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EXHIBIT 10.7
STOCK PURCHASE AGREEMENT
AMONG
CLASSIC CUSTOM VACATIONS
AND
THE OTHER PARTIES HERETO
dated as of April 20, 1998
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TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE..............................................................................................1
1.1 Purchase and Sale...........................................................................................1
1.2 The Closing.................................................................................................3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES.................................................................................3
2.1 Corporate Organization......................................................................................3
2.2 Capital Stock...............................................................................................3
2.3 Authorization, Etc..........................................................................................4
2.4 Financial Statements........................................................................................4
2.5 No Approvals or Conflicts...................................................................................5
2.6 No Violation; Governmental Authorizations...................................................................5
2.7 Litigation .................................................................................................5
2.8 Assets .................................................................................................6
2.9 Real Property; Leases.......................................................................................6
2.10 Absence of Undisclosed Liabilities.........................................................................7
2.11 Changes .................................................................................................7
2.12 Taxes. .................................................................................................9
2.13 Contracts..................................................................................................10
2.14 Environmental, Health, and Safety Matters..................................................................12
2.15 Affiliated Transactions....................................................................................13
2.16 ERISA. .................................................................................................13
(a) Employee Benefit Plan........................................................................13
(b) Title IV Liabilities.........................................................................13
(c) Qualification................................................................................13
(d) Compliance...................................................................................13
2.17 Insurance .................................................................................................14
2.18 Labor Relations............................................................................................14
2.19 Year 2000 .................................................................................................14
2.20 Intellectual Property Rights...............................................................................14
2.21 No Brokers' or Other Fees..................................................................................15
2.22 Accounts Receivable; Bookings..............................................................................15
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS ............................................................15
3.1 Authorization of Transaction................................................................................15
3.2 No Approvals or Conflicts...................................................................................16
3.3 Ownership of Existing Common Stock..........................................................................16
3.4 No Brokers' or Other Fees...................................................................................16
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................................................16
4.1 Organization................................................................................................16
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4.2 Authorization, Etc..........................................................................................16
4.3 No Approvals or Conflicts...................................................................................17
4.4 No Brokers' or Other Fees...................................................................................17
4.5 Purchaser's Investment Representations......................................................................17
ARTICLE 5 CONDITIONS TO STOCKHOLDERS' OBLIGATIONS........................................................................17
5.1 Representations and Warranties; Covenants...................................................................17
5.2 Certificate.................................................................................................18
5.3 No Action .................................................................................................18
5.4 HSR Act .................................................................................................18
5.5 Payment for Shares..........................................................................................18
5.6 Opinion of Counsel..........................................................................................18
5.7 Escrow Agreement............................................................................................18
5.8 Employment Agreement........................................................................................18
ARTICLE 6 CONDITIONS TO PURCHASER'S OBLIGATIONS..........................................................................19
6.1 Representations and Warranties; Covenants...................................................................19
6.2 No Action .................................................................................................19
6.3 Consents .................................................................................................19
6.4 HSR Act .................................................................................................19
6.5 No Changes .................................................................................................19
6.6 Delivery of Shares..........................................................................................19
6.7 Resignation of Director.....................................................................................19
6.8 Opinion of Counsel..........................................................................................20
6.9 [RESERVED] .................................................................................................20
6.10 Employment Agreement.......................................................................................20
6.11 Certificate................................................................................................20
6.12 Escrow Agreement...........................................................................................20
6.13 Release and Non-Competition Agreement......................................................................20
6.14 [RESERVED].................................................................................................20
6.15 Management Loan Amount.....................................................................................20
ARTICLE 7 [RESERVED].....................................................................................................21
ARTICLE 8 COVENANTS AND AGREEMENTS.......................................................................................21
8.1 [RESERVED] .................................................................................................21
8.2 Consents and Approvals......................................................................................21
8.3 [RESERVED] .................................................................................................21
8.4 Tax Matters.................................................................................................21
(a) Cooperation..................................................................................21
(b) Tax Return Preparation: Income Tax Periods Ending on or Before the Closing Date. ...........22
8.5 [RESERVED] .................................................................................................22
8.6 Litigation Support..........................................................................................22
8.7 Settlement Agreement Payments...............................................................................22
8.8 Termination of Existing Stockholder Agreements..............................................................22
8.9 [RESERVED] .................................................................................................22
8.10 Confidentiality............................................................................................22
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8.11 Expenses .................................................................................................23
8.12 [RESERVED].................................................................................................24
8.13 Further Assurances.........................................................................................24
8.14 Cooperation with Accountants...............................................................................24
8.15 Purchaser's Compliance with California Business and Professions CodeSection17550 et. seq. .................24
ARTICLE 9 [RESERVED].....................................................................................................24
ARTICLE 10 INDEMNIFICATION...............................................................................................24
10.1 Indemnification............................................................................................24
(a) Indemnification by the Stockholders..........................................................24
(b) Indemnification by Purchaser.................................................................25
(c) Survival of Representations and Warranties...................................................25
(d) Limitations on Indemnity Claims..............................................................26
(e) Notice and Opportunity to Defend.............................................................27
(f) Adjustment to Purchase Price.................................................................28
(g) Claims Against Tax Accountants...............................................................28
ARTICLE 11 MISCELLANEOUS.................................................................................................29
11.1 Defined Terms..............................................................................................29
11.2 Governing Law..............................................................................................36
11.3 Arbitration................................................................................................36
11.4 Amendment .................................................................................................36
11.5 No Assignment..............................................................................................36
11.6 Waiver; Liability..........................................................................................36
11.7 Notices .................................................................................................36
11.8 Complete Agreement.........................................................................................38
11.9 Counterparts...............................................................................................38
11.10 Headings .................................................................................................38
11.11 Severability..............................................................................................38
11.12 Third Parties.............................................................................................39
11.13 No Strict Construction....................................................................................39
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April 20,
1998, is entered into by and among Global Vacation Group, Inc., a New York
corporation (the "Purchaser"), Classic Custom Vacations, a California
corporation (the "Company"), Xxxxxxx X. Xxxxxx and Xxxxxx Xxxxxx (collectively,
the "Hellers"), Xxxxxx X. Xxxxxxxxx and Xxxx Xxxxxxxxx (collectively, the
"Lettermans"), Xxxxx X. Xxxxxx and Xxxxx Xxxxxx (collectively, the "XX
Xxxxxxx"), Xxxx X. Xxxxxx and Xxxxx Xxxxxx (collectively, the " XX Xxxxxxx"),
and Xxxx X. Xxxxx and Xxx Xxxxx (collectively, the "Robins", and together with
the Hellers, the Lettermans, the XX Xxxxxxx and the XX Xxxxxxx, the
"Stockholders"). Capitalized terms used in this Agreement are defined in Section
11.01.
WHEREAS, the Stockholders desire to sell, and Purchaser desires to
purchase, all of the outstanding shares of capital stock of the Company
beneficially owned by the Stockholders, upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale. On the Closing Date and subject to the terms and
conditions set forth in this Agreement:
(a) the Stockholders shall sell and transfer to Purchaser at the
Closing all of the outstanding shares of capital stock of the Company
beneficially owned by the Stockholders (the "Shares"), free and clear of all
options, pledges, security interests, voting trusts and similar arrangements,
liens, charges, and other encumbrances or restrictions ("Encumbrances"), other
than the restrictions imposed by federal and state securities laws, as follows:
(i) the Hellers shall sell and transfer to Purchaser 25,809
shares of the Company's Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), and one share of the Company's Class B Common Stock,
par value $1.00 per share (the "Class B Common Stock");
(ii) the Lettermans shall sell and transfer to Purchaser 8,603
shares of Class A Common Stock and one share of Class B Common Stock;
(iii) the XX Xxxxxxx shall sell and transfer to Purchaser 17,205
shares of Class A Common Stock and one share of Class B Common Stock;
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(iv) the XX Xxxxxxx shall sell and transfer to Purchaser 8,603
shares of Class A Common Stock; and
(v) the Robins shall sell and transfer to Purchaser 25,808 shares
of Class A Common Stock and one share of Class B Common Stock;
(b) Except as set forth in Section 6.15 hereof, Purchaser shall pay for
the Shares at the Closing by wire transfer of immediately available funds to the
accounts specified by the XX Xxxxxxx, the XX Xxxxxxx and the Robins,
respectively, at least one business day prior to the Closing Date as follows:
(i) Purchaser shall transfer to the Hellers at or immediately
after Closing, all shares of Xxxxx Travel, Inc. which are valued on the books
and records of the Company at $4,320,127.00. In addition, Purchaser shall
deposit the sum of $209,943.21 in the Escrow Account;
(ii) Purchaser shall transfer to the Lettermans at or immediately
after Closing all shares of Xxxxxx Travel, Inc. which are valued on the books
and records of the Company at $1,447,587.00. In addition, Purchaser shall
deposit the sum of $62,553.41 in the Escrow Account;
(iii) Purchaser shall pay to the XX Xxxxxxx $2,879,933.04 (which
is equal to the difference obtained by subtracting (x) $139,996.75 being
deposited in the Escrow Account from (y) the product of (A)(1) $15,100,000,
divided by (2) 86,032, multiplied by (B) 17,206);
(iv) Purchaser shall pay to the XX Xxxxxxx $1,439,966.53 (which
is equal to the difference obtained by subtracting (x) $69,998.37 being
deposited in the Escrow Account from (y) the product of (A)(1) $15,100,000,
divided by (2) 86,032, multiplied by (B) 8,603); and
(v) Purchaser shall pay to the Robins $4,394,899.57 (which is
equal to the difference obtained by subtracting (x) $134,995.12 being deposited
in the Escrow Account from (y) the product of (A)(1) $15,100,000, divided by (2)
86,032, multiplied by (B) 25,809);
(c) Purchaser shall deposit the sum of $617,486.86 (which includes the
amounts set forth in Section 1.01(b)), the Hellers shall deposit the sum of
$60.04 and the Lettermans shall deposit the sum of $7,453.10 with the Escrow
Agent as specified in the Escrow Agreement, and thereupon the Escrow Amount
shall be subject to the terms and conditions of the Escrow Agreement;
(d) the Hellers hereby assume and agree to hold Purchaser and the
Company harmless from and against, and Purchaser and the Company are hereby
unconditionally released from, all of the hedge contracts, puts, forward rate
agreements, currency contracts, loan agreements and all other obligations of
Purchaser or the Company, if any, arising in connection
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with or otherwise related, directly or indirectly, to any of the assets of Xxxxx
(the "Xxxxx Indebtedness"); and
(e) the Lettermans hereby assume and agree to hold Purchaser and the
Company harmless from and against, and Purchaser and the Company are hereby
unconditionally released from, all of the hedge contracts, puts, forward rate
agreements, currency contracts, loan agreements and all other obligations of
Purchaser or the Company, if any, arising in connection with or otherwise
related, directly or indirectly, to any of the assets of Xxxxxx (the "Xxxxxx
Indebtedness").
1.2 The Closing. The closing (the "Closing") of the transactions
contemplated in this Agreement shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xx, commencing at 5:00
p.m., local time on April 20, 1998, or at such other place or on such other date
as may be mutually agreeable to the Company, the Stockholders and Purchaser, but
in any event, no later than April 24, 1998. The date on which the Closing occurs
is referred to herein as the "Closing Date." At the Closing, the parties hereto
shall exchange the documents referred to in Articles 5 and 6 hereof, and such
other documents relating to the transactions contemplated hereby as any party
hereto or its counsel may reasonably request within a reasonable time prior to
Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Purchaser as follows:
2.1 Corporate Organization. The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation. The Company and each of its Subsidiaries has
full corporate power and authority necessary to own and lease its properties and
assets and to carry on its business as now being conducted. The Company and each
of its Subsidiaries is duly qualified or licensed to do business as a foreign
corporation and is in good standing in the jurisdictions in which the ownership,
use or occupancy of their respective properties or assets or the conduct of
their respective businesses requires such qualification except when the failure
to be so qualified or licensed would not be reasonably likely to have a material
adverse effect on the condition (financial or otherwise), assets, operations or
business of the Company or any of its Subsidiaries. Except as set forth in
Section 2.01 of the disclosure schedule attached hereto (the "Disclosure
Schedule"), neither the Company nor its Subsidiaries owns, directly or
indirectly, any capital stock or equity securities of, or other interest
(whether equity or debt) in, any Person. The Company and each of its
Subsidiaries has delivered or made available to the Purchaser a complete and
correct copy of their respective articles of incorporation and bylaws as
currently in effect, copies of which are attached as Exhibits 2.01-a, 2.01-b,
2.01-c, 2.01-d, 2.01-e and 2.01-f.
2.2 Capital Stock. (a) Immediately prior to the Closing, the authorized
capital stock of the Company consists of 100,004 shares of common stock, of
which 100,000 shares are
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designated Class A Common Stock, of which 86,028 shares are issued and
outstanding, and four shares are designated Class B Common Stock, of which four
shares are issued and outstanding. Except as set forth in Section 2.02(a) of the
Disclosure Schedule, there are no subscriptions, options, warrants, calls,
rights, contracts, commitments, understandings, restrictions or arrangements
relating to the issuance, sale, transfer or voting of any shares of Existing
Common Stock, including any rights of conversion or exchange under any
outstanding securities or other instruments. Section 2.02(a) of the Disclosure
Schedule sets forth the ownership of all of the issued and outstanding shares of
Existing Common Stock. Except as set forth in Section 2.02(a) of the Disclosure
Schedule, the outstanding shares of Existing Common Stock have been validly
issued, are fully paid, nonassessable and free of preemptive rights and are
owned by the Stockholders free and clear of all Encumbrances, other than the
restrictions imposed by federal and state securities laws.
(b) Section 2.02(b) of the Disclosure Schedule sets forth for each
Subsidiary of the Company (i) its name and jurisdiction of incorporation, (ii)
the number of shares of authorized capital stock of each class of its capital
stock and (iii) the number of issued and outstanding shares of each class of its
capital stock, the names and holders thereof and the number of shares held by
each such holder. All of the issued and outstanding shares of capital stock of
each Subsidiary of the Company have been duly authorized and are validly issued,
fully paid and nonassessable. The Company holds of record and owns beneficially
all of the outstanding shares of each Subsidiary of the Company free and clear
of all encumbrances, other than restrictions imposed by federal or state
securities laws. Except as contemplated by this Agreement or as set forth in
Section 2.02(b) of the Disclosure Schedule, there are no subscriptions, options,
warrants, calls, rights, contracts, commitments, understandings, restrictions or
arrangements relating to the issuance, sale, transfer or voting of any of the
shares of capital stock of each Subsidiary of the Company, including any rights
of conversion or exchange under any outstanding securities or other instruments.
2.3 Authorization, Etc. The Company has full corporate power and authority
to execute and deliver this Agreement and the documents and instruments
contemplated hereby and to carry out the transactions contemplated hereby and
thereby. The execution and delivery by the Company of this Agreement and the
documents and instruments contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, have been approved by all
necessary corporate proceedings on the part of the Stockholders and the Company,
respectively. This Agreement constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws of general application relating to or affecting the
enforcement of creditors' rights or by general principles of equity.
2.4 Financial Statements. Section 2.04 of the Disclosure Schedule contains
the following financial statements (the "Financial Statements"): (a) the audited
consolidated balance sheet of the Company as of December 31, 1995, (b) the
unaudited consolidated balance sheet of the Company as of December 31, 1996, and
the unaudited statement of operations and cash flows of the Company for the
fiscal year then ended (the "1996 Unaudited Financials") and (c) the unaudited
consolidated balance sheet of the Company as of December 31, 1997, and the
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unaudited statement of operations and cash flows of the Company for the fiscal
year then ended (the "Most Recent Financial Statements"). Except as set forth in
Section 2.04 of the Disclosure Schedule, the Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, fairly present in all
material respects the financial position of the Company as of such dates and the
results of operation of the Company for such periods, and are consistent with
the books and records of the Company (which books and records are correct and
complete in all material respects). The audited financial statements as of and
for the year ended December 31, 1996 will not differ materially and adversely
from the 1996 Unaudited Financials. The Company and its Subsidiaries have no
Indebtedness except Indebtedness related to or in connection with the Danish
Mortgages and such Indebtedness is set forth in Section 2.04 of the Disclosure
Schedule.
2.5 No Approvals or Conflicts. Except as set forth in Section 2.05(a) of
the Disclosure Schedule, neither the execution and delivery by the Company of
this Agreement nor the performance by the Company of its obligations hereunder
will (a) violate, conflict with or result in a breach of any provision of the
articles of incorporation or bylaws of the Company or any of its Subsidiaries,
(b) violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the creation of any Lien upon
any of the properties of the Company or any of its Subsidiaries under, cause the
termination or modification of, or give any other Person the right to terminate
or modify, any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, lease, contract, agreement or other instrument to which the
Company or any of its Subsidiaries is a party or by which any of its properties
are bound, (c) violate any Order or Law applicable to the Company or any of its
Subsidiaries or any of their respective properties or (d) except for filings or
approvals under the HSR Act and such other consents, approvals, filings, or
registrations and the like as may be required under applicable state securities
laws, require any consent, approval or authorization of, or notice to, or
declaration, filing or registration with, any Governmental Body or other third
party. Except as set forth in Section 2.05(b) of the Disclosure Schedule, all of
the consents set forth in Section 2.05(a) of the Disclosure Schedule have been
obtained.
2.6 No Violation; Governmental Authorizations. Except as set forth in
Section 2.06 of the Disclosure Schedule, the Company and each of its
Subsidiaries has complied in all material respects (except for prior incidents
of non-compliance which have been cured and for which no liability exists or
will exist) and is in compliance in all material respects with all Laws and
Orders applicable to the Company and each of its Subsidiaries or any of their
assets or properties. Except as set forth in Section 2.06 of the Disclosure
Schedule, the Company and each of its Subsidiaries has all material permits,
licenses, approvals and other governmental authorizations required in order to
own, lease, occupy and use its properties and assets and to carry on its
business as presently conducted, and all such permits, licenses, approvals and
other governmental authorizations are valid and in full force and effect.
2.7 Litigation. Except as set forth in Section 2.07 of the Disclosure
Schedule, there are no Actions (i) pending other than those filed but not yet
served on the Company or any of its Subsidiaries or (ii) to the Company's
knowledge, threatened against the Company or any of its
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Subsidiaries or any of its assets or properties before any Governmental Body
which, if adversely determined, would be reasonably likely to result in payments
by the Company or any of its Subsidiaries in excess of $50,000 or would be
reasonably likely to have a material adverse effect on the condition (financial
or otherwise), assets, operations or business of the Company or any of its
Subsidiaries.
2.8 Assets. Except as set forth in Section 2.08 of the Disclosure Schedule,
the Company and each of its Subsidiaries has good and marketable title to all
tangible personal properties and assets owned by them, free and clear of all
Liens except for Permitted Liens. The Company and each of its Subsidiaries owns,
or has a valid leasehold interest in or right to use, all assets necessary for
the conduct of their respective businesses as presently conducted.
2.9 REAL PROPERTY; LEASES.
(a) Neither the Company nor any of its Subsidiaries owns any real
property.
(b) Section 2.09(b) of the Disclosure Schedule sets forth a list of all
leases, subleases and other occupancy agreements, including all amendments,
extensions and other modifications (each a "Lease" and collectively the
"Leases") for real property (the "Leased Real Property") to which the Company or
any of its Subsidiaries is a party, together with a list of the location of all
Leased Real Property. The Company has delivered to Purchaser correct and
complete copies of the Leases. Except as set forth in Section 2.09(b) of the
Disclosure Schedule: (i) the Company and each of its Subsidiaries has a good and
valid leasehold interest in and to the Leased Real Property, subject to no Liens
except as described in Section 2.09(b) of the Disclosure Schedule; (ii) each
Lease constitutes a valid and binding obligation of the Company and each of its
Subsidiaries and, to the knowledge of the Company, the other parties thereto,
and is enforceable against the Company and each of its Subsidiaries and, to the
knowledge of the Company, the other parties thereto, in accordance with its
terms (except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws of general application relating to or
affecting the enforcement of creditors' rights or by general principles of
equity); (iii) the Company and each of its Subsidiaries are not, and, to the
Company's knowledge, no other party thereto is, in breach of or default under
any Lease in any material respect and no event has occurred which, with the
giving of notice, the passage of time or both, would constitute such a breach or
default by the Company or its Subsidiaries or, to the Company's knowledge, by
any other party, or permit termination, modification or acceleration thereunder
by the Company or, to the Company's knowledge, by any other party thereto; and
(d) except as described on Section 2.09(b) of the Disclosure Schedule, no
consent, waiver, approval or authorization is required from the landlord under
any Lease as a result of the execution of this Agreement or the consummation of
the transactions contemplated hereby.
(c) The Leased Real Property (i) constitutes all real property leased
or otherwise occupied or utilized by the Company or any of its Subsidiaries,
(ii) is in good operating condition and repair and (iii) is sufficient and
appropriate for the conduct of the business of the Company or any of its
Subsidiaries as presently conducted. To the Company's
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knowledge, other than the Company and its Subsidiaries, there are no parties in
possession or parties having any current or future right to occupy any of the
Leased Real Property. To the Company's knowledge, the Leased Real Property and
all buildings and improvements located thereon conform in all material respects
to all applicable building, zoning and other laws, ordinances, rules and
regulations. All material permits, licenses and other approvals necessary to the
current occupancy and use of the Leased Real Property by the Company or its
Subsidiaries have been obtained, are in full force and effect and have not been
violated in any material respect. There exists no material violation by the
Company or any of its Subsidiaries of any covenant, condition, restriction,
easement agreement or order affecting any portion of the Leased Real Property.
There is no pending or any threatened condemnation proceeding affecting any
portion of the Leased Real Property which would be reasonably likely to have a
material adverse affect on the business of the Company or any of its
Subsidiaries.
(d) To the knowledge of the Company, there are no outstanding options
or rights of first refusal with respect to the purchase or use of any of the
Leased Real Property, any portion thereof or interest therein, except as set
forth on Section 2.09(d) of the Disclosure Schedule. Neither the Company nor any
of its Subsidiaries is obligated to purchase or lease any real property, except
as set forth on Section 2.09(d) of the Disclosure Schedule.
2.10 Absence of Undisclosed Liabilities. Except as set forth in Section
2.10 of the Disclosure Schedule, the Company and its Subsidiaries do not have
any liabilities required to be disclosed on a balance sheet in accordance with
GAAP (whether accrued, absolute, contingent or otherwise, and whether known or
unknown) other than (i) liabilities set forth on the Most Recent Financial
Statements (including any notes thereto), (ii) liabilities which have arisen
after the date of the Most Recent Financial Statements in the ordinary course of
business (none of which is a liability resulting from, arising out of, or
relating to any breach of contract, breach of warranty, tort, infringement,
violation of Law or environmental matter (including those arising under
Environmental, Health, and Safety Requirements) by the Company or any of its
Subsidiaries), (iii) obligations under executory contracts or commitments set
forth in Section 2.13 of the Disclosure Schedules or under executory contracts
or commitments not required to be disclosed therein (except liabilities
resulting from, arising out of, or related to any breach thereof) and (iv) other
liabilities expressly disclosed in Section 2.10 of the Disclosure Schedule.
2.11 Changes. Except as set forth in Section 2.11 of the Disclosure
Schedule, since December 31, 1997, there has not been any material adverse
change in the condition (financial or otherwise), business, operations, assets,
operating results, or customer or supplier relations of the Company or its
Subsidiaries. Without limiting the generality of the foregoing, since December
31, 1997, except as set forth in Section 2.11 of the Disclosure Schedule, or as
otherwise consented to in writing by Purchaser after the date hereof, the
Company and its Subsidiaries have not:
(a) sold, leased, transferred, assigned or otherwise disposed of any of
its assets, tangible or intangible, other than sales in the ordinary course of
business;
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(b) entered into any contract, lease, sublease, license, or sublicense
outside the ordinary course of business;
(c) committed to the acquisition or construction of any property, plant
or equipment in excess of $100,000 individually or $300,000 in the aggregate;
(d) created, incurred, assumed, or guaranteed any Indebtedness (whether
due or to become due) outside the ordinary course of business;
(e) delayed or postponed (outside the ordinary course of business) the
payment of accounts payable and other liabilities or obligations or accelerated
the collection of accounts receivable or other amounts owed to it;
(f) canceled, compromised, waived, or released any right or claim (or
series of related rights and claims) either involving more than $10,000 in the
aggregate or outside the ordinary course of business;
(g) declared, set aside, or paid any dividend or distribution with
respect to its capital stock or redeemed, purchased, or otherwise acquired any
of its capital stock, or granted or issued any options relating to the issuance
of capital stock;
(h) experienced any material damage, destruction, or loss to any of its
material properties or assets through the date hereof;
(i) granted any increase outside the ordinary course of business in the
compensation of any of its officers, directors or employees, or adopted any
benefit plan or any retirement, deferred compensation, bonus, fringe benefit,
insurance or pension plan, program or arrangement or made any loan or other
credit accommodation to or for any officer, employee, director, or Stockholder;
(j) mortgaged, pledged or otherwise encumbered any of its respective
assets;
(k) entered into any contract the terms of which provide for
commissions or overrides in excess of those payable under the Company's Major
Accounts; or
(l) made or entered into any agreement or understanding to do any of
the foregoing.
Except as set forth in Section 2.11 of the Disclosure Schedule, since
December 31, 1997, the Company and its Subsidiaries have made all reasonable
efforts consistent with past practices to keep its business and properties
substantially intact and to preserve existing relationships with customers,
suppliers, lessors, licensors, employees and others with whom it deals.
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2.12 TAXES.
(a) Except as set forth in Section 2.12(a) of the Disclosure Schedule,
the Company and its Subsidiaries have timely filed all Tax Returns which they
are required to file under applicable laws and regulations; all such Tax Returns
are complete and correct in all material respects and have been prepared in
compliance with all applicable Laws in all material respects; the Company and
its Subsidiaries and each Affiliated Group have paid all Taxes due and owing by
it (whether or not such Taxes are required to be shown on a Tax Return), unless
and to the extent that the same are being contested in good faith and by
appropriate proceedings, adequate reserves (as determined in accordance with
GAAP, consistently applied) have been established, on its Financial Statements
and have been disclosed in Section 2.12(a) of the Disclosure Schedule; the
Company and its Subsidiaries and each Affiliated Group have withheld and paid
over to the appropriate taxing authority all Taxes which they are required to
withhold from amounts paid or owing to any employee, independent contractor,
stockholder, creditor or other third party.
(b) Except as set forth in Section 2.12(b) of the Disclosure Schedule:
(i) The Company and its Subsidiaries are not liable for the Taxes
of another Person (a) under Treas. Reg.Section 1.1502-6 (or comparable
provisions of state, local or foreign Law), (b) as a transferee or successor,
(c) by contract or indemnity or (d) otherwise. Neither the Company nor any of
its Subsidiaries are a party to any tax sharing agreement. Neither the Company
nor any of its Subsidiaries has made any payments, is obligated to make payments
or is a party to an agreement that could obligate it to make any payments that
would not be deductible under Section 280G of the Code.
(ii) Neither the Company nor any of its Subsidiaries has waived
any statute of limitations with respect to any material Taxes or agreed to any
extension of time with respect to any material Tax assessment or deficiency.
(iii) No foreign, federal, state or local tax audits or
administrative or judicial proceedings are pending or being conducted with
respect to the Company, no information related to Tax matters has been requested
by any foreign, federal, state or local taxing authority and no written notice
indicating an intent to open an audit or other review has been received by the
Company from any foreign, federal, state or local taxing authority.
(iv) The Company has delivered to Purchaser correct and complete
copies of all federal income Tax Returns, examination reports, and statements of
deficiencies against or agreed to by any of the Company since January 1, 1993.
(v) The latest balance sheet of the Company contains adequate
reserves for Taxes as of December 31, 1997, and the Company has not incurred any
liability for Taxes since the date of the latest balance sheet other than in the
ordinary course of business.
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(vi) The Company is not, and has never been, a member of an
Affiliated Group.
(vii) The Company has made a valid election under Section 1362 of
the Code and any corresponding state or local provisions (collectively, the "S
Elections") to be an S corporation within the meaning of Section 1361 of the
Code for all taxable years (or portions thereof) beginning on or after January
1, 1996; no such S Election has been terminated (whether voluntarily,
involuntarily or inadvertently, including, without limitation, by taking any
action defined in Section 1362(d) of the Code) since such time.
(viii) Neither the Company nor any of its Subsidiaries will be
required to include any amount in taxable income or exclude any item of
deduction or loss from taxable income for any taxable period (or portion
thereof) ending after the Closing Date (A) as a result of a change in method of
accounting for a taxable period ending on or prior to the Closing Date, (B) as a
result of any "closing agreement," as described in Code Section 7121 (or any
corresponding provision of state, local or foreign income Tax law) entered into
on or prior to the Closing Date, (C) as a result of any sale reported on the
installment method where such sale occurred on or prior to the Closing Date, and
(D) as a result of any prepaid amount received on or prior to the Closing Date.
(ix) The Company has not made any election under Section 341(f)
of the Code (or any corresponding provision of state, local or foreign income
Tax law).
2.13 CONTRACTS.
(a) Except for (i) actions taken to implement this Agreement and the
transactions contemplated hereby or (ii) as set forth in Section 2.13 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to nor bound by any written or oral:
(i) stock option or severance agreements, programs, policies or
arrangements;
(ii) contract for the employment of any officer, individual
employee or other Person on a full-time, part-time, consulting or other basis
providing annual compensation in excess of $75,000 or contract relating to loans
to officers, directors or Affiliates of the Company;
(iii) contract or instrument relating to the Danish Mortgages or
the California Mortgages;
(iv) contract or instrument under which the Company or any of its
Subsidiaries has advanced or loaned to any other Person amounts which exceed
$100,000 in the aggregate to all such Persons;
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(v) agreement or indenture relating to Indebtedness or to
mortgaging, pledging or otherwise placing a Lien on any material asset or
material group of assets of the Company or any of its Subsidiaries;
(vi) lease or agreement under which the Company or its
Subsidiaries is lessee of or holds or operates any personal property owned by
any other Person, except for any lease of personal property under which the
aggregate annual rental payments do not exceed $25,000 (and Section 2.13 of the
Disclosure Schedule identifies whether such leases are capital leases or
operating leases);
(vii) lease or agreement under which the Company or its
Subsidiaries is lessor of or permits any third party to hold or operate any
personal property owned or controlled by the Company;
(viii) agreement providing indemnification of any other Person;
(ix) agreement under which it has granted any Person any
registration rights regarding the Company's or any of its Subsidiaries' capital
stock (including demand and piggyback registration rights);
(x) supply, sales, distribution, franchise or travel agency
agreement which requires payment by the Company or its Subsidiaries of
consideration in excess of $3,000,000;
(xi) contract, agreement or other arrangement with any officer,
director, stockholder, employee or Affiliate, or any Affiliate of any officer,
director, stockholder or employee;
(xii) contract or agreement prohibiting it from freely engaging
in any business or competing anywhere in the world; or
(xiii) other contract or agreement which requires payment by the
Company or any of its Subsidiaries of consideration in excess of $300,000
annually (other than contracts and agreements not disclosed under clauses (i)
through (xii) above because of the dollar thresholds contained therein) or which
is material to the operations or financial condition of the Company or any of
its Subsidiaries taken as a whole.
(b) Except as set forth on Section 2.13 of the Disclosure Schedule, all
of the contracts, agreements and instruments set forth in Section 2.13 of the
Disclosure Schedule are valid and binding obligations of the Company and its
Subsidiaries, and, to the knowledge of the Company, the other parties thereto,
and enforceable against the Company, and its Subsidiaries, and, to the knowledge
of the Company, the other parties thereto, in accordance with their respective
terms, except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws of general application relating to or
affecting the enforcement of creditors' rights or by general principles of
equity. The Company and its
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Subsidiaries have performed all material obligations required to be performed by
them, and the Company and its Subsidiaries are not in material default under or
in material breach of nor in receipt of any claim of default or breach under any
contract, agreement or instrument to which the Company or its Subsidiaries are
subject (including without limitation the contracts, agreements and instruments
set forth in Section 2.13 of the Disclosure Schedule); no event has occurred
which with the passage of time or the giving of notice or both would result in a
material default, breach or event of noncompliance by the Company or its
Subsidiaries under any material contract, agreement or instrument to which the
Company or its Subsidiaries is subject (including without limitation the
contracts, agreements and instruments set forth in Section 2.13 of the
Disclosure Schedule); neither the Company nor its Subsidiary has any present
expectation or intention of not fully performing all such obligations under any
material contract, agreement or instrument to which it is a party (including
without limitation the contracts, agreements and instruments set forth in
Section 2.13 of the Disclosure Schedule); the Company has no knowledge of any
breach or anticipated breach by the other parties to any material contract,
agreement, instrument or commitment (including without limitation the contracts,
agreements, instruments and commitments set forth in Section 2.13 of the
Disclosure Schedule) to which it is a party.
(c) A true and correct copy of each of the written agreements and an
accurate description of each of the oral agreements which are required to be
referred to in Section 2.13 of the Disclosure Schedule, together with all
written amendments, waivers or other changes thereto have been delivered to
Purchaser.
2.14 Environmental, Health, and Safety Matters. Except as set forth in
Section 2.14 of the Disclosure Schedule:
(a) Each of the Company and its Affiliates and, to the knowledge of the
Company, each of the Company's predecessors has complied and is in compliance in
all material respects with all Environmental, Health, and Safety Requirements.
(b) Without limiting the generality of the foregoing, each of the
Company and its Affiliates has obtained and complied with, and is in compliance
with, in all material respects, all permits, licenses and other authorizations
that are required pursuant to Environmental, Health, and Safety Requirements for
the occupation of its facilities and the operation of its business; a list which
is complete and accurate in all material respects of all such permits, licenses
and other authorizations is set forth in Section 2.14 of the Disclosure
Schedule.
(c) To the Company's knowledge, none of the following exists at any
property or facility operated by the Company: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(d) Neither the Company nor its Affiliates and, to the knowledge of the
Company, none of the Company's predecessors has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or released any
substance, including without
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limitation 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 liabilities,
including any liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA")
or any other Environmental, Health, and Safety Requirements.
(e) Neither the Company nor any of its Affiliates and, to the knowledge
of the Company, none of the Company's predecessors has, either expressly or by
operation of Law, assumed or undertaken any liability, including without
limitation any obligation for corrective or remedial action, of any other Person
relating to Environmental, Health, and Safety Requirements.
2.15 Affiliated Transactions. Except for this Agreement, the Existing
Stockholder Agreements, and as set forth in Section 2.15 of the Disclosure
Schedule, no officer, director, stockholder (including the Stockholders) or
Affiliate of the Company or any individual related by blood or marriage to any
such Person, or any entity in which any such Person owns any beneficial
interest, is a party to any agreement, contract, arrangement or commitment with
the Company or engaged in any transaction with the Company or has any interest
in any property used by the Company.
2.16 ERISA.
(a) Employee Benefit Plan. Except as set forth in Section 2.16 of the
Disclosure Schedule, the Company does not maintain, contribute to or have any
liability under (or with respect to) any "employee benefit plan" (as such term
is defined in Section 3(3) of ERISA) or any other employee benefit plan, program
or arrangement. Each item listed on Section 2.16 of the Disclosure Schedule is
referred to herein as an "Employee Benefit Plan." For purposes of this Section
2.16, the term "Company" includes all organizations that are considered a single
employer with the Company for purposes of Section 414 of the Code.
(b) Title IV Liabilities. The Company does not maintain, contribute to,
have any obligation to contribute to, or any liability or potential liability
with respect to, any employee benefit plan (as such term is defined in Section
3(3) of ERISA) subject to Title IV of ERISA.
(c) Qualification. Except as set forth in Section 2.16 of the
Disclosure Schedule, a favorable determination opinion, advisory or notification
letter from the Internal Revenue Service has been received by the Company with
respect to each Employee Benefit Plan which is intended to be qualified under
Section 401(a) of the Code stating that each such plan is so qualified; and to
the Company's knowledge there are no circumstances which would cause such
Employee Benefit Plan to lose such qualified status.
(d) Compliance. Each Employee Benefit Plan and all related trusts,
insurance contracts and funds have been maintained, funded and administered in
compliance in all material
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respects with the terms of such Employee Benefit Plan and the applicable
provisions of ERISA, the Code and other applicable Laws. All required payments,
premiums, contributions, reimbursements or accruals, which are due and owing for
all periods ending prior to the Closing shall have been made or properly accrued
on the Most Recent Financial Statements.
2.17 Insurance. Section 2.17 of the Disclosure Schedule contains a
description of each insurance policy maintained by the Company and its
Subsidiaries with respect to its properties, assets and businesses, and each
such policy is in full force and effect. Neither the Company nor its
Subsidiaries is in default with respect to their respective material obligations
under any insurance policy maintained by them. Section 2.17 of the Disclosure
Schedule describes any self-insurance arrangements affecting the Company and its
Subsidiaries.
2.18 Labor Relations. The Company is not party to or bound by any
collective bargaining agreement or relationship with any labor organization. No
executive, key employee or group of employees has informed or otherwise
communicated to an executive officer of the Company that such executive, key
employee or group of employees has any plans to terminate his, her or their
employment with the Company. With respect to the Company: no labor organization
or group of employees has filed any representation petition or made any written
or oral, to the knowledge of the Company, any demand for recognition; to the
knowledge of the Company, no union organizing or decertification campaigns are
underway; and no labor strike, work stoppage or slowdown, or other material
labor dispute is underway or, to the knowledge of the Company, threatened.
2.19 Year 2000. Except as set forth in Section 2.19 of the Disclosure
Schedule, to the Company's knowledge, all of the material computer software,
computer firmware, computer hardware (whether general or special purpose), and
other similar or related items of automated, computerized, and/or software
system(s) that are used by the Company or its Subsidiaries in the conduct of
their respective businesses will not malfunction, will not cease to function,
will not generate incorrect data, and will not produce incorrect results when
processing, providing, and/or receiving (i) date-related data into and between
the twentieth and twenty-first centuries and (ii) date-related data in
connection with any valid date in the twentieth and twenty-first centuries.
2.20 INTELLECTUAL PROPERTY RIGHTS.
(a) Section 2.20(a) of the Disclosure Schedule contains a complete and
accurate list of all (i) patented or registered Intellectual Property owned by
the Company and its Subsidiaries, (ii) pending patent applications and
applications for registrations of other Intellectual Property filed by the
Company and its Subsidiaries, (iii) material unregistered trade names and
corporate names owned or used by the Company and its Subsidiaries and (iv)
material unregistered trademarks, service marks, copyrights, and computer
software owned or used by the Company and its Subsidiaries. Section 2.20(a) of
the Disclosure Schedule also contains a complete and accurate list of all
licenses and other rights granted by the Company and its Subsidiaries to any
third party with respect to any Intellectual Property and all material licenses
and other rights granted by any third party to the Company and its Subsidiaries
with respect to
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any Intellectual Property, in each case identifying the subject Intellectual
Property. All of the material licenses set forth in Section 2.20(a) of the
Disclosure Schedule are valid and binding obligations of the Company and its
Subsidiaries, and, to the knowledge of the Company, the other parties thereto,
and enforceable against the Company and its Subsidiaries, and, to the knowledge
of the Company, the other parties thereto, in accordance with their respective
terms, except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws of general application relating to or
affecting the enforcement of creditors' rights or by general principles of
equity.
(b) Except as set forth in Section 2.20(b) of the Disclosure Schedule,
the Company and its Subsidiaries own and possess all right, title and interest
in and to, or have the right to use pursuant to a valid license, all
Intellectual Property necessary for the operation of the business of the Company
as presently conducted.
2.21 No Brokers' or Other Fees. Except as set forth in Section 2.21 of the
Disclosure Schedule, there are no claims 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 or
its Subsidiaries.
2.22 Accounts Receivable; Bookings. Section 2.22 of the Disclosure Schedule
sets forth, as of the date specified therein, a list that is true and correct in
all material respects of all accounts receivable of the Company existing at such
date (the "Accounts Receivable"), and the aging of each such receivable, as well
as a list of all customer bookings as of such date ("Bookings"), all deposits
received from customers in connection with such Bookings as of such date, all
prepayments to vendors and suppliers and refunds to customers made by the
Company in connection with such Bookings as of such date, and all claims by
customers for refunds received by the Company for which refunds have not been
made as of such date. To the knowledge of the Company, all Accounts Receivable
are collectible in full, net of reserves for doubtful accounts set forth on the
Most Recent Financial Statements.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders hereby severally (and not jointly) represents
and warrants, as to himself or herself only, as follows:
3.1 Authorization of Transaction. Such Stockholder has full power,
authority and capacity to execute and deliver this Agreement and to perform such
Stockholder's obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms and conditions except to the extent
that the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
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3.2 No Approvals or Conflicts. Neither the execution and the delivery of
this Agreement by such Stockholder, nor the performance by such Stockholder of
his or her obligations hereunder, will (a) violate any Order, or Law applicable
to such Stockholder, (b) violate, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the creation of
any Lien upon any of the properties of the Company under, or cause the
termination or modification of, or give any other Person the right to terminate
or modify, any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, lease, contract, agreement or other instrument to which such
Stockholder or any of its properties are bound, of (c) except for filings or
approvals under the HSR Act, require any consent, approval or authorization of,
or notice to, or declaration, filing or registration with, any Governmental Body
or other third party.
3.3 Ownership of Existing Common Stock. Except as otherwise set forth in
Section 2.02 of the Disclosure Schedule, such Stockholder beneficially owns the
number of shares of Existing Common Stock set forth next to such Stockholder's
name on Annex 2.02(a) of the Disclosure Schedule, free and clear of all
Encumbrances, other than Encumbrances in favor of the Company that will be
terminated prior to the Closing, and the restrictions imposed by federal and
state securities laws.
3.4 No Brokers' or Other Fees. Except as set forth in Section 2.21 of the
Disclosure Schedule, there are no claims 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 such
Stockholder for which the Company or Purchaser could become liable.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Stockholders and the Company as
follows:
4.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York. Purchaser
has the power to own its properties and carry on its business as now being
conducted and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership, use or occupancy of its properties or
assets or the conduct of its business requires such qualification except when
the failure to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), assets, operations or business of Purchaser.
4.2 Authorization, Etc. Purchaser has full power and authority to execute
and deliver this Agreement and the documents and instruments contemplated
hereby, and to carry out the transactions contemplated hereby and thereby.
Purchaser has duly approved and authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and,
prior to the Closing, Purchaser will have duly approved and authorized the
documents and instruments contemplated hereby and the consummation of the
transactions
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contemplated thereby by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of Purchaser, enforceable against
Purchaser in accordance with its terms, except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
of general application relating to or affecting the enforcement of creditors'
rights or by general principles of equity.
4.3 No Approvals or Conflicts. Neither the execution and delivery by
Purchaser of this Agreement nor the performance by Purchaser of its obligations
hereunder will (i) violate, conflict with or result in a breach of any provision
of Purchaser's constituting documents, (ii) violate, conflict with or result in
a breach of any provision of, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the creation of
any Lien upon any of Purchaser's properties under or cause the termination or
modification of, or give any other Person the right to terminate or modify, any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
lease, contract, agreement or other instrument to which Purchaser or any of its
respective properties may be bound, (iii) violate any Order or Law applicable to
Purchaser or any of its respective properties, or (iv) except for filings or
approvals under the HSR Act, require any consent, approval or authorization of,
or notice to, or declaration, filing or registration with, any Governmental Body
or other third party.
4.4 No Brokers' or Other Fees. There are no claims 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 Purchaser for which the Company or the Stockholders could
become liable.
4.5 Purchaser's Investment Representations. Purchaser hereby represents
that it is acquiring the Shares purchased hereunder or acquired pursuant hereto
for its own account with the present intention of holding such securities for
purposes of investment, and that it has no intention of selling such securities
in a public distribution in violation of the federal securities laws or any
applicable state securities laws; provided that nothing contained herein shall
prevent Purchaser and subsequent holders of Shares from transferring such
securities in compliance with the applicable federal and state securities laws.
ARTICLE 5
CONDITIONS TO STOCKHOLDERS' OBLIGATIONS
The obligations of each Stockholder to effect the Closing under this
Agreement are subject to the satisfaction, at or prior to the Closing, of each
of the following conditions, unless waived in writing by each of the
Stockholders (other than the condition set forth in Section 5.08 hereof which
may be waived in writing by Xxxxxx X. Xxxxxxxxx).
5.1 Representations and Warranties; Covenants. The representations and
warranties of Purchaser contained in this Agreement (a) that are qualified as to
materiality, shall be true and correct and (b) that are not qualified as to
materiality, shall be true and correct in all material
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respects, in each case at and as of the Closing as though then made, and
Purchaser shall have performed in all material respects all of the covenants
required to be performed by it hereunder prior to the Closing.
5.2 Certificate. An executive officer of Purchaser shall have delivered to
the Stockholders a certificate, dated the date of the Closing, representing and
warranting, on behalf of Purchaser that the conditions specified in Section 5.01
have been fully satisfied (except to the extent expressly waived by the
Stockholders in writing at or prior to the Closing); provided, however, that in
the event that (a) the condition in this Section 5.02 shall not be satisfied
because one or more specific representations or warranties of Purchaser are not
true as of the Closing and (b) the Stockholders agree to waive satisfaction of
such condition so that the transactions contemplated herein will be consummated,
then Purchaser shall nevertheless provide the certificate referred to in this
Section 5.02 but such certificate shall exclude those specific representations
and warranties which were not true as of the Closing.
5.3 No Action. No action shall have been instituted (and be pending) by any
Governmental Body seeking to restrain and prohibit this Agreement or the
consummation of the transactions contemplated hereby. No Order preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect.
5.4 HSR Act. The waiting period (including any extensions thereof by reason
of a request for additional information) relating to the notification and report
forms under the HSR Act filed by Purchaser (or its ultimate parent entity), the
Company and the Stockholders with respect to the transactions contemplated by
this Agreement shall have expired or been terminated.
5.5 Payment for Shares. At the Closing, Purchaser shall pay to the Hellers,
the Lettermans, the XX Xxxxxxx, the XX Xxxxxxx and the Robins, respectively, the
respective amounts specified in Section 1.01(b).
5.6 Opinion of Counsel. The Stockholders shall have received an opinion of
Xxxxxxxx & Xxxxx addressed to the Stockholders and dated the Closing Date as to
the matters set forth in Exhibit 5.06 hereto and in a form reasonably acceptable
to the Stockholders.
5.7 Escrow Agreement. Purchaser and the Escrow Agent shall have entered
into an Escrow Agreement substantially in the form of Exhibit 5.07 attached
hereto (the "Escrow Agreement"), and the Escrow Agreement shall be in full force
and effect as of the Closing.
5.8 Employment Agreement. The Company and Xxxxxx X. Xxxxxxxxx shall have
entered into an Employment Agreement in the form of Exhibit 6.10 attached hereto
(the "Employment Agreement"), and the Employment Agreement shall be in full
force and effect as of the Closing.
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ARTICLE 6
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to effect the Closing under this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, unless waived in writing by Purchaser.
6.1 Representations and Warranties; Covenants. The representations and
warranties of the Company and each of the Stockholders contained in this
Agreement (a) that are qualified as to materiality, shall be true and correct
and (b) that are not qualified as to materiality, shall be true and correct in
all material respects, in each case at and as of the Closing as though then
made, and the Company and each of the Stockholders shall have performed in all
material respects all of the covenants required to be performed by it or him
hereunder prior to the Closing.
6.2 No Action. No Action shall have been instituted (and be pending) by any
Governmental Body seeking to restrain and prohibit this Agreement or the
consummation of the transactions contemplated hereby. No Order preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect.
6.3 Consents. All consents and approvals required for the consummation of
the transactions contemplated by this Agreement or where the effect of the
failure to obtain any such consent or approval would result in the breach of a
material agreement that the Company is a party to (including but not limited to
a Lease) shall have been given and delivered.
6.4 HSR Act. The waiting period (including any extensions thereof by reason
of a request for additional information) relating to the notification and report
forms under the HSR Act filed by Purchaser (or its ultimate parent entity), the
Company and the Stockholders with respect to the transactions contemplated by
this Agreement shall have expired or been terminated.
6.5 No Changes. Since December 31, 1997, there has been no material adverse
change in the condition (financial or otherwise), business, operations, assets,
operating results, or employee, customer or supplier relations of the Company,
as a whole.
6.6 Delivery of Shares. At the Closing, the Stockholders shall deliver to
Purchaser certificates representing the Shares and the certificates representing
the shares of capital stock of each of the Subsidiaries of the Company, free and
clear of all Encumbrances other than the restrictions imposed by federal and
state securities laws, duly endorsed for transfer or accompanied by duly
executed stock powers, executed in blank or in favor of Purchaser and otherwise
in a form acceptable for transfer on the books of the Company and its
Subsidiaries.
6.7 Resignation of Director. The Stockholders shall have delivered to
Purchaser the written resignations of all of the directors of the Company,
effective as of the Closing Date.
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6.8 Opinion of Counsel. Purchaser shall have received an opinion of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. addressed to Purchaser and dated the Closing
Date as to the matters set forth in Exhibit 6.08 hereto and in a form reasonably
acceptable to Purchaser.
6.9 [RESERVED]
6.10 Employment Agreement. The Company and Xxxxxx X. Xxxxxxxxx shall have
entered into an Employment Agreement in the form of Exhibit 6.10 attached hereto
(the "Employment Agreement"), and the Employment Agreement shall be in full
force and effect as of the Closing.
6.11 Certificate. An executive officer of the Company and each of the
Stockholders shall have delivered to Purchaser a certificate, dated the date of
the Closing, representing and warranting, on behalf of the Company or such
Stockholder, as applicable, that the conditions specified in Sections 6.01 have
been fully satisfied (except to the extent expressly waived by the Purchaser in
writing at or prior to the Closing); provided, however, that in the event that
(a) the condition in this Section 6.11 shall not be satisfied because one or
more specific representations or warranties of the Company or a Stockholder are
not true as of the Closing and (b) Purchaser agrees to waive satisfaction of
such condition so that the transactions contemplated herein will be consummated,
then the Company or such Stockholder, as applicable, shall nevertheless provide
the certificate referred to in this Section 6.11 but such certificate shall
exclude those specific representations and warranties which were not true as of
the Closing.
6.12 Escrow Agreement. The Escrow Agent and the Stockholders shall have
entered into the Escrow Agreement, and the Escrow Agreement shall be in full
force and effect as of the Closing.
6.13 Release and Non-Competition Agreement. The Company and the
Stockholders shall have entered into a Release and Non-Competition Agreement in
the form of Exhibit 6.13 attached hereto (the "Release and Non-Competition
Agreement"), and the Release and Non-Competition Agreement shall be in full
force and effect as of the Closing.
6.14 [RESERVED]
6.15 Management Loan Amount. At or before the Closing, each Stockholder
shall repay to the Company such Stockholder's Management Loan Amount. The
Purchaser may offset and reduce any amount it owes a Stockholder pursuant to
Section 1.01(b) hereby by the amount of any Management Loan Amount owed by such
Stockholder to the Company at Closing (and the Purchaser shall pay such amount
to the Company at Closing to reduce such Stockholder's Management Loan Amount).
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ARTICLE 7
[RESERVED]
ARTICLE 8
COVENANTS AND AGREEMENTS
8.1 [RESERVED]
8.2 CONSENTS AND APPROVALS.
(a) The Company and its Subsidiaries shall give any notices to third
parties and use its reasonable best efforts to obtain the third party consents
specified on Annex 2.05 to the Disclosure Schedule attached hereto and any other
third party consents that Purchaser may reasonably request in connection with
the satisfaction of the condition set forth in Section 6.03.
8.3 [RESERVED]
8.4 TAX MATTERS.
(a) COOPERATION.
(i) The Company, Purchaser and the Stockholders shall cooperate
fully as and to the extent reasonably requested by the other party or parties in
connection with the filing of Tax Returns and any audit, litigation or other
proceedings with respect to Taxes. Such cooperation shall include the retention
and (upon the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other proceeding
and making themselves or their employees, as applicable, available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company and the Stockholders agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
Purchaser or the Stockholders, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (B) to give the other party or parties reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the Company or the Stockholders, as
the case may be, shall allow the other party to take possession of such books
and records.
(ii) The Company, Purchaser and the Stockholders further agree,
upon request, to use commercially reasonable efforts to obtain any certificate
or other document from any Governmental Body or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated
hereby).
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(b) Tax Return Preparation: Income Tax Periods Ending on or Before the
Closing Date. The Company shall prepare or cause to be prepared and file or
cause to be filed all Tax Returns for the Company for all periods ending on or
prior to the Closing Date which are filed after the Closing Date. The Company
shall prepare any Federal or state income Tax Returns ("Income Tax Returns") not
less than 30 days prior to the due date thereof and shall permit the
Stockholders to review and comment on each such Income Tax Return prior to
filing. In the event that the Majority Stockholders disagree with the Tax Return
as prepared, the Majority Stockholders shall have the right to have the
disagreement resolved by an independent accounting firm, mutually acceptable to
both parties, with the cost of retaining such accounting firm to be shared
equally by the parties. The Company shall not amend any Income Tax Return of the
Company filed on or before the Closing except as required by law.
8.5 [RESERVED]
8.6 Litigation Support. In the event and for so long as any party is
actively contesting or defending against any Action or charge, complaint, or
demand in connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, circumstance, status, condition, activity, practice,
occurrence, event, action, failure to act, or transaction on or prior to the
Closing Date involving the Company, each of the other parties will cooperate and
make reasonably available themselves or their personnel, as applicable, and
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense. Notwithstanding anything
herein to the contrary, this Section 8.06 shall not apply to any action between
the Stockholders.
8.7 Settlement Agreement Payments. Promptly after the Closing, the Company
shall pay an aggregate of $1,000,000 to the Hellers and an aggregate of
$1,000,000 to the Lettermans pursuant to the terms and conditions of Section
2.2(b) of the Settlement Agreement.
8.8 Termination of Existing Stockholder Agreements. Without any further
action by any of the parties hereto, each Stockholder hereby unconditionally
releases and agrees to hold harmless the Company with respect to the Existing
Stockholder Agreements; provided, however, that notwithstanding anything hereto
the contrary, the Company shall remain obligated to pay an aggregate of
$1,000,000 to the Hellers and an aggregate of $1,000,000 to the Lettermans
pursuant to the terms and conditions of the Settlement Agreement. If the Closing
contemplated by this Agreement does not occur, this Section 8.08 shall have no
further force and effect.
8.9 [RESERVED]
8.10 CONFIDENTIALITY.
(a) Each of the Stockholders will treat and hold as confidential all of
the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and, following the
Closing, deliver promptly to Purchaser or
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destroy, at the request and option of Purchaser, all tangible embodiments (and
all copies) of the Confidential Information which are in such Stockholders'
possession. In the event that a Stockholder is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, such Stockholder will notify Purchaser
promptly of the request or requirement so that Purchaser may seek an appropriate
protective order or waive compliance with the provisions of this Section 8.09.
If, in the absence of a protective order or the receipt of a waiver hereunder,
such Stockholder is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, that
Person may disclose the Confidential Information to the tribunal; provided,
however, that the disclosing Person shall use reasonable efforts to obtain, at
the request and expense of Purchaser, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Purchaser shall designate. The foregoing
provisions shall not apply to any Confidential Information which is generally
available to the public immediately prior to the time of disclosure.
(b) Purchaser will treat and hold as confidential all of the
Stockholder Confidential Information, refrain from using any of the Stockholder
Confidential Information except in connection with this Agreement, and following
the Closing, deliver promptly to the applicable Stockholder or destroy, at the
request and option of such Stockholder, all tangible embodiments (and all
copies) of the Stockholder Confidential Information which are in Purchaser's
possession. In the event that Purchaser is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Stockholder Confidential Information, Purchaser will notify the
applicable Stockholder promptly of the request or requirement so that such
Stockholder may seek an appropriate protective order or waive compliance with
the provisions of this Section 8.10(b). If, in the absence of a protective order
or the receipt of a waiver hereunder, Purchaser is, on the advice of counsel,
compelled to disclose any Stockholder Confidential Information to any tribunal
or else stand liable for contempt, that Person may disclose the Stockholder
Confidential Information to the tribunal; provided, however, that the disclosing
Person shall use reasonable efforts to obtain, at the request and expense of
such Stockholder, an order or other assurance that confidential treatment will
be accorded to such portion of the Stockholder Confidential Information required
to be disclosed as such Stockholder shall designate. The foregoing provisions
shall not apply to any Stockholder Confidential Information which is generally
available to the public immediately prior to the time of disclosure.
8.11 Expenses. Except as otherwise provided herein, if the Closing occurs,
(i) each Stockholder shall pay (A) such Stockholder's Seller Expenses, and (B)
such Stockholder's portion (as set forth as a percentage next to such
Stockholder's name on Exhibit 10.01(d)(iv)) of all Company Expenses in excess of
$430,000 and, (ii) the Company shall pay Company Expenses up to $430,000 and all
Purchaser Expenses. If the Closing does not occur, (x) the Purchaser shall not
be responsible for any Seller Expenses or Company Expenses, and (y) neither the
Company nor any Stockholder shall be responsible for any Purchaser Expenses.
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8.12 [RESERVED].
8.13 Further Assurances. From time to time after the Closing Date, without
further consideration, the parties will execute and deliver such documents and
take such actions as any other party may reasonably request in order to more
effectively consummate the transactions contemplated hereby.
8.14 Cooperation with Accountants. The Hellers and the Lettermans shall
respond to reasonable requests for cooperation and assistance from Xxxxxx
Xxxxxxxx LLP, Deloitte & Touche or any other accounting firm chosen by Purchaser
or the Company in preparing audited Financial Statements and/or using such
Financial Statements in any filing with the U.S. Securities and Exchange
Commission or other Governmental Body by the Purchaser or any Affiliate thereof,
including signing and delivering management representation letters or any other
documents or instruments reasonably necessary or desirable in connection with
such preparation or use.
8.15 Purchaser's Compliance with California Business and Professions
CodeSection17550 et. seq. As soon as possible after the Closing, Purchaser shall
cause the Company to comply with Section 17550 et. seq. of the California
Business and Professions Code concerning Sellers of Travel.
ARTICLE 9
[RESERVED]
ARTICLE 10
INDEMNIFICATION
10.1 INDEMNIFICATION.
(a) Indemnification by the Stockholders. After the Closing and subject
to the limits set forth in this Section 10.01, each of the Stockholders agrees
to indemnify, defend and hold Purchaser, the Company, and their respective
officers, directors, agents and Affiliates (collectively, "Purchaser
Indemnitees"), harmless from and in respect of any and all losses, damages,
costs, fines, penalties, fees, lost profits, Taxes, amounts paid in settlement
and reasonable expenses (including, without limitation, reasonable expenses of
investigation, attorney's fees, enforcement of this Agreement, defense fees,
witness fees, court costs and disbursements of counsel and other professionals)
(collectively, "Damages"), that any of them may incur arising out of or due to
(i) the inaccuracy of any representation or the breach of any warranty made by
the Stockholders or the Company in this Agreement or any certificate required to
be delivered to Purchaser pursuant to Section 6.11 or (ii) any Federal or state
income or franchise taxes calculated on the basis of net income (other than the
1.5% California minimum
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tax imposed on S Corporations) for any period (or portion thereof) of the
Company ending on or before the Closing Date.
Notwithstanding anything herein to the contrary, after the
Closing, each of the Hellers and the Lettermans hereby jointly and severally,
agrees to indemnify, defend and hold the Purchaser Indemnitees harmless from all
Damages that any of them may incur arising out of or due to (x) the Xxxxx
Indebtedness or (y) the Xxxxxx Indebtedness.
(b) Indemnification by Purchaser. Subject to the limits set forth in
this Section 10.01, Purchaser agrees to indemnify, defend and hold each of the
Stockholders, harmless from and in respect of any and all Damages that they may
incur arising out of or due to (iii the inaccuracy of any representation or the
breach of any warranty made by Purchaser in this Agreement or in any certificate
delivered to the Stockholders pursuant to Section 5.02, or (iv) the breach of
any covenant, undertaking or other agreement of Purchaser contained in this
Agreement.
Further, Purchaser agrees to indemnify, defend and hold each of
the Robins, the XX Xxxxxxx and the XX Xxxxxxx (collectively, the "Cash
Sellers"), harmless from and in respect of any and all Damages that they may
incur which arises from or relates to any of the transactions contemplated by
Section 1.01(b)(i) (the "Xxxxx Distribution") or Section 1.01(b)(ii) (the
"Xxxxxx Distribution"), including, without limitation, (i) any increase in the
taxable income (or decrease in the taxable loss) of the Company directly
resulting from the Xxxxx Distribution and/or the Xxxxxx Distribution that is
passed through to the Cash Sellers under the applicable federal, state or local
"S corporation" taxation rules, and any increase in federal, state or local
Taxes (or decrease in credits against Taxes) imposed upon the Company for which
the Cash Sellers would otherwise be liable under this Agreement, (ii) any
increase in the taxable income (or decrease in the taxable loss) of the Cash
Sellers incurred as a result of the payment to the Cash Sellers of the amount of
any Damage payable to the Cash Sellers under the preceding clause (i) or this
clause (ii), and (iii) any Damages incurred by a Cash Seller under Section 500
of the California Corporations Code or in connection with any claim or assertion
of liability of the Cash Sellers under Section 500 of the California
Corporations Code.
Notwithstanding anything herein to the contrary, each of the
Hellers and the Lettermans hereby acknowledge and agree that the Xxxxx
Distribution and the Xxxxxx Distribution shall be made without any
representation by, or recourse to, Purchaser or the Company.
(c) Survival of Representations and Warranties. The several
representations and warranties of the parties contained in this Agreement or in
any certificate delivered pursuant hereto will survive the Closing Date and will
remain in full force and effect thereafter until the first to occur of : (1) the
date on which the Company has received final audited financial statements for
the year ending December 31, 1998 and (2) June 30, 1999; provided, however, that
(i) the representations and warranties contained in Sections 2.02, 2.03, 3.01
and 3.03 shall survive indefinitely and shall not expire, (ii) the
representations and warranties contained in Section 2.12 shall survive until the
applicable statute of limitations shall have expired (including
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any extensions or waivers thereof); and, provided further, that such
representations or warranties shall survive beyond such period with respect to
any inaccuracy therein or breach thereof, notice of which shall have been duly
given within such applicable period in accordance with Section 10.01(e) hereof.
(d) LIMITATIONS ON INDEMNITY CLAIMS.
(i) Anything to the contrary contained herein notwithstanding, no
Purchaser Indemnitee shall be entitled to recover any amount from the
Stockholders pursuant to Section 10.01(a)(i) of this Agreement (1) unless each
claim for Damages pursuant to Section 10.01(a)(i) resulting from a single
inaccuracy or breach is for Damages (which Damages Purchaser Indemnitee would be
entitled to be indemnified for hereunder but for the limitations contained in
this sentence) that are in excess of $25,000 (the "Minimum Claim Amount"),
provided that for purposes of this clause (1) all claims for Damages arising out
of the same facts or events resulting in such inaccuracy or breach shall be
treated as a single claim, and (2) unless and until the total of all claims for
Damages pursuant to Section 10.01(a)(i) that satisfy the Minimum Claim Amount
exceeds $300,000 (the "Basket") and then only for the amount by which all such
claims exceed the Basket.
(ii) None of the limitations set forth in clause (i) of this
Section 10.01(d) apply to claims for Damages with respect to any inaccuracy or
breach of any representations and warranties set forth in Sections 2.02, 2.03,
2.12, 3.01 or 3.03 or claims for Damages under clause (ii) of Section 10.01(a),
regardless of whether such indemnity obligations relate to matters covered by
representations and warranties that are subject to such limitations. With
respect to claims for Damages under clause (ii) of Section 10.01(a), the
Purchaser Indemnitees shall first seek recovery for such Damages by making
claims against the Escrow Account in accordance with the Escrow Agreement, and
shall only be entitled to make claims directly against the Stockholders after
all funds in the Escrow Account shall have been (1) paid to Purchaser
Indemnitees in accordance with the Escrow Agreement, (2) distributed to the
Stockholders in accordance with the Escrow Agreement or (3) the subject of
Claims made against the Escrow Account in accordance with the Escrow Agreement.
(iii) For purposes of Sections 10.01(a)(i) or 10.01(b)(i), any
requirement in any representation or warranty that an event or fact be material
or have a material adverse effect, as appropriate, in order for such event or
fact to constitute a misrepresentation or breach of such representation or
warranty shall be ignored.
(iv) The liability of each Stockholder hereunder shall be several
(and not joint) and, for indemnification or otherwise, shall be limited to the
percentage set forth next to such Stockholder's name on Exhibit 10.01(d)(iv)
hereto of the liability related to such claim and shall be limited to 60% of the
sum of (x) the amount such Stockholder received pursuant to Section 1.01(b), and
(y) such Stockholder's pro rata share of the Escrow Amount. Notwithstanding the
foregoing or any provision contained in this Agreement to the contrary, each
Stockholder shall have sole liability in respect of breaches of his or her
respective representations, warranties or covenants, which liability shall in
all respects be several and not
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joint, and no other Stockholder shall have any liability of any nature
whatsoever (whether under this Agreement, by law or otherwise) for the breaches
of any representation, warranty or covenant of another Stockholder.
(v) In calculating the amount of any Damages, there shall be
taken into account the present value (assuming a discount rate of 8%) of any net
Tax benefit or liability realized by a Purchaser Indemnitee or Stockholder, as
applicable, arising from the incurrence or payment of any such Damages. Any
indemnification payment hereunder shall initially be made without regard to this
Section 10.01(d)(v) and shall be reduced or increased to reflect any such net
Tax benefit or liability only after such Purchaser Indemnitee or Stockholder has
actually realized such benefit or incurred such liability.
(vi) In calculating the amount of any Damages, there shall be
taken into account any Net Insurance Recovery received or receivable by a
Purchaser Indemnitee or Stockholder, as applicable, with respect to such
Damages. If a Purchaser Indemnitee or Stockholder receives any such Net
Insurance Recovery or other such payment after receiving any payment with
respect to such Damages, the Purchaser Indemnitee or Stockholder, as applicable,
shall promptly return such payment to the extent of such Net Insurance Recovery.
Nothing contained in this Section 10.01(d)(vi) shall obligate any party to
obtain or maintain insurance or to assert any claim or otherwise seek to recover
in respect of any Damages from any insurer.
(e) NOTICE AND OPPORTUNITY TO DEFEND.
(i) If there occurs an event which a Purchaser Indemnitee or a
Stockholder asserts is an indemnifiable event pursuant to Section 10.01(a) or
10.01(b) hereof, the Purchaser, on behalf of such Purchaser Indemnitee, or such
Stockholder, shall notify all Stockholders, including the other party or parties
obligated to provide indemnification (the "Indemnifying Party") promptly upon
its determination to seek indemnification; provided, however, that no delay on
the part of the person seeking indemnification in notifying the Indemnifying
Party shall relieve the Indemnifying Party from any liability or obligation
hereunder unless (and then solely to the extent that) the Indemnifying Party was
damaged by such delay.
(ii) If there occurs an event which a Purchaser Indemnitee or a
Stockholder asserts is an indemnifiable event pursuant to Section 10.01(a) or
10.01(b), as applicable, which involves any claim or the commencement of any
claim, action or proceeding by a third person, the Purchaser, on behalf of such
Purchaser Indemnitee, or such Stockholder, will give the Indemnifying Party
prompt written notice of such claim or the commencement of such action or
proceeding; provided, however, that the failure to provide prompt notice as
provided herein will relieve the Indemnifying Party of its obligations hereunder
only to the extent that the Indemnifying Party was damaged by such delay. If any
such action shall be brought against any person seeking indemnification and the
Purchaser or such person, as applicable, shall notify the Indemnifying Party of
the commencement thereof, the Indemnifying Party shall be entitled to
participate therein and may elect, within fifteen (15) days of receiving such
notice, to assume the defense thereof, with counsel reasonably satisfactory to
such person
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seeking indemnification (provided that the Indemnifying Party shall only be
entitled to assume the defense of such action to the extent that the action
seeks only money damages from, and not injunctive or other equitable relief
against, such person seeking indemnification) and, after notice from the
Indemnifying Party of such election to assume the defense thereof, the
Indemnifying Party shall not be liable to the person seeking indemnification
hereunder for any legal expenses of other counsel or any other expenses
subsequently incurred by such person in connection with the defense thereof. The
person seeking indemnification agrees to cooperate fully with the Indemnifying
Party and its counsel in the defense against any such asserted liability. The
person seeking indemnification shall have the right to participate at its own
expense in the defense of such asserted liability. No settlement shall be
effected by the Indemnifying Party without the consent of the person seeking
indemnification (which consent shall not be unreasonably withheld) unless such
settlement provides that, with respect to the person seeking indemnification,
such person seeking indemnification is fully and unconditionally released from
all asserted liability (without any liability for payment). No settlement shall
be effected by a person seeking indemnification without the consent of the
Indemnifying Party, such consent not to be unreasonably withheld, unless the
person seeking indemnification would be liable for at least fifty percent of any
payments due pursuant to the terms of such settlement.
(f) Adjustment to Purchase Price. Any amounts paid pursuant to this
Article 10 or Article 8 shall be treated for all purposes as an adjustment to
the purchase price.
(g) CLAIMS AGAINST TAX ACCOUNTANTS.
(i) In the event that a Purchaser Indemnitee makes a claim for
indemnification pursuant to Section 10.01(a)(ii), then, any one of the
Stockholders may request that the Company assign to such Stockholder (the
"Requesting Stockholder") any cause of action or other claim that the Company
has or may have against Shilling & Xxxxxx Inc., the Company's former tax
accountants ("Shilling & Xxxxxx"). The Requesting Stockholder shall send notice
to the other Stockholders (the "Non-Requesting Stockholders") regarding such
request (the "Request"). The Non-Requesting Stockholders shall have thirty (30)
days from the date of receipt of such notification to notify the Requesting
Stockholder whether or not the Non-Requesting Stockholder wishes to join the
Request. If a Non-Requesting Stockholder joins the Request, he shall become a
Requesting Stockholder. If there is more than one Requesting Stockholder, then
decisions regarding the Request and any subsequent assignment, legal action
and/or settlement that arises from such Request shall be made by a majority of
the Requesting Stockholders (the "Majority Requesting Stockholders"); provided
that such majority shall be determined based upon each Requesting Stockholders
pro rata number of shares (the "Requesting Stockholder's Pro Rata Share"). Each
Requesting Stockholder's Pro Rata Share shall be equal to the number of shares
held by such Requesting Stockholder as set forth in '1.01(a) of this Agreement
as a percentage of the total number of all the shares of all Requesting
Stockholders. If there is only one Requesting Stockholder, then the references
to "Majority Requesting Stockholders" in Sections 10.01(g)(ii)-(g)(iv) below
shall mean "Requesting Stockholder."
(ii) In the event that, in the reasonable judgment of the
Majority Requesting Stockholders and the Company, the assignment referred to in
Section 10.01(g)(i) is
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illegal, against public policy or otherwise impracticable, the Company will, if
so requested by the Majority Requesting Stockholders, pursue all remedies,
including legal and equitable remedies that may reasonably be available to the
Company against Shilling & Xxxxxx so long as the Company, in its good faith
judgment, determines that the Requesting Stockholders are capable of bearing and
willing to bear the costs and expenses, including legal fees and expenses, of
pursuing such remedies. The Requesting Stockholders shall be solely responsible
for the payment of all costs and expenses, including legal fees and expenses,
incurred by the Company in the pursuit of such remedies.
(iii) The Company agrees that it will not effect a settlement
with Shilling & Xxxxxx without the prior consent of the Majority Requesting
Stockholders, which consent will not be unreasonably withheld. In the event that
the Company is awarded any judgment against Shilling & Xxxxxx, or in the event
that the Company is paid any amounts pursuant to any settlement with Shilling &
Xxxxxx (the "Award"), the Company shall first be entitled to offset the
Reimbursement against any amounts owed by the Requesting Stockholders to the
Company pursuant to Section 10.01(g)(ii) (the "Company Reimbursement"). The
Company will then promptly reimburse each Requesting Stockholder for any amounts
paid by such Requesting Stockholder to a Purchaser Indemnitee pursuant to
Section 10.01(a)(ii) (the "Stockholder Reimbursement"). After the Company
Reimbursement and Stockholder Reimbursement, the Company shall then disburse the
remaining proceeds of the Award, if any, to the Requesting Stockholders based on
their respective Requesting Stockholder Pro Rata Share.
(iv) The Requesting Stockholders shall defend and indemnify and
hold harmless the Non-Requesting Stockholders from any and all costs, losses,
claims, liabilities, damages and expenses (including court costs and fees and
disbursements of counsel) incurred by any of the Non-Requesting Stockholders,
directly or indirectly, in connection with any claim, demand or cause of action
made by the Requesting Stockholders against Shilling & Xxxxxx pursuant to the
Request, including, but not limited to, any cross-claim or counterclaim that
arises in connection with such Request.
ARTICLE 11
MISCELLANEOUS
11.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"1996 Unaudited Financials" has the meaning set forth in Section
2.04(b).
"Action" means any action, suit, or legal, administrative or arbitral
proceeding or investigation before or by any Governmental Body.
"Affiliate," as applied to any Person, means any other Person directly
or indirectly controlling, controlled by or under common control with that
Person.
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"Affiliated Group" means an affiliated group as defined in Section 1504
of the Code (or any analogous combined, consolidated or unitary group defined
under state, local or foreign income Tax law) of which the Company or any of its
Subsidiaries is or has been a member.
"Agreement" has the meaning set forth in the preface.
"Another Transaction" has the meaning set forth in Section 8.08.
"Basket" has the meaning set forth in Section 10.01(d)(i).
"California Mortgages" means the deeds of trusts identified on Section
2.13(a)(iii) Part I of the Disclosure Schedule attached hereto.
"CERCLA" has the meaning set forth in Section 2.14(d).
"Class A Common Stock" has the meaning set forth in Section 1.01(a)(i).
"Class B Common Stock" has the meaning set forth in Section 1.01(a)(i).
"Closing" has the meaning set forth in Section 1.02.
"Closing Date" has the meaning set forth in Section 1.02.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface hereof (except with
respect to Section 2.16, in which case the "Company" has the meaning set forth
in Section 2.16(a) hereof).
"Company Expenses" means the fees and expenses payable by, or incurred
by or on behalf of, the Company in connection with the negotiation, execution
and delivery of this Agreement, the Escrow Agreement, the Employment Agreement
and the Release and Non-Competition Agreement, the preparation of the 1996
Audited Financials, other fees specified in Section 2.21 of the Disclosure
Schedule, and the consummation of the transactions contemplated hereby and
thereby.
"Confidential Information" means any confidential or proprietary
information regarding the Company, its Intellectual Property, its other assets
or its operations.
"Confidentiality Agreement" means that certain Nondisclosure Agreement
dated July 16, 1997 between Xxxxx Xxxxxx and the Company.
"Consulting Agreements" means (i) the Consulting Agreement effective as
of January 1, 1997 between the Company and Xxxx X. Xxxxx; (ii) the Consulting
Agreement
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effective as of January 1, 1997 between the Company and Xxxxx X. Xxxxxx; and
(iii) the Consulting Agreement effective as of January 1, 1997 between the
Company and Xxxx X. Xxxxxx.
"Damages" has the meaning set forth in Section 10.01(a).
"Danish Mortgages" means the mortgages identified on Section
2.13(a)(iii)Part 2 of the Disclosure Schedules attached hereto.
"Disclosure Schedule" has the meaning set forth in Section 2.01.
"Employee Benefit Plan" has the meaning set forth in Section 2.16(a).
"Employment Agreement" has the meaning set forth in Section 6.10.
"Encumbrances" has the meaning set forth in Section 1.01(a).
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Account" shall have the meaning set forth in the Escrow
Agreement.
"Escrow Agent" has the meaning set forth in the Escrow Agreement.
"Escrow Agreement" has the meaning set forth in Section 5.07.
"Escrow Amount" means $625,000.
"Existing Common Stock" means the Class A Common Stock and the Class B
Common Stock.
"Existing Stockholder Agreements" means the Old Employment Agreements,
the Consulting Agreements, the Settlement Agreement, the Shareholders Agreement,
the Irrevocable Proxy and Agreement dated as of February 18, 1997 between Xxxx
and Xxx Xxxxx, Xxxxx and Xxxx Xxxxxx, the Loan Agreement between Xxxx Xxxxx and
the Company dated July 24, 1996,
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and any other agreement, instrument, arrangement or obligation between any of
the Stockholders and between the Stockholders and the Company.
"Financial Statements" has the meaning set forth in Section 2.04.
"GAAP" means United States generally accepted accounting principles.
"Governmental Body" means any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or regulatory or political subdivision
thereof, or any federal, state or foreign court or arbitrator.
"Hellers" has the meaning set forth in the preface.
"Xxxxx Indebtedness" has the meaning set forth in Section 1.01(d).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" of any Person at any date means without duplication (a)
all indebtedness of such Person for borrowed money (including without limitation
accrued interest, fees, penalties and premiums or other payments in addition to
principal with respect thereto), (b) indebtedness representing the deferred
purchase price of property or services which, in accordance with GAAP, would be
required to be shown as a liability on the face of a balance sheet of such
Person on such date (other than trade payables and accrued expenses, incurred in
the ordinary course of business and payable in accordance with customary
practices), (c) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (d) all capitalized lease
obligations of such Person, (e) all obligations of such Person in respect of
banker's acceptances issued or created for the account of such Person, (f) all
obligations of such Person in respect of letters of credit issued for the
account of such Person, (g) all guarantees of such Person of any indebtedness or
obligations of any other Person of the types referred to in the preceding
clauses (a) through (f), and (h) all indebtedness or obligations of the types
referred to in the preceding clauses (a) through (g) of any other Person secured
by any Lien on any assets of such Person to the extent attributable to such
Person's interest in such assets, even though such Person has not assumed or
otherwise become liable for the payment thereof but excluding customer deposits
and interest payable thereon in the ordinary course of business.
"Indemnifying Party" has the meaning set forth in Section 10.01(e)(i).
"Intellectual Property" shall mean all of the following: (i) patents,
patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; (v) trade secrets, confidential information
and know-how (including but not limited to ideas, formulae, compositions,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, business
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and marketing plans, and customer and supplier lists and related information);
and (vi) computer software (including but not limited to data, data bases and
documentation).
"XX Xxxxxxx" has the meaning set forth in the preface.
"XX Xxxxxxx" has the meaning set forth in the preface.
"Law" means any law, statute, code, ordinance, rule, regulation or
other requirement of any Governmental Body.
"Leased Real Property" has the meaning set forth in Section 2.09(b).
"Leases" has the meaning set forth in Section 2.09(b).
"Lettermans" has the meaning set forth in the preface.
"Lien" means any mortgage, pledge, lien, charge, security interest,
adverse claim, option, right, restriction on transfer or other encumbrance of
any nature.
"Major Accounts" means the Company's accounts set forth in Section
2.13(a)(x) of the Disclosure Schedule attached hereto.
"Majority Stockholders" means Stockholders owning (as of the date
hereof) more than 50% of the Shares.
"Management Loan Amount" means, with respect to a Stockholder, all
outstanding Indebtedness of such Stockholder owed to the Company as of the
Closing Date, which such amounts are set forth in Section 2.13(a)(iv) of the
Disclosure Schedules attached hereto.
"Minimum Claim Amount" has the meaning set forth in Section
10.01(d)(i).
"Most Recent Financial Statements" has the meaning set forth in Section
2.04.
"Net Insurance Recovery" means, with respect to any Person, any
insurance proceeds recovered by such Person or any Affiliate in respect of
Damages less 150% of the annual premium paid (taking into account only premiums
paid after the Closing Date) by such Person or any Affiliate thereof in the most
recent fiscal year in respect of such insurance (provided such Person shall
provide proper documentation to the indemnifying party evidencing the payment of
such premiums ) but shall not include any proceeds under any insurance policy
pursuant to which premiums are normally adjusted to reimburse the insurer for
the material part of proceeds paid out in previous years.
"Old Employment Agreements" means (i) the Employment Agreement dated
December 31, 1995 between the Company and Xxxxxxx X. Xxxxxx, as amended, and
(ii) the
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Employment Agreement dated December 31, 1995 between the Company and Xxxxxx X.
Xxxxxxxxx, as amended.
"Order" means any order, judgment, injunction, award, decree or writ of
any Governmental Body.
"Permitted Liens" means (i) Liens for Taxes or other governmental
charges or levies which are not delinquent or are being contested in good faith
and by appropriate proceedings, and with respect to which adequate reserves have
been established, and are being maintained, in accordance with GAAP, (ii)
mechanic's, worker's, materialmen's and other like Liens arising in the ordinary
course of business in respect of obligations which are not delinquent or which
are being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens arising in the ordinary course
of business for sums being contested in good faith and by appropriate
proceedings, and with respect to which adequate reserves have been established,
and are being maintained, in accordance with GAAP, or for sums not due, and (iv)
other Liens which do not materially impair the occupancy or use of the property
or asset burdened by such matter for the purposes for which it is currently used
in connection with the business of the Company.
"Person" means an individual, a partnership, a joint venture, a
corporation, an association, a joint stock company, a limited liability company,
a trust, an unincorporated organization or a government or any department or
agency or political subdivision thereof.
"Purchaser" has the meaning set forth in the preface.
"Purchaser Expenses" means the fees and expenses payable by, or
incurred by or on behalf of, Purchaser in connection with the negotiation,
execution and delivery of this Agreement, the Escrow Agreement, the Employment
Agreement and the Release and Non-Competition Agreement and the consummation of
the transactions contemplated hereby and thereby.
"Purchaser Indemnitees" has the meaning set forth in Section 10.01(a).
"Robins" has the meaning set forth in the preface.
"S Elections" has the meaning set forth in Section 2.12(b)(vii).
"Seller Expenses" means the fees and expenses payable by, or incurred
by or on behalf of, a Stockholder (as opposed to by or on behalf of the Company)
in connection with the negotiation, execution and delivery of this Agreement,
the Escrow Agreement, the Employment Agreement and the Release and
Non-Competition Agreement and the consummation of the transactions contemplated
hereby and thereby.
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"Settlement Agreement" means the Settlement Agreement effective as of
June 18, 1997 among the Company and the Stockholders.
"Shareholders Agreement" means the Shareholder Agreement effective as
of July 2, 1996 among the Company and the Stockholders.
"Shares" has the meaning set forth in Section 1.01(a).
"Shilling & Xxxxxx" has the meaning set forth in Section 10.01(g).
"Stockholder Confidential Information" means, with respect to a
Stockholder, any confidential or proprietary information regarding such
Stockholder.
"Stockholders" has the meaning set forth in the preface.
"Subsidiary" means any Person of which at least 50% of the outstanding
shares, partnership interests, or other equity interests having ordinary voting
power for the election of directors or comparable managers of such Person are
owned, directly or indirectly, by the Company, any one or more Subsidiaries of
the Company, or by the Company and one or more Subsidiaries of the Company.
"SWDA" has the meaning set forth in Section 2.14(d).
"Tax" means any (A) federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties or additions to tax or
additional amounts in respect of the foregoing; (B) liability of the Company for
the payment of any amounts of the type described in clause (A) arising as a
result of being (or ceasing to be) a member of any Affiliated Group (or being
included (or required to be included) in any Tax Return relating thereto); and
(C) liability of the Company for the payment of any amounts of the type
described in clause (A) as a result of any express or implied obligation to
indemnify or otherwise assume or succeed to the liability of any other Person.
"Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"Xxxxxx Indebtedness" has the meaning set forth in Section 1.01(d).
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11.2 Governing Law. This Agreement shall be construed under and governed by
the laws of the State of California without regard to the conflicts of laws
provisions thereof.
11.3 Arbitration. In the event of any dispute between the parties regarding
this Agreement, the parties shall submit to binding arbitration, conducted in
San Jose, California. The arbitration shall be conducted pursuant to the rules
of the American Arbitration Association and judgment upon the award rendered by
the arbitrators may be enforced in any court having jurisdiction thereof. The
parties shall pay the expenses of their own representative, if any, and shall
share equally all other costs of the Arbitration, including the arbitrator's
fees and expenses. The arbitrators shall award all legal fees, costs, and
expenses related to the Arbitration to the party the arbitrators determine to be
the prevailing party.
11.4 Amendment. This Agreement may not be amended, modified or supplemented
except upon the execution and delivery of a written agreement executed by the
Purchaser, on the one hand, and the Majority Stockholders, on the other hand.
11.5 No Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties hereto; provided that Purchaser may assign
all of its rights and obligations hereunder to any Affiliate of Purchaser
without the consent of the Stockholders or the Company; and, provided further,
that Purchaser may assign any or all of its rights hereunder, without the
consent of the Stockholders or the Company (i) to any lender providing financing
to Purchaser or its Affiliates, and (ii) following the Closing, in connection
with any sale of all or substantially all of the assets, capital stock or
business of Purchaser or the Company (whether effected by sale, exchange,
merger, consolidation or other transaction).
11.6 Waiver; Liability. Any of the terms or conditions of this Agreement
which may be lawfully waived may be waived in writing at any time by each party
which is entitled to the benefits thereof. Any waiver of any of the provisions
of this Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
11.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by facsimile, by reputable overnight courier (postage prepaid) or by
mail (registered or certified mail, postage prepaid, return receipt requested)
to the respective parties as follows:
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If to Purchaser:
Global Vacation Group, Inc.
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
Attention: Xxxxx Xxxxxx
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
Attention: Xxxx X. Xxxxx, Esq.
If to a Stockholder, at the address set forth below such Stockholder's name
on the signature pages hereto.
If to the Company:
Classic Custom Vacations
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000 or 000-0000
Telephone: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: 000-000-0000
Telephone: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
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and to:
Xxxxxx & Xxxxxxx
00 Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
Attention: Xxxxxxxxxxx Xxxxxxx, Esq.
and to:
Troop Xxxxxxxxx Xxxxxxx & Xxxxxx LLP
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: 000-000-0000
Telephone: 000-000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner. Notices will be deemed to have been
given hereunder when delivered personally, upon receipt of electronic
confirmation of transmission when sent via facsimile, five business days after
deposit in the U.S. mail and one business day after deposit with a reputable
overnight courier service.
11.8 Complete Agreement. This Agreement, the Exhibits and Schedules hereto
(including the Disclosure Schedule), the other certificates, documents and
writings referred to herein, delivered pursuant hereto or executed and delivered
concurrent with the execution and delivery hereof, and the Confidentiality
Agreement (which shall be terminated as of the Closing Date without any further
action of the parties thereto) contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and thereof. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.9 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
11.10 Headings. The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
11.11 Severability. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions
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hereof in such jurisdiction or rendering that or any other provision of this
Agreement invalid, illegal or unenforceable in any other jurisdiction.
11.12 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any Person, other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement.
11.13 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the Stockholders, the Company and Purchaser
have caused this Stock Purchase Agreement to be executed as of the date below.
CLASSIC CUSTOM VACATIONS
Date: April 20, 1998 By:/s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: CEO
GLOBAL VACATION GROUP, INC.
Date: April 20, 1998 By:/s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
Date: April 20, 1998 /s/ Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
Address: 000 X. Xxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx
Address: 000 Xxxx Xxxxx
Xxx Xxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Address: 00 Xxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
S-1
45
Date: April 20, 1998 /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Address: 00000 Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Date: April 20, 1998 /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
Address: 00000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
Address: 000 X. Xxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx
Address: 000 Xxxx Xxxxx
Xxx Xxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
Address: 00 Xxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Date: April 20, 1998 /s/ Xxxx X. Xxxxxx, Attorney-in-Fact
for Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Address: 00000 Xxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Date: April 20, 1998 Xxx Xxxxx by: /s/ Xxxx X. Xxxxx,
Attorney-in Fact
------------------------------------
Xxx Xxxxx
Address: 00000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
S-2
46
The Exhibits and Schedules to this Stock Purchase Agreement are not included
with this Registration Statement on Form S-1. The Registrant will provide these
Exhibits and Schedules upon the request of the Securities and Exchange
Commission.
