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Exhibit 10.4
EQUITY SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made as of May 4, 1998 by and among GLOBAL
VACATION GROUP, INC. (formerly Allied Bus Corp.), a New York corporation (the
"COMPANY"), and Xxxxx X. Xxxxxx (the "PURCHASER"). Except as otherwise
indicated, capitalized terms used herein are defined in Section 7 hereof.
The parties hereto agree as follows:
1. AUTHORIZATION OF STOCK. The Company has authorized
the issuance and sale to the Purchaser of (i) 2,160 shares of its Preferred
Stock, $1,000 par value per share (the "PREFERRED"), and (ii) 24,000 shares of
its Common Stock, $.01 par value per share (the "COMMON"). The Preferred and
the Common are collectively referred to herein as the "STOCK."
2. PURCHASE AND SALE OF THE STOCK. The parties will
execute and deliver counterparts of this Agreement and the Joinder to the
Shareholders Agreement (as defined in Section 3(d) below) on April __, 1998.
The subscription by the Purchaser will occur at a closing ("CLOSING") to be
held on that same date. At the Closing, the Company will sell to the Purchaser
and, subject to the terms and conditions set forth herein, the Purchaser will
purchase from the Company, (i) 2,160 shares of the Preferred at a price of
$1,000 per share and (ii) 24,000 shares of the Common at a price of $10 per
share (in the aggregate, a total price of $2,400,000). The Closing of the
purchase and sale of the Stock will be effected by exchange of documents,
certificates and agreements, by air courier, telefax or other means
satisfactory to the parties. At the Closing, the Company will issue and
deliver to the Purchaser certificates evidencing the Stock to be purchased by
the Purchaser, registered in the Purchaser's name, against payment of the
purchase price therefor by check or wire transfer of funds in the amount set
forth opposite the Purchaser's name on Exhibit A hereto.
3. CONDITIONS OF THE PURCHASER'S OBLIGATION AT THE
CLOSING. The obligation of the Purchaser to purchase and pay for the Stock at
the Closing is subject to the satisfaction as of the Closing of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Section 6 hereof will be true and
correct at and as of the Closing as though then made, except to the extent of
changes caused by the transactions expressly contemplated herein.
(b) CERTIFICATE OF INCORPORATION. The Company's
Certificate of Incorporation (the "CHARTER") in the form of Exhibit B hereto as
filed with the State of New York will be in full force and effect at the
Closing and will not have been further amended or modified.
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(c) EQUITY PURCHASE AGREEMENT. The Equity
Purchase Agreement dated March 27, 1998 (the "EQUITY PURCHASE AGREEMENT") among
the Company, Xxxxxx Equity Investors, III, L.P. ("XXXXXX III") and each of the
other Persons set forth in the Schedule of Purchasers attached thereto, will be
in full force and effect.
(d) SHAREHOLDERS AGREEMENT. The Company, Xxxxxx
III, and the other shareholders of the Company are parties to that certain
Shareholders Agreement dated March 27, 1998, in form and substance
substantially similar to Exhibit C attached hereto (the "SHAREHOLDERS
AGREEMENT"), and the Shareholders Agreement as so amended will be in full force
and effect as of the Closing.
(e) PROCEEDINGS. All corporate and other
proceedings taken or required to be taken in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto will be satisfactory in form and substance to the
Purchasers.
4. TRANSFER OF RESTRICTED SECURITIES.
(a) Restricted Securities are transferable
pursuant to (i) public offerings registered under the Securities Act, (ii) Rule
144 of the Securities and Exchange Commission (or any similar rule then in
force) if such rule is available and (iii) subject to the conditions specified
in Section 4(b) below, any other legally available means of transfer.
(b) In connection with the transfer of any
Restricted Securities (other than a transfer described in Section 4(a)(i) or
(ii) above), the holder thereof will deliver written notice to the Company
describing the transfer or proposed transfer, together with an opinion of Xxxxx
& Xxxxxxx, LLP or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that
such transfer of Restricted Securities may be effected without registration of
such Restricted Securities under the Securities Act. In addition, if the
holder of the Restricted Securities delivers to the Company an opinion of Xxxxx
& Xxxxxxx, LLP or such other counsel that no subsequent transfer of such
Restricted Securities will require registration under the Securities Act, the
Company will promptly upon such contemplated transfer deliver new certificates
for such Restricted Securities which do not bear the Securities Act legend set
forth in Section 8(a). If the Company is not required to deliver such new
certificates for such Restricted Securities, the holder thereof will not
transfer the same until the prospective transferee has confirmed to the Company
in writing its agreement to be bound by the conditions contained in this
Section 4(b) and Section 8(a).
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants to the Company that he is purchasing and will
purchase the Stock for his own account, with no present intention of
distributing or reselling the Stock or any part thereof, and that he is
prepared to bear the economic risk of retaining the Stock for an indefinite
period, all without prejudice, however, to his right at any time, in accordance
with this Agreement, lawfully to sell or otherwise dispose of all or any part
of the Stock held by him. The Purchaser also represents and warrants that he
is an accredited investor, as such term is defined in Rule 501
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of Regulation D promulgated under the Securities Act, and that he has had the
opportunity to ask questions of the Company's management with respect to his
investment. The Purchaser agrees that if, and to the extent, he elects to sell
the Stock, he will do so in compliance with the provisions and requirements of
the Securities Act and applicable state securities laws. The Purchaser further
represents that he has full authority to enter into the transactions
contemplated by this Agreement and to perform his obligations hereunder.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchaser to enter into this Agreement and purchase
the Stock, the Company hereby represents and warrants that:
(a) ORGANIZATION AND CORPORATE POWER. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York and is qualified to do business in
every jurisdiction in which the failure so to qualify might reasonably be
expected to have a material adverse effect on the financial condition,
operating results or business prospects of the Company. The Company has all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement. The copies of the
Company's Charter and bylaws that have been furnished to the Purchaser's
counsel reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
(b) CAPITAL STOCK AND RELATED MATTERS.
(i) As of the Closing and immediately
thereafter, the authorized capital stock of the Company will
consist of (A) 100,000 shares of the Preferred, of which
36,724.64 shares will be issued and outstanding, and (B)
6,000,000 shares of the Common, of which 639,174.4 shares will
be issued and outstanding. As of the Closing, the Company
will not have outstanding any stock or securities convertible
or exchangeable for any shares of its capital stock, nor will
it have outstanding any rights or options to subscribe for or
to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock, except
as described in the Equity Purchase Agreement. As of the
Closing, the Company will not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock, except pursuant to
its Charter and the Management Agreements with each of Xxxxx
Xxxxxx ("XXXXXX"), Xxxxxxx Xxxxx ("XXXXX") and Xxxxxx Xxxxxx
("XXXXXX"). As of the Closing, all of the outstanding shares
of the Company's capital stock will be validly issued, fully
paid and nonassessable.
(ii) Except as provided in the Equity
Purchase Agreement, there are no statutory or contractual
shareholders preemptive rights with respect to the issuance of
the Stock hereunder. Based in part on the investment
representations of the Purchaser in Section 5 above, the
Company has not violated
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any applicable federal or state securities laws in connection
with the offer, sale or issuance of any of the Stock, and the
offer, sale and issuance of the Stock hereunder do not require
registration under the Securities Act or any applicable state
securities laws. To the best of the Company's knowledge,
there are no agreements among the Company's shareholders with
respect to the voting or transfer of the Company's capital
stock or with respect to any other aspect of the Company's
affairs other than the Equity Purchase Agreement, the
Shareholders Agreement, [THE REGISTRATION AGREEMENT] or the
Management Agreements with Xxxxxx, Xxxxx and Xxxxxx.
(c) SUBSIDIARIES. The Company does not own or
hold any rights to acquire any shares of stock or any other security or
interest in any other Person, other than (i) Haddon Holidays, Inc. following
the consummation on March 30, 1998 of the Company's acquisition thereof and
Globetrotters, Inc. following the consummation on May 4, 1998 of the Company's
acquisition thereof, and (ii) the Company entered into a Stock Purchase
Agreement with Globetrotters, Inc. and Xxxxxx Xxxxxxxx on May 4, 1998 for the
acquisition of all the outstanding capital stock of Globetrotters, Inc..
(d) AUTHORIZATION; NO BREACH. The execution,
delivery and performance of this Agreement, the Shareholders Agreement, and all
other agreements contemplated hereby to which the Company is a party have been
duly authorized by the Company. This Agreement and each of the Shareholders
Agreement, the Charter and the other agreements contemplated hereby constitutes
a valid and binding obligation of the Company, enforceable in accordance with
its terms. The execution and delivery by the Company of this Agreement, the
Shareholders Agreement and all other agreements contemplated hereby to which
the Company is a party, the offering, sale and issuance of the Stock hereunder,
and fulfillment of and compliance with the respective terms hereof and thereof
by the Company, do not and will not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's capital stock or assets pursuant to, (iv) give any third
party the right to accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or other
action by or notice to any court or administrative or governmental body
pursuant to, the Charter or bylaws of the Company, or any law, statute, rule or
regulation to which the Company is subject, or any agreement, instrument,
order, judgment or decree to which the Company is a party or by which it is
bound.
(e) BROKERAGE. There are no claims against the
Company for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon the Company.
(f) GOVERNMENTAL CONSENT, ETC. No permit,
consent, approval or authorization of, or declaration to or filing with, any
governmental authority is required in connection with the execution, delivery
and performance by the Company of this Agreement or
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the other agreements contemplated hereby, or the consummation by the Company of
any other transaction contemplated hereby or thereby.
(g) COMPLIANCE WITH LAWS. The Company is not in
violation of any law or any regulation or requirement which violation might
reasonably be expected to have a material adverse effect upon the financial
condition, operating results or business prospects of the Company and the
Company has not received notice of any such violation.
(h) DISCLOSURE. Neither this Agreement nor any
of the schedules, attachments, written statements, documents, certificates or
other items prepared or supplied to the Purchaser by or on behalf of the
Company with respect to the transactions contemplated hereby contains any
untrue statement of a material fact or omits a material fact necessary to make
each statement contained herein or therein not misleading. There is no fact
which the Company has not disclosed to the Purchaser in writing and of which
any of its officers, directors or executive employees is aware and which could
reasonably be anticipated to have a material adverse effect upon the existing
or expected financial condition, operating results, assets, customer relations,
employee relations or business prospects of the Company.
(i) CLOSING DATE. The representations and
warranties of the Company contained in this Section 6 and elsewhere in this
Agreement and all information contained in any exhibit, schedule or attachment
hereto or in any writing delivered by, or on behalf of, the Company to the
Purchaser will be true and correct in all material respects on the date of the
Closing as though then made, except as affected by the transactions expressly
contemplated by this Agreement.
7. DEFINITIONS. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"PERSON" means an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization or a governmental entity or any department,
agency or political subdivision thereof.
"RESTRICTED SECURITIES" means the Stock issued
hereunder, and any securities issued with respect thereto by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Restricted Securities, such securities will cease to be Restricted
Securities when they have (a) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering
them, (b) become eligible for sale and have actually been sold to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or (c) been otherwise transferred and new certificates for them
not bearing the Securities Act legend set forth in Section 8(a) have been
delivered by the Company in accordance with Section 4(b). Whenever any
particular securities cease to be Restricted Securities, the holder thereof
will be entitled to receive from the Company, without expense, new securities
of like tenor not bearing a Securities Act legend of the character set forth in
Section 8(a).
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"SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended, or any similar federal law then in force.
"SUBSIDIARY" means any corporation of which the
securities having a majority of the ordinary voting power in electing the board
of directors are, at the time as of which any determination is being made,
owned by the Company either directly or through one or more Subsidiaries.
8. MISCELLANEOUS.
(a) RESTRICTIVE LEGEND. Each certificate for
Restricted Securities will be imprinted with a legend in substantially the
following form:
The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended. The transfer of the securities
represented by this certificate is subject to the
conditions specified in the Equity Subscription
Agreement, dated as of March 30, 1998, by and between
the issuer (the "COMPANY") and a certain investor,
and the Company reserves the right to refuse the
transfer of such securities until such conditions
have been fulfilled with respect to such transfer. A
copy of such conditions will be furnished by the
Company to the holder hereof upon written request and
without charge.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise
expressly provided herein or in any instruments of transfer or assignment, all
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the Purchaser's benefit as a
purchaser or holder of Stock are also for the benefit of, and enforceable by,
any subsequent holder of such Stock.
(c) COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, both of which need not contain the signatures
of more than one party, but both such counterparts taken together will
constitute one and the same Agreement.
(d) DESCRIPTIVE HEADINGS. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
(e) GOVERNING LAW. This Agreement will be
governed by the internal law, and not the law of conflicts, of the State of New
York.
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(f) NOTICES. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement will be in writing and will be deemed to have been given when
delivered personally, or sent by telex or facsimile transmission, or sent by
receipted air courier, or mailed by certified or registered mail, return
receipt requested and postage prepaid, to the recipient. Such notices, demands
and other communications will be sent to the Company and the Purchaser at the
address indicated below:
Notice to the Company
Global Vacation Group, Inc.
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Notice to the Purchaser
JFM Enterprises
0000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
GLOBAL VACATION GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Vice President and Secretary
PURCHASER:
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
The Exhibits to this Equity Subscription Agreement are not included with this
Registration Statement on Form S-1. AnswerThink will provide these exhibits
and schedules upon the request of the Securities and Exchange Commission.
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