Exhibit 2.1
ACQUISITION AGREEMENT
BY AND BETWEEN
LA FERN, INC. D/B/A/ LEISURE LINK INTERNATIONAL,
AS LFI,
AND
ALL OF THE HOLDERS OF LFI INTERESTS,
AS HOLDER,
AND
ONLINE VACATION CENTER HOLDINGS CORP.,
AS ONVC.
DATED AS OF OCTOBER 3, 2006.
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement"), dated as of October 3,
2006, is made by ONLINE VACATION CENTER HOLDINGS CORP., a Florida corporation
("ONVC"), LA FERN, INC. D/B/A/ LEISURE LINK INTERNATIONAL, a Florida corporation
("LFI"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Florida resident and the owner of all of the
ownership interests of LFI (the "Holder").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, Holder desires to sell, and ONVC desires to acquire, all
of the issued and outstanding ownership interests of LFI (the "LFI Interests")
for the consideration and on the terms set forth in this Agreement and the
parties, intending to be legally bound, hereby agree as follows:
1. SALE AND TRANSFER OF LFI INTERESTS; CLOSING
1.1 LFI INTERESTS.
Subject to the terms and conditions of this Agreement, at the Closing,
Holder will sell and transfer the LFI Interests to ONVC, and ONVC will acquire
the LFI Interests from Holder.
1.2 CONSIDERATION.
(a) The total consideration (the "Consideration") for the LFI Interests will
be equal to: $ 400,000
(b) The Consideration shall be paid as follows:
$25,000 Cash by wire transfer or check; and
$375,000 Convertible Note (the "Note"), bearing interest at 6%
per annum, with principal payable at maturity of October 1, 2009
and interest payable semi-annually on April 1, 2007 and on each
April 1 and October 1 thereafter. The Note may not be prepaid and
shall be convertible at the election of Holder prior to maturity
into 187,500 Shares of ONVC Common Stock at a conversion price
equal to $2.00 per share.
(c) The Consideration shall be adjusted, if necessary, as required pursuant
to Section 3.1(d) hereof.
(d) Further, after Closing, Holder shall be paid an amount equal to 75% of
the total "commission overrides" actually received by LFI for travel
originated by LFI and taken in calendar year 2006, such amount to be
payable to Holder by corporate check within 10 days after receipt and
reconciliation of such "commission overrides" by LFI.
1.3 CLOSING
The acquisition and sale (the "Closing") provided for in this Agreement
will take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇, P.A., 110 Southeast 6th Street,
15th Floor, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m. (local time) on October 3,
2006, or at such other time and place as the parties may agree.
1.4 ESCROW AND CLOSING OBLIGATIONS
Holder has indicated his acceptance of this Agreement by the execution
and delivery in escrow to LFI of his applicable Transfer Power. Such Transfer
Power shall be released from escrow upon payment of the Consideration to Holder
as set forth in the Acceptance and Transfer Power and no further action,
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consent, approval or direction shall be required of Holder in connection
therewith. The Transfer Power shall be cancelled at the written request of
Holder at any time after October 3, 2006 if the Consideration has not been paid
or if this Agreement has been terminated prior to such date. At the Closing,
ONVC will have received the Closing Deliverables as described in Exhibit A
attached hereto, all in form and substance reasonably satisfactory to ONVC.
1.5 TAX MATTERS
Holder and LFI further represent and warrant that all (a) tax returns
due to be filed on or before Closing have been accurately and timely filed, (b)
all taxes due and payable on or before Closing have been paid, and (c) for any
periods for which tax returns are not yet due, or for which all taxes have not
yet been paid, LFI has accurately and properly accrued on the books, records and
financial statements of LFI liabilities or reserves reflecting the taxes due
from LFI for such periods, except as follows:
(1) Holder and LFI represent and warrant that LFI has elected to file
its federal income tax returns as a "Subchapter S Corporation"
and therefore no federal or state income taxes are payable by LFI
nor are any federal or state income tax accruals, reserve or
payments reflected on the books, records or financial statements
of LF.
(2) Holder will prepare and timely file "short-period" federal and
state income tax returns for the "short-period" ended as of the
date of Closing and Holder will be responsible for, and will pay
when due, any and all taxes, interest, penalties preparation,
audit or other expenses or costs in connection therewith. Holder
shall provide a copy of these "short-period" tax returns to ONVC
together with the work papers and schedules utilized in their
preparation.
(3) For clarification, all expenses incurred by LFI prior to the date
of Closing, including, but not limited to, expenses associated
with (A) the transactions contemplated by this Agreement, and (B)
payments of compensation to employees and other service
providers, shall be paid by Holder and, to the extent so paid,
shall be expenses of LFI reflected on the "short-period' tax
returns.
(4) Neither Holder, ONVC nor LFI shall file an amended tax return
with respect to any and all taxable periods, or portions thereof
(including the "short-period"), ending on or before the Closing
Date, without the prior written consent of Holder, ONVC and LFI;
except that such consents shall not be required for any amendment
filed in connection with any requirement or finding of any audit
by a governmental entity of the tax return to which the amendment
relates. Holder shall indemnify ONVC and LFI for any liability,
cost or expense ONVC or LFI incurs as a result of any such
amendment filed in accordance with the terms hereof.
For purposes hereof, "taxes" shall mean all federal, state, local, foreign and
other governmental net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, unemployment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties or other taxes,
fees, assessments or charges of any kind whatever, together with any interest
and any penalties, additions to tax or additional amounts with respect thereto.
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2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF HOLDER AND LFI
Holder and LFI each hereby represents and warrants to ONVC as follows:
(a) Ownership. Holder is and will be on the Closing Date the record and
beneficial owners and holders of the LFI Interests, free and clear of
any and all liens or encumbrances. Holder owns the number of the LFI
Interests set forth on the Acceptance and Transfer Powers attached
hereto, which represents 100% of the outstanding equity and other
securities of LFI. There are no agreements, rights, claims or
obligations relating to the issuance, sale, or transfer of any equity
or other securities of LFI. LFI has no subsidiaries.
(b) Authorization. Holder is an individual. LFI is a corporation duly
organized and in good standing under the laws of the State in which it
was formed and is duly qualified and in good standing in each
jurisdiction in which it conducts business or owns property. Holder and
LFI each has full right, power and authority to execute and deliver the
Holder Documents (as defined below), to perform its obligations therein
and to consummate all of the transactions contemplated thereby.
(c) Documents. Holder and LFI each has, or before Closing will have,
approved the sale of the LFI Interests, this Acquisition Agreement and
the transactions contemplated hereby, and approved, executed and
delivered this Acquisition Agreement and certain agreements,
instruments to be executed and delivered by each of Holder and LFI in
connection herewith (collectively, the "Holder Documents") and each of
the Holder Documents, when executed by Holder or LFI, shall be the
legal valid and binding obligation of each of Holder and LFI in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally
applicable and subject to the exercise of judicial discretion in
appropriate cases.
(d) No Default. Neither Holder nor LFI, nor any vendor or party in contract
with LFI, is in violation of any provision of, or in default under,
LFI's articles of incorporation or by-laws, or any indenture,
mortgagee, deed of trust, indebtedness, agreement, judgment, decree,
order, statute, rule or regulation affecting the LFI Interests or to
which LFI is a party or by which LFI or its property is subject or
bound and further, the execution and delivery of the Holder Documents,
the performance of the obligations therein and the consummation of the
transactions contemplated thereby will not result in a violation
thereof, or a default thereunder.
(e) No Approvals. Neither Holder nor LFI is required to obtain the
approval, authorization, consent or any other order of any public or
private entity, person, board or body in connection with the
transactions contemplated by the Holder Documents, except as set forth
in Section 3.1(e) hereof.
(f) Financial Statements. The unaudited financial statements and other
information of LFI, copies of which have been, or prior to Closing will
have been, provided to ONVC, are true and correct in all material
respects.
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(g) No Material Adverse Change. From the date of the last financial
statements to the date hereof, there has not been, and through the date
of Closing, there will not have been any change that would materially
and adversely affect the financial position or results of operation of
LFI, except for such changes that are a result of industry changes
generally or general economic conditions, or their ability to
consummate the transactions contemplated hereby, or that should be
disclosed to ONVC in order to make any statements or information
furnished to ONVC, in light of the circumstances under which they were
made, not misleading, which has not been, or prior to Closing, will not
have been, disclosed in writing to ONVC.
(h) No Undisclosed Liabilities. There is no account, note, lease, tax,
environmental liability, fine, penalty, civil or criminal action,
filing, liability, obligation, lien, encumbrance, restriction or other
duty affecting LFI or the LFI Interests (nor is there any reasonable
basis, circumstance or fact that might give rise thereto), whether
realized or contingent, pending or threatened, as of the date hereof or
as of the date of Closing, which has not been, or prior to Closing,
will not have been, disclosed in writing to ONVC.
(i) No Litigation. There is no action, suit, proceeding or investigation at
law or in equity, before or by any court, public board or body,
realized or contingent, pending or threatened, known, against or
affecting LFI or the LFI interests) (nor is there any reasonable basis,
circumstance or fact therefore) as of the date hereof, or as of the
date of Closing, which has not been, or prior to Closing, will not have
been, disclosed in writing to ONVC.
(j) Ordinary Course of Business. Since January 1, 2005, LFI has conducted
its business in the ordinary course of business consistent with the
past practices of LFI.
(k) Brokers or Finders. Neither Holder nor LFI or their officers or agents
have incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement, except Innovative Travel
Acquisitions whose fees and expenses shall be paid directly by Holder.
Holder will indemnify and hold ONVC harmless from any such payment
alleged to be due by or through Holder or LFI as a result of the action
of Holder or LFI or their officers or agents.
(l) Securities Representations. Holder hereby represents and warrants to
Company as follows: (1) Holder is an "Accredited investor", as such
term is defined in Rule 501(a) to the Securities Act of 1933, as
amended (the "Securities Act"); (2) Holder's address as set forth on
the Transfer Power is Holder's true and correct residence and Holder
has no present intention of becoming a resident of any other state or
jurisdiction; (3) the Note and the Conversion Shares, if converted, are
being acquired solely for Holder's own account, for investment, and are
not being purchased with a view to or for the resale, distribution,
subdivision, or fractionalization thereof and Holder has no present
plans to enter into any contract, undertaking, agreement, or
arrangement relating thereto; (4) Holder understands that neither the
Note nor any Conversion Shares have been or will be registered under
the Securities Act, that Holder has no rights to require that the Note
or any Conversion Shares be registered under the Securities Act or any
state securities or blue sky laws; that Holder may have to hold the
Note or any Conversion Shares for a substantial period of time and that
it may not be possible for Holder to liquidate Holder's investment in
Company; and that in any event the Note and the Conversion Shares may
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not be assigned, transferred, pledged, or otherwise sold or offered for
sale except pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration under the
Securities Act, the availability of which must be established by Holder
to the satisfaction of Company; and in replacement or exchange
therefore, are to bear a restrictive legend to this effect; (5) Holder
is acquiring the Note without being furnished any offering literature
or prospectus, but Holder has been granted, and is relying upon,
Holder's personal discussions, investigations and due diligence of
Company and its officers; (6) Holder has such knowledge and experience
in business and financial matters that Holder is capable of evaluating
the business and financial matters of Company and the risks and merits
relating thereto; (7) that there has never been any representation,
guarantee, or warranty made to Holder by any broker, Company, its
agents or employees, or any other person, expressly or by implication,
as to any gain or profit to be derived from, or the approximate or
exact length of time that Holder may be required to remain an owner of,
the Note or the Conversion Shares, or as to any other matter not
expressly contained herein.
2.2 REPRESENTATIONS AND WARRANTIES OF ONVC
ONVC hereby represents and warrants to Holder as follows:
(a) Authorization. ONVC is duly organized, validly existing, and in good
standing under the laws of the State in which it was formed. ONVC has
full right, power and authority to execute and deliver the ONVC
Documents (as defined below), to perform its obligations therein and to
consummate all of the transactions contemplated thereby.
(b) Documents. ONVC has, or before Closing will have, approved the sale of
the LFI Interests, this Acquisition Agreement and the transactions
contemplated hereby, and approved, executed and delivered this
Acquisition Agreement and certain agreements, instruments to be
executed and delivered by ONVC in connection herewith (collectively,
the "ONVC Documents") and each of the ONVC Documents, when executed by
ONVC, shall be the legal valid and binding obligation of ONVC in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally
applicable and subject to the exercise of judicial discretion in
appropriate cases.
(c) No Default. ONVC is not in violation of any provision of, or in default
under, and the execution and delivery of the ONVC Documents, the
performance of the obligations therein and the consummation of the
transactions contemplated thereby will not result in a violation of, or
default under, the any of the ONVC's articles of incorporation, by-laws
or any indenture, mortgagee, deed of trust, indebtedness, agreement,
judgment, decree, order, statute, rule or regulation to which ONVC is a
party or by which ONVC or its property is subject or bound.
(d) No Approvals. ONVC is not required to obtain the approval,
authorization, consent or any other order of any public or private
entity, person, board or body in connection with the transactions
contemplated by the ONVC Documents, except as set forth in Section
3.2(a) hereof.
(e) Investment Intent. ONVC is acquiring the LFI Interests for its own
account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act of 1933.
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(f) Brokers or Finders. Neither ONVC nor its officers or agents have
incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement and ONVC will indemnify and
hold Holder harmless from any such payment alleged to be due by or
through ONVC as a result of the action of ONVC or its officers or
agents.
3. COVENANTS PRIOR TO CLOSING
3.1 COVENANTS OF HOLDER AND LFI
(a) Access and Investigation. LFI will (1) afford ONVC and its
representatives full and free access, during normal business hours, to
its personnel, properties (including subsurface testing), contracts,
books and records, and other documents and data, (2) furnish ONVC with
copies of all such contracts, books and records, and other existing
documents and data as ONVC may reasonably request, and (3) furnish ONVC
with such additional financial, operating, and other data and
information as ONVC may reasonably request.
(b) Due Diligence. Each of Holder and LFI shall cooperate with ONVC in the
conduct of its due diligence and shall furnish, at a minimum, the
information, documents and other items set forth in Exhibit B attached
hereto.
(c) Audit. LFI acknowledges that ONVC, as a publicly traded company, will
need audited financial statements of LFI. ONVC, at its expense, will
cause its accountants to conduct an audit of LFI and to issue audited
financial statements as diligently possible. Holder and LFI (and any
LFI subsidiaries, if any) will assist and provide ONVC and its auditors
access to conduct such audit and such further due diligence in
connection therewith as ONVC may require. Holder, LFI and ONVC each
acknowledge and agree that such audit may be completed after the
Closing.
(d) Operation of LFI. LFI will: (1) conduct its business only in the
ordinary course of business and not take, or fail or choose not to
take, any action in contemplation of the transactions contemplated
hereby or other than in the ordinary course of business consistent with
its past practices; (b) use its reasonable best efforts to preserve
intact its current business organization, keep available the services
of its current officers, employees, and agents, and maintain the
relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships
with it; (3) confer with ONVC concerning operational or any other
matters of a material nature; and (4) otherwise report periodically to
ONVC concerning the status of its business, operations, and finances.
Further, LFI will NOT: (1) enter into, amend, modify, extend, terminate
or permit to expire (a) any agreement that involves more than $25,000
or exceeds one year ,or (b) any compensation agreements, benefit plans
or insurance policies, or (2) dispose of any assets, issue any
securities or rights with respect to securities, or declare or pay any
bonuses, dividends or distributions;
EXCEPT LFI, prior to closing, may distribute or dividend cash,
shall pay or satisfy all shareholder loans and, if necessary,
shall pay or satisfy other liabilities, all in aggregate amounts
sufficient to cause, immediately thereafter and at closing, the
book value of assets of LFI to equal or exceed the book value of
liabilities of LFI, all as determined in accordance with generally
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accepted accounting principles consistently applied (if not, the
Consideration shall be reduced by any deficiency therein). LFI,
ONVC and Holder each acknowledge and agree that any deficiency
determined after the Closing as a result of the conclusion of the
audit shall be deducted from the principal balance of the Note
retroactively back to the date of Closing and Holder shall, upon
written request from ONVC, return the Note (or, if not received
within 20 days, ONVC may cancel such Note) and, upon receipt
thereof, ONVC shall issue a new Note for the principal balance
less the deficiency to be deducted hereunder. In lieu of any
deduction from the principal balance of the Note, Holder may elect
to pay cash in satisfaction of any deficiency, which cash shall be
paid within 15 days of written notice of such deficiency. LFI,
ONVC and Holder each acknowledge and agree that any excess of
assets over liabilities determined after Closing as a result of
the audit will be paid in cash to Holder within 15 days after the
receipt of the final audit report. Holder may review or question
auditors as to audit findings and results but the determinations
of the auditors shall be final. Each of LFI, ONVC and Holder
acknowledge and agree that commissions payable on bookings not yet
traveled shall be the responsibility and obligation of ONVC and
LFI, not Holder.
(e) Required Approvals. As promptly as practicable after the date of this
Agreement, each of Holder and LFI will:
(1) seek and obtain the approval of these transactions by Holder and
LFI's Board of Director(s) and, shareholders,
(2) make all filings, if any, required by applicable law to be made
by them in connection with these transactions, and
(3) cooperate with ONVC with respect to all filings, if any, that
ONVC elects, or is required by any applicable law, to make in
connection with these transactions.
(f) Notifications Each of Holder and LFI will promptly notify ONVC in
writing if Holder or LFI becomes aware of (1) any fact or condition
that causes or constitutes a breach of Holder's or LFI's
representations, warranties or covenants as of the date of this
Agreement or as of the date of Closing as if made as of the date of
Closing, or (2) any fact or condition that should be disclosed to ONVC
in order to make any statements or information furnished to ONVC, in
light of the circumstances under which they were made, not misleading.
(g) Exclusive Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 5.1 hereof, none of Holder nor LFI will
directly or indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public
information to, or consider the merits of any unsolicited inquiries or
proposals from, any person or entity (other than ONVC) relating to any
transaction involving any sale of the LFI Interests, any sale of any of
the businesses, assets or equity or other securities of LFI, or any
merger, consolidation, business combination, or similar transaction
involving LFI.
(h) Reasonable Commercial Efforts. Each of Holder and LFI will use their
reasonable commercial efforts to cause the conditions in Article 4
hereof to be satisfied.
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3.2 COVENANTS OF ONVC
(a) Required Approvals. As promptly as practicable after the date of this
Agreement, ONVC will:
(1) seek and obtain the approval of these transactions by ONVC's
Board of Directors and, if required, shareholders,
(2) make all filings, if any, required by applicable law to be made
by it in connection with these transactions, and
(3) cooperate with Holder and LFI with respect to all filings, if
any, that any of Holder or LFI is required by any applicable law
to make in connection with these transactions;
provided that this Agreement will not require ONVC to dispose of or
make any change in any portion of its business or to incur any other
burden to obtain any approval or governmental authorization.
(b) Notifications. ONVC will promptly notify Holder and LFI in writing if
ONVC becomes aware of any fact or condition that causes or constitutes
a breach of ONVC's representations, warranties or covenants as of the
date of this Agreement or as of the date of Closing as if made as of
the date of Closing.
(c) Reasonable Commercial Efforts. ONVC will use its reasonable commercial
efforts to cause the conditions in Article 4 hereof to be satisfied.
4. CONDITIONS PRECEDENT TO CLOSING
4.1 CONDITIONS PRECEDENT TO HOLDER'S AND LFI'S OBLIGATION TO CLOSE
Holder's and LFI's obligation to sell the LFI Interests and to take the
other actions required to be taken by Holder and LFI at the Closing is subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Holder or LFI, in whole or in part):
(a) Representations. Each of the representations and warranties made by
ONVC herein and in the Holder Documents is true and correct in all
material respects as of the date hereof and as of the date of Closing
as if made on the date of Closing.
(b) Conditions. Each of the conditions required for the execution and
delivery of the ONVC Documents, including, without limitation those
required herein, has been fulfilled or waived to the satisfaction of
Holder, LFI and all parties thereto.
(c) ONVC's Performance. Each and every covenant and obligation of ONVC
hereunder required to be performed or complied with at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), has been duly performed and
complied with in all material respects.
(d) Closing Deliverables. Each of the Closing Deliverables listed in
Exhibit A attached hereto has been delivered to the satisfaction of
Holder and LFI, including the approvals required in Sections 3.1(e) and
3.2(a) hereof.
(e) Ancillary Agreements. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have
entered into consulting and non-compete agreements with ONVC in form
and substance satisfactory to Holder and LFI.
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4.2 CONDITIONS PRECEDENT TO ONVC'S OBLIGATION TO CLOSE
ONVC's obligation to acquire the LFI Interests and to take the other
actions required to be taken by ONVC at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by ONVC, in whole or in part):
(a) Representations. Each of the representations and warranties made by
each of Holder and LFI herein and in the Holder Documents is true and
correct in all material respects as of the date hereof and as of the
date of Closing as if made on the date of Closing.
(b) Conditions. Each of the conditions required for the execution and
delivery of the Holder Documents, including, without limitation those
required herein, has been fulfilled or waived to the satisfaction of
ONVC and all parties thereto.
(c) Holder's Performance. Each and every covenant and obligation of each of
Holder and LFI hereunder required to be performed or complied with at
or prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), has been duly
performed and complied with in all material respects.
(d) Due Diligence. ONVC shall have concluded its due diligence and the
audit of the LFI financial statements and the results thereof shall be
satisfactory to ONVC in its sole discretion; provided, however, ONVC
may elect to conclude the audit after the Closing thereby waiving such
condition in reliance upon any adjustments as required by Section
3.1(d) hereof.
(e) Closing Deliverables. Each of the Closing Deliverables listed in
Exhibit A attached hereto has been delivered to the satisfaction of
ONVC, including the approvals required in Sections 3.1(e) and 3.2(a)
hereof.
(f) Ancillary Agreements. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have
entered into consulting and non-compete agreements with ONVC in form
and substance satisfactory to ONVC.
5. TERMINATION
5.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by mutual consent of ONVC and Holder;
(b) by either ONVC or Holder if a material breach of any provision of this
Agreement has been committed by the other party and such breach has not
been waived, provided that the breaching party has received 20 days
prior written notice of such breach and such breach has not been
corrected within such 20 day period;
(c) by Holder or ONVC if any of the conditions in Section 4.1 and 4.2,
respectively, has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of ONVC to comply with its obligations under this
Agreement) and ONVC, or Holder as the case may be, has not waived such
condition on or before the Closing Date; or
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(d) by either ONVC or Holder if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to
comply with its obligations under this Agreement) on or before October
3, 2006, or such later date as the parties may agree.
5.2 EFFECT OF TERMINATION
Each party's right of termination under Section 5.1 hereof is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of remedies. If
this Agreement is terminated pursuant to Section 5.1 hereof, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Article VI and Sections 7.1 and 7.3 will survive; provided,
however, that if this Agreement is terminated by a party because of the breach
of the Agreement by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
6. INDEMNIFICATION; REMEDIES
6.1 SURVIVAL; INDEMNIFICATION AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this
Agreement, the Holder Documents and the ONVC Documents will survive the Closing
for a period of eighteen (18) months. Notwithstanding any provision contained
herein to the contrary, no Indemnified Person (as defined herein) shall be
entitled to indemnification hereunder with respect to a breach by Holder or LFI
of any representation or warranty made in this Agreement or any other Holder
Document that such Indemnified Person had knowledge of on the date of this
Agreement. Each of Holder, LFI and ONVC represent that they have no knowledge of
any such breach as of the date hereof. The right to indemnification, payment of
damages or other remedy based on such representations, warranties, covenants,
and obligations will not be affected by any investigation conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time after
the execution and delivery of this Agreement or the Closing Date, with respect
to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
6.2 INDEMNIFICATION BY HOLDER
From and after Closing, Holder will indemnify and hold harmless ONVC,
LFI, and their respective representatives, stockholders, controlling persons,
and affiliates (collectively, the "Indemnified Persons") for, and will pay to
the Indemnified Persons the amount of, any loss, liability, claim, damage
(excluding incidental, punitive, consequential, exemplary and other similar
damages) or expense (including costs of investigation and defense and reasonable
attorneys' fees), whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with: (a) any
breach of any representation, warranty or covenant made by Holder or LFI in this
Agreement or in any other Holder Document, whether such breach is as of the date
hereof or as of the date of Closing as if made on the date of Closing; or (b)
any action or omission by, or any product shipped or manufactured by, or any
services provided by, LFI prior to the date of Closing.
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6.3 INDEMNIFICATION BY ONVC
ONVC will indemnify and hold harmless Holder, and will pay to Holder
the amount of any Damages arising, directly or indirectly, from or in connection
with (a) any breach of any representation or warranty made by ONVC in this
Agreement or in any ONVC Document, whether such breach is as of the date hereof
or as of the date of Closing as if made on the date of Closing; or (b) any
action or omission by, or any product shipped or manufactured by, or any
services provided by, LFI after the date of Closing.
6.4 PROCEDURE FOR INDEMNIFICATION
The party or parties making a claim for indemnification under this
Article 6 shall be, for the purposes of this Agreement, referred to as the
"Indemnified Party" and the party or parties against whom such claims are
asserted under this Article 6 shall be, for the purposes of this Agreement,
referred to as the "Indemnifying Party." All claims by any Indemnified Party
under this Article 6 shall be asserted and resolved as follows:
(a) In the event that (i) any action, proceeding, investigation, litigation
or suit (each, a "Proceeding") is asserted or instituted by any person
other than the parties to this Agreement that could give rise to
Damages for which an Indemnifying Party could be liable to an
Indemnified Party under this Agreement (such Proceeding, a "Third Party
Claim") or (ii) any Indemnified Party under this Agreement shall have a
claim to be indemnified by any Indemnifying Party under this Agreement
that does not involve a Third Party Claim (such claim, a "Direct
Claim"), the Indemnified Party shall with reasonable promptness send to
the Indemnifying Party a written notice briefly specifying the nature
of such Third Party Claim or Direct Claim and the amount or estimated
amount thereof, which amount or estimated amount shall not be
conclusive of the final amount, if any, of such Third Party Claim or
Direct Claim (a "Claim Notice").
(b) In the event of a Third Party Claim, the Indemnifying Party shall be
entitled to appoint counsel of the Indemnifying Party's choice at the
expense of the Indemnifying Party to represent the Indemnified Party
and any others the Indemnifying Party may reasonably designate in
connection with such Third Party Claim (in which case the Indemnifying
Party shall not thereafter be responsible for the fees and expenses of
any separate counsel retained by any Indemnified Party except as set
forth below); provided, however, that such counsel must be reasonably
acceptable to the Indemnified Party. Notwithstanding an Indemnifying
Party's election to appoint counsel to represent an Indemnified Party
in connection with a Third Party Claim, an Indemnified Party shall have
the right to retain separate counsel to conduct the defense of such
Third Party Claim, and only in the case of clauses (i) and (iv) below
(but not clauses (ii) and (iii) below) the Indemnifying Party shall
bear the reasonable fees, costs and expenses of such separate counsel,
if (i) the use of counsel chosen by the Indemnifying Party to represent
the Indemnified Party would present such counsel with a conflict of
interest, (ii) the Third Party Claim seeks an injunction or other
equitable relief that would be binding on the Indemnified Party, (iii)
an adverse determination with respect to the Third Party Claim could
reasonably be expected to establish a material adverse precedent or
(iv) the Indemnifying Party shall not have employed counsel to
represent the Indemnified Party within a reasonable time after notice
of the institution of such Third Party Claim. If and to the extent
reasonably requested by the Indemnifying Party, the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel in
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contesting any Third Party Claim that the Indemnifying Party defends
or, if appropriate and related to the Third Party Claim, in making any
counterclaim against the person asserting the Third Party Claim, or any
cross complaint against any person. No Third Party Claim may be settled
or compromised (i) by the Indemnified Party without the prior written
consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed, or (ii) by the Indemnifying Party
without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed. In the event
that any Indemnified Party or Indemnifying Party settles or compromises
or consents to the entry of any judgment with respect to any Third
Party Claim in violation of the preceding sentence, then such violating
party shall pay and indemnify fully, hold harmless, and defend the
other party against any incremental Damages under this Article 6 caused
by or arising from such settlement, compromise or consent to the entry
of judgment without the prior written consent of the other party.
(c) In the event of a Direct Claim, the Indemnifying Party shall notify the
Indemnified Party within 45 days following receipt of a Claim Notice
whether or not the Indemnifying Party disputes such claim.
(d) From and after the delivery of a Claim Notice relating to a Third Party
Claim, at the reasonable request of the Indemnifying Party, each
Indemnified Party shall grant the Indemnifying Party and its
representatives reasonable access to the books, records, personnel and
properties of such Indemnified Party to the extent reasonably related
to the matters to which the Third Party Claim relates. All such access
shall be granted during normal business hours and shall be granted
under conditions that will not interfere with the business and
operations of such Indemnified Party. The Indemnifying Party shall not,
and shall require its representatives to not, use (except in connection
with such Third Party Claim) or disclose to any third party other than
the Indemnifying Party's representatives (except as may be required by
applicable law) any information obtained pursuant to this Section
6.4(d).
6.5 RIGHT OF SET-OFF
Upon written notice to Holder specifying in reasonable detail the basis
for amounts to which ONVC may be entitled under this Article 6, either ONVC or
Holder may, within 15 days of such written notice, set off such amounts to which
ONVC may be entitled under this Article 6, against amounts otherwise due and
payable hereunder or under the Note, all in satisfaction and payment thereof to
the extent set off hereunder. The exercise of such right of set-off by ONVC in
good faith, whether or not ultimately determined to be justified, will not
constitute an event of default hereunder or under any ONVC Document. Neither the
exercise of nor the failure to exercise such right of set-off or to give a
notice of any claim hereunder will constitute an election of remedies or limit
ONVC in any manner in the enforcement of any other remedies that may be
available to it. In the event of a dispute regarding any setoff, ONVC may
withhold payments otherwise due and payable hereunder or under the Note until
such dispute is resolved and such withholding shall not constitute an event of
default hereunder or under any ONVC Document.
6.6 LIMITATIONS ON INDEMNITY OBLIGATIONS
(a) Neither Holder nor ONVC, respectively, shall have any liability
(for indemnification or otherwise) to the Indemnified Persons with respect to
any matters described in this Article 6 until the total amount of Damages
attributable to Holder or ONVC, respectively, with respect to such matters
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exceeds $10,000 (the "Deductible"), and then only for the amount by which such
Damages exceed the Deductible.
(b) The maximum aggregate amount of Damages that Holder or ONVC,
respectively, shall be obligated to pay to the Indemnified Persons under this
Article 6 shall be limited to an amount equal to the value of the Consideration.
6.7 SOLE REMEDY
Upon and after the Closing, the provisions of this Article 6 represent
the sole and exclusive remedy available to any party to this Agreement for any
misstatement or omission by any other party relating to any representation or
warranty contained herein or for any breach by any other party of any
representation, warranty, covenant or agreement contained herein and, except
with respect to fraudulent acts, each party hereby unconditionally waives any
other rights that it may have at law or in equity for any misstatement or
omission by any other party from any representation or warranty contained
herein, or any breach by any other party of any representation, warranty,
covenant or agreement contained herein.
7. GENERAL PROVISIONS
7.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and these
transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
7.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the contemplated transactions will be issued, if at all, at such
time and in such manner as ONVC determines. Unless consented to by ONVC in
advance, prior to the Closing Holder shall, and shall cause LFI to, keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any person or entity except as required by law or to Holder's and
LFI's advisors which have like wise agreed to be bound by confidentiality terms
of this Agreement. Holder and ONVC will consult with each other concerning the
means by which LFI's employees, customers, and suppliers and others having
dealings with LFI will be informed of these contemplated transactions, and ONVC
will have the right to be present for any such communication.
7.3 CONFIDENTIALITY
ONVC and each of Holder and LFI will maintain in confidence, and will
cause the directors, officers, employees, agents, and advisors of each to
maintain in confidence, and not use to the detriment of another party any
written, oral, or other information obtained in confidence from another party in
connection with this Agreement or these transactions, unless (a) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (b) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of these transactions, or (c) the furnishing or use of such
information is required by or necessary or appropriate in connection with legal
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proceedings. If these transactions are not consummated, each party will return
or destroy as much of such written information as the other party may reasonably
request.
7.4 MISCELLANEOUS
All notices and communications hereunder will be deemed given upon
receipt by personal delivery, overnight courier, fax or e-mail or upon the 3rd
day following mailing by registered or certified mail, return receipt requested,
and either delivered or addressed to the addresses set forth herein. This
Agreement constitutes the entire agreement between the parties and supersedes
any prior understandings or agreements, written or verbal, between the parties.
This Agreement may be amended, supplemented, modified or discharged only in
writing executed by all parties. This Agreement may not be assigned by either
party. Any dispute hereunder shall be resolved by arbitration and all parties
waive any right to a trial by jury in connection therewith. Each party agrees
that remedies for any breach hereof include damages, specific performance,
injunctive relief and other equitable remedies, that no bond shall be required
in connection therewith and that the prevailing party shall be entitled to
recover attorney's fees and costs. This Agreement will be governed by the laws
of the State of Florida and venue and jurisdiction will lie only in Broward
County, Florida.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
ONVC: ONLINE VACATION CENTER HOLDINGS CORP. LFI: LA FERN, INC. D/B/A/ LEISURE LINK INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------- ----------------------------------------
Name, Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President Name, Title: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Address: ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
HOLDER: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name, Title: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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