FORM OF
AGREEMENT AND PLAN OF SHARE EXCHANGE
THIS AGREEMENT AND PLAN OF SHARE EXCHANGE (the "Agreement") dated this
__ day of March, 2000, by and among LEISURE TRAVEL GROUP, INC., a Delaware
corporation (the "Company"), LEISURE TRAVEL GROUP LIMITED, a private limited
company organized under the laws of England and Wales ("LTGL"), CIGNET VENTURES
LIMITED, a private limited company organized under the laws of Guernsey Channel
Islands ("Cignet"), RED KITE VENTURES LIMITED, a private limited company
organized under the laws of ________ ("Red Kite"), XXXXXX CAPITAL LIMITED, a
private limited company organized under the laws of England and Wales ("WCL"),
XX0XXX.XXX, INC., a Delaware corporation ("Ci4net"), XXXXXXX X. XXXX ("Peel"),
XXXXXX ESTATES, a ________ ("Xxxxxx"), XXXXXX XXXXX ("Xxxxx"), XXXXXXX LAST
("Last"), XXX XXXXXXX ("Xxxxxxx"), and XXXXX XXXXXXXX ("Marriott"). Red Kite,
WCL, Ci4net and Xxxxxx are sometimes hereinafter collectively referred to herein
as the "LTGL Shareholders," Cignet, Xxxxx, Xxxxxxx and Last are sometimes
hereinafter collectively referred to herein as the "GHG Shareholders," and the
LTGL Shareholders and the GHG Shareholders are sometimes hereinafter
collectively referred to herein as the "Shareholders." The Company and the
Shareholders are hereinafter sometimes collectively referred to as the
"Parties."
WHEREAS, the Board of Directors of the Company deems it advisable and
in the best interests of the Company that the Company acquire all of the issued
and outstanding share capital of LTGL, which currently owns 100% of the share
capital OF MISS ELLIE'S WORLD TRAVEL LIMITED, a private limited company
organized under the laws of England and Wales ("Miss Ellie's) and ILIOS TRAVEL
LIMITED, a private limited company organized under the laws of England and Wales
("Ilios"); and
WHEREAS, the shareholders and Board of Directors of the Company and
LTGL deems it advisable and in the best interests of the Company and LTGL that
LTGL acquire all of the issued and outstanding share capital of GRAND HOTEL
GROUP LIMITED, a private limited company organized under the laws of England and
Wales ("GHG"); and
WHEREAS, the shareholders and Board of Directors of the Company and
LTGL deems it advisable and in the best interests of the Company and LTGL that
LTGL also acquire 49% of the issued and outstanding share capital of
XXXXXXXX.XXX, LTD., a private limited company organized under the laws of
England and Wales ("Xxxxxxxx.xxx"), and
WHEREAS, the case of each of the above acquisitions, the holders of the
share capital of each of LTGL, GHG and Xxxxxxxx.xxx will receive in exchange for
the share capital of such Acquired Corporations newly issued shares of common
stock, par value $0.001 per share, of the Company (the "Company Common Stock"),
all upon and subject to the terms and conditions contained in this Agreement
(the "Share Exchange"); and
WHEREAS, the shareholders of each of the Acquired Corporations and the
Company have approved and adopted this Agreement as a "plan of reorganization"
within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended.]
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions, and conditions contained herein, and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings, unless the context shall otherwise require:
(a) "ACQUIRED CORPORATIONS" shall mean the collective reference to LTGL
(including its Miss Ellie's and Ilios subsidiaries), GHG and Xxxxxxxx.xxx.
(b) "LTGL ESCROWED SHARES" shall mean the ordinary shares of LTGL.
(c) "GHG ESCROWED SHARES" shall mean the ordinary shares of GHG.
(d) "XXXXXXXX.XXX ESCROWED SHARES" shall mean the ordinary shares of
Xxxxxxxx.xxx.
(e) "COMPANY COMMON STOCK" shall mean the common stock, par value
$0.001 per share of the Company.
(f) "COMPANY IPO" shall mean the initial public offering of shares of
Company Common Stock pursuant to a registration statement on Form S-1 or other
applicable form of registration (the "Registration Statement") which shall be
declared effective by the United States Securities and Exchange Commission
("SEC"), and the trading of such shares of Company Common Stock on the Nasdaq
Stock Exchange or other national securities exchange in the United States.
(g) "EFFECTIVE DATE" shall mean the date on which the SEC shall declare
effective the Registration Statement and related prospectus in connection with
the Company IPO.
(h) "RANK INDEBTEDNESS" shall mean all indebtedness for money borrowed,
whether or not evidenced by notes, which shall be owed on the Effective Date by
GHG or any subsidiary of GHG to The Rank Group plc or any of its subsidiaries or
affiliates.
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ARTICLE II
TERMS AND PROVISIONS OF SHARE EXCHANGE
Section 2.01 SHARE EXCHANGE.
(a) TRANSFER OF SHARE CAPITAL OF ACQUIRED CORPORATIONS. Upon the terms
and subject to the conditions herein contained, including, without limitation,
the conditions contained in Section ____ hereof, at the Effective Date:
(i) the GHG Shareholders shall sell, assign, transfer and
deliver to LTGL, and LTGL shall acquire from the GHG Shareholders all
right, title and interest in and to _______ GHG Escrowed Shares,
representing all, and not less than all, of the outstanding share
capital of GHG as at the Effective Date, free and clear of all liens
and encumbrances thereon;
(iiii) Ci4net shall sell, assign, transfer and deliver to
LTGL, and LTGL shall acquire from Ci4net all right, title and interest
in and to _______ Xxxxxxxx.xxx Escrowed Shares, representing 49% of the
issued and outstanding share capital of Xxxxxxxx.xxx as at the
Effective Date, free and clear of all liens and encumbrances thereon;
and
(iii) immediately following the transfers contemplated by
clauses (i) and (ii) of this Section 2.01(a), the LTGL Shareholders
shall sell, assign, transfer and deliver to the Company, and the
Company shall acquire from the LTGL Shareholders all right, title and
interest in and to an aggregate of _______ LTGL Escrowed Shares,
representing all, and not less than all, of the outstanding share
capital of LTGL as at the Effective Date, free and clear of all liens
and encumbrances thereon;
In furtherance of the foregoing, on the Effective Date:
(x) the GHG Shareholders shall deliver to LTGL share
certificates representing all of the issued and outstanding share
capital of GHG as at the Effective Date, duly endorsed in blank for
transfer,
(y) Ci4net shall deliver to LTGL share certificates
representing 49% of the issued and outstanding share capital of
Xxxxxxxx.xxx as at the Effective Date, duly endorsed in blank for
transfer; and
(z) the LTGL Shareholders shall deliver to the Company share
certificates representing all of the issued and outstanding share
capital of LTGL as at the Effective Date, duly endorsed in blank for
transfer,
(b) ISSUANCE OF COMPANY COMMON STOCK. In consideration for the transfer
and assignment of all the issued and outstanding share capital of GHG and 49% of
the issued and outstanding share capital of Xxxxxxxx.xxx to LTGL, and the
transfer and assignment of all the issued and outstanding share capital of LTGL
to the Company, and
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against delivery of the certificates representing such share capital as provided
in Section 1.1(a) hereof, at the Effective Date, the Company shall issue an
aggregate of 5,060,000 shares of Common Stock to the Shareholders, as follows:
(i) to the GHG Shareholders an aggregate of 3,700,000 shares
of Company Common Stock, in the individual amounts among the GHG
Shareholders as set forth opposite their respective names on SCHEDULE 1
annexed hereto and made a part hereof;
(ii) to the LTGL Shareholders, an aggregate of 940,000 shares
of Company Common Stock, in the individual amounts among the GHG
Shareholders as set forth opposite their respective names on SCHEDULE 2
annexed hereto and made a part hereof; and
(iii) to Ci4net, an aggregate of 220,000 shares of Company
Common Stock.
Section 2.02 TAKING OF NECESSARY ACTION. The Company, LTGL and the
Shareholders shall take all such actions as may be necessary or appropriate in
order to effectuate the transactions contemplated by this Agreement. If, at any
time after the Effective Date, any further action is necessary or desirable to
carry out the purposes of this Agreement, to vest the Company with title to 100%
of the issued and outstanding LTGL Escrowed Shares, or to vest LTGL with title
to 100% of the issued and outstanding GHG Escrowed Shares and 49% of the issued
and outstanding Xxxxxxxx.xxx Escrowed Shares, the officers and directors of
LTGL, GHG or Xxxxxxxx.xxx, as the case may be, at their expense, shall take such
necessary or desirable action in order to effectuate the transactions
contemplated by this Agreement.
Section 2.03 STOCK LEGENDS. Certificates representing shares of the
Company Common Stock shall bear a legend restricting transfer of the shares of
the the Company Common Stock represented by such certificate in substantially
the form set forth below:
"The shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be transferred, nor will any assignee or endorsee hereof be
recognized as an owner hereof by the issuer for any purpose, unless a
registration statement under the Securities Act with respect to such
shares shall then be in effect or unless the availability of an
exemption from registration with respect to any proposed transfer or
disposition of such shares shall be established to the satisfaction of
counsel for the issuer."
the Company shall, from time to time, make stop transfer notations in its
records to ensure compliance in connection with any proposed transfer of the
shares with the Securities Act, and all applicable state securities laws.
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Section 2.04 FEES AND EXPENSES. the Company shall be responsible for
all fees and expenses incurred in connection with the negotiation, execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, the professional fees of counsel for the
Shareholders incurred in connection with the Share Exchange.
ARTICLE III
COMPANY REPRESENTATIONS AND WARRANTIES
The following representations and warranties are hereby made (i) by the
Company to the Shareholders with respect only to the Company, (ii) by LTGL and
the LTGL Shareholders to the Company with respect only to LTGL and its Miss
Ellie's and Ilios subsidiaries, (iii) by the GHG Shareholders to the Company and
LTGL with respect only to GHG and (iv) by Ci4net to the Company and LTGL with
respect only to Xxxxxxxx.xxx.
Section 3.01 ORGANIZATION; AUTHORIZATION. It is a corporation duly
organized, validly existing, and in good standing under the laws of the state or
country of its incorporation and has full power and authority to carry on its
business as it now is being conducted and to own the properties and assets it
now owns. It is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction in which the conduct of its business or
ownership of its property requires such qualification; and, subject to the
requisite approval of and authorization by the holders of its capital stock, it
has full power and authority to enter into this Agreement and to carry out the
transactions contemplated herein.
Section 3.02 NO DEFAULTS. It is not a party to or bound by any contract
or agreement, or subject to any charter provision or other legal restriction
(other than restrictions applicable to corporations or businesses generally),
which adversely affects its business, operations, properties, assets, or
condition, financial or otherwise. It is not in default under any material
contract, lease, agreement, or other undertaking to which it is a party or by
which it is bound. Subject to the requisite approval of and authorization by the
holders of its capital stock, neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
compliance with the terms and conditions hereof will conflict with, result in a
breach of the unwaived terms and conditions of, or constitute a default under
its articles of incorporation or bylaws or any contract, agreement, commitment,
or other undertaking to which it is a party or by which it is bound.
Section 3.03 GOVERNMENTAL CONSENTS. Except for the requirements of the
United States Securities Act of 1933, as amended (the "Securities Act")and any
applicable state securities laws, and any applicable laws of the United Kingdom
or the United States no consent or approval of, or filing or registration with,
any governmental or regulatory authority is required in connection with the
performance of the terms of this Agreement.
Section 3.04 EXAMINATION OF DOCUMENTS. All original documents and other
information relating to its affairs will be made available, and copies of any
such
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documents will be furnished, upon request to the other party and its
counsel. Included among the documents to be made available are all articles of
incorporation and amendments, bylaws and amendments, minutes of all
incorporators, directors and shareholders meetings or consent minutes with
respect to actions taken by incorporators, directors, or shareholders, all
financial statements, tax returns, and all material contracts, leases, and
agreements to which it is a party or an intended beneficiary.
Section 3.05 TITLE TO ASSETS. It has good and marketable title to all
of its properties and assets, both real and personal, free and clear of all
security interest liens, claims, equities of others, and restrictions on the
right to transfer, except as disclosed in writing to the Company.
Section 3.06 TAX RETURNS AND PAYMENTS. All of its tax returns and
reports required by law to be filed have been duly filed, and all taxes,
assessments, fees, and other governmental charges (other than those presently
payable without interest or penalty or those which are being contested in good
faith by appropriate proceedings diligently conducted and which are disclosed in
the Exceptions Schedule) upon it or upon any of its properties, assets,
interest, or income which are due or are to become due have been paid or
adequately reserved against. None of its federal income tax returns is currently
under examination by the Inland Revenue.
Section 3.07 NO LITIGATION. Except as disclosed in writing to the
Company:
(a) there is no action, proceeding, claim, or investigation pending or
threatened against it or to which any of its assets or properties are subject
before any court or any governmental department, commission, board, bureau,
agency, or instrumentality which involves the possibility of any judgment or
liability or which might adversely affect its assets, business, or goodwill and,
after investigations it knows of no basis or grounds for any such action,
proceeding, claim, or investigation; and
(b) there is no outstanding order, writ, injunction, or decree of any
court, government department, commission, board, bureau, government agency, or
instrumentality, or any arbitration award, against it.
Section 3.08 NO MATERIAL ADVERSE CHANGES. Between the date of this
Agreement and the Effective Date, as a condition precedent to the obligations
hereunder, it will not, without the Company's prior written consent, it will not
engage in any material transaction not in the ordinary course of its business,
make or declare any dividends or distributions of its capital, surplus, or
profits, or redeem or issue any shares of its common stock or other securities.
There will be no changes in its assets, properties, liabilities, or financial
condition from those shown in its financial statements or in its condition,
other than changes which do not materially affect, singly or in the aggregate,
its business, assets, properties, or financial condition. Other than as
disclosed to the Company, it will not borrow any amounts or incur any
liabilities other than pursuant to contracts entered into in the ordinary course
of business; discharge any lien or encumbrance or satisfy any liabilities other
than current liabilities incurred in the ordinary
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course of business; mortgage, pledge, or subject to lien or charge or any other
encumbrance any of its assets or properties; sell, assign, or transfer any of
its assets except in the ordinary course of business; waive any rights of
substantial value; or loan money to any of its directors, officers, or
shareholders.
Section 3.09 BOOKS AND RECORDS COMPLETE. Its books and records are
accurate and complete and there are no matters for which proper entry has not
been made in such books and records.
Section 3.10 INSURANCE. It is adequately insured with respect to risks
usually insured against by companies owning properties and conducting business
similar to those owned and conducted by it. All policies are presently in force
and paid in full and will continue to be so without interruption until the
Effective Date.
Section 3.11 NO BROKERAGE FEES. Except as disclosed in the Registration
Statement, no agent, broker, investment banker, person, or firm acting on its
behalf, to the best of its knowledge, is or will be entitled to any broker's or
finder's fee or any other commission or fee, directly or indirectly, in
connection with any of the transactions contemplated hereby, except for the
Brokers.
Section 3.11 COMPLIANCE WITH CERTAIN LAWS. It is in full compliance
with all laws material and applicable to its business, including, without
limitation, laws (i) regulating atmospheric, water, and other pollution or
damage to the environment, (ii) regulating the ownership and operation of
hotels, travel agencies, tour operators and requirements of the CAA in respect
of airline seat bookings, and (iii) prohibiting discrimination based on race,
creed, color, sex, age, disability, or national origin.
Section 3.12 AUTHORIZATION. Its shareholders and Board of Directors
have duly authorized the execution and delivery of this Agreement and all
documents and transactions called for hereunder, and, this Agreement constitutes
a valid and binding obligation of the corporation in accordance with the
Agreement's terms. Each shall deliver to the other a certified copy of
resolutions of its Board of Directors pertaining to the foregoing. It has taken
or will exert its best efforts to take, prior to the Effective Date, all action
required by law, its Articles of Association, Memorandum of Association,
Certificate of Incorporation and Bylaws, as applicable, and otherwise to
authorize the execution, delivery, and performance of this Agreement.
Section 3.13 CONTRACTS. Other than as set forth or described in the
Registration Statement, it is not a party to any material agreement,
understanding or other contractual obligation ("Contract") binding upon it, the
non-performance of which by either a party to this Agreement or the other party
to such Contract, would have a material adverse effect on the business,
financial condition or prospects of such party hereto.
Section 3.14 PROPERTY AND EQUIPMENT. The property and equipment as
shown on its most recent balance sheet are in good operating condition and state
of repair, reasonable wear and tear excepted. The use of its real property
conforms in all material
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respects with applicable ordinances, regulations, zoning, or building codes, and
other applicable laws.
Section 3.15 SHARE OWNERSHIP. The Shareholders who have executed this
Agreement are the record and beneficial owners of 100% of the share capital of
each of the Acquired Corporations and there are no options, warrants, rights or
other agreements or understandings, written or oral, to sell, issue or purchase
any additional share capital of any of the Acquired Corporations. There are not
issued or outstanding any options, warrants, or rights to subscribe for,
purchase, or receive ordinary shares or preference shares or any other
securities convertible into ordinary shares of preference shares of any of the
Acquired Corporations.
Section 3.16 REPRESENTATIONS TRUE. No representation or warranty
contained herein, nor any statement or certificate furnished hereunder or in
connection herewith, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE V
COVENANTS
Section 5.01 PRESERVATION OF BUSINESS; ACCESS TO DOCUMENTS. From and
after the date of this Agreement and until the Effective Date, the parties
hereto hereby covenant and agree with each other that the Company and each of
the Acquired Corporations shall:
(a) use its best efforts to preserve its business organization,
goodwill, and business relationships intact and to retain the services of its
officers and key employees;
(b) provided the same does not violate any statute, order, decree,
rule, regulation, or contract, give each other and its authorized agents full
access, during normal business hours, upon reasonable notice, to all of its
assets, properties, books, records, agreements, and commitments and furnish such
representatives during such period with all such information concerning its
affairs as the other may reasonably request; provided. however that each party
and its authorized agents shall hold in confidence all documents and information
thus acquired or learned concerning the parties and, if the transactions
contemplated by this Agreement are not consummated, all such documents shall
immediately thereafter be returned to the appropriate parties;
(c) take all necessary corporate and any other action, and use its best
efforts to obtain all consents, approvals, and agreements required to carry out
the transactions contemplated in this Agreement and to satisfy, or cause to be
satisfied, the conditions specified herein; and
(d) maintain in full force and effect insurance policies providing
coverages and amount of coverage as now provided.
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Section 5.02 BUSINESS IN ORDINARY COURSE. Except as specifically
authorized by this Agreement, until the Effective Date, none of the Acquired
Corporations shall do any of the following except with the prior written consent
of the Company:
(a) effect any general salary increase except in line with its past
practices;
(b) enter into any written employment agreement;
(c) increase the base compensation or other benefits of any employee by
more than 10%;
(d) make any contribution to any trust or plan for the benefit of
employees not required by the present terns thereof or in accordance with its
past practices;
(e) make any change in any employee benefit plan which would materially
increase the cost thereof or adopt any new employee benefit plan;
(f) issue or commit to issue any capital stock or other ownership
interests.
(g) grant or omit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of capital stock or
other ownership interests or issue or commit to issue any securities convertible
into or exchangeable for shares of its common stock or other ownership
interests;
(h) declare, set aside, or pay any dividend or distribution with
respect to its common stock or other ownership interests;
(i) directly or indirectly redeem, purchase, or otherwise acquire or
commit to acquire any of its common stock or other ownership interest or
directly or indirectly terminate or reduce or commit to terminate or reduce any
bank line of credit or the availability of any funds under any loan or financing
agreement;
(j) effect a split or reclassification of any capital stock or
recapitalization;
(k) change its articles of incorporation, bylaws, or other governing
instruments, except to effectuate the transactions contemplated by this
Agreement;
(1) borrow or agree to borrow any funds except pursuant to existing
bank lines of credit or other existing loan agreements or financing
arrangements; or
(m) waive or commit to waive any right of substantial value.
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ARTICLE VI
CONDITIONS PRECEDENT TO THE SHARE EXCHANGE
The obligations of the parties under this Agreement are subject to the
satisfaction of the following express conditions precedent at or before the
Effective Date:
Section 6.01 COMPLIANCE WITH LAWS. All statutory requirements for the
valid consummation by it of the transactions contemplated by this Agreement
shall have been fulfilled.
Section 6.02 DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated herein and all documents incident
thereto shall be reasonably satisfactory in form and substance to it and its
counsel.
Section 6.03 PAYMENT OF RANK INDEBTEDNESS. Subject only to consummation
of the Company IPO within five business days following the Effective Date and
receipt of the net proceeds thereof, the Company will apply sufficient net
proceeds from such Company IPO which, when coupled with other available funds,
will be sufficient to (a) retire and pay in full all Rank Indebtedness, and (b)
cause the release of all personal guarantees of Xxxxx X. Xxxxx or his affiliates
and all collateral securing a bank letter of credit issued by Citibank, N.A. in
favor of the holder of such Rank Indebtedness.
Section 6.04 CAPITALIZATION OF CERTAIN LOANS. On the Effective Date,
Red Kite or another applicable corporate affiliate of Xxxxx X. Xxxxx, shall
capitalize as share equity in the Company an aggregate of (pound)1,030,000 of
loans made to LTGL or its subsidiaries; provided that except for the shares of
Company Common Stock issued pursuant to this Agreement, no other form of
consideration shall be issued or paid for the capitalization of the aforesaid
loans.
Section 6.05 OPINIONS OF COUNSEL. Unless waived in writing by the
parties prior to the Effective Date, the Company and each Acquired Corporation
shall have caused its counsel to prepare and deliver to the other an opinion,
dated as of the Effective Date, in form and substance satisfactory to the other,
to the effect that:
(a) It has been duly incorporated and is a validly existing corporation
in good standing under the laws of its state or country of incorporation, with
full corporate power and authority to own and operate its properties and to
carry on its business as presently being conducted.
(b) It is duly qualified and licensed to transact business in each
state or other jurisdiction in which it transacts business and by each
governmental authority by which it is required to be licensed, except for
jurisdictions in which failure to qualify would not materially and adversely
affect its business, operations, or financial condition.
(c) It has an authorized capital as set forth in Article IV hereinabove
and the outstanding shares of its common stock stated as issued and outstanding
have been duly and validly issued and are fully paid and nonassessable and
contain no preemptive rights.
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To the best knowledge of such counsel, there are no outstanding options,
warrants, or other rights to subscribe for, purchase, or receive shares of its
common stock or securities convertible into its common stock, other than as set
forth in Article IV hereinabove.
(d) Neither the execution and delivery of this Agreement nor compliance
with the terms of this Agreement will conflict with or result in a material
breach of any of the terms, conditions, or provisions of, or constitute a
material default under its Articles of Association, Memorandum of Association,
Certificate of Incorporation or bylaws or any material note, indenture,
mortgage, deed of trust, or other material agreement or instrument known to such
counsel to which it is a party or by which it or any of its property is bound,
or any existing law, order, rule, regulation, writ, injunction, or decree known
to such counsel of any government, governmental instrumentality, agency, body,
arbitration tribunal, or court, domestic or foreign, having jurisdiction over it
or its properties.
(e) This Agreement has been duly authorized and executed by it, and all
corporate action by it required to authorize the Share Exchange has been taken.
(f) Such counsel knows of no material litigation, proceeding, or
governmental investigation pending or threatened against or relating to it or
its properties or business.
In rendering such opinion, counsel may rely on certificates of its
officers as to matters of fact and, as to matters of law, may rely on opinions
of local counsel chosen by it provided that copies of such opinions of such
other counsel accompany the opinion delivered by counsel.
Section 6.06 CERTIFICATE OF PRESIDENT AND SECRETARY. The Company and
each Acquired Corporation shall have furnished to the other a certificate of the
President or Vice President and the Secretary of the respective company, dated
as of the Effective Date, to the effect that the representations and warranties
of the respective company in this Agreement are true and correct at and as of
the Effective Date, that no error, misstatement, or omission has been discovered
or is known with respect to such representations and warranties, and that the
respective company has complied with all the agreements and has satisfied all
the covenants on its part to be performed at or prior to the Effective Date.
Section 6.07 NO MATERIAL ADVERSE CHANGE. Between the date of execution
of this Agreement and the Effective Date, neither the Company nor any of the
Acquired Corporations: (a) except in the ordinary course of its business, shall
have incurred any liabilities or obligations (direct or contingent) or disposed
of any of its assets, or entered into any material transaction or suffered or
experienced any materially adverse change in its condition, financial or
otherwise, and (b) shall have increased its issued and outstanding ordinary
shares, preference shares, common stock or any other securities, or rights,
options, warrants or other instruments convertible into or exercisable for
ordinary shares, preference shares, common stock.
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ARTICLE VII
TERMINATION, FURTHER ASSURANCES, AND MISCELLANEOUS
Section 7.01 TERMINATION AND POSTPONEMENT. This Agreement and the Share
Exchange contemplated hereby may be terminated, and the transactions provided
for herein abandoned, , as follows:
(a) at any time prior to but not after the Effective Date by mutual
consent of the the Company and Cignet, or
(b) at the sole option of Cignet, at any time following five (5)
business days after the Effective Date if the Company IPO shall not have been
consummated and the Rank Indebtedness paid in full within five (5) business days
following such Effective Date
In the event of the termination and abandonment of this Agreement and
the Share Exchange contemplated hereby, this Agreement shall become void and of
no effect, without any liability on the part of any party or its directors,
officers, or shareholders.
Section 7.02 SURVIVAL. All agreements, representations, and warranties
made hereunder or in connection with the transactions contemplated hereby shall
survive the Effective Date and remain effective in accordance with the terms
hereof.
Section 7.03 LIABILITY. In the event that this Agreement shall be
terminated pursuant to Section 7.01 hereinabove, all further obligations of the
Company and the Shareholders under this Agreement shall terminate without
further liability to the other.
Section 7.04 ASSIGNMENT. This Agreement may not be assigned nor any of
the performances hereunder delegated by operation of law or otherwise by any
party hereto, and any purported assignment or delegation shall be void.
Section 7.05 HEADINGS. The article and section headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of this Agreement.
Section 7.06 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, legal representatives, assigns, and transferors.
Section 7.07 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof. There
are no representations, warranties, conditions, or other obligations except as
herein specifically provided. Any waiver, amendment, or modification hereof must
be in writing. A waiver in one instance shall not be deemed to be a continuing
waiver or waiver in any other instance.
Section 7.08 COUNTERPARTS. This Agreement may be executed in
counterparts and each counterpart hereof shall be deemed to be an original, but
all such counterparts
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together shall constitute but one agreement an original, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
LEISURE TRAVEL GROUP, INC.
a Delaware corporation
By:
-------------------------------
LEISURE TRAVEL GROUP LIMITED
a private limited company organized under the laws of England and Wales
By:
-------------------------------
CIGNET VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By:
-------------------------------
RED KITE VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By:
-------------------------------
XXXXXX CAPITAL LIMITED
a private limited company organized under the laws of England and Wales
By:
-------------------------------
XX0XXX.XXX, INC.
a Delaware corporation
By:
-------------------------------
XXXXXXX X. XXXX
13
XXXXXX ESTATES
By:
------------------------------
XXXXXX XXXXX
-----------------------------
XXXXXXX LAST
------------------------------
XXX XXXXXXX
------------------------------
XXXXX XXXXXXXX
14
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of the date set forth below,
by and among LEISURE TRAVEL GROUP, INC., a Delaware corporation (the "Company"),
LEISURE TRAVEL GROUP LIMITED, a private limited company organized under the laws
of England and Wales ("LTGL"), CIGNET VENTURES LIMITED, a private limited
company organized under the laws of Guernsey (Channel Islands) ("Cignet"), RED
KITE VENTURES LIMITED, a private limited company organized under the laws of
________ ("Red Kite"), XXXXXX CAPITAL LIMITED, a private limited company
organized under the laws of England and Wales ("WCL"), XX0XXX.XXX, INC., a
Delaware corporation ("Ci4net"), XXXXXXX X. XXXX ("Peel"), XXXXXX ESTATES, a
________ ("Xxxxxx"), XXXXXX XXXXX ("Xxxxx"), XXXXXXX LAST ("Last"), XXX XXXXXXX
("Xxxxxxx"), and XXXXX XXXXXXXX ("Marriott") and XXXXXXXXX XXXXXXX LLP, a law
firm with offices located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Escrow Agent"). Red Kite, WCL, Ci4net and Xxxxxx are sometimes hereinafter
collectively referred to herein as the "LTGL Shareholders," Cignet, Xxxxx,
Xxxxxxx and Last are sometimes hereinafter collectively referred to herein as
the "GHG Shareholders," and the LTGL Shareholders and the GHG Shareholders are
sometimes hereinafter collectively referred to herein as the "Shareholders."
WITNESSETH
WHEREAS, on or about ____________, 2000, the Company and the
Shareholders entered into an Agreement and Plan of Share Exchange (the
"Agreement") under which (a) LTGL agreed to purchase (i) from the GHG
Shareholders, all of the outstanding share capital of GHG and (ii) from Ci4net,
49% of the outstanding share capital of Xxxxxxxx.xxx and (b) the Company agreed
to purchase from the Shareholders all of the outstanding share capital of LTGL;
and
WHEREAS, each of the Shareholders have agreed to deposit said shares in
escrow in order implement the Agreement, and have executed this Agreement to
evidence the terms of said escrow with the Escrow Agent.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The parties hereby designate, constitute and appoint Escrow Agent as
the "Escrow Agent" under this Agreement.
2. The Escrow Agent hereby acknowledges receipt of certificates
evidencing ordinary shares of each of LTGL, MISS ELLIE'S WORLD TRAVEL LIMITED, a
private limited company organized under the laws of England and Wales ("Miss
Ellie's) and ILIOS TRAVEL LIMITED, a private limited company organized under the
laws of England and Wales
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("Ilios"), GHG and Xxxxxxxx.xxx in the amounts set forth on SCHEDULE A annexed
hereto and made a part hereof (collectively, the "Escrowed Escrowed Shares"),
together with stock powers duly executed in blank by the Shareholders of record
of such Escrowed Escrowed Shares
3. The Escrowed Shares are to be held by Escrow Agent in escrow and
disposed of pursuant to and strictly in accordance with the terms and conditions
of this Agreement. Escrow Agent shall hold the Escrowed Shares in a safe place,
provided that Escrow Agent shall not be obligated to obtain insurance covering
the loss and/or destruction of the Escrowed Shares unless the Parties so request
and advance the Escrow Agent sufficient funds to pay for said insurance. The
Escrow Agent undertakes to perform only such duties as are expressly set forth
in this Agreement, and no implied duties or obligations of the Escrow Agent
shall be read into this Agreement.
4. The Escrow Agent shall at all times be authorized to deliver the
Escrowed Shares in accordance with the terms of the Agreement or with written
instructions executed by Xxxxx X. Xxxxx or Cignet, as representative of all of
the Shareholders (the "Representative"), all the Parties. In the event the
Escrow Agent shall receive a written claim of default under the Agreement by any
of the Parties, then the Escrow Agent shall not release the Escrowed Shares from
escrow unless and until the Escrow Agent shall have received written
instructions from the Representative as the proper deliver of the Escrowed
Shares or Escrow Agent has received direction from a court of competent
jurisdiction (after expiration of any applicable appeal period) as to the proper
party entitled to receipt of the Escrowed Shares. Escrow Agent shall be
authorized to file an action in interpleader to determine the proper party
entitled to the Escrowed Shares; and the defaulting party, as determined in such
proceeding, shall indemnify and hold harmless the Escrow Agent from all costs
and expenses, including reasonable attorney's fees associated with the
proceeding. Escrow Agent may act in reliance upon any writing or instrument or
signature which it in good faith believes to be genuine and may assume that any
person purporting to give any writing, notice, advice, or instruction in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent shall not be liable in any manner for the sufficiency or correctness as to
form, manner of execution or validity of any instrument deposited in this escrow
nor as to the identity, authority or right of any persons executing the same;
and its duties hereunder shall be limited to the safekeeping of the Escrowed
Shares and for the disposition of same in accordance with this Agreement. Escrow
Agent hereby executes this Agreement for the sole and exclusive purpose of
evidencing its Agreement of the provisions hereof.
5. The Parties hereby agree to indemnify and hold the Escrow Agent
harmless from any and all claims, liabilities, losses, actions, suits or
proceedings at law or in equity, or any other expense, fees, or charges of any
character or nature, which it may incur or with which it may be threatened by
reason of its acting as Escrow Agent under this Agreement; and in connection
therewith, to indemnify the Escrow Agent against any and all expenses, including
reasonable attorney's fees and the cost of defending any action, suit or
proceeding or resisting any claim.
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6. The Escrow Agent may consult with counsel of its own choice and
shall have full and complete authorization and protection for any action taken
or suffered by it and hereunder in good faith and in accordance with the opinion
of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes
of fact or error in judgment, or for any acts or omissions of any kind unless
caused by its willful misconduct or gross negligence.
7. All reasonable out-of-pocket expenses of Escrow Agent in connection
with the services rendered under this Agreement shall be paid by the Company.
8. Upon release and/or delivery of all Escrowed Shares in accordance
with the terms of the Agreement and this Agreement, this Agreement shall
terminate and the parties shall be released hereunder except with respect to the
indemnification obligations in favor of the Escrow Agent.
9. The provisions of this Agreement may not be amended, supplemented,
waived or changed orally, but only by a writing signed by the party as to whom
enforcement of any such amendment, modification, supplement or waiver is sought
and making specific reference to this Agreement.
10. Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein. Escrow Agent shall not be liable for any
action taken or omitted by it, or any action suffered by it, except for gross
negligence or willful misconduct. The Escrow Agent shall not be bound by any
notice or demand unless evidenced by a writing delivered to Escrow Agent signed
by the proper party or parties.
11. This Agreement contains the entire understanding between and among
the parties hereto with respect to the subject matter hereof, and shall be
binding upon and inure to the benefit of such parties, and their respective
heirs, successors in interest and legal representatives.
12. This Agreement is governed by, and is to be construed in accordance
with, the laws of the State of New York, United States of America.
This Agreement may be executed in counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
LEISURE TRAVEL GROUP, INC.
a Delaware corporation
By:
-------------------------------
17
LEISURE TRAVEL GROUP LIMITED
a private limited company organized under the laws of England and Wales
By:
-------------------------------
CIGNET VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By:
-------------------------------
RED KITE VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By:
-------------------------------
XXXXXX CAPITAL LIMITED
a private limited company organized under the laws of England and Wales
By:
-------------------------------
XX0XXX.XXX, INC.
a Delaware corporation
By:
------------------------------
XXXXXXX X. XXXX
18
XXXXXX ESTATES
By:
-----------------------------
XXXXXX XXXXX
-----------------------------
XXXXXXX LAST
------------------------------
XXX XXXXXXX
------------------------------
XXXXX XXXXXXXX
ESCROW AGENT:
XXXXXXXXX TRAURIG, LLP
By:
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XXXXXXX X. XXXXX, SHAREHOLDER
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