Exhibit 10.1
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AMENDMENT AGREEMENT
by and among
MYTRAVEL CANADA HOLIDAYS INC.,
VE HOLDINGS, INC.,
SUNTRIPS, INC.,
RCG COMPANIES INCORPORATED,
FLIGHTSERV, INC.,
FS TOURS, INC.,
and
FS SUNTOURS, INC.,
Dated as of
November 4, 2004
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AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT, dated as of November 4, 2004 (this
"Agreement"), by and among MYTRAVEL CANADA HOLIDAYS INC., a Canadian corporation
("MyTravel Canada"), VE HOLDINGS, INC., a Delaware corporation ("VE Holdings"),
SUNTRIPS, INC., a California corporation ("SunTrips"), RCG COMPANIES
INCORPORATED f/k/a eResource Capital Group, Inc., a Delaware corporation
("RCG"), FLIGHTSERV, INC., a Delaware corporation and a wholly-owned subsidiary
of RCG ("Flightserv"), FS TOURS, INC., a Delaware corporation and a wholly-owned
subsidiary of Flightserv ("FS Tours") and FS SUNTOURS, INC., a Delaware
corporation and a wholly-owned subsidiary of Flightserv ("FS SunTours"). VE
Holdings and SunTrips are each referred to herein individually as "Seller" and
collectively as "Sellers". FS Tours and FS SunTours are each referred to herein
individually as a "Purchaser" and collectively as "Purchasers". Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Asset Purchase Agreement (as hereinafter defined).
RECITALS:
WHEREAS, Sellers and Purchasers are parties to that certain Amended and
Restated Asset Purchase Agreement, dated as of October 31, 2003 (the "Asset
Purchase Agreement"), pursuant to which Sellers have sold to Purchaser
substantially all of the assets of Sellers;
WHEREAS, in connection with the Asset Purchase Agreement, in payment of
the Purchase Price thereunder, Purchasers and Flightserv have, jointly and
severally, issued in favor of Sellers that certain $10,000,000 Promissory Note,
dated October 31, 2003 (the "Purchase Price Note");
WHEREAS, MyTravel Canada, Flightserv and Purchasers are parties to that
certain Purchase Agreement Supplement, dated as of October 31, 2003 (the
"Purchase Agreement Supplement"), pursuant to which MyTravel Canada provides
certain services to Purchasers;
WHEREAS, RCG and Sellers are parties to that certain Stock Pledge
Agreement, dated as of October 31, 2003 (the "Stock Pledge Agreement", and
collectively with the Asset Purchase Agreement, the Purchase Agreement
Supplement and the Stock Pledge Agreement the "Transaction Documents"), pursuant
to which RCG has pledged 3,809,524 shares of the common stock, par value $.001
per share, of Lifestyle Innovations, Inc. in order to secure the obligations of
Purchasers and Flightserv under the Purchase Price Note; and
WHEREAS, the parties to the Transaction Documents wish to amend the
Transaction Documents specified herein in the manner and upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, subject to and upon the conditions herein set
forth, the specified Transaction Documents are hereby amended and the parties
hereto hereby agree as follows:
ARTICLE I
Certain Agreements
Section 1.1 Letter of Credit. Flightserv and/or Purchasers shall deliver
to MyTravel Airways Limited, an English corporation and an affiliate of MyTravel
Canada ("MyTravel Airways"), a letter of credit in favor of MyTravel Airways, in
form and substance reasonably satisfactory to MyTravel Canada, in the amount of
Five Hundred Thousand Dollars ($500,000) (the "Letter of Credit"), securing the
obligations of each of RCG, Flightserv and each Purchaser under Section 1.4.
Section 1.2 Novation Agreement. RCG, Flightserv and/or Purchasers shall
use commercially reasonable efforts to cause ▇▇▇▇ International Airlines, Inc.
("▇▇▇▇") or another third party to negotiate and enter into a novation agreement
(the "Novation Agreement") with Finova Capital Corporation ("Finova"), in form
and substance reasonably satisfactory to MyTravel Canada, whereby (i) ▇▇▇▇ or
such third party or an Affiliate of either of the foregoing shall fully and
finally assume all obligations of MyTravel Airways, MyTravel Canada, Sellers and
any of their Affiliates under the Aircraft Lease Agreement, dated as of February
5, 2003 (the "Master Lease"), between Finova and MyTravel Airways relating to
the Boeing 757 aircraft bearing MSN 25488 which is currently operating under
Ryan's certificate (as may be modified, supplemented or amended from time to
time) and (ii) as a result thereof, MyTravel Airways, MyTravel Canada, Sellers
and each of their Affiliates shall be fully and finally released of all
obligations relating to or arising out of such lease. Upon (and only upon)
execution of the Novation Agreement and delivery thereof to MyTravel Canada,
MyTravel Canada shall cause MyTravel Airways to (i) deliver a written
designation of ▇▇▇▇ as beneficiary under the Letter of Credit and (ii) surrender
the Letter of Credit for delivery to such designee and, upon such designation
and delivery, MyTravel Airways shall no longer have any rights or obligations
thereunder.
Section 1.3 Purchase Price Note. (i) In consideration of the issuance of
the Letter of Credit, the entrance by RCG, Flightserv and/or Purchasers (or
their designee(s)) into negotiations relating to the Novation Agreement and the
value provided to Sellers in connection with the foregoing and (ii) as an
inducement to HPC Capital Management to have consummated a financing transaction
with RCG, Sellers hereby consent to the amendment and restatement of the
Purchase Price Note, in accordance with Section 7 thereof and in the form
attached hereto as Exhibit A (the "Amended Purchase Price Note"), in order to
reduce the aggregate principal amount due thereunder and revise the payment
terms thereof. Upon such amendment and restatement, Sellers shall return the
original Purchase Price Note to Purchasers.
Section 1.4 Finova Lease Obligations. Flightserv and each Purchaser,
jointly and severally, shall hereby indemnify, defend and hold harmless MyTravel
Airways, MyTravel Canada, each of its Affiliates, and each member of the Seller
Group (the foregoing entities, collectively, the "MyTravel Entities") in respect
of all obligations (other than obligations with regard to payment of deferred
rent from a date prior to the date hereof) of any MyTravel Entity under, and all
Damages imposed upon or incurred or suffered by any MyTravel Entity arising out
of, relating to or in connection with, the Master Lease, in each case arising on
or after October 31, 2003. Upon (and only upon) execution of the Novation
Agreement and delivery thereof to MyTravel Canada, the obligations of Flightserv
and each Purchaser pursuant to this Section 1.4 shall automatically terminate
(other than with respect to any such obligations arising out of events or
circumstances occurring on or prior to the date of such execution and delivery).
Section 1.5 No Default. To the knowledge of MyTravel Airways and MyTravel
Canada, as of the date hereof there exist no facts or circumstances which
constitute (or with or without notice or passage of time or both would
constitute) or could reasonably be expected to constitute, a default under the
Master Lease.
ARTICLE II
Amendments
Section 2.1 Purchase Agreement Supplement. Pursuant to Section 8 of the
Purchase Agreement Supplement, the following Sections thereof are hereby amended
as follows:
(a) Section 2 of the Purchase Agreement Supplement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the following:
"Service Fees. During the Term, as compensation for the Services
provided to Purchasers under this Agreement, each Purchaser and
Flightserv shall have a joint and several obligation to make payments
to MyTravel for each month (or portion thereof) during the Term in
accordance with the schedule of fees and other costs and expenses to be
passed through to Purchasers set forth on Exhibit B hereto (the "Fees
and Costs"). In addition to the payments described in the preceding
sentence, Purchasers and Flightserv acknowledge that unpaid Fees and
Costs in the aggregate amount of $399,346 are owed to MyTravel Canada
and payable by each of them under this Agreement, and as a result each
Purchaser and Flightserv shall have a joint and several obligation to
make payments to MyTravel of such unpaid Fees and Costs in equal
monthly installments of $16,139.42 beginning on July 1, 2005 and the
first day of each month thereafter until such aggregate amount has been
satisfied (such payments to be in addition to, and not in lieu of, any
amounts that are otherwise due at such times hereunder). All amounts of
all Fees and Costs and all other amounts described herein and in the
Exhibits hereto shall be in United States Dollars."
(b) Section 3 of the Purchase Agreement Supplement is hereby amended by
deleting it in its entirety and inserting, in lieu thereof, the following:
"Term. The term of this Agreement shall commence on the date hereof and
shall end October 31, 2010 (the "Term") unless earlier terminated in
accordance with this Section 3; provided, however, that if Purchasers
desire to continue receiving any Services from MyTravel following
termination of this Agreement, upon notice from Purchasers to MyTravel not
less than sixty (60) days prior to the date upon which the Term is to
expire, MyTravel, Purchasers and Flightserv shall negotiate in good faith
an arrangement for the continuation of such Services on terms to be
mutually agreed upon by the parties. In the event of a material breach of
any of the terms or provisions hereof, Purchasers and Flightserv (in the
event of such breach by MyTravel) or MyTravel (in the event of such breach
by either Purchaser or Flightserv) may terminate this Agreement if the
breaching party fails to cure such material breach within ten (10)
business days of notification thereof. Upon termination in accordance with
the preceding sentence, this Agreement shall become null and void and of
no further force or effect; provided that the provisions of Sections 2, 3,
6 and 11 hereof shall survive any termination of this Agreement. Anything
herein to the contrary notwithstanding, in the event of any termination of
this Agreement (i) by MyTravel unilaterally other than for material breach
of the terms and provisions hereof by either Purchaser or Flightserv, the
joint and several obligation of each Purchaser and Flightserv to pay all
Fees and Costs due for Services rendered prior to such termination shall
survive such termination and Purchasers and/or Flightserv shall pay such
Fees and Costs at such times, in such amounts, and in such manner as
provided for hereunder until such Fees and Costs are indefeasably paid in
full, but Purchasers and Flightserv shall not be obligated to pay
additional Fees and Costs relating to periods after such termination due
to the fact that Services shall no longer be provided during such periods
or (ii) for any other reason (including, without limitation, by Purchasers
and Flightserv pursuant to this Section 3) the joint and several
obligation of each Purchaser and Flightserv to pay all Fees and Costs
shall survive such termination and Purchasers and/or Flightserv shall pay
such Fees and Costs at such times, in such amounts, and in such manner as
provided for hereunder, as if the Services continued to be provided
hereunder, until all such Fees and Costs are indefeasably paid in full. In
the event that MyTravel desires to exit the businesses related to
providing the Services or otherwise cease to provide the Services,
MyTravel hereby agrees to give Purchasers ninety (90) days prior written
notice thereof and MyTravel and each Purchaser agree, subject to the
preceding sentence, to negotiate in good faith in order to determine a
mutually agreeable course of action for winding up the parties' activities
hereunder."
(c) Exhibit B of the Purchase Agreement Supplement is hereby amended in
its entirety in the form attached hereto as Exhibit B.
Section 2.2 Stock Pledge Agreement. Pursuant to Section 16 of the Stock
Pledge Agreement, the following Sections thereof are hereby amended as follows:
(a) The first paragraph of the Introductory Statement of the Stock Pledge
Agreement is hereby amended by deleting it in its entirety and inserting, in
lieu thereof, the following:
"Pursuant to that certain Promissory Note, amended and restated as of
November 4, 2004 (as amended, supplemented or otherwise modified,
renewed or replaced from time to time, the "Note"), made by FS Tours,
Inc. ("FS Tours"), FS SunTours, Inc. ("FS SunTours", and together with
FS Tours, "Purchasers") and Flightserv, Inc. ("Flightserv", and
together with FS Tours and FS SunTours, the "Makers") in favor of the
Lenders, the Makers agreed, jointly and severally, to pay the aggregate
sum of One Million Dollars ($1,000,000) to the Lenders pursuant to the
terms thereof. All capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Note.
Pursuant to that certain Amended and Restated Asset Purchase Agreement,
dated as of October 31, 2003 (the "Asset Purchase Agreement"), among
Purchasers and the Lenders, the Lenders have sold to Purchasers
substantially all of the assets of the Lenders in accordance with the
terms thereof.
Pursuant to that certain Purchase Agreement Supplement, dated as of
October 31, 2003 and as amended by that certain Amendment Agreement,
dated as of November 4, 2004 (the "Amendment Agreement"), among the
Pledgor, the Makers, the Lenders and MyTravel Canada Holidays Inc.
("MyTravel Canada"), the Makers have agreed to purchase certain
services from MyTravel Canada."
(b) The definition of "Obligations" set forth in Section 9 of the Stock
Pledge Agreement is hereby amended by deleting it in its entirety and inserting,
in lieu thereof, the following:
"Obligations" means (i) the obligations of the Makers under the Note,
(ii) the obligations of the Pledgor and the Makers under the Amendment
Agreement, (iii) the obligations of the Makers under the Purchase
Agreement Supplement and (iv) the obligations of the Pledgor hereunder.
The term "Obligations" includes, without limitation, the obligations to
pay principal, charges, costs, expenses and fees including, without
limitation, the disbursements and reasonable fees of counsel and all
renewals extensions, restructurings, refinancings or refundings thereof
in a nature of a "workout" or otherwise."
ARTICLE III
EFFECTIVENESS
Section 3.1 Effectivness. Upon the execution hereof by all of the parties
hereto, each Transaction Document specified herein shall be amended as set forth
herein and all references in the Asset Purchase Agreement and each other
Ancillary Document to such Transaction Document shall be a reference to such
Transaction Document as amended hereby. This Agreement shall be deemed to modify
the specified Transaction Documents only the extent to which this Agreement is
inconsistent with such Transaction Documents. Without limiting the generality of
the foregoing, except as otherwise expressly provided in this Agreement, nothing
in this Agreement shall be construed to waive, release or otherwise impair any
rights, remedies or powers of Sellers or MyTravel Canada under the Asset
Purchase Agreement or any Ancillary Agreement or waive or release any defaults
of Purchasers, RCG or Flightserv under the Asset Purchase Agreement or any
Ancillary Agreement. Anything herein, in the Asset Purchase Agreement or in any
Ancillary Agreement to the contrary notwithstanding, each of the Asset Purchase
Agreement and each Ancillary document shall, prior to, on and after the
Effective Date, continue in full force and effect in accordance with its terms
(as shall be, solely upon the occurrence of the Effective Date, amended hereby).
Section 3.2 References. All references to "eResource Capital Group, Inc."
in the Asset Purchase Agreement and each other Ancillary Document are hereby
deemed to be references to RCG.
ARTICLE IV
GENERAL
Section 4.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by Federal
Express (or other internationally recognized courier), to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
To either Seller or
MyTravel Canada: MyTravel Canada Holidays Inc. or
VE Holdings, Inc. or
Suntrips, Inc.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, Group Company Secretary
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To either Purchaser
or Flightserv: FS Tours, Inc. or
FS SunTours, Inc. or
Flightserv, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To RCG: RCG Companies Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice that is delivered personally or by courier in the manner
provided herein shall be deemed to have been duly given to the party to whom it
is directed upon receipt by such party in the case of personal delivery, or upon
receipt of delivery thereof in the case of delivery by courier.
Section 4.2 Amendment, Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each party against which such amendment
is to be effective and enforced, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder will operate as a waiver
thereof nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Section 4.3 Assignment. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other parties hereto. Any assignment in contravention of this provision
shall be void.
Section 4.4 Entire Agreement. This Agreement (including all Schedules and
Exhibits hereto) contains the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to thereto.
Section 4.5 Parties in Interest. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Other than with respect to the rights of the MyTravel
Entities set forth in Article I, nothing in this Agreement, express or implied,
is intended to confer upon any Person other than the parties hereto or their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
Section 4.6 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby (including all fees and
disbursements of financial advisors, counsel and accountants) shall be borne by
the party incurring such expenses.
Section 4.7 Governing Law. This Agreement is to be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the choice of law provisions thereof.
Section 4.8 Counterparts. This Agreement may be executed by facsimile and
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute but one and the same instrument.
Section 4.9 Headings. The heading references herein and in the table of
contents hereto are for convenience purposes only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
Section 4.10 Publicity. Each party hereto shall not, and shall cause each
of their Affiliates not to issue or make, or allow to be issued or made, any
press release or public announcement concerning the transactions contemplated by
this Agreement without the prior written consent of the other party hereto
(which consent shall not be unreasonably withheld), except as otherwise required
by applicable Law or the rules of any applicable stock exchange, but in any
event only after giving the other party hereto a reasonable opportunity to
comment on such release or announcement in advance, consistent with such
applicable legal requirements. It is hereby understood and agreed that RCG shall
file a form 8-K upon the execution hereof.
Section 4.11 Severability. If any term or provision of this Agreement or
the application thereof to any situation or circumstance shall be held to be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to situations or circumstances other than those as to
which it shall have been held to be invalid or unenforceable, shall not be
affected and such remaining terms of this Agreement shall be valid to the
fullest extent permitted by applicable law. In addition, the parties hereto
shall in good faith endeavor to reach agreement on a provision to replace the
invalid provision which, as nearly as possible, will reflect the intent of the
original provision.
Section 4.12 Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
Section 4.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 4.14 Construction. Unless otherwise expressly provided herein or
unless the context of this Agreement clearly requires otherwise, (a) words using
the singular or plural number also include the plural or singular number,
respectively, (b) the use of any gender herein shall be deemed to include the
other genders, (c) references herein to "Articles," "Sections," "Schedules",
"Exhibits", "subsections" and other subdivisions without reference to a document
are to the specified Articles, Sections, Schedules, Exhibits, subsections and
other subdivisions of this Agreement, (d) a reference to a subsection without
further reference to a Section is a reference to such subsection as contained in
the same Section in which the reference appears, and this rule shall also apply
to other subdivisions within a Section or subsection, (d) the words "herein,"
"hereof," "hereunder," "hereby" and other words of similar import refer to this
Agreement as a whole and not to any particular provision, and (e) the words
"include," "includes" and "including" are deemed to be followed by the phrase
"without limitation".
Signature Page Follows
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
by its duly authorized representative as of the day and year first above
written.
MYTRAVEL CANADA HOLIDAYS INC.
By:__________________________________
Name:
Title:
VE HOLDINGS, INC.
By:__________________________________
Name:
Title:
SUNTRIPS, INC.
By:__________________________________
Name:
Title:
RCG COMPANIES INCORPORATED
f/k/a eResource Capital Group, Inc.
By:__________________________________
Name:
Title:
FLIGHTSERV, INC.
By:__________________________________
Name:
Title:
FS TOURS, INC.
By:__________________________________
Name:
Title:
FS SUNTOURS, INC.
By:__________________________________
Name:
Title
Signature Page to Amendment Agreement
Exhibit A
PROMISSORY NOTE
$1,000,000 November 4, 2004
Originally issued October 31, 2003
FS Tours, Inc., a Delaware corporation ("FS Tours"), FS SunTours, Inc., a
Delaware corporation ("FS SunTours") and Flightserv, Inc. a Delaware corporation
("Flightserv", and together with FS Tours and FS SunTours, "Makers"), for value
received, hereby promise, jointly and severally, to pay to each of VE Holdings,
Inc., a Delaware corporation ("VE Holdings"), and SunTrips, Inc., a Delaware
corporation (together, "Holders") at c/o MyTravel Group plc Parkway One, Parkway
Business Centre, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Attn:
▇▇▇▇ ▇▇▇▇▇▇▇, jointly and severally, the aggregate principal amount of One
Million Dollars ($1,000,000), subject to adjustment as set forth in Section 2.
The terms used but not otherwise defined herein shall have the meanings set
forth in the Amended and Restated Asset Purchase Agreement, dated as of October
31, 2003 (the "Asset Purchase Agreement"), between Makers and Holders. This Note
shall not bear interest.
This Note (i) amends and restates in its entirety the Promissory Note,
issued October 31, 2003, by the Makers in favor of the Holders in the aggregate
principal amount of Ten Million Dollars ($10,000,000) and (ii) upon execution
and delivery hereof, is the "Purchase Price Note" referred to in the Asset
Purchase Agreement and the Stock Pledge Agreement.
1. Payments of Principal. Makers shall jointly and severally pay the
principal amount of this Note in lawful money of the United States of America in
immediately available funds as follows: (i) four (4) equal yearly payments of
One Hundred Thousand Dollars ($100,000) commencing on October 31, 2006, and
continuing on the last day of each October thereafter through October 31, 2009
and (ii) a final balloon payment in the amount of Six Hundred Thousand Dollars
($600,000) on the Maturity Date. As used herein, "Maturity Date" means October
31, 2010. All payments hereunder shall be made to the following account:
National City Bank of Michigan/Illinois ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇▇▇▇▇▇▇, Account No.628614139. Upon payment in full of
the entire principal amount of this Note, Holders shall surrender this Note to
Makers for cancellation. If any payment required to be made hereunder becomes
due and payable on a Saturday, Sunday or other day on which commercial banks in
either ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ are authorized or required to be
closed, the due date thereof shall be extended until the next following business
day.
2. Adjustment of Principal Amount of Note.
(a) As provided in Section 7.4(a) of the Asset Purchase Agreement,
the principal amount due under this Note may be adjusted from time to time as
follows: (i) The principal amount due on this Note shall be decreased by the
amount of the payment obligation of Holders for the benefit of Makers pursuant
to any indemnification obligation under the Asset Purchase Agreement, except
those obligations elected or required to be paid in cash by Holders and (ii) the
principal amount due on this Note shall be increased (x) for each payment made
by Makers to or for the benefit of Holders pursuant to any indemnification
obligations under the Asset Purchase Agreement or (y) if Makers elect for any
amount required to be paid by Makers as a working capital adjustment pursuant to
Section 2.5 of the Asset Purchase Agreement. Any reduction or increase in the
Purchase Price shall reduce the balloon payment due on the Maturity Date, and
shall not change the scheduled yearly principal payments hereunder.
(b) In connection with the Consent to Assignment Agreement, dated as
of October 31, 2003 (the "Assignment"), among FS Tours, VE Holdings, Flightserv
and Pace Airlines, Inc. the principal amount due under this Note may be adjusted
from time to time as follows: In the event that FS Tours would have qualified
under the ACMI Agreement (as defined in the Assignment) for (i) a "block-hour"
rate reduction upon fulfilling its minimum revenue guarantee and/or (ii) a
"rollover credit", as demonstrated to Holders by documentary evidence reasonably
satisfactory thereto, but as a result of the agreements set forth in Section
4(b) of the Assignment is unable to obtain such reduction or such credit, the
principal amount due on this Note shall be decreased, dollar for dollar, by the
aggregate amount the benefits of such reduction or credit up to an aggregate
maximum decrease of Three Hundred Fifty Thousand Dollars ($350,000). Any
decrease in the principal amount due under this Note pursuant to this Section
2(b) shall, at FS Tours' option, reduce either (x) the next scheduled yearly
principal payment or payments hereunder at the time of such reduction or (y) the
balloon payment due hereunder on the Maturity Date.
3. Security. RCG Companies Incorporated f/k/a eResource Capital Group,
Inc. (the "Parent") and Holders have entered into a Stock Pledge Agreement
concurrently herewith (the "Stock Pledge Agreement", and together with this
Note, the "Loan Documents") that provides Holders with certain interests and
rights in and to certain shares of common stock of Lifestyle Innovations, Inc.
owed by the Parent, as security for Makers' obligations hereunder.
4. Default. If one or more of the following described events shall occur
(each, an "Event of Default"):
a. default shall be made in the payment of principal under this
Note, as and when due and payable, whether by reason of maturity, acceleration
or otherwise;
b. any of Makers or the Parent shall make a general assignment for
the benefit of creditors; or shall commence any case, proceeding or other action
seeking to have an order for relief entered on its behalf as debtor or to
adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property or shall file an
answer or other pleading in any such case, proceeding or other action admitting
the material allegations of any petition, complaint against it or consenting to
the relief sought therein; or any of Makers or the Parent shall take any action
to authorize or in contemplation of any of the foregoing; or
c. any involuntary case, proceeding or other action against any of
Makers or the Parent shall be commenced seeking to have an order for relief
entered against it as debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case, proceeding or other action (i)
results in the entry of any order for relief against it or (ii) shall remain
undismissed for a period of sixty (60) days;
then, and in each and every such case, unless such Event of Default shall have
been waived in writing by Holders (which waiver shall not be deemed to be a
waiver of any subsequent Event of Default), at the option of Holders, and in
Holders' sole discretion, (i) Holders may accelerate the entire principal amount
of this Note, and declare such amount immediately due and payable, and (ii)
Holders may immediately enforce any and all of Holders' rights and remedies
provided herein or in any of the other Loan Documents, or any other rights or
remedies afforded by law.
5. Prepayment. The principal amount of this Note may be prepaid, in whole
or in part, at any time without penalty or premium, at the discretion of Makers.
6. Rights Cumulative. The rights, powers and remedies given to Holder
under this Note shall be in addition to all rights, powers and remedies given to
them by virtue of any document or instrument executed in connection herewith
(including, but not limited to, the Asset Purchase Agreement and the Loan
Documents) or any statute or rule of law.
7. Amendments in Writing. No modification or waiver of any provision of
this Note, or any documents or instruments executed in connection therewith
shall be effective unless it shall be in writing and signed by Holders, and any
such modification or waiver shall apply only in the specific instance for which
given.
8. Governing Law. This Note and the rights and obligations of the parties
hereto, shall be governed, construed and interpreted according to the laws of
the State of Delaware, without regard to the conflict of law provisions thereof.
9. Successors. The term "Holders" as used herein shall be deemed to
include Holders and their successors and assigns. All stipulations, promises and
agreements herein by or on behalf of Makers to Holders shall bind the successors
and assigns of such party, whether so expressed or not, and shall inure to the
benefit of the successors and assigns of Makers and Holders.
10. Mutilated, Lost, Stolen or Destroyed Note. In case this Note shall be
mutilated, lost, stolen or destroyed, Makers shall issue and deliver in exchange
and substitution for and upon cancellation of the mutilated Note, or in lieu of
and substitution for the Note, mutilated, lost, stolen or destroyed, a new Note
in the form hereof, but only upon receipt of evidence reasonably satisfactory to
Makers of such loss, theft or destruction and an indemnity, if requested, also
reasonably satisfactory to it.
11. Waiver. No delay on the part of Holders in the exercise of any power
or right under this Note shall operate as a waiver thereof, nor shall a single
or partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
12. Demand, Presentment, Protest, etc. Makers and any and all sureties,
guarantors and endorsers of this Note and all other parties now or hereafter
liable hereon severally waive grace, demand, presentment for payment, protest,
notice of any kind (including, but not limited to, notice of dishonor, notice of
protest, notice of intention to accelerate or notice of acceleration) and
diligence in collecting and bringing suit against any party hereto and agree to
the extent permitted by applicable law (i) to all extensions and partial
payments, with or without notice, before or after maturity, (ii) to any
substitution, exchange or release of any security now or hereafter given for
this Note, (iii) to the release of any party primarily or secondarily liable
hereon, and (iv) that it will not be necessary for any holder of this Note, in
order to enforce payment of this Note, to first institute or exhaust such
holder's remedies against the Makers or any other party liable hereon or against
any security for this Note. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.
13. Notices. Any notice to be given to or served upon Makers, the Parent
or Holders hereunder or under any of the other Loan Documents must be in writing
and shall be delivered by Federal Express (or other internationally recognized
courier service) or personal delivery addressed to the intended recipient
thereof at the address for each specified in this Note. Any such notice sent by
personal delivery shall be deemed to have been delivered as of the date upon
which actually received by the addressee. Any such notice sent by Federal
Express (or other internationally recognized courier service) shall be deemed to
have been given or served on the fifth (5th) Business Day after it is delivered.
Any party hereto may, at any time, by giving five (5) days written notice to the
other party hereto, designate any other address or facsimile number in
substitution of the address or facsimile number to which such notice shall be
given.
If to Makers:
FS Tours, Inc. or
FS SunTours, Inc. or
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: RCG Companies Incorporated
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent: RCG Companies Incorporated
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Holders: SunTrips, Inc. or
VE Holdings, Inc.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
14. Invalid Provisions. If any provisions hereof shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
Signature Page Follows
IN WITNESS WHEREOF, each Maker has caused this Note to be duly executed
and delivered as of the date first above written.
FS TOURS, INC.
By _________________________
Name:
Title:
FS SUNTOURS, INC.
By _________________________
Name:
Title:
FLIGHTSERV, INC.
By _________________________
Name:
Title:
ACCEPTED AND AGREED:
VE HOLDINGS, INC.
By _________________________
Name:
Title:
SUNTRIPS, INC.
By _________________________
Name:
Title:
Exhibit B
SERVICE FEES
Hotel Room Purchasing (USD):
Year 1 (November 1st, 2003 to October 31st, 2004):
November 1st, 2003 $62,500
December 1st, 2003 $62,500
January 1st, 2004 $62,500
February 1st, 2004 $62,500
March 1st, 2004 $62,500
April 1st, 2004 $62,500
May 1st, 2004 $187,500
June 1st, 2004 $187,500
July 1st, 2004 $187,500
August 1st, 2004 $187,500
September 1st, 2004 $75,000
October 1st, 2004 $75,000
Year 2 (November 1st, 2004 to February 28th, 2005):
Monthly payments made the first of each month in the amount of $75,000
(March 1st, 2005 to October 31st, 2005):
Monthly payments made the first of each month in the amount of $150,000
Year 3 (November 1st, 2005 to February 28th, 2006):
Monthly payments made the first of each month in the amount of $150,000
(March 1st, 2006 to October 31st, 2006):
Monthly payments made the first of each month in the amount of $125,000
Year 4 (November 1st, 2006 to October 31st, 2007):
Monthly payments made the first of each month in the amount of $125,000
Year 5 (November 1st, 2007, to October 31st, 2008):
Monthly payments made the first of each month in the amount of $125,000
Year 6 (November 1st, 2008, to October 31st, 2009):
Monthly payments made the first of each month in the amount of $125,000
Year 7 (November 1st, 2009, to October 31st, 2010):
Monthly payments made the first of each month in the amount of $41,667
Resort Services:
With regard to each Purchaser:
All commissions and revenues (including, without limitation, ground handling and
tour sale revenues) generated in connection with the performance of the Resort
Services plus:
Resort Services Fee (per passenger USD) $1.00