San Lotus Holding Inc.


3F B302C, No. 185 Kewang Road


Longtan Township, Taoyuan County 325


Taiwan (R.O.C.)


 


 


 


January 18, 2013


 


 


 


USA XO Tours Inc.


Attn: Ms. Chen Tseng Chih Ying, CEO


9368 Valley Blvd., #103


Rosemead, CA 91770


USA


 


 


Re: Acquisition of USA XO Tours Letter
of Intent


 


 


Dear Ms. Chen:


 


This non-binding letter
of intent (the “LOI”) sets forth our understanding of the mutual intentions of the below parties regarding the
proposed acquisition of USA XO Tours Inc., a California corporation (“XO”), by San Lotus Holding Inc., a Nevada
corporation (“San Lotus”) (San Lotus and XO may be referred to hereinafter individually as a “Party”
and collectively as the “Parties”).


 


1. Transaction Structure. San Lotus is a Securities
and Exchange Commission reporting company that is in the process of applying to be traded on the over-the-counter bulletin board.
The planned acquisition will be accomplished by San Lotus acquiring a 100 percent ownership interest in XO (the “Acquisition”)
from XO’s shareholders, thereby making XO a wholly owned subsidiary of San Lotus, in accordance with the terms of an executed
definitive stock purchase agreement (the “Stock Purchase Agreement”) to be negotiated by the Parties. The Parties
will jointly determine the optimum tax structure for the transaction in order to best satisfy tax planning, regulatory and other
considerations.


 


2. Transaction Closing.  The Parties shall use their
commercially best efforts to close the Acquisition (the “Closing”) within 180 days of execution by both Parties
executing the LOI. Should the Parties be unable to close the transaction within that time period, the Closing may be extended based
upon renegotiation of the timeline by the Parties.


 


3. Definitive Agreements.  The Parties shall commence
preparation of the Stock Purchase Agreement and any other necessary documents (together, the “Definitive Agreements”)
that will define the terms and other commitments contemplated by the parties. The Definitive Agreements will contain the general
provisions outlined above in addition to the usual and customary representations and warranties, covenants, conditions, and indemnifications
for a transaction of this kind, including, but not limited to, tax and securities filings, and state and local corporate filings.
 


 






    	 



    	 



    



 


4. Due Diligence.  For a period of 180 days following
execution of this LOI (the “Due Diligence Period”), the Parties must comply with all reasonable requests to
review relevant information concerning themselves and any business entities they are affiliated with, insofar as such requests
are reasonably related to the completion of the Acquisition. Upon the execution of this LOI by all Parties, and subsequent request
to or by a Party, the Parties shall mutually exchange the following:


 


		·	all Financial Statements;



		·	history of financings and related documents;



		·	all employment contracts and consulting agreements;



		·	a list of all officers, key employees, directors,
and advisors, with related bios;



		·	a list and description of all assets;



		·	a list of all known liabilities and claims;



		·	a list of all licenses and certifications;



		·	Certificate of Incorporation (with any amendments
thereto);



		·	all board minutes;



		·	bylaws (with any amendments thereto); and



		·	current shareholder list.



 


5. Audit Requirement. As a condition to entering into
the Stock Purchase Agreement, XO shall provide San Lotus with (i) fully audited financial statements and accounts and (ii) demonstrate
that the accounting procedures in place at XO are in full conformity with the expectations and requirements of San Lotus. Should
either the audit report or the accounting procedures or both fail to meet the expectations and requirements of San Lotus, San Lotus
shall be under no obligation to proceed with the Acquisition.


 


6. Transaction Document Expenses.  Each Party shall
be solely responsible for all fees and expenses of the Parties’ agents, advisors, attorneys and accountants with respect
to the negotiation of this LOI, the negotiation and drafting of the Definitive Agreements and, if the Definitive Agreements are
executed, the closing of the Transaction.


 


7. No Shop.  Until the closing of the Acquisition,
or termination of negotiations related to the Acquisition, XO may not enter into any transaction or agreement related to the sale
of XO, or any of its assets, or otherwise encumber or enter into an agreement that would encumber any of the foregoing, or enter
into any agreement outside of the ordinary course of business or that would otherwise hinder the Parties’ rights or intentions
under this LOI.  


 


8. Confidentiality, Non-Disclosure and Subsequent Public
Announcement. Neither Party shall disclose to any other person (other than such party’s employees, representatives
and agents who are bound by confidentiality agreements or other confidentiality obligations) the terms or conditions hereof or
the fact that the Acquisition is being contemplated by the Parties. Following the execution of this LOI, San Lotus shall release
a Form 8-K with the Securities and Exchange Commission and a related press release regarding the LOI and the proposed Acquisition.
With the exception of the Form 8-K and press release described in this section, the Parties agree not to issue any further press
releases or make any further public announcement regarding the Acquisition prior to the Closing without prior written mutual consent
of all Parties, except where a public announcement is otherwise required by law. In addition, each of the Parties hereto shall
keep confidential each of the provision of this LOI and the agreements referenced or contemplated herein and all information each
party obtains regarding the other party (collectively, the “Confidential Information”), except if (a) the information
is already a matter of public record or knowledge; (b) the information may be necessary to a Party’s financial or legal advisor(s)
(subject to such party agreeing to be bound to the non-disclosure covenants contained in this paragraph); or (c) such disclosure
is required by law. This covenant regarding Confidential Information shall indefinitely survive the termination of this LOI or
any Definitive Agreements.


 






    	 



    	 



    



 


9. Acknowledgments and Assent. The Parties acknowledge
that they were advised to consult with an independent attorney prior to signing this LOI and that they have in fact consulted with
counsel of their own choosing prior to executing this LOI. The Parties agree that they have read this LOI and understand the content
herein and freely and voluntarily assent to all of the terms herein.  


 


10. Entire Agreement; Amendment; Counterparts. This LOI
represents the entire understanding of the Parties with respect to the terms of San Lotus’s proposed acquisition of XO and
supersedes all prior and/or contemporaneous agreements, representations and understandings, whether written or oral. This LOI may
only be amended, modified or extended by a written agreement signed by both Parties hereto. This LOI may not be assigned without
the other Party’s written consent. This LOI may be signed in two or more counterparts, any one of which need not contain
the signature of more than one Party, but all such counterparts will constitute one and the same agreement.


 


We trust that these terms accurately reflect
our understanding. If there are any questions or comments regarding the same, please feel to contact me at your convenience. Otherwise
kindly execute this LOI acknowledging your agreement to the terms outlined above.


 


 


 


 


Agreed and accepted by:


	 	 
	
        San Lotus Holding, Inc.

        a Nevada corporation

         

         

         

        By: /s/ Chen Tseng Chih Ying                     

        Name: Chen Tseng Chih Ying

        Title: Chief Executive Officer
	
        USA XO Tours Inc.

        a California corporation

         

         

         

        By:  /s/ Chen Tseng Chih Ying               

        Name: Chen Tseng Chih Ying

        Title: Chief Executive Officer