CAPITAL CONTRIBUTION AGREEMENT
This is an Agreement (the "Agreement") dated November 2, 2001 among CVG
Investment LLC (the "Company"), a Delaware limited liability company, Three
Cities Fund III, L.P. ("TCF III"), a Delaware limited partnership, GV Investment
LLC ("GVI"), a Delaware limited liability company, Xxxxxxxx X. Xxxxx ("Xxxxx")
and Xxxxxx Equity Investors III, L.P. ("Xxxxxx"), a Delaware limited
partnership, which agreement is as follows:
1. CONTRIBUTIONS BY TCF III.
1.1 At the Closing (defined in Paragraph 8.1), TCF III will contribute
to the Company $8,000,000 in cash in exchange for 8,000,000 Units of equity
ownership in the Company ("Units").
1.2 Each time Classic Vacation Group, Inc. ("CVG") requests that the
Company purchase Exchangeable Senior Subordinated Notes due 2006 ("Exchangeable
Notes" and, together with the Company's Convertible Senior Subordinated Notes
due 2006, "Notes") from it in accordance with a Note Purchase Agreement (the
"Note Purchase Agreement") between CVG and the Company dated the same date as
this Agreement, other than the purchase of Notes at the Initial Closing under
the Note Purchase Agreement, TCF III will contribute to the Company, within four
business days after the request by the Company, a sum equal to 80% of the
purchase price of the Notes in exchange for Units at the rate of one Unit for
each $1 contributed by TCF III pursuant to this Paragraph 1.2. The obligation of
TCF III to make contributions under this Paragraph 1.2 is limited to
$11,400,000.
1.3 When the Company requests funds in order to (i) fund capital
contributions to CVG Acquisition Corporation ("Acquisition") to be used by
Acquisition to pay the purchase price of shares of CVG common stock which are
tendered in response to a tender offer (the "Tender Offer") by Acquisition for
stock of CVG at a price (the "Tender Offer Price") of $0.15 per share (or
another price approved by TCF III and Xxxxxx) or to be paid to shareholders of
CVG as a result of a merger (the "Merger") of CVG with Acquisition in which
shareholders of CVG other than Acquisition and the Company will receive cash
equal to the price per share paid in the Tender Offer, or (ii) pay expenses of
the Tender Offer or the Merger, TCF III will contribute to the Company, within
two business days after the request by the Company, 80% of the sum requested by
the Company in exchange for Units at the rate of one Unit for each $1
contributed by TCF III pursuant to this Paragraph 1.3. The obligation of TCF III
to make contributions pursuant to this Paragraph 1.3 is limited to $600,000.
1.4 If at a time when Xxxxx is required to make a contribution to the
Company as provided in Paragraph 4, Xxxxxx'x Advisory Committee (the "TEI
Advisory Committee") has not approved Xxxxx'x acquiring interests in CVG and no
Permitted Xxxxxx Transferee (as that term is defined in the Company's Limited
Liability Company Agreement (the "LLC Agreement")) other than Xxxxx makes that
contribution when Xxxxx was required to make it, TCF III will make the
contribution which, by reason of Paragraph 4.2, Xxxxx was not able to make, and
TCF III will receive one Unit for each $1 contributed by TCF III pursuant to
this Paragraph 1.4.
1.5 If Xxxxxx does not make any of the contributions to the Company
contemplated in Paragraph 3.4 because CVG's Board of Directors (the "CVG Board")
recommends to CVG's shareholders that they not tender their shares in response
to the Tender Offer, TCF III will make the contributions contemplated by
Paragraph 3.4 which Xxxxxx does not make, and TCF III will receive one Unit for
each $1 contributed by TCF III pursuant to this Paragraph 1.5.
2. CONTRIBUTIONS BY GVI.
2.1 If at December 31, 2001 (the "Securities Contribution Date") (i)
the Securities Contribution Condition and the conditions in Paragraph 10.1 have
been fulfilled, at the Subsequent Closing (defined in Paragraph 8.2), GVI will
contribute to the Company 386,300 shares of common stock of CVG ("Common Stock")
in exchange for 57,945 Units. The "Securities Contribution Condition" will be
that Acquisition will have notified TCF III and Xxxxxx that Acquisition intends
to accept for payment and pay for all the shares of Common Stock that are
properly tendered in response to the Tender Offer and not withdrawn by the time
the Tender Offer expires.
2.2 At the Third Closing, GVI will contribute 6,099,749 shares of
Common Stock to the Company in exchange for 914,962 Units.
3. CONTRIBUTIONS BY XXXXXX.
3.1 At the Closing, Xxxxxx will contribute to the Company $2,000,000 in
cash in exchange for 2,000,000 Units.
3.2 If at the Securities Contribution Date, the Securities Contribution
Condition and the conditions in Paragraph 10.2 have been fulfilled, at the
Subsequent Closing Xxxxxx will contribute to the Company 3,500,000 shares of
Common Stock in exchange for 525,000 Units.
3.3 Each time CVG requests that the Company purchase Notes from it in
accordance with the Note Purchase Agreement, other than the purchase of Notes at
the Initial Closing under the Note Purchase Agreement, Xxxxxx will contribute to
the Company, within four business days after the request by the Company
accompanied by a statement that the Company intends to purchase the Notes as
requested, a sum equal to 20% of the purchase price of the Notes in exchange for
Units at the rate of one Unit for each $1 contributed by Xxxxxx pursuant to this
Paragraph 3.3. The obligation of Xxxxxx to make contributions under this
Paragraph 3.3 is limited to $1,850,000.
3.4 Each time the Company requests funds in order to (i) fund capital
contributions to Acquisition to be used by Acquisition to pay the purchase price
of shares of CVG common stock which are tendered in response to the Tender Offer
or to be paid to shareholders of CVG as a result of the Merger, or (ii) pay
expenses of the Tender Offer or the Merger, Xxxxxx will, within two business
days after the request from the Company, contribute to the Company 20% of the
sum requested by the Company in exchange for Units at the rate of one Unit for
each $1 contributed by Xxxxxx pursuant to this Paragraph 3.4. The obligation of
Xxxxxx to make contributions under this Paragraph 3.4 (i) is limited to $150,000
and (ii) is subject to the condition that the CVG Board not have recommended to
CVG's shareholders that they not tender their shares in response to the Tender
Offer.
4. OBLIGATIONS OF XXXXX.
4.1 Subject to the condition in Paragraph 4.2, beginning at such time
as the total amount contributed by Xxxxxx to the Company under Paragraphs 3.1
and 3.3 equals $3,850,000, each time CVG requests that the Company purchase
Notes from it in accordance with the Note Purchase Agreement, Xxxxx will
contribute to the Company, within four business days after the request by the
Company accompanied by a statement that the Company intends to purchase the
Notes as requested, a sum equal to 20% of the purchase price of the Notes in
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exchange for Units at the rate of one Unit for each $1 contributed by Xxxxx
pursuant to this Paragraph 4.1. The obligations of Xxxxx to make contributions
under this Paragraph 4.1 are limited to $1 million.
4.2 Xxxxx'x obligations under this Paragraph 4 are subject to approval
by the TEI Advisory Committee of Xxxxx'x acquiring Units as contemplated by this
Agreement. Xxxxx will have no obligations under this Paragraph 4 unless and
until the TEI Advisory Committee approves Xxxxx'x acquiring Units as
contemplated by this Agreement. If the TEI Advisory Committee has not approved
Xxxxx'x acquiring Units by the time Xxxxx is required by Paragraph 4.1 to make a
contribution to the Company, Xxxxx may (but will not be required to) designate
another Permitted Xxxxxx Transferee to make that contribution and receive in
exchange for the contribution the Units Xxxxx would have received if he had made
the contribution. In order to designate another Permitted Xxxxxx Transferee to
make a contribution, Xxxxx will give the Company notice of the designation on or
before the day on which the contribution is due. If the approval of the TEI
Advisory Committee comes after another Permitted Xxxxxx Transferee, or TCF III
in accordance with Section 1.5, has made, some but not all of the contributions
Xxxxx is required to make under Paragraph 4.1, Xxxxx will make the remaining
contributions he is required to make under that Paragraph and will receive the
Units which are to be exchanged for those remaining contributions.
5. TRANSACTIONS BETWEEN TCF III AND XXXXXX.
5.1 If Xxxxxx contributes 3,500,000 shares of Common Stock to the
Company at the Subsequent Closing, as contemplated by Paragraph 3.2, at the
Third Closing described in Paragraph 8.3, (a) TCF III will sell to Xxxxxx
$4,950,353 principal amount of 9% Pass-Through Notes of GVI ("GVI Notes"), and
Xxxxxx will transfer to TCF III, in exchange for those GVI Notes, 6,099,749
shares of Common Stock and 225,419 Units.
5.2 TCF III hereby grants Xxxxxx an option (the "9% Notes Option") to
purchase from TCF III, if the Note Purchase Agreement is terminated or
terminates under Paragraph 8.2 of the Note Purchase Agreement and Xxxxxx does
not acquire GVI Notes in accordance with Paragraph 5.1 (but not otherwise),
$3,897,945 principal amount of GVI Notes. The exercise price of the 9% Notes
Option will be $897,945. The Note Purchase Option will be exercisable from and
after the date the Note Purchase Agreement is terminated or terminates under
Paragraph 8.2 until the 9% Notes are paid in full. The 9% Notes Option will
survive any termination of this Agreement.
6. TRANSACTION BETWEEN TCF III AND GVI.
6.1 If Xxxxxx transfers to TCF III 6,099,749 shares of Common Stock and
225,419 Units as contemplated in Paragraph 5.1, at the Third Closing, TCF III
will transfer those shares and Units to GVI, and GVI will deliver to TCF III in
exchange for those shares and Units a GVI Note in the principal amount of
$4,950,353.
6.2 If Xxxxxx exercises the 9% Notes Option, when Xxxxxx does that, GVI
will deliver to TCF III GVI Notes in the principal amount of $3,897,953 and in
payment for those GVI Notes, TCF III will pay to GVI III the sum TCF III
receives as the exercise price of the 9% Notes Option.
7. RECISION OF TRANSACTIONS; CONTRIBUTIONS OF NOTES.
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7.1 If (a) the Note Purchase Agreement is terminated or terminates
under Paragraph 8.2 of the Note Purchase Agreement, or (b) the Securities
Contribution Condition is satisfied on or before the Securities Contribution
Date, but despite that Acquisition does not accept for payment, and promptly pay
for, the shares of Common Stock that are properly tendered in response to the
Tender Offer and not withdrawn, but any of TCF III, GVI or Xxxxxx has already
transferred any Common Stock or GVI Units in accordance with any provision of
this Agreement, as promptly as practicable (and under the circumstances
described in clause (a), in any event before 11:59 p.m. on December 31, 2001),
(i) the transaction in which the Common Stock or GVI Units were transferred will
be rescinded, (ii) the person to which the Common Stock or GVI Units were
transferred will return that Common Stock or those GVI Units to the person that
transferred them, and (iii) the person that transferred the Common Stock or GVI
Units will return the Units or other consideration which was received in
exchange for the Common Stock or GVI Units and (iv) the parties to this
Agreement will have no further obligations under any of Paragraphs 2.1, 3.2,
4.1, 5.1, or 6.1 of this Agreement.
7.2 If at any time when the Company or its subsidiaries own all the
outstanding stock of CVG and it would not violate the Allied Note for GVI to
contribute 9% Notes to the Company and the Company to contribute those 9% Notes
to CVG (or the Allied Note is no longer outstanding), either TCF III or Xxxxxx
requests that GVI contribute a specified principal amount of 9% Notes to the
Company (up to, but not exceeding, a principal amount of 9% Notes which is five
times the total principal amount of all the outstanding GVI Notes), on a day
specified in the request which is not fewer than five nor more than twenty
business days after the day on which the request is given, (i) GVI will
contribute to the Company the requested principal amount of 9% Notes, (ii)
Xxxxxx will contribute to the Company GVI Notes with a principal amount equal to
20% of the principal amount of the 9% Notes GVI contributes to the Company,
(iii) the Company will contribute the 9% Notes it receives from GVI to CVG, (iv)
the GVI Notes which are held by the Company will be deemed amended to remove any
obligation that GVI make payments with regard to those GVI Notes other than with
proceeds of 9% Notes and (v), the Company will transfer to GVI the GVI Notes the
Company receives from Xxxxxx. Nothing in this Paragraph 7.2 will effect a
departure from the basic principle that Xxxxxx will receive, through GVI Notes,
20% of the benefits of the ownership of the outstanding 9% Notes after payment
of sums due with regard to the Allied Note, and Xxxxxx will receive 20% of the
benefits of ownership of the Company (or such other percentage of those benefits
as the number of Units Xxxxxx owns is of all the outstanding Units). No Units
will be issued in respect of any contribution to CVGI pursuant to this Paragraph
7.2. Each GVI Note will bear a legend stating that it is subject to this
Paragraph.
7.3 While any GVI Notes are outstanding, TCF III will not transfer any
of its equity ownership in GVI, other than (i) to a Permitted TCR Transferee,
(ii) in connection with a transfer of TCF III's entire interest in CVGI and all
TCF III's other direct or indirect interest in equity or debt securities of CVG,
or (iii) as part of a sale required by Paragraph 7.5 of the LLC Agreement.
8. CLOSINGS.
8.1 The Closing of the capital contributions to the Company described
in Sections 1.1 and 3.1 (the "Closing") will take place at the offices of
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at the
time and on the date (the "Closing Date") which are the time and date of the
closing under the Note Purchase Agreement. At the Closing, the following will
occur:
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8.1.1 TCF III will do the following:
a. Deliver to the Company evidence of a wire transfer
to an account specified at least 24 hours before the Closing
by the Company of $8,000,000 in immediately available funds.
b. Deliver to Company a letter in which TCF III
acknowledges that it will be acquiring the Units that will be
issued to it at the Closing for investment and not with a view
to the resale or distribution of those Units (except that TCF
III may transfer some or all of those Units to GVI or another
Permitted TCR Transferee, as that term is defined in the LLC
Agreement).
8.1.2 Xxxxxx will do the following:
a. Deliver to the Company evidence of a wire transfer
to an account specified at least 24 hours before the Closing
by the Company of $2,000,000 in immediately available funds.
b. Deliver to Company a letter in which Xxxxxx
acknowledges that it will be acquiring the Units that will be
issued to it at the Closing for investment and not with a view
to the resale or distribution of those Units (except that
Xxxxxx may transfer some or all of those Units to Permitted
Xxxxxx Transferees, as that term is defined in the LLC
Agreement).
8.1.3 The Company will do the following:
a. Deliver to TCF III a certificate representing
8,000,000 Units.
b. Deliver to Xxxxxx a certificate representing
2,000,000 Units.
8.2 The closing of the transactions described in Paragraphs 2.1 and 3.2
(the "Subsequent Closing") will take place at the offices of Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 5:00 p.m. New York
City time, on the Securities Contribution Date. At the Subsequent Closing, the
following will occur (subject to fulfillment or waiver of the respective
conditions to GVI's and Xxxxxx'x obligations set forth in Paragraphs 2 and 3):
8.2.1 GVI will do the following:
a. Deliver to the Company certificates representing
386,300 shares of Common Stock, endorsed or accompanied by
documents of assignment that comply with the requirements of
Section 8-401 of the Uniform Commercial Code as in effect in
New York State ("Section 8-401").
b. Deliver to the Company a letter by which GVI
acknowledges that it will be acquiring the Units that will be
issued to it at the Subsequent Closing for investment and not
with a view to the resale or distribution of those Units
(except that GVI may transfer some or all of those Units to
TCF III or to Permitted TCR Transferees).
8.2.2 Xxxxxx will do the following:
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a. Deliver to the Company certificates representing
3,500,000 shares of Common Stock, endorsed or accompanied by
documents of assignment that comply with the requirements of
Section 8-401.
b. Deliver to the Company a letter in which Xxxxxx
acknowledges that it will be acquiring the Units that will be
issued to at the Subsequent Closing for investment, and not
with a view to the resale or distribution of those Units
(except that Xxxxxx may transfer some or all of those Units to
Permitted Xxxxxx Transferees).
8.2.3 The Company will do the following.
a. Deliver to GVI a certificate representing 57,945
Units.
b. Deliver to Xxxxxx a certificate representing
525,000 Units.
8.3 The closing of the transactions described in Paragraphs 2.2, 5.1
and 6.1 (the "Third Closing") will take place at the offices of Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 5:00 p.m. New York
City time, on the day after the day on which the Subsequent Closing takes place
(and subject to all the obligations of all the parties at the Subsequent Closing
being fulfilled or waived). At the Third Closing, the following will occur:
8.3.1 GVI will do the following:
a. Deliver to the TCF III $4,950,353 principal amount
of GVI Notes.
b. Deliver to the Company certificates representing
6,099,749 shares of Common Stock, endorsed or accompanied by
documents of assignment that comply with the requirements of
Section 8-401.
c. Deliver to the Company a letter by which GVI
acknowledges that it will be acquiring the Units that will be
issued to it at the Third Closing for investment and not with
a view to the resale or distribution of those Units (except
that GVI may transfer some or all of those Units to TCF III or
to Permitted TCF III Transferees).
8.3.2 TCF III will do the following:
a. Deliver to Xxxxxx $4,950,353 principal amount of
GVI Notes.
b. Deliver to GVI certificates representing 6,099,749
shares of Common Stock, endorsed or accompanied by documents
of assignment that comply with the requirements of Section
8-401.
c. Deliver to GVI certificates representing 225,419
Units, endorsed or accompanied by documents of assignment
which comply with the requirements of Section 8-401.
8.3.3 Xxxxxx will do the following:
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a. Deliver to TCF III certificates representing
6,099,749 shares of Common Stock, endorsed or accompanied by
documents of assignment that comply with the requirements of
Section 8-401.
b. Deliver to TCF III certificates representing
225,419 Units, endorsed or accompanied by documents of
assignment that comply with the requirements of Section 8-401.
8.3.4 The Company will do the following:
a. Deliver to GVI a certificate representing 914,962
Units.
8.4 Each time TCF III, Xxxxxx or Xxxxx makes a contribution to the
Company under Paragraph 1.2, 1.3, 1.4, 1.5, 3.3, 3.4 or 4.1, (a) the applicable
one of them will deliver to the Company (i) evidence of a wire transfer to an
account specified by the Company of the applicable sum, and (ii) a letter
acknowledging that it will be acquiring the Units which are being issued in
exchange for the contribution of that sum for investment, and not with a view to
their resale or distribution, and (b) the Company will deliver to the applicable
one of them a certificate representing those Units.
9. FAILURE OF PARTY TO PERFORM.
9.1 If TCF III fails to fulfill any of its obligations to make
contributions to the capital of the Company as contemplated by any of Paragraphs
1.1, 1.2, 1.3, 1.4 and 1.5, or Xxxxxx fails to fulfill any of its obligations to
make contributions to the capital of the Company as contemplated by any of
Paragraphs 3.1. 3.3 and 3.4, and that failure continues for more than four
business days (or, as to obligations under Paragraphs 1.3 or 3.4, within two
business days) after the day on which Xxxxxx notifies TCF III in writing, or TCF
III notifies Xxxxxx in writing, that the other of them has failed to fulfill an
obligation under this Agreement (specifying in reasonable detail the nature of
the failure), Xxxxxx or TCF III will have the option (but will not be required)
to make the capital contribution which the other of them failed to make and to
receive in exchange the Units which the other of them would have received if it
had made the capital contribution.
10. CONDITIONS TO OBLIGATIONS.
10.1 The obligations of TCF III and GVI at the Closing, at the
Subsequent Closing, at the Third Closing and under Paragraph 8.4 will be subject
to the following conditions (any or all of which may be waived by TCF III):
10.1.1 The Company, Xxxxxx and Xxxxx each will have fulfilled
in all material respects all its or his obligations which are required
to have been fulfilled at or prior to the Closing or the Subsequent
Closing, as the case may be.
10.1.2 The Company and CVG will have signed the Note Purchase
Agreement.
10.1.3 All the conditions to the concurrent closing under the
Note Purchase Agreement (other than the Company's payment of the
purchase price of the Notes and the issuance of the Notes) will have
been fulfilled or waived.
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10.1.4 As to the Subsequent Closing and the Third Closing (but
not the Closing or the obligations under Paragraph 8.4), the (a)
closing under the Note Purchase Agreement will have taken place and (b)
there will not be an unwaived Event of Default under the Notes.
10.1.5 The Note Purchase Agreement will not have been
terminated or have terminated, and, as to each of the Subsequent
Closing and the Third Closing (but not the Closing or the obligations
under Paragraph 8.4), CVG will not, before the applicable one of those
events takes place, have entered into a definitive agreement of the
type described in Paragraph 8.2(b) of the Note Purchase Agreement.
10.2 The obligations of Xxxxxx and Xxxxx at the Closing, at the
Subsequent Closing, at the Third Closing and under Paragraph 8.4 will be subject
to the following conditions (any or all of which may be waived by Xxxxxx):
10.2.1 The Company, TCF III and GVI each will have fulfilled
in all material respects all its obligations which are required to have
been fulfilled at or prior to the Closing, the Subsequent Closing or
the Third Closing, as the case may be.
10.2.2 The Company and CVG will have signed the Note Purchase
Agreement.
10.2.3 All the conditions to the Closing under the Note
Purchase Agreement (other than the Company's payment of the purchase
price of the Notes and the issuance of the Notes) will have been
fulfilled or waived.
10.2.4 As to the Subsequent Closing (but not the Closing), the
Third Closing and the obligations under Paragraph 8.4, (a) the closing
under the Note Purchase Agreement will have taken place and (b) there
will not be an unwaived Event of Default under the Notes.
10.2.5 As to the Third Closing (but not the Closing or the
Subsequent Closing), GVI will have delivered to Xxxxxx a certificate of
an officer of GVI stating that the issuance of the GVI Notes will not
violate or constitute a default under the Allied Note.
10.2.6 The Note Purchase Agreement will not have been
terminated or have terminated, and, as to each of the Subsequent
Closing and the Third Closing (but not the Closing or the obligations
under Paragraph 8.4), CVG will not, before the applicable one of those
events takes place, have entered into a definitive agreement of the
type described in Paragraph 8.2(b) of the Note Purchase Agreement.
10.3 The obligations of the Company at the Closing are subject to the
following conditions (any or all of which may be waived by the Company):
10.3.1 TCF III and Xxxxxx each will have fulfilled in all
material respects all its obligations under this Agreement which are
required to be fulfilled at or prior to the Closing.
11. REPRESENTATIONS AND WARRANTIES.
11.1 The Company represents and warrants to each of TCF III, GVI,
Xxxxxx and Xxxxx as follows:
11.1.1 The Company is a limited liability company which has
been duly formed under the laws of the State of Delaware.
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11.1.2 The Company has all the power and authority that is
necessary to enable it to enter into this Agreement and carry out the
transactions contemplated by this Agreement. All actions necessary to
authorize the Company to enter into this Agreement and carry out the
transactions contemplated by it have been taken. This Agreement and the
LLC Agreement each has been duly executed by the Company and is a valid
and binding agreement of the Company, enforceable against the Company
in accordance with its terms.
11.1.3 Neither the execution or delivery of this Agreement,
the LLC Agreement or the Note Purchase Agreement, nor the consummation
of the transactions contemplated by this Agreement or by the Note
Purchase Agreement, will violate, result in a breach of, or constitute
a default (or an event that, with notice or lapse of time or both,
would constitute a default) under, the LLC Agreement, any other
agreement or instrument to which the Company is a party or by which it
is bound, any law, or any order, rule or regulation of any court or
governmental agency or other regulatory organization having
jurisdiction over the Company.
11.1.4 When the Company issues Units as contemplated by this
Agreement, those Units will be valid Units representing equity
ownership interests in the Company as provided in the LLC Agreement.
11.2 TCF III represents and warrants to the Company, Xxxxxx and Xxxxx
as follows:
11.2.1 TCF III is a limited partnership, which has been duly
formed and is validly existing under the laws of the State of Delaware
Limited Partnership Act.
11.2.2 TCF III has all power and authority that is necessary
to enable it to enter into this Agreement and the LLC Agreement and
carry out the transactions contemplated by this Agreement. All actions
necessary to authorize TCF III to enter into this Agreement and carry
out the transactions contemplated by it have been taken. This Agreement
and the LLC Agreement each has been duly executed by TCF III and is a
valid and binding agreement of TCF III, enforceable against TCF III in
accordance with its terms.
11.2.3 Neither the execution or delivery of this Agreement or
the LLC Agreement, nor the consummation of the transactions
contemplated by this Agreement, will violate, result in a breach of, or
constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under the Limited Partnership
Agreement of TCF III, any other agreement or instrument to which TCF
III is a party or by which it is bound, any law, or any order, rule or
regulation of any court or governmental agency or other regulatory
organization having jurisdiction over TCF III.
11.2.4 When TCF III transfers GVI Notes to Xxxxxx in
accordance with Paragraph 5.1 or upon exercise of the 9% Notes Option,
Xxxxxx will become the owner of those GVI Notes, free and clear of any
liens or encumbrances, other than liens or encumbrances imposed by
reason of acts of Xxxxxx.
11.3 GVI represents and warrants to the Company, Xxxxxx and Xxxxx as
follows:
11.3.1 GVI is a limited liability company which has been duly
formed and is validly existing under the laws of the State of Delaware.
11.3.2 GVI has all power and authority that is necessary to
enable it to enter into this Agreement and the LLC Agreement and carry
out the transactions contemplated by this
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Agreement. All actions necessary to authorize GVI to enter into this
Agreement and carry out the transactions contemplated by it have been
taken. This Agreement and the LLC Agreement each has been duly executed
by GVI and is a valid and binding agreement of GVI, enforceable against
GVI in accordance with its terms.
11.3.3 Neither the execution or delivery of this Agreement or
the LLC Agreement nor the consummation of the transactions contemplated
by this Agreement will violate, result in a breach of, or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under the Limited Liability Company Agreement of
GVI, any agreement or instrument to which GVI is a party or by which it
is bound, any law, or any order, rule or regulation of any court or
governmental agency or other regulatory organization having
jurisdiction over GVI.
11.3.4 GVI owns the 386,300 shares of CVG Common Stock which
it will be delivering to the Company at the Subsequent Closing, no
consents of any other persons are required to permit GVI to deliver
those shares of Common Stock to the Company as contemplated by this
Agreement, and when the Company receives those shares of CVG Common
Stock from GVI as contemplated by this Agreement, the Company will own
those shares of Common Stock free and clear of any liens, encumbrances
or claims of other persons, other than liens or encumbrances imposed by
reason of acts of the Company.
11.3.5 When GVI issues either (i) the GVI Notes which GVI
delivers to TCF III in accordance with Paragraph 8.3.1 or (ii) the GVI
Notes which TCF III delivers to Xxxxxx upon exercise of the 9% Notes
Option, those GVI Notes will be valid and binding obligations of GVI,
enforceable against GVI in accordance with their terms.
11.3.6 The total principal amount of 9% Notes held by GVI at
the date of this Agreement (including Notes issued as interest on other
Notes, but not including Notes the proceeds of which are committed to
making payments under a 12% Partially Exchangeable Note dated June 20,
2000 (the "Allied Note") in the original principal amount of
$5,500,000, which GVI issued to Allied Capital Corporation) is
$24,751,765.
11.4 Xxxxxx represents and warrants to TCF III, GVI and the Company as
follows:
11.4.1 Xxxxxx is a limited partnership which has been duly
formed and is validly existing under the laws of the State of Delaware.
11.4.2 Xxxxxx has all power and authority that is necessary to
enable it to enter into this Agreement and the LLC Agreement and carry
out the transactions contemplated by this Agreement. All actions
necessary to authorize Xxxxxx to enter into this Agreement and carry
out the transactions contemplated by it have been taken. This Agreement
and the LLC Agreement each has been duly executed by Xxxxxx and is a
valid and binding agreement of Xxxxxx, enforceable against Xxxxxx in
accordance with its terms.
11.4.3 Neither the execution or delivery of this Agreement or
the LLC Agreement nor the consummation of the transactions contemplated
by this Agreement will violate, result in a breach of, or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under the Limited Partnership Agreement of
Xxxxxx, any agreement or instrument to which Xxxxxx is a party or by
which it is bound, any law, or any order, rule or regulation of any
court or governmental agency or other regulatory organization having
jurisdiction over Xxxxxx.
10
11.4.4 Xxxxxx owns, and on the Securities Contribution Date
Xxxxxx will own, 9,599,749 shares of Common Stock, no consents of any
other persons are required to permit Xxxxxx to deliver those shares of
Common Stock to the Company as contemplated by this Agreement, and when
the Company or TCF III receives shares of Common Stock from Xxxxxx as
contemplated by this Agreement, the Company will own those shares of
Common Stock free and clear of any liens, encumbrances or claims of
other persons, other than liens or encumbrances imposed by reason of
acts of the Company or TCF III, as the case may be.
11.5 Xxxxx represents and warrants to each of TCF III, GVI and the
Company as follows:
11.5.1 Xxxxx is an individual.
11.5.2 Xxxxx has all power and authority that is necessary to
enable him to enter into this Agreement and carry out the transactions
contemplated by this Agreement without any consents or authorizations
by any other persons (other than the approval of the TEI Advisory
Committee described in Section 4.2). This Agreement has been duly
executed by Xxxxx and is a valid and binding agreement of Xxxxx,
enforceable against Xxxxx in accordance with its terms.
11.5.3 Neither the execution or delivery of this Agreement nor
the consummation of the transactions contemplated by this Agreement
will violate, result in a breach of, or constitute a default (or an
event that, with notice or lapse of time or both, would constitute a
default) under any agreement or instrument to which Xxxxx is a party or
by which he is bound, any law, or any order, rule or regulation of any
court or governmental agency or other regulatory organization having
jurisdiction over Xxxxx.
12. VOTING OBLIGATIONS
12.1 TCF III, GVI and Xxxxxx each will do all things in its power,
including voting all shares of CVG stock which it owns or otherwise has the
power to vote, to cause CVG to fulfill all its obligations under the Note
Purchase Agreement and the Notes and to cooperate in all reasonable ways in
connection with the transactions which are the subject of this Agreement.
12.2 TCF III, GVI and Xxxxxx each will vote all Units which it owns or
otherwise has the power to vote in the manner required by Paragraph 5.4 of the
Limited Liability Company Agreement.
12.3 TCF III, GVI and Xxxxxx each will do all things in its power,
including voting all Units held by it, to cause the Company to adopt as soon as
practicable after completion of the Third Closing a plan under which senior
management personnel of CVG and its subsidiaries selected by TCF III and Xxxxxx
(a) would purchase an aggregate of 300,000 Units at a price of $1 per Unit,
subject to such vesting provisions (extending for not more than five years) as
the Board might determine to be appropriate, and (b) would be permitted to pay
for the Units with five year promissory notes, secured by the Units being
purchased, and with recourse against the respective makers for at least 50% of
the principal of the notes (subject to cancellation of the notes to the extent
shares are forfeited before they are vested).
12.4 If the Company distributes securities of CVG to its Members, TCF
III and GVI will, and as promptly as practicable will cause any Permitted TCR
Transferees to which the CVG securities are distributed or transferred to, enter
into such agreements as Xxxxxx may
11
reasonably request in order effectively to preserve the benefits to which Xxxxxx
would be entitled, and Xxxxxx will, and as promptly as practicable will cause
any Permitted Xxxxxx Transferees to which the CVG securities are distributed, to
enter into such agreements as TCF III may reasonably request in order
effectively to preserve the benefits to which TCF III would be entitled, under
paragraphs 3.5.5, 5.4.1.b, 7.3, 7.4, 7.5, 8.1 and 10.4 of the LLC Agreement if
no distribution had taken place.
13. TRANSACTIONS INVOLVING ALLIED NOTE
13.1 If TCF III, GVI or any of their respective affiliates purchases
the 12% Partially Exchangeable Note dated June 20, 2000 (the "Allied Note")
issued by GVI to Allied Capital Corporation in the original principal amount of
$5,500,000, TCF III or GVI, as the case may be, will (or will cause its
affiliate to) (a) notify Xxxxxx not later than 10 days after the day of the
purchase of (x) the principal amount of the Allied Note which has been purchased
and (y) the purchase price (including accrued interest) paid for it, and (b)
xxxxx Xxxxxx the option, exercisable by a notice given by Xxxxxx to the person
which grants the option not later than 30 days after the day on which the notice
is given to Xxxxxx, to purchase 20% of the principal amount of the Allied Note
specified in the notice to Xxxxxx for 20% of the purchase price specified in the
notice to Xxxxxx, plus accrued interest at the rate specified in the Allied Note
on the 20% of the purchase price from the date the Allied Note was purchased to
the date Allied pays for the portion of the Allied Note it is purchasing.
13.2 If at any time when the GVI Note is outstanding and not held by
the Company, GVI prepays or redeems the Allied Note in whole or in part, GVI
will (a) notify Xxxxxx not later than 10 days after the day of the prepayment or
redemption that the Allied Note has been prepaid or redeemed, including (x) the
balance of the principal amount evidenced by Allied Note which was prepaid or
redeemed and the amount of accrued interest paid in connection with the
prepayment or redemption, and (y) the amount (including accrued interest) paid
by GVI to prepay or redeem the Allied Note, and (b) xxxxx Xxxxxx the option,
exercisable by a notice given by Xxxxxx to GVI not later than 30 days after the
day on which GVI gives the notice to Xxxxxx, to purchase from GVI additional GVI
Notes in a principal amount equal to 20% of the sum of the principal amount
evidenced by the Allied Note which was prepaid or redeemed and the accrued
interest on the Allied Note paid in connection with the prepayment or redemption
for a purchase price equal to 20% of the excess of (i) the amount (including
accrued interest) paid by GVI to prepay or redeem the Allied Note, over (ii) any
portion of that amount which was paid with proceeds of payments of principal or
interest with regard to the 9% Notes. The GVI Note will be dated the date it is
issued by GVI to Xxxxxx and will begin to accrue interest on the day it is
issued, except that a portion of the GVI Note equal to the amount described in
clause (ii) will begin to accrue interest on the day of the prepayment or
redemption.
13.3 If at any time there is a modification, amendment, change or
alteration (collectively, "modification") of the Allied Note which reduces the
principal or interest payable with regard to the Allied Note or changes the time
when any payments of principal or interest are required to be made, that will be
treated as a prepayment of the Allied Note which is subject to the provisions of
Paragraph 13.2 (with any sum paid by GVI to obtain the modification, other than
to the extent that sum is paid with proceeds of payments of principal or
interest with regard to the 9% Notes, being the amount it paid to prepay the
Allied Note) in an amount equal to (i) the discounted value of all the future
payments of principal and interest required to be made with regard to the Allied
Note without the modification, minus (ii) the discounted value of all the future
payments of principal and interest required to be made with regard to the Allied
Note after
12
the modification, in each case using a discount rate of 9% per annum compounded
on the Interest Payment Dates under the 9% Notes.
14. MISCELLANEOUS.
14.1.1 The reasonable expenses of each of the parties to this
Agreement in connection with the transactions which are the subject of
this Agreement or the Note Purchase Agreement, including legal fees and
disbursements, will be included as expenses of the Company which are
subject to reimbursement by CVG under the Note Purchase Agreement.
14.1.2 The obligation of the Company and CVG together to pay
or reimburse expenses of TCF III and its affiliates (including
Permitted TCR Transferees, as that term is defined in the LLC
Agreement) or to pay or reimburse expenses of Xxxxxx and its affiliates
(including Permitted Xxxxxx Transferees, as that term is defined in the
LLC Agreement), other than expenses in connection with the transactions
which are the subject of this Agreement or the Note Purchase Agreement,
will be limited with regard to any 12 month period to $100,000 as to
TCF III and its affiliates (including Permitted TCR Transferees) and to
$100,000 as to Xxxxxx and its affiliates (including Permitted Xxxxxx
Transferees). For the purposes of this subparagraph, the amount the
Company or CVG will be deemed to pay with regard to travel or other
expenses borne by the Company or CVG will be the out of pocket amount
the Company or CVG pays with regard to those expenses.
14.2 This Agreement and the agreements referred to in it contain the
entire agreement among the parties relating to the transactions which are the
subject of this Agreement and the agreements referred to in it. All prior
negotiations, understandings or agreements between or among any of the parties
to this Agreement are superseded by this Agreement, and there are no
representations, warranties, understandings or agreements between or among any
of the parties to this Agreement concerning the transactions which are the
subject of this Agreement or the agreements referred to in it other than those
expressly set forth in this Agreement or the agreements referred to in it.
14.3 This Agreement is for the benefit of the parties to it, their
respective successors and any permitted assigns. This Agreement is not intended
to be for the benefit of, or to give any rights to, anybody other than the
parties, their respective successors and any permitted assigns.
14.4 The captions of Sections of this Agreement are for convenience
only, and do not affect the meaning or interpretation of this Agreement.
14.5 Except as specifically provided in this Agreement, neither this
Agreement nor any rights of any party under it may be assigned.
14.6 The parties acknowledge that (i) it would not be possible to
purchase in the market or otherwise, other than from the parties to this
Agreement, GVI Notes or nearly as many as 9,599,749 shares of Common Stock, (ii)
because of the investments the parties have made or will be making in CVG, the
damage to Xxxxxx and the Company if TCF III did not sell GVI Notes to Xxxxxx as
contemplated by Paragraph 5.1 or 5.2, and the damage to TCF III if Xxxxxx did
not contribute to the Company or transfer to TCF III a total of 9,599,749 shares
of Common Stock as contemplated by Paragraphs 3.2 and 5.1, would exceed the
monetary value of those GVI Notes or shares of Common Stock, but would not be
readily measurable. Therefore the parties agree that, in addition to any other
remedies to which any of them may be
13
entitled, (x) if TCF III does not transfer GVI Notes to Xxxxxx as contemplated
by Paragraph 5.1 or on exercise of the 9% Notes Option, Xxxxxx will be entitled
to specific performance to enforce the obligation of GVI to issue those GVI
Notes and the obligation of TCF III to deliver them to Xxxxxx and (y) if Xxxxxx
does not contribute or transfer 9,599,749 shares of Common Stock as contemplated
by Paragraphs 3.2 and 5.1, TCF III will be entitled to specific performance to
enforce the obligation of Xxxxxx to contribute shares of Common Stock to the
Company and transfer shares of Common Stock to TCF III.
14.7 Any notice or other communication under this Agreement must be in
writing and will be deemed given when it is delivered in person or sent by
facsimile (with proof of receipt at the number to which it is required to be
sent), or on the third business day after the day on which it is mailed by
first-class registered mail, return receipt requested, from within the United
States of America, to the following addresses ( or such other address as may be
specified after the date of this Agreement by the party to which the notice or
communication is sent):
If to TCF III, or GVI or the Company:
c/o Three Cities Research, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxxx
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
If to Xxxxxx:
Xxxxxx Equity Investors III, L.P.
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to Xxxxx:
14
Xxxxxxxx X. Xxxxx
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
14.8 This Agreement will be governed by, and construed under, the
substantive laws of the State of Delaware.
14.9 This Agreement may be amended by, but only by, a document in
writing signed by each of TCF III and Xxxxxx and, beginning at such, if any,
time as the TEI Advisory Committee approves Xxxxx'x acquiring Units as
contemplated by this Agreement, by Xxxxx, except that even before the TEI
Advisory Committee approves Xxxxx'x acquiring Units as contemplated by this
Agreement, any amendment which would adversely affect Xxxxx'x rights or
obligations under this Agreement must be signed by Xxxxx, as well as by TCF III
and Xxxxxx.
14.10 This Agreement may be executed in two or more counterparts, some
of which may be signed by fewer than all the parties or may contain facsimile
copies of pages signed by some of the parties. Each of those counterparts will
be deemed to be an original copy of this Agreement, but all of them together
will constitute one and the same agreement.
15
IN WITNESS WHEREOF, the parties to this Agreement have executed it,
intending to be legally bound by it, on the day shown on the first page of this
Agreement.
CVG INVESTMENT LLC
By: /s/ Xxxxxxxx Xxxxx
-------------------------------
THREE CITIES FUND III, L.P.
By: TCR Associates III, L.L.C.
General Partner
By: TCR GP. L.L.C.
Managing Member
By: /s/ Xxxxxx xx Xxxxx
-------------------------------
Managing Member
GV INVESTMENT LLC
By: /s/ Xxxxxxxx Xxxxx
-------------------------------
XXXXXX EQUITY INVESTORS III, L.P.
By TC Equity Partners, L.L.C.'
Its general partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
/s/ Xxxxxxxx X. Xxxxx
-------------------------------
Xxxxxxxx X. Xxxxx
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