AGREEMENT AND PLAN OF SHARE EXCHANGE
THIS AGREEMENT AND PLAN OF SHARE EXCHANGE (the "Agreement") dated as of
this 9th day of March, 2000, by and among LEISURE TRAVEL GROUP, INC., a Delaware
corporation (the "Company"), LEISURE TRAVEL GROUP LIMITED, a private limited
company organized under the laws of England and Wales ("LTGL"), CIGNET VENTURES
LIMITED, a private limited company organized under the laws of Guernsey Channel
Islands ("Cignet"), RED KITE VENTURES LIMITED, a private limited company
organized under the laws of Guernsey Channel Islands ("Red Kite"), INTERNET PLC,
a private limited company organized under the laws of the British Virgin
Islands ("IPC"), TECHNOLOGY FINANCE LIMITED, a private limited company
organized under the laws of the British Virgin Islands ("TFL"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
("Peel"), ▇▇▇▇▇▇ LABORATORIES LIMITED, a private limited company ("▇▇▇▇▇▇"),
▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ LAST ("Last"), ▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Marriott"). Red Kite, IPC, TFL and ▇▇▇▇▇▇ are sometimes
hereinafter collectively referred to herein as the "LTGL Shareholders," Cignet,
▇▇▇▇▇, ▇▇▇▇▇▇▇ and Last are sometimes hereinafter collectively referred to
herein as the "GHG Shareholders," and the LTGL Shareholders and the GHG
Shareholders are sometimes hereinafter collectively referred to herein as the
"Shareholders." The Company and the Shareholders are hereinafter sometimes
collectively referred to as the "Parties."
WHEREAS, the Board of Directors of the Company deems it advisable and in
the best interests of the Company that the Company acquire all of the issued and
outstanding share capital of LTGL, which currently owns 100% of the share
capital OF MISS ELLIE'S WORLD TRAVEL LIMITED, a private limited company
organized under the laws of England and Wales ("Miss Ellie's) and ILIOS TRAVEL
LIMITED, a private limited company organized under the laws of England and Wales
("Ilios"); and
WHEREAS, the shareholders and Board of Directors of the Company and LTGL
deems it advisable and in the best interests of the Company and LTGL that LTGL
acquire all of the issued and outstanding share capital of GRAND HOTEL GROUP
LIMITED, a private limited company organized under the laws of England and Wales
("GHG"); and
WHEREAS, the shareholders and Board of Directors of the Company and LTGL
deems it advisable and in the best interests of the Company and LTGL that LTGL
also acquire 49% of the issued and outstanding share capital of ▇▇▇▇▇▇▇▇.▇▇▇,
LTD., a private limited company organized under the laws of England and Wales
("▇▇▇▇▇▇▇▇.▇▇▇"), and
WHEREAS, the case of each of the above acquisitions, the holders of the
share capital of each of LTGL, GHG and ▇▇▇▇▇▇▇▇.▇▇▇ will receive in exchange for
the share capital of such Acquired Corporations newly issued shares of common
stock, par value $0.001 per share, of the Company (the "Company Common Stock"),
all upon and subject to the terms and conditions contained in this Agreement
(the "Share Exchange"); and
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WHEREAS, the shareholders of each of the Acquired Corporations and the
Company have approved and adopted this Agreement as a "plan of reorganization"
within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions, and conditions contained herein, and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings, unless the context shall otherwise require:
(a) "Acquired Corporations" shall mean the collective reference to
LTGL (including its Miss Ellie's and Ilios subsidiaries), GHG and
▇▇▇▇▇▇▇▇.▇▇▇.
(b) "LTGL Escrowed Shares" shall mean all, and not less than all
of the issued and outstanding ordinary shares of LTGL.
(c) "GHG Escrowed Shares" shall mean all, and not less than all
of the issued and outstanding ordinary shares of GHG.
(d) "▇▇▇▇▇▇▇▇.▇▇▇ Escrowed Shares" shall mean all, and not less
than all of the issued and outstanding ordinary shares of
▇▇▇▇▇▇▇▇.▇▇▇.
(e) "Company Common Stock" shall mean the common stock, par value
$0.001 per share of the Company.
(f) "Company IPO" shall mean the initial public offering of shares
of Company Common Stock pursuant to a registration statement on Form S-1
or other applicable form of registration (the "Registration Statement")
which shall be declared effective by the United States Securities and
Exchange Commission ("SEC"), and the trading of such shares of Company
Common Stock on the Nasdaq Stock Exchange or other national securities
exchange in the United States.
(g) "Effective Date" shall mean the date on which the SEC shall
declare effective the Registration Statement and related prospectus in
connection with the Company IPO.
(h) "Rank Indebtedness" shall mean all indebtedness for money
borrowed, whether or not evidenced by notes, which shall be owed on the
Effective Date by GHG or any subsidiary of GHG to The Rank Group plc or
any of its subsidiaries or affiliates.
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ARTICLE II
TERMS AND PROVISIONS OF SHARE EXCHANGE
Section 2.01 Share Exchange.
(a) Transfer of Share Capital of Acquired Corporations. Upon the terms and
subject to the conditions herein contained, including, without limitation, the
conditions contained in Article VI hereof, at the Effective Date:
(i) the GHG Shareholders shall sell, assign, transfer and deliver to
LTGL, and LTGL shall acquire from the GHG Shareholders all right, title
and interest in and to the GHG Escrowed Shares, representing all, and
not less than all, of the outstanding share capital of GHG as at the
Effective Date, free and clear of all liens and encumbrances thereon;
(ii) TFL shall sell, assign, transfer and deliver to LTGL, and
LTGL shall acquire from TFL all right, title and interest in and to
the ▇▇▇▇▇▇▇▇.▇▇▇ Escrowed Shares, representing 49% of the issued and
outstanding share capital of ▇▇▇▇▇▇▇▇.▇▇▇ as at the Effective Date, free
and clear of all liens and encumbrances thereon; and
(iii) immediately following the transfers contemplated by clauses
(i) and (ii) of this Section 2.01(a), the LTGL Shareholders shall sell,
assign, transfer and deliver to the Company, and the Company shall acquire
from the LTGL Shareholders all right, title and interest in and to an
aggregate of the LTGL Escrowed Shares, representing all, and not less
than all, of the outstanding share capital of LTGL as at the Effective
Date, free and clear of all liens and encumbrances thereon;
In furtherance of the foregoing, on the Effective Date:
(x) the GHG Shareholders shall deliver to LTGL share certificates
representing all of the issued and outstanding share capital of GHG as at
the Effective Date, duly endorsed in blank for transfer,
(y) TFL shall deliver to LTGL share certificates representing 49%
of the issued and outstanding share capital of ▇▇▇▇▇▇▇▇.▇▇▇ as at the
Effective Date, duly endorsed in blank for transfer; and
(z) the LTGL Shareholders shall deliver to the Company share
certificates representing all of the issued and outstanding share capital
of LTGL as at the Effective Date, duly endorsed in blank for transfer,
(b) Issuance of Company Common Stock. In consideration for the transfer
and assignment of all the issued and outstanding share capital of GHG and 49% of
the issued and outstanding share capital of ▇▇▇▇▇▇▇▇.▇▇▇ to LTGL, and the
transfer and
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assignment of all the issued and outstanding share capital of LTGL to the
Company, and against delivery of the certificates representing such share
capital as provided in Section 1.1(a) hereof, at the Effective Date, the Company
shall issue an aggregate of 5,060,000 shares of Common Stock to the
Shareholders, as follows:
(i) to the GHG Shareholders an aggregate of 3,700,000 shares of
Company Common Stock, in the individual amounts among the GHG Shareholders
as set forth opposite their respective names on Schedule 1 annexed hereto
and made a part hereof;
(ii) to the LTGL Shareholders, an aggregate of 940,000 shares of
Company Common Stock, in the individual amounts among the GHG Shareholders
as set forth opposite their respective names on Schedule 2 annexed hereto
and made a part hereof;
(iii) to TFL, 220,000 shares of Company Common Stock; and
(iv) to ▇▇▇▇▇▇ Laboratories Limited, 200,000 shares of Company
Common Stock.
Section 2.02 Taking of Necessary Action. the Company, LTGL and the
Shareholders shall take all such actions as may be necessary or appropriate in
order to effectuate the transactions contemplated by this Agreement. If, at any
time after the Effective Date, any further action is necessary or desirable to
carry out the purposes of this Agreement, to vest the Company with title to 100%
of the issued and outstanding LTGL Escrowed Shares, or to vest LTGL with title
to 100% of the issued and outstanding GHG Escrowed Shares and 49% of the issued
and outstanding ▇▇▇▇▇▇▇▇.▇▇▇ Escrowed Shares, the officers and directors of
LTGL, GHG or ▇▇▇▇▇▇▇▇.▇▇▇, as the case may be, at their expense, shall take such
necessary or desirable action in order to effectuate the transactions
contemplated by this Agreement.
Section 2.03 Stock Legends. Certificates representing shares of the
Company Common Stock shall bear a legend restricting transfer of the shares of
the Company Common Stock represented by such certificate in substantially the
form set forth below:
"The shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be transferred, nor will any assignee or endorsee hereof
be recognized as an owner hereof by the issuer for any purpose,
unless a registration statement under the Securities Act with
respect to such shares shall then be in effect or unless the
availability of an exemption from registration with respect to any
proposed transfer or disposition of such shares shall be established
to the satisfaction of counsel for the issuer."
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the Company shall, from time to time, make stop transfer notations in its
records to ensure compliance in connection with any proposed transfer of the
shares with the Securities Act, and all applicable state securities laws.
Section 2.04 Fees and Expenses. the Company shall be responsible for all
fees and expenses incurred in connection with the negotiation, execution,
delivery and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, the professional fees of counsel for the
Shareholders incurred in connection with the Share Exchange.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The following representations and warranties are hereby made (i) by the
Company to the Shareholders with respect only to the Company, (ii) by LTGL and
the LTGL Shareholders to the Company with respect only to LTGL and its Miss
Ellie's and Ilios subsidiaries, (iii) by the GHG Shareholders to the Company and
LTGL with respect only to GHG and (iv) by TFL to the Company and LTGL with
respect only to ▇▇▇▇▇▇▇▇.▇▇▇.
Section 3.01 Organization; Authorization. It is a corporation duly
organized, validly existing, and in good standing under the laws of the state or
country of its incorporation and has full power and authority to carry on its
business as it now is being conducted and to own the properties and assets it
now owns. It is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction in which the conduct of its business or
ownership of its property requires such qualification; and, subject to the
requisite approval of and authorization by the holders of its capital stock, it
has full power and authority to enter into this Agreement and to carry out the
transactions contemplated herein.
Section 3.02 No Defaults. It is not a party to or bound by any contract or
agreement, or subject to any charter provision or other legal restriction (other
than restrictions applicable to corporations or businesses generally), which
adversely affects its business, operations, properties, assets, or condition,
financial or otherwise. It is not in default under any material contract, lease,
agreement, or other undertaking to which it is a party or by which it is bound.
Subject to the requisite approval of and authorization by the holders of its
capital stock, neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor compliance with the
terms and conditions hereof will conflict with, result in a breach of the
unwaived terms and conditions of, or constitute a default under its articles of
incorporation or bylaws or any contract, agreement, commitment, or other
undertaking to which it is a party or by which it is bound.
Section 3.03 Governmental Consents. Except for the requirements of the
United States Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws, and any applicable laws of the United Kingdom
or the United States no
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consent or approval of, or filing or registration with, any governmental or
regulatory authority is required in connection with the performance of the terms
of this Agreement.
Section 3.04 Examination of Documents. All original documents and other
information relating to its affairs will be made available, and copies of any
such documents will be furnished, upon request to the other party and its
counsel. Included among the documents to be made available are all articles of
incorporation and amendments, bylaws and amendments, minutes of all
incorporators, directors and shareholders meetings or consent minutes with
respect to actions taken by incorporators, directors, or shareholders, all
financial statements, tax returns, and all material contracts, leases, and
agreements to which it is a party or an intended beneficiary.
Section 3.05 Title to Assets. It has good and marketable title to all of
its properties and assets, both real and personal, free and clear of all
security interest liens, claims, equities of others, and restrictions on the
right to transfer, except as disclosed in writing to the Company.
Section 3.06 Tax Returns and Payments. All of its tax returns and reports
required by law to be filed have been duly filed, and all taxes, assessments,
fees, and other governmental charges (other than those presently payable without
interest or penalty or those which are being contested in good faith by
appropriate proceedings diligently conducted and which are disclosed in the
Exceptions Schedule) upon it or upon any of its properties, assets, interest, or
income which are due or are to become due have been paid or adequately reserved
against. None of its federal income tax returns is currently under examination
by the Inland Revenue.
Section 3.07 No Litigation. Except as disclosed in writing to the Company:
(a) there is no action, proceeding, claim, or investigation pending
or threatened against it or to which any of its assets or properties are
subject before any court or any governmental department, commission,
board, bureau, agency, or instrumentality which involves the possibility
of any judgment or liability or which might adversely affect its assets,
business, or goodwill and, after investigations it knows of no basis or
grounds for any such action, proceeding, claim, or investigation; and
(b) there is no outstanding order, writ, injunction, or decree of
any court, government department, commission, board, bureau, government
agency, or instrumentality, or any arbitration award, against it.
Section 3.08 No Material Adverse Changes. Between the date of this
Agreement and the Effective Date, as a condition precedent to the obligations
hereunder, it will not, without the Company's prior written consent, it will not
engage in any material transaction not in the ordinary course of its business,
make or declare any dividends or distributions of its capital, surplus, or
profits, or redeem or issue any shares of its common stock or other securities.
There will be no changes in its assets, properties, liabilities, or financial
condition from those shown in its financial statements or in its
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condition, other than changes which do not materially affect, singly or in the
aggregate, its business, assets, properties, or financial condition. Other than
as disclosed to the Company, it will not borrow any amounts or incur any
liabilities other than pursuant to contracts entered into in the ordinary course
of business; discharge any lien or encumbrance or satisfy any liabilities other
than current liabilities incurred in the ordinary course of business; mortgage,
pledge, or subject to lien or charge or any other encumbrance any of its assets
or properties; sell, assign, or transfer any of its assets except in the
ordinary course of business; waive any rights of substantial value; or loan
money to any of its directors, officers, or shareholders.
Section 3.09 Books and Records Complete. Its books and records are
accurate and complete and there are no matters for which proper entry has not
been made in such books and records.
Section 3.10 Insurance. It is adequately insured with respect to risks
usually insured against by companies owning properties and conducting business
similar to those owned and conducted by it. All policies are presently in force
and paid in full and will continue to be so without interruption until the
Effective Date.
Section 3.11 No Brokerage Fees. Except as disclosed in the Registration
Statement, no agent, broker, investment banker, person, or firm acting on its
behalf, to the best of its knowledge, is or will be entitled to any broker's or
finder's fee or any other commission or fee, directly or indirectly, in
connection with any of the transactions contemplated hereby, except for the
Brokers.
Section 3.11 Compliance with Certain Laws. It is in full compliance with
all laws material and applicable to its business, including, without limitation,
laws (i) regulating atmospheric, water, and other pollution or damage to the
environment, (ii) regulating the ownership and operation of hotels, travel
agencies, tour operators and requirements of the CAA in respect of airline seat
bookings, and (iii) prohibiting discrimination based on race, creed, color, sex,
age, disability, or national origin.
Section 3.12 Authorization. Its shareholders and Board of Directors have
duly authorized the execution and delivery of this Agreement and all documents
and transactions called for hereunder, and, this Agreement constitutes a valid
and binding obligation of the corporation in accordance with the Agreement's
terms. Each shall deliver to the other a certified copy of resolutions of its
Board of Directors pertaining to the foregoing. It has taken or will exert its
best efforts to take, prior to the Effective Date, all action required by law,
its Articles of Association, Memorandum of Association, Certificate of
Incorporation and Bylaws, as applicable, and otherwise to authorize the
execution, delivery, and performance of this Agreement.
Section 3.13 Contracts. Other than as set forth or described in the
Registration Statement, it is not a party to any material agreement,
understanding or other contractual obligation ("Contract") binding upon it, the
non-performance of which by either a party
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to this Agreement or the other party to such Contract, would have a material
adverse effect on the business, financial condition or prospects of such party
hereto.
Section 3.14 Property and Equipment. The property and equipment as shown
on its most recent balance sheet are in good operating condition and state of
repair, reasonable wear and tear excepted. The use of its real property conforms
in all material respects with applicable ordinances, regulations, zoning, or
building codes, and other applicable laws.
Section 3.15 Share Ownership. The Shareholders who have executed this
Agreement are the record and beneficial owners of 100% of the share capital of
each of the Acquired Corporations and there are no options, warrants, rights or
other agreements or understandings, written or oral, to sell, issue or purchase
any additional share capital of any of the Acquired Corporations. There are not
issued or outstanding any options, warrants, or rights to subscribe for,
purchase, or receive ordinary shares or preference shares or any other
securities convertible into ordinary shares of preference shares of any of the
Acquired Corporations.
Section 3.16 Representations True. No representation or warranty contained
herein, nor any statement or certificate furnished hereunder or in connection
herewith, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE IV
INVESTMENT REPRESENTATIONS AND WARRANTIES
Each Stockholder hereby acknowledges, represents and warrants to, and
agrees with, the Company as follows:
Section 4.01 The Stockholder is acquiring the shares of Company Common
Stock for his or its own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale, distribution
thereof in whole or in part. Further, the Stockholder does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the shares of Company Common Stock.
Section 4.02 The Stockholder acknowledges his or its understanding that
the issuance of the shares of Company Common Stock is intended to be exempt from
registration under the Securities Act of 1933, as amended (the "Securities Act")
by virtue of Section 4(2) of the Securities Act and the provisions of Regulation
D promulgated thereunder ("Regulation D"). In furtherance thereof, the
Stockholder represents and warrants to, and agrees with, the Company that he or
it: (i) is an "accredited investor" as that term is defined in Section 2(15) of
the Securities Act, and Rule 501(a) of Regulation D promulgated thereunder; (ii)
has the financial ability to bear the economic risk of an investment in the
Company and has no need for liquidity with respect to his or its
8
investment in the Company; and (iii) has such knowledge and experience in
companies similar to the Company in terms of the Company's stage of development
so as to be capable of evaluating the merits and risks of an investment in the
Company.
Section 4.03 The Stockholder has been given the opportunity for a
reasonable time prior to the date hereof to ask questions of, and receive
answers from, the Company or its representatives concerning the business of the
Company the powers and rights of the Company Common Stock, and has been given
the opportunity for a reasonable time prior to the date hereof to obtain such
additional information necessary to verify the accuracy of the information which
was provided to the extent the Company possesses such information or can acquire
it without unreasonable effort or expense.
Section 4.04 The Stockholder represents, warrants and agrees that he or it
will not sell or otherwise transfer the shares of Company Common Stock without
registration under the Securities Act or an exemption therefrom and fully
understands and agrees that he or it must bear the economic risk of an
investment in the shares of Company Common Stock because, among other reasons,
such shares have not been registered under the Securities Act or under the
securities laws of any state and, therefore, cannot be resold, pledged, assigned
or otherwise disposed of unless they are registered under the Securities Act and
under the applicable securities laws of such states prior to such resale,
pledge, assignment or other disposition, or an exemption from such registration
is available. In particular, the Stockholder is aware that such shares, when
issued, will be "restricted securities," as such term is defined in Rule 144
promulgated under the Securities Act ("Rule 144"), and they may not be sold
pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The
Stockholder understands that Rule 144 is not currently available in connection
with a sale of such shares. The Stockholder also understands that the Company is
under no obligation to register such shares on his or its behalf or to assist
him or it in complying with any exemption from registration under the Securities
Act or applicable state securities laws. The Stockholder further understands
that sales or transfers of such shares are further restricted by applicable
state securities laws and the provisions of this Agreement.
Section 4.05 The Stockholder is not acquiring the shares of Company Common
Stock as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, any seminar or meeting, or any solicitation
of a subscription by a person or entity not previously known to the Stockholder
in connection with investments in securities generally.
Section 4.06 The foregoing representations, warranties and agreements
shall survive the date hereof.
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ARTICLE V
COVENANTS
Section 5.01 Preservation of Business; Access to Documents. From and after
the date of this Agreement and until the Effective Date, the parties hereto
hereby covenant and agree with each other that the Company and each of the
Acquired Corporations shall:
(a) use its best efforts to preserve its business organization,
goodwill, and business relationships intact and to retain the services of
its officers and key employees;
(b) provided the same does not violate any statute, order, decree,
rule, regulation, or contract, give each other and its authorized agents
full access, during normal business hours, upon reasonable notice, to all
of its assets, properties, books, records, agreements, and commitments and
furnish such representatives during such period with all such information
concerning its affairs as the other may reasonably request; provided.
however that each party and its authorized agents shall hold in confidence
all documents and information thus acquired or learned concerning the
parties and, if the transactions contemplated by this Agreement are not
consummated, all such documents shall immediately thereafter be returned
to the appropriate parties;
(c) take all necessary corporate and any other action, and use its
best efforts to obtain all consents, approvals, and agreements required to
carry out the transactions contemplated in this Agreement and to satisfy,
or cause to be satisfied, the conditions specified herein; and
(d) maintain in full force and effect insurance policies providing
coverages and amount of coverage as now provided.
Section 5.02 Business in Ordinary Course. Except as specifically
authorized by this Agreement, until the Effective Date, none of the Acquired
Corporations shall do any of the following except with the prior written consent
of the Company:
(a) effect any general salary increase except in line with its past
practices;
(b) enter into any written employment agreement;
(c) increase the base compensation or other benefits of any employee
by more than 10%;
(d) make any contribution to any trust or plan for the benefit of
employees not required by the present terns thereof or in accordance with
its past practices;
(e) make any change in any employee benefit plan which would
materially increase the cost thereof or adopt any new employee benefit
plan;
(f) issue or commit to issue any capital stock or other ownership
interests.
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(g) grant or omit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of capital stock
or other ownership interests or issue or commit to issue any securities
convertible into or exchangeable for shares of its common stock or other
ownership interests;
(h) declare, set aside, or pay any dividend or distribution with
respect to its common stock or other ownership interests;
(i) directly or indirectly redeem, purchase, or otherwise acquire or
commit to acquire any of its common stock or other ownership interest or
directly or indirectly terminate or reduce or commit to terminate or
reduce any bank line of credit or the availability of any funds under any
loan or financing agreement;
(j) effect a split or reclassification of any capital stock or
recapitalization;
(k) change its articles of incorporation, bylaws, or other governing
instruments, except to effectuate the transactions contemplated by this
Agreement;
(1) borrow or agree to borrow any funds except pursuant to existing
bank lines of credit or other existing loan agreements or financing
arrangements; or
(m) waive or commit to waive any right of substantial value.
ARTICLE VI
CONDITIONS PRECEDENT TO THE SHARE EXCHANGE
The obligations of the parties under this Agreement are subject to the
satisfaction of the following express conditions precedent at or before the
Effective Date:
Section 6.01 Compliance with Laws. All statutory requirements for the
valid consummation by it of the transactions contemplated by this Agreement
shall have been fulfilled.
Section 6.02 Documents. All corporate and other proceedings in connection
with the transactions contemplated herein and all documents incident thereto
shall be reasonably satisfactory in form and substance to it and its counsel.
Section 6.03 Payment of Rank Indebtedness. Subject only to consummation of
the Company IPO within five business days following the Effective Date and
receipt of the net proceeds thereof, the Company will apply sufficient net
proceeds from such Company IPO which, when coupled with other available funds,
will be sufficient to (a) retire and pay in full all Rank Indebtedness, and (b)
cause the release of all personal guarantees of ▇▇▇▇▇ ▇. ▇▇▇▇▇ or his affiliates
and all collateral securing a bank letter of credit issued by Citibank, N.A. in
favor of the holder of such Rank Indebtedness.
Section 6.04 Capitalization of Certain Loans. On the Effective Date, Red
Kite or another applicable corporate affiliate of ▇▇▇▇▇ ▇. ▇▇▇▇▇, shall
capitalize as share equity in
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the Company an aggregate of (pound)1,030,000 of loans made to LTGL or its
subsidiaries; provided that except for the shares of Company Common Stock issued
pursuant to this Agreement, no other form of consideration shall be issued or
paid for the capitalization of the aforesaid loans.
Section 6.05 Opinions of Counsel. Unless waived in writing by the parties
prior to the Effective Date, the Company and each Acquired Corporation shall
have caused its counsel to prepare and deliver to the other an opinion, dated as
of the Effective Date, in form and substance satisfactory to the other, to the
effect that:
(a) It has been duly incorporated and is a validly existing
corporation in good standing under the laws of its state or country of
incorporation, with full corporate power and authority to own and operate
its properties and to carry on its business as presently being conducted.
(b) It is duly qualified and licensed to transact business in each
state or other jurisdiction in which it transacts business and by each
governmental authority by which it is required to be licensed, except for
jurisdictions in which failure to qualify would not materially and
adversely affect its business, operations, or financial condition.
(c) It has an authorized capital as set forth in Article IV
hereinabove and the outstanding shares of its common stock stated as
issued and outstanding have been duly and validly issued and are fully
paid and nonassessable and contain no preemptive rights. To the best
knowledge of such counsel, there are no outstanding options, warrants, or
other rights to subscribe for, purchase, or receive shares of its common
stock or securities convertible into its common stock, other than as set
forth in Article IV hereinabove.
(d) Neither the execution and delivery of this Agreement nor
compliance with the terms of this Agreement will conflict with or result
in a material breach of any of the terms, conditions, or provisions of, or
constitute a material default under its Articles of Association,
Memorandum of Association, Certificate of Incorporation or bylaws or any
material note, indenture, mortgage, deed of trust, or other material
agreement or instrument known to such counsel to which it is a party or by
which it or any of its property is bound, or any existing law, order,
rule, regulation, writ, injunction, or decree known to such counsel of any
government, governmental instrumentality, agency, body, arbitration
tribunal, or court, domestic or foreign, having jurisdiction over it or
its properties.
(e) This Agreement has been duly authorized and executed by it, and
all corporate action by it required to authorize the Share Exchange has
been taken.
(f) Such counsel knows of no material litigation, proceeding, or
governmental investigation pending or threatened against or relating to it
or its properties or business.
In rendering such opinion, counsel may rely on certificates of its
officers as to matters of fact and, as to matters of law, may rely on opinions
of local counsel chosen by
12
it provided that copies of such opinions of such other counsel accompany the
opinion delivered by counsel.
Section 6.06 Certificate of President and Secretary. The Company and each
Acquired Corporation shall have furnished to the other a certificate of the
President or Vice President and the Secretary of the respective company, dated
as of the Effective Date, to the effect that the representations and warranties
of the respective company in this Agreement are true and correct at and as of
the Effective Date, that no error, misstatement, or omission has been discovered
or is known with respect to such representations and warranties, and that the
respective company has complied with all the agreements and has satisfied all
the covenants on its part to be performed at or prior to the Effective Date.
Section 6.07 No Material Adverse Change. Between the date of execution of
this Agreement and the Effective Date, neither the Company nor any of the
Acquired Corporations: (a) except in the ordinary course of its business, shall
have incurred any liabilities or obligations (direct or contingent) or disposed
of any of its assets, or entered into any material transaction or suffered or
experienced any materially adverse change in its condition, financial or
otherwise, and (b) shall have increased its issued and outstanding ordinary
shares, preference shares, common stock or any other securities, or rights,
options, warrants or other instruments convertible into or exercisable for
ordinary shares, preference shares, common stock.
ARTICLE VII
TERMINATION, FURTHER ASSURANCES, AND MISCELLANEOUS
Section 7.01 Termination and Postponement. This Agreement and the Share
Exchange contemplated hereby may be terminated, and the transactions provided
for herein abandoned, as follows:
(a) at any time prior to but not after the Effective Date by mutual
consent of the Company and Cignet, or
(b) at the sole option of Cignet, at any time following five (5)
business days after the Effective Date if the Company IPO shall not have
been consummated and the Rank Indebtedness paid in full within five (5)
business days following such Effective Date
In the event of the termination and abandonment of this Agreement and the
Share Exchange contemplated hereby, this Agreement shall become void and of no
effect, without any liability on the part of any party or its directors,
officers, or shareholders.
Section 7.02 Survival. All agreements, representations, and warranties
made hereunder or in connection with the transactions contemplated hereby shall
survive the Effective Date and remain effective in accordance with the terms
hereof.
13
Section 7.03 Liability. In the event that this Agreement shall be
terminated pursuant to Section 7.01 hereinabove, all further obligations of the
Company and the Shareholders under this Agreement shall terminate without
further liability to the other.
Section 7.04 Assignment. This Agreement may not be assigned nor any of the
performances hereunder delegated by operation of law or otherwise by any party
hereto, and any purported assignment or delegation shall be void.
Section 7.05 Headings. The article and section headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
this Agreement.
Section 7.06 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, legal representatives, assigns, and transferors.
Section 7.07 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof. There
are no representations, warranties, conditions, or other obligations except as
herein specifically provided. Any waiver, amendment, or modification hereof must
be in writing. A waiver in one instance shall not be deemed to be a continuing
waiver or waiver in any other instance.
Section 7.08 Counterparts. This Agreement may be executed in counterparts
and each counterpart hereof shall be deemed to be an original, but all such
counterparts together shall constitute but one agreement an original, but all
such counterparts together shall constitute but one agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
LEISURE TRAVEL GROUP, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
LEISURE TRAVEL GROUP LIMITED
a private limited company organized under the laws of England and Wales
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
CIGNET VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
RED KITE VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
INTERNET PLC
a private limited company organized under the laws of the British Virgin Islands
By: /s/ ▇▇▇ ▇▇▇▇
---------------------------------------------
TECHNOLOGY FINANCE LIMITED
a private limited company organized under the laws of the British Virgin Islands
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
15
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ LABORATORIES LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Last
---------------------------------------------
▇▇▇▇▇▇▇ LAST
/s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
16
SCHEDULE 1
Cignet Ventures Limited 3,145,000 Shares
▇▇▇▇▇▇ ▇▇▇▇▇ 370,000 Shares
▇▇▇▇▇▇▇ Last 74,000 Shares
▇▇▇ ▇▇▇▇▇▇▇ 74,000 Shares
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 37,000 Shares
17
SCHEDULE 2
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 263,333 Shares
Internet plc 263,333 Shares
Red Kite Ventures Limited 413,334 Shares
18
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into as of the date set forth below, by
and among LEISURE TRAVEL GROUP, INC., a Delaware corporation (the "Company"),
LEISURE TRAVEL GROUP LIMITED, a private limited company organized under the laws
of England and Wales ("LTGL"), CIGNET VENTURES LIMITED, a private limited
company organized under the laws of Guernsey (Channel Islands) ("Cignet"), RED
KITE VENTURES LIMITED, a private limited company organized under the laws of
Guernsey (Channel Islands) ("Red Kite"), INTERNET PLC, a private limited company
organized under the laws of the British Virgin Islands ("IPC"), TECHNOLOGY
FINANCE LIMITED, a private company organized under the laws of the British
Virgin Islands ("TFL"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ("Peel"), ▇▇▇▇▇▇ LABORATORIES LIMITED, a
private limited company ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ LAST
("Last"), ▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Marriott") and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, LLP, a law firm with offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Escrow Agent"). Red Kite, IPC, TFL and ▇▇▇▇▇▇ are sometimes
hereinafter collectively referred to herein as the "LTGL Shareholders," Cignet,
▇▇▇▇▇, ▇▇▇▇▇▇▇ and Last are sometimes hereinafter collectively referred to
herein as the "GHG Shareholders," and the LTGL Shareholders and the GHG
Shareholders are sometimes hereinafter collectively referred to herein as the
"Shareholders."
WITNESSETH
WHEREAS, as of March 9, 2000, the Company and the Shareholders entered
into an Agreement and Plan of Share Exchange (the "Agreement") under which (a)
LTGL agreed to purchase (i) from the GHG Shareholders, all of the outstanding
share capital of GHG and (ii) from TFL, 49% of the outstanding share capital of
▇▇▇▇▇▇▇▇.▇▇▇ and (b) the Company agreed to purchase from the Shareholders all of
the outstanding share capital of LTGL; and
WHEREAS, each of the Shareholders have agreed to deposit said shares in
escrow in order implement the Agreement, and have executed this Agreement to
evidence the terms of said escrow with the Escrow Agent.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The parties hereby designate, constitute and appoint Escrow Agent
as the "Escrow Agent" under this Agreement.
2. The Escrow Agent hereby acknowledges receipt of certificates
evidencing ordinary shares of each of LTGL, MISS ELLIE'S WORLD TRAVEL
LIMITED, a private limited company organized under the laws of England and
Wales ("Miss Ellie's) and ILIOS TRAVEL LIMITED, a private limited company
organized under the laws of England and
19
Wales ("Ilios"), GHG and ▇▇▇▇▇▇▇▇.▇▇▇ in the amounts set forth on SCHEDULE
A annexed hereto and made a part hereof (collectively, the "Escrowed
Shares"), together with stock powers duly executed in blank by the
Shareholders of record of such Escrowed Shares
3. The Escrowed Shares are to be held by Escrow Agent in escrow and
disposed of pursuant to and strictly in accordance with the terms and
conditions of this Agreement. Escrow Agent shall hold the Escrowed Shares
in a safe place, provided that Escrow Agent shall not be obligated to
obtain insurance covering the loss and/or destruction of the Escrowed
Shares unless the Parties so request and advance the Escrow Agent
sufficient funds to pay for said insurance. The Escrow Agent undertakes to
perform only such duties as are expressly set forth in this Agreement, and
no implied duties or obligations of the Escrow Agent shall be read into
this Agreement.
4. The Escrow Agent shall at all times be authorized to deliver the
Escrowed Shares in accordance with the terms of the Agreement or with
written instructions executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇ or Cignet, as
representative of all of the Shareholders (the "Representative"), all the
Parties. In the event the Escrow Agent shall receive a written claim of
default under the Agreement by any of the Parties, then the Escrow Agent
shall not release the Escrowed Shares from escrow unless and until the
Escrow Agent shall have received written instructions from the
Representative as the proper deliver of the Escrowed Shares or Escrow
Agent has received direction from a court of competent jurisdiction (after
expiration of any applicable appeal period) as to the proper party
entitled to receipt of the Escrowed Shares. Escrow Agent shall be
authorized to file an action in interpleader to determine the proper party
entitled to the Escrowed Shares; and the defaulting party, as determined
in such proceeding, shall indemnify and hold harmless the Escrow Agent
from all costs and expenses, including reasonable attorney's fees
associated with the proceeding. Escrow Agent may act in reliance upon any
writing or instrument or signature which it in good faith believes to be
genuine and may assume that any person purporting to give any writing,
notice, advice, or instruction in connection with the provisions hereof
has been duly authorized to do so. Escrow Agent shall not be liable in any
manner for the sufficiency or correctness as to form, manner of execution
or validity of any instrument deposited in this escrow nor as to the
identity, authority or right of any persons executing the same; and its
duties hereunder shall be limited to the safekeeping of the Escrowed
Shares and for the disposition of same in accordance with this Agreement.
Escrow Agent hereby executes this Agreement for the sole and exclusive
purpose of evidencing its Agreement of the provisions hereof.
5. The Parties hereby agree to indemnify and hold the Escrow Agent
harmless from any and all claims, liabilities, losses, actions, suits or
proceedings at law or in equity, or any other expense, fees, or charges of
any character or nature, which it may incur or with which it may be
threatened by reason of its acting as Escrow Agent under this Agreement;
and in connection therewith, to indemnify the Escrow Agent against any and
all expenses, including reasonable attorney's fees and the cost of
defending any action, suit or proceeding or resisting any claim.
20
6. The Escrow Agent may consult with counsel of its own choice and
shall have full and complete authorization and protection for any action
taken or suffered by it and hereunder in good faith and in accordance with
the opinion of such counsel. The Escrow Agent shall otherwise not be
liable for any mistakes of fact or error in judgment, or for any acts or
omissions of any kind unless caused by its willful misconduct or gross
negligence.
7. All reasonable out-of-pocket expenses of Escrow Agent in
connection with the services rendered under this Agreement shall be paid
by the Company.
8. Upon release and/or delivery of all Escrowed Shares in accordance
with the terms of the Agreement and this Agreement, this Agreement shall
terminate and the parties shall be released hereunder except with respect
to the indemnification obligations in favor of the Escrow Agent.
9. The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by
the party as to whom enforcement of any such amendment, modification,
supplement or waiver is sought and making specific reference to this
Agreement.
10. Escrow Agent shall have no duties or responsibilities other than
those expressly set forth herein. Escrow Agent shall not be liable for any
action taken or omitted by it, or any action suffered by it, except for
gross negligence or willful misconduct. The Escrow Agent shall not be
bound by any notice or demand unless evidenced by a writing delivered to
Escrow Agent signed by the proper party or parties.
11. This Agreement contains the entire understanding between and
among the parties hereto with respect to the subject matter hereof, and
shall be binding upon and inure to the benefit of such parties, and their
respective heirs, successors in interest and legal representatives.
12. This Agreement is governed by, and is to be construed in
accordance with, the laws of the State of New York, United States of
America.
This Agreement may be executed in counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
LEISURE TRAVEL GROUP, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
21
LEISURE TRAVEL GROUP LIMITED
a private limited company organized under the laws of England and Wales
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
CIGNET VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
RED KITE VENTURES LIMITED
a private limited company organized under the laws of Guernsey (Channel Islands)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
INTERNET PLC
a private limited company organized under the laws of the British Virgin Islands
By: /s/ ▇▇▇ ▇▇▇▇
---------------------------------------
TECHNOLOGY FINANCE LIMITED
a private limited company organized under the laws of the British Virgin Islands
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ LABORATORIES LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
22
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Last
-----------------------------------
▇▇▇▇▇▇▇ LAST
/s/ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ESCROW AGENT:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, SHAREHOLDER
23
