1
EXHIBIT 2.2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMONG
THE XXXXXX XXXXXXX GROUP, INC.
THE XXXXXX XXXXXXX GROUP, LLC
AND
800 TRAVEL SYSTEMS, INC.
List of Exhibits:
Exhibit "A": List of Assets
Exhibit "B": Note to Xxxxxx Xxxxxxx Group, LLC, and Assumed Liabilities
Exhibit "C": Indemnity and Release Agreement
Exhibit "D": Release Agreement
Exhibit "E": Promissory Note
Exhibit "F": Escrow Agreement
Exhibit "F-1": Interim Operating Agreement
Exhibit "G": Security Agreement, Memorandum of Security Agreement and UCC-1
Exhibit "G-1"" List of Put Assets and Liabilities
Exhibit "H": Telephone Transfer Documents
2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement") is dated as of November 11, 1996, among THE XXXXXX XXXXXXX GROUP,
LLC (the "Selling Shareholder"), a California limited liability company; The
Xxxxxx Xxxxxxx Group, Inc. ("Xxxxxxx"), a California corporation, and 800
TRAVEL SYSTEMS, INC. ("Travel Systems"), a Delaware corporation. For purposes
hereof, Xxxxxxx and Travel Systems are sometimes hereinafter referred to as the
"Constituent Corporations."
BACKGROUND STATEMENT
The parties hereto are parties to that certain Agreement and Plan of
Merger dated November 11, 1996, as amended by that certain Amendment Agreement
dated March 31, 1997 among such parties (together, the "Original Agreement").
The purpose of this Agreement is to amend and restate the Original Agreement in
its entirety. This Agreement shall supersede the Original Agreement in all
respects and for all purposes. Except as otherwise provided in Article XV-A
hereof, this Agreement shall be deemed effective as of November 11, 1996.
W I T N E S S E T H:
WHEREAS, the Selling Shareholder owns all of the issued and
outstanding shares of Xxxxxxx, which is engaged primarily in the telemarketing
travel business providing reservation services for domestic and international
flights under the xxxx "Fly 4 Less" (the "Business").
WHEREAS, the Boards of Directors of Xxxxxxx and Travel Systems deem it
advisable that Xxxxxxx be merged with and into Travel Systems pursuant to this
Agreement and the applicable provisions of the laws of the States of California
and Delaware (such transaction being hereinafter referred to as the "Merger");
and
WHEREAS, the Boards of Directors of Xxxxxxx and Travel Systems deem
the Merger advisable and in the best interests of each such entity and their
respective shareholders and the Boards of Directors of Xxxxxxx and Travel
Systems have approved the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
3
ARTICLE I
THE MERGER
Upon the terms and subject to the conditions set forth herein, Xxxxxxx
shall merge with and into Travel Systems upon the filing of Articles of Merger
with the Department of State of the State of Delaware in accordance with the
laws of the State of Delaware and the filing of a Certificate of Merger with
the Secretary of State of the State of California (such time of filing
hereinafter referred to as the "Effective Time"), with Travel Systems being the
corporation surviving the Merger (the "Surviving Corporation") as a corporation
organized and existing under the laws of the State of Delaware.
ARTICLE II
CERTAIN RESULTS OF THE MERGER
1. Succession By Surviving Corporation. Upon the Merger becoming
effective and by virtue thereof:
(a) Xxxxxxx and Travel Systems shall become and be a
single corporation, with Travel Systems as the Surviving Corporation, and the
separate corporate existence of Xxxxxxx shall cease.
(b) Travel Systems shall, in addition to all rights,
privileges, powers and properties vested in it prior to the Merger, succeed to
and possess, as a result of the Merger, all rights, privileges, powers,
immunities and properties (whether real, personal or mixed) of Xxxxxxx, and
such rights, privileges, powers, immunities and properties shall be vested in
it without further act or deed.
(c) All rights of creditors and all liens upon any
property of the Constituent Corporations shall be preserved unimpaired; Travel
Systems, as the Surviving Corporation, shall be subject to all the
restrictions, disabilities and duties existing immediately prior to the Merger
with respect to Xxxxxxx; and all of the debts, liabilities and obligations of
the Constituent Corporations existing immediately before the Merger shall
thenceforth attach to the Surviving Corporation and may be enforced against the
Surviving Corporation to the same extent as if said debts, liabilities and
obligations had been incurred or contracted by the Surviving Corporation;
provided, however, that nothing herein is intended to or shall extend or
enlarge any obligation or the lien of any indenture, agreement or other
instrument executed or assumed prior to the Merger.
2
4
2. Articles of Incorporation, By-Laws and Officers and Directors
of Surviving Corporation. Upon the Merger becoming effective:
(a) The Articles of Incorporation of Travel Systems in
effect immediately prior to the Merger becoming effective shall be the Articles
of Incorporation of the Surviving Corporation until amended in the manner
provided by law.
(b) The Bylaws of Travel Systems in effect immediately
prior to the Merger becoming effective shall be the Bylaws of the Surviving
Corporation until amended in the manner provided by law, the Articles of
Incorporation of the Surviving Corporation and said bylaws.
(c) After the Effective Time, the directors of the
Surviving Corporation shall be the directors of Travel Systems, and they shall
hold office until their successors have been duly elected and have qualified in
the manner provided by law and the bylaws of the Surviving Corporation. The
officers of the Surviving Corporation after the Effective Time shall be the
officers of Travel Systems, and they shall hold office until new officers are
duly appointed by the Board of Directors.
ARTICLE III
EFFECT OF MERGER UPON ISSUED
SHARES OF CONSTITUENT CORPORATIONS
1. Stock of Acquisition. At the Effective Time, all of the
shares of the capital stock of Xxxxxxx issued and outstanding immediately prior
to the Effective Time shall be converted into and become shares of the voting
common stock of Travel Systems (the "Travel Stock"), as provided in subsection
2., below. Each share of such voting common stock of Travel Systems issued
pursuant to this section shall be fully paid and nonassessable and shall be
registered under the Securities Act of 1933, as amended (the "1933 Act")
pursuant to a registration statement filed with, and declared effective by, the
U.S. Securities and Exchange Commission (the "SEC").
2. Number of Shares to be Issued. At the Effective Time, the
parties agree that Travel System shall issue and deliver to the Selling
Shareholder the greater of (i) 300,000 shares of Travel Stock or (ii) that
number of shares of Travel Stock having an aggregate value of $1,500,000, using
the IPO Opening Price (defined in Article IX below) in calculating the per
share value of the Travel Stock at the Effective Time (as applicable, the
"Initial Travel Shares").
3
5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER
The Selling Shareholder hereby represents and warrants to Travel
Systems as follows:
1. Organization and Standing: Authority. Xxxxxxx is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of California. Xxxxxxx has full power and authority to carry
on its business as a corporation and to own, hold and operate its properties
and assets, and to enter into this Agreement and to consummate the transactions
contemplated herein. Xxxxxxx has full power and authority to execute, deliver,
and perform this Agreement in accordance with its terms, and this Agreement
constitutes a valid and binding obligation of Xxxxxxx and is enforceable in
accordance with its terms.
2. Capital Stock. Xxxxxxx' authorized capital stock consists
solely of 20 million shares of common stock, no par value, of which 1,760,000
shares are issued and outstanding. All the issued and outstanding shares of
such common stock are validly issued, fully paid and non-assessable.
Immediately prior to the Effective Time there will be 1,760,000 shares of the
capital stock of Xxxxxxx issued and outstanding, all of which shall be owned by
the Selling Shareholder, free and clear of all liens, security interests,
adverse claims, demands and encumbrances of every kind and nature. No warrants,
options, or other such rights to purchase or subscribe for additional shares of
the capital stock of Xxxxxxx shall be outstanding at the Effective Time.
Xxxxxxx has no commitment to issue or sell any of its capital stock or any
securities or obligations convertible into, or exchangeable for, Xxxxxxx'
capital stock. No shares of Xxxxxxx capital stock has or is entitled to
preemptive rights.
3. Due Execution. The execution, delivery, and performance of
this Agreement has been duly authorized by the Selling Shareholder and by the
Board of Directors of Xxxxxxx. The performance and observance of and
compliance with the terms and provisions hereof by said parties will not
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of Incorporation or
By-laws of Xxxxxxx or the Articles of Organization or Operating Agreement of
the Selling Shareholder, or any agreement, indenture, deed of trust,
instrument, judgment, obligation, order or decree to which Xxxxxxx or Selling
Shareholder is a party or by which Xxxxxxx or Selling Shareholder may be bound
or affected.
4. Financial Statements. All financial statements furnished by
Xxxxxxx to Travel Systems have been prepared in accordance with generally
accepted accounting principles, applied on a consistent
4
6
basis, and fairly present the financial position and the profit and loss of
Xxxxxxx as provided therein.
5. No Subsidiaries. Xxxxxxx has no equity interest in any
corporation, partnership, joint venture, trust or other entity and has entered
into no binding agreements to obtain any such equity interest.
6. Assets and Properties. At the Effective Time, Xxxxxxx will
have good and marketable title in and to the assets described on Exhibit "A"
hereto (together, the "Assets"), and all of the Assets shall be free and clear
of all liens, security interests, adverse claims, limitations, restrictions,
demands and encumbrances, of every kind and nature. Before the Effective Time,
Xxxxxxx will have sold or otherwise transferred all of its other assets not
included in Exhibit "A" hereto to others, including but not limited to the
Selling Shareholder, in exchange for the assumption of all of Xxxxxxx'
liabilities to such persons and entities, except for the JSG Debt (defined
below) and other liabilities specifically assumed and identified on Exhibit
"B."
7. No Debts, Obligations or Agreements. Except as provided
below, and as identified on attached Exhibit "B" hereto at the Effective Time,
Xxxxxxx shall have no outstanding debts, liabilities, obligations or
contractual commitments of any kind or nature. Without limiting the generality
of the foregoing, Xxxxxxx shall, at the Effective Time, have no outstanding
liability to any person or entity for any payroll expense, vacation expense,
sick pay expense, employee or dependent medical expense or contribution,
pension or profit sharing plan contribution or expense or employment tax,
incurred or accrued at any time prior to the Effective Time; provided, however,
that, as the sole exception to the foregoing, Xxxxxxx shall be indebted to the
Selling Shareholder at the Effective Time in an amount not to exceed $650,000
(the "JSG Debt"), which indebtedness shall be due and payable not later than
the closing date of the IPO and evidenced by a promissory note in the form of
Exhibit "B-1" hereto, to be executed and delivered by Xxxxxxx immediately prior
to the Effective Time.
8. Operations. At the Effective Time (and without limiting any
other warranties and representations set forth herein):
(a) Xxxxxxx will not be a party to any employment
agreement or contract; and
(b) Xxxxxxx will be in full compliance with all
applicable laws, regulations and ordinances.
9. Litigation. There are (and, at the Effective Date, there will
be) no actions, suits, proceedings or investigations at law or in equity
pending, or to the knowledge of the Selling Shareholder, directly or indirectly
threatened against Xxxxxxx by or before any
5
0
xxxxxxx, xxxxx, xxxxxxxxx or other governmental department, commission, board,
agency or instrumentality.
10. ERISA. Xxxxxxx has no employee benefit plans as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended.
11. Taxes.
(a) Returns and Payment of Taxes. All tax returns
required to be filed on or prior to the Effective Time by Xxxxxxx have been or
prior to the Effective Time will have been filed; and all taxes shown to be due
and payable on such returns, all other taxes, duties and governmental charges
payable by Xxxxxxx, and all deficiencies, assessments, penalties and interest
relating thereto that are accrued or due and payable at or before the Effective
Time, will have been paid by Xxxxxxx at or before the Effective Date.
(b) Withholding of Taxes. There has been withheld or
collected from each payment made to each employee of Xxxxxxx the full 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 (or will
timely be) paid to the proper tax depositories or collecting authorities.
12. Trademark. The Trademark (as defined in Exhibit "A" hereto)
is duly registered exclusively in the name of Xxxxxxx with the U.S. Patent and
Trademark Office, as Reg. No. 1,662,796, and the Trademark and related
registration are free and clear of all liens, encumbrances, restrictions and
adverse claims of any kind or nature.
13. Phone Number. Xxxxxxx has the sole and exclusive rights to
the telephone number "0-000 000-0000" in the United States of America, and such
rights are free and clear of all liens, restrictions, limitations, adverse
claims, demands and encumbrances, of every kind and nature, subject only to
regulatory restrictions. Xxxxxxx is (and will, through the Effective Time,
continue to be) in full compliance with all documents and agreements relating
to its acquisition, ownership and/or utilization of such number.
14. No Material Changes. From the date hereof until the Effective
Time there shall be no material change in the assets, liabilities, business, or
financial condition of Xxxxxxx, except as provided in the Interim Operating
Agreement (as defined in Article XIII) and as except as otherwise provided or
contemplated herein.
6
8
ARTICLE V
TRAVEL SYSTEMS' WARRANTIES
AND REPRESENTATIONS TO THE SELLING SHAREHOLDER
1. Corporate Organization and Authority. Travel Systems 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. Travel Systems' execution, delivery and
performance of this Agreement and its acquisition of the capital stock of
Xxxxxxx hereunder have been duly authorized by all requisite corporate action
on the part of Travel Systems, and this Agreement constitutes, and all
agreements and other instruments and documents to be executed and delivered by
Travel Systems hereunder will constitute, Travel Systems' legal, valid and
binding obligations, enforceable against Travel Systems 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.
Travel Systems is duly qualified to do business in the State of Florida and,
prior to undertaking obligations under the Interim Operating Agreement will be
qualified to do business in the State of California.
2. Absence of Conflicts and Consent Requirements. Travel
Systems' execution and delivery of this Agreement and performance of its
obligations hereunder, including the purchase of and payment for the capital
stock of Xxxxxxx hereunder, do not and will not conflict with, violate or
result in any default under Travel Systems' articles of incorporation or bylaws
or any mortgage, indenture, agreement, instrument or other contract to which
Travel Systems is a party or by which Travel Systems or its property is bound,
nor will they violate any judgment, order, decree, law, statute, regulation or
other judicial or governmental restriction to which Travel Systems is subject.
Travel Systems' execution and delivery of this Agreement and performance of its
obligations hereunder, including the purchase of and payment for the capital
stock of Xxxxxxx 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, except as contemplated hereby.
3. Absence of Litigation. Except as disclosed in writing to
Xxxxxxx, no claim, action, proceeding or investigation is pending or, to the
knowledge of Travel Systems, threatened against Travel Systems or its business.
4. Financial Statements. All financial statements furnished by
Travel Systems to the Selling Shareholder have been prepared in accordance with
generally accepted accounting principles, applied on a consistent basis, and
fairly present the financial position and the profit and loss of Travel Systems
as provided therein.
7
9
5. Taxes.
(a) Returns and Payment of Taxes. All tax returns
required to be filed on or prior to the Effective Time by Travel Systems has
been or prior to the Effective Time will have been filed; and all taxes shown
to be due and payable on such returns, all other taxes, duties and governmental
charges payable by Travel Systems, and all deficiencies, assessments, penalties
and interest relating thereto due and payable on or before the Effective Time,
will have been paid.
(b) Withholding of Taxes. There has been withheld or
collected from each payment made to each employee of Travel Systems the full
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.
6. Stock of Travel Systems. The authorized capital stock of
Travel Systems consists of 10 million shares of common stock, having a par
value of $.01 per share each, of which 5,380,600 shares are issued and
outstanding; and 400 shares of preferred stock, par value $100.00 per share,
all of which are outstanding. All issued and outstanding shares are validly
issued, fully paid and nonassessable, and such shares have been so issued in
full compliance with all federal and state securities laws. There are no
outstanding subscriptions, options, rights, warrants (except those described in
Article VIII Section 3 below), convertible securities or other agreements or
commitments obligating Travel Systems to issue or to transfer from treasury any
additional shares of its capital stock of any class.
7. Absence of Undisclosed Liabilities. Travel Systems does not
have any debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, that is
not reflected or reserved against in Travel Systems' balance sheet as of
September 30, 1996, included in the financial statements referred to in Section
4 of this Article, except for (1) those that may have been incurred after the
date of such balance sheet and which are either (a) incurred in the ordinary
course of Travel Systems' business, or (b) disclosed in writing to Xxxxxxx, and
(2) those that are not required by generally accepted accounting principles to
be included in the balance sheet. All debts, liabilities and obligations
incurred after such date were incurred in the ordinary course of business and
are usual and normal in amount both individually and in the aggregate.
8. Trademarks. All of the trademarks, service marks, logos and
other identifying features of Travel Systems' business are owned exclusively by
Travel Systems, free and clear of all liens,
8
10
encumbrances, restrictions and adverse claims of any kind or nature.
9. Phone Number. Travel Systems has the sole and exclusive
rights to the telephone number 0-000-000-0000 in the United States of America,
and such rights are free and clear of all liens, restrictions, limitations,
adverse claims, demands and encumbrances, of every kind and nature, subject
only to regulatory restrictions. Travel Systems is (and will, through the
Effective Time, continue to be) in full compliance with all documents and
agreements relating to its acquisition, ownership and/or utilization of such
number.
10. No Material Changes. From the date hereof until the Effective
Time there shall be no material change in the assets, liabilities, business, or
financial condition of Travel Systems, except as provided in the Interim
Operating Agreement (as defined in Article XIII) and as except as otherwise
provided or contemplated herein.
ARTICLE VI
INDEMNIFICATION BY SELLING SHAREHOLDER
1. Indemnification by the Selling Shareholder. Subject to the
procedures and limitations set forth in this Article VI, the Selling
Shareholder agrees to indemnify and save harmless Travel Systems and its agents
and representatives from and against any and all Net Economic Loss (herein
defined) incurred by Travel Systems or any of the other indemnified persons or
entities arising after the Closing (defined below) out of (i) the breach of any
representation or warranty made by the Selling Shareholder in this Agreement or
in any instrument or documents required to be delivered by the Selling
Shareholder to Travel Systems pursuant to this Agreement, (ii) the Selling
Shareholder'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 the Selling Shareholder to Travel Systems pursuant to this
Agreement, and (iii) any liabilities or obligations, contingent or otherwise,
of Xxxxxxx which exist at the Effective Time and which are based upon any act,
state of facts or condition which occurred or existed before the Effective
Time, known or unknown, due or payable, except to the extent such liabilities
and/or obligations are specifically assumed hereunder by Travel Systems.
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 Travel Systems or
any of the other indemnified persons or entities arising out of the matters or
circumstances referred to in Article VI, Section 1., hereof, less the amount of
9
11
the economic benefit (if any) received by Travel Systems 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 Travel Systems after the calculation of Net Economic Loss
shall be subtracted from any amount payable by the Selling Shareholder under
this Article VI or shall be payable to the Selling Shareholder in reimbursement
for amounts already paid by the Selling Shareholder 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.
3. Indemnity Claims by Travel Systems or Others.
(a) Notice of Claim. If any matter shall arise which, in
the opinion of Travel Systems or any of the other indemnified persons or
entities, constitutes or may give rise to a Net Economic Loss subject to
indemnification by the Selling Shareholder as provided herein (an "Indemnity
Claim"), Travel Systems shall give written notice (the "Notice of Claim") of
such Indemnity Claim to the Selling Shareholder, setting forth the relevant
facts and circumstances of each Indemnity Claim in reasonable detail and the
amount of indemnity sought from the Selling Shareholder with respect thereto,
and shall give continuing notice promptly thereafter as to developments coming
to Travel Systems' attention materially affecting any matter relating to such
Indemnity Claim.
(b) Mitigation of Loss. Travel Systems 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 VI.3(b) shall not apply with
respect to a Third Party Claim (hereinafter defined) for which the Selling
Shareholder did not elect 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 Travel
Systems or any of the other indemnified persons or entities or the Assets (a
"Third Party Claim"), then Travel Systems, at the time it gives the Selling
Shareholder the Notice of Claim with respect to such Third Party Claim shall
offer to the Selling Shareholder the option to have the Selling Shareholder
assume the defense of the Third Party Claim, which option may be exercised by
the Selling Shareholder by written notice to Travel Systems within fifteen (15)
days after Travel Systems gives written notice to the Selling Shareholder
thereof. If the Selling Shareholder so exercises the option, then the Selling
Shareholder shall at its own
10
12
expense assume the defense of the Third Party Claim, shall upon the final
determination thereof fully discharge at their own expense all liability of
Travel Systems and the other indemnified persons and entities with respect to
the Third Party Claim, and shall be entitled, in their sole discretion and at
their sole expense but without any liability of Travel Systems or any of the
other indemnified persons or entities therefor, to compromise or settle the
Third Party Claim upon terms acceptable to the Selling Shareholder. From the
time the Selling Shareholder so assumes such defense and while such defense is
pursued diligently and in good faith, the Selling Shareholder shall have no
further liability for attorneys' fees or other costs of defense thereafter
incurred by Travel Systems and the other indemnified persons and entities in
connection with such Third Party Claim. If the Selling Shareholder does not
exercise the option to defend such Third Party Claim, then Travel Systems or
any of the other indemnified persons or entities shall undertake to defend such
Third Party Claim itself. Travel Systems and/or the other persons and entities
indemnified hereunder shall conduct such defense as would a reasonable and
prudent person to whom no indemnity were available, shall permit the Selling
Shareholder (at the Selling Shareholder's expense) to participate in (but not
control) such defense, and shall not settle or compromise such Third Party
Claim without the Selling Shareholder's consent (but such consent shall not of
itself establish the Selling Shareholder's indemnity liability therefor).
ARTICLE VI-A
INDEMNIFICATION BY TRAVEL SYSTEMS
1. Indemnification by the Travel Systems. Subject to the
procedures and limitations set forth in this Article VI-A, Travel Systems
agrees to indemnify and save harmless the Selling Shareholder and agents and
representatives from and against any and all Net Economic Loss (herein defined)
incurred by the Selling Shareholder or any of the other indemnified persons or
entities arising after the Closing (defined below) out of (i) the breach of any
representation or warranty made by Travel Systems in this Agreement or in any
instrument or documents required to be delivered by Travel Systems to the
Selling Shareholder pursuant to this Agreement, (ii) Travel Systems' 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
Travel Systems to the Selling Shareholder pursuant to this Agreement, and
(iii) any liabilities or obligations, contingent or otherwise, of Travel
Systems which exist at the Effective Time and which are based upon any act,
state of facts or condition which occurred or existed before the Effective
Time, known or unknown, due or payable, except to the extent such liabilities
and/or obligations are specifically assumed hereunder by the Selling
Shareholder.
11
13
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 the Selling
Shareholder or any of the other indemnified persons or entities arising out of
the matters or circumstances referred to in Article VI - A Section 1., hereof,
less the amount of the economic benefit (if any) received by the Selling
Shareholder 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 the Selling Shareholder
after the calculation of Net Economic Loss shall be subtracted from any amount
payable by Travel Systems under this Article VI-A or shall be payable to Travel
Systems in reimbursement for amounts already paid by Travel Systems 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.
3. Indemnity Claims by the Selling Shareholder or Others.
(a) Notice of Claim. If any matter shall arise which, in
the opinion of the Selling Shareholder or any of the other indemnified persons
or entities, constitutes or may give rise to a Net Economic Loss subject to
indemnification by Travel Systems as provided herein (an "Indemnity Claim"),
the Selling Shareholder shall give written notice (the "Notice of Claim") of
such Indemnity Claim to Travel Systems, setting forth the relevant facts and
circumstances of each Indemnity Claim in reasonable detail and the amount of
indemnity sought from Travel Systems with respect thereto, and shall give
continuing notice promptly thereafter as to developments coming to the Selling
Shareholder's attention materially affecting any matter relating to such
Indemnity Claim.
(b) Mitigation of Loss. The Selling Shareholder 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 VI-A.3(b) shall not apply with
respect to a Third Party Claim (hereinafter defined) for which Travel Systems
did not elect 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 the Selling
Shareholder or any of the other indemnified persons or entities or the Assets
(a "Third Party Claim"), then the Selling Shareholder, at the time it gives
Travel Systems the Notice of Claim with respect to such Third Party Claim shall
offer to Travel
12
14
Systems the option to have Travel Systems assume the defense of the Third Party
Claim, which option may be exercised by Travel Systems by written notice to the
Selling Shareholder within fifteen (15) days after the Selling Shareholder
gives written notice to Travel Systems thereof. If Travel Systems so exercises
the option, then Travel Systems shall at its own expense assume the defense of
the Third Party Claim, shall upon the final determination thereof fully
discharge at their own expense all liability of the Selling Shareholder and the
other indemnified persons and entities with respect to the Third Party Claim,
and shall be entitled, in their sole discretion and at their sole expense but
without any liability of the Selling Shareholder or any of the other
indemnified persons or entities therefor, to compromise or settle the Third
Party Claim upon terms acceptable to Travel Systems. From the time Travel
Systems so assumes such defense and while such defense is pursued diligently
and in good faith, Travel Systems shall have no further liability for
attorneys' fees or other costs of defense thereafter incurred by the Selling
Shareholder and the other indemnified persons and entities in connection with
such Third Party Claim. If Travel Systems does not exercise the option to
defend such Third Party Claim, then the Selling Shareholder or any of the other
indemnified persons or entities shall undertake to defend such Third Party
Claim itself. The Selling Shareholder and/or the other persons and entities
indemnified hereunder shall conduct such defense as would a reasonable and
prudent person to whom no indemnity were available, shall permit Travel Systems
(at Travel Systems' expense) to participate in (but not control) such defense,
and shall not settle or compromise such Third Party Claim without Travel
Systems' consent (but such consent shall not of itself establish Travel
Systems' indemnity liability therefor).
ARTICLE VI-B
OTHER INDEMNITIES AND RELEASES
1. Former Shareholder Indemnity and Release; Note Holder Release.
(a) To induce Travel Systems to enter into this
Agreement, the Selling Shareholder shall, at the Closing (defined below), cause
those of its Members who are former shareholders of Xxxxxxx from whom the
Selling Shareholder acquired the stock of Xxxxxxx to execute and deliver to
Travel Systems an indemnity and release agreement in the form of Exhibit "C"
hereto (the "Indemnity Agreement"). For purposes hereof, said former
shareholders of Xxxxxxx consist of the following persons and entities: Xxxxx
Xxxxxxxx; Sovova Beach, Inc.; Xxx Xxxxxxxx; XXXX, Inc.; and WH/JSG L.L.C. (the
"Former Shareholders).
(b) To induce Travel Systems to enter into this
Agreement, the Selling Shareholder shall, at the Closing (defined below) cause
all of the Note Holders of Xxxxxxx to execute and
13
15
deliver to Travel Systems a release agreement in the form of Exhibit "D" hereto
(the "Release Agreement"). For purposes hereof, the aforesaid Note Holders of
Xxxxxxx consist of the following persons and entities: Western Horizons, Ltd.;
MOHS, Inc.; Sovova Beach, Inc.; 800 Ways to Fly; Xxxx Xxxxxxxx; and Xxxxxx
Xxxxxxxx (the "Note Holders").
ARTICLE VII
CONDITIONS TO CLOSING
1. Travel Systems' Obligations. The obligations of Travel Systems
to consummate the Merger hereunder are subject to its satisfaction with respect
to each of the following conditions:
(a) The representations and warranties of the Selling
Shareholder set forth herein shall be true and correct in all material respects
on the date hereof and at the Effective Time, and the Selling Shareholder shall
have complied in all material respects with all covenants and agreements set
forth herein to be performed by it, prior to the Effective Time or the Closing.
(b) On the date hereof until immediately prior to the
Effective Time, no injunction, restraining order or other order of any federal
or state court in the United States which prevents the consummation of the
Merger shall be in effect and no litigation shall be pending seeking any such
order.
(c) On the date hereof until immediately prior to the
Effective Time, no statute, rule or regulation shall have been enacted by any
state or federal government or governmental agency in the United States which
would prevent the consummation of the Merger.
(d) The Former Shareholders shall have executed and
delivered to Travel Systems the Indemnity Agreement.
(e) The Note Holders shall have executed and delivered to
Travels Systems, the Release Agreement.
(f) The IPO shall have occurred.
2. Selling Shareholder's Obligations. The obligations of the
Selling Shareholder to consummate the Merger hereunder are subject to its
satisfaction with respect to each of the following conditions:
(a) The representations and warranties of Travel Systems
set forth herein shall be true and correct in all material respects on the date
hereof and at the Effective Time, and Travel Systems shall have complied in
all material respects with all covenants and
14
16
agreements set forth herein to be performed by Travel Systems prior to the
Effective Time.
(b) On the date hereof and until immediately prior to the
Effective Time no injunction, restraining order or other order of any federal
or state court in the United States which prevents the consummation of the
Merger shall be in effect and no litigation shall be pending seeking any such
order.
(c) On the date hereof and until immediately prior to the
Effective Time no statute, rule or regulation shall have been enacted by any
state or federal government or governmental agency in the United States which
would prevent the consummation of the Merger.
(d) The IPO shall have occurred.
ARTICLE VIII
COVENANTS OF THE PARTIES
1. No Reg. S Offerings. Travel Systems agrees that none of its
common stock shall be registered under the provisions of SEC Regulation S at
any time that the Selling Shareholder is a holder of the common stock of Travel
Systems acquired under the terms of this Agreement.
2. Nonsolicitation. If Travel Systems does not register its
common stock with the SEC and this Agreement terminates under the provisions of
Section 1(b) of Article IX hereof, then Travel Systems agrees that it shall not
for a period of three years from March 31, 1997, use or disclose to any other
person or entity any Trade Secrets of Xxxxxxx. For purposes hereof, "Trade
Secrets" shall mean any information or material that is (a) confidential in
nature, (b) not generally known in the industry, and (c) identified or marked
as a Trade Secret by Xxxxxxx upon delivery thereof to Travel Systems.
3. Issuance of Warrants.
(i) At the Closing, Travel Systems shall issue to the
Selling Shareholder 250,000 warrants for 250,000 shares of Travel Systems'
common stock, which warrants shall not be registered with the SEC (except as
otherwise provided in Subparagraph (ii) of this Section 3) and shall have the
same exercise price and the same terms and conditions as the warrants to be
sold to the public pursuant to the Registration Statement.
(ii) Travel Systems agrees that, at its sole cost and
expense, Travel Systems shall file to register with the SEC all of the warrants
issued to the Selling Shareholder under Article VIII, Section 3(i) above,
within 180 days after the closing date of the
15
17
IPO, and shall diligently pursue to complete such registration as expeditiously
as possible. If such filing is not made by Travel Systems within said 180-day
period, Travel Systems shall immediately pay to the Selling Shareholder the sum
of $100,000 and shall promptly file to register the aforesaid warrants with the
SEC and diligently pursue to complete such registration as expeditiously as
possible.
4. Advance of Fees. Travel Systems hereby agrees to advance to
the Company the sum of $100,000 for the payment of legal, accounting and other
expenses incurred by the Company and/or the Selling Shareholder in connection
with the transactions contemplated hereby, which sum shall be advanced as
follows:
Payment Date Amount
------------ ------
May 30, 1997 $50,000
June 13, 1997 $50,000
ARTICLE IX
TERMINATION AND ABANDONMENT
1. General. Anything in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the Merger abandoned at
any time prior to the Effective Time as follows:
(a) Mutual Consent. By the mutual consent of the
Constituent Corporations.
(b) IPO; Expiration Date. Travel Systems represents to
the Selling Shareholder that Travel Systems currently plans to file a
registration statement with the SEC on SEC Form SB-2 (the "Registration
Statement") and it is anticipated that the effective date of the initial public
offering (the "IPO") will occur no later than August 31, 1997 (the initial IPO
price per Share is referred to herein as the "Initial IPO Price").
Notwithstanding any other provision to the contrary herein contained, the
parties hereto agree and understand that, if the effective date of the IPO does
not occur by August 31, 1997 (the "IPO Deadline"), then this Agreement shall
automatically terminate and expire and no party shall have any liability
whatsoever to the other party under this Agreement, other than to terminate the
Escrow Agreement (defined below) and the Interim Operating Agreement in
accordance with their respective terms.
2. Expenses if Merger Terminated. Anything herein or elsewhere to
the contrary notwithstanding, in the event of the termination of this Agreement
under the provisions of this Article, each party hereto shall pay its own
expenses, including, without limiting the generality of the foregoing, the fees
and expenses of its agents, representatives, counsel, and accountants
incidental to
16
18
the preparation of this Agreement and all matters related thereto, and no party
shall be liable to any other party for any expenses or damages incurred in
connection with the Agreement or the termination thereof.
ARTICLE X
CLOSING DATE AND PROCEDURES
1. Closing Date. The consummation of the Merger contemplated
hereby (the "Closing") shall be held at Xxxxxxx' executive offices in San
Diego, California at 10:00 a.m. (local time) on or before the closing date of
the IPO. The date on which the Closing occurs is referred to herein as the
"Closing Date."
2. Closing Procedures. On or immediately prior to the Closing
Date, the parties hereto shall exchange applicable documents pursuant to the
terms of this Agreement and as may be reasonably requested by any party hereto
and shall cause to be executed, delivered, and, as reasonably promptly as
possible, filed and recorded all instruments and shall cause all other acts to
be done, as shall be required to make the Merger effective under the laws of
the State of Delaware.
ARTICLE XI
ESCROW PROCEDURES
1. Escrow Provisions. Concurrently with the execution and
delivery of this Agreement, the parties shall execute and deliver an escrow
agreement in the form of Exhibit "F" attached hereto (the "Escrow Agreement"),
pursuant to which (I) Travel Systems shall deliver to the escrow agent
thereunder the following: (a) cash in the amount of $46,665.00 (the "Cash
Deposit"); (b) a promissory note (the "Note") in the form of Exhibit "E" hereto
from Travel Systems to the Selling Shareholder (which Note shall have an
initial outstanding principal balance as calculated in Article XV below and be
payable to the Selling Shareholder on the closing date of the IPO); (c)
Security Agreement, Memorandum of Security Agreement and UCC-1 (Exhibit "G"),
Telephone Transfer Documents (Exhibit "H"); and (d) certificates representing
the shares of the authorized but previously unissued voting common stock of
Travel Systems to be issued to the Selling Shareholder in the Merger; and (II)
the Selling Shareholder shall deliver to the escrow agent serving under the
Escrow Agreement all of the certificates representing the outstanding capital
stock of Xxxxxxx, the Indemnity Agreement signed by all of the Former
Shareholders, and the Release Agreement signed by all of the Note Holders. The
aforesaid documents, agreements and certificates shall be executed by the party
or parties tendering the same to the escrow agent, but such instruments shall
be undated. The parties agree that the Cash Deposit, when disbursed from
escrow to the Selling Shareholder,
17
19
shall constitute the license fee due the Interim License Agreement between
Travel Systems and Xxxxxxx.
2. Escrow Agent. The escrow agent under the Escrow Agreement
will be Mission Valley Escrow, with any and all escrow fees and expenses of
such agent and its counsel to be shared equally by the Selling Shareholder and
Travel Systems.
3 Disbursement from Escrow. At the Closing, the parties will
cause the Escrow Agent to disburse the Note, the Security Agreement, UCC-1 and
Memorandum of Service Xxxx Assignment and the certificates described above to
the appropriate party or parties under the terms of this Agreement. The
parties acknowledge that they have caused the Escrow Agent to disburse the Cash
Deposit to the Selling Shareholder in accordance with this Agreement and the
Escrow Agreement.
ARTICLE XII
CONTINGENT SHARES
1. Two Year Provision. If, on the second annual anniversary date
of the Closing Date, the value of the Initial Travel Shares then held by the
Selling Shareholder (or its members), together with the aggregate amount of
cash and the fair market value of any assets or properties received by the
Selling Shareholder (or its members) in connection with the sale of all or any
of the Initial Travel Shares (at the then existing fair market value thereof)
prior to the second annual anniversary of the Closing Date, is less than
$2,571,429.00, then Travel Systems shall issue to the Selling Shareholder, on
the second annual anniversary of the Closing Date, additional shares of Travel
Systems' voting common stock, using the bid price of Travel Systems' stock on
the second annual anniversary of the Closing Date (or, if such date is a
Saturday, Sunday or Federal Holiday, the immediately preceding business day on
which Travel Systems' stock shall have been traded); and an appropriate number
of additional shares of Travel Systems' voting common stock shall be issued to
the Selling Shareholder based upon such price in order to make-up any such
deficiency (the "Additional Shares").
2. 120-Day Estimate. The parties agree that not later than 120
days prior to the second annual anniversary date of the IPO, the parties will
estimate the number of Additional Shares to be issued to the Selling
Shareholder by Travel Systems under this Article, using the latest bid price of
Travel Systems' stock. Within 90 days prior to such second anniversary date,
Travel Systems will take whatever action is necessary to register the projected
number of Additional Shares under the 1933 Act, by filing a registration
statement with the SEC, it being the intent that, on the such anniversary date,
the Additional Shares issued to the Selling Shareholder under this Article will
be registered under the 1933 Act pursuant to a registration statement filed
with the SEC
18
20
and declared effective by the SEC on or before, or no later than 30 days after,
such second anniversary date with the SEC or that such registration will be
imminent. Travel Systems shall update its estimate of the Additional Shares to
be issued, if any, at least 10 days prior to such second anniversary date.
3. Transfer Restrictions. The Selling Shareholder hereby agrees
that all of the Initial Travel Shares shall be subject to the following
transfer restrictions (which restrictions shall be expressly set forth in a
legend on each certificate representing all or any part of the Initial Travel
Shares):
(a) During the first 30-day period immediately following the
closing date of the Merger (the "First Month"), all of the
Initial Travel Shares shall be non-transferable;
(b) During the consecutive 11-month period immediately following
the expiration of the First Month (the "First Year"), the
Selling Shareholder may sell, transfer or convey up to 4,546
Initial Travel Shares per month in bonafide arm's length
transactions for cash only (and if, during any such month, the
actual number of such shares sold, transferred or conveyed by
the Selling Shareholder in less than 4,546, the difference
thereof may be carried forward and added to the minimum number
of Initial Travel Shares that may be sold by the Selling
Shareholder in any subsequent month, without regard to the
restrictions set forth herein);
(c) During the consecutive 12-month period immediately following
the expiration of the First Year (the Second Year"), the
Selling Shareholder may sell, transfer or convey up to 20,833
Initial Travel Shares per month in bonafide arm's length
transactions for cash only(and if, during any such month, the
actual number of such shares sold, transferred or conveyed by
the Selling Shareholder is less than 20,833, the difference
thereof may be carried-forward and added to the minimum number
of Initial Travel Shares that may be sold by the Selling
Shareholder in any subsequent month, without regard to the
restrictions set forth herein); and
(d) There shall be no transfer restrictions imposed upon the
Initial Travel Shares under the terms hereof after the
expiration the Second Year.
Provided, however, that trades of common stock not effectuated on an exchange,
shall not be subject to the limitations of this Article XII, Section 3, so long
as such shares are subject to the limitations as set forth in the hands of the
transferee of such shares. Provided, further, however, that the Selling
Shareholder may exceed the volume transfer restrictions imposed under this
19
21
Section with, and only with, the prior written consent of the Travel Systems,
which consent may not be reasonably withheld. The parties hereto, in
determining the reasonableness of a consent, shall examine average daily
trading volumes, and price fluctuations created by certain volume trades.
Travel Systems shall use its best efforts to remove a legend from stock
certificates to facilitate the expeditious sale of stock under this Article
XIII, Section 3.
ARTICLE XIII
INTERIM OPERATING AGREEMENT
On the date hereof, the parties hereto shall enter into and deliver an
interim operating agreement in the form of Exhibit "F-1" hereto, and certain
related agreements specified therein, (the "Interim Operating Agreements"),
pursuant to which Travel Systems shall operate the Business as therein
provided.
ARTICLE XIV
PUT OPTION AND RIGHT
1. Put Option and Right. For a period of 120 days after the
Closing Date (the "Option Period"), the Selling Shareholder shall have the
option and right (the "Put Option") to require Travel Systems to purchase from
the Selling Shareholder, and Travel Systems shall be obligated to purchase from
the Selling Shareholder, the Put Assets described on Exhibit "G-1" hereto,
subject only to the Put Liabilities described on said Exhibit "G-1" that arise
after the effective date of the Interim Operating Agreements. If the Selling
Shareholder elects to exercise the Put Option, the Selling Shareholder shall
give written notice thereof ("Notice of Exercise") to Travel Systems prior to
the expiration of the Option Period. Upon the timely giving of such notice as
provided herein, Selling Shareholder shall be obligated to sell to Travel
Systems, and Travel Systems shall be obligated to purchase from the Selling
Shareholder, the Put Assets, subject only to the Put Liabilities that arise on
or after the effective date of the Interim Operating Agreements, and otherwise
free and clear of all liens and encumbrances of any kind or nature. The
closing of the Put Option shall take place within 15 days after the Notice of
Exercise and shall take place at the executive offices of Xxxxxxx (the "Closing
Location"). At such closing, Travel Systems shall pay the entire purchase
price of $50,000 (payable in cash by cashier's check or by wire transfer) for
the Put Assets and the Selling Shareholder shall execute and deliver to Travel
Systems a xxxx of sale and/or assignments for the Put Assets, in form and
substance reasonably satisfactory to Travel Systems, together with the Put
Assets, at the Closing Location. Travel Systems shall, at
20
22
such closing, execute and deliver to the Selling Shareholder whatever documents
or agreements may be necessary to evidence its assumption of the Put
Liabilities, in form and substance reasonably satisfactory to the Selling
Shareholder.
ARTICLE XV
CALCULATION OF PROMISSORY NOTE; OFFSET RIGHTS
The parties hereto agree and understand that the principal amount of
the Note shall be calculated as follows: $1,653,335 less the sum of (y) and (z)
where (y) is equal to the amount of the JSG Debt on the Closing Date and (z) is
equal to the amount advanced by Travel Systems under the provision of Article
VIII, Section 4 hereof (but the amount of (z) shall not under any circumstances
exceed $75,000).
ARTICLE XV-A
MUTUAL RELEASE
Effective as of May 30, 1997 (the date on which the agreement is
executed and delivered by the parties), each party does hereby fully release,
acquit and forever discharge each of the other parties hereto, including their
respective successors and assigns, of and from any and all claims, demands,
damages, actions, and causes of action, of any kind or nature whatsoever,
arising from any breach, default, violation, or alleged breach, default, or
violation, by any such other party or parties that occurred, or is alleged to
have occurred, on or prior to May 30, 1997 and arising under or pursuant to
this Agreement or the Original Agreement or any of the documents or agreements
executed in connection therewith, including, without limitation, the Interim
Operating Agreement. Without limiting the generality of the foregoing, Travel
Systems releases the Selling Shareholder and the Company from all of the
matters described in its letter dated February 28, 1997 to Xx. Xxxxx Xxxxxxxx,
Chairman of the Board. The Xxxxxx Xxxxxxx Group, INC., and the Selling
Shareholder releases Travel Systems and the Company from all of the matters
described in its letter of March 6, 1997 to Xx. Xxxx Xxxxxxxx, President, 800
Travel Systems, Inc.
ARTICLE XVI
MISCELLANEOUS
1. Survival of Representations and Warranties. The warranties,
representations, covenants and indemnities of the parties hereto shall survive
for a period of 24 months after the Closing of the Merger and may survive such
period only if a written claim alleging a breach or violation of any such
warranty, representation, covenant or indemnity is given by an aggrieved
21
23
party to the parties hereto before the expiration of such 24-month period.
2. Counterparts. For the convenience of the parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original.
3. Waiver of Compliance. Any failure of any party hereto to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing to the other parties, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of or estoppel with respect to any
subsequent or other failure.
4. Notices. Any notices or other communications required or
permitted under this Agreement shall be sufficiently given if hand delivered or
sent by first class certified mail, return receipt requested, or by facsimile,
overnight courier or telegram, addressed as follows:
800 Travel Systems, Inc.
0000 Xxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Facsimile No : (000)000-0000
With a copy to:
Vincent, Berg, Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Facsimile No: 000-000-0000
The Selling Shareholder/Xxxxxxx
Messrs. Xxxxxx Xxxxxxxx and Xxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile Nos.: (000) 000-0000
(000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxxxx, Esq,
Xxxxx & Xxxxxxxx, PLC
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
22
24
5. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented by mutual written consent
of the parties.
6. Partial Invalidity. If any term, provision, section, sentence
or paragraph of this Agreement shall be found to be invalid or unenforceable by
a court of competent jurisdiction, the remainder of this Agreement shall remain
valid and enforceable to the fullest extent possible by law.
7. Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assignable by any of
the parties hereto without the prior written consent of the other parties.
8. Governing Law. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with the laws of
the State of Delaware, both substantive and remedial, without giving effect to
the principles of conflicts of law and choice of law thereof.
9. Headings. The headings of the section and articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or be used in the interpretation of the language of this Agreement.
10. Entire Agreement. This Agreement, including any documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, warranties, covenants or undertakings other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
11. Attorneys' Fees. If a party commences or is made a party to
an action or arbitration proceedings to enforce or interpret the terms of this
Agreement, or to obtain a declaration of rights under this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover from
the other party all attorneys' fees, costs and expenses incurred in connection
with such action or proceeding or any appeal or enforcement of such action or
proceeding.
12. Escrow Agreement. The parties agree forthwith to deposit this
Agreement and the other documents executed in connection therewith with the
Escrow Agent and to amend the Escrow Agreement as and to the extent necessary
to comply with the terms hereof.
23
25
IN WITNESS WHEREOF, each of the parties, hereto has caused this
Agreement and Plan of Merger to be executed on the first date above written.
"Xxxxxxx"
THE XXXXXX XXXXXXX GROUP, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------
President
Attest: /s/ Xxx Xxxxxxxx
-------------------------
,Secretary
"Travel Systems"
800 TRAVEL SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------
Its: President
Attest:
,Secretary
"Selling Shareholder"
THE XXXXXX XXXXXXX GROUP, LLC
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Manager
24
26
EXHIBIT "A"
o The service xxxx 1-800 FLY 4 LESS, U.S. Department of
Commerce, Patent and Trademark Office, Registration No.
1,662,796, Serial No. 74/108480 (the "Service Xxxx"); and
o The telephone number 0-000-000-0000 (the "Number"), and
related service marks, logos and other identifying features
associated with the Service Xxxx and the Number.
o All miscellaneous office supplies.
25
27
EXHIBIT "B"
NOTE TO XXXXXX XXXXXXX GROUP, LLC AND ASSUMED LIABILITIES
Yellow Page, Radio and Lowfare map agreements; promissory note
from The Xxxxxx Xxxxxxx Group, Inc., payable to The Xxxxxx
Xxxxxxx Group, LLC dated on or about the date hereof and
described more particularly in Exhibit "I" hereto.
26
28
EXHIBIT "B-1"
JSG NOTE
27
29
EXHIBIT "C"
INDEMNITY AND RELEASE AGREEMENT
28
30
EXHIBIT "D"
RELEASE AGREEMENT
29
31
EXHIBIT "E"
PROMISSORY NOTE
30
32
EXHIBIT "F"
ESCROW AGREEMENT
31
33
EXHIBIT "F-1"
INTERIM OPERATING AGREEMENT
32
34
EXHIBIT "G"
MEMORANDUM OF SECURITY AGREEMENT AND UCC-1
33
35
EXHIBIT "G-1"
THE PUT ASSETS
2. Telephone switch and equipment.
2. All AT&T computer equipment.
4. All Excell printers and all office furniture.
5. Master lease time clock system.
6. All miscellaneous office supplies and equipment.
7. All manufacturer's and other warranties relating to any of the
foregoing.
THE PUT LIABILITIES
1. Financing and service arrangements for telephone switch and
equipment described in Exhibit "G" to this Agreement -
Schedule 1 attached hereto.
2. Frontier long distance contract - Schedule 2 attached hereto.
3. San Diego building lease - Schedule 3 attached hereto.
4. Tokai copier lease - Schedule 4 attached hereto.
5. All liabilities arising after the effective date of the
Interim Operating Agreement under other leases relating to the
"Put Assets."
34
