EXHIBIT 10.21
ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement") is entered into this
April 8, 2005, by and among One Link 4 Travel, Inc., a Delaware corporation
("OneLink"), The Call Center, LLC, a Delaware limited liability company with its
principal office located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxx, Xxxxxx
00000 ("TCC"), Xxxx X. Xxxxxxxx, as Trustee of the Xxxx Xxxxxxxx Trust under
trust agreement dated July 2, 2001 as amended and restated November 26, 2003,
the sole member of TCC ("Xxxxxxxx Trust"), and Xxxx X. Xxxxxxxx ("Xxxxxxxx").
R E C I T A L S:
A. The Xxxxxxxx Trust is the sole member of TCC and the Xxxxxxxx Trust
owns all of the issued and outstanding equity, capital and profits interests of
TCC (the "TCC Membership Interest"). OneLink desires to acquire, and the
Xxxxxxxx Trust desires to sell to OneLink, all of the TCC Interests, and thereby
transfer to OneLink sole ownership of TCC, including the operations, assets, and
business of TCC.
B. OneLink and the Xxxxxxxx Trust have determined that it is in their
mutual best interests for OneLink to acquire all of the TCC Membership Interest
as provided herein, and, subject to the conditions set forth herein, in order to
effectuate acquisition of the TCC operations, assets and business. The Xxxxxxxx
Trust will be paid consideration as provided herein in exchange for the TCC
Membership Interest.
ONELINK, TCC AND THE XXXXXXXX TRUST AGREE AS FOLLOWS:
1. DEFINITIONS.
The capitalized terms set forth below shall have the following defined
meanings when used in this Agreement and for all purposes of this Agreement and
the Operating Documents:
"Accounts Receivable Shortfall" means the amount, if any, by which the
amount of March 31, 2005 Accounts Receivable of TCC collected on or before
December 31, 2005 is less than the March 31, 2005 Accounts Receivable.
"Accounts Receivable Surplus" means the amount, if any, by which (a)
the sum of (i) the March 31, 2005 Accounts Receivable, plus (ii) the cash assets
of TCC as of March 31, 2005 as reflected on TCC's March 31, 2005 balance sheet,
is greater than (b) the Chargeable Liabilities of TCC as of March 31, 2005.
"Acquisition" means the transaction contemplated by this Agreement, by
which OneLink will acquire the TCC Interests.
"Acquisition Consideration" means the consideration to be paid or
caused to be paid by OneLink to Xxxxxxxx Trust as set forth in Section 2.2 of
this Agreement.
"Acquisition Consideration Adjustment" means the adjustment described
in Section 2.8 of this Agreement.
"Additional Consideration" means the consideration set forth in Section
2.3.
"Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.
"Agreement" means this Acquisition Agreement and the attached Schedules
and Exhibits.
"Approvals" means any and all approvals of governmental authorities or
other parties required for the Acquisition and for OneLink to operate the
Business.
"Assets" means all of the personal properties and assets, tangible and
intangible, of any nature, reflected on the Current Balance Sheet or owned or
used by TCC and necessary for the conduct of the Business.
"Business" means TCC's activities in the conduct of a call center
business, providing customer contact and collection activities, conducted
directly in the name of clients and on their behalf without any assignment of
rights or receivables, at any location within the United States.
"Cash Flow Shortfall Adjustment" means the amount defined and
determined pursuant to Section 2.8(c) of this Agreement.
"Chargeable Liabilities" means all liabilities of TCC existing as of
March 31, 2005, whether known or unknown, and whether or not reflected on the
Current Balance Sheet, excluding (i) future liabilities for lease payments under
vehicle leases for a 2004 Lexis LUV Model GX 470 with Chase Manhattan Automotive
Finance Corporation and for a 2003 Acura Sedan with Honda Lease Trust; (ii)
future liabilities for payment on a vehicle purchase loan dated August 14, 2004
for a 2004 Toyota Tundra pickup truck (ID # 0XXXX00000X000000) with Toyota Motor
Credit Corporation; (iii) obligations for future lease payments due with respect
to the Lease on the Premises; (iv) obligations not to exceed $350,000 with
respect to the Xxxxxxxx Note; (v) liabilities not to exceed $250,000 with
respect to the TCC Credit Line, (vi) outstanding obligations due to Concerto
Software Inc. and etalk Corporation for recently installed quality control and
dialer equipment, and (vii) future liabilities for lease payments under lease
#001-006795165-001 with Dell Financial Services dated June 18, 2004.
"Closing" and "Closing Date" means the time and date set forth in
Section 2.5(a) of this Agreement.
"Contingent Consideration" means the consideration described in Section
2.2(c) and payable pursuant to Section 2.9.
"Cumulative Gross Revenues" means the gross revenues of TCC for the
period beginning on April 1, 2005 and ending on March 31, 2007, as defined and
calculated pursuant to Section 2.8(b) of this Agreement.
"Disclosure Schedules" means the schedules delivered by the Xxxxxxxx
Trust to OneLink for the purpose of modifying, explaining or clarifying the
representations and warranties set forth in Section 3 of this Agreement.
"Employee Benefit Plan" means each (a) welfare benefit, pension or
retirement or plan or program established for the benefit of employees pursuant
to Sections 3(1) or 3(2) of the Employee Retirement Income Security Act of 1974
("ERISA"), and (b) personnel policy, stock option, stock bonus, restricted
stock, stock appreciation right, phantom stock, or stock purchase plan or
arrangement, worker's compensation, collective bargaining agreement, bonus plan
or arrangement, incentive award plan or arrangement, vacation policy, severance
pay plan, policy, or agreement, deferred compensation agreement or arrangement,
executive compensation or supplemental income arrangement, consulting agreement,
employment agreement, change in control plan or agreement and other employee
benefit plan, agreement, arrangement, program, practice, or understanding, which
is sponsored, maintained, or contributed to by the TCC for the benefit of the
employees, former employees, independent contractors, or agents of TCC, or has
been so sponsored, maintained, or contributed to at any time since 1974.
"Employment Agreement" means the employment agreement entered into
among OneLink, TCC and Xxxxxxxx pursuant to Section 5.8 of this Agreement.
"Escrow" means the escrow established pursuant to the Escrow Agreement.
"Escrow Agent" means the person designated as the "Escrow Agent" under
the Escrow Agreement.
"Escrow Agreement" means an agreement in the form attached hereto as
Exhibit 2.2(b).
"Escrow Shares" means the One Million Shares of OneLink Common Stock to
be delivered to the Escrow Agent pursuant to Section 2.2(b) and Section 2.5 on
the Closing Date.
"Financial Statements" means the profit and loss statements and balance
sheets for TCC dated December 31, 2004 for the Business, reflecting information
for TCC's fiscal year ended December 31, 2004, as supplemented and updated by
TCC financial statements dated January 31, 2005 and February 28, 2005.
"Xxxxxxxx" means Xxxx X. Xxxxxxxx, an unmarried individual.
"Xxxxxxxx Note" means a demand promissory note issued by TCC to
Xxxxxxxx and dated December 23, 2004 in exchange for $550,000 in operating
capital, the principal amount of which has been reduced to $100,000 at Closing.
"Xxxxxxxx Note Demand" means a demand for payment issued by Xxxxxxxx to
TCC at Closing, together with an acknowledgement of the obligation to pay the
Xxxxxxxx Note according to the demand in the form attached hereto as Exhibit
2.6(b).
"Xxxxxxxx Release" means the release of Xxxxxxxx and the Xxxxxxxx Trust
from liability as borrower or guarantor under the TCC Credit Line, which
Xxxxxxxx Release is to be delivered to Xxxxxxxx pursuant to Section 5.13 of this
Agreement.
"Xxxxxxxx Trust" means Xxxx X. Xxxxxxxx, acting in the capacity of
trustee for The Xxxx Xxxxxxxx Trust under an original trust agreement dated July
2, 2001 as further amended and restated in an agreement dated November 26, 2003.
"Lease" means the lease relating to the Premises between TCC and
Truckee River Office Tower, LLC, dated February 19, 2004.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or similar or related charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge).
"March 31, 2005 Accounts Receivable" means the amount invoiced or
billed to TCC customers with respect to services actually rendered by TCC on or
before March 31, 2005, and amounts of unbilled work completed by TCC on or
before March 31, 2005 under TCC's ordinary payment arrangements with its
customers, and which remain unpaid and have not been written off, compromised,
set off or settled and are not subject to any claim or refusal to pay by the
party to which the invoice was issued as of the Closing Date, including work in
process not billed or invoiced until after the Closing Date. The March 31, 2005
Accounts Receivable shall include all of the xxxxxxxx of TCC normally attributed
to the calendar month according to TCC's ordinary course payment arrangements
with its customers for the month of March 2005.
"Market Value" means the average closing price of OneLink Common Stock
on the Over The Counter Bulletin Board Exchange (or on NASDAQ or such other
established exchange on which the OneLink Common Stock is listed or quoted) for
the ten trading days immediately preceding the date on which Market Value is to
be measured. If the OneLink Common Stock is not listed or quoted on the Over The
Counter Bulletin Board Exchange or on NASDAQ or such other established exchange
on the date Market Value is to be measured, the Market Value shall be determined
as follows: (i) if the OneLink Common Stock has been converted into another
security of OneLink or the security of another issuer which is listed on the
Over The Counter Bulletin Board Exchange or on NASDAQ or another established
exchange, the Market Value shall be determined with reference to the security or
securities into which the OneLink Common Stock has been converted; (ii) if
OneLink Common Stock has been converted into cash or other property that is not
traded on an established exchange, the Market Value shall be determined by the
amount of cash or the equivalent value in cash paid for the OneLink Common Stock
or into which or for which the OneLink Common Stock was exchanged or converted,
as determined in the transaction documents covering the purchase or exchange of
the OneLink Common Stock, and (iii) if the OneLink Common Stock is not listed or
quoted on the Over The Counter Bulletin Board Exchange or on NASDAQ or another
established exchange on the date Market Value is to be measured and has not been
converted into cash, stock or securities or property for which Market Value can
otherwise be determined under this definition, the Market Value shall be deemed
to be zero ($0.00). For any purpose under this Agreement, the Market Value of
the OneLink Common Stock included in the Acquisition Consideration as of the
Closing Date is $0.773 per share, as determined under the foregoing defiinition.
"Material Adverse Effect" shall have the meaning set forth in the
second paragraph of Section 3 of this Agreement.
"Material Contract" means each written or oral contract to which TCC is
now a party or by which it or its properties or assets may be bound or affected
in one or more of the following categories: (a) loan agreements, indentures,
mortgages, pledges, hypothecations, deeds of trust, conditional sale or title
retention agreements, security agreements, equipment financing obligations or
guaranties, or other sources of contingent liability in respect of any
indebtedness or obligations to any other Person, or letters of intent or
commitment letters with respect to same; (b) leases of real or personal property
(c) distribution, sales agency or franchise or similar agreements, or agreements
providing for an independent contractor's services, or letters of intent with
respect to same; (d) employment agreements, management service agreements,
consulting agreements, confidentiality agreements, non-competition agreements or
any other agreements relating to any employee, consultant, officer or director
of TCC; (e) licenses, development, teaming, assignments or transfers of
trademarks, trade names, service marks, patents, copyrights, trade secrets or
know how, or other agreements regarding proprietary rights or intellectual
property; (f) contracts relating to pending capital expenditures by TCC; (g)
contracts obligating TCC to expend more than $5,000 to purchase supplies,
equipment, advertising, media and media related services of any kind; (h)
non-competition agreements restricting TCC in any manner; (i) any other
contracts obligating TCC to make payments of more than $5,000 after the Closing
Date; (j) any Employee Benefit Plans; and (k) any agreement or contracts with
any Affiliate of TCC, Xxxxxxxx or the Xxxxxxxx Trust.
"Non-Competition Covenant" means the agreements of Xxxxxxxx and the
Xxxxxxxx Trust not to compete with the Business and the Travel Segment of the
Business as set forth in Section 5.7 of this Agreement.
"OneLink" means One Link 4 Travel, Inc., a Delaware corporation.
"OneLink Common Stock" means the Common Stock (par value $0.001) of
OneLink.
"Operative Documents" means all documents, agreements, schedules,
consents or actions required to carry out the Acquisition, including those
documents and agreements set forth in or required by the Exhibits to this
Agreement.
"Person" means any: (i) individual; (ii) corporation, general
partnership, limited partnership, limited liability partnership, trust, company
(including any limited liability company or joint stock company) or other
organization or entity; or (iii) governmental body or authority.
"Pledge Agreement" means the pledge agreement pursuant to which OneLink
will pledge the TCC Membership Interest as security for its obligations under
this Agreement and the Operative Documents in the form attached hereto as
Exhibit 2.4B.
"Premises" means the offices, facilities and real property interests
located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxx, Xxxxxx 00000.
"PSF Guarantee Obligation" means any of the obligations of TCC under
any contractual relationship disclosed in the Disclosure Schedules with respect
to which Xxxxxxxx or the Xxxxxxxx Trust has a personal obligation or liability,
including as guarantor, co-purchaser or co-lessee, including those obligations
noted to be PSF Guarantee Obligations in Schedule 3.20 to this Agreement.
"Repurchase Option" means the option in favor of OneLink to repurchase
all or a portion of the Escrow Shares pursuant to Section 2.10 of this
Agreement.
"Schedule" means any of the schedules and exhibits referred to on
Schedule 8.4 to this Agreement, all of which are to be prepared and delivered on
or before the Closing Date.
"Second Anniversary" means April 8, 2007, the date two years after the
Closing Date.
"Security Agreement" means the security agreement pursuant to which TCC
and OneLink will secure the obligations of OneLink and TCC to Xxxxxxxx and the
Xxxxxxxx Trust under this Agreement and the Operative Documents with a security
interest in TCC's Assets in the form attached hereto as Exhibit 2.4A.
"Tax Return" means any return (including any information return),
report, statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any legal requirement relating to any Tax.
"Tax" means any tax (including any income tax, franchise tax, capital
gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or fee, and any related charge or amount (including
any fine, penalty or interest), imposed, assessed or collected by or under the
authority of any governmental body.
"TCC" means The Call Center, LLC, a Delaware limited liability company.
"TCC Credit Line" means the credit line TCC maintains with Nevada
Security Bank which is subject to a credit limit of $800,000 in principal.
"TCC Loan Balances" means the aggregate balances of the Xxxxxxxx Note,
the TCC Credit Line and any substitute credit facility opened or loans incurred
for the purpose of providing working capital to TCC.
"TCC Membership Interest" means all of the issued and outstanding
equity, capital and profits interests of TCC, constituting the entire membership
interest in TCC, including all economic, voting and management rights of members
under the laws applicable to a Delaware limited liability company doing business
in Nevada.
"TCC Membership Interest Assignment" means the Operative Document by
which the TCC Membership Interest is assigned from the Xxxxxxxx Trust to OneLink
in the form attached hereto as Exhibit 2.1.
"Travel Segment of the Business" means any activity providing Business
services to customers or clients which are engaged in providing or supporting
travel services, including, without limitation, hotel and hotel services or
providing travel accommodations, car rental, air land and water transportation
services, tour operations, destination management services, travel agencies or
booking services, travel consolidators and resellers, reservation systems and
services, fulfillment services for any travel related activities, and travel
insurance providers or underwriters, and GDS services. Notwithstanding the
intended breadth of this definition, the Travel Segment of the Business is not
intended to mean activities undertaken on behalf of customers which are not in
the Travel Segment of the Business which involve calling Persons who are engaged
in the Travel Segment of the Business, unless the campaign or purpose of the
call relates to the travel industry. Similarly, Business relating to customers
whose services may be incidentally used by travelers but are not necessarily
travel related, such as providing mobile telephone services, providing health
services, or providing translation services, are not intended to fall within the
Travel Segment of the Business.
2. PURCHASE OF TCC INTERESTS; ACQUISITION CONSIDERATION.
2.1 Purchase of TCC Interests. The Xxxxxxxx Trust shall sell, assign,
transfer and convey to OneLink all of the issued and outstanding TCC Membership
Interest, free and clear of all Liens of any nature whatsoever, other than such
restrictions as may be imposed pursuant to state or federal securities laws. The
sale and transfer of the TCC Membership Interest shall be evidenced by delivery
to OneLink, at Closing, of the assignment executed by the Xxxxxxxx Trust in the
form set forth in Exhibit 2.1 to this Agreement (the "TCC Membership Interest
Assignment").
2.2 Acquisition Consideration. Subject to the terms and conditions of this
Agreement, the Acquisition Consideration shall be paid in the following forms
and amounts:
(a) Closing Shares. One Million (1,000,000) shares of OneLink Common
Stock shall be issued to the Xxxxxxxx Trust at Closing;
(b) Escrow Shares. One Million (1,000,000) shares of OneLink Common
Stock shall be issued to the Escrow Agent (the "Escrow Shares") for the
benefit of the Xxxxxxxx Trust at Closing and placed in the Escrow, subject
to an escrow agreement in the form attached hereto as Exhibit 2.2(b) (the
"Escrow Agreement"), and further subject to the Repurchase Option described
in Section 2.10 of this Agreement.
(c) Contingent Consideration. An amount of up to Two Million Fifty
Thousand Dollars ($2,050,000.00) plus the amount of the Accounts Receivable
Surplus (together, the "Contingent Consideration") shall be paid following
the Second Anniversary, subject to the provisions set forth in Section 2.9
of this Agreement.
2.3 Additional Consideration. If, on the Second Anniversary of the Closing,
the Market Value of OneLink Common Stock is less than Two Dollars and Fifty
Cents ($2.50) per share, OneLink shall pay to the Xxxxxxxx Trust an amount (the
"Additional Consideration") determined by the following formula: (a) One Million
(1,000,000), plus the number of Escrow Shares that the Xxxxxxxx Trust is
determined to be entitled to retain as of the Second Anniversary, multiplied by
(b) the positive difference, if any, between (i) Two Dollars and Fifty Cents
($2.50), minus (ii) the Market Value of OneLink Common Stock on the Second
Anniversary. The amount of any Additional Consideration due shall be paid by
cashier's check or by wire transfer to the Xxxxxxxx Trust within five (5)
business days following Second Anniversary; provided, however, that in the event
the number of Escrow Shares which the Xxxxxxxx Trust is entitled to retain has
not been finally determined by such time, a partial payment in the amount of the
Additional Consideration which has been determined to be due shall be paid by
cashier's check or by wire transfer to the Xxxxxxxx Trust within five (5)
business days following Second Anniversary, and thereafter, any further
Additional Consideration determined to be due shall be paid (together with
interest at an annual rate of ten percent (10%) measured from the Second
Anniversary until the time of payment) within five (5) business days following
the date the amount of Additional Consideration is finally determined, which
date shall not be more than sixty (60) days following the Second Anniversary,
unless the number of Escrowed Shares to which the Xxxxxxxx Trust is entitled as
of the Second Anniversary is the subject of an active dispute pursuant to
Section 8.2. Notwithstanding the foregoing, in the event the Xxxxxxxx Trust has
sold or otherwise disposed of part or all of the shares of OneLink Common Stock
issued as Acquisition Consideration pursuant to Section 2.2(a) prior to Second
Anniversary, the number set forth in part (a) of the formula in this Section 2.3
shall be reduced from One Million (1,000,000) to the number of shares of OneLink
Common Stock which the Xxxxxxxx Trust has retained from the shares received
under Section 2.2(a), provided, however, that this sentence shall not apply in
the event the sale or disposition of shares occurs as part of a sale of the
Assets or Business of OneLink or in connection with a merger or acquisition
which is approved by the OneLink Board of Directors. If the Market Value of the
OneLink Common Stock is zero ($0.00) or deemed to be zero ($0.00) on the Second
Anniversary, the payment of Contingent Consideration shall be made to the
Xxxxxxxx Trust as required under this Section 2.3, but the Xxxxxxxx Trust shall
be required to return to OneLink all of the 2,000,000 shares of OneLink Common
Stock issued as Acquisition Consideration pursuant to Section 2.2(a) (or such
portion as the Xxxxxxxx Trust has retained) in exchange for the Additional
Consideration.
2.4 Security Agreement and Pledge Agreement. The obligations and
representations of OneLink under this Agreement, including the obligations to
pay Contingent Consideration, Additional Consideration, and the Xxxxxxxx Note
shall be secured under (i) a security agreement in the form attached hereto as
Exhibit 2.4A (the "Security Agreement"), under which the obligations of OneLink
will be secured by a security interest in the assets of TCC, and (ii) a Pledge
Agreement in the form attached hereto as Exhibit 2.4B (the "Pledge Agreement",
under which the obligations of OneLink will be secured by a pledge of the
Membership Interest. OneLink shall also take all actions required under the
Security Agreement and the Pledge Agreement to perfect the security interests
provided therein.
2.5 Closing Date; Closing Procedure, and Deliveries.
(a) The Acquisition shall be consummated and given effect (the
"Closing") at 9:00 AM (PST) on April 8, 2005 or such other date as may be
agreed to by the parties (the "Closing Date"); provided that Closing shall
not take place prior to the date and time OneLink and Xxxxxxxx Trust are
prepared to deliver all of the documents required to be delivered in this
Section 2.5 (unless subject to a written waiver signed by the party
entitled to delivery) and have met all conditions to Closing set forth in
Sections 2.6 and 2.7 of this Agreement. The Closing shall take place at the
offices of TCC at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxx, Xxxxxx 00000 or
such other place as OneLink and the Xxxxxxxx Trust shall designate.
(b) On the Closing Date the Xxxxxxxx Trust shall deliver to OneLink
the following fully executed documents: (i) the TCC Membership Interest
Assignment covering the entire TCC Membership Interest in the form attached
hereto as Exhibit 2.1; (ii) an Employment Agreement in the form attached to
this Agreement as Exhibit 5.8 (the "Employment Agreement"), executed by
Xxxxxxxx, (iii) the Representations Certificate as required under Section
2.6(a), (iv) the Escrow Agreement executed by Xxxxxxxx, and (v) the
Xxxxxxxx Note Demand executed by Xxxxxxxx in the form attached hereto as
Exhibit 2.6(b). In addition, on the Closing Date the Xxxxxxxx Trust will
deliver to the Escrow Agent an assignment of the Escrowed Shares, signed in
blank by the Xxxxxxxx Trust in favor of the Escrow Agent.
(c) On the Closing Date OneLink shall deliver to the Xxxxxxxx Trust
the following fully executed documents: (i) a certificate or certificates
for One Million (1,000,000) shares of OneLink Common Stock, issued in the
name of the Xxxxxxxx Trust; (ii) the Employment Agreement in the form
attached to this Agreement as Exhibit 5.8, executed by Onelink; (iii) the
Escrow Agreement, executed by OneLink, (iv) the Security Agreement,
executed by OneLink, together with such additional documents as are
required by the Security Agreement, (v) the Pledge Agreement, executed by
OneLink, together with an assignment of the Membership Interest, executed
in blank and undated, and (vi) the Xxxxxxxx Note Demand in the form
attached hereto as Exhibit 2.6(b), countersigned and accepted by OneLink.
In addition, on the Closing Date OneLink shall deliver to the Escrow Agent
a certificate or certificates for One Million (1,000,000) shares of OneLink
Common Stock, issued in the name of the Xxxxxxxx Trust as required under
the Escrow Agreement.
2.6 Conditions To Obligations of OneLink. Except as otherwise specifically
set forth herein, all obligations of OneLink under this Agreement are subject to
the fulfillment of the following conditions, prior to or on the Closing Date:
(a) The representations and warranties of Xxxxxxxx and the Xxxxxxxx
Trust set forth in this Agreement shall be deemed to have been made again
at and as of the Closing Date with respect to the state of facts then
existing and shall then be true in all respects, and the Xxxxxxxx Trust
shall deliver to OneLink a certificate to that effect in the form attached
hereto as Exhibit 2.6(a).
(b) Xxxxxxxx shall have submitted to TCC the Xxxxxxxx Note Demand in
the form attached hereto as Exhibit 2.6(b) executed by Xxxxxxxx for
acceptance and countersignature by TCC and OneLink.
(c) Xxxxxxxx Trust shall have met any covenants or completed any acts
required to have been completed by the Closing Date.
(d) Before the Closing Date, there shall have been no change having a
Material Adverse Effect on the Business except to the extent disclosed in
the Disclosure Schedules and accepted by OneLink.
(e) OneLink, shall either (i) have received as of the Closing Date all
material licenses, permits, consents, authorizations and Approvals of any
governmental agency or authority, or any other Person, necessary or
appropriate for the consummation of this Agreement or the operation of the
Business by OneLink (including Approvals of the Acquisition by TCC's
largest client, and Approval of the "assignment" of the Lease occurring as
a consequence of the Acquisition by operation of Section 21 of the Lease),
or (ii) if such Approvals have not been issued prior to the date first set
forth above, OneLink shall be reasonably satisfied that such Approvals will
be issued in the ordinary course after such date and that OneLink may
operate the Business as presently operated after such date prior to the
issuance of such approvals without incurring any material liability or
obligation based on such operation prior to the issuance of such Approvals.
(f) OneLink and its counsel, accountants and other representatives
shall have been afforded full access during normal business hours to all
properties, books, accounts, records, contracts and documents of or
relating to the Business., and the Xxxxxxxx Trust shall have furnished or
caused to be furnished to OneLink and its representatives all data and
information concerning the Business requested. Notwithstanding any
investigation by, or knowledge on the part of OneLink concerning the
Business, the representations and warranties of Xxxxxxxx Trust set forth in
Section 3 of this Agreement shall be deemed to be in full force and effect,
fully effective and unaffected thereby.
(g) OneLink shall have entered into and received the fully executed
Employment Agreement with Xxxxxxxx.
(h) The Xxxxxxxx Trust and the Escrow Agent hall have entered into the
fully executed Escrow Agreement.
(i) The Xxxxxxxx Trust shall have delivered to OneLink and the Escrow
Agent all of the documents and consideration required to be delivered at
Closing under Section 2.5(b).
(j) In the event any one or more of the conditions set forth in this
Section 2.6 are not satisfied as required, OneLink, in its sole and
absolute discretion, may elect: (i) to waive any such condition precedent,
(ii) to terminate this Agreement, or (iii) to postpone the Closing Date for
a period not to exceed 30 days.
2.7 Conditions Precedent to Obligations of Xxxxxxxx Trust. Except as
otherwise specifically set forth herein, all obligations of the Xxxxxxxx Trust
under this Agreement are subject to the fulfillment and satisfaction, on or
before the Closing Date, of the following conditions, which may be waived by
Xxxxxxxx Trust:
(a) The representations and warranties of OneLink contained in this
Agreement shall be deemed to have been made again at and as of the Closing
Date with respect to the state of facts then existing and shall then be
true in all respects.
(b) OneLink shall have met any covenants or completed any acts
required to have been completed by the Closing Date.
(c) OneLink shall have delivered to Xxxxxxxx Trust and the Escrow
Agent all of the documents and consideration required to be delivered at
Closing under Section 2.5(c).
(d) OneLink and the Escrow Agent have executed the Escrow Agreement.
(e) In the event any one or more of the conditions set forth in this
Section 2.7 are not satisfied as required, the Xxxxxxxx Trust, in its sole
and absolute discretion, may elect: (i) to waive any such condition
precedent, (ii) to terminate this Agreement, or (iii) to postpone the
Closing Date for a period not to exceed 30 days.
2.8 Acquisition Consideration Adjustment Formula. For purposes of
determining (i) whether and to what extent Contingent Consideration is payable
under Section 2.9, (ii) whether and to what extent the Repurchase Option is
exercisable pursuant to Section 2.10, and (iii) whether and to what extent the
Xxxxxxxx Note is cancelled pursuant to Section 5.14, the following formula and
rules shall be applied to determine the adjustment, if any, to the Acquisition
Consideration (the "Acquisition Consideration Adjustment"):
(a) Formula. The Acquisition Consideration Adjustment equals: (i)
Seventeen Million Dollars ($14,000,000); minus (ii) Cumulative Gross
Revenue, minus the Cash Flow Shortfall Adjustment, if any, and (iii)
multiplying the result by thirty five percent (35%).
(b) "Cumulative Gross Revenue" Defined. Cumulative Gross Revenue means
the "gross revenue of TCC" for the period beginning on April 1, 2005 and
ending on March 31, 2007. For purposes of determining Cumulative Gross
Revenue, the term "gross revenue of TCC" shall include all xxxxxxxx or work
in process for services provided during the measurement period to third
parties and to OneLink Affiliates (other than TCC) on an accrual basis
under generally accepted accounting principles and excluding, for this
purpose, any revenues from sales of assets, any prior period adjustments or
extraordinary items.
(c) "Cash Flow Shortfall Adjustment" Defined. Cash Flow Shortfall
Adjustment means two hundred percent (200%) of the positive amount, if any,
by which: (i) the sum of (A) all payments of operating expenses of TCC
during the period beginning on April 1, 2005 and ending on March 31, 2006
(excluding for this purpose any expenses incurred at the request of OneLink
and which are attributable to OneLink or its Affiliates but which have not
been reimbursed by March 31, 2006), plus (B) amounts paid by TCC to reduce
the balance of the TCC Loan Balances during the period beginning on April
1, 2005 and ending on March 31, 2006, exceeds (ii) the sum of: (A) all
amounts of cash or the equivalent actually collected by TCC from the March
31, 2005 Accounts Receivable and from the gross revenues of TCC during the
period beginning on the April 1, 2005 and ending on March 31, 2006, plus
(B) the cash assets of TCC as of March 31, 2005, plus (C) the amount of TCC
Loan Balances borrowed by TCC during the period beginning on April 1, 2005
and ending March 31, 2006, but only to the extent the amount borrowed does
not cause the TCC Loan Balances to exceed $550,000.00 on March 31, 2006.
The Cash Flow Shortfall Adjustment shall not take into account any dividend
distributions or intercompany loans made by TCC to OneLink or any OneLink
Affiliate, or any cash investments made by OneLink in TCC.
(d) Method of Determination. Within forty five (45) days after the
Second Anniversary, OneLink shall give written notice to the Xxxxxxxx Trust
setting forth the amount of the Acquisition Consideration Adjustment,
together with the components of the calculation as set forth in Sections
2.8(b) and (c) and the method of calculation used in deriving the
Acquisition Consideration Adjustment. If OneLink fails to provide timely
notice of the Acquisition Consideration Adjustment, then there shall be no
Acquisition Consideration Adjustment. Upon receipt of OneLink's notice of
the Acquisition Consideration Adjustment, the Xxxxxxxx Trust may either:
(i) accept OneLink's determination of the Acquisition Consideration
Adjustment, or (ii) challenge the determination by delivering a written
notice to OneLink and indicating that OneLink's determination of
Acquisition Consideration Adjustment is being challenged, in either case
within thirty (30) days after the date of OneLink's notice; provided that
in the event the Xxxxxxxx Trust fails to respond to OneLink's notice within
such thirty (30) day period, the Xxxxxxxx Trust shall be deemed to have
accepted the amount of the Acquisition Consideration Adjustment as proposed
by OneLink in its notice. During the thirty (30) day period following
OneLink's notice, and thereafter until the matter is resolved, the Xxxxxxxx
Trust and its advisors shall have full access to accounting records and
books and records relevant to the determination of the Acquisition
Consideration Adjustment during regular business hours. Any challenge or
dispute of the Acquisition Consideration Adjustment shall be resolved
pursuant to Section 8.2. The Acquisition Consideration Adjustment shall be
deemed final at the earliest to occur of: (A) OneLink's failure to give
notice of an Acquisition Consideration Adjustment within forty five (45)
days after the Second Anniversary, (B) the Xxxxxxxx Trust's written
acceptance or deemed acceptance of the Acquisition Consideration Adjustment
as determined by OneLink and set forth in OneLink's timely notice, and (C)
the resolution of a dispute regarding the Acquisition Consideration
Adjustment pursuant to Section 8.2 of this Agreement.
2.9 Contingent Consideration.
(a) Amount of Contingent Consideration. The amount of the Contingent
Consideration shall be equal to: (i) the sum of (A) Two Million Fifty
Thousand Dollars ($2,050,000.00) plus (B) the Accounts Receivable Surplus,
minus (ii) the Acquisition Consideration Adjustment determined under
Section 2.8. In no event shall the amount of the Contingent Consideration
be less than zero ($0.00) or greater than the sum of: Two Million Fifty
Thousand Dollars ($2,050,000.00), plus the Accounts Receivable Surplus.
(b) Time and Manner of Payment. The Contingent Consideration
determined under this Section 2.9 shall be paid to the Xxxxxxxx Trust by
cashier's check or by wire transfer (if OneLink is provided adequate
instructions for making the wire transfer by the Xxxxxxxx Trust prior to
the date of payment) within five (5) business days after the Acquisition
Consideration Adjustment becomes final pursuant to the final sentence of
Section 2.8(d).
2.10 Escrow Shares and Repurchase Option.
(a) Repurchase Option. Subject to the terms of this Section 2.10,
OneLink shall have an irrevocable option to re-acquire each and every share
of the Escrow Shares from the Xxxxxxxx Trust (the "Repurchase Option"). The
repurchase price per share of Escrow Shares subject to the Repurchase
Option shall be one cent ($0.01) per share.
(b) Escrow Shares Subject to Repurchase. The number of Escrow Shares
subject to repurchase under the Repurchase Option shall be determined by
the following formula:
(i) (A) the Acquisition Consideration Adjustment, minus (B) the
sum of: (1)Two Million Fifty Thousand Dollars ($2,050,000.00), plus
(2) the Accounts Receivable Surplus;
(ii) divided by Two Dollars and Fifty Cents ($2.50); and
(iii) rounded up to the next highest whole number.
(c) Exercise of Repurchase Option. The Repurchase Option may be
exercised at any time within thirty (30) days after the Acquisition
Consideration Adjustment becomes final pursuant to the final sentence of
Section 2.8(d), by providing the Xxxxxxxx Trust and the Escrow Agent with
written notice of the number of shares of Escrow Stock being repurchased
under the Repurchase Option, together with a check to the Escrow Agent for
the amount of the repurchase price.
(d) Elective Reduction of Xxxxxxxx Note Principal. Within fifteen days
after receipt of OneLink's exercise notice under Section 2.10(c), the
Xxxxxxxx Trust may elect to reduce the amount of Escrow Shares subject to
exercise under Section 2.10(b) by canceling a portion of the outstanding
principal amount of the Xxxxxxxx Note (if any, after application of Section
5.14 of this Agreement), and such election and cancellation shall be
effected by (i) providing written notice to OneLink of the election to
reduce the Xxxxxxxx Note principal and the amount of the Xxxxxxxx Note
principal to be cancelled within ten (10) business days after the date of
OneLink's exercise notice, together with the original Xxxxxxxx Note (with
copies to the Escrow Agent). The number of Escrow Shares subject to the
Repurchase Option as determined under Section 2.10(b) shall be reduced by:
(A) the amount of the Xxxxxxxx Note principal cancelled, divided by (B) Two
Dollars and Fifty Cents ($2.50), and (C) rounded down to the next lowest
whole number. Any portion of the Xxxxxxxx Note principal not cancelled
under this Section 2.10(d) shall be paid in cash to the Xxxxxxxx Trust
within five (5) business days after the notice is given.
(e) Closing of Repurchase. The Escrow Agent shall effect the
repurchase of Escrow Shares subject to this Section 2.10 within twenty (20)
business days after the date of OneLink's exercise notice, and shall
thereupon transfer the repurchased Escrow Shares to OneLink and release any
remaining Escrow Shares and the repurchase price for the repurchased Escrow
Shares to the Xxxxxxxx Trust, all in accordance with the Escrow Agreement.
(f) Expiration of Repurchase Option. The Repurchase Option shall
expire with respect to any Escrow Shares not repurchased pursuant to this
Section 2.10.
3. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND THE XXXXXXXX TRUST.
Xxxxxxxx and the Xxxxxxxx Trust represent and warrant to OneLink that the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement, which warranties and representations are made jointly and
severally by Xxxxxxxx and the Xxxxxxxx Trust. All warranties and representations
are made subject to the Disclosure Schedule delivered by the Xxxxxxxx Trust to
Onelink on the date hereof. Schedule numbers set forth in the Disclosure
Schedule are intended to correspond to the section numbers of this Agreement
which are modified by the disclosures; provided that any information disclosed
under any section number in the Disclosure Schedule shall be deemed to be
disclosed and incorporated into any other section number under the Agreement
where such disclosure would be appropriate.
In this Agreement, any reference to any event, change, condition or effect
being "material" with respect to any entity or individual means any material
event, change, condition or effect related to the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of such entity or
individual. In this Agreement, any reference to a "Material Adverse Effect" with
respect to any entity or individual means any event, change or effect that is
materially adverse to the condition (financial or otherwise), properties,
assets, liabilities, business, operations, results of operations or prospects of
such entity or individual, taken as a whole.
3.1 TCC Status. TCC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. TCC also
is registered to do business and is in good standing in the State of Nevada, and
has the requisite power and authority to own or lease its assets and properties
and to carry on its business as now being conducted. TCC is also registered to
do business and is in good standing in the states of California and Florida. TCC
is not required to register, qualify or be licensed to do business as a foreign
corporation in any other jurisdiction in which failure to so qualify or be
licensed would individually or in the aggregate have a Material Adverse Effect
on its business or on its ability to own or use any of its assets. There is no
pending or threatened proceeding for the dissolution, liquidation, insolvency or
rehabilitation of TCC.
3.2 Capitalization. The Xxxxxxxx Trust is the sole owner and member of TCC
and the TCC Membership Interest, and TCC has a single class of membership
interest which constitutes the entire TCC Membership Interest. TCC has not
granted or entered into and does not have outstanding any subscriptions,
options, rights, warrants, convertible securities or other agreements obligating
TCC to issue any TCC Membership Interest, including any membership interest of
any class or kind, or securities convertible into a membership interest.
3.3 Xxxxxxxx Trust. The Xxxxxxxx Trust owns all issued and outstanding TCC
Membership Interest. The Xxxxxxxx Trust is controlled solely and exclusively by
Xxxxxxxx. There are no voting trusts, proxies, agreements, buy-sell agreements,
puts, calls, rights of first refusal or other agreements or understandings with
respect to the TCC Membership Interest.
3.4 Records of TCC. The copies of the Certificate of Formation, Operating
Agreement and other documents and agreements of TCC that have been provided to
OneLink are true, accurate, and complete and reflect all amendments made
thereto.
3.5 Subsidiaries. TCC does not, directly or indirectly, own any outstanding
voting securities of or other interests in, or control, any other corporation,
partnership, joint venture, limited liability company or other entity or Person.
3.6 Financial Statements. TCC has delivered to OneLink its financial
statements for the fiscal year ended December 31, 2004 and for the calendar
month ended January 31, 2005 (the "Financial Statements") which are attached as
Schedule 3.6 hereto. The referenced balance sheet as of December 31, 2004, as
modified by the balance sheet dated January 31, 2005 is referred to herein as
the "Current Balance Sheet." The Financial Statements (i) present fairly the
financial position and results of operation and cash flow of TCC as of December
31, 2004 and as of January 31, 2005, and (ii) reflect and provide adequate
provisions for liabilities of TCC, including (without limitation) all known
fixed or contingent liabilities. The books and records of TCC fully and fairly
reflect all of its transactions, properties, assets and liabilities.
3.7 Changes Since the January 31, 2005 Balance Sheet Date. Since the
January 1, 2005 Balance Sheet date, TCC has conducted its business only in the
ordinary course and in conformity with past practice and, except as expressly
contemplated by the terms of this Agreement or disclosed in Schedule 3.7, TCC
has not:
(a) declared, set aside, made, or paid any distribution payable in
cash or property or otherwise, on or with respect to the TCC Membership
Interest or redeemed, purchased or otherwise acquired, directly or
indirectly, any of its membership interests;
(b) sold, leased or transferred any of its properties or assets other
than in the ordinary course of business consistent with past practice;
(c) (i) except in the ordinary course of business consistent with past
practice, purchased any property or assets of any other Person, (ii) made
or obligated itself to make capital expenditures out of the ordinary course
consistent with past practice, (iii) incurred any indebtedness or other
obligations or liabilities other than in the ordinary course consistent
with past practice, (iv) issued any debt securities or assumed, guaranteed
or endorsed or otherwise as an accommodation become responsible for, the
obligations of any Person, or made any loans or advances, (v) modified,
terminated or entered into any Material Contract other than in the ordinary
course of business consistent with past practice, or (vi) imposed any
security interest or other Lien on any of its assets other than in the
ordinary course of business consistent with past practice;
(d) suffered any material theft, damage, destruction or casualty loss,
whether or not covered by insurance;
(e) suffered any extraordinary losses (whether or not covered by
insurance);
(f) waived, canceled, compromised or released any rights other than in
the ordinary course of business consistent with past practice;
(g) made any payment in respect of its liabilities other than in the
ordinary course of business consistent with past practice;
(h) paid any salary, bonus, draw or other compensation to Xxxxxxxx or
any Affiliate of Xxxxxxxx (other than in the ordinary course of business
consistent with past practice, and as set forth on Schedule 3.7), or
increased the compensation payable or to become payable to any of its other
employees or granted any severance or termination pay to, or entered into
any bonus, employment or severance agreement with, any of its officers or
employees (other than bonuses to employees in the ordinary course of
business consistent with past practice), or established, adopted, entered
into or amended or taken any action to accelerate any rights or benefits
with respect to any compensation plan, agreement, trust, fund, policy or
arrangement for the benefit of any employees;
(i) taken any action or made any changes with respect to accounting
policies or procedures or made any adjustment to its books and records;
(j) paid, discharged or satisfied any existing claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business of due and payable liabilities reflected or
reserved against in its financial statements, as appropriate, or
liabilities incurred after the date thereof in the ordinary course of
business and consistent with past practice;
(k) delayed paying any account payable beyond the date on which it was
due and payable except to the extent it was being contested in good faith;
(l) entered into any transaction with Xxxxxxxx or any Xxxxxxxx
Affiliates (other than in the ordinary course consistent with past
practices, and as set forth on Schedule 3.7);
(m) entered into any other transaction or been subject to any event or
series of transactions or events that has or may reasonably be expected to
have a Material Adverse Effect on TCC; or
(n) agreed to do or authorized any of the foregoing.
3.8 Liabilities. TCC has no material liabilities or obligations, whether
accrued, absolute, contingent, known or unknown, except:
(a) to the extent reflected on the Current Balance Sheet and not
heretofore paid or discharged; and
(b) liabilities incurred in the ordinary course of business consistent
with past practice since the date of the Current Balance Sheet (none of
which relates to (A) any breach of contract, or (B) any tort, infringement
or violation of law, or that arose out of any action, suit, claim,
governmental investigation or arbitration proceeding) and which are not
individually or in the aggregate material in amount or scope or which do
not have a Material Adverse Effect; and
(c) liabilities disclosed on Schedule 3.8.
3.9 Litigation. Except as disclosed in Schedule 3.9, there is no litigation
or action, suit, proceeding, investigation pending and served on, or to the
knowledge of Xxxxxxxx or the Xxxxxxxx Trust, threatened against, or affecting
TCC, its Business, properties or assets, and to the knowledge of Xxxxxxxx and
the Xxxxxxxx Trust, there is no basis for any of the foregoing.
3.10 Real Estate.
(a) TCC does not own and has never owned any real property or interest
therein (including, without limitation, any option or other right or
obligation to purchase any real property or any interest therein, but
excluding leasehold interests).
(b) The Lease is in full force and effect and has not been amended,
and, to the knowledge of Xxxxxxxx or the Xxxxxxxx Trust, neither TCC nor
the lessors are materially in default or breach of the Lease. No event has
occurred that, with the passage of time or the giving of notice or both,
would cause a material breach of or default under the Lease by TCC nor, to
the knowledge of Xxxxxxxx or the Xxxxxxxx Trust, by the lessors. TCC has
not entered into any subleases of the Premises or any portion thereof, or
granted any licenses or occupancy rights with respect to the Premises.
3.11 Environment, Health and Safety. To the knowledge of Xxxxxxxx and the
Xxxxxxxx Trust, there is no environmental or health and safety matter that could
give rise to any material liability, cost or expense to TCC. To the knowledge of
Xxxxxxxx and the Xxxxxxxx Trust, TCC has complied with all laws of any
governmental authority concerning the environment, public health and safety, and
employee health and safety where the failure to so comply would have a Material
Adverse Effect on TCC, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand or notice has been filed or commenced
against any of them alleging any failure to comply with any such law or
regulation.
3.12 Good Title to and Condition of Assets.
(a) TCC has good and marketable title to, or a valid leasehold
interest in or license or other right to use, all of its assets reflected
on the Current Balance Sheet, free and clear of any Liens, other than Liens
described on Schedule 3.12.
(b) The Assets in use or necessary for the Business and operations of
TCC are in good operating condition, normal wear and tear excepted, and
have been maintained in accordance with all applicable manufacturer's
specifications and warranties.
3.13 Compliance with Laws; Permits. To the knowledge of Xxxxxxxx and the
Xxxxxxxx Trust, TCC has been in material compliance with all laws, regulations
and orders applicable to TCC, its business and operations (as conducted by it
now and in the past), the Premises and any other properties and Assets owned or
used by it now or in the past. TCC has not been cited, fined or otherwise
notified of any asserted past or present failure to comply with any laws,
regulations or orders and no proceeding with respect to any such violation is
pending and served or, to the knowledge of Xxxxxxxx or the Xxxxxxxx Trust,
threatened. TCC is not subject to any Material Contract, decree or injunction
that restricts the continued operation of any business or the expansion thereof
to other geographical areas, customers and suppliers or lines of business.
Neither TCC, nor any of its employees or agents, has made any payment of funds
in connection with its business that is prohibited by law, and no funds have
been set aside to be used in connection with its business for any payment
prohibited by law. TCC possesses all permits and licenses applicable to it, its
business and operations and all such permits are in full force and effect and
TCC is in compliance therewith. All such permits and licenses are listed on
Schedule 3.13.
3.14 Labor and Employment Matters.
(a) Set forth in Schedule 3.14 is a true and complete list of all
employees and consultants of TCC showing the current salary, benefits and
other compensation (including any bonus) for each such employee and
consultant and including a list of all contracts or agreements with each
such Person. Except as set forth on Schedule 3.14, the employment of each
employee or consultant is terminable at will, without any notice or
severance of any kind.
(b) TCC is not a party to or bound by any collective bargaining
agreement, nor has it experienced any strikes, grievances, claims or unfair
labor practices, or other collective bargaining disputes. To the knowledge
of Xxxxxxxx and the Xxxxxxxx Trust, there is no organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of TCC.
(c) No employee or former employee of TCC has any claim against TCC
(whether under applicable law, pursuant to any employment agreement, or
otherwise) on account of, or for: (i) overtime pay; (ii) wages or salary,
other than for the current payroll period; (iii) vacation, time off or pay
in lieu of vacation or time off, other than vacation or time off (or pay in
lieu thereof) earned in respect of the current or past fiscal year, accrued
on the Current Balance Sheet or shown on Schedule 3.14; or (iv) any other
claims arising under any law governing labor and employment matters
including without limitation, employment discrimination claims.
(d) TCC is current with respect to all wages, salaries, bonuses,
expenses and other amounts payable to any of its employees (other than for
the current payroll period). TCC has complied with all laws relating to
health, safety and conditions of employment and employment practices and
wages and hours including payment of all Taxes where the failure to so
comply would have a Material Adverse Effect on TCC.
3.15 Employee Benefit Plans. Except as set forth in Schedule 3.15, TCC does
not maintain or contribute to any current Employee Benefit Plan, and has not
maintained or contributed to any Employee Benefit Plan. All payments necessary
to fund any Employee Benefit Plan with respect to any obligations accrued or
incurred on or before the Closing Date have either been paid in full or are
reflected on the Current Balance Sheet.
3.16 Tax Matters.
(a) TCC has timely filed (with permitted extensions in some cases) all
Tax Returns that it was required to file in compliance with all applicable
laws and regulations. All such Tax Returns were correct and complete in all
respects. All Taxes owed by TCC (whether or not shown on any Tax Return)
have been paid, other than payroll taxes for the payroll period which
includes the Closing Date. TCC currently is not the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever
been made by an authority in a jurisdiction where TCC does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
There are no Liens on any of the assets of TCC that arose in connection
with any failure (or alleged failure) to pay any Tax.
(b) TCC has timely withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party in compliance with
all applicable laws and regulations.
(c) TCC does not expect any authority to assess any additional Taxes
against TCC for any period for which Tax Returns have been filed. There is
no dispute or claim concerning any tax liability of TCC either (i) claimed
or raised by any authority in writing and delivered to TCC or (ii) as to
which Xxxxxxxx or the Xxxxxxxx Trust has knowledge.
(d) Neither TCC nor Xxxxxxxx (including the Xxxxxxxx Trust) has waived
any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency.
(e) The unpaid Taxes of TCC do not exceed, and as of the Closing Date
will not exceed, the reserve for tax liability set forth on the face of the
Financial Statements as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of TCC.
3.17 Insurance. TCC is covered by valid, outstanding enforceable policies
of insurance listed in Schedule 3.17 (the "Insurance Policies"). Such Insurance
Policies are in full force and effect, and all premiums due thereon have been
paid at least through the date of Closing. TCC has complied with the provisions
of such Insurance Policies applicable to it, and has provided OneLink copies of
all Insurance Policies and all amendments and riders thereto or other evidence
thereof. There are no pending claims under any of the Insurance Policies,
including any claim for loss or damage to the properties, assets or business of
TCC. TCC has not failed to give, in a timely manner, any notice required under
any of the Insurance Policies to preserve its rights thereunder.
3.18 Accounts Receivable. A listing of the March 31, 2005 Accounts
Receivable of TCC, updated as of March 31, 2005 is attached hereto as Schedule
3.18. All accounts listed on Schedule 3.18 either represent amounts invoiced by
TCC prior to the Closing Date, or amounts of unbilled work completed by TCC on
or before the Closing Date and which remain unpaid and have not been written
off, compromised, set off or settled and are not subject to any claim or refusal
to pay by the party to which the invoice was issued as of the Closing. One
hundred percent (100%) of the Accounts Receivable amount set forth on Schedule
3.18 are collectible and will be collected on or before December 31, 2005. Any
amount of the Accounts Receivable not collected after Closing and before
December 31, 2005 is referred to as the "Accounts Receivable Shortfall."
3.19 Relationships with Customers and Suppliers; Affiliated Transactions.
To the knowledge of Xxxxxxxx and the Xxxxxxxx Trust, no current supplier to TCC
has threatened to terminate its business relationship with TCC for any reason.
TCC does not have any direct or indirect ownership interest in any customer,
supplier or competitor of TCC or in any Person from whom or to whom TCC leases
real or personal property.
3.20 Material Contracts. Schedule 3.20 sets forth all Material Contracts to
which TCC is a party or bound. TCC has not materially violated any of the terms
or conditions of any Material Contract or any term or condition that would
permit termination or modification of any Material Contract, all of the material
covenants to be performed by any other party thereto have, to the knowledge of
Xxxxxxxx and the Xxxxxxxx Trust, been fully performed, and no claims have been
made or issued for breach or indemnification or notice of default or termination
under any Material Contract. Each Material Contract is currently in full force
and effect, and except as set forth in Schedule 3.20, no Material Contract is,
by its terms, due to expire before July 1, 2005. Each of the Material Contracts
constitutes the legal, valid and binding obligation of TCC. No event has
occurred that constitutes, or after notice or the passage of time, or both,
would constitute, a material default by TCC under any Material Contract and, to
the knowledge of Xxxxxxxx and the Xxxxxxxx Trust, no such event has occurred
that constitutes or would constitute a material default by any other party. TCC
is not subject to any liability for payment resulting from renegotiation of
amounts paid under any Material Contract. TCC has delivered to Onelink true and
correct copies of all written Material Contracts to which TCC is now a party or
by which it or its properties or assets may be bound or affected. Except as set
forth on Schedule 3.20, no Material Contract requires the consent or approval of
any party based upon the sale of the TCC Membership Interest to OneLink or in
connection with the consummation of the transactions contemplated hereby, and
the sale of the TCC Membership Interest will not result in the termination of
any Material Contract and will not bring into operation any other provisions
thereof (including penalties or acceleration) nor result in a breach or default
thereunder.
3.21 Brokers and Finders. Neither Xxxxxxxx nor the Xxxxxxxx Trust have
retained any broker or finder in connection with the Acquisition. TCC has not
retained or contracted with any broker or finder, and will not be indebted to
any broker or finder, in connection with the transactions contemplated by this
Agreement.
3.22 Power and Authority. Xxxxxxxx hereby warrants and represents that he
has the power and authority and legal capacity, individually and on behalf of
the Xxxxxxxx Trust, to execute and deliver this Agreement and the other
Operative Documents to which either Xxxxxxxx or the Xxxxxxxx Trust is a party,
to perform all obligations hereunder, and to consummate the transactions
contemplated hereby. Xxxxxxxx further warrants and represents that he has taken
all action necessary to authorize execution and delivery of this Agreement and
the other Operative Documents to which the Xxxxxxxx Trust is a party, the
performance of its obligations hereunder, and the consummation by it of the
transactions contemplated hereby.
3.23 Enforceability. Each of Xxxxxxxx and the Xxxxxxxx Trust warrants and
represents jointly and severally, that this Agreement and the other Operative
Documents have been duly executed and delivered and constitute legal, valid and
binding obligations, enforceable against Xxxxxxxx or the Xxxxxxxx Trust in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
3.24 Ownership of TCC Membership Interest. Xxxxxxxx and the Xxxxxxxx Trust
jointly and severally warrant and represent that (i) the Xxxxxxxx Trust owns all
of the TCC Membership Interest free and clear of all Liens, restrictions and
claims of any kind, other than restrictions imposed by state or federal
securities laws, and (ii) upon the delivery of the TCC Interest Assignment to
OneLink as provided herein, OneLink will receive good and marketable title
thereto, free and clear of all Liens and other restrictions, other than
restrictions imposed by state or federal securities laws.
3.25 No Violation; Consents. Xxxxxxxx and the Xxxxxxxx Trust warrant and
represent, jointly and severally, that the execution and delivery by Xxxxxxxx
and the Xxxxxxxx Trust of this Agreement and all other Operative Documents to
which either Xxxxxxxx or the Xxxxxxxx Trust may be a party, the performance by
Xxxxxxxx and the Xxxxxxxx Trust of their respective obligations under this
Agreement and the Operative Documents and the consummation of the transactions
contemplated by this Agreement and the Operative Documents will not require the
consent, approval, authorization or permit of, or filing with or notification to
any other Person.
3.26 Untrue or Omitted Facts. No representation, warranty, Schedule or
statement by Xxxxxxxx Trust in this Agreement contains any untrue statement of a
material fact, or omits or will omit to state a fact necessary in order to make
such representations, warranties or statements not materially misleading.
Without limitation of the foregoing, there is no fact known to the Xxxxxxxx
Trust, after reasonable inquiry, that has had, or which may be reasonably
expected to have, a materially adverse effect on the Business or the Assets and
that has not been disclosed in writing to the OneLink.
3.27 Representations, Warranties, Covenants, and Acknowledgments of
Xxxxxxxx Relating to the OneLink Common Stock. Xxxxxxxx hereby represents,
warrants, covenants, acknowledges and agrees, on behalf of Xxxxxxxx and the
Xxxxxxxx Trust, that:
(a) No Registration. Xxxxxxxx and the Xxxxxxxx Trust must bear the
economic risk of investment in the OneLink Common Stock for an indefinite
period of time, because the issuance of OneLink Common Stock to the
Xxxxxxxx Trust has not been registered under the Securities Act of 1933
(the "Act"), and the OneLink Common Stock cannot be transferred by Xxxxxxxx
or the Xxxxxxxx Trust unless such transfer is registered under the Act or
an exemption from such registration is available. OneLink has made no
agreements, covenants or undertakings whatsoever to register the transfer
of any of the OneLink Common Stock except as set forth in Section 5.15 of
this Agreement. Except as set forth in Section 5.15, OneLink has made no
representations, warranties, or covenants whatsoever as to whether any
exemption from the Act, including without limitation any exemption under
Rule 144, will be available; if the exemption under Rule 144 is available
at all, it will not be available until at least one year after Closing
Date, and not then unless: (i) a public trading market then exists in the
OneLink Common Stock; (ii) adequate information as to OneLink's financial
and other affairs and operations is then available to the public; and (iii)
all other terms and conditions of Rule 144 have been satisfied.
(b) Purchase For the Xxxxxxxx Trust's Own Account. Xxxxxxxx represents
that the Xxxxxxxx Trust is receiving the OneLink Common Stock for the
Xxxxxxxx Trust's own account and not for sale or with a view to sale or
distribution of the OneLink Common Stock received.
(c) Business and Investment Experience. Xxxxxxxx is capable of
evaluating the merits and risks of the Xxxxxxxx Trust's ownership of
OneLink Common Stock. Xxxxxxxx is a sophisticated investor and has made
previous private investments in the common stock of OneLink, both before
and after the stock became listed for trading on the Over the Counter
Bulletin Board Exchange, and therefore, Xxxxxxxx is familiar with OneLink
and the nature of investments in OneLink.
(d) Access to Information. Xxxxxxxx has had the opportunity to ask
questions of, and to receive answers from, the Chief Executive Officer of
OneLink with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
conditions, and results of operations of OneLink. Xxxxxxxx has had access
to such financial and other information as is necessary in order for
Employee to make a fully-informed decision as to ownership of OneLink
Common Stock, and has had the opportunity to obtain any additional
information necessary to verify any of such information to which Xxxxxxxx
has had access.
(e) Speculative Investment. The Xxxxxxxx Trust's investment in OneLink
represented by the OneLink Common Stock is highly speculative in nature and
is subject to a high degree of risk of loss in whole or in part. The amount
of such investment is within the Xxxxxxxx Trust's risk capital means and is
not so great in relation to the Xxxxxxxx Trust's total financial resources
as would jeopardize the personal financial needs of Xxxxxxxx or in the
event such investment were lost in whole or in part.
(f) Accredited Investor. Xxxxxxxx (and the Xxxxxxxx Trust by virtue of
its relationship to Xxxxxxxx) is an "accredited investor" within the
meaning of Rule 501 of Regulation D issued under the Act.
4. REPRESENTATIONS AND WARRANTIES OF ONELINK. OneLink represents and
warrants to Xxxxxxxx Trust that the following statements are true, complete and
correct as of the date hereof and shall be true, complete and correct on the
Closing Date:
4.1 Organization and Authority of OneLink. OneLink is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and properly qualified to engage in business in California. OneLink has
all requisite power and authority to enter into, perform and carry out this
Agreement, and the signatory hereto for OneLink has proper authorization to
execute this Agreement on behalf of OneLink. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
of OneLink and its directors.
4.2 Enforceability. This Agreement has been duly executed and delivered by
OneLink, and, upon delivery, will constitute OneLink's legal, valid and binding
obligation enforceable against OneLink in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
4.3 No Violation. The execution and delivery of this Agreement by OneLink,
the performance by OneLink of its obligations hereunder and the consummation of
the transactions contemplated by this Agreement and by the Operative Documents
will not (i) contravene any material provision of the Certificate of
Incorporation or Bylaws, or other organizational or governing documents of the
Purchaser, (ii) violate or conflict with any material law, statute, ordinance,
rule, regulation, decree, writ, injunction, judgment, ruling or order of any
governmental authority or of any arbitration award that is either applicable to,
binding upon, or enforceable against the Purchaser, (iii) conflict with, result
in any breach of, or constitute a default (or an event that would, with the
passage of time or the giving of notice or both, constitute a default) under, or
give rise to a right to terminate, amend, modify, abandon or accelerate, any
material contract that is applicable to, binding upon or enforceable against
OneLink, or (iv) require the consent, approval, authorization or permit of, or
filing with or notification to, any governmental authority, any court or
tribunal or any other Person.
4.4 Reports and Financial Statements. OneLink has filed all reports on
Forms 10-K, 10-Q and 8-K required to be filed by OneLink with the Securities and
Exchange Commission. Such reports on Forms 10-K, 10-Q and 8-K filed by OneLink
are available to the Xxxxxxxx Trust at xxx.xxx.xxx . As of their respective
dates, such reports did not contain any untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
4.5 Brokers and Finders. OneLink has not retained any broker or finder in
connection with the transactions contemplated by this Agreement.
5. COVENANTS AND OTHER AGREEMENTS.
5.1 Deliveries of Schedules and Exhibits. All Schedules and Exhibits
referenced in this Agreement which have not been prepared or delivered to
OneLink as of the date of this Agreement shall be delivered to OneLink on or
before the Closing Date, and OneLink, Xxxxxxxx and the Xxxxxxxx Trust shall
cooperate and use their respective best efforts to complete such Schedules on a
timely basis.
5.2 Operation of Business Prior to Closing Date. During the period from the
date of this Agreement until the Closing Date, the Xxxxxxxx Trust shall cause
TCC to conduct the Business in a prudent, responsible manner, and in the
ordinary course consistent with past practice, and shall not, without the
consent of the OneLink fail to perform in all material respects all of its
obligations under all material contracts and commitments applicable to the
Business.
5.3 Access. During the period until the Closing Date, Xxxxxxxx and the
Xxxxxxxx Trust shall cause TCC to (a) give OneLink and OneLink's authorized
representatives reasonable access during normal working hours and at all times
on weekends to all of the Premises and to the books and records relating to the
Business, (b) permit OneLink to make inspections thereof, and (c) furnish
OneLink with such financial and operating data and other information with
respect to the Business, and to discuss with OneLink and its authorized
representatives its affairs, all as OneLink may from time to time reasonably
request. Xxxxxxxx and the Xxxxxxxx Trust expressly acknowledge and agree that,
until the Closing, the Business remains under the sole control and
responsibility of Xxxxxxxx and the Xxxxxxxx Trust; the Xxxxxxxx Trust remains
responsible for all decisions and operations in respect to the Business; and
OneLink shall in no manner be deemed to be in control of the Business or its
operations.
5.4 Confidentiality. Xxxxxxxx and the Xxxxxxxx Trust and its agents each
agree that all confidential and proprietary information (including without
limitation, technical information, customer lists and financial data) relating
to the Business shall be treated as confidential, and Xxxxxxxx Trust shall not
use or disclose such information after the Closing Date; provided, however, that
there shall be no obligation to keep in confidence any information which (a) was
permitted in writing by OneLink to be used or disclosed, or (b) is within the
public domain or comes within the public domain without any breach of this
Agreement.
5.5 Duties Under Agreement. Xxxxxxxx Trust and OneLink each shall use their
best efforts to complete and execute all acts, undertakings and duties required
under this Agreement on or before the projected Closing Date, or on a timely
basis as provided in this Agreement.
5.6 Satisfaction of Waived Conditions or Deliveries. In the event delivery
of any document or approval required under this Agreement is waived at the
Closing Date, the parties agree to use commercially reasonable efforts
thereafter to deliver such document or approval as soon as practical, unless the
terms of the waiver state that the delivery or act is permanently waived.
5.7 Non-Competition.
(a) For a period of three (3) years commencing on the Closing Date,
neither Xxxxxxxx nor the Xxxxxxxx Trust shall, without the prior written
consent of OneLink, as or through any contracting party, agent, employee,
partner, consultant or representative, or through any subsidiary, venture,
partnership or entity partially or wholly owned by Xxxxxxxx or the Xxxxxxxx
Trust, directly or indirectly, engage in the Travel Segment of the Business
at any location worldwide other than through TCC or OneLink; provided,
however that Xxxxxxxx or the Xxxxxxxx Trust may, directly or indirectly,
provide services for Accor Hotels in Asia. Furthermore, for a period of two
(2) years, commencing on the Closing Date, neither Xxxxxxxx nor the
Xxxxxxxx Trust shall, without the prior written consent of OneLink, as or
through any contracting party, agent employee, partner, consultant or
representative, or through any subsidiary, venture, partnership or entity
partially or wholly owned by Xxxxxxxx or the Xxxxxxxx Trust, directly or
indirectly, engage in the Business at any location in the United States
other than through TCC or OneLink. OneLink acknowledges that Xxxxxxxx and
the Xxxxxxxx Trust are involved in significant activities similar to the
Business in Asia which activities will be permitted to continue after the
Closing Date and consistent with this Non-Compete Covenant, and that such
activities may involve the Travel Segment of the Business.
(b) Xxxxxxxx and the Xxxxxxxx Trust acknowledge that the
Non-Competition Covenant set forth in this Section 5.7 is reasonable and
necessary to protect OneLink's interests in TCC and the Travel Segment of
the Business after the Closing and that any violation hereof would result
in irreparable injury to OneLink and TCC. Xxxxxxxx and the Xxxxxxxx Trust
therefore acknowledge and agree that, in the event of any violation hereof,
OneLink shall not be required to use the dispute resolution procedure set
forth in Section 8.2 of this Agreement, and OneLink shall be entitled and
authorized to obtain, from any court of competent jurisdiction, temporary
or permanent injunctive relief as well as an equitable accounting of all
profits or benefits arising out of such violation, which rights and
remedies shall be cumulative and in addition to any other rights and
remedies to which OneLink may be entitled. In the event injunctive relief
is sought by OneLink, Xxxxxxxx and the Xxxxxxxx Trust agree that OneLink
shall have the right to seek such relief from the appropriate court without
first posting any bond which might otherwise be required.
(c) Nothing in this Non-Competition Covenant shall prevent Xxxxxxxx or
the Xxxxxxxx Trust from owning up to one percent (1%) of the total shares
of all classes of stock outstanding of any corporation engaged in the
Business and having securities listed on any recognized stock exchange;
provided that neither Xxxxxxxx nor the Xxxxxxxx Trust is involved with such
corporation other than as a passive owner.
(d) Xxxxxxxx and the Xxxxxxxx Trust understand and acknowledge that
this Non-Competition Covenant is a material inducement to OneLink to enter
into this Agreement and that OneLink is relying upon this Non-Competition
Covenant in consummating the transactions contemplated by this Agreement.
(e) OneLink has provided payments totaling $100,000.00 as
consideration for the Non-Competition Covenant, to be paid together with
Xxxxxxxx'x salary under the Employment Agreement, and subject to the terms
of the Employment Agreement.
5.8 Employment Agreement. Xxxxxxxx has agreed to be employed by OneLink as
a President of TCC and Director of Call Center Operations for OneLink for the
period beginning on the Closing Date and ending on the Second Anniversary
pursuant to terms of an employment agreement in the form attached to this
Agreement as Exhibit 5.8 (the "Employment Agreement"), and OneLink agrees to
employ Xxxxxxxx in such capacities pursuant to the Employment Agreement.
5.9 Director Position. OneLink shall cause Xxxxxxxx to be appointed as a
member of the Board of Directors of OneLink, within sixty (60) days after the
Closing Date. Xxxxxxxx'x continued tenure and service as a member of the Board
of Directors shall be subject to requirements of applicable law and the
provisions of OneLink's corporate charter and bylaws.
5.10 Efforts to Collect Accounts Receivable. OneLink shall cause TCC to
make diligent efforts to collect the Accounts Receivables after the Closing.
5.11 Audit of TCC. For the purposes of presenting the financial statements
of TCC in a form acceptable for consolidation of TCC with OneLink financials for
the purpose of reporting to the Securities and Exchange Commission, after the
Closing, OneLink and its auditors will conduct an audit and restatement of the
financial statements of TCC. OneLink shall use its best efforts to cause the
audit to be completed on or before June 1, 2005, and Xxxxxxxx and the Xxxxxxxx
Trust agree to provide reasonable cooperation, at OneLink's expense, in the
conduct of the audit.
5.12 Taxes. Xxxxxxxx and the Xxxxxxxx Trust shall be solely responsible for
payment, and shall timely pay, any Tax relating to TCC or the Business for the
period ending on the Closing Date and any period ending on or prior to the
Closing Date.
5.13 OneLink Indemnity of Xxxxxxxx and Xxxxxxxx Release. Xxxxxxxx is a
personal guarantor on the TCC Credit Line and on the TCC equipment lease with
Dell Financial Services, Inc. dated June 18, 2004, and is a co-purchaser or
co-lessee on certain other leases or purchase agreements as indicated on
Schedule 3.20 to this Agreement (the "PSF Guarantee Obligations"). OneLink
agrees to pay all obligations under the PSF Guarantee Obligations on a timely
basis (subject to reasonable delays for the purpose of resolving disputes in
good faith). OneLink shall indemnify and hold Xxxxxxxx and the Xxxxxxxx Trust
harmless from and against any and all claims, losses, costs, expenses,
liabilities, demands and judgments of every nature (including the defense
thereof and reasonable attorneys' fees incurred) arising as the result of
nonpayment or breach of any PSF Guarantee Obligation after Closing. In addition,
OneLink shall take all necessary measures to remove Xxxxxxxx and the Xxxxxxxx
Trust as guarantors of the TCC Credit Line on or before January 10, 2006 and to
cause Nevada Security Bank to issue a release in a form reasonably acceptable to
Xxxxxxxx confirming such removal. It is understood that the measures required to
meet this covenant are likely to include payment of the credit line in full and
closing of the existing TCC Credit Line. During the period between Closing and
the date Xxxxxxxx and the Xxxxxxxx Trust are removed as guarantors on the TCC
Credit Line, Xxxxxxxx shall remain the sole and exclusive person holding
signature authority or authority to draw funds under the TCC Credit Line, which
he may exercise or refuse to exercise in his sole discretion based upon any one
or more of: (i) his own personal judgment regarding the cash needs of the TCC
business, (ii) his personal judgment regarding his personal exposure to
liability as guarantor under the TCC Credit Line, and (iii) his personal
judgment whether any draw on the TCC Credit Line will impair OneLink's ability
to meet its obligation under the preceding sentence.
5.14 Xxxxxxxx Note. The Xxxxxxxx Trust agrees that, in the event the
Acquisition Consideration Adjustment as determined under Section 2.8 of this
Agreement exceeds the sum of: (i) Four Million Five Hundred Fifty Thousand
Dollars ($4,550,000), plus (i) the Accounts Receivable Surplus, then the amount
of principal under the Xxxxxxxx Note outstanding on the date the Acquisition
Consideration Adjustment becomes final under the last sentence of Section 2.8(d)
shall be reduced dollar for dollar by the amount of such excess, and the
Xxxxxxxx Trust agrees to surrender the Xxxxxxxx Note promptly thereafter for
cancellation and reissuance or payment of any remaining principal; provided that
the Xxxxxxxx Trust may apply such remaining principal balance as provided in
Section 2.10(d).
5.15 Registration of OneLink Common Stock. OneLink hereby agrees that, on
or before the Second Anniversary, OneLink shall either (i) cause the OneLink
Common Stock issued to the Xxxxxxxx Trust under Section 2.2(a) of this Agreement
to be registered for sale so as to render such OneLink Common Stock tradable
under the Securities Act of 1933 at all times after the Second Anniversary, or
(ii) provide the Xxxxxxxx Trust with an opinion of legal counsel reasonably
acceptable to the Xxxxxxxx Trust and acceptable to OneLink's transfer agent
which verifies that the OneLink Common Stock is freely tradable and free of
restrictions in reliance on Rule 144 under the Securities Act of 1933 all times
after the Second Anniversary. OneLink further covenants to keep current all
reports on Forms 10-K, 10-Q and 8-K and any other reports or filings required to
be made of filed by "reporting companies" with the Securities and Exchange
Commission.
5.16 Allocation of Purchase Price. OneLink and the Xxxxxxxx Trust
acknowledge that, because the Xxxxxxxx Trust owns TCC as a single member, and
OneLink will purchase and hold TCC as a single member, the Acquisition will be
treated as a sale of the Assets for tax purposes. Accordingly, OneLink and the
Xxxxxxxx Trust will be required to agree on allocations of the purchase price
among the Assets in accordance with the requirements of Section 1060 of the
Code. The allocation of the Acquisition Consideration paid under Section 2.2 of
this Agreement shall be determined as follows:
(a) The portion of the Acquisition Consideration allocated to the
Lease shall be zero ($0.00) and future Lease payments by OneLink shall be
treated as fair market payments for the future rights obtained by OneLink
under the Lease.
(b) For purposes of allocating Acquisition Consideration to the
Non-Competition Covenant, none of the Acquisition Consideration paid under
Section 2.2 shall be allocated to the Non-Competition Covenant of Xxxxxxxx,
as the Non-Competition Covenant and Employment Agreement provide for
separate compensation in the amount of $100,000.00 for the promises and
obligations set forth therein.
(c) Within sixty (60) days after the Closing Date, OneLink shall
provide to the Xxxxxxxx Trust for review and approval (which approval shall
not be unreasonably withheld) a proposed allocation of the Acquisition
Consideration payable under Section 2.2 of this Agreement. The proposed
allocation shall be in the form set forth in Schedule 5.16 and on IRS Form
8594. All allocations made pursuant to this Section 5.16 shall be made in
accordance with the requirements of Section 1060 of the Code. OneLink and
the Xxxxxxxx Trust each agree to report this Acquisition for state and
federal income tax purposes in accordance with the allocation of the
Acquisition Consideration as set forth on Schedule 5.16, and the Xxxxxxxx
Trust and OneLink shall file Form 8594 with their respective federal income
tax forms for 2005. Neither OneLink nor the Xxxxxxxx Trust shall take a
position on any tax return (including IRS Form 8594), before any tax
authority or in any judicial proceeding that is in any manner inconsistent
with such allocation without the written consent of the other party or
unless specifically required to do so pursuant to a determination by an
applicable tax authority. The parties shall promptly advise each other of
the existence of any tax audit, controversy or litigation related to any
allocation hereunder.
5.17 Xxxxxxxx Use of Name and Position; TCC Tours. OneLink agrees that
during the term of Xxxxxxxx'x employment under the Employment Agreement and
consistent with Xxxxxxxx'x obligations under the Non-Competition Covenant,
Xxxxxxxx may use his position and titles with TCC and OneLink as references in
developing customers or business opportunities for Business in Asia; provided
that Xxxxxxxx may make no representation or inference that such business is
being conducted through or in the name of OneLink, TCC or any related entity. In
connection with such activities, Xxxxxxxx may provide tours or demonstrations at
the TCC Premises to interested potential customers or investors for Xxxxxxxx'x
personal activities outside of the United States, provided that such activities
are subject to the approval of OneLink (which shall not be unreasonably
withheld) and that no material disruption of normal business activities of TCC
or OneLink results from such activities.
5.18 Transactions between TCC and OneLink and Affiliates. OneLink agrees
that all services rendered by TCC for OneLink or any Affiliate of OneLink (or
for TCC by OneLink or another OneLink Affiliate) will be priced at the fair
market value or rate for such services, and that during the period beginning on
the Closing Date and ending on the Second Anniversary, charges made to TCC by
OneLink or any OneLink Affiliate other than TCC shall be for specific services
or assets actually delivered and no charge shall be made in the nature of
general intercompany charges or overhead charges.
5.19 Approval of New TCC Business By OneLink CEO. Acceptance of any
customer contract or relationship by TCC during the period beginning on the
Closing Date and ending on March 31, 2007 which exceeds $500,000 in projected
annual revenues shall be subject to the prior approval of the Chief Executive
Officer of OneLink, which approval shall not be unreasonably withheld. The
purpose of this Section 5.10 is to provide a reasonable safeguard against
acceptance of high revenue/low profit business, and therefore, the approval
rights under this Section 5.19 shall be exercised with a view to maintaining
appropriate profit levels.
6. INDEMNITIES.
6.1 Indemnity of OneLink by Xxxxxxxx and the Xxxxxxxx Trust.
(a) Xxxxxxxx and the Xxxxxxxx Trust, jointly and severally, shall
indemnify, hold harmless and defend OneLink from and against any and all
claims, losses, costs, expenses, liabilities, demands and judgments of
every nature (including the defense thereof and reasonable attorneys' fees
incurred) arising out of or in connection with or related to (i) the breach
or failure of any representation made by Xxxxxxxx or the Xxxxxxxx Trust
pursuant to this Agreement, whether made on behalf of the Xxxxxxxx Trust or
TCC, or (ii) the non-performance, partial or total, of any covenant made by
Xxxxxxxx or the Xxxxxxxx Trust pursuant to this Agreement.
(b) Notwithstanding the provisions of this Section 6.1, the following
limits shall apply to Indemnity Claims: (i) no Indemnity Claim shall be
made by OneLink against Xxxxxxxx or the Xxxxxxxx Trust except to the extent
that the aggregate amount of all Indemnity Claims hereunder exceeds the
aggregate threshold of $20,000.00, and upon meeting the aggregate
threshold, the amount payable for Indemnity Claims shall be the amount by
which aggregate Indemnity Claims exceeds the $20,000 threshold; and (ii)
the maximum amount which Xxxxxxxx and Xxxxxxxx Trust may be obligated to
pay for Indemnity Claims arising hereunder shall be the Acquisition
Consideration set forth in Section 2.2, valued as of the Closing Date.
Notwithstanding the foregoing, with respect to representations in Section
3.18 regarding the amount of Accounts Receivable to be collected on or
before December 31, 2005, the Xxxxxxxx Trust shall be responsible for the
first dollar of any Accounts Receivable Shortfall.
6.2 Indemnity of Xxxxxxxx and the Xxxxxxxx Trust by OneLink.
(a) OneLink shall indemnify and hold Xxxxxxxx and the Xxxxxxxx Trust
harmless from and against any and all claims, losses, costs, expenses,
liabilities, demands and judgments of every nature (including the defense
thereof and reasonable attorneys' fees incurred) arising out of or in
connection with or which are related to (i) the breach by OneLink of any
warranty or representation made by OneLink pursuant to this Agreement, (ii)
the non-performance, partial or total, of any covenant made by OneLink
pursuant to this Agreement, (iii) and any liability or obligation arising
with respect to the Assets and operations of the Business after the Closing
Date, including any liability relating to any liabilities expressly
excluded from the Chargeable Liabilities, and, in particular, with respect
to any obligations which are PSF Guarantee Obligations.
(b) Notwithstanding the provisions of this Section 6.2, the following
limits shall apply to Indemnity Claims: (i) no Indemnity Claim shall be
made by Xxxxxxxx Trust against OneLink except to the extent that the
aggregate amount of all Indemnity Claims hereunder exceeds the aggregate
threshold of $20,000.00, and upon meeting the aggregate threshold, the
amount payable for Indemnity Claims shall be the amount by which aggregate
Indemnity Claims exceeds the $20,000 threshold; and (ii) the maximum amount
which OneLink may be obligated to pay for Indemnity Claims arising
hereunder shall be the Acquisition Consideration set forth in Section 2.2,
valued as of the Closing Date and the Contingent Consideration set forth in
Section 2.3, determined as of the Second Anniversary. Notwithstanding the
foregoing, with respect to: (i) liabilities or obligations described in
Section 6.2(a)(iii) above, and (ii) any breach of the obligation of OneLink
to indemnify Xxxxxxxx or the Xxxxxxxx Trust with respect to PSF Guarantee
Obligations pursuant to Section 5.13, OneLink shall be responsible for the
first dollar of any such liability or obligation.
6.3 Notice of Claims; Disputed Claims; Third Party Suits.
(a) Any party making a claim for indemnity under this Section 6
("Indemnitee") against the other party ("Indemnitor") shall give notice of
such claim in writing (the "Claim Notice"), which Claim Notice shall state
in general terms the facts upon which Indemnitee makes such claim for
indemnification together with reasonable documentation of such claim.
Within fifteen (15) days following the date of the Claim Notice, the
Indemnitor receiving the Claim Notice shall respond with a written notice
to Indemnitee (the "Response Notice"): (i) accepting the claim set forth in
the Claim Notice (a "Claim Acceptance"), (ii) disputing the claim in the
Claim Notice and stating in general terms the basis for disputing the claim
together with reasonable documentation, if any, of the basis for disputing
the claim (a "Claim Dispute"), (iii) disputing in a portion of the claim
set forth in the Claim Notice, in which case only the portion that is
disputed shall be treated as subject to a Claim Dispute and the remainder
shall be deemed subject to a Claim Acceptance.
(b) In the event of any claim or demand asserted against Indemnitee by
a third party upon which Indemnitee may claim indemnification under this
Section 6, Indemnitee shall give Indemnitor a Claim Notice within fifteen
(15) days after receipt thereof, and indicating in the Claim Notice whether
Indemnitee intends to conduct the defense of such claim or demand.
Indemnitor shall have the right, at such Indemnitor's own expense, to
participate in such defense. If Indemnitee conducts the defense and
Indemnitor does not participate in such defense, Indemnitee shall have the
right fully to control and to settle the proceeding. If Indemnitor elects
to participate in such defense, Indemnitee shall nonetheless control the
proceeding, but shall not settle the same without the consent of
Indemnitor, which consent shall not be unreasonably withheld. If Indemnitee
elects not to conduct the defense, Indemnitor shall conduct such defense
and Indemnitor shall not settle the same without the consent of Indemnitee,
which consent shall not be unreasonably withheld.
(c) No Claim Notice shall be effective if given by either OneLink or
Xxxxxxxx Trust at any time on or after the Second Anniversary.
6.4 Procedure for Determining Indemnity Obligations. With respect to any
Claim Dispute given pursuant to Section 6.3 of this Agreement, the following
procedure shall be followed: (i) Indemnitee and Indemnitor shall attempt in good
faith to resolve the Claim Dispute within thirty (30) days after the date of the
Response Notice which sets forth the Claim Dispute; (iii) in the event that the
attempt to resolve the Claim Dispute is unsuccessful, the parties shall pursue
the dispute resolution procedure set forth in Section 8.2 of this Agreement.
6.5 Payment of Claims; Setoff. The amount of the any claim for indemnity
under this Section 6 shall be paid by Indemnitor to Indemnitee within five (5)
business days after the claim is resolved as evidenced by any of the following
(each, an "Indemnity Decision"): (i) a Claim Acceptance or other written
agreement of Indemnitor and Indemnitee; (ii) the decision of an arbitrator
pursuant to Section 8.2 that Indemnitor is liable for such indemnity, or (iii)
the decision of a court of competent jurisdiction that Indemnitor is liable for
such indemnity. In the event the OneLink is the Indemnitee, OneLink shall be
entitled to set off the amount of the indemnity claim subject to the Indemnity
Decision, or any portion thereof, against the following items in the following
order: (A) the principal amount of the Xxxxxxxx Note, (B) the Contingent
Consideration payable under Section 2.9, and (C) the Escrow Shares at the Market
Value of the Escrowed Shares as of the Closing Date, provided that such setoff
may not occur prior to an Indemnity Decision. In the event a Claim Dispute is in
effect on the date a principal payment is due under the Xxxxxxxx Note, the date
Contingent Consideration is to be paid to the Xxxxxxxx Trust, or the Escrowed
Shares are to be released to the Xxxxxxxx Trust, if the amount of such payment
would be subject to offset if the Claim Dispute resulted in an Indemnity
Decision in favor of OneLink, OneLink may defer payment of that portion of the
payment not in excess of the amount of the Indemnity Claim which is subject to
the Claim Dispute until an Indemnity Decision is reached, and at that time the
principal shall either be paid or offset in the amount provided in the Indemnity
Decision.
7. Termination. This Agreement may be terminated as follows:
(a) At any time upon the mutual consent of the parties hereto;
(b) By the Xxxxxxxx Trust upon the giving of notice in the event that
the one or more of the conditions described in Section 2.6 has not been
fulfilled by OneLink or waived by Xxxxxxxx Trust on or before the Closing
Date; or
(c) By OneLink upon the giving of notice in the event that any or all
of the conditions described in Section 2.5 have not been fulfilled by
Xxxxxxxx or the Xxxxxxxx Trust or waived by OneLink on or before the
Closing Date.
In the event of termination of this Agreement pursuant to this Section 7, no
party shall have any obligation to the others whatsoever with respect to this
Agreement, the transactions provided for herein, or the expenses incurred in
connection with or in contemplation of this Agreement.
8. Miscellaneous.
8.1 Assignment. Neither the Xxxxxxxx Trust nor OneLink may assign, in whole
or in part, any of their respective rights or obligations under this Agreement,
unless such assignment is expressly consented to by the other. This Agreement
shall be binding upon and inure to the benefit of the assigns, heirs,
administrators, executors, legal representatives and successors in interest of
the parties hereto.
8.2 Dispute Resolution; Arbitration. Except as otherwise provided in this
Agreement or in the relevant Operative Document, any controversy, dispute, or
claim arising out of or relating to this Agreement (including the Operative
Documents) or the performance or breach thereof, shall be settled according to
the following procedures.
(a) Notice of Dispute. Any party may initiate this dispute resolution
procedure by giving notice to the other party or parties, which notice
shall describe the claim or dispute at issue and shall propose an
arbitrator. For a period of fifteen (15) days following such notice, the
parties shall attempt in good faith to settle their dispute without resort
to arbitration.
(b) Mediation. The parties may, with the approval of each party
involved, attempt in good faith to settle their dispute by mediation.
(c) Arbitration. Any matter not settled among the parties by mediation
shall be submitted to JAMS/Endispute, Inc. for binding arbitration in San
Francisco, California. Arbitration may be commenced at any time after
thirty (30) days following a Dispute Notice given under Section 8.2(a)
hereof. The cost of arbitration, including any administration fee, the
arbitrator's fee, and costs for use of facilities during any hearing, shall
be borne equally by the parties to the arbitration. Attorneys' fees may be
awarded to the prevailing or most prevailing party at the discretion of the
arbitrator. The provisions of Sections 1282.6, 1283, and 1283.05 of the
California Code of Civil Procedure apply to the arbitration. The arbitrator
shall not have the power to alter, amend, modify or change any of the terms
of this Agreement, nor to grant any remedy which is either prohibited by
the terms of this Agreement or not available in a court of law.
8.3 Expenses. Unless otherwise provided in this Agreement, OneLink and
Xxxxxxxx Trust shall each pay their own costs and expenses incurred in
connection with this Agreement and the transactions and activities contemplated
herein.
8.4 Schedules and Exhibits. All references in this Agreement to schedules
and exhibits refer to those schedules and exhibits set forth on Schedule 8.4,
which schedules and exhibits have been delivered to and initialed by OneLink or
Xxxxxxxx Trust as the case may be.
8.5 Additional Documentation. Xxxxxxxx Trust shall from time to time,
subsequent to the date first set forth above, at OneLink's request and without
further consideration, execute and deliver such other instruments of conveyance,
assignment and transfer and take such other action as OneLink reasonably may
require in order more effectively to consummate the transactions contemplated by
this Agreement.
8.6 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given: (a) upon delivery if
delivered personally, (b) five (5) days after mailing if mailed, certified or
registered mail with postage prepaid, or (c) upon confirmed delivery if sent by
courier, next-day or overnight mail or delivery, to the address, facsimile
number, or e-mail address set forth below:
If to OneLink or OneLink: OneLink 4 Travel, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxx
00XX Xxxxx
Xxx Xxxxxxxxx, XX 94105
Attn: X. X. Xxxxxx, CEO
If to Xxxxxxxx or
the Xxxxxxxx Trust: Xxxx X. Xxxxxxxx
9900 Xxxxxx May Parkway #2203
Xxxx, Xxxxxx 00000
The addresses provided for notice hereunder may be changed by any party by
providing notice to the other party.
8.7 Survival of Terms. All warranties and covenants contained in this
Agreement or in any certificates or other instrument delivered by or on behalf
of the parties hereto shall be continuous and survive the execution of this
Agreement.
8.8 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of California
applicable to contracts executed by residents of California and wholly to be
performed in California; provided, however, that in any matter or dispute
involving the application of laws to the location or operation of the Business
or of a particular transaction or asset of the Business, reference shall be made
to the laws of the applicable jurisdiction. Subject to the obligations of the
parties under Section 8.2, each party hereby submits to the exclusive
jurisdiction and venue of the Superior Court of the State of California for the
City and County of San Francisco or the Federal District Court for the Northern
District of California for purposes of any legal or equitable action or
proceeding arising out of this Agreement. Each party agrees that service upon
such party in any such action or proceeding may be made by first class mail,
certified or registered, return receipt requested as provided by the giving of
notices in Section 8.6.
8.9 Captions. The captions to Sections of this Agreement have been inserted
for identification and reference purposes and shall not by themselves determine
the construction or interpretation of this Agreement.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
8.11 Entire Agreement and Modification. This Agreement and the schedules
and exhibits hereto constitute and contain the entire agreement of the parties
and supersede any and all prior negotiations, correspondence, understandings and
agreements between the parties respecting the subject matter hereof. This
Agreement may only be amended by a written instrument signed by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed as of the date first above written.
TCC: The Call Center, LLC,
a Delaware limited liability company
By: /s/ Xxxx X. Xxxxxxxx
______________________________________
Xxxx X. Xxxxxxxx, Manager
XXXXXXXX TRUST: /s/ Xxxx X. Xxxxxxxx
__________________________________________
Xxxx X. Xxxxxxxx, Trustee of the Xxxx
Xxxxxxxx Trust under trust agreement dated
July 2, 2001 and amended and
restated November 26, 2003
XXXXXXXX: /s/ Xxxx X. Xxxxxxxx
_________________________________________
Xxxx X. Xxxxxxxx
ONELINK: ONE LINK 4 TRAVEL, INC.,
a Delaware corporation
By: /s/ X. X. Xxxxxx
_____________________________________
X. X. Xxxxxx, Chief Executive Officer
