EXHIBIT 2.1
ACQUISITION AGREEMENT
BY AND BETWEEN
LA TOURS & CRUISES, INC. D/B/A WEST UNIVERSITY TRAVEL,
AS LTC,
AND
ALL OF THE HOLDERS OF LTC INTERESTS,
AS HOLDERS,
AND
ONLINE VACATION CENTER HOLDINGS CORP.,
AS ONVC.
DATED AS OF JANUARY 3, 2007.
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement"), dated as of January 3,
2007, is made by ONLINE VACATION CENTER HOLDINGS CORP., a Florida corporation
("ONVC"), LA TOURS & CRUISES, INC. D/B/A WEST UNIVERSITY TRAVEL, a Texas
corporation ("LTC"), and Xxx Xxxxxxxx and Xxxxxxx Xxxxxxxx (collectively,
"Holder").
FOR GOOD AND VALAUBLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, Holder desires to sell, and ONVC desires to acquire, all
of the issued and outstanding ownership interests of LTC (the "LTC 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 LTC INTERESTS; CLOSING
1.1 LTC INTERESTS.
Subject to the terms and conditions of this Agreement, at the Closing,
Holder will sell and transfer the LTC Interests to ONVC, and ONVC will acquire
the LTC Interests from Holder.
1.2 CONSIDERATION.
(a) The total consideration (the "Consideration") to be paid by ONVC to the
Holder for the LTC Interests will be paid as follows:
(A) $ 250,000 Cash (the "Cash Consideration") payable by
wire transfer or cashiers check at closing;
(B) $ 100,000 Cash payable by corporate check on January
2, 2008, plus an adjustment (not to exceed $25,000)
equal to 50% of the revenues less cost of goods
("Total Commissions") earned in 2007 in excess of
$530,000 or minus an adjustment (not to exceed
$25,000) equal to 50% of the difference between
$530,000 and the total commissions earned in 2007,
such adjustments to be paid to Holder or reimbursed
to ONVC on February 15, 2008, such $100,000 payment
and adjustments to be payable on such dates only if
Xxx Xxxxxxxx'x Employment Agreement has not been
terminated on or before such dates by Xxx Xxxxxxxx
without cause or by ONVC with cause (excluding
therefrom death and/or disability);
(C) $ 100,000 Cash payable by corporate check on January
2, 2009, plus an adjustment (not to exceed $25,000)
equal to 50% of the total commissions earned in 2008
in excess of $530,000 or minus an adjustment (not to
exceed $25,000) equal to 50% of the difference
between $530,000 and the total commissions earned in
2008, such adjustments to be paid to Holder or
reimbursed to ONVC on February 15, 2009, such
$100,000 payment and adjustments to be payable on
such dates only if Xxx Xxxxxxxx'x Employment
Agreement has not been terminated on or before such
dates by Xxx Xxxxxxxx without cause or by ONVC with
cause (excluding therefrom death and/or disability);
(D) $ 100,000 Cash payable by corporate check on January
4, 2010, plus an adjustment (not to exceed $25,000)
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equal to 50% of the total commissions earned in 2009
in excess of $530,000 or minus an adjustment (not to
exceed $25,000) equal to 50% of the difference
between $530,000 and the total commissions earned in
2009, such adjustments to be paid to Holder or
reimbursed to ONVC on February 15, 2010, such
$100,000 payment and adjustments to be payable on
such dates only if Xxx Xxxxxxxx'x Employment
Agreement has not been terminated on or before such
dates by Xxx Xxxxxxxx without cause or by ONVC with
cause (excluding therefrom death and/or disability);
(E) 50,000 restricted shares of ONVC common stock, par
value $0.0001 per share, (the "Restricted Shares") to
be issued at closing, which shares shall be subject
to a Lock-Up Agreement whereby 25,000 shares shall be
released for trading on January 1, 2008 and 25,000
shares shall be released for trading on January 1,
2009; and
(b) The Consideration shall be adjusted, if necessary, as required pursuant
to Section 3.1(d) hereof.
1.3 CLOSING
The acquisition and sale (the "Closing") provided for in this Agreement
will take place at the offices of The Xxxxxx Law Firm, 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, at 10:00 a.m. (local time) on January 3, 2007,
or at such other time and place as the parties may agree.
1.4 CLOSING OBLIGATIONS
Holder has indicated his acceptance of this Agreement by his execution
hereof. At the Closing, ONVC will have received the Closing Deliverables as
described in Exhibit A attached hereto, including holder's ownership certificate
and transfer power, all in form and substance reasonably satisfactory to ONVC.
1.5 TAX MATTERS
Holder and LTC further represent and warrant that all (a) tax returns
due to be filed on or before Closing have been accurately and timely filed, (b)
all taxes due and payable on or before Closing have been paid, and (c) for any
"short-periods" for which tax returns are not yet due, or for which all taxes
have not yet been paid, LTC has accurately and properly accrued on the books,
records and financial statements of LTC liabilities or reserves reflecting the
taxes due from LTC for such "short-periods", except as follows:
(1) Holder and LTC represent and warrant that LTC has elected to file
its federal income tax returns as a "Subchapter S Corporation" and
therefore no federal or state income taxes are payable by LTC nor
are any federal or state income tax accruals, reserve or payments
reflected on the books, records or financial statements of LTC.
(2) Holder will prepare and timely file "short-period" federal and
state income tax returns for the "short-period" ended as of the
date of Closing and Holder will be responsible for, and will pay
when due, any and all taxes, interest, penalties preparation,
audit or other expenses or costs in connection therewith. Holder
shall provide a copy of these "short-period" tax returns to ONVC
together with the work papers and schedules utilized in their
preparation.
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(3) For clarification, all expenses incurred by LTC prior to the date
of Closing, 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 Holder and, to the extent so paid, shall be
expenses of LTC reflected on the "short-period' tax returns,
except that the parties to this agreement agree that any expenses
billed on a monthly basis after the date of Closing shall be the
responsibility of ONVC.
(4) Neither Holder, ONVC nor LTC shall file an amended tax return with
respect to any and all taxable periods, or portions thereof
(including the "short-period"), ending on or before the Closing
Date, without the prior written consent of Holder, ONVC and LTC;
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 of the tax return to which the amendment
relates. Holder shall indemnify ONVC and LTC for any liability,
cost or expense ONVC or LTC incurs as a result of any such
amendment filed in accordance with the terms hereof.
For purposes hereof, "taxes" shall mean all federal, state, local, foreign and
other governmental net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, 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.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF HOLDER AND LTC
Each of Holder and LTC hereby represents and warrants to ONVC as
follows:
(a) Ownership. Holder is and will be on the Closing Date the record and
beneficial owner and holder of the LTC Interests, free and clear of any
and all liens or encumbrances. There are no agreements, rights, claims
or obligations relating to the issuance, sale, or transfer of any
equity or other securities of LTC. LTC has no subsidiaries.
(b) Authorization. Holder is an individual. LTC is duly organized and in
good standing under the laws of the State in which it was formed and is
duly qualified and in good standing in each jurisdiction in which such
registration is required. Each of Holder and LTC has full right, power
and authority to execute and deliver the Holder Documents (as defined
below), to perform its obligations therein and to consummate all of the
transactions contemplated thereby.
(c) Documents. Each of Holder and LTC has, or before Closing will have,
approved the sale of the LTC Interests, this Acquisition Agreement and
the transactions contemplated hereby, and approved, executed and
delivered this Acquisition Agreement and certain agreements,
instruments to be executed and delivered by each of Holder and LTC in
connection herewith (collectively, the "Holder Documents") and each of
the Holder Documents, when executed by Holder or LTC, shall be the
legal valid and binding obligation of each of Holder and LTC in
accordance with their terms.
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(d) No Default. Neither Holder nor LTC, nor any vendor or party in contract
with Holder or LTC , is in violation of any provision of, or in default
under, LTC's articles of incorporation, by-laws, articles of
organization, operating agreement or partnership agreement or any
indenture, mortgagee, deed of trust, indebtedness, agreement, judgment,
decree, order, statute, rule or regulation to which Holder or LTC 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 Holder nor LTC is required to obtain the
approval, authorization, consent or any other order of any public or
private 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 and other information of
LTC, copies of which have been, or prior to Closing will have been,
provided to ONVC, 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 LTC (and
of any person or entity required by sound accounting principles to be
consolidated or included therein) at their respective dates and for
their respective periods, all in accordance with sound accounting
principles applied on a consistent basis, subject 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).
(g) No Material Adverse Change. From the date of the last audited financial
statements to the date hereof, there has not been, and through the date
of Closing, there will not have been, any change that would materially
and adversely affect the financial position or results of operation of
LTC, or the ability of Holder or LTC to consummate the transactions
contemplated hereby.
(h) No Undisclosed Liabilities. There is no account, note, lease, tax,
environmental liability, fine, penalty, civil or criminal action,
filing, liability, obligation, lien, encumbrance, restriction or other
duty affecting the Holder or LTC (nor is there any basis, circumstance
or fact that might give rise thereto), whether realized or contingent,
pending or threatened, or known, as of the date hereof or as of the
date of Closing, which has not been, or prior to Closing, will not have
been, disclosed in writing to ONVC.
(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 threatened, known or unknown,
against or affecting the Holder or LTC (nor is there any basis,
circumstance or fact therefor) as of the date hereof or as of the date
of Closing, which has not been, or prior to Closing, will not have
been, disclosed in writing to ONVC.
(j) Ordinary Course of Business. Neither Holder nor LTC have, nor prior to
Closing will they have, taken, or failed or chosen not to take, any
action in contemplation of the transactions contemplated hereby other
than in the ordinary course of business consistent with the past
practices of Holder or LTC, which has not been, or prior to Closing,
will not have been, disclosed in writing to ONVC.
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(k) Brokers or Finders. Neither Holder nor LTC or their officers or agents
have 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, except for GW Equities whose
fees and expenses shall be paid directly by Holder. Holder will
indemnify and hold ONVC and LTC harmless from any such payment alleged
to be due by or through Holder or LTC as a result of the action of
Holder or LTC or their officers or agents.
(l) Securities Representations. Holder hereby represents and warrants to
Company as follows: (1) Holder is an "Accredited Investor", as such
term is defined in Rule 501(a) to the Securities Act of 1933, as
amended (the "Securities Act"); (2) Holder's address as set forth on
the Transfer Power is Holder's true and correct residence and Holder
has no present intention of becoming a resident of any other state or
jurisdiction; (3) the Restricted Shares are being acquired solely for
Holder's own account, for investment, and are not being purchased with
a view to or for the resale, distribution, subdivision, or
fractionalization thereof and Holder has no present plans to enter into
any contract, undertaking, agreement, or arrangement relating thereto;
(4) Holder understands that none of the Restricted Shares have been or
will be registered under the Securities Act, that Holder has no rights
to require that the Restricted Shares be registered under the
Securities Act or any state securities or blue sky laws; that Holder
may have to hold the Restricted Shares for a substantial period of time
and that it may not be possible for Holder to liquidate Holder's
investment in Company; and that in any event the Restricted Shares may
not be assigned, transferred, pledged, or otherwise sold or offered for
sale except pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration under the
Securities Act, the availability of which must be established by Holder
to the satisfaction of Company; and in replacement or exchange
therefore, are to bear a restrictive legend to this effect; (5) Holder
is acquiring the Restricted Shares without being furnished any offering
literature or prospectus, but Holder has been granted, and is relying
upon, Holder's personal discussions, investigations and due diligence
of Company and its officers; (6) Holder has such knowledge and
experience in business and financial matters that Holder is capable of
evaluating the business and financial matters of Company and the risks
and merits relating thereto; (7) that there has never been any
representation, guarantee, or warranty made to Holder by any broker,
Company, its agents or employees, or any other person, expressly or by
implication, as to any gain or profit to be derived from, or the
approximate or exact length of time that Holder may be required to
remain an owner of, the Restricted Shares, or as to any other matter
not expressly contained herein.
2.2 REPRESENTATIONS AND WARRANTIES OF ONVC
ONVC hereby represents and warrants to Holder as follows:
(a) Authorization. ONVC is duly organized, validly existing, and in good
standing under the laws of the State in which it was formed. ONVC has
full right, power and authority to execute and deliver the ONVC
Documents (as defined below), to perform its obligations therein and to
consummate all of the transactions contemplated thereby.
(b) Documents. ONVC has, or before Closing will have, approved the purchase
of the LTC Interests, this Acquisition Agreement and the transactions
contemplated hereby, and approved, executed and delivered this
Acquisition Agreement and certain agreements, instruments to be
executed and delivered by ONVC in connection herewith (collectively,
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the "ONVC Documents") and each of the ONVC Documents, when executed by
ONVC, shall be the legal valid and binding obligation of ONVC in
accordance with their terms.
(c) No Default. ONVC is not in violation of any provision of, or in default
under, and the execution and delivery of the ONVC Documents, the
performance of the obligations therein and the consummation of the
transactions contemplated thereby will not result in a violation of, or
default under, any of ONVC's articles of incorporation, by-laws or any
indenture, mortgagee, deed of trust, indebtedness, agreement, judgment,
decree, order, statute, rule or regulation to which ONVC is a party or
by which ONVC or its property is subject or bound.
(d) No Approvals. ONVC is not required to obtain the approval,
authorization, consent or any other order of any public or private
entity, person, board or body in connection with the transactions
contemplated by the ONVC Documents, except as set forth in Section
3.2(a) hereof.
(e) SEC Reports. ONVC has filed, on a timely basis, all forms, reports and
documents (collectively, the "SEC Reports") required to be filed with
the Securities Exchange Commission in accordance with the Securities
Exchange Act of 1934, as amended (the "Exchange Act") since August 31,
2003. As of their respective dates, each of the SEC Documents complied
in all material respects with all applicable requirements of the
Securities Act of 1933, as amended and the Exchange Act.
(f) Investment Intent. ONVC is acquiring the LTC Interests for its own
account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act of 1933.
(g) Brokers or Finders. Neither ONVC nor its officers or agents have
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 and ONVC will indemnify and
hold Holder harmless from any such payment alleged to be due by or
through ONVC as a result of the action of ONVC or its officers or
agents.
3. COVENANTS PRIOR TO CLOSING
3.1 COVENANTS OF HOLDER AND LTC
(a) Access and Investigation. Holder and LTC each will (1) afford ONVC and
its representatives reasonable access to its personnel, properties
(including subsurface testing), contracts, books and records, and other
documents and data, (2) furnish ONVC with copies of all such contracts,
books and records, and other existing documents and data as ONVC may
reasonably request, and (3) furnish ONVC with such additional
financial, operating, and other data and information as ONVC may
reasonably request.
(b) Due Diligence. Holder and LTC each shall cooperate with ONVC in the
conduct of its due diligence and shall furnish, at a minimum, the
information, documents and other items set forth in Exhibit B attached
hereto. Each of Holder, LTC and ONVC hereby acknowledge that all items
required under Exhibit B have been provided by Holder to ONVC and that
Holder makes no representations or warranties with respect to such due
diligence materials, except as set forth in Section 2.1 hereof.
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(c) Audit. LTC acknowledges that ONVC, as a publicly traded company, may
need audited financial statements of LTC. ONVC, at its expense, will
cause its accountants to conduct an audit of LTC and to issue audited
financial statements as diligently possible. Holder and LTC each will
assist and provide ONVC and its auditors access to conduct such audit
and such further due diligence in connection therewith as ONVC may
require. Holder, LTC and ONVC each acknowledge and agree that such
audit may be completed after the Closing.
(d) Operation of LTC. Holder and LTC each will: (1) conduct its business
only in the ordinary course of business and not take, or fail or choose
not to take, any action in contemplation of the transactions
contemplated hereby or other than in the ordinary course of business
consistent with its past practices; (b) 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 ONVC concerning operational or any other
matters of a material nature; and (4) otherwise report periodically to
ONVC concerning the status of its business, operations, and finances.
Further, Holder and LTC each will NOT: (1) enter into, amend, modify,
extend, terminate or permit to expire (a) any agreement that involves
more than $25,000 or exceeds one year 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;
EXCEPT Holder and LTC each may distribute or dividend cash and the
Excluded Assets to Holder, shall pay or satisfy all shareholder
loans and, if necessary, shall pay or satisfy other liabilities,
all in aggregate amounts sufficient to cause, immediately
thereafter and at closing, the book value of assets (excluding GWE
Deposit Prepaid Marketing - $29,500, Land Improvements - $1,924,
Leasehold Improvements - $49,425 and unamortized Franchise Fee -
$2563) of LTC to equal or exceed the book value of liabilities of
LTC, all as determined in accordance with generally accepted
accounting principles consistently applied (if not, the
Consideration shall be reduced by any deficiency therein). LTC,
ONVC and Holder each acknowledge and agree that any deficiency
determined at or prior to Closing shall be deducted from the Cash
Consideration first and any deficiency determined after the
Closing as a result of the conclusion of the audit shall be
deducted from the Restricted Shares first payable thereafter by
reducing the number of issued shares by an amount equal to the
dollar amount of any such deficiency divided by $2.88
(representing the negotiated value per share for purposes hereof).
Any excess of such assets over liabilities determined after
Closing as a result of the conclusion of the audit shall be paid
in cash to Holder within 15 days after conclusion of the audit.
ONVC intends to purchase LTC in its entirety, including all of the
assets and liabilities of LTC, excluding only the assets and
liabilities identified to be excluded in the due diligence
checklists provided to ONVC (the "Excluded Assets"), which
Excluded Assets may be transferred or distributed by LTC to Holder
(or entities owned or controlled by Holder) prior to Closing.
(e) Required Approvals. As promptly as practicable after the date of this
Agreement, Holder and LTC each will:
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(1) seek and obtain the approval of these transactions by Holder's and
LTC's Board of Director(s) and shareholders,
(2) make all filings, if any, required by applicable law to be made by them
in connection with these transactions, and
(3) cooperate with ONVC with respect to all filings, if any, that ONVC
elects, or is required by any applicable law, to make in connection
with these transactions.
(f) Notifications. Holder and LTC each will promptly notify ONVC in writing
if Holder or LTC becomes aware of (1) any fact or condition that causes
or constitutes a breach of Holder's or LTC's representations,
warranties or covenants as of the date of this Agreement or as of the
date of Closing as if made as of the date of Closing, or (2) any fact
or condition that should be disclosed to ONVC in order to make any
statements or information furnished to ONVC, 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 Holder nor LTC 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 ONVC) relating to any
transaction involving any sale of the LTC Interests, any sale of any of
the businesses, assets or equity or other securities of LTC, or any
merger, consolidation, business combination, or similar transaction
involving LTC.
(h) Efforts. Holder and LTC each will use their reasonable commercial
efforts to cause the conditions in Article 4 hereof to be satisfied.
3.2 COVENANTS OF ONVC
(a) Required Approvals. As promptly as practicable after the date of this
Agreement, ONVC will:
(1) seek and obtain the approval of these transactions by ONVC's Board of
Directors and, if required, shareholders,
(2) make all filings, if any, required by applicable law to be made by it
in connection with these transactions, and
(3) cooperate with Holder and LTC with respect to all filings, if any, that
Holder or LTC is required by any applicable law to make in connection
with these transactions;
provided that this Agreement will not require ONVC to dispose of or
make any change in any portion of its business or to incur any other
burden to obtain any approval or governmental authorization.
(b) Notifications. ONVC will promptly notify Holder and LTC in writing if
ONVC becomes aware of any fact or condition that causes or constitutes
a breach of ONVC's representations, warranties or covenants as of the
date of this Agreement or as of the date of Closing as if made as of
the date of Closing.
(c) Efforts. ONVC will use its 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 ONVC'S OBLIGATION TO CLOSE
ONVC's obligation to acquire the LTC Interests and to take the other
actions required to be taken by ONVC 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 ONVC, in whole or in part):
(a) Representations. Each of the representations and warranties made by
Holder and LTC herein and in the Holder Documents is true and correct
in all material respects as of the date hereof and as of the date of
Closing as if made on the date of Closing.
(b) Conditions. Each of the conditions required for the execution and
delivery of the Holder Documents, including, without limitation those
required herein, has been fulfilled in all material respects or waived
to the satisfaction of ONVC and all parties thereto.
(c) Holder's Performance. Each and every covenant and obligation of Holder
and LTC 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), has been duly performed and
complied with in all material respects.
(d) Due Diligence. ONVC has concluded its due diligence except for the
audit of the LTC financial statements which each of Holder, LTC and
ONVC have agreed will be conducted post-closing and that the sole
remedy in connection with such post-closing audit shall be the
adjustments described in Section 3.1(d) hereof and indemnification as
described in Article VI hereof.
(e) Closing Deliverables. Each of the Closing Deliverables listed in
Exhibit A attached hereto has been delivered to the satisfaction of
ONVC, including the approvals required in Sections 3.1(e) and 3.2(a)
hereof.
(f) Ancillary Agreements. Xxx Xxxxxxxx and Xxxxxxx Xxxxxxxx shall have
entered into Employment Agreements with ONVC in form and substance
satisfactory to ONVC. Holder shall cause Transpac Investments, LLP to
enter into a Lease Agreement with ONVC for the main building at 0000
Xxxxxxxxxx Xxxx., Xxxxxxx, Xxxxx in form and substance satisfactory to
ONVC. Holder, LTC and ONVC shall diligently work together to remove
Holder as guarantor of the Sabre Contract, the ARC Contract, the IATAN
Surety Bond and all LTC bank accounts within 120 days of Closing.
5. TERMINATION
5.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by mutual consent of ONVC and Holder;
(b) by either ONVC or Holder if a material breach of any provision of this
Agreement has been committed by the other party and such breach has not
been waived or cured within 20 days after written notice to the party
in breach;
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(c) by ONVC if any of the conditions in Section 4.1 has 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 ONVC to comply
with its obligations under this Agreement) and ONVC has not waived such
condition on or before the Closing Date; or
(d) by either ONVC or 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
January 3, 2007, or such later date as the parties may agree.
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 NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this
Agreement, the Holder Documents and the ONVC Documents will survive the Closing
for a period of twenty-four (24) months. 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,
whether before or 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 HOLDER
Holder will indemnify and hold harmless ONVC, LTC, and their respective
representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, 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,
warranty or covenant made by Holder or LTC in this Agreement or in any other
Holder Document, whether such breach is as of the date hereof or as of the date
of Closing as if made on the date of Closing; or (b) any action or omission by,
or any product shipped or manufactured by, or any services provided by, LTC
prior to the date of Closing.
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6.3 INDEMNIFICATION BY ONVC
ONVC will indemnify and hold harmless Holder, and will pay to Holder
the amount of any Damages arising, directly or indirectly, from or in connection
with (a) any breach of any representation or warranty made by ONVC in this
Agreement or in any ONVC Document, whether such breach is as of the date hereof
or as of the date of Closing as if made on the date of Closing; or (b) any
action or omission by, or any product shipped or manufactured by, or any
services provided by, LTC after the date of Closing.
6.4 PROCEDURE FOR INDEMNIFICATION
(a) Promptly after receipt by an indemnified party of notice of a potential
indemnified third-party claim, such indemnified party will give written
notice thereof to the indemnifying party, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to the
extent that the indemnifying party demonstrates that the defense of
such action is prejudiced by the indemnifying party's failure to give
such notice. The indemnifying party shall assume, and pay all fees and
costs incurred in, the defense of such action with counsel reasonably
satisfactory to the indemnified party (including separate
representation if the indemnifying party is also a party to such
action). No compromise or settlement of any claim may be effected
without the written consent of both the indemnifying and the
indemnified parties, which consents shall not be unreasonably withheld
or delayed.
(b) A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification
is sought.
6.5 RIGHT OF SET-OFF
Upon 30 days written notice to Holder specifying in reasonable detail
the basis for such set-off, ONVC may (and, if so directed by Holder, shall) set
off any amount to which it may be entitled under this Article 6 against amounts
otherwise due and payable hereunder. The exercise of such right of set-off by
ONVC in good faith, whether or not ultimately determined to be justified, will
not constitute an event of default hereunder or under any ONVC Document, unless
within the 30 day period Holder notifies ONVC that such offset will not be in
good faith. 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 ONVC in any manner in the enforcement of any other remedies
that may be available to it.
6.6 LIMITATIONS ON INDEMNITY OBLIGATIONS
(a) Neither Holder nor ONVC, respectively, shall have any liability
(for indemnification or otherwise) to the Indemnified Persons with respect to
any matters described in this Article 6 until the total amount of Damages
attributable to Holder or ONVC, 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 Holder or ONVC,
respectively, shall be obligated to pay to the Indemnified Persons under this
Article 6 shall be limited to an amount equal to the value of the Consideration.
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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 these
transactions, 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 contemplated transactions 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 Holder shall, and shall cause LTC to, keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any person or entity. Holder and ONVC will consult with each other
concerning the means by which LTC's employees, customers, and suppliers and
others having dealings with LTC will be informed of these contemplated
transactions, and ONVC will have the right to be present for any such
communication.
7.3 CONFIDENTIALITY
ONVC and Holder and LTC 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
transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings. 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
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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. 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 Florida and venue and jurisdiction will lie in Broward County,
Florida.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
ONVC: ONLINE VACATION CENTER HOLDINGS CORP. LTC: LA TOURS & CRUISES, INC.
D/B/A WEST UNIVERSITY TRAVEL
By: /s/ XXXXXX X. XXXXXX By: /s/ XXX XXXXXXXX
-------------------- ----------------
Name, Title: Xxxxxx X. Xxxxxx, President Name, Title: Xxx Xxxxxxxx, President
Address: 0000 XX 00xx Xxxxxx, Xxxxx 000 Address: 0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxx 00000
Holder: XXX XXXXXXXX AND XXXXXXX XXXXXXXX
By: /s/ XXX XXXXXXXX
----------------
Name, Title: Xxx Xxxxxxxx
By: /s/ XXXXXXX XXXXXXXX
--------------------
Name, Title: Xxxxxxx Xxxxxxxx
Address: 0000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 00000
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