FIRST AMENDMENT TO
AGREEMENT AND PLAN OF ORGANIZATION
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF ORGANIZATION (the
"Amendment") is dated as of June 30, 1997, by and among Travel Services
International, Inc., a Delaware corporation ("TSII"), 800-Ideas, Inc., a Nevada
corporation (the "Company"), and Xxxxx Xxxxxx, an individual residing in the
City of San Diego, California (the "Stockholder").
In consideration of the mutual agreements herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Agreement and Plan of Organization, dated as of May 9, 1997, by and among the
parties hereto (the "Agreement").
2. Amendments Relating to Structure. The parties acknowledge
that the Agreement as originally drafted contemplates a transfer of the LLC
Interest on the Funding and Consummation Date. The parties hereto agree that the
transaction structure described in the Agreement shall be changed in the
following ways:
a. The LLC to be formed under the Agreement shall be
formed as a wholly-owned subsidiary of TSII rather
than as a wholly-owned subsidiary of the Company.
b. In lieu of a transfer of the LLC Interest
contemplated by Section 1 of the Agreement, the asset
transfer from the Company to the LLC contemplated by
Section 7.13 of the Agreement shall occur on the
Funding and Consummation Date. All actions necessary
and appropriate to be taken for such asset transfer,
except for the actual delivery of transfer documents
and consideration, shall be taken on the Closing
Date.
c. To the extent necessary, the provisions of the
Agreement shall be construed to be consistent with
the above-described change in structure. Except as
described above, the provisions of the Agreement are
ratified and confirmed in all respects.
3. Amendment to Section 10.3. Section 10.3(ii) of the
Agreement is hereby deleted in its entirety and replaced with the following:
"(ii) TSII shall file or cause to be filed all separate Returns of, or that
include, the LLC for all taxable periods ending after the Funding and
Consummation Date."
4. Amendment to Annex III. Annex III to the Agreement is
hereby deleted in its entirety and replaced with Annex III attached hereto.
5. Amendment to Annex V. Annex V to the Agreement is hereby
deleted in its entirety and replaced with Annex V attached hereto.
6. Amendment to Employment Agreement. The Employment Agreement
of the Stockholder, a form of which is attached as Annex VIII to the Agreement,
is hereby amended as follows:
a. The first sentence of Paragraph 2(a) of the
Employment Agreement is amended by deleting
"$200,000" as the base salary and inserting
"$150,000" as the base salary.
b. The last two sentences of Paragraph 2(a) of the
Employment Agreement are hereby deleted in their
entirety.
c. Paragraph 4(b) of the Employment Agreement is
amended by adding the following at the end of the
sentence: ", and in such circumstance Employee shall
continue to be employed hereunder"
d. The first sentence in Paragraph 5 of the
Employment Agreement is hereby amended by deleting
"three (3)" and inserting "five (5)" as the number of
years in the Term.
7. Amendment relating to Sprint Agreement. The Agreement is
hereby amended to provide that the Sprint Agreement to which the Company is a
party reflected on the Schedules to the Agreement shall be retained by the
Company and shall not be assigned to the LLC. The parties agree that the
services provided to the Company under the Sprint agreement, from and after the
transfer of assets to the LLC contemplated by Section 7.13 of the Agreement,
shall be provided to the LLC and the fees therefor to be paid by the LLC shall
be at the same cost charged by Sprint to the Company.
8. Amendments to Schedules 5.25, 7.2 and 7.3. Schedules 5.25,
7.2 and 7.3 of the Agreement are hereby amended by inserting the following at
the end of item (1) relating to net working capital in the paragraph entitled
"PERMITTED DISTRIBUTIONS": ", except that the accounts receivables listed as
Excluded Assets on Schedule 7.13 shall be included in current assets for
purposes of this item"
9. Amendment to Schedule 7.13. Schedule 7.13 of the Agreement
is hereby amended to add as an Excluded Asset "accounts receivables of the
Company in an amount equal to the adjusted book value of the fixed assets of the
Company (which on the date hereof is approximately $240,000."
10. Future Payments. The parties hereby agree that Xxxxx
Xxxxxx shall not receive, directly or indirectly, any compensation, fees or
other payments of any type (except for reimbursements for reasonable expenses
incurred while in the employ of the Company) in cash or in kind, as an employee,
consultant, independent contractor, agent, vendor or in any other capacity, from
the LLC or any successor in interest of the LLC.
11. No Other Amendments. Except as expressly provided in this
Amendment, all of the terms and conditions of the Agreement remain unchanged,
and the terms and conditions of the Agreement as amended hereby remain in full
force and effect.
12. Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Governing Law. This Amendment shall be construed in
accordance with laws of the State of Delaware.
14. Captions. The headings of this Amendment are inserted for
convenience only and shall not constitute a part of this Amendment or be used to
construe or interpret any provision hereof.
[The next page is the signature page]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Agreement and Plan of Organization to be duly executed and delivered as of
the day and year first above written.
TRAVEL SERVICES INTERNATIONAL, INC.
By: /s/ Elan X. Xxxxxxxxx
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Elan X. Xxxxxxxxx
President
800-IDEAS, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
President
STOCKHOLDER:
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Individually
