Document:

Exhibit 10.1

Exhibit 10.1

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

among

TRAVEL AND EVENT SERVICES, LLC

and

AMBASSADORS, LLC

and

AMBASSADORS INTERNATIONAL, INC.

April 16, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I SALE AND PURCHASE OF ASSETS
	 	 	1	 
	1.1 Sale and Purchase of Assets
	 	 	1	 
	1.2 Excluded Assets
	 	 	2	 
	1.3 Assumed Liabilities
	 	 	2	 
	1.4 Excluded Liabilities
	 	 	3	 
	1.5 Purchase Price
	 	 	4	 
	1.6 Deferred Cash Consideration
	 	 	4	 
	1.7 Closing
	 	 	5	 
	1.8 Allocation of Purchase Price
	 	 	5	 
	 
	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES REGARDING THE STAKEHOLDERS
	 	 	5	 
	2.1 Organization, Qualification and Corporate Power
	 	 	5	 
	2.2 Authority
	 	 	5	 
	2.3 No Conflicts
	 	 	5	 
	2.4 Financial Statements
	 	 	6	 
	2.5 Absence of Certain Changes
	 	 	6	 
	2.6 Title to and Sufficiency of Assets
	 	 	7	 
	2.7 Tangible Personal Property; Condition of Purchased Assets
	 	 	7	 
	2.8 Accounts Receivable
	 	 	7	 
	2.9 Real Property
	 	 	8	 
	2.10 Contracts
	 	 	8	 
	2.11 Intellectual Property
	 	 	9	 
	2.12 Tax
	 	 	9	 
	2.13 Legal Compliance
	 	 	10	 
	2.14 Litigation
	 	 	10	 
	2.15 Environmental
	 	 	11	 
	2.16 Employees
	 	 	11	 
	2.17 Employee Benefits
	 	 	11	 
	2.18 Customers
	 	 	12	 
	2.19 Transactions with Affiliates
	 	 	12	 
	2.20 No Brokers’ Fees
	 	 	12	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE BUYER
	 	 	13	 
	3.1 Organization and Authority
	 	 	13	 
	3.2 No Conflicts
	 	 	13	 
	3.3 Litigation
	 	 	13	 
	3.4 No Brokers’ Fees
	 	 	13	 
	 
	 	 	 	 
	ARTICLE IV EMPLOYEES AND EMPLOYEE BENEFITS
	 	 	13	 
	4.1 Salaries and Benefits
	 	 	13	 
	4.2 General Employee Provisions
	 	 	13	 
	4.3 Continuing Employees
	 	 	14	 
	4.4 Severance Payments; Vacation
	 	 	14	 
	 
	 	 	 	 
	ARTICLE V POST-CLOSING COVENANTS
	 	 	14	 
	5.1 Payment of Excluded Liabilities
	 	 	14	 
	5.2 Payment of Assumed Liabilities
	 	 	14	 
	5.3 Bulk Transfer Compliance
	 	 	14	 

 

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	 	 	Page	 
	 
	 	 	 	 
	5.4 Tax Covenants
	 	 	14	 
	5.5 Consents
	 	 	15	 
	5.6 Mail and Receivables
	 	 	15	 
	5.7 Litigation Support
	 	 	15	 
	5.8 Transition
	 	 	15	 
	5.9 Confidentiality; Public Disclosure
	 	 	16	 
	5.10 License to Use Name “Ambassadors”
	 	 	17	 
	5.11 Retention of and Access to Books and Records
	 	 	17	 
	5.12 Accounting Software
	 	 	17	 
	5.13 Website and Client Portal
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VI INDEMNIFICATION
	 	 	17	 
	6.1 Indemnification by the Stakeholders
	 	 	17	 
	6.2 Indemnification by the Buyer
	 	 	18	 
	6.3 Survival and Time Limitations
	 	 	18	 
	6.4 Limitations on Indemnification by the Stakeholders
	 	 	18	 
	6.5 Manner of Payment
	 	 	18	 
	6.6 Third-Party Claims
	 	 	18	 
	6.7 Other Indemnification Matters
	 	 	19	 
	6.8 Exclusive Remedy
	 	 	20	 
	6.9 Insurance and Third Party Recoveries
	 	 	20	 
	6.10 Tax Benefit
	 	 	20	 
	 
	 	 	 	 
	ARTICLE VII MISCELLANEOUS
	 	 	20	 
	7.1 Further Assurances
	 	 	20	 
	7.2 No Third-Party Beneficiaries
	 	 	20	 
	7.3 Entire Agreement
	 	 	20	 
	7.4 Successors and Assigns
	 	 	20	 
	7.5 Counterparts
	 	 	20	 
	7.6 Notices
	 	 	21	 
	7.7 JURISDICTION; SERVICE OF PROCESS
	 	 	22	 
	7.8 Governing Law
	 	 	22	 
	7.9 Amendments and Waivers
	 	 	22	 
	7.10 Severability
	 	 	22	 
	7.11 Expenses
	 	 	22	 
	7.12 Interpretation
	 	 	23	 
	7.13 Specific Performance
	 	 	23	 
	7.14 Time Is of the Essence
	 	 	23	 

 

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	SCHEDULES	 	 
	1.1(a)

	 	Tangible Personal Property
	1.1(b)

	 	Accounts Receivable and Other Indebtedness
	1.1(c)

	 	Leases
	1.1(d)

	 	Assumed Contracts
	1.1(e)

	 	Intellectual Property
	1.1(h)

	 	Telephone Numbers, Domain Names, Etc.
	1.2(f)

	 	Other Excluded Assets
	1.3(a)

	 	Assumed Accounts Payable
	1.3(b)

	 	Assumed Expenses
	1.3(c)

	 	Assumed Customer Deposits
	1.3(d)

	 	Overpayment Liabilities
	1.3(f)

	 	Earned Paid Time Off
	2.1

	 	Organization
	2.2

	 	Conflicts and Consents
	2.4

	 	Financial Statements
	2.5

	 	Certain Changes
	2.6

	 	Exceptions to Title
	2.7

	 	Tangible Personal Property
	2.8

	 	Accounts Receivable
	2.9

	 	Real Property
	2.10

	 	Material Contracts
	2.11

	 	Intellectual Property
	2.12

	 	409A
	2.13

	 	Compliance with Law; Permits
	2.14

	 	Litigation and Orders
	2.15

	 	Environmental
	2.16

	 	Employees
	2.17

	 	Employee Benefit Plans
	2.18

	 	Customers
	2.19

	 	Affiliate Transactions

 

iii

 

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is entered into as of April 16, 2009
(the “Closing Date”), by Travel and Event Services, LLC, a Delaware limited liability company (the
“Buyer”), Ambassadors, LLC, a Delaware limited liability company (the “Seller”), and Ambassadors
International, Inc., a Delaware corporation (the “Parent” and, together with the Seller, the
“Stakeholders”).

STATEMENT OF PURPOSE

The Buyer has agreed to purchase from the Seller, and the Seller has agreed to sell to the
Buyer, substantially all of the Seller’s assets relating to the Business for the consideration,
including the Buyer’s assumption of certain stated liabilities, and on the terms and subject to the
conditions set forth in this Agreement. Certain defined terms are included in Exhibit A.

ARTICLE I

SALE AND PURCHASE OF ASSETS

1.1 Sale and Purchase of Assets. The Seller hereby sells, assigns, transfers and conveys to
the Buyer, and the Buyer purchases, acquires and accepts from the Seller, free and clear of all
Encumbrances other than Permitted Encumbrances, all of the Seller’s assets of every kind and
description (other than the Excluded Assets) used, owned, leased or otherwise held by or for the
benefit of the Seller in the operation of, or otherwise relating specifically to, the Business on
the Closing Date (the “Purchased Assets”), including the following assets of the Seller (other than
the Excluded Assets):

(a) All equipment, fixtures, furniture, office equipment, computer hardware, inventory,
supplies, and other items of tangible personal property, in each case to the extent relating to the
Business and located at the Offices (the “Tangible Personal Property”), including the personal
property set forth on Schedule 1.1(a);

(b) All trade and other accounts receivable and other Indebtedness owing to the Seller
(including any future rights to commissions relating to pre-closing client events, whether related
to commissions on any rooms booked directly through hotels or otherwise), in each case to the
extent arising from the Business, including the benefit of all collateral, security, guaranties,
and similar undertakings received or held in connection therewith and any claim, remedy or other
right related to the foregoing (the “Accounts Receivable”), including the receivables and
Indebtedness set forth on Schedule 1.1(b);

(c) All leases and subleases of real property related to the Offices set forth on Schedule
1.1(c) as to which the Seller is the lessor or sublessor and all leases and subleases of real
property of the Offices set forth on Schedule 1.1(c) as to which the Seller is the lessee
or sublessee, together with any options to purchase the underlying property and leasehold
improvements thereon, and in each case all other rights, subleases, licenses, permits, deposits and
profits appurtenant to or related to such leases and subleases;

(d) All rights and interests in and to the Contracts set forth on Schedule 1.1(d);

(e) All Intellectual Property set forth on Schedule 1.1(e);

(f) All business, employee and financial records, books, ledgers, files, correspondence,
documents, lists, studies and reports, including the accounting system software of the Seller
(subject to the Buyer obtaining the required licenses to use such software), customer lists,
supplier lists and equipment repair, maintenance, service, personnel, payroll, employee benefit,
quality control and
insurance records, whether written, electronically stored or otherwise recorded, in each case
to the extent relating to the Business (the “Books and Records”);

 

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(g) All goodwill and all sales, advertising, promotional and marketing information and
materials, in each case to the extent relating to the Business;

(h) All telephone, fax and pager numbers, domain names, URLs and e-mail addresses assigned to
the Seller, in each case to the extent relating to the Business, including those set forth on
Schedule 1.1(h); provided, however, that such domain names and URLs which
contain the name “Ambassadors” may only be used during the period set forth in Section 5.10;

(i) All rights of the Seller to causes of action, lawsuits, judgments, claims and demands of
any nature and all counterclaims, rights of setoff, rights of indemnification and affirmative
defenses to any claims that may be brought against the Buyer by third parties, in each case to the
extent arising from or relating to the Business, the Purchased Assets or the Assumed Liabilities;

(j) All rights to refunds from customers and suppliers, all prepaid expenses and deposits and
all rights to condemnation proceeds, in each case to the extent arising from the Business; and

(k) All other properties and assets relating to the Business to the extent the Seller has any
rights thereto or interests therein, whether a present or future interest, an inchoate right or
otherwise and whether such properties or assets are tangible or intangible and whether or not of a
type falling within any of the categories of assets or properties described above.

1.2 Excluded Assets. The Seller hereby retains ownership of the following assets of the
Seller (collectively, the “Excluded Assets”):

(a) All assets relating primarily to the AT&E Business;

(b) All cash, cash equivalents and short-term investments;

(c) Organizational Documents, stock books, stock ledgers, minute books and Tax Returns;

(d) All rights to causes of action, lawsuits, judgments, claims and demands of any nature and
all counterclaims, rights of setoff, rights of indemnification and affirmative defenses to any
claims that may be brought against the Seller by third parties, in each case to the extent that
they relate to the Excluded Assets or Excluded Liabilities;

(e) All rights under any Transaction Document; and

(f) Those assets, if any, listed on Schedule 1.2(f).

1.3 Assumed Liabilities. The Buyer hereby assumes and agrees to pay, perform and discharge
only the following Liabilities of the Seller (collectively, the “Assumed Liabilities”):

(a) All trade accounts payable as of the Closing Date listed on Schedule 1.3(a);

(b) All accrued and unpaid expenses as of the Closing Date listed on Schedule 1.3(b),
including bonus commissions to sales personnel (collectively, the “Assumed Bonuses”) and rebate
payments to associations (to the extent that the Seller has not received payment from its
customers relating to such rebate payments listed on Schedule 1.3(b)), as of the
Closing Date relating primarily to the Business;

 

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(c) All participant and customer deposits as of the Closing Date relating to the Business and
listed on Schedule 1.3(c) (collectively, the “Customer Deposit Liabilities”);

(d) Liability for duplicative payments or overpayments as of the Closing Date relating
primarily to the Business, including the Account 2000 amounts, listed on Schedule 1.3(d)
(collectively, the “Overpayment Liabilities”);

(e) Liabilities to be performed after the Closing Date under any executory Contract relating
primarily to the Business incurred by the Seller in the ordinary course of business and listed on
Schedule 1.1(d); provided, however, that such Liabilities will only be
Assumed Liabilities to the extent that all benefits under such Contracts are transferred to the
Buyer pursuant to this Agreement and the existence of such Liabilities does not constitute a breach
of any provision of such Contract or a breach of the representations and warranties of the Seller
set forth in this Agreement or in such Contract;

(f) Liability for any paid time off earned by the employees of Seller prior to the Closing
Date as listed on Schedule 1.3(f) to the extent not waived under the Vacation Releases; and

(g) Liabilities incurred in the ordinary course of business related to the Business of the
type set forth in items (a) through (c) above not set forth on the applicable Schedules which have
been incurred by the Seller since March 31, 2009 in an amount not to exceed $50,000.

1.4 Excluded Liabilities. The Excluded Liabilities hereby remain the sole responsibility of
the Seller and are and will be retained, paid, performed and discharged as and when due solely by
the Seller. “Excluded Liabilities” means every Liability of the Seller, other than the Assumed
Liabilities, including:

(a) All Liabilities relating to the AT&E Business;

(b) All Liabilities for trade accounts payable, accrued expenses, participant and customer
deposits, or duplicative payments or overpayments, in each case, to the extent not an Assumed
Liability;

(c) All Liabilities under any Transaction Document;

(d) All Liabilities for Taxes (whether federal, state, local or foreign), including Taxes
incurred in respect of or measured by (i) the sales of goods or services by Seller, (ii) the wages
or other compensation paid by the Seller to its employees (except for the Assumed Bonuses), (iii)
the value of Seller’s property (personal as well as real property), (iv) the income of Seller
earned on or realized prior to the Closing Date, and (v) any gain and income from the sale of the
Purchased Assets and other Transactions;

(e) All Liabilities for environmental, ecological, health or safety claims to the extent
relating to or arising from the ownership or operation of the Business or the Purchased Assets on
or prior to the Closing Date; and

(f) All Liabilities to indemnify any Person (including the Parent) by reason of the fact that
such Person was a director, officer, employee or agent of the Seller.

 

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1.5 Purchase Price.

(a) The purchase price for the Purchased Assets (the “Purchase Price”) will be (i) $500,000.00
in cash (the “Cash Purchase Price”), plus (ii) the Deferred Cash Consideration (computed in
accordance with Section 1.6, below), plus (ii) the assumption of the Assumed Liabilities.

(b) The Buyer hereby pays the Cash Purchase Price at Closing to the Seller by wire transfer of
immediately available funds.

(c) The Seller represents and warrants that the consideration paid hereunder by the Buyer to
the Seller for the Purchased Assets represents at least the fair value of such Purchased Assets.

1.6 Deferred Cash Consideration.

(a) If Net Revenue for calendar year 2009 exceeds $7,000,000, the Buyer shall pay to Seller,
in accordance with the procedures set forth in Section 1.6(b), an amount in cash (the “Deferred
Cash Consideration”) equal to the product of $300,000 multiplied by a fraction, the numerator of
which is Net Revenue for calendar year 2009 and the denominator of which is the $8,000,000;
provided, however, that the amount of the Deferred Cash Consideration shall not
exceed $300,000.

(b) Within forty-five (45) days after December 31, 2009, the Buyer shall deliver to the Seller
a written statement (the “Payment Statement”), including supporting documentation, setting forth
the amount of Net Revenue for calendar year 2009. The Payment Statement shall become final and
binding upon the Buyer and the Seller on the 15th day following delivery thereof, unless the Seller
gives notice of disagreement with the Payment Statement (a “Dispute Notice”) to the Buyer prior to
such date. Any Dispute Notice shall specify in reasonable detail the nature of any disagreement so
asserted. If a Dispute Notice is received by the Buyer in a timely manner, then the Payment
Statement shall become final and binding upon the Buyer and the Seller on the earlier of (i) the
date the Buyer and the Seller resolve in writing any differences they have with respect to the
matters specified in the Dispute Notice and (ii) the date any disputed matters are finally resolved
in writing by the Accounting Firm. During the 30-day period (the “Resolution Period”) following
the delivery of a Dispute Notice, the Buyer and the Seller shall use their commercially reasonable
efforts and seek in good faith to resolve in writing any differences that they may have with
respect to the matters specified in the Dispute Notice. At the end of the Resolution Period, the
Buyer and the Seller shall submit to an independent accounting firm (the “Accounting Firm”) for
arbitration, in accordance with the standards set forth in this Section 1.6, only matters that
remain in dispute and were properly included in the Notice of Disagreement in accordance with this
Section 1.6 and any claim of calculation-related errors. The Accounting Firm shall be Grant
Thornton (which the parties represent has not provided services to any of them or their respective
subsidiaries during the past three years) or, if such firm is unable or unwilling to act, such
other independent public accounting firm as shall be agreed upon by the Buyer and the Seller in
writing. The Buyer and the Seller shall use their commercially reasonable efforts to cause the
Accounting Firm to render a written decision resolving the matters submitted to the Accounting Firm
within thirty (30) days of their delivery of such submission. The Accounting Firm shall determine
Net Revenue for calendar year 2009 pursuant to this Section 1.6 in accordance with GAAP and the
principles, policies and practices that were used in preparing the Balance Sheet; provided,
however, that no adjustment shall be made by the Accounting Firm in favor of the Seller
with respect to any item that was not included in the Seller’s Dispute Notice. The Accounting
Firm’s decision shall be based solely on written submissions by the Buyer and the Seller and their
respective representatives and by reference to the terms of this Agreement. The Seller and the
Buyer shall furnish or cause to be furnished to the Accounting Firm such work papers and other
documents and information related to the disputed matters as the Accounting Firm may request and
are reasonably available to the Seller, the Buyer or their respective agents. The Accounting Firm
shall address only those items in dispute and calculation-related errors. Judgment may be entered
upon
the determination of the Accounting Firm in any court having jurisdiction over the party
against which such determination is to be enforced. Within three (3) Business Days of the Payment
Statement becoming final and binding, the Buyer shall pay to the Seller the Deferred Cash
Consideration. The fees and expenses of the Accounting Firm incurred pursuant to this Section 1.6
shall be borne equally by the Buyer and the Seller.

 

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1.7 Closing. The closing of the Transactions to be performed on the Closing Date
(the “Closing”) will take place on the Closing Date. The sale, assignment, transfer and conveyance
to the Buyer of the Purchased Assets and the assumption by the Buyer of the Assumed Liabilities
will be deemed effective as of 11:59 p.m. Atlanta, Georgia time on the Closing Date. The Buyer’s
obligations to close the Transactions are subject to the Buyer receiving at the Closing executed
copies, in a form satisfactory to the Buyer, of all employment agreements, consents and conveyance
documents reasonably required by the Buyer.

1.8 Allocation of Purchase Price. Promptly after the Closing, the Buyer and Seller shall
mutually agree upon the allocation of the Purchase Price among the Purchased Assets. The Buyer and
the Seller agree (a) that any such allocation is consistent with the requirements of Code § 1060
and (b) to complete and file IRS Form 8594, or a successor form, and any amendments thereto, as and
when required by applicable Law.

ARTICLE II

REPRESENTATIONS AND WARRANTIES REGARDING THE STAKEHOLDERS

The Stakeholders, jointly and severally, represent and warrant to the Buyer as follows:

2.1 Organization, Qualification and Corporate Power. Schedule 2.1 sets forth the
jurisdictions in which the Seller is qualified to do business. Each Stakeholder is duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation or
formation. The Seller has delivered to the Buyer correct and complete copies of the Organizational
Documents of the Seller. The minute books of the Seller, as delivered or made available to the
Buyer, are correct and complete.

2.2 Authority. Each Stakeholder has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery by such Stakeholder
of each Transaction Document to which it is a party and the performance by such Stakeholder of the
Transactions have been duly approved by the board of directors or comparable governing body of such
Stakeholder and, if required, the equity holders of such Stakeholder. Each Transaction Document
constitutes the valid and legally binding obligation of each Stakeholder, enforceable against it in
accordance with the terms of such Transaction Document.

2.3 No Conflicts. Except as set forth on Schedule 2.3, neither the execution and
delivery of this Agreement nor the performance of the Transactions will, directly or indirectly,
with or without notice or lapse of time: (a) violate any Law to which either Stakeholder or any
Purchased Asset is subject; (b) violate any Permit held by the Seller or its Affiliates in
connection with the Business or give any Governmental Body the right to terminate, revoke, suspend
or modify any Permit held by the Seller; (c) violate any Organizational Document of either
Stakeholder; (d) violate, conflict with, result in a breach of, constitute a default under, result
in the acceleration of or give any Person the right to accelerate the maturity or performance of,
or to cancel, terminate, modify or exercise any remedy under, any Contract to which either
Stakeholder is a party or by which either Stakeholder is bound or to which any Purchased Asset is
subject or under which either Stakeholder has any rights or the performance of which is guaranteed
by either Stakeholder; (e) cause the Buyer to have any Liability for any Tax; (f) result in the
imposition of any Encumbrance upon any Purchased Asset; or (g) result in any shareholder of the
Seller having the right to exercise dissenters’ appraisal rights. Except as set forth on
Schedule 2.3, the Seller is
not required to notify, make any filing with, or obtain any Consent of any Person in order to
perform the Transactions.

 

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2.4 Financial Statements.

(a) Attached to Schedule 2.4 are the following financial statements (collectively,
the “Financial Statements”): the Balance Sheet and the Seller’s statements of income for fiscal
years 2007 and 2008. The Financial Statements have been prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby, and present fairly the financial
condition of the Business as of and for their respective dates.

(b) The Financial Statements (i) are complete and correct in all material respects and all
transactions to which the Seller is or has been a party are accurately reflected therein in all
material respects on an accrual basis, (ii) reflect all discounts, returns and allowances granted
by the Seller with respect to the periods covered thereby, and (iii) reflect in all material
respects the assets, liabilities, financial position, results of operations and cash flows of the
Seller on an accrual basis.

2.5 Absence of Certain Changes. Except as set forth on Schedule 2.5, since the
Balance Sheet Date:

(a) the Seller has not sold, leased, transferred or assigned any asset used in the Business,
other than for fair consideration in the ordinary course of business;

(b) the Seller has not experienced any damage, destruction or loss (whether or not covered by
insurance) to its property or assets used in the Business, in excess of $25,000;

(c) the Seller has not entered into any Contract (or series of related Contracts) relating to
the Business involving the payment or receipt of more than $25,000 or that cannot be terminated
without penalty on less than six months notice, and no Person has accelerated, terminated, modified
or canceled any Contract (or series of related Contracts) relating to the Business involving more
than $25,000 to which the Seller is a party or by which the Seller or any of its assets are bound;

(d) no Encumbrance (other than any Permitted Encumbrance) has been imposed upon any of the
Seller’s assets that are used in the Business;

(e) the Seller has not made any capital investment in, any loan to, or any acquisition of the
securities or assets of, any other Person (or series of related capital investments, loans or
acquisitions) involving more than $25,000;

(f) the Seller has not issued, created, incurred or assumed any Indebtedness (or series of
related Indebtedness) relating to the Business involving more than $25,000 in the aggregate or
delayed or postponed the payment of accounts payable relating to the Business or other Liabilities
relating to the Business beyond the original due date;

(g) the Seller has not canceled, compromised, waived or released any right or claim (or series
of related rights or claims) relating to the Business or any Indebtedness (or series of related
Indebtedness) relating to the Business owed to it, in any case involving more than $25,000;

(h) the Seller has not issued, sold or otherwise disposed of any of its capital stock, or
granted any options, warrants or other rights to acquire (including upon conversion, exchange or
exercise) any of its capital stock or declared, set aside, made or paid any dividend or
distribution with respect to its
capital stock (whether in cash or in kind) or redeemed, purchased or otherwise acquired any of
its capital stock or amended any of its Organizational Documents;

 

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(i) the Seller has not (i) conducted the Business outside the ordinary course of business
consistent with past practices, (ii) made any loan to, or entered into any other transaction with,
any of its directors, officers or employees on terms that would not have resulted from an
arms-length transaction, (iii) entered into any employment Contract with an Active Employee or
modified the terms of any existing employment Contract with an Active Employee, (iv) granted any
increase in the base compensation of any of its directors, officers or, except in the ordinary
course of business, employees, or (v) adopted, amended, modified or terminated any Employee Benefit
Plan or other Contract relating to the Business for the benefit of any of its directors, officers
or employees;

(j) the Seller has not incurred any Liability for Taxes outside the ordinary course of
business;

(k) there has not been any Proceeding commenced nor, to the Knowledge of the Seller,
threatened or anticipated relating to or affecting the Seller, the Business or any asset used in
the Business;

(l) there has not been any loss of any material customer, distribution channel, sales location
or source of supply of utilities or contract services or the receipt of any notice that such a loss
may be pending, in each case relating to the Business; and

(m) the Seller has not agreed or committed to any of the foregoing.

2.6 Title to and Sufficiency of Assets. Except as set forth on Schedule 2.6, the
Seller has good and marketable title to the Purchased Assets, free and clear of any Encumbrances
except Permitted Encumbrances. The Purchased Assets include all tangible and intangible property
and assets (except for the Excluded Assets) necessary for the continued conduct of the Business
after Closing in the same manner as conducted prior to Closing. The transfer of the Purchased
Assets hereunder will convey to the Buyer good, valid and indefeasible title to the Purchased
Assets, free and clear of any Encumbrances except Permitted Encumbrances.

2.7 Tangible Personal Property; Condition of Purchased Assets. Schedule 2.7 lists
each item of Tangible Personal Property that has a net book value in excess of $5,000 and its net
book value. The buildings, plants, structures, Tangible Personal Property and other tangible
assets that are owned or leased by the Seller (including the Purchased Assets) are adequate for the
uses to which they are being put. All of the Purchased Assets are located on the Real Property.

2.8 Accounts Receivable. Schedule 2.8 contains a list of all Accounts Receivable that
were generated since January 1, 2009, and were outstanding as of April 11, 2009, all of which (a)
represent valid obligations arising from services actually sold or performed by the Seller in the
ordinary course of business and (b) were as of April 11, 2009 current and collectible in accordance
with their terms net of the reserves on the Balance Sheet.

 

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2.9 Real Property. The Seller does not own any real property. Schedule 2.9 lists all
of the real property and interests therein leased, subleased or otherwise occupied or used by the
Seller in connection with the Business (with all easements and other rights appurtenant to such
property, the “Real Property”). Except as set forth on Schedule 2.9 the leasehold interest
of the Seller with respect to each item of Real Property is free and clear of any Encumbrances,
except Permitted Encumbrances. The Seller is not a sublessor of, and has not assigned any lease
covering, any item of Real Property. Leasing commissions or other brokerage fees due from or
payable by the Seller with respect to any Lease have
been paid in full. The Real Property constitutes all interests in real property used in
connection with the Business. The Real Property is not subject to any rights of way, building use
restrictions, title exceptions, variances, reservations or limitations of any kind or nature,
except (a) those that in the aggregate do not impair the current use, occupancy, value or
marketability of title to the Real Property and (b) as set forth in the Lease relating to such
item. All buildings, plants, structures and other improvements owned or used by the Seller in the
Business lie wholly within the boundaries of the Real Property and do not encroach upon the
property, or otherwise conflict with the property rights, of any other Person. The Seller is not a
party to or bound by any Contract (including any option) relating to the Business for the purchase
or sale of any real estate interest or any Contract relating to the Business for the lease to or
from the Seller of any real estate interest not currently in possession of the Seller.

2.10 Contracts.

(a) Schedule 2.10 lists the following Contracts to which the Seller is a party or by
which the Seller is bound or to which any asset of the Seller is subject or under which the Seller
has any rights or the performance of which is guaranteed by the Seller and, in each case, is used
in the Business or relates to the Purchased Assets or Assumed Liabilities (collectively, with the
Leases and Licenses, the “Material Contracts”): (i) each Contract (or series of related Contracts)
that involves delivery or receipt of products or services of an amount or value in excess of
$25,000, that was not entered into in the ordinary course of business or that involves expenditures
or receipts in excess of $25,000; (ii) each Contract with a customer of the Business, including all
Contracts with any hotel; (iii) each lease, rental or occupancy agreement, license, installment and
conditional sale agreement, and other Contract affecting the ownership of, leasing of, title to,
use of, or any leasehold or other interest in, any real or personal property (except personal
property leases and installment and conditional sales agreements having a value per item or
aggregate payments of less than $25,000 and with terms of less than one year), including each Lease
and License; (iv) each licensing agreement or other Contract with respect to Intellectual Property
owned or used by or for the benefit of Seller in connection with the Business or the Purchased
Assets, including any agreement with any current or former employee, consultant, or contractor
regarding the appropriation or the non-disclosure of any Intellectual Property; (v) each joint
venture, partnership or Contract involving a sharing of profits, losses, costs or Liabilities with
any other Person; (vi) each Contract containing any covenant that purports to restrict the business
activity of the Seller or limit the freedom of the Seller to engage in any line of business or to
compete with any Person; (vii) each Contract providing for payments to or by any Person based on
sales, purchases or profits, other than direct payments for goods; (viii) each power of attorney;
(ix) each Contract for Indebtedness relating to or covering any of the Business or the Purchased
Assets; (x) each employment or consulting Contract; (xi) each Contract to which the Parent or any
Affiliate of the Parent is a party or is otherwise bound; and (xii) each Contract not terminable
without penalty on less than six months notice.

(b) The Seller has delivered to the Buyer a correct and complete copy of each Material
Contract. Each Material Contract, with respect to the Seller, is legal, valid, binding,
enforceable, in full force and effect and will continue to be so on identical terms following the
Closing Date. Each Material Contract, with respect to the other parties to such Material Contract,
to the Knowledge of the Seller, is legal, valid, binding, enforceable, in full force and effect and
will continue to be so on identical terms following the Closing Date. The Seller is not in breach
or default, and no event has occurred that with notice or lapse of time would constitute a breach
or default, or permit termination, modification or acceleration, under any Material Contract. To
the Knowledge of the Seller, no other party is in breach or default, and no event has occurred that
with notice or lapse of time would constitute a breach or default, or permit termination,
modification or acceleration, under any Material Contract. No party to any Material Contract has
repudiated any provision of any Material Contract.

 

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2.11 Intellectual Property.

(a) The Seller owns or has the right to use all Intellectual Property necessary or prudent for
the operation of the Business as presently conducted. Except as set forth on
Schedule 2.11, each item of Intellectual Property owned, licensed or used by the Seller in
the Business immediately prior to the Closing (i) is a Purchased Asset, (ii) will be owned,
licensed or available for use by the Buyer on identical terms and conditions immediately following
the Closing, and (iii) is valid and enforceable and otherwise fully complies with all Laws
applicable to the enforceability thereof.

(b) The Seller has not violated or infringed upon or otherwise come into conflict with any
Intellectual Property of third parties, and the Seller has not received any notice alleging any
such violation, infringement or other conflict. To the Knowledge of the Seller, no third party has
infringed upon or otherwise come into conflict with any Intellectual Property of the Seller. No
patent or registration (including copyright, trademark and servicemark) has been issued to the
Seller (whether active and in force or abandoned, lapsed, canceled or expired) with respect to any
of its Intellectual Property used in the Business nor has any been applied for by the Seller or by
any Affiliate of the Seller on its behalf. Schedule 2.11 identifies each item of
Intellectual Property that any Person other than the Seller owns and that the Seller uses in the
Business pursuant to license, agreement or permission (a “License”). All software used by the
Seller or installed on any computers owned or used by the Seller is either (A) owned by the Seller
or (B) used pursuant to valid and effective Licenses from the owners thereof. With respect to each
item of Intellectual Property required to be identified in Schedule 2.11: (i) to the
Knowledge of the Seller, such item is not subject to any Order; (ii) to the Knowledge of the
Seller, no Proceeding is pending or is threatened or anticipated that challenges the legality,
validity or enforceability of such item; and (iii) the Seller has not granted any sublicense or
similar right with respect to the License relating to such item.

2.12 Tax.

(a) The Seller has timely filed with the appropriate Governmental Body all Tax Returns that
the Seller is required to have filed. All Tax Returns filed by the Seller are true, correct and
complete in all respects. All Taxes owed (or required to be remitted) by the Seller (whether or
not shown or required to be on any Tax Return) have been paid to the appropriate Governmental Body.
No event has occurred which could impose on Buyer any successor or transferee liability for any
Taxes in respect of the Seller, the Purchased Assets or the Business. No claim has been made by
any Governmental Body in a jurisdiction where the Seller does not file Tax Returns that the Seller
is or may be subject to the payment, collection or remittance of any Tax of that jurisdiction or is
otherwise subject to taxation by that jurisdiction. There is no dispute or claim concerning any
Liability for Taxes paid, collected or remitted by the Seller either (i) claimed or raised by any
Governmental Body in writing or (ii) as to which the Seller has Knowledge. There are no
Encumbrances on any of the Purchased Assets that arose in connection with, or otherwise relate to,
any failure (or alleged failure) of any Person to pay any Tax. The Seller has delivered or made
available to the Buyer true, correct and complete copies of all Tax Returns filed by, and all
examination reports, and statements of deficiencies assessed against or agreed to by, the Seller
during the six-year period ending on the date hereof.

(b) The Seller has withheld or collected, and paid to the appropriate Governmental Body, all
Taxes required to have been withheld or collected and remitted, and complied with all information
reporting and back-up withholding requirements, and has maintained all required records with
respect thereto, in connection with amounts paid or owing to any employee, customer, creditor,
stockholder, independent contractor, or other third party.

 

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(c) None of the Assumed Liabilities is an obligation to make a payment that is not deductible
under Code § 280G. The Seller has not been a United States real property holding corporation
within the meaning of Code § 897(c)(2) during the applicable period specified in Code §
897(c)(1)(A)(ii). The Buyer will not be required to deduct and withhold any amount under Code
§1445(a) or otherwise upon the transfer of the Purchased Assets to the Buyer. The Seller is not a
party to any Tax allocation, sharing, reimbursement or similar agreement. The Seller has not been
a member of any “affiliated group” as defined in Code § 1504(a) (or any similar group defined under
a similar provision of state, local or foreign Law) filing a consolidated federal, state, local or
foreign income Tax Return (other than a group the common parent of which was the Parent). The
Seller has no Liability for Taxes of any Person under Treasury Regulation § 1.1502-6 (or any
similar provision of any other Law), as a transferee or successor, by Contract, or otherwise.

(d) Schedule 2.12 lists each agreement, contract, plan or other arrangement (whether
or not written and whether or not an Employee Benefit Plan) to which the Seller is a party and the
Buyer is assuming (whether pursuant to this Agreement or the Transactions) that is a “nonqualified
deferred compensation plan” within the meaning of Code § 409A and the Treasury Regulations
promulgated thereunder. Each such nonqualified deferred compensation plan (i) complies, and is
operated and administered in accordance, with the requirements of Code § 409A, the Treasury
Regulations promulgated thereunder and any other IRS guidance issued thereunder and (ii) has been
operated and administered in good faith compliance with Code § 409A from the period beginning on
January 1, 2005.

(e) The execution and delivery of this Agreement and the performance of the Transactions will
not cause the Buyer to have any Liability for any Tax.

2.13 Legal Compliance. Except as set forth on Schedule 2.13, the Seller is, and since
January 1, 2007, has been, in compliance with all applicable Laws and Permits. Except as set forth
on Schedule 2.13, no Proceeding is pending, nor since January 1, 2007, has been filed or
commenced, against the Seller alleging any failure to comply with any applicable Law or Permit. No
event has occurred or circumstance exists that (with or without notice or lapse of time) may
constitute or result in a violation by the Seller of any Law or Permit. The Seller has not
received any notice or other communication from any Person regarding any actual, alleged or
potential violation by the Seller of any Law or Permit or any cancellation, termination or failure
to renew any Permit held by the Seller. Schedule 2.13 contains a complete and accurate
list of each Permit held by the Seller and used in the Business or that otherwise relates to the
Business or any asset owned or leased by the Seller and used in the Business and states whether
each such Permit is transferable. Each Permit listed or required to be listed on Schedule
2.13 is valid and in full force and effect. The Permits listed on Schedule 2.13
constitute all of the Permits necessary to allow the Seller to lawfully conduct and operate the
Business as currently conducted and operated and to own and use its assets as currently owned and
used.

2.14 Litigation. Except as set forth on Schedule 2.14, there is no Proceeding pending
or, to the Knowledge of the Seller, threatened or anticipated relating to or affecting (a) the
Seller or the Business or any asset owned or used by the Seller in the Business or (b) the
Transactions. To the Knowledge of the Seller, no event has occurred or circumstance exists that
would reasonably be expected to give rise to or serve as a basis for the commencement of any such
Proceeding. The Proceedings listed in Schedule 2.14 have not resulted in and are not
reasonably likely to result in any material adverse effect on the Business. Except as set forth on
Schedule 2.14, there is no outstanding Order to which the Seller or any asset owned or used
by the Seller in the Business is subject. Schedule 2.14 lists all Proceedings pending in
which the Seller has been named as a defendant (whether directly, by counterclaim or as a
third-party defendant) and all Proceedings pending in which the Seller is a plaintiff.
Schedule 2.14 lists all Orders in effect to which the Seller has been subject or any asset
owned or used by the Seller is subject.

 

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2.15 Environmental. Except as set forth on Schedule 2.15, the Seller and each of its
predecessors have complied and are in compliance with all Environmental Laws. The Seller has
received
no written or oral notice, report or other information regarding any actual or alleged
violation of any Environmental Law, or any Liabilities or potential Liabilities, including any
investigatory, remedial or corrective obligations, relating to it or its facilities arising under
any Environmental Law. Neither the Seller nor any of its predecessors has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled or released any
substance, including any Hazardous Substance, or owned or operated any property or facility (and no
such property or facility is contaminated by any such substance) in a manner that has given or
would give rise to any Liability, including any Liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages or attorney fees, pursuant to
any Environmental Law. The Seller has not, either expressly or by operation of law, assumed or
undertaken any Liability, including any obligation for corrective or remedial action, of any other
Person relating to any Environmental Law.

2.16 Employees. Schedule 2.16 sets forth the name, job title and rate of pay with
respect to each Active Employee. The Seller is not, nor has the Seller been, a party to or bound
by any collective bargaining agreement or any other Contract with any labor union or other employee
representative of a group of employees. The Seller has not experienced any strike, slowdown,
picketing, work stoppage, employee grievance process, claim of unfair labor practice or other
collective bargaining dispute. There is no lockout of any employees by the Seller, and no such
action is contemplated by the Seller. The Seller has not committed any unfair labor practice. To
the Knowledge of the Seller, (a) no event has occurred or circumstances exist that could provide
the basis for any work stoppage or other labor dispute and (b) there is no organizational effort
presently being made or threatened by or on behalf of any labor union with respect to employees of
the Seller. To the Knowledge of the Seller, no employee, officer or director of the Seller is a
party to or bound by any agreement that (w) could adversely affect the performance of his or her
duties as an employee, officer or director other than for the benefit of the Seller, (x) could
adversely affect the ability of the Seller to conduct the Business, (y) restricts or limits in any
way the scope or type of work in which he or she may be engaged other than for the benefit of the
Seller or (z) requires him or her to transfer, assign or disclose information concerning his or her
work to anyone other than the Seller. To the Knowledge of the Seller, no officer or employee of
the Seller has any plans to accept employment with any Person other than the Buyer after Closing.

2.17 Employee Benefits.

(a) Schedule 2.17 lists (i) all employee benefit plans (as defined in Section 3(3) of ERISA)
and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation,
retiree medical or life insurance, supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, termination, severance or other contracts or
agreements, whether legally enforceable or not, to which the Seller is a party, with respect to
which the Seller has any obligation or which are maintained, contributed to or sponsored by Seller
for the benefit of any current or former employee, officer or director of Seller who performs or
performed services with the Business (collectively, the “Plans”). Each Plan is in writing and the
Seller has furnished to the Buyer a complete and accurate copy of each Plan. There are no other
employee benefit plans, programs, arrangements or agreements, whether formal or informal, whether
in writing or not, to which the Seller is a party, with respect to which the Seller has any
obligation or which are maintained, contributed to or sponsored by the Seller for the benefit of
any current or former employee, officer or director of the Seller. The Seller has delivered or
made available to the Buyer true, correct and complete copies of all required annual filings,
including, but not limited to, any Form 5500s for 2006, 2007 and 2008.

(b) The Seller does not now and has never contributed to any Plan that is subject to Title IV
of ERISA. None of the Plans provides for the payment of separation, severance, termination or
similar benefits to any person or obligates the Seller to pay separation, severance, termination or
similar benefits solely as a result of any transaction contemplated by this Agreement or as a
result of a “change in control”, within the meaning of such term under Section 280G of the Code.
None of the Plans provides
for or promises retiree medical, disability or life insurance benefits to any current or
former employee, officer or director who performs or performed services with the Business.

 

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(c) Each Plan is now and always has been operated in all respects in accordance with the
requirements of all applicable law, including ERISA and the Code, and all persons who participate
in the operation of such Plans and all Plan “fiduciaries” (within the meaning of Section 3(21) of
ERISA) have always acted in all material respects accordance with the provisions of all applicable
law, including ERISA and the Code. Seller has performed all obligations required to be performed
by it under, is not in any respect in default under or in violation of, and has no knowledge of any
default or violation by any party to, any Plan. No legal action is pending or, to the Knowledge of
the Seller, threatened with respect to any Plan (other than claims for benefits in the ordinary
course) and, to the Knowledge of the Seller, no fact or event exists that would give rise to any
such legal action.

(d) Each Plan that is intended to be qualified under Section 401(a) of the Code or Section
401(k) of the Code has received a favorable determination letter from the IRS that it is so
qualified, and each trust established in connection with any Plan that is intended to be exempt
from federal income taxation under Section 501(a) of the Code has received a determination letter
from the IRS that it is so exempt, and, to the Knowledge of the Seller, no fact or event has
occurred since the date of such determination letter from the IRS to adversely affect the qualified
status of any such Plan or the exempt status of any such trust.

(e) There has been no prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) with respect to any Plan. No complete or partial termination has
occurred with respect to any Plan.

(f) All contributions, premiums or payments required to be made with respect to any Plan have
been made on or before their due dates. All such contributions have been fully deducted for income
tax purposes and no such deduction has been challenged or disallowed by any Governmental Authority,
and to the Knowledge of the Seller no fact or event exists that would give rise to any such
challenge or disallowance.

2.18 Customers. With respect to each of the two fiscal years most recently completed prior to
the date hereof, Schedule 2.18 lists the ten largest (by dollar volume) customers of the
Seller relating to the Business during each such period (showing the dollar volume for each).

2.19 Transactions with Affiliates. Except as set forth in Schedule 2.19, for the past
three years, neither any Affiliate, member, officer, director or employee of the Seller nor any
Affiliate of any of the foregoing (a) has owned any interest in any asset used in the Business, (b)
is a party to any Contract with, or has any claim or right against, the Seller or (c) has any
Indebtedness owing to the Seller. Except as set forth in Schedule 2.19, the Seller (A) has
no claim or right against any Affiliate, shareholder, officer, director or employee of the Seller
or any Affiliate of any of the foregoing or (B) has no Indebtedness owing to any Affiliate,
shareholder, officer, director or employee of the Seller or any Affiliate of any of the foregoing.
Schedule 2.19 sets forth a list and description of (a) services provided to the Seller with
respect to the operation of the Business by the Parent or any of its Affiliates (including by
employees of the Parent or its Affiliates who are not Active Employees) and (b) all Contracts,
arrangements or other transactions between the Seller and the Parent or its Affiliates or under
which each of the Seller and the Parent or its Affiliates has rights, benefits or obligations.

2.20 No Brokers’ Fees. The Seller has no Liability for any fee, commission or payment to any
broker, finder or agent with respect to the Transactions for which the Buyer could be liable.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE BUYER

The Buyer represents and warrants to the Seller as follows:

3.1 Organization and Authority. The Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization. The
Buyer has full power and authority to execute and deliver the Transaction Documents to which it is
a party and to perform its obligations thereunder. The execution and delivery by the Buyer of each
Transaction Document to which the Buyer is a party and the performance by the Buyer of the
Transactions have been duly approved by all requisite action of the Buyer. Each Transaction
Document to which the Buyer is a party constitutes the valid and legally binding obligation of the
Buyer, enforceable against the Buyer in accordance with the terms of such Transaction Document.

3.2 No Conflicts. Neither the execution and delivery of this Agreement nor the performance of
the Transactions will, directly or indirectly, with or without notice or lapse of time: (a)
violate any Law to which the Buyer is subject; (b) violate any Organizational Document of the
Buyer; or (c) violate, conflict with, result in a breach of, constitute a default under, result in
the acceleration of or give any Person the right to accelerate the maturity or performance of, or
to cancel, terminate, modify or exercise any remedy under, any Contract to which the Buyer is a
party or by which the Buyer is bound or the performance of which is guaranteed by the Buyer. The
Buyer is not required to notify, make any filing with, or obtain any Consent of any Person in order
to perform the Transactions.

3.3 Litigation. There is no Proceeding pending or, to the actual knowledge of the Buyer,
threatened or anticipated against the Buyer relating to or affecting the Transactions.

3.4 No Brokers’ Fees. The Buyer has no Liability for any fee, commission or payment to any
broker, finder or agent with respect to the Transactions for which the Seller could be liable.

ARTICLE IV

EMPLOYEES AND EMPLOYEE BENEFITS

4.1 Salaries and Benefits. The Seller will be responsible for and shall pay when due (a) the
payment of all wages and other remuneration due to employees with respect to their services as
employees of the Seller, (but excluding (i) all paid time off earned prior to the Closing Date and
(ii) the Assumed Bonuses), (b) the provision of health plan continuation coverage in accordance
with the requirements of COBRA and ERISA §§ 601 through 608, and (c) any claims made or incurred by
employees and their beneficiaries under any of the Plans.

4.2 General Employee Provisions. Each of the Seller and the Buyer will give any notices
required by Law and take whatever other actions with respect to the plans, programs and policies
described in this Article IV as may be reasonably required for it to carry out its obligations
described in this Article IV. Each of the Seller and the Buyer will provide the other with such
plan documents and summary plan descriptions, employee data or other information as may be
reasonably required for it to carry out its obligations described in this Article IV. If any
arrangement described in this Article IV is determined by any Governmental Body to be prohibited by
Law, the Seller and the Buyer will modify such arrangement to as closely as possible reflect such
arrangement and retain the allocation of economic benefits and burdens to the Parties contemplated
herein in a manner that is not prohibited by Law. The Seller will provide the Buyer with completed
I-9 forms and attachments with respect to all Active Employees hired by the Buyer, except for such
employees as the Seller certifies in writing to the Buyer are exempt from such requirement. The
Buyer will not have any responsibility, liability or obligation, whether to Active Employees,
former employees, their beneficiaries or to any other Person, with respect
to the Plans (including the establishment, operation or termination thereof and the
notification and provision of COBRA coverage extension) maintained by the Seller.

 

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4.3 Continuing Employees. The Seller shall terminate all employees employed in the Business
as of the Closing Date (the “Terminated Employees”). The Buyer shall offer employment from and
after the Closing Date to all Terminated Employees (collectively, the “Scheduled Employees”) on
terms reasonably satisfactory to the Buyer. All employees who accept employment with the Buyer
within one week of the Closing Date shall be referred to as the “Continued Employees.”

4.4 Severance Payments; Vacation. If any Continued Employee agrees to release any rights to
claim paid time off from Seller, in a form mutually agreed upon by Buyer and Seller (the “Vacation
Release”), then Buyer will grant to each such Continued Employee under the Buyer’s vacation plan
the same number of vacation days such Continued Employee has accrued while employed by the Seller.
For the avoidance of doubt, the Buyer and the Seller acknowledge and agree that this Section 4.4 is
intended to permit any Continued Employee who is employed by Buyer and who signs a Vacation Release
to be eligible to receive vacation from the Buyer equal to the Continued Employee’s total accrued
vacation with the Seller, less any vacation actually used by such Continued Employee or for which
such Continued Employee received monetary compensation from the Seller. The Seller represents and
warrants that Schedule 1.3(f) contains a complete and accurate list of the accrued 2009
vacation for each Terminated Employee.

ARTICLE V

POST-CLOSING COVENANTS

The Parties agree as follows with respect to the period following the Closing:

5.1 Payment of Excluded Liabilities. The Seller will, and the Parent will cause the Seller
to, pay, perform and discharge the Excluded Liabilities.

5.2 Payment of Assumed Liabilities. The Buyer will pay, perform and discharge the Assumed
Liabilities as and when due.

5.3 Bulk Transfer Compliance. Inasmuch as the Buyer is to assume the Assumed Liabilities and
the Seller is to pay, perform and discharge the Excluded Liabilities, the Buyer and the Seller
hereby mutually agree to waive compliance with the provisions of any bulk transfer or sales laws,
to the extent applicable to the Transactions.

5.4 Tax Covenants. The Seller will, at its own expense, file when due all necessary Tax
Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, including penalties and interest thereon (collectively, the
“Transfer Taxes”), and, if required by applicable Law, the Buyer will, and will cause its
Affiliates to, join in the execution of any such properly completed Tax Returns and other
documentation. The Seller will pay all Transfer Taxes when due. Each of the Seller and the Buyer
shall be responsible for its pro rata share of the current year’s personal property, real property,
ad valorem and similar Taxes with respect to the Purchased Assets, prorated on a calendar year
basis as of the Closing Date. Notwithstanding the foregoing, the Seller shall be responsible for
all Taxes for all prior calendar years and periods prior to and including the Closing Date.

 

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5.5 Consents. This Agreement will not constitute an assignment, attempted assignment or
agreement to assign any Contract or Permit to the extent that any attempted assignment or agreement
to assign such Contract or Permit without the Consent of any Person would constitute a breach
thereof or would impair the rights of the Seller or the Buyer thereunder and such Consent is not
obtained. If any
Consent set forth or required to be set forth on Schedule 2.3 has not been obtained
prior to or at the Closing, then the Seller will, and the Parent will cause the Seller to, use
commercially reasonable efforts to obtain such Consent. Until such Consent is obtained, or the
Contract or Permit to which such Consent relates is novated or terminated, to the extent
permissible under such Contract or Permit, the Buyer will be entitled to receive all of the
Seller’s benefits under such Contract or Permit and, to the extent it receives such benefits, will
perform all of the Assumed Liabilities under such Contract or Permit. The Seller will, at the
Buyer’s request (at Buyer’s cost and expense), do all such acts and things as the Buyer may
reasonably request to enable due performance of such Contract or Permit and to provide for the
Buyer the benefits, subject to the obligations, of such Contract or Permit. Without limiting the
generality of the foregoing, the Seller will provide all reasonable assistance to the Buyer (at the
Buyer’s request and at Buyer’s cost and expense) to enable the Buyer to enforce its rights under
such Contract or Permit.

5.6 Mail and Receivables. The Seller hereby irrevocably authorizes the Buyer after the
Closing to receive and open all mail and other communications received by the Buyer and addressed
or directed to the Seller and, to the extent relating to the Business, the Purchased Assets or the
Assumed Liabilities, to act with respect to such communications in such manner as the Buyer may
elect. If any such communication does not relate to the Business, the Purchased Assets or the
Assumed Liabilities, the Buyer will forward such communication to the Seller. The Seller will, and
the Parent will cause the Seller to, promptly deliver to the Buyer the original of any mail or
other communication received by the Seller after the Closing that relates to the Business, the
Purchased Asset or the Assumed Liabilities. After the Closing, the Seller will, and the Parent
will cause the Seller to, promptly remit to the Buyer any payment relating to the Business or the
Purchased Assets (including payments for Accounts Receivable) that the Seller receives.

5.7 Litigation Support. If any Party is evaluating, pursuing, contesting or defending against
any Proceeding in connection with (a) any Transaction or (b) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Seller, each other Party will
cooperate with such Party and such Party’s counsel in the evaluation, pursuit, contest or defense,
make available its personnel, and provide such testimony and access to its books and records as may
be necessary in connection therewith. The evaluating, pursuing, contesting or defending Party will
reimburse each other Party for its out-of-pocket expenses related to such cooperation (unless the
contesting or defending Party is entitled to indemnification therefor under Section 6.1).

5.8 Transition. For a period of 90 days after the Closing, the Seller shall promptly provide,
at the Buyer’s request but at no expense to the Buyer, information technology transition services
reasonably necessary in connection with the Seller’s accounting system and IT systems, websites and
Intellectual Property. During the 90-day period, at the Buyer’s request, the Seller will cooperate
with the Buyer in its efforts to continue and maintain for the benefit of the Buyer those business
relationships of the Business existing prior to the Closing, including relationships with lessors,
lessees, employees, Governmental Bodies, licensors, licensees, customers, suppliers and others, and
the Seller will satisfy the Excluded Liabilities in a manner that is not detrimental to any of such
relationships; provided, however, that the Buyer will reimburse the Seller for its
out-of-pocket expenses related to such cooperation (unless the Buyer is entitled to indemnification
with respect to the matter for which the Buyer is seeking the Seller’s cooperation under Section
6.1 and except in connection with the Excluded Liabilities). The Seller will refer to the Buyer
all inquiries relating to the Business.

 

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5.9 Confidentiality; Public Disclosure.

(a) Each Stakeholder will, and will cause its Affiliates and Representatives to, maintain the
confidentiality of the Confidential Information at all times, and will not, directly or indirectly,
use any Confidential Information for its own benefit or for the benefit of any other Person or
reveal or disclose any Confidential Information to any Person other than authorized
Representatives of the Buyer, except in connection with this Agreement or with the prior written
consent of the Buyer. The covenants in this Section 5.9(a) will not apply to Confidential
Information that (i) is or becomes available to the general public through no breach of this
Agreement by either Stakeholder or any of their respective Affiliates or Representatives or, to the
Knowledge of the Seller, breach by any other Person of a duty of confidentiality to the Buyer or
(ii) either Stakeholder is required to disclose by applicable Law; provided,
however, that such Stakeholder will (A) notify the Buyer in writing of such required
disclosure as much in advance as practicable in the circumstances, (B) cooperate with the Buyer to
limit the scope of such disclosure and (C) obtain the Buyer’s prior consent as to the wording of
such disclosure. At any time that the Buyer may request, each Stakeholder will, and will cause its
Affiliates and Representatives to, turn over or return to the Buyer all Confidential Information in
any form (including all copies and reproductions thereof) in its possession or control.

(b) No Party will issue any press release or make any public announcement or disclosure
relating to the subject matter of this Agreement without the prior written approval of the other
Parties; provided, however, that any Party may make any public disclosure it
believes in good faith is required by Law, in which case such Party shall (i) notify the other
Parties who are not its Affiliates in writing of such required disclosure as much in advance as
practicable in the circumstances, (ii) cooperate with the other Parties who are not its Affiliates
to limit the scope of such disclosure and (iii) obtain the prior consent of the other Parties
(which shall not be unreasonably withheld) who are not its Affiliates as to the wording of such
disclosure.

(c) The Stakeholders acknowledge and agree that the Buyer would be irreparably damaged if
either Stakeholder were to provide services to or otherwise participate in the business of any
Person competing with the Business and that any such competition by any Stakeholder would result in
a significant loss of goodwill by the Business and the Buyer. Neither Stakeholder shall engage
(whether as an owner, operator, stockholder, partner, joint venturer, manager, consultant, adviser,
representative, or otherwise) directly in any business which is directly competitive with the
Business anywhere in the United States during the period beginning on the Closing Date and ending
on the third anniversary of the Closing Date (the “Restricted Period”); provided however; that
ownership of less than three percent of the outstanding stock of any publicly traded corporation
shall not be deemed to be engaging solely by reason thereof in a business competitive with the
Business.

(d) The Stakeholders agree that, during the Restricted Period, they will not (i) directly or
indirectly contact, approach, or solicit for the purpose of offering employment to (whether as an
employee, consultant, agent, independent contractor, or otherwise) or actually hire any employee of
the Buyer, without the prior written consent of the Buyer, or (ii) induce or attempt to induce any
customer, prospect, supplier or other business relation of the Business, into any business
relationship which might materially harm the Buyer or the Business, or discourage such customer,
prospect, supplier or business relation from doing business with the Buyer and its Affiliates after
the Closing.

(e) The Parties hereto agree that the covenants set forth in this Section 5.9 are reasonable
with respect to their duration, geographical area, and scope. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this Section 5.9 is invalid or
unenforceable, the Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified.

 

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5.10 License to Use Name “Ambassadors”. In exchange for the consideration and covenants given
by the Buyer in this Agreement, the Seller hereby grants to the Buyer an irrevocable, fully
paid-up,
worldwide, non-exclusive, nontransferable, royalty-free license for the 12-month period
immediately following the Closing Date to use the designation “AMBASSADORS” or any trademark,
service mark, trade name, trade dress, logo or other intellectual property related to the same, and
the goodwill associated therewith, solely in connection with the Business including in all sales,
advertising, marketing and promotion of the Business and related goods and services. The Buyer
agrees that its goods and services identified by the mark shall meet the quality control standards
and requirements promulgated by the Seller from time to time.

5.11 Retention of and Access to Books and Records. The Buyer will retain for a period
consistent with the Buyer’s record-retention policies and practices the Books and Records delivered
to the Buyer. The Buyer also will provide the Seller and its Representatives reasonable access
thereto, during normal business hours and on at least three Business Days’ prior written notice, to
enable them to prepare financial statements or Tax Returns or deal with Tax audits. The Seller
will provide the Buyer and its Representatives reasonable access to those books and records that
are Excluded Assets, during normal business hours and on at least three Business Days’ prior
written notice, for any reasonable business purpose specified by the Buyer in such notice.

5.12 Accounting Software. The Seller will, and the Parent will cause the Seller and its Affiliates
to, promptly provide the Buyer such information from the Seller’s or its Affiliates’ books and
records, including its accounting system and data, historically used in the Business as the Buyer
reasonably requests for those requests submitted on or prior to the 90th day after the Closing
Date.

5.13 Website and Client Portal. The Seller will, and the Parent will cause the Seller and its
Affiliates to, host and manage the website and client portal, ambassadorstechnology.com and
ambassadors.com, which clients access to, among other things, monitor the status of certain events
for the 12-month period immediately following the Closing Date, exercising the same degree of care
as the Seller exercises in performing the same or similar services for its own account or for the
account of any of its Affiliates with priority and in accordance with the service levels provided
by the Seller immediately prior to the Closing Date.

5.14 Transfer of IATA Number. Promptly after the Closing, the Seller and the Parent shall use
their best efforts to transfer IATA number 05-85912-5 to Buyer such that the Buyer can utilize the
Seller’s current arrangement with ARC. Any charges made or obligations incurred by the Buyer with
respect to such IATA number shall be for the Buyer’s account.

ARTICLE VI

INDEMNIFICATION

6.1 Indemnification by the Stakeholders. Subject to the terms and conditions of this Article
VI, each Stakeholder, jointly and severally, will indemnify and hold harmless the Buyer and its
Affiliates and Representatives from, and pay and reimburse the Buyer and its Affiliates and
Representatives for, all Losses directly or indirectly relating to or arising from: (a) any breach
or inaccuracy or any allegation of any third party that, if true, would be a breach or inaccuracy
of any representation or warranty made by any Stakeholder in this Agreement; (b) any breach of any
covenant or agreement of any Stakeholder in this Agreement; or (c) any failure to pay, perform or
otherwise discharge any Excluded Liability as and when due or any Liability arising out of or in
connection with non-compliance with any “bulk sales,” “bulk transfer” or any similar Law other than
as a result of any failure by the Buyer to discharge any Assumed Liability. The Stakeholders
acknowledge that the indemnification obligations under this Section 6.1 apply to direct claims by
the Buyer as well as claims by the Buyer based on Third Party Claims.

 

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6.2 Indemnification by the Buyer. Subject to the terms and conditions of this Article VI, the
Buyer will indemnify and hold harmless the Seller from, and pay and reimburse the Seller for, all
Losses, directly or indirectly, relating to or arising from: (a) any breach or inaccuracy or any
allegation of any third party that, if true, would be a breach or inaccuracy of any representation
or warranty made by the Buyer in this Agreement; (b) any breach of any covenant or agreement of the
Buyer in this Agreement; or (c) any failure to pay, perform or otherwise discharge any Assumed
Liability as and when due. The Buyers acknowledge that the indemnification obligations under this
Section 6.1 apply to direct claims by the Stakeholders as well as claims by the Stakeholders based
on Third Party Claims.

6.3 Survival and Time Limitations. All representations, warranties, covenants and agreements
of the Parties in this Agreement will survive the Closing. The Stakeholders will have no Liability
with respect to any claim for any breach or inaccuracy of any representation or warranty in this
Agreement, unless the Buyer notifies the Seller of such a claim on or before October 15, 2010;
provided, however, that (a) any claim relating to Section 2.10 (taxes) may be made
at any time until the date 90 days after the expiration of the applicable statute or period of
limitations (including any extension of such statute or period of limitations) and (b) any claim
relating to Section 2.1 (organization), 2.2 (capitalization), 2.2 (authority), 2.3 (conflicts), 2.6
(title to assets) or 2.20 (broker fees), fraud, intentional misconduct, or any covenant or
agreement may be made at any time without any time limitation. The Buyer will have no Liability
with respect to any claim for any breach or inaccuracy of any representation or warranty in this
Agreement, unless the Seller notifies the Buyer of such a claim on or before October 15, 2010;
provided, however, that any claim relating to fraud, intentional misconduct, or any
covenant or agreement may be made at any time without any time limitation. If the Buyer or the
Seller, as applicable, provides proper notice of a claim within the applicable time period set
forth above, Liability for such claim will continue until such claim is resolved.

6.4 Limitations on Indemnification by the Stakeholders. The Stakeholders will have no
Liability with respect to the matters described in Section 6.1(a) until the total of all Losses
with respect to such matters exceeds $50,000 (the “Deductible”), at which point the Stakeholders
will be obligated to indemnify for only for Losses in excess of the Deductible; provided,
however, that any claim relating to Section 2.2 (authority), 2.3 (conflicts), 2.6 (title to
assets), 2.12 (taxes) or 2.21 (brokers) will not be subject to or counted towards the Deductible.
The Stakeholders’ maximum aggregate Liability with respect to the matters described in Section
6.1(a) will be limited to $500,000 (the “Cap”); provided, however, that any claim
relating to Section 2.2 (authority), 2.3 (conflicts), 2.6 (title to assets), 2.12 (taxes), 2.15
(environmental) or 2.21 (brokers) or any covenant or agreement will not be subject to the Cap.
This Section 6.4 will not apply to any fraudulent or intentional breach of any representation or
warranty.

6.5 Manner of Payment. Upon notice to the Seller specifying in reasonable detail the basis
for such set-off, the Buyer may set off any amount to which it is entitled under this Article VI
against any amount otherwise payable by the Buyer or its Affiliates to the Seller or the either
Stakeholder.

6.6 Third-Party Claims.

(a) If a third party commences a lawsuit or arbitration (a “Third-Party Claim”) against any
Person (the “Indemnified Party”) with respect to any matter that the Indemnified Party might make a
claim for indemnification against any Party (the “Indemnifying Party”) under this Article VI, then
the Indemnified Party must notify the Indemnifying Party thereof in writing of the existence of
such Third-Party Claim and must deliver copies of any documents served on the Indemnified Party
with respect to the Third-Party Claim; provided, however, that any failure to
notify the Indemnifying Party or deliver copies will not relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying Party is materially
prejudiced by such failure.

 

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(b) Upon receipt of the notice described in Section 6.6(a), the Indemnifying Party will have
the right to defend the Indemnified Party against the Third-Party Claim with counsel reasonably
satisfactory to the Indemnified Party so long as (i) within ten days after receipt of such notice,
the Indemnifying Party notifies the Indemnified Party in writing that the Indemnifying Party will,
subject to the limitations of Section 6.4, indemnify the Indemnified Party from and against any
Losses the Indemnified Party may incur relating to or arising out of the Third-Party Claim, (ii)
the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources to defend against
the Third-Party Claim and fulfill its indemnification obligations hereunder, (iii) the Indemnifying
Party is not a party to the Proceeding or the Indemnified Party has determined in good faith that
there would be no conflict of interest or other inappropriate matter associated with joint
representation, (iv) the Third-Party Claim does not involve, and is not likely to involve, any
claim by any Governmental Body, (v) the Third-Party Claim involves only money damages and does not
seek an injunction or other equitable relief, (vi) settlement of, or an adverse judgment with
respect to, the Third-Party Claim is not, in the good faith judgment of the Indemnified Party,
likely to establish a precedential custom or practice adverse to the continuing business interests
of the Indemnified Party, (vii) the Indemnifying Party conducts the defense of the Third-Party
Claim actively and diligently and (viii) the Indemnifying Party keeps the Indemnified Party
apprised of all developments, including settlement offers, with respect to the Third-Party Claim
and permits the Indemnified Party to participate in the defense of the Third-Party Claim.

(c) So long as the Indemnifying Party is conducting the defense of the Third-Party Claim in
accordance with Section 6.6(b), (i) the Indemnifying Party will not be responsible for any
attorneys’ fees incurred by the Indemnified Party regarding the Third-Party Claim (other than
attorneys’ fees incurred prior to the Indemnifying Party’s assumption of the defense pursuant to
Section 6.6(b)) and (ii) neither the Indemnified Party nor the Indemnifying Party will consent to
the entry of any judgment or enter into any settlement with respect to the Third-Party Claim
without the prior written consent of the other party, which consent will not be withheld
unreasonably. If the Indemnified Party desires to consent to the entry of judgment with respect to
or to settle a Third-Party Claim but the Indemnifying Party refuses, then the Indemnifying Party
will be responsible for all Losses with respect to such Third-Party Claim, without giving effect to
the Deductible or the Cap.

(d) If any condition in Section 6.6(b) is or becomes unsatisfied, (i) the Indemnified Party
may defend against, and consent to the entry of any judgment or enter into any settlement with
respect to, the Third-Party Claim in any manner it may deem appropriate (and the Indemnified Party
need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith),
(ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically (but no
less often than monthly) for the costs of defending against the Third-Party Claim, including
attorneys’ fees and expenses, and (iii) the Indemnifying Party will remain responsible for any
Losses the Indemnified Party may incur relating to or arising out of the Third-Party Claim to the
fullest extent provided in this Article VI.

6.7 Other Indemnification Matters. Any claim for indemnification under this Article VI must
be asserted by providing written notice to the Seller (or the Buyer, in the case of a claim by the
Seller) specifying the factual basis of the claim in reasonable detail to the extent then known by
the Person asserting the claim. All indemnification payments under this Article VI will be deemed
adjustments to the Purchase Price. 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 agreement,
will not affect the right to indemnification, payment of damages, or other remedy based on any such
representation, warranty, covenant or agreement. If either Stakeholder liquidates or dissolves at
any time when any Liability of such Stakeholder with respect to this Article VI may thereafter
arise or be determined, then, at the time of such liquidation or dissolution, such Stakeholder will
cause its
shareholders, members, partners or other equity holders or distributees of such Stakeholder’s
assets, as the case may be, to take such assets subject to such Liabilities ratably in proportion
to the assets received; provided, however, that the failure on behalf of either
Stakeholder to comply with the covenant set forth in this sentence will in no way reduce such
Stakeholder’s obligations in this Agreement.

 

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6.8 Exclusive Remedy. After the Closing, this Article VI will provide the exclusive legal
remedy for the matters covered by this Article VI, except for claims based upon fraud. This
Article VI will not affect any equitable remedy available to any Party.

6.9 Insurance and Third Party Recoveries. Any Losses for which indemnification is provided
under this Article VI shall be net of any amounts actually recovered from third parties
(including amounts actually recovered under insurance policies) with respect to such Losses after
having subtracted from the amounts so recovered the costs incurred in pursuing such recovery.

6.10 Tax Benefit. The parties hereto agree to treat any payment made pursuant to this
Article VI as an adjustment to the Purchase Price for Federal, State and local income tax purposes.

ARTICLE VII

MISCELLANEOUS

7.1 Further Assurances. Each Party agrees to furnish upon request to any other Party such
further information, to execute and deliver to any other Party such other documents, and to do such
other acts and things (including the execution and delivery of such further instruments or
documents as may be necessary or convenient to transfer and convey any Purchased Asset to the
Buyer), all as any other Party may reasonably request for the purpose of carrying out the intent of
the Transaction Documents.

7.2 No Third-Party Beneficiaries. This Agreement does not confer any rights or remedies upon
any Person (including any employee of the Seller) other than the Parties, their respective
successors and permitted assigns and, as expressly set forth in this Agreement, any Indemnified
Party.

7.3 Entire Agreement. The Transaction Documents constitute the entire agreement among the
Parties with respect to the subject matter of the Transaction Documents and supersede all prior
agreements (whether written or oral and whether express or implied) among any Parties to the extent
related to the subject matter of the Transaction Documents (including any letter of intent or
confidentiality agreement).

7.4 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of
the Parties and their respective successors and permitted assigns. Neither the Seller nor the
Parent may assign, delegate or otherwise transfer (whether by operation of law or otherwise) any of
its rights, interests or obligations in this Agreement without the prior written approval of the
Buyer. The Buyer may assign any or all of its rights or interests, or delegate any or all of its
obligations, in this Agreement to (a) any successor to the Buyer or any acquirer of a material
portion of the business or assets of the Buyer, (b) one or more of the Buyer’s Affiliates, or (c)
any lender to the Buyer or its Affiliates as security for obligations to such lender.

7.5 Counterparts. This Agreement may be executed by the Parties in multiple counterparts and
shall be effective as of the date set forth above when each Party shall have executed and delivered
a counterpart hereof, whether or not the same counterpart is executed and delivered by each Party.
When so executed and delivered, each such counterpart shall be deemed an original and all such
counterparts shall be deemed one and the same document. Transmission of images of signed signature
pages by facsimile, e-mail or other electronic means shall have the same effect as the delivery of
manually signed documents in person.

 

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7.6 Notices. Any notice pursuant to this Agreement must be in writing and will be deemed
effectively given to another Party on the earliest of the date (a) three Business Days after such
notice is sent by registered U.S. mail, return receipt requested, (b) one Business Day after
receipt of confirmation if such notice is sent by facsimile, (c) one Business Day after delivery of
such notice into the custody and control of an overnight courier service for next day delivery, (d)
one Business Day after delivery of such notice in person and (e) such notice is received by that
Party; in each case to the appropriate address below (or to such other address as a Party may
designate by notice to the other Parties):

If to either Stakeholder:

Ambassadors International, Inc.

2101 4th Avenue

Seattle, WA 98121

Fax: (206) 340-0975

Phone: (206) 733-2988

Attn: Mark Detillion

with a copy to:

Rutan & Tucker, LLP

611 Anton Boulevard, Suite 1400

Costa Mesa, CA 92626-1931

Fax: 714.641.3487

Phone: 714.546.9035

Attn: Derek D. Dundas

If to the Buyer:

Travel and Event Services, LLC

110 West Hubbard Street

Chicago, IL 60610

Fax: 312.329.1795

Phone: 312.527.7348

Attn: Michael Howe

and

Lakeview Equity Partners, LLC

700 North Water Street, Suite 630

Milwaukee, WI 53202

Fax: 414.732-2041

Phone: 414.732.2040

Attn: Kent Velde

 

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with a copy to:

O’Neil, Cannon, Hollman, DeJong S.C.

111 E. Wisconsin Ave., Suite 1400

Milwaukee, WI 53202

Fax: 414.276-6581

Phone: 414.276.5000

Attn: Peter J. Faust

7.7 JURISDICTION; SERVICE OF PROCESS. EACH PARTY (a) CONSENTS TO THE PERSONAL JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF GEORGIA (AND ANY CORRESPONDING APPELLATE COURT)
IN ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT, (b) WAIVES ANY VENUE OR
INCONVENIENT FORUM DEFENSE TO ANY PROCEEDING MAINTAINED IN SUCH COURTS, AND (c) EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, AGREES NOT TO INITIATE ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY
TRANSACTION DOCUMENT IN ANY OTHER COURT OR FORUM. PROCESS IN ANY SUCH PROCEEDING MAY BE SERVED ON
ANY PARTY ANYWHERE IN THE WORLD.

7.8 Governing Law. This Agreement and all other Transaction Documents (unless otherwise
stated therein) will be governed by the laws of the State of Delaware without giving effect to any
choice or conflict of law principles of any jurisdiction.

7.9 Amendments and Waivers. No amendment of any provision of this Agreement will be valid
unless the amendment is in writing and signed by the Buyer and the Seller. No waiver of any
provision of this Agreement will be valid unless the waiver is in writing and signed by the waiving
Party (or the Seller, in the case of a waiver by the Parent). The failure of a Party at any time
to require performance of any provision of this Agreement will not affect such Party’s rights at a
later time to enforce such provision. No waiver by any Party of any breach of this Agreement will
be deemed to extend to any other breach hereunder or affect in any way any rights arising by virtue
of any other breach.

7.10 Severability. Any provision of this Agreement that is determined by any court of
competent jurisdiction to be invalid or unenforceable will not affect the validity or
enforceability of any other provision hereof or the invalid or unenforceable provision in any other
situation or in any other jurisdiction. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

7.11 Expenses. The Stakeholders will bear all expenses incurred by either Stakeholder or any
of their respective Representatives in connection with the Transactions contemplated to be
performed before or on the Closing Date. Except as otherwise expressly provided in this
Agreement, the Buyer will bear all expenses incurred by the Buyer or any of its Representatives in
connection with the Transactions contemplated to be performed before or on the Closing Date.

 

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7.12 Interpretation. The article and section headings in this Agreement are inserted for
convenience only and are not intended to affect the interpretation of this Agreement. Any
reference in this Agreement to any Article or Section refers to the corresponding Article or
Section of this Agreement. Any reference in this Agreement to any Schedule or Exhibit refers to
the corresponding Schedule or Exhibit attached to this Agreement and all such Schedules and
Exhibits are incorporated herein by reference. The word “including” in this Agreement means
“including without limitation.” This Agreement will be construed as if drafted jointly by the
Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by
virtue of the authorship of any provision in this
Agreement. Unless the context requires otherwise, any reference to any Law will be deemed
also to refer to all amendments and successor provisions thereto and all rules and regulations
promulgated thereunder, in each case as in effect as of the Closing Date. All accounting terms not
specifically defined in this Agreement will be construed in accordance with GAAP as in effect on
the date hereof (unless another effective date is specified herein). The word “or” in this
Agreement is disjunctive but not necessarily exclusive. All words in this Agreement will be
construed to be of such gender or number as the circumstances require. References in this
Agreement to time periods in terms of a certain number of days mean calendar days unless expressly
stated herein to be Business Days. In interpreting and enforcing this Agreement, each
representation and warranty will be given independent significance of fact and will not be deemed
superseded or modified by any other such representation or warranty.

7.13 Specific Performance. Each Party acknowledges that the other Parties would be damaged
irreparably and would have no adequate remedy of law if any provision of this Agreement is not
performed in accordance with its specific terms or otherwise is breached. Accordingly, each Party
agrees that the other Parties will be entitled to an injunction to prevent any breach of any
provision of this Agreement and to enforce specifically any provision of this Agreement, in
addition to any other remedy to which they may be entitled and without having to prove the
inadequacy of any other remedy they may have at law or in equity and without being required to post
bond or other security.

7.14 Time Is of the Essence. Time is of the essence with respect to all time periods and
dates set forth herein.

[signature pages follow]

 

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The Parties have executed and delivered this Asset Purchase Agreement as of the date first
written above.

	 	 	 	 	 	 	 	 	 
	 	 	TRAVEL AND EVENT SERVICES, LLC
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name: 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AMBASSADORS, LLC
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By: 
	Ambassadors International, Inc.,	 	 
	 

	 	 	 	 	sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	Arthur A. Rodney,	 	 
	 

	 	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AMBASSADORS INTERNATIONAL, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Arthur A. Rodney,	 	 
	 	 	 	 	Chief Executive Officer	 	 

 

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EXHIBIT A

“Accounting Firm” is defined in Section 1.6(b).

“Accounts Receivable” is defined in Section 1.1.

“Active Employees” means all employees employed by the Seller in the Business, including
employees on temporary leave of absence, including family medical leave, military leave, temporary
disability or sick leave, but excluding employees on long-term disability leave.

“Affiliate” means, with respect to a specified Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, the specified Person. The
term “control” means (a) the possession, directly or indirectly, of the power to vote 10% or more
of the securities or other equity interests of a Person having ordinary voting power, (b) the
possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person, by contract or otherwise or (c) being a director, officer, executor, trustee
or fiduciary (or their equivalents) of a Person or a Person that controls such Person.

“Agreement” is defined in the opening paragraph.

“Assumed Bonuses” is defined in Section 1.3(b).

“Assumed Liabilities” is defined in Section 1.3.

“AT&E Business” means the business line operated by the Seller that has been referred to as
the “Ambassadors Travel & Events” business, which is distinct from the Business being acquired
hereunder, related to corporate incentive travel planning and management.

“Balance Sheet” means the balance sheet of the Business as of December 31, 2008, which is
attached to Schedule 2.4.

“Balance Sheet Date” means the date of the Balance Sheet.

“Books and Records” is defined in Section 1.1.

“Business” means the business conducted by the Seller, including the activities carried on by
the Seller (a) under the line of business referred to as “Ambassadors Convention Housing Services”
or (b) for the purpose of arranging full service housing for trade shows, associations and
conventions on a global scale, including site selection, hotel event contract services,
registration, event marketing, onsite housing, and post show reporting.

“Business Day” means any day that is not a Saturday, Sunday or any other day on which banks
are required or authorized by law to be closed in Atlanta, Georgia.

“Buyer” is defined in the opening paragraph.

“Cap” is defined in Section 6.4.

“Cash Purchase Price” is defined in Section 1.5.

“Closing” is defined in Section 1.7.

 

A-1

 

“Closing Date” is defined in the opening paragraph.

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code § 4980B.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” means information concerning the Purchased Assets, the Assumed
Liabilities, the Business or affairs of the Seller, including information relating to customers,
clients, suppliers, distributors, investors, lenders, consultants, independent contractors or
employees, customer and supplier lists, price lists and pricing policies, cost information,
financial statements and information, budgets and projections, business plans, production costs,
market research, marketing plans and proposals, sales and distribution strategies, processes and
business methods, technical information, pending projects and proposals, new business plans and
initiatives, research and development projects, inventions, discoveries, ideas, technologies, trade
secrets, know-how, formulae, technical data, designs, patterns, marks, names, improvements,
industrial designs, mask works, compositions, works of authorship and other Intellectual Property,
devices, samples, plans, drawings and specifications, photographs and digital images, computer
software and programming, all other confidential information and materials relating to the
Purchased Assets, the Assumed Liabilities, the Business, and all notes, analyses, compilations,
studies, summaries, reports, manuals, documents and other materials prepared by or for the Seller
containing or based in whole or in part on any of the foregoing, whether in verbal, written,
graphic, electronic or any other form and whether or not conceived, developed or prepared in whole
or in part by the Seller.

“Consent” means any consent, approval, authorization, permission or waiver.

“Contract” means any contract, obligation, understanding, commitment, lease, license, purchase
order, bid or other agreement, whether written or oral or whether express or implied, together with
all amendments and other modifications thereto.

“Continued Employees” is defined in Section 4.3.

“Customer Deposit Liabilities” is defined in Section 1.3(c).

“Deductible” is defined in Section 6.4.

“Deferred Cash Consideration” is defined in Section 1.6(a).

“Dispute Notice” is defined in Section 1.6(b).

“Encumbrance” means any lien, mortgage, pledge, encumbrance, charge, security interest,
adverse or other claim, community property interest, condition, equitable interest, option,
warrant, right of first refusal, easement, profit, license, servitude, right of way, covenant,
zoning or other restriction of any kind or nature.

“Environmental Law” means any Law relating to the environment, health or safety, including any
Law relating to the presence, use, production, generation, handling, management, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control or cleanup of any material, substance or waste limited or regulated by
any Governmental Body.

“Equity” means the outstanding membership interests of the Seller.

 

A-2

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Excluded Assets” is defined in Section 1.2.

“Excluded Liabilities” is defined in Section 1.4.

“Financial Statements” is defined in Section 2.4.

“GAAP” means generally accepted accounting principles in the United States as set forth in
pronouncements of the Financial Accounting Standards Board (and its predecessors) and the American
Institute of Certified Public Accountants and, unless otherwise specified, as in effect on the date
hereof or, with respect to any financial statements, the date such financial statements were
prepared.

“Governmental Body” means any federal, state, local, foreign or other government or
quasi-governmental authority or any department, agency, subdivision, court or other tribunal of any
of the foregoing.

“Hazardous Substance” means any material, substance or waste that is limited or regulated by
any Governmental Body or, even if not so limited or regulated, could pose a hazard to the health or
safety of the occupants of the Real Property or adjacent properties or any property or facility
formerly owned, leased or used by the Seller. The term includes asbestos, polychlorinated
biphenyls, petroleum products and all materials, substances and wastes regulated under any
Environmental Law.

“Indebtedness” means as to any Person at any time: (a) obligations of such Person for
borrowed money; (b) obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments; (c) obligations of such Person to pay the deferred purchase price of property
or services (including obligations under noncompete, consulting or similar arrangements), except
trade accounts payable of such Person arising in the ordinary course of business that are not past
due by more than 90 days or that are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established on the financial
statements of such Person; (d) capitalized lease obligations of such Person; (e) indebtedness or
other obligations of others guaranteed by such Person; (f) obligations secured by an Encumbrance
existing on any property or asset owned by such Person; (g) reimbursement obligations of such
Person relating to letters of credit, bankers’ acceptances, surety or other bonds or similar
instruments; (h) Liabilities of such Person relating to unfunded, vested benefits under any
Employee Benefit Plan (excluding obligations to deliver stock pursuant to stock options or stock
ownership plans); and (i) net payment obligations incurred by such Person pursuant to any hedging
agreement.

“Indemnified Party” is defined in Section 6.6.

“Indemnifying Party” is defined in Section 6.6.

“Intellectual Property” means (a) inventions (whether patentable or unpatentable and whether
or not reduced to practice), improvements thereto, and patents, patent applications, and patent
disclosures, together with reissuances, continuations, continuations-in-part, revisions, extensions
and reexaminations thereof; (b) trademarks, service marks, trade dress, logos, trade names, and
corporate names, together with translations, adaptations, derivations and combinations thereof and
including goodwill associated therewith, and applications, registrations, and renewals in
connection therewith; (c) copyrightable works, copyrights, and applications, registrations and
renewals in connection therewith; (d) mask works and applications, registrations and renewals in
connection therewith; (e) trade secrets and Confidential Information; (f) computer software, in
object and source code format (including data and related documentation); (g) plans, drawings,
architectural plans and specifications; (h) websites; (i) other
proprietary rights; and (j) copies and tangible embodiments and expressions thereof (in
whatever form or medium), all improvements and modifications thereto and derivative works thereof.

 

A-3

 

“IRS” means the U.S. Internal Revenue Service.

“Knowledge of the Seller” means the actual knowledge of Tim Whorton, Rose Dubrovich and Todd
Lambert.

“Law” means any federal, state, local, foreign or other law, statute, ordinance, regulation,
rule, regulatory or administrative guidance, Order, constitution, treaty, principle of common law
or other restriction of any Governmental Body.

“Lease” means any Contract pursuant to which the Seller holds a possessory interest in Real
Property, and all amendments, renewals or extensions thereto.

“Liability” means any liability, obligation or commitment of any kind or nature, whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due.

“License” is defined in Section 2.11.

“Loss” means any loss, claim, demand, Order, damage, penalty, fine, cost (including any
opportunity cost), settlement payment, Liability, Tax, Encumbrance, diminution of value, expense,
fee, court costs or attorneys’ fees and expenses.

“Material Contract” is defined in Section 2.10.

“Multiemployer Plan” has the meaning set forth in ERISA § 3(37).

“Net Revenue” means gross revenues of the Business for calendar year 2009 less rebates,
on-site expenses, returns, discounts and allowances, calculated in accordance with GAAP and the
principles, policies and practices that were used in preparing the Balance Sheet.

“Offices” means the business offices of the Business located in Atlanta, Georgia and
specfically excludes the corporate office of the Parent located in Newport Beach, California.

“Order” means any order, award, decision, injunction, judgment, ruling, decree, charge, writ,
subpoena or verdict entered, issued, made or rendered by any Governmental Body or arbitrator.

“Organizational Documents” means (a) the certificate or articles of incorporation and the
bylaws, (b) any documents comparable to those described in clause (a) as may be applicable pursuant
to any Law and (c) any amendment or modification to any of the foregoing.

“Overpayment Liabilities” is defined in Section 1.3(d).

“Parent” is defined in the opening paragraph.

“Party” means the Buyer, the Seller or the Parent.

“Payment Statement” is defined in Section 1.6(b).

 

A-4

 

“Permit” means any permit, license or Consent issued by any Governmental Body or pursuant to
any Law.

“Permitted Encumbrance” means (a) any mechanic’s, materialmen’s or similar statutory lien
incurred in the ordinary course of business for monies not yet due, (b) any lien for Taxes not yet
due and (c) any recorded easement, covenant, zoning or other restriction on the Real Property that,
together with all other Permitted Encumbrances, does not prohibit or impair the current use,
occupancy, value or marketability of title of the property subject thereto.

“Person” means any individual, corporation, limited liability company, partnership, company,
sole proprietorship, joint venture, trust, estate, association, organization, labor union,
Governmental Body or other entity.

“Proceeding” means any proceeding, charge, complaint, claim, demand, notice, action, suit,
litigation, hearing, audit, investigation, arbitration or mediation (in each case, whether civil,
criminal, administrative, investigative or informal) commenced, conducted, heard or pending by or
before any Governmental Body, arbitrator or mediator.

“Purchase Price” is defined in Section 1.5.

“Purchased Assets” is defined in Section 1.1.

“Real Property” is defined in Section 2.9.

“Representative” means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor or other representative of such Person, including legal counsel,
accountants and financial advisors.

“Resolution Period” is defined in Section 1.6(b).

“Secured Debt” means any Indebtedness that is secured by any Encumbrance other than a
Permitted Encumbrance on any Purchased Asset.

“Seller” is defined in the opening paragraph.

“Stakeholders” is defined in the opening paragraph.

“Tangible Personal Property” is defined in Section 1.1.

“Tax” means (a) any federal, state, local, foreign or other income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code § 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, general service, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, however denominated or computed, and including any
interest, penalty, or addition thereto, whether disputed or not, and (b) Liability for the payment
of any amount of the type described in clause (a) as a transferee or successor, by Contract or from
any express or implied obligation to indemnify or otherwise assume or succeed to the Liability of
any other Person.

“Tax Return” means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any form, schedule or attachment thereto and any amendment
or supplement thereof.

 

A-5

 

“Terminated Employees” is defined in Section 4.3.

“Third-Party Claim” is defined in Section 6.6.

“Transactions” means the transactions contemplated by the Transaction Documents.

“Transaction Documents” means this Agreement and all other written agreements, documents and
certificates contemplated by any of the foregoing documents.

“Transfer Taxes” is defined in Section 5.4.

“Vacation Release” is defined in Section 4.4.

“WARN Act” means the Worker Adjustment Retraining and Notification Act of 1988.

 

A-6exhibit10-18.htm

    EXHIBIT
10.18

    SEVEN
ARTS FILMED ENTERTAINMENT LIMITED

    30
Farringdon Street

    London
EC4A 4HJ

    UK

    

    As of
November 1, 2004

    

    

    Seven
Arts Pictures Inc.

    6310 San
Vicente Boulevard, Suite 510

    Los
Angeles, California 90048

    

    Re:  INTERCOMPANY
AGREEMENT

    

    Gentlemen:

    

    You ("SAP") are hereby appointed as the
independent agent of us ("SAFE") to enter into agreements and to conduct
business on behalf of us in all aspects related to the motion picture
business.  All of your actions will be taken pursuant to the direction
of the Board of Directors of us and you shall take no actions without our
approval.  All results and proceeds of any actions and services
performed by you shall belong to us and are hereby assigned to us in full for no
further consideration.  The intention of this agreement is that SAP
will be an independent agent under the terms of the tax treaty between the
United States and the United Kingdom as in effect or as it may be amended from
time to time, and therefore the office of SAP in the United States shall not be
and is not intended to be a "permanent establishment" of us.

    

    Please confirm you agreement to the
foregoing by signing below where indicated.

    

    SEVEN ARTS PICTURES
FILMED

    ENTERTAINMENT LIMITED

    

    

    By:  __/s/ John
Bottomley__________

    

    AGREED
AND ACCEPTED

    

    

    SEVEN
ARTS PICTURES INC.

    

    

    By:  __/s/
Peter Hoffman_____________

    
 

    
      
        
        

      

      
        1

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