ONLINE VACATION CENTER HOLDINGS CORP. MARCH 31, 2008
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PHOENIX INTERNATIONAL PUBLISHING, LLC ACQUISITION AGREEMENT DOC #456656 V8
EXHIBIT 2.1
ACQUISITION AGREEMENT
BY AND AMONG
XXXXX XXXX,
AS XXXX,
AND
ONLINE VACATION CENTER HOLDINGS CORP.,
AS ONVC AND/OR THE HOLDER,
AND
PHOENIX INTERNATIONAL PUBLISHING, LLC,
AS PIP.
DATED AS OF MARCH 31, 2008
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement"), dated as of March 31,
2008, is made by and among ONLINE VACATION CENTER HOLDINGS CORP., a Florida
corporation (as "ONVC" and/or the "Holder"), PHOENIX INTERNATIONAL PUBLISHING,
LLC, a Delaware limited liability company ("PIP"), and Xxxxx Xxxx, an individual
residing in Trophy Club, Texas ("Xxxx").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, the Holder desires to sell, transfer and deliver to
Xxxx, and Xxxx desires to purchase and acquire from the Holder, all of the
issued and outstanding ownership interests of PIP (the "PIP Interests") for the
consideration and on the terms set forth in this Agreement and the parties,
intending to be legally bound, hereby agree as follows:
1. SALE AND TRANSFER OF PIP INTERESTS; CLOSING
1.1 PIP INTERESTS
Subject to the terms and conditions of this Agreement, at the Closing
(defined below), the Holder will sell and transfer the PIP Interests to Xxxx,
and Xxxx will purchase and acquire the PIP Interests from the Holder.
1.2 CONSIDERATION
(a) The total consideration (the "Consideration") to be paid at the
Closing by Xxxx to the Holder for the PIP Interests will be 1,250,000 restricted
shares of ONVC common stock, par value $0.0001 per share, (the "Restricted
Shares").
(b) In the event certain conditions are met, the Consideration shall be
adjusted as set forth in the Contingent Payment Agreement, included in the
Closing Deliverables.
1.3 CLOSING
The acquisition and sale (the "Closing") provided for in this Agreement
will take place at the offices of Xxxxxx and Xxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, by 11:00 p.m. (local time) on March 31, 2008, or at
such other time and place as the parties may agree (the "Closing Date").
1.4 CLOSING OBLIGATIONS
At the Closing, ONVC and Xxxx shall receive their respective Closing
Deliverables as described on Exhibit A attached hereto, each in form and
substance reasonably satisfactory to ONVC and Xxxx.
1.5 TAX TREATMENT
It is the intent of the parties that the exchange of stock contemplated
by this Agreement qualifies as a tax-free split-off under section 355 of the
Internal Revenue Code.
1.6 ADMINISTRATION OF TAX MATTERS
(a) Tax Returns.
(i) The Holder shall prepare and timely file, or cause to be timely
filed, for PIP, the federal income Tax Return (defined below) and other Tax
Returns, if any (the "Short Period Tax Returns"), that are required by law to be
filed for the taxable period of PIP that ends on or before the Closing Date and
the Holder shall be responsible for and shall pay as and when due any and all
Taxes (defined below), preparation, audit or other expenses or costs in
connection therewith. The Holder shall provide a copy of these Short Period Tax
Returns to Xxxx together with the work papers and schedules utilized in their
preparation. Xxxx, ONVC and PIP shall cooperate fully, as and to the extent
reasonably requested, in connection with the filing of the Short Period Tax
Returns and any audit, litigation or other proceeding with respect to the Short
Period Tax Returns. For clarification, all expenses incurred by PIP prior to the
Closing Date, including, but not limited to, expenses associated with (A) the
transactions contemplated by this Agreement, and (B) payments of compensation to
employees and other service providers, shall be paid by the Holder and, to the
extent so paid, shall be expenses of PIP reflected on the Short Period Tax
Returns.
(ii) Neither Xxxx, ONVC nor PIP shall file an amended Tax Return with
respect to any and all taxable periods, or portions thereof, ending on or before
the Closing Date (the "Pre-Closing Tax Periods"), without the prior written
consent of Xxxx, ONVC and PIP; except that such consents shall not be required
for any amendment filed in connection with any requirement or finding of any
audit by a Governmental Entity (defined below) of the Tax Return to which the
amendment relates. The Holder shall indemnify Xxxx and PIP for any liability,
cost or expense Xxxx or PIP incurs as a result of any such amendment filed in
accordance with the terms of this Section 1.6(a)(ii).
(b) General Administration of Tax Matters. ONVC, PIP and Xxxx shall
cooperate fully, as and to the extent reasonably requested, in connection with
any audit, litigation or other proceeding with respect to Taxes and Tax Returns
(which the Holder shall control with respect to the Pre-Closing Tax Periods).
Such cooperation shall include the retention, and (upon the other party's
request) the provision, of records and information which are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder; provided, however, the Holder, with respect
to Pre-Closing Tax Periods, and Xxxx and PIP, with respect to all subsequent Tax
Periods, shall pay the reasonable out-of-pocket expenses incurred by the party
providing such assistance; provided, further, no party shall be required to
provide assistance at times or in amounts that would interfere unreasonably with
the business and operations of such party. ONVC agrees to retain, and to make
available to Xxxx and PIP upon their request, all books and records with respect
to Tax matters pertinent to PIP relating to the Pre-Closing Tax Periods, until
the expiration of any applicable statute of limitations or extensions thereof.
As used in this Agreement, the term "Tax Return" shall mean all
reports, returns, information returns, declarations, statements and other
documents required to be filed in respect of Taxes.
As used in this Agreement, the term "Tax" shall mean all federal,
state, local, foreign and other governmental net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind whatever,
together with any interest and any penalties, additions to tax or additional
amounts with respect thereto, and the term "Tax" means any one of the foregoing
Taxes.
As used in this Agreement, the term "Governmental Entities" shall mean
any court, tribunal, governmental or regulatory authority, agency, department,
commission, instrumentality, body or other governmental entity of the United
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States of America or any state or political subdivision thereof or any court or
arbitrator, and the term "Governmental Entity" means any one of the foregoing
Governmental Entities.
1.7 REPAYMENT OF INTER-COMPANY LOAN.
PIP shall, and Xxxx shall cause PIP to, repay the inter-company loan
owed by PIP to ONVC as of the date hereof in the principal amount of $100,000,
which shall be paid in full by January 1, 2012, with no interest due, in equal
monthly payments of $2,500 beginning October 1, 2008 and continuing for a total
of forty (40) months.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE HOLDER AND PIP
The Holder and PIP hereby represent and warrant to Xxxx that all of the
following representations and warranties set forth in this Section 2.1 are, to
the actual Knowledge of Holder and PIP (as defined herein), true, correct and
complete as of the date of this Agreement and will be, to the actual Knowledge
of Holder and PIP, true, correct and complete at and as of the Closing Date as
though restated on and as of such date.
(a) Ownership. The Holder is the record and beneficial owner and holder of
the PIP Interests, free and clear of any and all liens, encumbrances,
charges, claims, conditions, interests, options, security interests,
pledges, rights of first refusal or restrictions of any kind
(collectively, "Liens"). The Holder owns 100% of the outstanding equity
and other securities of PIP. PIP does not own, control, or have voting
rights with respect to, directly or indirectly, any interest in any
other corporation, partnership, association or other business entity
and PIP is not a party to any agreement relating to the acquisition of
such an interest. There are no agreements, rights, claims or
obligations relating to the issuance, sale, or transfer of any equity
or other securities of PIP.
(b) Authorization. The Holder is duly incorporated and in good standing
under the laws of the State of Florida and is duly qualified and in
good standing in each jurisdiction in which it conducts business or
owns property, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on its
financial condition or business operations. PIP is duly organized and
in good standing under the laws of the State of Delaware and is duly
qualified and in good standing in each jurisdiction in which it
conducts business or owns property, except where the failure to be so
qualified could not reasonably be expected to have a material adverse
effect on its financial condition or business operations. Each of the
Holder and PIP has full right, power and authority to execute and
deliver this Agreement and the other Holder Documents (defined below),
to perform its obligations set forth herein and therein and to
consummate all of the transactions contemplated hereby and thereby.
(c) Documents. The Holder and PIP have, or before the Closing will have,
approved the sale of the PIP Interests, this Agreement and the
transactions contemplated hereby, and approved, executed and delivered
this Agreement, the Contingent Payment Agreement, the Termination of
Employment Agreement, the Acknowledgment of Inter-Company Debt and
certain other agreements and instruments contemplated by this Agreement
to be executed and delivered by the Holder and PIP in connection
herewith (collectively, the "Holder Documents") and each of the Holder
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Documents, when executed by the Holder or PIP, shall be the legal valid
and binding obligation of the Holder and PIP in accordance with their
terms, except as limited by (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application affecting the
rights and remedies of creditors and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(d) No Default. Neither the Holder or PIP, nor, to the knowledge of the
Holder and PIP, any vendor or party in contract with the Holder or PIP,
is in violation of any provision of, or in default under, any of the
Holder's certificate of incorporation or bylaws, PIP's articles of
association or operating agreement or any indenture, mortgage, deed of
trust, indebtedness, agreement, judgment, decree, order, statute, rule
or regulation to which the Holder or PIP is a party or by which any of
them or their property is subject or bound and further, the execution
and delivery of the Holder Documents, the performance of the
obligations therein and the consummation of the transactions
contemplated thereby will not result in a violation thereof, or a
default thereunder.
(e) No Approvals. Neither the Holder nor PIP is required to obtain the
approval, authorization, consent, waiver or any other order of any
public or private entity (including any Governmental Entity), person,
board or body in connection with the transactions contemplated by the
Holder Documents, except as set forth in Section 3.1(e) hereof.
(f) Financial Statements. The financial statements (all of which are
unaudited) of PIP, copies of which have been, or prior to the Closing
will have been, provided to Xxxx, are true and correct in all material
respects and fairly present the assets, liabilities, financial
condition, results of operations, changes in stockholders' equity, and
cash flow of PIP (and of any person or entity required by generally
accepted accounting principles to be consolidated or included therein)
at their respective dates and for their respective periods, all in
accordance with generally accepted accounting principles applied on a
consistent basis, subject in the case of unaudited statements only to
normal recurring year-end adjustments and footnotes (the effect and the
content of either of which will not, individually or in the aggregate,
be materially adverse to the financial condition or business operations
of PIP).
(g) No Material Adverse Change. From the date of its last unaudited
financial statements dated December 31, 2007, there has not been any
change that would materially and adversely affect the financial
position or results of operations of PIP, or its ability to consummate
the transactions contemplated hereby, or that should be disclosed to
Xxxx in order to make any statements or information furnished to Xxxx,
in light of the circumstances under which they were made, not
misleading, which has not been disclosed in writing to Xxxx, as set
forth in Schedule 2.1(g) to this Agreement.
(h) No Undisclosed Liabilities. No officer, employee, agent or
representative of ONVC (other than Xxxx, or any agent or representative
of Xxxx) has committed PIP to, or otherwise entered into any agreement,
contract or instrument on behalf of PIP with respect to, any
liabilities or obligations of any nature (absolute, accrued, contingent
or otherwise, whether due or to become due, known or unknown and
whether pending or threatened), including, without limitation, any
Indebtedness (defined below), account, note, lease, Tax, environmental
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liability, fine, penalty, civil or criminal action, filing, lien,
encumbrance, restriction or other duty affecting PIP or its assets or
properties (nor, to the knowledge of the Holder and PIP, is there any
basis, circumstance or fact that might give rise thereto), as of the
date hereof or as of the date of the Closing, which has not been
disclosed in writing to Xxxx, as set forth in Schedule 2.1(h) to this
Agreement. "Indebtedness" means (i) indebtedness for borrowed money,
whether secured or unsecured (including, without limitation,
inter-company loans), (ii) obligations under conditional or installment
sale or other title retention Contracts or deferred purchase price
obligations relating to purchased property, (iii) capitalized lease
obligations, (iv) commitments under letters of credit, (v) obligations
under non-cancelable operating leases, and (vi) guarantees of any of
the foregoing of another person.
(i) No Litigation. There is no action, suit, proceeding or investigation at
law or in equity, before or by any court, public board or body,
realized or contingent, pending or, to the knowledge of the Holder and
PIP, threatened, against or affecting the Holder or PIP (nor, to the
knowledge of the Holder and PIP, is there any basis, circumstance or
fact therefore) as of the date hereof or as of the date of the Closing,
which has not been disclosed in writing to Xxxx, as set forth in
Schedule 2.1(i) to this Agreement.
(j) Ordinary Course of Business. Since January 1, 2008, PIP has conducted
its business only in the ordinary course of business consistent with
the past practice.
(k) Brokers or Finders. Neither the Holder nor PIP or its officers 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. The Holder
will indemnify and hold Xxxx harmless from any such payment alleged to
be due by or through the Holder or PIP as a result of the action of the
Holder or PIP or its officers or agents.
(l) Tax Treatment. Todd's transfer of PIP Interests to Holder, pursuant to
the Acquisition Agreement dated August 31, 2006, was treated by ONVC as
a tax-free reorganization under section 368 of the Internal Revenue
Code.
(m) Contracts. No officer, employee, agent or representative of ONVC (other
than Xxxx, or any agent or representative of Xxxx) has caused PIP or
Holder (with respect to the business of PIP) to be or become a party to
any contract, obligation, undertaking, arrangement, commitment, note,
bond, mortgage, indenture, agreement, lease, license or other
instrument or agreement (each, a "Contract"), other than Contracts that
have been counter-signed by Xxxx or disclosed to Xxxx in writing, as
set forth in Schedule 2.1(m) to this Agreement.
(n) Account Activity. Schedule 2.1(n) contains a true and complete listing
of all changes and adjustments made to any PIP accounts (including,
without limitation, bank accounts) between March 1, 2008 and the date
of this Agreement.
(o) As Is. Except as expressly provided in this Agreement, Holder is
transferring its interests in PIP to Xxxx and Xxxx is taking the
interests in PIP "as is". Except as expressly provided in this
Agreement, Holder makes no other representations or warranties
regarding PIP. Schedule 2.1(n) contains a complete and accurate balance
sheet of PIP as of the date of this Agreement.
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"Knowledge of Holder and PIP" shall mean the actual, not constructive, knowledge
of any employee of PIP or ONVC, other than Xxxx. Xxxx hereby acknowledges and
agrees that certain information provided by Holder and PIP is based upon
information provided or known by Xxxx in his capacity as President of PIP and as
of Vice President of ONVC. Holder and PIP have not independently verified or
confirmed such information and therefore make no representation or warranty with
respect thereto, other than the representation and warranty that Holder and PIP
and employees (other than Xxxx) of Holder and PIP have no actual knowledge of
information that would lead them to believe the information furnished by Holder
and PIP hereunder is not correct.
2.2 REPRESENTATIONS AND WARRANTIES OF XXXX
Xxxx hereby represents and warrants to the Holder and PIP that all of
the following representations and warranties set forth in this Section 2.2 are
true, correct and complete as of the date of this Agreement and will be true,
correct and complete at and as of the Closing Date as though restated on and as
of such date:
(a) Authorization. Xxxx has full right, power and authority to execute and
deliver this Agreement and the other Xxxx Documents (defined below), to
perform his obligations set forth herein and therein and to consummate
all of the transactions contemplated hereby and thereby.
(b) Documents. Xxxx has, or before Closing will have, approved the purchase
of the PIP Interests, this Agreement and the transactions contemplated
hereby, and approved, executed and delivered this Agreement, the
Contingent Payment Agreement, the Personal Guaranty of Contingent
Payment Agreement, the Termination of Employment Agreement, the
Acknowledgment of Inter-Company Debt and certain other agreements and
instruments contemplated by this Agreement to be executed and delivered
by Xxxx in connection herewith (collectively, the "Xxxx Documents") and
each of the Xxxx Documents, when executed by Xxxx, shall be the legal,
valid and binding obligation of Xxxx in accordance with their terms,
except as limited by (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application affecting the
rights and remedies of creditors and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(c) No Default. Xxxx is not in violation of any provision of, or in default
under, and the execution and delivery of the Xxxx Documents, the
performance of the obligations set forth therein and the consummation
of the transactions contemplated thereby will not result in a violation
of, or default under, any indenture, mortgage, deed of trust,
indebtedness, agreement, judgment, decree, order, statute, rule or
regulation to which Xxxx is a party or by which Xxxx or his property is
subject or bound.
(d) No Approvals. Xxxx is not required to obtain the approval,
authorization, consent, waiver or any other order of any public or
private entity (including any Governmental Entity), person, board or
body in connection with the transactions contemplated by the Xxxx
Documents, except as set forth in Section 3.2(a) hereof.
(e) Valid Issuance. Reserved.
(f) Investment Intent. Reserved.
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(g) Brokers or Finders. Neither Xxxx nor his 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. Xxxx will indemnify and hold the Holder
harmless from any such payment alleged to be due by or through Xxxx as
a result of the action of Xxxx or his agents.
(h) Tax Treatment. Todd's transfer of PIP Interests to Holder, pursuant to
the Acquisition Agreement dated August 31, 2006, was treated by Xxxx as
a tax-free reorganization under section 368 of the Internal Revenue
Code.
(i) Contracts. With respect to the business of PIP, Xxxx is not a party to
any Contract containing an obligation or commitment of ONVC, other than
Contracts that have been counter-signed by Holder or disclosed to
Holder in writing.
(j) As Is. Xxxx acknowledges that, except as expressly provided in this
Agreement, Holder is transferring its interests in PIP to him and that
he is taking the interests in PIP "as is". Xxxx acknowledges that,
except as expressly provided in the Agreement, Holder makes no other
representations or warranties regarding PIP.
3. COVENANTS PRIOR TO CLOSING
3.1 COVENANTS OF THE HOLDER AND PIP
(a) Access and Investigation. Upon reasonable notice, PIP shall, and the
Holder shall cause PIP to, (1) afford Xxxx and his representatives
access during normal business hours to its personnel, properties
(including subsurface testing), Contracts, books and records, and other
documents and data, (2) xxxxxxx Xxxx with copies of all such Contracts,
books and records, and other existing documents and data as Xxxx xxx
reasonably request, and (3) xxxxxxx Xxxx with such additional
financial, operating, and other data and information as Xxxx xxx
reasonably request.
(b) Due Diligence. The Holder and PIP shall reasonably cooperate with Xxxx
in the conduct of his due diligence.
(c) Audit. The Holder acknowledges that Xxxx xxx conduct an audit of the
financial statements of PIP. Xxxx, at his expense, may cause his
accountants to conduct an audit of PIP and to issue audited financial
statements as diligently as possible. The Holder will assist and
provide Xxxx and his auditors access to conduct such audit and such
further due diligence in connection therewith as Xxxx xxx require. PIP,
ONVC and Xxxx each acknowledge that such audit may be completed after
the Closing.
(d) Operation of PIP. To the actual Knowledge of Holder and PIP and based
upon information supplied by Xxxx in his capacity as President of PIP
and Vice President of ONVC, PIP shall, and the Holder shall cause PIP
to, (1) conduct its business only in the ordinary course of business
consistent with its past practices; (2) use its best efforts to
preserve intact its current business organization, keep available the
services of its current officers, employees, and agents, and maintain
the relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships
with it; (3) confer with Xxxx concerning material operational matters
or any other matters material to PIP's business; and (4) otherwise
report periodically to Xxxx concerning the status of his business,
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operations, and finances. Further, PIP shall NOT, and the Holder shall
cause PIP not to, (1) enter into, amend, modify, extend, terminate or
permit to expire (a) any agreement that involves more than $25,000 or
exceeds one year in term or (b) any compensation agreements, benefit
plans or insurance policies, or (2) dispose of any assets, issue any
securities or rights with respect to securities, or declare or pay any
bonuses, dividends or distributions.
(e) Required Approvals. As promptly as practicable after the date of this
Agreement, the Holder and PIP will:
(1) seek and obtain the approval of these transactions by Holder's and
PIP's Board of Director(s) or Manager(s), shareholders and members,
(2) make all filings, if any, required by applicable law to be made by
them in connection with these transactions, and
(3) cooperate with Xxxx with respect to all filings, if any, that Xxxx
elects, or is required by any applicable law, to make in connection
with these transactions.
(f) Notifications. The Holder and PIP will promptly notify Xxxx in writing
if the Holder or PIP becomes aware of (1) any fact or condition that
causes or constitutes a breach of the Holder's or PIP's
representations, warranties or covenants as of the date of this
Agreement or as of the date of the Closing as if made as of the date of
the Closing, or (2) any fact or condition that should be disclosed to
Xxxx in order to make any statements or information furnished to Xxxx,
in light of the circumstances under which they were made, not
misleading.
(g) Exclusive Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 5.1 hereof, neither the Holder nor PIP
will directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any person or entity (other than Xxxx)
relating to any transaction involving any sale of the PIP Interests,
any sale of any of the businesses, assets or equity or other securities
of PIP (or any PIP subsidiary, if any), or any merger, consolidation,
business combination, or similar transaction involving PIP (or any PIP
subsidiary, if any).
(h) Best Efforts. The Holder and PIP will use their reasonable commercial
efforts to cause the conditions in Article 4 hereof to be satisfied.
3.2 COVENANTS OF XXXX
(a) Required Approvals. As promptly as practicable after the date of this
Agreement, Xxxx will:
(1) make all filings, if any, required by applicable law to be made by
it in connection with these transactions, and
(2) cooperate with the Holder and PIP with respect to all filings, if
any, that the Holder or PIP is required by any applicable law to
make in connection with these transactions;
provided that this Agreement will not require Xxxx to dispose of or
make any change in any portion of his business or to incur any other
burden to obtain any approval or governmental authorization.
(b) Best Efforts. Xxxx will use his reasonable commercial efforts to cause
the conditions in Article 4 hereof to be satisfied.
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4. CONDITIONS PRECEDENT TO CLOSING
4.1 CONDITIONS PRECEDENT TO TODD'S OBLIGATION TO CLOSE
Todd's obligation to purchase and acquire the PIP Interests and to take
the other actions required to be taken by Xxxx at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Xxxx in writing, in whole or in part):
(a) Representations.
(i) Each of the representations and warranties made by the Holder and
PIP in this Agreement to the extent not qualified by materiality must
have been accurate in all material respects as of the date of this
Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date (except to the extent such
representations and warranties expressly relate to an earlier date, in
which case as of such earlier date).
(ii) Each of the representations and warranties made by the Holder and
PIP in this Agreement to the extent qualified by materiality must have
been accurate in all respects as of the date of this Agreement, and
must be accurate in all respects as of the Closing Date as if made on
the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of
such earlier date).
(b) Conditions. Each of the conditions required for the execution and
delivery of the Holder Documents, including, without limitation those
required herein, shall have been fulfilled or waived to the
satisfaction of Xxxx.
(c) Holder's and PIP's Performance. Each and every covenant and obligation
of the Holder and PIP hereunder required to be performed or complied
with at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), shall have
been duly performed and complied with in all respects.
(d) Due Diligence. Xxxx shall have concluded his due diligence and the
audit of the PIP financial statements and the results thereof shall be
satisfactory to Xxxx in his sole discretion; provided, however, Xxxx
xxx elect to conclude the audit after the Closing pursuant to Section
3.1 (c) hereof.
(e) Closing Deliverables. Each of the Closing Deliverables to be delivered
by the Holder to Xxxx listed on Exhibit A attached hereto shall have
been delivered to the satisfaction of Xxxx, including the approvals
required in Sections 3.1(e) and 3.2(a) hereof.
(f) Ancillary Agreements. ONVC shall have executed the Contingent Payment
Agreement, the Termination of Employment Agreement and the
Acknowledgement of Inter-Company Debt.
4.2 CONDITIONS PRECEDENT TO THE HOLDER'S OBLIGATION TO CLOSE
The Holder's obligation to sell the PIP Interests and to take the other
actions required to be taken by the Holder at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Holder in writing, in whole or in part):
(a) Representations.
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(i) Each of the representations and warranties made by Xxxx in this
Agreement to the extent not qualified by materiality must have been
accurate in all material respects as of the date of this Agreement, and
must be accurate in all material respects as of the Closing Date as if
made on the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of
such earlier date).
(ii) Each of the representations and warranties made by Xxxx in this
Agreement to the extent qualified by materiality must have been
accurate in all respects as of the date of this Agreement, and must be
accurate in all respects as of the Closing Date as if made on the
Closing Date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier
date).
(b) Todd's Performance. Each and every covenant and obligation of Xxxx
hereunder required to be performed or complied with at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), shall have been duly performed
and complied with in all respects.
(c) Closing Deliverables. Each of the Closing Deliverables to be delivered
by Xxxx to the Holder listed on Exhibit A attached hereto shall have
been delivered to the satisfaction of the Holder, including the
approvals required in Sections 3.1(e) and 3.2(a) hereof.
(d) Ancillary Agreements. Xxxx shall have executed the Contingent Payment
Agreement, Personal Guaranty of Contingent Payment Agreement the
Termination of Employment Agreement and the Acknowledgement of
Inter-Company Debt.
5. TERMINATION
5.1 TERMINATION EVENTS
This Agreement may, by written notice given prior to or at the Closing,
be terminated:
(a) by mutual written consent of Xxxx and the Holder;
(b) by either Xxxx or the Holder if a material breach of any provision of
this Agreement has been committed by the other party and such breach
has not been cured;
(c) by Xxxx if any of the conditions in Section 4.1 have not been satisfied
as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Xxxx to comply
with its obligations under this Agreement) and Xxxx has not waived such
condition on or before the Closing Date;
(d) by the Holder if any of the conditions in Section 4.2 have not been
satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of the Holder
to comply or with his obligations under this Agreement) and the Holder
has not waived such condition on or before the Closing Date; or
(e) by either Xxxx or the Holder if the Closing has not occurred (other
than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on
or before March 31, 2008, or such later date as the parties may agree.
10
5.2 EFFECT OF TERMINATION
Each party's right of termination under Section 5.1 hereof is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of remedies. If
this Agreement is terminated pursuant to Section 5.1 hereof, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Article VI and Sections 7.1 and 7.3 will survive; provided,
however, that if this Agreement is terminated by a party because of the breach
of the Agreement by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
6. INDEMNIFICATION; REMEDIES
6.1 SURVIVAL; INDEMNIFICATION AFFECTED BY KNOWLEDGE
All representations and warranties in this Agreement, the Holder
Documents and the Xxxx Documents will survive the Closing for a period of
twenty-four (24) months, other than the representations and warranties set forth
in Sections 2.1(a), 2.1(b) and 2.2(a) above which shall survive indefinitely.
Notwithstanding any provision contained herein to the contrary, neither any
Indemnified Person (defined below) nor Holder shall be entitled to
indemnification hereunder with respect to a breach by the Holder or PIP, on the
one hand, or Xxxx, on the other hand, of any representation or warranty made in
this Agreement or any other Holder Document or Xxxx Document that such
Indemnified Person or Holder, respectively, had knowledge of on the date of this
Agreement. The right to indemnification, payment of damages or other remedy
based on such representations, warranties, covenants, and obligations will not
be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time after the execution and
delivery of this Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with, any such representation, warranty, covenant,
or obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
damages, or other remedy based on such representations, warranties, covenants,
and obligations.
6.2 INDEMNIFICATION BY THE HOLDER
The Holder will indemnify and hold harmless Xxxx and his affiliates and
their successors and permitted assigns (the "Xxxx Indemnified Persons") for, and
will pay to the Xxxx Indemnified Persons the amount of, any loss, liability,
claim, damage (specifically excluding incidental, consequential, punitive or
exemplary damages) or expense (including costs of investigation and defense and
reasonable attorneys' fees), whether or not involving a third-party claim
(collectively, "Damages"), arising, directly or indirectly, from or in
connection with: (a) any breach of any representation or warranty made by the
Holder or PIP in this Agreement or in any other Holder Document, whether such
breach is as of the date hereof or as of the date of the Closing as if made on
the date of the Closing; (b) any breach by the Holder or PIP of any covenant or
obligation of the Holder or PIP contained in this Agreement or in any Holder
Document, or arising from the Holder's ownership of the PIP Interests.
6.3 INDEMNIFICATION BY XXXX
Xxxx will indemnify and hold harmless the Holder and its successors and
permitted assigns, and will pay to the Holder the amount of any Damages arising,
11
directly or indirectly, from or in connection with (a) any breach of any
representation or warranty made by Xxxx in this Agreement or in any Xxxx
Document, whether such breach is as of the date hereof or as of the date of the
Closing as if made on the date of the Closing; (b) any breach by Xxxx of any
covenant or obligation of Xxxx contained in this Agreement or in any Xxxx
Document; or (c) any claim arising from Todd's ownership of the PIP Interests or
the operation of PIP's business after the date of the Closing, including,
without limitation, any action or omission by, or any product shipped or
manufactured by, or any services provided by, PIP after the date of the Closing.
6.4 PROCEDURE FOR INDEMNIFICATION
The party or parties making a claim for indemnification under this
Article 6 shall be, for the purposes of this Agreement, referred to as the
"Indemnified Party" and the party or parties against whom such claims are
asserted under this Article 6 shall be, for the purposes of this Agreement,
referred to as the "Indemnifying Party." All claims by any Indemnified Party
under this Article 6 shall be asserted and resolved as follows:
(a) In the event that (i) any action, proceeding, investigation, litigation
or suit (each, a "Proceeding") is asserted or instituted by any person
other than the parties to this Agreement that could give rise to
Damages for which an Indemnifying Party could be liable to an
Indemnified Party under this Agreement (such Proceeding, a "Third Party
Claim") or (ii) any Indemnified Party under this Agreement shall have a
claim to be indemnified by any Indemnifying Party under this Agreement
that does not involve a Third Party Claim (such claim, a "Direct
Claim"), the Indemnified Party shall with reasonable promptness send to
the Indemnifying Party a written notice briefly specifying the nature
of such Third Party Claim or Direct Claim and the amount or estimated
amount thereof, which amount or estimated amount shall not be
conclusive of the final amount, if any, of such Third Party Claim or
Direct Claim (a "Claim Notice").
(b) In the event of a Third Party Claim, the Indemnifying Party shall be
entitled to appoint counsel of the Indemnifying Party's choice at the
expense of the Indemnifying Party to represent the Indemnified Party
and any others the Indemnifying Party may reasonably designate in
connection with such Third Party Claim (in which case the Indemnifying
Party shall not thereafter be responsible for the fees and expenses of
any separate counsel retained by any Indemnified Party except as set
forth below); provided, however, that such counsel must be reasonably
acceptable to the Indemnified Party. Notwithstanding an Indemnifying
Party's election to appoint counsel to represent an Indemnified Party
in connection with a Third Party Claim, an Indemnified Party shall have
the right to retain separate counsel to conduct the defense of such
Third Party Claim, and only in the case of clauses (i) and (iv) below
(but not clauses (ii) and (iii) below) the Indemnifying Party shall
bear the reasonable fees, costs and expenses of such separate counsel,
if (i) the use of counsel chosen by the Indemnifying Party to represent
the Indemnified Party would present such counsel with a conflict of
interest, (ii) the Third Party Claim seeks an injunction or other
equitable relief that would be binding on the Indemnified Party, (iii)
an adverse determination with respect to the Third Party Claim could
reasonably be expected to establish a material adverse precedent or
(iv) the Indemnifying Party shall not have employed counsel to
represent the Indemnified Party within a reasonable time after notice
of the institution of such Third Party Claim. If and to the extent
reasonably requested by the Indemnifying Party, the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel in
contesting any Third Party Claim that the Indemnifying Party defends
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or, if appropriate and related to the Third Party Claim, in making any
counterclaim against the person asserting the Third Party Claim, or any
cross-complaint against any person. No Third Party Claim may be settled
or compromised (i) by the Indemnified Party without the prior written
consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed, or (ii) by the Indemnifying Party
without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed. In the event
that any Indemnified Party or Indemnifying Party settles or compromises
or consents to the entry of any judgment with respect to any Third
Party Claim in violation of the preceding sentence, then such violating
party shall pay and indemnify fully, hold harmless, and defend the
other party against any incremental Damages under this Article 6 caused
by or arising from such settlement, compromise or consent to the entry
of judgment without the prior written consent of the other party.
(c) In the event of a Direct Claim, the Indemnifying Party shall notify the
Indemnified Party within 45 days following receipt of a Claim Notice
whether or not the Indemnifying Party disputes such claim.
(d) From and after the delivery of a Claim Notice relating to a Third Party
Claim, at the reasonable request of the Indemnifying Party, each
Indemnified Party shall grant the Indemnifying Party and its
representatives reasonable access to the books, records, personnel and
properties of such Indemnified Party to the extent reasonably related
to the matters to which the Third Party Claim relates. All such access
shall be granted during normal business hours and shall be granted
under conditions that will not interfere with the business and
operations of such Indemnified Party. The Indemnifying Party shall not,
and shall require its representatives to not, use (except in connection
with such Third Party Claim) or disclose to any third party other than
the Indemnifying Party's representatives (except as may be required by
applicable law) any information obtained pursuant to this Section
6.4(d).
6.5 LIMITATIONS ON INDEMNITY OBLIGATIONS
(a) Neither the Holder nor Xxxx, respectively, shall have any liability
for indemnification to the Indemnified Persons or the Holder, as the case may
be, with respect to any matters described in Section 6.2(a) (other than any
breach of the representations and warranties set forth in Sections 2.1(a) or
(b)) or 6.3(a) (other than any breach of the representations and warranties set
forth in Section 2.2(a)), respectively, until the total amount of Damages
attributable to the Holder or Xxxx, respectively, with respect to such matters
exceeds $10,000 (the "Deductible"), and then only for the amount by which such
Damages exceed the Deductible.
(b) The maximum aggregate amount of Damages that the Holder or Xxxx,
respectively, shall be obligated to pay to the Indemnified Persons or the
Holder, as the case may be, with respect to any matters described in Section
6.2(a) (other than any breach of the representations and warranties set forth in
Sections 2.1(a) or (b)) or 6.3(a) (other than any breach of the representations
and warranties set forth in Section 2.2(a)), shall be limited to an amount equal
to three hundred thousand dollars ($300,000).
6.6 RIGHT OF SET-OFF
Upon notice to the Holder or Xxxx, as the case may be, specifying in
reasonable detail the basis for such set-off, Xxxx or Holder, as the case may
be, may set off any amount to which he or it may be entitled under this Article
13
6 against amounts otherwise payable hereunder or under the Contingent Payment
Agreement. The exercise of such right of set-off by Xxxx or the Holder, as the
case may be, in good faith, whether or not ultimately determined to be
justified, will not constitute an event of default hereunder or under any Xxxx
Document or Holder Document, as the case may be. Neither the exercise of nor the
failure to exercise such right of set-off or to give a notice of any claim
hereunder will constitute an election of remedies or limit Xxxx or Holder, as
the case may be, in any manner in the enforcement of any other remedies that may
be available to it.
6.7 SOLE REMEDY
Upon and after the Closing, the provisions of this Article 6 represent
the sole and exclusive remedy available to any party to this Agreement for any
misstatement or omission by any other party relating to any representation or
warranty contained herein or for any breach by any other party of any
representation, warranty, covenant or agreement contained herein and, except
with respect to fraudulent acts, each party hereby unconditionally waives any
other rights that it may have at law or in equity for any misstatement or
omission by any other party from any representation or warranty contained
herein, or any breach by any other party of any representation, warranty,
covenant or agreement contained herein.
7. GENERAL PROVISIONS
7.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the transactions
contemplated hereby, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
7.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the transactions contemplated hereby will be issued, if at all, at
such time and in such manner as ONVC determines. Unless consented to by ONVC in
advance, prior to the Closing, Xxxx shall keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any person or
entity, other than the accountants, attorneys and other advisors and
representatives of Xxxx. The Holder and Xxxx will consult with each other
concerning the means by which PIP's employees, customers, and suppliers and
others having dealings with PIP will be informed of these contemplated
transactions, and Xxxx will have the right to be present for any such
communication.
7.3 CONFIDENTIALITY
Xxxx and the Holder and PIP will maintain in confidence, and will cause
the directors, officers, employees, agents, and advisors of each to maintain in
confidence, and not use to the detriment of another party any written, oral, or
other information obtained in confidence from another party in connection with
this Agreement or these transactions, unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of these
14
transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings or any applicable
laws, rules or regulations. If these transactions are not consummated, each
party will return or destroy as much of such written information as the other
party may reasonably request.
7.4 MISCELLANEOUS
All notices and communications hereunder will be deemed given upon
receipt by personal delivery, overnight courier, fax or e-mail or upon the 3rd
day following mailing by registered or certified mail, return receipt requested,
and either delivered or addressed to the addresses set forth herein. This
Agreement constitutes the entire agreement between the parties and supersedes
any prior understandings or agreements, written or verbal, between the parties.
This Agreement may be amended, supplemented, modified or discharged only in
writing executed by all parties. This Agreement may not be assigned by either
party. The headings of Sections in this Agreement are provided for convenience
only and shall not affect its construction or interpretation. This Agreement may
be executed in counterparts, each of which shall be deemed to be an original
copy of this Agreement and all of which, when taken together, shall be deemed to
constitute one and the same agreement. If any provision of this Agreement is
held invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any dispute
hereunder shall be resolved by arbitration and all parties waive any right to a
trial by jury in connection therewith. Each party agrees that remedies for any
breach hereof include damages, specific performance, injunctive relief and other
equitable remedies, that no bond shall be required in connection therewith and
that the prevailing party shall be entitled to recover attorney's fees and
costs. This Agreement will be governed by the laws of the State of Texas without
regard to conflict of laws principles and venue and jurisdiction will lie only
in federal or state courts seated in the Northern District of Texas, and the
Parties hereby consent to jurisdiction and venue therein.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
THE HOLDER: ONLINE VACATION CENTER HOLDINGS CORP. PIP: PHOENIX INTERNATIONAL PUBLISHING, LLC,
By: Online Vacation Center Holdings Corp., as the sole
member of Phoenix International Publishing, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name, Title: Xxxxxx X. Xxxxxx, President
By: Xxxxxx X. Xxxxxx
----------------
Name, Title: Xxxxxx X. Xxxxxx, President
Address: 0000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Address: 0000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
XXXXX XXXX, for himself
/s/ Xxxxx Xxxx
--------------
Name: Xxxxx Xxxx
Address: 000 Xxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxx 00000
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SCHEDULE 2.1
2.1(g) Material Adverse Changes. Since December 31, 2007, the date of the last
unaudited financial statements of PIP, there have been no material adverse
changes to PIP.
2.1(h) Liabilities. Balance Sheet showing the liabilities of PIP to be provided
at Closing.
2.1(i) Litigation. None.
2.1(m) Contracts. None.
2.1(n) Account Activity. See Attached Bank Register for PIP for 3/1/08 through
3/31/08 and Attached Balance Sheet of PIP as of the date of this Agreement.
Exhibit A - Closing Deliverables
------------------------- --------------------------------------------------------------------------------------------
CLOSING 1. Acquisition Agreement
------------------------- --------------------------------------------------------------------------------------------
TITLE 2. Interest Certificates representing PIP Interests with Transfer Powers
3. Stock Transfer
------------------------- --------------------------------------------------------------------------------------------
INSTRUMENTS 4. General Certificate of the Holder
5. Stock Certificates representing Restricted Shares with Transfer Letter
------------------------- --------------------------------------------------------------------------------------------
AGREEMENTS 6. Contingent Payment Agreement
7. Termination of Employment Agreement
8. Acknowledgement of Inter-Company Debt
------------------------- --------------------------------------------------------------------------------------------
ORGANIZATIONAL 9. General Certificates of PIP with Articles, Operating Agreement, Good Standing
INSTRUMENTS Certificate and Resolutions/Actions
10. General Certificates of ONVC with Articles, Bylaws, Good Standing Certificate and
the Minutes of the Board of Directors Meeting Authorizing the sale of PIP
11. Resignation of Manager and Appointment of Xxxx as Manager
12. Resignation of Xxxxx Xxxx as Vice President of ONVC
13. Checkbooks related to all PIP accounts and an electronic/software copy of such
accounts
------------------------- --------------------------------------------------------------------------------------------
OTHER 14. Legal Opinion for PIP and Holder
15. Legal Opinion for Xxxx
------------------------- --------------------------------------------------------------------------------------------
DUE DILIGENCE 16. Corporate and Organizational
INSTRUMENTS 17. Invoices and documentation related to outstanding accounts payable.
