five Hundred Thousand (500,000) of the Escrow Shares
shall be released from the Escrow and transferred by the Escrow
Agent to OneLink for cancellation on or before December 31, 2005.
The Escrow Agreement shall be amended and restated to reflect the
provisions of this Section 2.10."
(b) The Parties acknowledge that the Escrow Agreement
concurrently is being amended and restated to read as set forth in the
Amended and Restated Escrow Agreement attached hereto as Exhibit A
(the "Amended and Restated Escrow Agreement").
(c) Release of the Escrow Shares and the resulting termination
of the Escrow pursuant to this Amendment and the Amended and Restated
Escrow Agreement eliminate the original purpose and meaning of the
Repurchase Option, and accordingly, Section 2.10 of the Original
Agreement is deleted in its entirety, and all references in the
Original Agreement to the term "Repurchase Option" shall be
ineffective and inoperative.
3.2 Contingent Consideration. The Parties have agreed that all
consideration other than the Accounts Receivable Surplus included in the term
"Contingent Consideration" as defined in the Original Agreement and payable to
the Xxxxxxxx Trust under the Original Agreement is eliminated and shall not be
payable at any time or under any circumstances, and the Parties agree further
that the manner in which the Accounts Payable Surplus, if any, shall be payable
shall be changed to permit the Xxxxxxxx Trust to meet certain tax obligations.
Accordingly, the following changes are hereby adopted in the Original Agreement:
(a) Section 2.2(c) of the Original Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Contingent Consideration. The amount of the Accounts Receivable
Surplus (the "Contingent Consideration") shall be paid within ten (10)
business days following the Second Anniversary, provided, however,
that, during the 2006 calendar year, the Xxxxxxxx Trust may, by
advance notice to OneLink of not less than ten (10) business days
request payment of not more than $150,000 of any Contingent
Consideration after January 1, 2006 and on or before April 15, 2006,
not more than $100,000 of any Contingent Consideration after April 15,
2006 and on or before June 15, 2006, and not more than $100,000 of any
Contingent Consideration after June 15, 2006 and on or before
September 15, 2006. OneLink shall effect any payment so requested on
or before the indicated payment date (or ten (10) days after notice if
later); provided, however, that in no event shall the cumulative
amount of such requests for payment during 2006 exceed OneLink's
liability to pay Contingent Consideration.
(b) For all purposes of the Original Agreement, the term "Contingent
Consideration" shall be synonymous with and equivalent to the Accounts
Receivable Surplus.
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(c) Sections 2.8, 2.9 and 5.14 are hereby deleted from the Original
Agreement in their entirety, and all references to the following defined
terms in the Original Agreement shall be ineffective and inoperative:
"Acquisition Consideration Adjustment"
"Cash Flow Shortfall Adjustment"
"Cumulative Gross Revenues"
"TCC Loan Balances"
4. Amendment of Additional Consideration Provision. The Parties do not
intend to alter the terms and conditions under which Additional Consideration is
to be paid to the Xxxxxxxx Trust with respect to the 1,000,000 shares of OneLink
Common Stock issued to the Xxxxxxxx Trust outright at Closing (the "Closing
Shares"). The Escrow Shares were subject to payment of Additional Consideration
under identical terms and conditions under the Original Agreement, but the
Parties have now agreed that the 500,000 Escrow Shares to be retained by the
Xxxxxxxx Trust under this Amendment are to be subject to identical Additional
Consideration terms and conditions except that the measuring date for the
retained Escrow Shares is to be April 8, 2008 (the "Third Anniversary") and not
the Second Anniversary measurement date that applies to the Closing Shares.
Additionally, because the number of Escrow Shares to be retained is now fixed, a
substantial portion of the language in Section 2.3 of the Original Agreement has
been rendered meaningless. For the purpose of differentiating between the terms
and conditions of any Additional Consideration payable with respect to the
Closing Shares and the Escrow Shares, and for purposes of clarity and
simplification, Section 2.3 of the Original Agreement is amended and restated to
read in its entirety as follows:
"2.3 Additional Consideration.
(a) With respect to the Closing Shares. If, on the Second
Anniversary of the Closing, the Market Value of OneLink Common Stock
is less than Two Dollars and Fifty Cents ($2.50) per share, OneLink
shall pay to the Xxxxxxxx Trust an amount (the "Additional
Consideration") determined by the following formula: (i) One Million
(1,000,000), multiplied by (ii) the positive difference, if any,
between (A) Two Dollars and Fifty Cents ($2.50), minus (B) the Market
Value of OneLink Common Stock on the Second Anniversary. The amount of
any Additional Consideration due with respect to the Closing Shares
shall be paid by cashier's check or by wire transfer to the Xxxxxxxx
Trust within five (5) business days following the Second Anniversary.
Notwithstanding the foregoing, in the event the Xxxxxxxx Trust has
sold or otherwise disposed of part or all of the Closing Shares prior
to Second Anniversary, the number set forth in part (a)(i) of the
formula in this Section 2.3(a) shall be reduced from One Million
(1,000,000) to the number of Closing Shares which the Xxxxxxxx Trust
has retained, provided, however, that this sentence shall not apply in
the event the sale or disposition of shares occurs as part of a sale
of the Assets or Business of OneLink or in connection with a merger or
acquisition which is approved by the OneLink Board of Directors. If
the Market Value of the OneLink Common Stock is zero ($0.00) or deemed
to be zero ($0.00) on the Second Anniversary, the payment of
Additional Consideration shall be made to the Xxxxxxxx Trust as
required under this Section 2.3, but the Xxxxxxxx Trust shall be
required to return to OneLink all of the 1,000,000 Closing Shares of
OneLink Common Stock (or such lesser portion as the Xxxxxxxx Trust has
retained) in exchange for the Additional Consideration.
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(b) With Respect to Escrow Shares. If, on the Third Anniversary
of the Closing, the Market Value of OneLink Common Stock is less than
Two Dollars and Fifty Cents ($2.50) per share, OneLink shall pay to
the Xxxxxxxx Trust an amount (the "Additional Consideration")
determined by the following formula: (i) Five Hundred Thousand
(500,000), multiplied by (ii) the positive difference, if any, between
(A) Two Dollars and Fifty Cents ($2.50), minus (B) the Market Value of
OneLink Common Stock on the Third Anniversary. The amount of any
Additional Consideration due with respect to the Escrow Shares shall
be paid by cashier's check or by wire transfer to the Xxxxxxxx Trust
within five (5) business days following the Third Anniversary.
Notwithstanding the foregoing, in the event the Xxxxxxxx Trust has
sold or otherwise disposed of part or all of the Escrow Shares prior
to Third Anniversary, the number set forth in part (b)(i) of the
formula in this Section 2.3(b) shall be reduced from Five Hundred
Thousand (500,000) to the number of Escrow Shares which the Xxxxxxxx
Trust has retained, provided, however, that this sentence shall not
apply in the event the sale or disposition of shares occurs as part of
a sale of the Assets or Business of OneLink or in connection with a
merger or acquisition which is approved by the OneLink Board of
Directors. If the Market Value of the OneLink Common Stock is zero
($0.00) or deemed to be zero ($0.00) on the Third Anniversary, the
payment of Additional Consideration shall be made to the Xxxxxxxx
Trust as required under this Section 2.3(b), but the Xxxxxxxx Trust
shall be required to return to OneLink all of the 500,000 Escrow
Shares of OneLink Common Stock (or such lesser portion as the Xxxxxxxx
Trust has retained) in exchange for the Additional Consideration."
The following capitalized terms are referred to in amended Section 2.3 above and
shall be added to those set forth in the Original Agreement and shall have the
following meanings:
""Closing Shares" means the 1,000,000 shares of OneLink Common
Stock issued to the Xxxxxxxx Trust outright at Closing.
"Third Anniversary means the third anniversary of the Closing
which will be April 8, 2008."
5. Termination of Employment Agreement. Xxxxxxxx, TCC and OneLink, by
mutual agreement, acknowledge and agree to the termination of the Employment
Agreement among Xxxxxxxx, TCC and OneLink dated April 8, 2005 as of the close of
business on July 31, 2005. Notwithstanding the termination of the Employment
Agreement, and the language set forth in Section 5.7(e) of the Original
Agreement, Xxxxxxxx and the Xxxxxxxx Trust acknowledge that the Xxxxxxxx Trust
and Xxxxxxxx have received adequate consideration to support the Non-Competition
covenants set forth in Section 5.7 of the Original Agreement, and the Parties
agree that Section 5.7 shall remain in full force and effect according to its
original terms (other than Section 5.7(e)) notwithstanding the termination of
the Employment Agreement. Consistent with the foregoing, Section 5.8 is hereby
deleted from the Original Agreement in its entirety.
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6. Termination of Automobile Benefits. The Parties agree that use of the
2004 Lexis LUV Model GX 470 provided to Xxxxxxxx without charge under the
Employment Agreement terminated upon termination of the Employment Agreement;
provided, however, that Xxxxxxxx shall have the right and obligation to assume
lease obligations previously paid by TCC and/or purchase the automobile from the
lessor reasonably promptly after execution of this Amendment; and further
provided that for purposes of determining the amount of "Chargeable Liabilities"
under the Original Agreement (which is included in the formula for determining
the amount of Accounts Receivable Surplus and Contingent Consideration payable
to the Xxxxxxxx Trust), any lease payments paid by TCC with respect to the 2004
Lexis LUV Model GX 470 attributable to periods on or after August 1, 2005 shall
be treated as "Chargeable Liabilities."
7. Modification of Xxxxxxxx Note Demand. Due to changes in terminology
adopted by this Amendment, the Xxxxxxxx Note Demand previously submitted by
Xxxxxxxx and accepted by OneLink and TCC has been altered to read as set forth
on Exhibit B to this Amendment, and all Parties hereby adopt and accept such
demand in place of the original Xxxxxxxx Note Demand.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment of
Acquisition Agreement to be executed as of the date first above written.
TCC: The Call Center, LLC,
a Delaware limited liability company
By: /s/ X. X. Xxxxxx
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X. X. Xxxxxx, CEO of One Link 4
Travel, Inc., Manager of The Call
Center, LLC
XXXXXXXX TRUST: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Trustee of the Xxxx
Xxxxxxxx Trust under trust agreement dated
July 2, 2001 and amended and restated
November 26, 2003
XXXXXXXX: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
ONELINK: ONE LINK 4 TRAVEL, INC.,
a Delaware corporation
By: /s/ X. X. Xxxxxx
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X. X. Xxxxxx, Chief Executive Officer
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