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EXHIBIT 10.18
XXXXXXX XXXXXX CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "AGREEMENT") is dated as of March
27, 1998 by and between GLOBAL VACATION GROUP, INC. (formerly Allied Bus Corp.),
a New York corporation (the "COMPANY") and XXXXXXX XXXXXX (the "CONSULTANT").
RECITALS
X. XXXXXX EQUITY INVESTORS III, L.P. ("XXXXXX"), the Company, the
Consultant (in his capacity as a shareholder of the Company) and XXXXXXX XXXXXX,
XXXXXXX XXXXXX AND XXXXXXXX XXXXXXX (the other current shareholders of the
Company) ("SHAREHOLDERS"), are parties to that certain Recapitalization
Agreement dated March 18, 1998 herewith (the "RECAPITALIZATION AGREEMENT"),
pursuant to which Xxxxxx and certain other investors have agreed to purchase a
portion of the outstanding stock of the Company from the Consultant and the
other Shareholders; and
B. Pursuant to the Recapitalization Agreement, the Company and the
Consultant agreed to enter into a consulting arrangement upon the closing of the
transactions contemplated by the Recapitalization Agreement, whereby the Company
would engage the Consultant as a consultant to the Company; and
C. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Recapitalization Agreement.
AGREEMENT
In consideration for the payments to be made to the Consultant
pursuant to this Agreement and for the mutual covenants and agreements contained
herein, the parties have agreed that the Consultant shall resign from his
employment with the Company effective as of the closing date of the
Recapitalization Agreement and shall thereafter be engaged as a consultant to
the Company pursuant to the terms and provisions hereof.
1. CONSULTING. The Company hereby engages the Consultant to serve as
an advisor and consultant to the Company and the Consultant hereby accepts such
engagement, on the terms and conditions of this Agreement.
2. TERM OF ENGAGEMENT. The term of Consultant's engagement hereunder
shall commence effective as of the Closing Date under the Recapitalization
Agreement in accordance with the provisions of Section 13 hereof, and shall
continue thereafter until the earlier of (i) December 31, 1999 or (ii) the death
or disability of Consultant. This Agreement shall automatically extend for
additional one month periods, on the same terms and conditions as are
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set forth herein, unless at least one month prior written notice is sent from
either Consultant or the Company to the other declining to extend this Agreement
as aforesaid. In addition to any other remedies the Company may have, the
Company may terminate this Agreement in the event of the breach of any of the
provisions of this Agreement by Consultant.
3. DUTIES. The Consultant shall during the term of this Agreement,
be available to the Company for up to fifty (50) days per annum primarily at the
Company's offices in New York, New York or by telephone to provide services to
and be a member of the advisory board which the Company intends to establish to
guide it in its consolidation of the wholesale travel sales industry, and to
provide such other information and consultation to the Company as the Company
may request from time to time. Such services shall be aimed at assisting the
Company with the development and marketing of the Company's business. The
Consultant shall discharge such consulting functions to the best of his ability.
Consultant shall provide information as set forth above to the Chairman and
President (or Chief Executive Officer) of the Company or such other person as
the Company may designate. Information provided to the Company pursuant to the
terms of this Agreement will not be used by Consultant, or any company or entity
which he owns or controls, directly or indirectly, or provided to any company or
other person or organization without, in each case, the prior written consent of
the Company. The restriction in the foregoing sentence shall not apply to
information which is or subsequently becomes part of the public domain (unless
such information became public as a result of Consultant's breach of the
foregoing sentence).
4. COMPENSATION. For providing consulting services hereunder and the
Consultant's undertakings pursuant to Section 6 hereof, the Company shall pay
the Consultant $100,000 per year. Such annual compensation shall be paid to the
Consultant in accordance with the Company's normal payroll schedule.
5. EXPENSES. The Company will reimburse the Consultant for all
reasonable expenses incurred by Consultant in rendering services hereunder upon
submission to the Company of an accounting and substantiation for such expenses;
provided, however, that any expenses or series of related expenses in excess of
$5,000 shall be approved in advance by the Company.
6. COVENANT NOT TO COMPETE.
(a) For and in consideration of the payments made to the
Consultant under this Agreement, Consultant, by signing this Agreement,
covenants and agrees, for a period of four (4) years from and after the date of
this Agreement or one (1) year beyond the term of his engagement as a consultant
by the Company, whichever is shorter, Consultant agrees that he will not,
directly or indirectly without the prior written consent of the Company, for or
on behalf of any entity:
(i) become interested or engaged, directly or
indirectly, as a shareholder, bondholder, creditor, officer,
director, partner, agent, contractor
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with, employer or representative of, or in any manner associated
with, or give financial, technical or other assistance to, any
Person, firm or corporation for the purpose of engaging in the
wholesale travel sales business in competition with the Company or
its Affiliates, within the United States;
(ii) enter into any agreement with, service, assist or
solicit the business of any customers of the Company or its
Affiliates for the purpose of providing wholesale travel services to
such customers in competition with the Company or its Affiliates in
the United States or to cause them to reduce or end their business
with the Company or such Affiliates; or
(iii) hire, retain, or solicit the employment or
services of employees, consultants or representatives of the Company
or its Affiliates for the purpose of causing them to leave the
employment of the Company or its Affiliates;
provided, however, that no owner of less than five percent (5%) of the
outstanding stock of any publicly-traded corporation shall be deemed to be in a
violation of this Section 6.(a) solely by reason thereof.
(b) Consultant represents to the Company that the enforcement
of the restrictions contained in this Agreement would and will not be unduly
burdensome to Consultant. The parties to this Agreement hereby agree that the
covenants contained in this Agreement are reasonable and necessary restrictions
for the purpose of protecting the goodwill and other business interests of the
Company, which includes the Company's expectation of expanding its business
without competition from Consultant for such period. In the event that a court
should determine that any of such restrictions are unenforceable, the parties
agree that this Agreement shall nevertheless be enforceable for the maximum term
and maximum geographical area allowed by law.
(c) Consultant acknowledges and agrees that the covenant not
to compete contained in this Section 6 is in addition to, is separate from and
is based on independent consideration as compared to, that certain
non-competition covenant to which Consultant is bound as a shareholder under
Section 6.4 of the Recapitalization Agreement.
7. CONSULTANT'S REPRESENTATIONS. Consultant hereby represents and
warrants to the Company that (i) the execution, delivery and performance by
Consultant of this Agreement and all other agreements contemplated hereby to
which Consultant is a party do not and shall not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgment or
decree to which Consultant is a party or by which he is bound, (ii) Consultant
is not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity that remains in full
force and effect, and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Consultant, enforceable in accordance with its terms.
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8. NON-ASSIGNABILITY. The Consultant shall have no right to assign
or transfer any rights hereunder.
9. BINDING NATURE; AMENDMENT AND WAIVER; ENTIRE AGREEMENT;
COUNTERPARTS AND FACSIMILE CLOSING. This Agreement shall be binding upon the
Company, its successors and assigns, and upon the Consultant and his respective
heirs, legatees, executors and administrators. This Agreement may not be
modified or amended except by an instrument in writing signed by both the
parties. This Agreement is the entire agreement between the parties hereto with
regard to the subject matter hereof and supersedes all prior discussions,
arrangements or agreements between the parties relating thereto. This Agreement
may be executed in counterparts and executed signature pages sent by facsimile
shall be binding as evidence of acceptance of the terms hereof by the signatory
party.
10. INDEPENDENT CONTRACTOR. The relationship of Consultant to the
Company is that of an independent contractor. Consultant shall not be considered
an employee or agent of the Company or any of its Affiliates, and shall have
absolutely no authority to bind, commit or otherwise obligate the Company or any
of its Affiliates in any way whatsoever. Consultant is not eligible to
participate in any employee benefit or other plan of the Company or any of its
Affiliates.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES.
12. CONDITIONAL AGREEMENT. This Agreement and all rights, duties and
obligations of Consultant and the Company contained herein are expressly
conditioned upon the closing of the Recapitalization Agreement. In the event the
Recapitalization Agreement closes, the closing date thereof shall be the
effective date of this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date and year first above written.
GLOBAL VACATION GROUP, INC.
By: /s/ J. Xxxxxxx Xxxxx
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J. Xxxxxxx Xxxxx
President and Chief Operating Officer
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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