EXHIBIT 99.5
NLG CALL OPTION
1. Parent has agreed to acquire 100% of the fully-diluted equity of National
Leisure Group, Inc. ("NLG") for stock, cash and other consideration as set
forth in the acquisition agreement (the "USA NLG Price").
2. If the Parent acquisition of NLG closes, Parent shall grant the Company an
option (the "NLG Option") to acquire upon exercise 100% of the NLG equity
then owned by Parent, which option shall expire on the two-year anniversary
of the Merger. The Company may exercise the call by notifying Parent of its
exercise in writing.
3. The exercise price for the NLG Option shall be the USA NLG Price. The
purchase price shall be paid in cash and in low-vote shares of common stock
of the Company, which the Company shall register at the request of Parent.
At the election of the Company, Parent will lend to the Company the cash
portion of the consideration at Parent's cost of funds not to exceed the
prime rate plus one percent. The stock portion will be based on the average
closing share price of the Company's shares on Nasdaq for the 5 trading days
preceding the Company's purchase in the same cash/stock ratio as used in
Parent acquisition of NLG; provided that in no event shall the Company be
obligated to pay more than 50% of the purchase price of the NLG Option in
cash.
4. If the Company exercises the NLG Option, its acquisition of NLG shall be
structured as reasonably determined by Parent so as to (i) qualify as a
Section 351 exchange or a Section 368(a) reorganization within the meaning
of the Code and (ii) if Parent's acquisition of NLG was structured as a
Section 368(a) reorganization, preserve such treatment.
5. During the two-year term of the NLG Option, Parent cannot dispose of all or
any part of its interest in NLG to any non-wholly owned affiliate of Parent
(other than the Company). Parent may, however, transfer or dispose of all or
any part of its interest in NLG to any wholly-owned Subsidiary; PROVIDED
such Subsidiary shall take the interest in NLG subject to the NLG Option. In
addition, during the two-year term of the NLG Option, Parent may dispose of
all or any part of its interests in NLG to a non-affiliate, either alone or
as part of a larger transaction; PROVIDED that the consideration to be paid
by the third party in respect of the NLG portion, in connection with a
larger transaction, shall be separately identified and shall be based on
reasonable, arm's-length negotiations conducted in good faith by Parent.
Such a disposition by Parent is a "Disposition Transaction". In the event of
a Disposition Transaction, the Company shall have, at its option, (i) a
right of first refusal on such Disposition Transaction pursuant to which the
Company may elect to match the terms of such Disposition Transaction or
(ii) the right to exercise the NLG Option prior to the execution of a
definitive agreement with respect to the Disposition Transaction. If the
Company declines to exercise its right of first refusal or the NLG Option,
the NLG Option expires immediately upon the execution of such agreement, but
only with respect to the NLG interest in the Disposition Transaction (and
subject to the completion of such Disposition Transaction) and not with
respect to any remaining interest in NLG still owned by Parent, if any;
provided, that, if the Company declines to exercise its right of first
refusal or the NLG Option, Parent may consummate the Disposition Transaction
only on the terms declined by the Company (or more favorable to Parent) and
shall have 60 days, subject to extension for customary approvals, within
which to consummate the Disposition Transaction, after which period the
Company's right of first refusal is reinstated. If the Company elects to
exercise its right of first refusal and such Disposition Transaction
involves a disposition by Parent of less than all of its interest in NLG,
then the Company shall continue to have the same rights set forth in this
paragraph number six with respect to Xxxxxx's remaining interest in NLG,
with the NLG Option applicable only to the percentage of NLG owned
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by Parent after any such Disposition Transaction and with an exercise price
equal to the USA NLG Price multiplied by the percentage of Parent's original
interest in NLG retained by Parent after any such Disposition Transaction.
The foregoing notwithstanding, during the term of the NLG Option, no new
equity of NLG shall be issued. To the extent that NLG requires cash during
the option term, Parent may fund such needs through debt, which debt will be
assumed by the Company upon exercise of the NLG Option. During the term of
the NLG Option, Parent shall not dividend or otherwise distribute cash of
NLG in respect of the NLG equity, unless at such time NLG has no outstanding
debt owed to Parent.
6. If Parent does not acquire NLG within 6 months of the Company's merger with
Merger Sub, Parent shall pay the Company $20 million plus interest accrued
at an annual rate of 7%.
7. During the two-year term of the NLG Option, the Company shall have the
right, upon written notice to Parent, to conduct, on reasonable notice and
in a reasonable manner, and subject to confidentiality restrictions, due
diligence on NLG, including access to NLG's facilities, personnel (including
outside accountants), budget, records, contracts, financial information and
accounts. In addition, during the two-year term of the NLG Option, NLG shall
provide the Company with monthly reports of financial and operating results.
8. During the two-year term of the NLG Option, the Company shall have the right
to appoint one observer to all NLG board meetings. The Company will not
receive pursuant to paragraph 7 or 8 confidential or competitive information
relating to direct competitors, such as Orbitz and Travelocity.
9. Upon exercise of the NLG Option, the Company shall be able to terminate any
agreement, contract or arrangement of NLG with Parent or Parent's
affiliates, which arrangements are on terms less favorable to NLG than would
be agreed in an arm's-length transaction.
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