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EXHIBIT 10.3
EQUITY SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made as of March 30, 1998 by and among GLOBAL
VACATION GROUP, IN(c) (formerly Allied Bus Corp.), a New York corporation (the
"COMPANY"), and XXXXX X. XXXXXX ("XXXXXX") and XXXXXXX X. XXXXXX ("XXXXXX")
(collectively, the "PURCHASERS" and each individually a "PURCHASER"). Except
as otherwise indicated, capitalized terms used herein are defined in Section
7 hereof.
The parties hereto agree as follows:
1 AUTHORIZATION OF STOCK. The Company has authorized the
issuance and sale to the Purchasers of an aggregate of (i) 450 shares of its
Preferred Stock, $1,000 par value per share (the "PREFERRED"), and (ii) 5,000
shares of its Common Stock, $.01 par value per share (the "COMMON"). The
Preferred and the Common are collectively referred to herein as the "STOCK."
2 PURCHASE AND SALE OF THE STOCK. The parties will execute
and deliver counterparts of this Agreement and the Joinder to the
Shareholders Agreement (as defined in Sections 3(d) and 3(e) below) on March
30, 1998. The subscription by the Purchasers will occur at a closing
("CLOSING") to be held on that same date. At the Closing, the Company will
sell to the Purchasers and, subject to the terms and conditions set forth
herein, the Purchasers will purchase from the Company, an aggregate of (i)
450 shares of Preferred at a price of $1,000 per share and (ii) 5,000 shares
of Common at a price of $10 per share (in the aggregate, a total price of
$500,000). The allocation of the purchase of the Stock among each of the
Purchasers is set forth in Exhibit A hereto. The Closing of the purchase and
sale of the Stock will be effected by exchange of documents, certificates and
agreements, by air courier, telefax or other means satisfactory to the
parties. At the Closing, the Company will issue and deliver to the
Purchasers certificates evidencing the Stock to be purchased by the
Purchasers, registered in each Purchaser's name, against payment of the
purchase price therefor by check or wire transfer of funds in the amount set
forth for each Purchaser in Exhibit A hereto.
3 CONDITIONS OF THE PURCHASERS' OBLIGATION AT THE CLOSING.
The obligation of the Purchasers to purchase and pay for the Stock at the
Closing is subject to the satisfaction as of the Closing of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Section 6 hereof will be true and correct at and
as of the Closing as though then made, except to the extent of changes caused
by the transactions expressly contemplated herein.
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(b) CERTIFICATE OF INCORPORATION. The Company's
Certificate of Incorporation (the "CHARTER") in the form of Exhibit B as
filed with the State of New York will be in full force and effect at the
Closing and will not have been further amended or modified.
(c) EQUITY PURCHASE AGREEMENT. The Equity Purchase
Agreement dated March 30, 1998 (the "EQUITY PURCHASE AGREEMENT") among the
Company, Xxxxxx Equity Investors, III, L.P. ("XXXXXX III") and each of the
other Persons set forth in the Schedule of Purchasers attached thereto, will
be in full force and effect and will not have been amended or modified as of
the Closing.
(d) SHAREHOLDERS AGREEMENT. The Company, Xxxxxx III, and
the other shareholders of the Company are parties to that certain
Shareholders Agreement dated March 30, 1998, in form and substance
substantially similar to Exhibit C attached hereto (the "SHAREHOLDERS
AGREEMENT"), and the Shareholders Agreement as so amended will be in full
force and effect as of the Closing.
(e) PROCEEDINGS. All corporate and other proceedings
taken or required to be taken in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto will be satisfactory in form and substance to the
Purchasers.
4 TRANSFER OF RESTRICTED SECURITIES.
(a) Restricted Securities are transferable pursuant to
(i) public offerings registered under the Securities Act, (ii) Rule 144 of
the Securities and Exchange Commission (or any similar rule then in force) if
such rule is available and (iii) subject to the conditions specified in
Section 4(b) below, any other legally available means of transfer.
(b) In connection with the transfer of any Restricted
Securities (other than a transfer described in Section 4(a)(i) or (ii)
above), the holder thereof will deliver written notice to the Company
describing the transfer or proposed transfer, together with an opinion of
Xxxxx & Xxxxxxx, LLC or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that
such transfer of Restricted Securities may be effected without registration
of such Restricted Securities under the Securities Act. In addition, if the
holder of the Restricted Securities delivers to the Company an opinion of
Xxxxx & Xxxxxxx, LLC or such other counsel that no subsequent transfer of
such Restricted Securities will require registration under the Securities
Act, the Company will promptly upon such contemplated transfer deliver new
certificates for such Restricted Securities which do not bear the Securities
Act legend set forth in Section 8(a). If the Company is not required to
deliver such new certificates for such Restricted Securities, the holder
thereof will not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the
conditions contained in this Section 4(b) and Section 8(a).
5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of
the Purchasers represents and warrants to the Company that he or she is
purchasing and will
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purchase the Stock for his or her own account, with no present intention of
distributing or reselling the Stock or any part thereof, and that he or she is
prepared to bear the economic risk of retaining the Stock for an indefinite
period, all without prejudice, however, to his or her right at any time, in
accordance with this Agreement, lawfully to sell or otherwise dispose of all or
any part of the Stock held by him or her. Each of the Purchasers also represents
and warrants that he or she is an accredited investor, as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act, and that he or
she has had the opportunity to ask questions of the Company's management with
respect to his or her investment. Each of the Purchasers agrees that if, and to
the extent, he or she elects to sell the Stock, he or she will do so in
compliance with the provisions and requirements of the Securities Act and
applicable state securities laws. Each of the Purchasers further represents that
he or she has full authority to enter into the transactions contemplated by this
Agreement and to perform his or her obligations hereunder.
6 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchasers to enter into this Agreement and
purchase the Stock, the Company hereby represents and warrants that:
(a) ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York and is qualified to do business in every
jurisdiction in which the failure so to qualify might reasonably be expected
to have a material adverse effect on the financial condition, operating
results or business prospects of the Company. The Company has all requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement. The copies of the
Company's Charter and bylaws that have been furnished to the Purchasers'
counsel reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
(b) CAPITAL STOCK AND RELATED MATTERS.
(i) As of the Closing and immediately thereafter,
the authorized capital stock of the Company will consist of (A)
100,000 shares of Preferred, of which 27,439.64 shares will be
issued and outstanding, and (B) 6,000,000 shares of Common, of
which 615,174.37 shares will be issued and outstanding. As of
the Closing, the Company will not have outstanding any stock or
securities convertible or exchangeable for any shares of its
capital stock, nor will it have outstanding any rights or options
to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital
stock, except as described in the Equity Purchase Agreement. As
of the Closing, the Company will not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock, except pursuant to its
Charter and the Management Agreements with each of Xxxxx Xxxxxx
("XXXXXX"), Xxxxxxx Xxxxx ("XXXXX") and Xxxxxx Xxxxxx
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("XXXXXX"). As of the Closing, all of the outstanding shares of
the Company's capital stock will be validly issued, fully paid
and nonassessable.
(ii) Except as provided in the Equity Purchase
Agreement, there are no statutory or contractual shareholders
preemptive rights with respect to the issuance of the Stock
hereunder. Based in part on the investment representations of
the Purchasers in Section 5 above, the Company has not violated
any applicable federal or state securities laws in connection
with the offer, sale or issuance of any of the Stock, and the
offer, sale and issuance of the Stock hereunder do not require
registration under the Securities Act or any applicable state
securities laws. To the best of the Company's knowledge, there
are no agreements among the Company's stockholders with respect
to the voting or transfer of the Company's capital stock or with
respect to any other aspect of the Company's affairs other than
the Equity Purchase Agreement, the Shareholders Agreement, the
Registration Agreement or the Management Agreements with Xxxxxx,
Xxxxx and Xxxxxx.
(c) SUBSIDIARIES. The Company does not own or hold any
rights to acquire any shares of stock or any other security or interest in
any other Person, other than Haddon Holidays, In(c) following the consummation
on March 30, 1998 of the Company's acquisition thereof.
(d) AUTHORIZATION; NO BREACH. The execution, delivery
and performance of this Agreement, the Registration Agreement, the
Shareholders Agreement, and all other agreements contemplated hereby to which
the Company is a party have been duly authorized by the Company. This
Agreement and each of the Registration Agreement, the Shareholders Agreement,
the Charter and the other agreements contemplated hereby constitutes a valid
and binding obligation of the Company, enforceable in accordance with its
terms. The execution and delivery by the Company of this Agreement, the
Registration Agreement, the Shareholders Agreement and all other agreements
contemplated hereby to which the Company is a party, the offering, sale and
issuance of the Stock hereunder, and fulfillment of and compliance with the
respective terms hereof and thereof by the Company, do not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions
of, (ii) constitute a default under, (iii) result in the creation of any
lien, security interest, charge or encumbrance upon the Company's capital
stock or assets pursuant to, (iv) give any third party the right to
accelerate any obligation under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or other action by or
notice to any court or administrative or governmental body pursuant to, the
Charter or bylaws of the Company, or any law, statute, rule or regulation to
which the Company is subject, or any agreement, instrument, order, judgment
or decree to which the Company is a party or by which it is bound.
(e) BROKERAGE. There are no claims against the Company
for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon the Company.
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(f) GOVERNMENTAL CONSENT, ETC. No permit, consent,
approval or authorization of, or declaration to or filing with, any
governmental authority is required in connection with the execution, delivery
and performance by the Company of this Agreement or the other agreements
contemplated hereby, or the consummation by the Company of any other
transaction contemplated hereby or thereby.
(g) COMPLIANCE WITH LAWS. The Company is not in
violation of any law or any regulation or requirement which violation might
reasonably be expected to have a material adverse effect upon the financial
condition, operating results or business prospects of the Company and the
Company has not received notice of any such violation.
(h) DISCLOSURE. Neither this Agreement nor any of the
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to the Purchasers by or on behalf of the Company
with respect to the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading. There is no fact which
the Company has not disclosed to the Purchasers in writing and of which any
of its officers, directors or executive employees is aware and which could
reasonably be anticipated to have a material adverse effect upon the existing
or expected financial condition, operating results, assets, customer
relations, employee relations or business prospects of the Company.
(i) CLOSING DATE. The representations and warranties of
the Company contained in this Section 6 and elsewhere in this Agreement and
all information contained in any exhibit, schedule or attachment hereto or in
any writing delivered by, or on behalf of, the Company to any Purchasers will
be true and correct in all material respects on the date of the Closing as
though then made, except as affected by the transactions expressly
contemplated by this Agreement.
7 DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"RESTRICTED SECURITIES" means the Stock issued hereunder, and
any securities issued with respect thereto by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities will cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) become eligible
for sale and have actually been sold to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the Securities Act legend
set forth in Section 8(a) have been delivered by the Company in accordance with
Section 4(b). Whenever any particular securities cease to be Restricted
Securities, the
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holder thereof will be entitled to receive from the Company, without expense,
new securities of like tenor not bearing a Securities Act legend of the
character set forth in Section 8(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SUBSIDIARY" means any corporation of which the securities
having a majority of the ordinary voting power in electing the board of
directors are, at the time as of which any determination is being made, owned by
the Company either directly or through one or more Subsidiaries.
8 MISCELLANEOUS.
(a) RESTRICTIVE LEGEND. Each certificate for Restricted
Securities will be imprinted with a legend in substantially the following
form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
transfer of the securities represented by this certificate is
subject to the conditions specified in the Equity Subscription
Agreement, dated as of March 30, 1998, by and between the
issuer (the "COMPANY") and a certain investor, and the Company
reserves the right to refuse the transfer of such securities
until such conditions have been fulfilled with respect to such
transfer. A copy of such conditions will be furnished by the
Company to the holder hereof upon written request and without
charge.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise
expressly provided herein or in any instruments of transfer or assignment,
all covenants and agreements contained in this Agreement by or on behalf of
any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed
or not. In addition, and whether or not any express assignment has been
made, the provisions of this Agreement which are for the Purchasers' benefit
as a purchaser or holder of Stock are also for the benefit of, and
enforceable by, any subsequent holder of such Stock.
(c) COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, both of which need not contain the signatures
of more than one party, but both such counterparts taken together will
constitute one and the same Agreement.
(d) DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
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E. GOVERNING LAW. This Agreement will be governed by
the internal law, and not the law of conflicts, of the State of New York.
F. NOTICES. All notices, demands or other
communications to be given or delivered under or by reason of the provisions
of this Agreement will be in writing and will be deemed to have been given
when delivered personally, or sent by telex or facsimile transmission, or
sent by receipted air courier, or mailed by certified or registered mail,
return receipt requested and postage prepaid, to the recipient. Such
notices, demands and other communications will be sent to the Company and the
Purchasers at the address indicated below:
Notice to the Company
Global Vacation Group, In(c)
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Notice to the Purchasers
To each Purchaser at the address of each
Purchaser set forth on the signature page hereto.
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
GLOBAL VACATION GROUP, INC.
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
President and Chief Operating Officer
PURCHASERS:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
ADDRESS:
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/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
ADDRESS:
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The Exhibits to this Equity Subscription Agreement are not included with this
Registration Statement on Form S-1. Global will provide these exhibits and
schedules upon the request of the Securities and Exchange Commission.
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