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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this [13]th day of November, 1995, by and among 1-800 LOW AIR FARE, INC.
("1-800"), a Delaware corporation and S. TRAVEL, INC. ("ST"), a Delaware
corporation (together "Sellers"); and 800 TRAVEL SYSTEMS, INC., a Delaware
corporation ("Purchaser").
NOW, THEREFORE, in consideration of the representations, warranties and
covenants hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, Sellers and Purchaser hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
SECTION 1.1 ASSETS TO BE PURCHASED AND SOLD.
(a) Description of Assets. At the Closing, Sellers shall sell, assign,
transfer and convey to Purchaser, and Purchaser shall purchase and acquire from
Sellers, all of the assets, rights and properties described on Exhibit A
attached hereto, free and clear of liens, claims, charges and encumbrances of
any nature except as otherwise specifically provided herein. The assets to be
purchased hereunder are referred to herein as the "Assets."
SECTION 1.2 PURCHASE PRICE; OPTION TO 0-000 XXX XX CREDITORS.
(a) Amount. The purchase price to be paid by Purchaser for the Assets (the
"Purchase Price") shall be $100,000.00, plus Purchaser's assumption at Closing
of the Assumed Obligations (hereinafter defined).
(b) Allocation. The parties have agreed that the Purchase Price (without
regard to the Assumed Obligations) shall be allocated between the Sellers in the
manner set forth on Exhibit B hereto.
(c) Option to 1-800 and ST Creditors. For a period of ninety (90) days
after the date hereof, Purchaser will purchase from any creditors of 1-800
and/or ST the principal amount of any bona fide debt owed by 1-800 or ST to such
creditor or creditors by issuing one share of the common stock of Purchaser for
each $10.00 of such principal indebtedness owed by 1-800 or ST, up to an
aggregate of 300,000 shares of Purchaser's common stock. For purposes of this
Agreement, the phrase "bona fide debt owed by 1-800 and/or ST" shall mean the
principal amount of any indebtedness acknowledged by, and reflected in the
financial books and records of, 1-800 or
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ST. The offer to purchase indebtedness pursuant to the provisions of this
Section 1.2(c) shall not apply to any Assumed Obligations, notwithstanding any
other provision to the contrary herein contained. If, at the end of the
aforesaid 90-day period, less than 300,000 shares of common stock of Purchaser
have been issued to acquire bona fide debt of 1-800 and/or ST under the
provisions of this subsection, the difference between 300,000 shares and the
number of shares actually issued hereunder to the holders of such debt shall,
upon the expiration of such 90-day period, be issued to and in the name of ST.
SECTION 1.3 PAYMENT OF PURCHASE PRICE.
The Purchase Price (without regard to the Assumed Obligations) shall be
payable by Purchaser in the following manner:
(a) The amount of $10,000.00 shall be paid to 1-800 at Closing.
(b) The total amount of $90,000.00 shall be paid to ST by delivery from
Purchaser at Closing of an unsecured promissory note (the "Note") in
substantially the form attached hereto as Exhibit C.
SECTION 1.4 ASSUMPTION OF ASSUMED OBLIGATIONS.
(a) Instrument of Assumption. At the Closing, Purchaser shall assume and
agree to pay, perform and discharge, as and when they become due, all of the
Assumed Obligations as herein defined.
(b) Assumed Obligations Defined. As used in this Agreement, "Assumed
Obligations" shall have the meaning set forth in Exhibit D hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
To induce Purchaser to enter into this Agreement and to purchase the
Assets, Sellers hereby jointly and severally represent and warrant that:
SECTION 2.1 CORPORATE ORGANIZATION AND AUTHORITY.
Each Seller is a corporation duly organized, validly existing and in good
standing, with full corporate power and authority to conduct its business as now
conducted, own and lease its assets and enter into and perform its obligations
under this Agreement. Each Sellers execution, delivery and performance of this
Agreement and the sale to Purchaser of the Assets hereunder have been duly
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authorized by all requisite corporate action on the part of such Seller, and
this Agreement constitutes, and all bills of sale, assignments, agreements and
other instruments and documents to be executed and delivered by any Seller
hereunder will constitute, such Seller's legal, valid and binding obligations,
enforceable against such Seller in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and principles of equity.
SECTION 2.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS.
Each Seller's execution and delivery of this Agreement and performance of
its obligations hereunder, including the sale of the Assets hereunder, do not
and will not conflict with, violate or result in any default under such Seller's
articles of incorporation or bylaws or any mortgage, indenture, agreement,
instrument or other contract applicable to its business, nor will they violate
any judgment, order, decree, law, statute, regulation or other judicial or
governmental, restriction applicable hereto. Each Seller's execution and
delivery of this Agreement and performance of its obligations hereunder,
including the sale of the Assets hereunder, do not and will not require the
consent of, or any prior filing with or notice to, any governmental authority or
other third party.
SECTION 2.3 TITLE TO ASSETS.
Sellers have good and marketable fee simple title to the Assets, free and
clear of all liens, charges, security interests, reservations, restrictions,
encumbrances and other defects in title (collectively "Encumbrances"), other
than the Encumbrances set forth in Exhibit A hereto (the "Exceptions"), have the
right to convey such Assets to Purchaser, at the Closing shall have conveyed to
Purchaser good and marketable title to such Assets free and clear of all
Encumbrances other than the Exceptions, and will warrant and defend the title to
such Assets in Purchaser against the lawful claims of all person whomsoever,
subject only to the Exceptions.
SECTION 2.4 CONTRACT RIGHTS.
The rights of Sellers under the contracts and agreements described or
referred to in Exhibit A are valid and enforceable, except as such
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally or by such principles of
equity. Before the Closing, Sellers will provide Purchaser with true and correct
copies of all contracts and agreements listed in Exhibit D that will be assumed
by Purchaser.
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SECTION 2.5 TAXES.
(a) Returns and Payment of Taxes. All tax returns required to be filed on
or prior to the Closing Date by Sellers have been or prior to the Closing Date
will have been filed; and all taxes shown to be due and payable on such returns,
all other taxes, duties and other governmental charges payable by any Seller and
for the payment of which there may arise any lien upon the Assets sold hereunder
subsequent to the Closing Date, and all deficiencies, assessments, penalties and
interest with respect thereto due and payable on or before the Closing Date,
notice of which has been received by any Seller, have been or prior to the
Closing Date will have been paid.
(b) Withholding of Taxes. There has been withheld or collected from each
payment made to each employee of the Business the amount of all taxes (including
without limitation federal income taxes, Federal Insurance Contributions Act
taxes and state and local income, payroll and wage taxes) required to be
withheld or collected therefrom and the same have been paid to the proper tax
depositories or collecting authorities.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
To induce the Sellers to enter into this Agreement and to sell the Assets,
Purchaser hereby represents and warrants that:
SECTION 3.1 CORPORATE ORGANIZATION AND AUTHORITY.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to conduct its business as now conducted and enter into and perform
its obligations under this Agreement. Purchaser's execution, delivery and
performance of this Agreement and its acquisition of and payment for the Assets
hereunder have been duly authorized by all requisite corporate action on the
part of Purchaser, and this Agreement constitutes, and all agreements and other
instruments and documents to be executed and delivered by Purchaser hereunder
will constitute, Purchasers legal, valid and binding obligations, enforceable
against Purchaser in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and principles of equity.
SECTION 3.2 ABSENCE OF CONFLICTS AND CONSENT REQUIREMENTS
Purchaser's execution and delivery of this Agreement and performance of its
obligations hereunder, including the purchase of and payment for the Assets
hereunder, do not and will not conflict
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with, violate or result in any default under Purchaser's articles of
incorporation or bylaws or any mortgage, indenture, agreement, instrument or
other contract to which Purchaser is a party or by which Purchaser or its
property is bound, nor will they violate any judgment, order, decree, law,
statute, regulation or other judicial or governmental restriction to which
Purchaser is subject. Purchaser's execution and delivery of this Agreement and
performance of its obligations hereunder, including the purchase of and payment
for the Assets hereunder, do not and will not require the consent of, or any
prior filing with or notice to, any governmental authority or other third party.
SECTION 3.3 ABSENCE OF LITIGATION.
No claim, action, proceeding or investigation is pending or, to the
knowledge of Purchaser, threatened, which seeks to delay or prevent the
consummation of the transactions contemplated herein.
SECTION 3.4 INVESTIGATION.
Purchaser acknowledges and agrees that it (a) has made its own inquiry and
investigation into, and based thereon has formed an independent judgment
concerning, the Assets and the Assumed Obligations, and (b) has been furnished
with or given adequate access to such information about the Assets and the
Assumed Obligations, as it has requested. Sellers acknowledge that the
Purchaser's opportunity to inquire does not diminish its right to rely on
Sellers' representations and warranties contained herein and in the Exhibits
hereto.
SECTION 3.5 CONFIDENTIALITY BY THE PURCHASER.
Purchaser shall not disclose the terms of this Agreement after the date
hereof to any person other than such officers, employees, independent
contractors, agents, controlling persons, stockholders, or lenders to,
Purchaser, or such other persons acting on behalf of or in the interest of the
Purchaser, to whom disclosure of the terms of this Agreement is necessary in the
reasonable opinion of the Purchaser. Purchaser may, however, disclose the terms
of this Agreement to any person to the extent required by law or as may
reasonably be required in the defense of Sellers or Purchaser in any action,
arbitration, investigation or proceedings, or as may reasonably be required in
connection with the performance or enforcement of any agreement or other
obligation of Purchaser relating to or arising from this Agreement.
SECTION 3.6 FURTHER ASSURANCES.
Sellers and Purchaser each hereby covenants and agrees with the others that
at any time and form time to time after the execution of this Agreement and
after the Closing Date it will promptly execute and deliver such further
assurances, instruments
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and documents and take such further action as the others may reasonably request
in order to carry out the full intent and purpose of this Agreement.
SECTION 3.7 NO OTHER BROKERS.
Sellers and Purchaser each represent and warrant to the others that no
broker or finder has been involved or engaged by it in connection with the
transactions contemplated hereby and each hereby agrees to indemnify and save
harmless the other from and against any and all broker's or finder's fees,
commissions or similar charges incurred or alleged to have been incurred by the
indemnifying party in connection with the transactions contemplated hereby and
any and all loss, liability, cost or expense (including reasonably attorneys'
fees) arising out of any claim that the indemnifying party incurred any such
fees, commissions or charges.
SECTION 3.8 CONSENTS, WAIVERS AND APPROVALS.
Sellers agree, at no expense to Purchaser, to use their reasonable best
efforts to obtain the waivers, consents and approvals required for the transfer
to the Purchaser of the contracts and agreements listed on Exhibit A hereto on
such terms and conditions in all material respects as presently exist. Purchaser
agrees to cooperate with Sellers in the transfer of such contracts, which
cooperation shall include prompt response to reasonable requests for information
regarding Purchaser by the other parties to such contracts.
SECTION 3.9 CONVEYANCES.
At the Closing, Sellers will execute and deliver to Purchaser any and all
documents deemed necessary or desirable in the judgment of Purchaser's and
Sellers' counsel to fully effectuate the conveyance to Purchaser of all the
Sellers ownership interest in and to the Assets.
ARTICLE IV
CLOSING
SECTION 4.1 TIME AND PLACE OF CLOSING.
The consummation of the purchase and sale transaction contemplated hereby
(the "Closing") shall be held at a mutually acceptable location commencing at
10:00 a.m. (New York Time) on the date hereof. The date on which the Closing
occurs is referred to herein as the "Closing Date." At the Closing, subject to
the fulfillment or waiver of the conditions set forth in this Article IV,
Sellers shall convey the Assets to Purchaser by appropriate instruments of
transfer, and Purchaser shall pay to l-800, as
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herein provided, the cash portion of the Purchase Price in cash or equivalent,
shall deliver the Note to ST, and shall assume the Assumed Obligations.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 INDEMNIFICATION BY SELLERS.
Subject to the procedures and limitations set forth in this Article V,
Sellers jointly and severally agree that they will indemnify and save harmless
Purchaser from and against any and all Net Economic Loss (herein defined)
incurred by Purchaser arising after the Closing out of (i) the breach of any
representation or warranty made by either or both of the Sellers in this
Agreement or in any instrument or documents required to be delivered by any
Seller to Purchaser pursuant to this Agreement, (ii) any Seller's failure to
duly perform any covenant or agreement to be performed by it under this
Agreement or under any instrument or document required to be delivered by
Sellers or any Seller to Purchaser pursuant to this Agreement, and (iii) any
liabilities or obligations, contingent or otherwise, of any Seller which exist
on the Closing Date and which are based upon any act, state of facts or
condition which occurred or existed before the Closing Date, known or unknown,
due or payable, except to the extent such liabilities and/or obligations are
specifically assumed hereunder by Purchaser.
SECTION 5.2 NET ECONOMIC LOSS DEFINED.
As used in this Agreement, the term "Net Economic Loss" means the amount of
any loss, liability, damage, cost or expense (including reasonably attorneys'
fees) incurred by Purchaser arising out of the matters or circumstances referred
to in Section 5.1 hereof, less the amount of the economic benefit (if any)
received by Purchaser in connection with such loss, liability, damage, cost or
expense (including without limitation benefits obtained under federal, state and
local tax laws, amounts recovered under insurance policies net of deductibles
and incidental expenses and premium increases resulting therefrom, recovery or
potential recovery by setoffs or counterclaims, and other economic benefits).
The amount of any such economic benefit received by Purchaser after the
calculation of Net Economic Loss shall be subtracted from any amount payable by
Sellers under this Article V or shall be payable to Sellers in reimbursement for
amounts already paid by Sellers under this Article. In determining the amount of
such economic benefit, due consideration shall be given to, among other things,
appropriate discount for timing factors.
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SECTION 5.3 INDEMNITY CLAIMS BY PURCHASER.
(a) Notice of Claim. If any matter shall arise which, in the opinion of
Purchaser, constitutes or may give rise to a Net Economic Loss subject to
indemnification by Sellers as provided herein (an "Indemnity Claim"), Purchaser
shall give written notice (the "Notice of Claim") of such Indemnity Claim to
each Seller, setting forth the relevant facts and circumstances of each
Indemnity Claim in reasonable detail and the amount of indemnity sought from
Sellers with respect thereto, and shall give continuing notice promptly
thereafter as to developments coming to Purchaser's attention materially
affecting any matter relating to such Indemnity Claim.
(b) Mitigation of Loss. Purchaser shall use reasonable efforts to mitigate
its Net Economic Loss in connection with any Indemnity Claim, to the same extent
as would a reasonable and prudent person to whom no indemnity were available.
This Section 5.3(b) shall not apply with respect to a Third Party Claim
(hereinafter defined) for which no Seller elected to assume the defense as
provided in the following subsection (c).
(c) Third Party Claims. If any Indemnity Claim is based upon any claim,
demand, suit or action of any third party against Purchaser or the Assets (a
"Third Party Claim"), then Purchaser, at the time it gives Sellers the Notice of
Claim with respect to such Third Party Claim shall offer to Sellers the option
to have Sellers or any Seller assume the defense of the Third Party Claim, which
option may be exercised by any Seller(s) by written notice to Purchaser within
fifteen (15) days after Purchaser gives written notice to Sellers thereof. If
any Seller or Sellers so exercise the option (the defending Seller"), then the
defending Seller shall at its own expense assume the defense of the Third Party
Claim, shall upon the final determination thereof fully discharge at its own
expense all liability of Purchaser with respect to the Third Party Claim, and
shall be entitled, in its sole discretion and at its sole expense but without
any liability of Purchaser therefor, to compromise or settle the Third Party
Claim upon terms acceptable to the defending Seller. From the time the defending
Seller so assumes such defense and while such defense is pursued diligently and
in good faith, the defending Seller shall have no further liability for
attorneys' fees or other costs of defense thereafter incurred by Purchaser in
connection with such Third Party Claim. If no Seller exercises the opinion to
defend such Third Party Claim, then Purchaser shall undertake to defend such
Third Party Claim itself. Purchaser shall conduct such defense as would a
reasonable and prudent person to whom no indemnity were available, shall permit
Sellers (at Sellers' expense) to participate in (but not control) such defense,
and shall not settle or compromise such Third Party Claim without Sellers
consent (but such consent shall not of itself establish Sellers' indemnity
liability therefor).
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SECTION 5.4 INDEMNIFICATION BY PURCHASER.
Purchaser agrees that it will indemnify and save harmless Sellers from and
against any and all loss, liability, damages, cost or expense (including
reasonable attorneys' fees) incurred by Sellers (net of any benefits to Sellers
similar to those taken into account in determining "Net Economic Loss" as
hereinabove defined) arising out of Purchaser's breach of any of its
representations, warranties, covenants and agreements in this Agreement or in
any documents delivered by Purchaser to Sellers hereunder, or Purchaser's
failure to duly pay, perform or discharge any of the Assumed Obligations.
SECTION 5.5 ARBITRATION.
All claims, disputes, controversies and other matters in question between
the parties to this Agreement, arising out of or relating to this Agreement or
the breach thereof, shall be settled by arbitration in Tampa, Florida, before a
board of three (3) persons. Arbitration proceedings hereunder will be conducted
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. Each party shall bear its own attorneys' and
accountants' fees and charges in any such arbitration proceeding.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 MERGERS.
This Agreement contains the final, complete and exclusive statement of the
Agreement between the parties with respect to the transactions contemplated
herein and all prior or contemporaneous written or oral agreements with respect
to the subject matter hereof are merged herein.
SECTION 6.2 AMENDMENTS.
No change, amendment, qualification or cancellation hereof shall be
effective unless in writing and executed by all of the parties hereto by their
duly authorized officers.
SECTION 6.3 BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. All warranties,
representations and indemnities set forth herein shall survive the Closing and
the transactions contemplated hereby.
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SECTION 6.4 NOTICES.
All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been duly given when personally delivered
or when placed in the United States Mail, and forwarded by Registered or
Certified Mail, return receipt requested, postage prepaid, addressed to the
party to whom such notice is being given at the following addresses:
AS TO EACH SELLER: 1-800 LOW-AIR FARE, INC.
S. TRAVEL, INC.
0000 X.X. Xxxxxxx 000 Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
IF TO PURCHASER: 800 Travel Systems, Inc.
c/o Xxxxxxx Xxxxx, President
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Any party may change the address(es) to which notices to it are to be sent
by giving notice of such change to the other parties in accordance with this
Section.
SECTION 6.5 CAPTIONS.
The captions herein are for convenience of reference only and shall not be
construed as a part of this Agreement.
SECTION 6.6 GOVERNING LAW.
This Agreement shall be construed, interpreted, enforced and governed by
and under the laws of the State of Florida.
SECTION 6.7 EXHIBITS.
All of the Exhibits and other attachments thereto referred to in this
Agreement are incorporated herein by reference and shall be deemed and construed
to be a part of this Agreement for all purposes.
SECTION 6.8 SEVERABILITY.
The invalidity or unenforceability of any one or more phrases, sentences,
clauses or provisions of this Agreement shall not affect the validity or
enforceability of the remaining portions of this Agreement or any part thereof.
SECTION 6.9 ASSIGNMENT.
This Agreement may not be assigned by either party without the prior
written consent of the other party.
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SECTION 6.10 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, Sellers and Purchaser have each caused this Agreement
to be executed under seal by their respective duly authorized officers and have
caused their respective corporate seals to be affixed hereto, as of the day and
year first above written .
"SELLERS"
1-800 LOW AIR FARE, INC.
By: /s/ XXXXXX XXXXXX
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Its: President
S. TRAVEL, INC.
By: /s/ XXXXXX XXXXXX
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Its: President
"PURCHASER" 800 TRAVEL SYSTEMS, INC.
By:______________________________
Its: President
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EXHIBIT A
"Assets"
1. All furniture and fixtures currently located at the executive offices of
the Sellers, including those described on Schedule 1 hereto.
2. All telephone equipment of each Seller, wherever located.
3. One (1) uninterrupted power supply unit.
4. Letter of credit and/or deposits provided by 1-800 to the ARC in the amount
of $20,000.
5. All rights to the telephone number "0-000 XXX XXX FARE."
6. The trademark/service xxxx "1-800 LOW AIR FARE" and all goodwill associated
therewith.
7. All deposits, if any, provided by the Sellers, or either of them, to others
pursuant to the contracts or agreements described in Exhibit D hereto.
8. All rights arising under or pursuant to the contracts and agreements
described in Exhibit D hereto.
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