Exhibit 99.1
ASSET PURCHASE AGREEMENT
Among
CLASSIC CUSTOM VACATIONS,
CLASSIC VACATION GROUP, INC.
and
EXPEDIA, INC.
Dated as of January 22, 2002
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms ........................................ 2
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Assets to Be Sold ............................................ 9
SECTION 2.02 Assumption and Exclusion of Liabilities ...................... 11
SECTION 2.03 Purchase Price ............................................... 11
SECTION 2.04 Closing ...................................................... 11
SECTION 2.05 Closing Deliveries by the Company ............................ 12
SECTION 2.06 Closing Deliveries by the Purchaser .......................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CLASSIC
SECTION 3.01 Organization, Authority and Qualification of the Company ..... 12
SECTION 3.02 Subsidiaries ................................................. 13
SECTION 3.03 No Conflict .................................................. 13
SECTION 3.04 Governmental Consents and Approvals .......................... 13
SECTION 3.05 Financial Information, Books and Records ..................... 14
SECTION 3.06 No Undisclosed Liabilities ................................... 14
SECTION 3.07 Receivables .................................................. 14
SECTION 3.08 Payables ..................................................... 15
SECTION 3.09 Bookings ..................................................... 15
SECTION 3.10 Conduct in the Ordinary Course; Absence of Certain
Changes, Events and Conditions ............................... 15
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SECTION 3.11 Litigation ................................................... 17
SECTION 3.12 Certain Interests ............................................ 18
SECTION 3.13 Compliance with Laws ......................................... 18
SECTION 3.14 Environmental Matters ........................................ 19
SECTION 3.15 Material Contracts ........................................... 19
SECTION 3.16 Intellectual Property ........................................ 20
SECTION 3.17 Real Property ................................................ 20
SECTION 3.18 Assets ....................................................... 21
SECTION 3.19 Consortia .................................................... 22
SECTION 3.20 Suppliers .................................................... 22
SECTION 3.21 Employee Benefit Matters ..................................... 22
SECTION 3.22 Labor Matters ................................................ 23
SECTION 3.23 Taxes ........................................................ 24
SECTION 3.24 Insurance .................................................... 24
SECTION 3.25 Full Disclosure .............................................. 24
SECTION 3.26 Brokers ...................................................... 24
SECTION 3.27 Board Approvals .............................................. 25
SECTION 3.28 Classic Destination Management ............................... 25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CLASSIC
SECTION 4.01 Organization, Authority and Qualification of Classic ......... 25
SECTION 4.02 No Conflict .................................................. 25
SECTION 4.03 Governmental Consents and Approvals .......................... 26
SECTION 4.04 SEC Filings; Financial Statements ............................ 26
SECTION 4.05 Full Disclosure .............................................. 26
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SECTION 4.06 Brokers ...................................................... 27
SECTION 4.07 Cash Contribution; Restricted Cash ........................... 27
SECTION 4.08 Board Approvals; Vote Required ............................... 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 5.01 Organization and Authority of the Purchaser .................. 28
SECTION 5.02 No Conflict .................................................. 28
SECTION 5.03 Governmental Consents and Approvals .......................... 28
SECTION 5.04 Brokers ...................................................... 28
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Conduct of Business Prior to the Closing ..................... 29
SECTION 6.02 Access to Information ........................................ 29
SECTION 6.03 Confidentiality .............................................. 30
SECTION 6.04 Regulatory and Other Authorizations; Notices and Consents .... 31
SECTION 6.05 Notice of Developments ....................................... 32
SECTION 6.06 No Solicitation or Negotiation ............................... 32
SECTION 6.07 Use of Intellectual Property ................................. 32
SECTION 6.08 Further Action; Reasonable Best Efforts ...................... 33
SECTION 6.09 Information Statement ........................................ 33
SECTION 6.10 Stockholders' Meeting ........................................ 34
SECTION 6.11 Liquidating Distribution ..................................... 34
SECTION 6.12 Excluded Liabilities ......................................... 35
SECTION 6.13 Bulk Transfer Laws ........................................... 35
SECTION 6.14 Conveyance Taxes ............................................. 35
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SECTION 6.15 Contribution of Restricted Cash .............................. 35
SECTION 6.16 Material Contracts ........................................... 35
SECTION 6.17 Welfare Benefits for Transferred Employees ................... 35
SECTION 6.18 Letters of Credit ............................................ 35
SECTION 6.19 Transfer of Classic Contracts ................................ 36
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01 Conditions to Obligations of Each Party ...................... 36
SECTION 7.02 Conditions to Obligations of each of Classic
and the Company .............................................. 36
SECTION 7.03 Conditions to Obligations of the Purchaser ................... 37
ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.01 Termination .................................................. 38
SECTION 8.02 Effect of Termination ........................................ 39
SECTION 8.03 Waiver ....................................................... 39
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Expenses ..................................................... 39
SECTION 9.02 Notices ...................................................... 39
SECTION 9.03 Public Announcements ......................................... 40
SECTION 9.04 Headings ..................................................... 40
SECTION 9.05 Severability ................................................. 40
SECTION 9.06 Entire Agreement ............................................. 41
SECTION 9.07 Assignment ................................................... 41
SECTION 9.08 No Third Party Beneficiaries ................................. 41
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SECTION 9.09 Amendment .................................................... 41
SECTION 9.10 Governing Law ................................................ 41
SECTION 9.11 Counterparts ................................................. 42
SECTION 9.12 Specific Performance ......................................... 42
EXHIBITS
1.01(a) FORM OF ASSUMPTION AGREEMENT
1.01(b) FORM OF XXXX OF SALE AND ASSIGNMENT
3.05 REFERENCE BALANCE SHEET
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ASSET PURCHASE AGREEMENT, dated as of January 22, 2002, by and among
CLASSIC CUSTOM VACATIONS, a California corporation (the "Company"), CLASSIC
VACATION GROUP, INC. a New York corporation ("Classic"), and EXPEDIA, INC., a
Washington corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of providing customized
vacation product at various locations in the United States and other countries
(as conducted by the Company immediately prior to the date hereof, the
"Business");
WHEREAS, Classic owns all the issued and outstanding shares of capital
stock of the Company;
WHEREAS, the Company desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Company, the Business, including, without
limitation, all right, title and interest of the Company in and to the property
and assets of the Business, and in connection therewith the Purchaser is willing
to assume all of the liabilities of the Company relating thereto, except for
those specifically excluded hereunder, all upon the terms and subject to the
conditions set forth herein;
WHEREAS, the Board of Directors of Classic (the "Classic Board") has (i)
determined that this Agreement, the Liquidation and Indemnification Agreement
and the Note Purchase Agreement (each as defined below) are fair to, and in the
best interests of, Classic and its stockholders and has approved and adopted
this Agreement and declared its advisability and approved the other transactions
contemplated by this Agreement and (ii) has recommended the approval and
adoption of this Agreement by the stockholders of Classic;
WHEREAS, the Board of Directors of the Company (the "Company Board") has
(i) determined that this Agreement is fair to, and in the best interests of, the
Company and its stockholder and has approved and adopted this Agreement and
declared its advisability and approved the other transactions contemplated by
this Agreement and (ii) has recommended the approval and adoption of this
Agreement by the stockholder of the Company;
WHEREAS, as a condition to and contemporaneously with this Agreement, the
Purchaser, Classic, GV Investment LLC, a Delaware limited liability company
("GVI"), and CVG Investment LLC, a Delaware limited liability company ("CVGI")
are entering into a Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of the date hereof, pursuant to which the Purchaser has agreed to
acquire (i) from CVGI all of the outstanding 7.5% Convertible Senior
Subordinated Notes due December 31, 2006 issued by Classic and all of the 7.5%
Exchangeable Senior Subordinated Notes due December 31, 2006 issued by Classic
and (ii) from GVI all of the 9% Convertible Subordinated Notes due July 1, 2007
issued by Classic (collectively, the "Notes"), all on the terms and subject to
the conditions more particularly set forth therein;
WHEREAS, as a condition to and contemporaneously with this Agreement, each
of Xxxxxx Equity Investors III, L.P., a Delaware limited partnership ("Xxxxxx")
and Three Cities Fund III, L.P., a Delaware limited partnership ("TCR") are
entering into a Voting Agreement and
Irrevocable Proxy with the Purchaser (the "Voting Agreements"), dated as of the
date hereof, pursuant to which each of Xxxxxx and TCR are agreeing, among other
things, to vote at any stockholders' meeting of Classic in favor of the
transactions contemplated hereunder and to grant to the Purchaser with respect
to such matters an irrevocable proxy with respect to the voting securities of
Classic held by such entity, all on the terms and subject to the conditions more
particularly set forth therein;
WHEREAS, as a condition to and contemporaneously with this Agreement, each
of Xxxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx are entering into an employment
agreement with the Purchaser to be effective upon the consummation of the
transactions contemplated hereunder, all on the terms and subject to the
conditions more particularly set forth therein; and
WHEREAS, as a condition to and contemporaneously with this Agreement,
Classic, the Purchaser, Xxxxxx and Xxxxxx Xxxxxxxxx are entering into a
Liquidation and Indemnification Agreement (the "Liquidation and Indemnification
Agreement"), dated as of the date hereof, pursuant to which, among other things,
after the consummation of the transactions contemplated by this Agreement, (i)
Classic shall effect a liquidating distribution to its stockholders in
accordance with the NYBCL, (ii) the Purchaser shall use commercially reasonable
efforts to cause Xxxxxx Xxxxxxxxx to be available to assist Classic with
effecting such liquidating distribution, and (iii) each of Classic and Xxxxxx
shall indemnify and hold harmless the Purchaser and Xxxxxx Xxxxxxxxx for any
losses suffered by either the Purchaser or Xxxxxx Xxxxxxxxx in connection with
the winding up of Classic and such liquidating distribution, all on the terms
and subject to the conditions more particularly set forth therein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, the Company, the Purchaser and Classic
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
"Agreement" or "this Agreement" means this Asset Purchase Agreement, dated
as of January 22, 2002, among the Company, Classic and the Purchaser (including
the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made
in accordance with the provisions of Section 9.09.
"Amadeus Contract Amount " means $450,000.
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"Ancillary Agreements" means the Xxxx of Sale and the Assumption Agreement.
"Assets" has the meaning specified in Section 2.01(a).
"Assumed Liabilities" has the meaning specified in Section 2.02(a).
"Assumption Agreement" means the Assumption Agreement to be executed by the
Purchaser and the Company on the Closing Date substantially in the form of
Exhibit 1.01(a).
"Xxxx of Sale" means the Xxxx of Sale and Assignment to be executed by the
Company and Classic on the Closing Date substantially in the form of Exhibit
1.01(b).
"Business" has the meaning specified in the recitals to this Agreement.
"Business Day" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in the City of New
York.
"Classic" has the meaning specified in the preamble to this Agreement.
"Classic Board" has the meaning specified in the recitals to this
Agreement.
"Classic Contracts" has the meaning specified in Section 2.01(a)(xiii).
"Classic SEC Reports" has the meaning specified in Section 4.04(a).
"Closing" has the meaning specified in Section 2.04.
"Closing Date" has the meaning specified in Section 2.04.
"Code" means the Internal Revenue Code of 1986, as amended through the date
hereof.
"Company" has the meaning specified in the preamble to this Agreement.
"Company Board" has the meaning specified in the recitals to this
Agreement.
"Company Contracts" has the meaning specified in Section 2.01(a)(xii).
"Consolidated Corporation" means any corporation that was included in the
filing of a Return with Classic on a consolidated or combined basis.
"control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
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"CVGAC" means CVG Acquisition Corporation, a Delaware corporation and the
party that is the purchaser in connection with the pending Tender Offer.
"CVGI" has the meaning specified in the recitals to this Agreement.
"Disclosure Schedule" means the Disclosure Schedule of the Company attached
hereto, dated as of the date hereof, and forming a part of this Agreement.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership.
"Environment" means surface waters, groundwaters, surface water sediment,
soil, subsurface strata and ambient air.
"Environmental Claims" means any and all actions, suits, demands, demand
letters, claims, liens, notices of non-compliance or violation, notices of
liability or potential liability, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law, any
Environmental Permit or any Hazardous Material or arising from any alleged
injury or threat of injury to health or safety or related to the Environment.
"Environmental Law" means any Law, now or hereafter in effect and as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the Environment, or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required to operate the Business under any
applicable Environmental Law.
"ERISA" has the meaning specified in Section 3.21(a).
"Exchange Act" means Securities Exchange of 1934, as amended.
"Excluded Assets" has the meaning specified in Section 2.01(b).
"Excluded Liabilities" has the meaning specified in Section 2.02(b).
"Financial Statements" has the meaning specified in Section 3.05(a).
"Governmental Authority" means any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
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"GVI" has the meaning specified in the recitals to this Agreement.
"Hazardous Materials" means (a) petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials and polychlorinated biphenyls, and (b) any other chemicals, materials
or substances regulated as toxic or hazardous or as a pollutant, contaminant or
waste under any applicable Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, (a) all indebtedness of
such Person, whether or not contingent, for borrowed money, (b) all obligations
of such Person for the deferred purchase price of property or services (other
than trade credit extended in the ordinary course of business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with U.S. GAAP, recorded as
capital leases, (f) all obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities, (g) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of such Person or any warrants, rights or options to acquire
such capital stock, valued, in the case of redeemable preferred stock, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (h) all Indebtedness of others referred to in clauses (a)
through (f) above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (ii) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Indebtedness or
to assure the holder of such Indebtedness against loss, (iii) to supply funds to
or in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor against loss, and
(i) all Indebtedness referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"Information Statement" has the meaning specified in Section 6.09(a).
"Intellectual Property" means (a) inventions, whether or not patentable,
whether or not reduced to practice, and whether or not yet made the subject of a
pending patent application or applications, (b) ideas and conceptions of
potentially patentable subject matter, including, without limitation, any patent
disclosures, whether or not reduced to practice and whether or not yet made the
subject of a pending patent application or applications, (c) national (including
the United States) and multinational statutory invention registrations, patents,
patent
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registrations and patent applications (including all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations) and all
rights therein provided by international treaties or conventions (d) trademarks,
service marks, trade dress, logos, trade names and corporate names, whether or
not registered, including all common law rights, and registrations and
applications for registration thereof and all rights therein provided by
international treaties or conventions, (e) copyrights (registered or otherwise)
and registrations and applications for registration thereof, and all rights
therein provided by international treaties or conventions, (f) moral rights
(including, without limitation, rights of paternity and integrity), and waivers
of such rights by others, (g) computer software, in any and all forms and
versions, including, without limitation, source code, operating systems and
specifications, data, databases, Internet websites, domain names, web content
and links, files, documentation and other materials related thereto, (h)
confidential and proprietary information, including trade secrets and know-how,
(i) whether or not confidential, technology (including know-how and show-how),
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and information,
(j) copies and tangible embodiments of all the foregoing, in whatever form or
medium, (k) all rights to obtain and rights to apply for patents, and to
register trademarks and copyrights, and (l) all rights to xxx or recover and
retain damages and costs and attorneys' fees for present and past infringement
or misappropriation of any of the foregoing.
"IRS" means the Internal Revenue Service of the United States.
"Law" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law.
"LC Collateral Amount" has the meaning specified in Section 4.07.
"Letters of Credit" has the meaning specified in Section 4.07.
"Liabilities" means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including, without limitation, the Payables and those arising
under any Law (including, without limitation, any Environmental Law), Action or
Governmental Order and those arising under any contract, agreement, arrangement,
commitment or undertaking.
"Licensed Intellectual Property" has the meaning specified in Section
3.16(c).
"Liquidation and Indemnification Agreement" has the meaning specified in
the recitals to this Agreement.
"Material Adverse Effect" means any circumstance, change in, or effect on
the Business, Classic or the Company that, individually or in the aggregate with
any other circumstances, changes in, or effects on, the Business, Classic or the
Company: (a) is, or is reasonably likely to be, materially adverse to the
business, operations, assets or Liabilities, employee relationships, customer or
supplier relationships, prospects, results of operations or the condition
(financial or otherwise) of the Company, or (b) is reasonably likely to
materially and adversely affect the ability of the Purchaser or the Company to
operate or conduct the Business
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in the manner in which it is currently operated or conducted by Classic or the
Company; provided, however, that, in either case, the foregoing shall not
include any circumstance, change or effect resulting from the public
announcement or pendency of the transactions contemplated hereby.
"Material Contract" has the meaning specified in Section 3.15(a).
"Notes" has the meaning specified in the recitals to this Agreement.
"Note Purchase Agreement" has the meaning specified in the recitals to this
Agreement.
"NYBCL" means the Business Corporation Law of the State of New York.
"Owned Intellectual Property" has the meaning specified in Section 3.16(b).
"Payables" means any and all accounts payable, notes and other amounts
payable by the Company to third parties, including, without limitation,
customers, arising from the conduct of the Business or otherwise before the
Closing Date, whether or not in the ordinary course, together with all unpaid
financing charges accrued thereon.
"Permitted Encumbrances" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) liens for taxes, assessments and governmental charges or
levies not yet due and payable which are not in excess of the amount accrued
therefor on the Reference Balance Sheet; (b) Encumbrances imposed by law, such
as materialmen's, mechanics', carriers', workmen's and repairmen's liens and
other similar liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days and (ii)
are not in excess of $5,000 in the case of a single property or $50,000 in the
aggregate at any time; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations; and (d) minor survey exceptions, reciprocal easement
agreements and other customary encumbrances on title to real property that (i)
were not incurred in connection with any Indebtedness, (ii) do not render title
to the property encumbered thereby unmarketable and (iii) do not, individually
or in the aggregate, materially adversely affect the value or use of such
property for its current and anticipated purposes.
"Person" means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.
"Plans" has the meaning specified in Section 3.21(a).
"Purchase Price" has the meaning specified in Section 2.03(a).
"Purchase Price Bank Account" means a bank account in the United States to
be designated by the Company in a written notice to the Purchaser at least two
Business Days before the Closing.
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"Purchaser" has the meaning specified in the preamble to this Agreement.
"Receivables" means any and all accounts receivable, notes and other
amounts receivable by the Company from third parties, including, without
limitation, customers, arising from the conduct of the Business or otherwise
before the Closing Date, whether or not in the ordinary course, together with
all unpaid financing charges accrued thereon.
"Reference Balance Sheet" has the meaning specified in Section 3.05(a).
"Regulations" means the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal tax statutes.
"Release" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing and the like
into or upon any land or water or air or otherwise entering into the
Environment.
"Remedial Action" means any investigation, assessment, monitoring,
treatment, excavation, removal, remediation or cleanup of Hazardous Materials in
the Environment.
"Replacement Notes" means the Replacement Notes to be issued to the
Purchaser by Classic upon the consummation of the transactions contemplated by
the Note Purchase Agreement, all on the terms and subject to the conditions more
particularly set forth therein.
"Returns" has the meaning specified in Section 3.23.
"Restricted Cash" has the meaning specified in Section 4.07.
"Restricted Cash Shortfall" has the meaning specified in Section 2.06(a).
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholders' Meeting" has the meaning specified in Section 6.09(a).
"Tax" or "Taxes" means any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any government or taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges.
"TCR" has the meaning specified in the recitals to this Agreement.
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"Tender Offer" means the pending tender offer launched by CVGAC for the
shares of common stock of Classic held by unaffiliated public stockholders of
Classic.
"Xxxxxx" has the meaning specified in the recitals to this Agreement.
"Transferred Employees" has the meaning specified in Section 6.17.
"U.S. GAAP" means United States generally accepted accounting principles
and practices as in effect from time to time and applied consistently throughout
the periods involved.
"Voting Agreements" has the meaning specified in the recitals to this
Agreement.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Assets to Be Sold. (a) On the terms and subject to the
conditions of this Agreement, the Company shall, and with respect to any of the
Classic Contracts which have theretofore not been transferred to the Company in
accordance with Section 6.19 hereof, Classic shall (or shall cause its
Affiliates party thereto to), on the Closing Date, sell, assign, transfer,
convey and deliver to the Purchaser or cause to be sold, assigned, transferred,
conveyed and delivered to the Purchaser, and the Purchaser shall purchase from
the Company (or Classic, as applicable, for no additional consideration), on the
Closing Date, all the assets, properties, goodwill and business of every kind
and description and wherever located, whether tangible or intangible, real,
personal or mixed, directly or indirectly owned by the Company or to which it is
directly or indirectly entitled and, in any case, belonging to or used or
intended to be used in the Business, other than the Excluded Assets (the assets
to be purchased by the Purchaser being referred to as the "Assets"), including,
without limitation, the following:
(i) the Business as a going concern;
(ii) all rights in respect of leased real property;
(iii) all furniture, fixtures, equipment, machinery and other tangible
personal property used or held for use by the Company at the locations at which
the Business is conducted, or otherwise owned or held by the Company at the
Closing Date for use in the conduct of the Business and not otherwise included
in clause (ii) above;
(iv) all vehicles;
(v) all cash, cash equivalents and bank accounts (other than the Purchase
Price Bank Account) owned by the Company at the Closing Date;
(vi) all Receivables;
(vii) all books of account, general, financial, tax and personnel records,
invoices, shipping records, supplier lists, correspondence and other documents,
records and files and all computer software and programs and any rights thereto
owned, associated with or
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employed by the Company or used in, or relating to, the Business at the Closing
Date, other than organization documents, minute and stock record books and the
corporate seal of the Company;
(viii) the goodwill of the Company relating to the Business;
(ix) all the Company's right, title and interest in, to and under the Owned
Intellectual Property and the Licensed Intellectual Property;
(x) except for the Excluded Assets, all claims, causes of action, choses in
action, rights of recovery and rights of set-off of any kind (including rights
to insurance proceeds and rights under and pursuant to all warranties,
representations and guarantees made by suppliers of products, materials or
equipment, or components thereof), pertaining to, arising out of, and ensuring
to the benefit of the Company;
(xi) all sales and promotional literature, customer lists and other
sales-related materials owned, used, associated with or employed by the Company
at the Closing Date;
(xii) except for the Excluded Assets, all rights of the Company under all
contracts, licenses, sublicenses, agreements, leases, commitments, and sales and
purchase orders, and under all commitments, bids and offers (to the extent such
offers are transferable) (collectively, the "Company Contracts");
(xiii) except for the Excluded Assets, all rights of Classic (or its
Affiliates, other than the Company) under all contracts, licenses, sublicenses,
agreements, leases, commitments, and sales and purchase orders, and under all
commitments, bids and offers (to the extent such offers are transferable) which
relate to, or are required for, the Business, other than (1) employment
agreements or independent contractor or consulting agreements or arrangements,
(2) those Letters of Credit and the contracts or agreements related thereto
which are not transferred to the Purchaser, (3) insurance contracts, (4)
employee benefit plans or (5) to the extent that the Purchaser would be bound by
the exclusivity provisions thereof upon the assignment of such contract, the
Tour Operator Agreement, dated August 9, 2001, between the Hertz Corporation and
Classic (those contracts, licenses, sublicenses, agreements, leases,
commitments, and sales and purchase orders which are included among the Assets,
being, collectively, the "Classic Contracts");
(xiv) all municipal, state and federal franchises, permits, licenses,
agreements, waivers and authorizations held or used by the Company in connection
with, or required for, the Business, to the extent transferable; and
(xv) except for the Excluded Assets, all the Company's right, title and
interest on the Closing Date in, to and under all other assets, rights and
claims of every kind and nature used or intended to be used in the operation of,
or residing with, the Business.
(b) The Assets shall exclude the following assets owned by the Company (the
"Excluded Assets"):
(i) the Purchase Price Bank Account; and
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(ii) all rights of the Company under this Agreement and the Ancillary
Agreements.
SECTION 2.02 Assumption and Exclusion of Liabilities. (a) On the terms and
subject to the conditions of this Agreement, the Purchaser shall, on the Closing
Date, assume and shall pay, perform and discharge when due all Liabilities of
the Company (including all Liabilities under the Classic Contracts to the extent
they relate to the Business, regardless of whether consent is received for the
assignment of such Classic Contracts, and including the Assumed Taxes) as at the
Closing Date arising out of or relating to the Business, whether accrued or
arising before or after the Closing, except for the Excluded Liabilities (the
"Assumed Liabilities").
(b) The Company (or Classic, as applicable) shall retain, and shall be
responsible for paying, performing and discharging when due, and the Purchaser
shall not assume or have any responsibility for, the following Liabilities of
the Company as of the Closing Date which are not Assumed Liabilities (the
"Excluded Liabilities"):
(i) all Taxes (other than property, sales, use, workers compensation and
excise taxes, the taxes in this parenthetical being the "Assumed Taxes") now or
hereafter owed by Classic or any Affiliate of Classic, including the Company;
(ii) all Liabilities under the Classic Contracts which do not relate to the
Business;
(iii) all Liabilities under the Company Contracts which do not relate to
the Business;
(iv) all Liabilities relating to or arising out of the Excluded Assets; and
(v) all obligations of the Company under this Agreement and the Ancillary
Agreements.
SECTION 2.03 Purchase Price. (a) The aggregate purchase price for the
Assets shall be (i) $5,037,488.75 and (ii) the cancellation of the Replacement
Notes (the "Purchase Price").
(b) The sum of the Purchase Price and the Assumed Liabilities shall be
allocated among the Assets as of the Closing Date at the Purchaser's discretion
in a manner consistent with Treasury Regulation ss. 1.1060-1T(f). For all Tax
purposes, the Purchaser and the Company agree to report the transactions
contemplated in this Agreement in a manner consistent with the terms of this
Agreement and that none of them will take any position inconsistent therewith in
any Tax return, in any refund claim, in any litigation, or otherwise.
SECTION 2.04 Closing. Upon the terms and subject to the conditions of this
Agreement, the sale and purchase of the Assets and the assumption of the Assumed
Liabilities contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Shearman & Sterling, 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, at 10:00 A.M. local time on the third
Business Day following the later to occur of (A) expiration or termination
11
of all applicable waiting periods under the HSR Act and (B) satisfaction or
waiver of all other conditions to the obligations of the parties set forth in
Article VII (other than conditions which it is contemplated will be fulfilled at
the Closing), or at such other place or at such other time or on such other date
as Classic and the Purchaser may mutually agree upon in writing (the day on
which the Closing takes place being the "Closing Date").
SECTION 2.05 Closing Deliveries by the Company. At the Closing, the Company
shall deliver or cause to be delivered to the Purchaser:
(a) the Xxxx of Sale and such other instruments, in form and substance
satisfactory to the Purchaser, as may be requested by the Purchaser to transfer
the Assets to the Purchaser or evidence such transfer on the public records;
(b) an executed counterpart of the Assumption Agreement;
(c) a receipt for the Purchase Price; and
(d) the certificates and other documents required to be delivered pursuant
to Section 7.03.
SECTION 2.06 Closing Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver to the Company:
(a) the Purchase Price by wire transfer in immediately available funds to
the Purchase Price Bank Account; provided, however, the Purchase Price wired to
the Purchase Price Bank Account shall be reduced dollar for dollar by (i) the LC
Collateral Amount, (ii) the Amadeus Contract Amount and (iii) in the event that,
prior to the Closing, Classic has not contributed to the Company the entire
amount of the Restricted Cash (any such shortfall in such contribution being
referred to herein as the "Restricted Cash Shortfall"), the amount of the
Restricted Cash Shortfall;
(b) an executed counterpart of the Assumption Agreement;
(c) the Replacement Notes to be cancelled; and
(d) the certificates and other documents required to be delivered pursuant
to Section 7.02.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND CLASSIC
As an inducement to the Purchaser to enter into this Agreement, each of the
Company and, as applicable, Classic, hereby represents and warrants to the
Purchaser as follows:
SECTION 3.01 Organization, Authority and Qualification of the Company. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of California and has all necessary power and
authority to enter into this Agreement
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and the Ancillary Agreements, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The Company is duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the properties owned or leased by it or the
operation of its business makes such licensing or qualification necessary,
except to the extent that the failure to be so licensed or qualified would not
(i) adversely affect the ability of the Company to carry out its obligations
under, and to consummate the transactions contemplated by, this Agreement and
the Ancillary Agreements or (ii) individually or in the aggregate have a
Material Adverse Effect. The execution and delivery of this Agreement and the
Ancillary Agreements by the Company, the performance by the Company of its
obligations hereunder and thereunder and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Company. This Agreement has been, and upon
their execution the Ancillary Agreements shall have been, duly executed and
delivered by the Company, and (assuming due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and upon their execution the Ancillary Agreements will constitute, legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except that enforceability may be
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors rights generally and to general principles of equity.
SECTION 3.02 Subsidiaries. There are no corporations, partnerships, joint
ventures, associations or other entities in which the Company owns, of record or
beneficially, any direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same. The Company is not a member of
(nor is any part of the Business conducted through) any partnership. The Company
is not a participant in any joint venture or similar arrangement.
SECTION 3.03 No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 3.04 have been obtained
and all filings and notifications listed in Section 3.04 of the Disclosure
Schedule have been made, the execution, delivery and performance of this
Agreement and the Ancillary Agreements by the Company do not and will not (a)
violate, conflict with or result in the breach of any provision of the Articles
of Incorporation or By-laws (or similar organizational documents) of the
Company, (b) conflict with or violate in any material respect (or cause an event
which could have a Material Adverse Effect as a result of) any Law or
Governmental Order applicable to the Company, or any of its assets, properties
or businesses, including, without limitation, the Business, or (c) except as set
forth in Section 3.03(c) of the Disclosure Schedule, conflict with, result in
any breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on any of the assets or properties of the Company pursuant to, any
note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which the
Company is a party or by which any of such assets or properties is bound or
affected.
SECTION 3.04 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement and the Ancillary Agreements by the Company do
not and will not require any consent, approval, authorization or other order of,
action by, filing with or
13
notification to any Governmental Authority, except (a) as described in Section
3.04 of the Disclosure Schedule and (b) the notification requirements of the HSR
Act.
SECTION 3.05 Financial Information, Books and Records. (a) True and
complete copies of (i) the unaudited balance sheet of the Company for each of
the three fiscal years ended as of December 31, 2001, 2000 and 1999, and the
related unaudited statements of income of the Company (collectively referred to
herein as the "Financial Statements") have been delivered by the Company to the
Purchaser and, in the case of the unaudited balance sheet of the Company as of
December 31, 2001 (the "Reference Balance Sheet"), attached as Exhibit 3.05
hereto. The Financial Statements (i) were prepared in accordance with the books
of account and other financial records of the Company, (ii) present fairly the
financial condition and results of operations of the Company as of the dates
thereof or for the periods covered thereby, (iii) have been prepared in
accordance with U.S. GAAP applied on a basis consistent with the past practices
of the Company, and (iv) include all adjustments that are necessary for a fair
presentation of the financial condition of the Company and the results of the
operations of the Company as of the dates thereof or for the periods covered
thereby, subject to normal and recurring year-end adjustments which would not
have had, and would not have, individually or in the aggregate, a Material
Adverse Effect.
(b) The books of account and other financial records of the Company: (i)
reflect all items of income and expense and all assets and Liabilities required
to be reflected therein in accordance with U.S. GAAP applied on a basis
consistent with the past practices of the Company, (ii) are in all material
respects complete and correct, and do not contain or reflect any material
inaccuracies or discrepancies and (iii) have been maintained in accordance with
good business and accounting practices.
SECTION 3.06 No Undisclosed Liabilities. There are no material Liabilities
of the Company, other than Liabilities (i) reflected or reserved against on the
Reference Balance Sheet, (ii) disclosed in Section 3.06 of the Disclosure
Schedule. Reserves are reflected on the Reference Balance Sheet against all
Liabilities of the Company in amounts that have been established on a basis
consistent with the past practices of the Company and in accordance with U.S.
GAAP.
SECTION 3.07 Receivables. Section 3.07 of the Disclosure Schedule sets
forth an aged list of the material Receivables of the Company as of December 31,
2001 showing separately those material Receivables that as of such date had been
outstanding and the date from which they have been outstanding. Except to the
extent, if any, reserved for on the Reference Balance Sheet, all material
Receivables reflected on the Reference Balance Sheet arose from, and the
material Receivables existing on the Closing Date will have arisen from, the
sale of services to Persons not affiliated with the Company and in the ordinary
course of the Business consistent with past practice and, except as reserved
against on the Reference Balance Sheet, constitute or will constitute, as the
case may be, only valid, undisputed claims of the Company not subject to valid
claims of set-off or other defenses or counterclaims other than normal cash
discounts accrued in the ordinary course of the Business consistent with past
practice. To the knowledge of the Company, all material Receivables reflected on
the Reference Balance Sheet or arising from the date thereof until the Closing
(subject to the reserve for bad debts, if any, reflected on the Reference
Balance Sheet) are or will be good and have been collected or are or
14
will be collectible, without resort to litigation or extraordinary collection
activity, with respect to receivables payable in cash within 90 days of the
Closing Date, and with respect to receivables payable in kind in the ordinary
course of the Business consistent with past practice.
SECTION 3.08 Payables. Section 3.08 of the Disclosure Schedule sets forth
an aged list of certain Payables of the Company (namely, unvouchered payables to
hotels and vouchered trade payables) as of December 31, 2001 showing separately
those Payables that as of such date had been outstanding and the date from which
they have been outstanding. All material Payables reflected on the Reference
Balance Sheet arose from, and the material Payables existing on the Closing Date
will have arisen from, the purchase of services from Persons not affiliated with
the Company (except as disclosed in Section 3.08 of the Disclosure Schedule) and
in the ordinary course of the Business consistent with past practice and
constitute or will constitute, as the case may be, only valid, undisputed
obligations of the Company incurred in the ordinary course of the Business
consistent with past practice.
SECTION 3.09 Bookings. As of January 20, 2002, 2002 gross bookings accepted
by the Company totalled $115,175,833, and, as of the date immediately preceding
the date hereof, 2002 gross bookings accepted by the Company are estimated to be
$118,643,000 (subject to normal reconciliations which are completed on a weekly
basis). Section 3.09 of the Disclosure Schedule lists all bookings by date of
booking which have been accepted by the Company, and which were open as of
January 20, 2002.
SECTION 3.10 Conduct in the Ordinary Course; Absence of Certain Changes,
Events and Conditions. Since December 31, 2001, except as disclosed in Section
3.10 of the Disclosure Schedule, the business of the Company has been conducted
in the ordinary course and consistent with past practice. As amplification and
not limitation of the foregoing, except as disclosed in Section 3.10 of the
Disclosure Schedule, since December 31, 2001, the Company has not, other than in
the ordinary course of its business and consistent with past practice:
(i) permitted or allowed any of its material assets or properties (whether
tangible or intangible) to be subjected to any Encumbrance, other than Permitted
Encumbrances and Encumbrances that will be released at or prior to the Closing;
(ii) discharged or otherwise obtained the release of any Encumbrance or
paid or otherwise discharged any Liability, other than current liabilities
reflected on the Reference Balance Sheet and current liabilities incurred in the
ordinary course of business consistent with past practice since December 31,
2001;
(iii) made any loan to, guaranteed any Indebtedness of or otherwise
incurred any Indebtedness on behalf of any Person;
(iv) failed to pay any creditor any amount owed to such creditor when due;
(v) redeemed any of its capital stock or declared, made or paid any
dividends or distributions (whether in cash, securities or other property) to
the holders of its capital stock or otherwise;
15
(vi) made any material changes in its customary methods of operations,
including, without limitation, practices and policies relating to manufacturing,
purchasing, marketing, selling and pricing;
(vii) merged with, entered into a consolidation with or acquired an
interest of 5% or more in any Person or acquired a substantial portion of the
assets or business of any Person or any division or line of business thereof, or
otherwise acquired any material assets other than in the ordinary course of
business consistent with past practice;
(viii) made any capital expenditure or commitment for any capital
expenditure in excess of $50,000 individually or $250,000 in the aggregate;
(ix) accepted any bookings in a barter transaction or otherwise agreed to
make any purchases involving exchanges in value (other than cash) in excess of
$50,000 individually or $150,000 in the aggregate;
(x) sold, transferred, leased, subleased, licensed or otherwise disposed of
any properties or assets, real, personal or mixed (including, without
limitation, leasehold interests and intangible assets);
(xi) issued or sold any capital stock, notes, bonds or other securities, or
any option, warrant or other right to acquire the same, of, or any other
interest in, the Company;
(xii) entered into any material agreement, arrangement or transaction with
any of its directors, officers, employees or shareholders (or with any relative,
beneficiary, spouse or Affiliate of such Person);
(xiii) (A) granted any increase, or announced any increase, in the wages,
salaries, compensation, bonuses, incentives, pension or other benefits payable
by it to any of its employees, including, without limitation, any increase or
change pursuant to any Plan or (B) established or increased or promised to
increase any benefits under any Plan, in either case except as required by Law
or any collective bargaining agreement and involving ordinary increases
consistent with its past practices;
(xiv) written down or written up (or failed to write down or write up in
accordance with U.S. GAAP consistent with past practice) the value of any
Receivables in any material respect or revalued any of its material assets other
than in the ordinary course of business consistent with past practice and in
accordance with U.S. GAAP;
(xv) amended, terminated, cancelled or compromised any of its material
claims or waived any other rights of substantial value to it;
(xvi) made any change in any method of accounting or accounting practice or
policy used by it, other than such changes required by U.S. GAAP or disclosed in
Section 3.10 of the Disclosure Schedule;
(xvii) failed to maintain its material assets in accordance with good
business practice and in good operating condition and repair;
16
(xviii) allowed any material permit that was issued or relates to it or
otherwise relates to any Asset to lapse or terminate or failed to renew any such
permit or any insurance policy that is scheduled to terminate or expire within
45 calendar days of March 31, 2002;
(xix) incurred any Indebtedness (other than accrued interest under the
Notes);
(xx) amended, modified or consented to the termination of any Material
Contract or its rights thereunder;
(xxi) amended or restated its Articles of Incorporation or By-laws (or
other organizational documents);
(xxii) terminated, discontinued, closed or disposed of any plant, facility
or other business operation, or laid off any employees (other than layoffs of
less than 10 employees in any three-month period in the ordinary course of
business consistent with past practice) or implemented any early retirement,
separation or program providing early retirement window benefits within the
meaning of Section 1.401(a)-4 of the Regulations or announced or planned any
such action or program for the future;
(xxiii) made any charitable contribution;
(xxiv) (a) abandoned, sold, assigned, or granted any security interest in
or to any item of the Owned Intellectual Property or the Licensed Intellectual
Property, including, without limitation, failing to perform or failing to cause
to be performed all applicable filings, recordings and other acts, and pay or
caused to be paid all required fees and taxes, to maintain and protect its
interest in such Intellectual Property, (b) granted to any third party any
license with respect to any Owned Intellectual Property or Licensed Intellectual
Property, (c) developed, created or invented any Intellectual Property jointly
with any third party, or (d) disclosed, or allow to be disclosed, any
confidential Intellectual Property, unless such Intellectual Property is subject
to a confidentiality or non-disclosure covenant protecting against disclosure
thereof;
(xxv) made any express or deemed election or settled or compromised any
liability, with respect to Taxes of the Company;
(xxvi) suffered any casualty loss or damage with respect to any of its
assets which in the aggregate have a replacement cost of more than $100,000,
whether or not such loss or damage shall have been covered by insurance;
(xxvii) suffered any Material Adverse Effect; or
(xxviii) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 3.10 or granted any options to purchase,
rights of first refusal, rights of first offer or any other similar rights or
commitments with respect to any of the actions specified in this Section 3.10,
except as expressly contemplated by this Agreement.
SECTION 3.11 Litigation. Except as set forth in Section 3.11 of the
Disclosure Schedule, there is no Action pending or, to the knowledge of the
Company, threatened against the Company, or any property or asset of the
Company, before any Governmental Authority that
17
(a) individually or in the aggregate, has had or would have a Material Adverse
Effect or (b) seeks to materially delay or prevent the consummation of the
transactions contemplated by this Agreement, the Liquidation and Indemnification
Agreement, the Note Purchase Agreement or the Ancillary Agreements. Neither the
Company nor any material property or asset of the Company is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Authority, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority that
would prevent or materially delay the Company from performing its obligations
under this Agreement or the Ancillary Agreements or would, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 3.12 Certain Interests. (a) Except as disclosed in Section 3.12(a)
of the Disclosure Schedule, no officer or director of the Company and no
relative or spouse (or relative of such spouse) who resides with, or is a
dependent of, any such officer or director:
(i) has any material direct or indirect financial interest in any
competitor, supplier or customer of the Company, provided, however, that the
ownership of securities representing no more than one percent of the outstanding
voting power of any competitor, supplier or customer, and which are listed on
any national securities exchange or traded actively in the national
over-the-counter market, shall not be deemed to be a "financial interest" so
long as the Person owning such securities has no other connection or
relationship with such competitor, supplier or customer;
(ii) owns, directly or indirectly, in whole or in part, or has any other
material interest in any tangible or intangible property which the Company uses
or has used in the conduct of the Business or otherwise; or
(iii) has outstanding any Indebtedness to the Company.
(b) Except as disclosed in Section 3.12(b) of the Disclosure Schedule, no
officer or director of the Company and no relative or spouse (or relative of
such spouse) who resides with, or is a dependent of, any such officer or
director has outstanding any Indebtedness to the Company.
(c) Except as disclosed in Section 3.12(c) of the Disclosure Schedule, the
Company has no Liability or any other obligation of any nature whatsoever (i) to
any director or shareholder of the Company or to any relative or spouse (or
relative of such spouse) who resides with, or is a dependent of, any such
director or shareholder, or (ii) other than in respect of accrued wages, the
reimbursement of expenses and the extension of benefits to such person made in
the ordinary course of its business consistent with past practice, to any
officer or senior executive of the Company or to any relative or spouse (or
relative of such spouse) who resides with, or is a dependent of, any such
officer or senior executive.
SECTION 3.13 Compliance with Laws. (a) Except as set forth in Section
3.13(a) of the Disclosure Schedule, the Company has conducted and continues to
conduct the Business in accordance in all material respects with all Laws and
Governmental Orders applicable to the Company or any of its assets or the
Business, and the Company is not in violation of any such Law or Governmental
Order.
18
(b) Section 3.13(b) of the Disclosure Schedule sets forth a brief
description of each Governmental Order applicable to the Company or any of its
assets or the Business, and no such Governmental Order has or has had a Material
Adverse Effect.
SECTION 3.14 Environmental Matters. Except as described in Section 3.14 of
the Disclosure Schedule or as would not prevent or materially delay the Company
from performing its obligations under this Agreement and the Ancillary
Agreements and would not, individually or in the aggregate, have a Material
Adverse Effect, (a) the Company has not violated and is not in violation of any
Environmental Law; (b) none of the properties currently leased or operated by
the Company (including, without limitation, soils and surface and ground waters)
are contaminated with any Hazardous Substance; (c) the Company is not actually,
or to the Company's knowledge, potentially or allegedly liable for any off-site
contamination by Hazardous Substances; (d) the Company is not actually, or to
the Company's knowledge, potentially or allegedly liable under any Environmental
Law (including, without limitation, pending or threatened liens); (e) the
Company has all material Environmental Permits; and (f) the Company has always
been and is in compliance in all material respects with its Environmental
Permits.
SECTION 3.15 Material Contracts. Except as set forth in Section 3.15 of the
Disclosure Schedule, (a) neither the Company nor Classic (with respect to
contracts, arrangements, commitments or understandings which relate to, or are
required for, the Business) is a party to or bound by any contract, arrangement,
commitment or understanding (whether written or oral) (i) which is a "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement that has not been filed or
incorporated by reference in the Classic SEC Reports, (ii) which materially
restricts the conduct of any line of business by the Company or upon
consummation of the transactions contemplated by this Agreement will materially
restrict the conduct of any line of business by the Purchaser, the Purchaser's
subsidiaries or the ability of the Purchaser or any of the Purchaser's
subsidiaries to engage in any line of business, (iii) which upon consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements
will subject the Company to any exclusivity arrangements or (iv) (other than any
plan or agreement covered by Section 3.21 hereof) any of the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement or
the Ancillary Agreements, or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement or the Ancillary Agreements. Each contract, arrangement, commitment or
understanding of the type described in this Section 3.15, together with any
material license or contract relating to Intellectual Property, whether or not
set forth in the Disclosure Schedule, is referred to herein as a "Material
Contract," and neither the Company nor Classic knows of, and have not received
notice of, any violation of the above by any of the other parties thereto which
will have, individually or in the aggregate, a Material Adverse Effect.
(b) (i) Each Material Contract is valid and binding on the Company (or, as
applicable, Classic) and in full force and effect, (ii) the Company (or, as
applicable, Classic) has
19
in all material respects performed all obligations required to be performed by
it to date under each Material Contract, except where such noncompliance, either
individually or in the aggregate, will not have a Material Adverse Effect and
(iii) no event or condition exists which constitutes or, after notice or lapse
of time or both, will constitute, a material default on the part of the Company
(or, as applicable, Classic) under any such Material Contract, except for such
defaults, which, either individually or in the aggregate, will not have a
Material Adverse Effect.
SECTION 3.16 Intellectual Property. Except as would not, individually or in
the aggregate, have a Material Adverse Effect and except as set forth in Section
3.16 of the Disclosure Schedule, (a) the conduct of the business of the Company
as currently conducted does not infringe upon or misappropriate the Intellectual
Property rights of any third party, and no claim has been asserted to the
Company that the conduct of the Business as currently conducted infringes upon
or may infringe upon or misappropriates the Intellectual Property Rights of any
third party; (b) with respect to each item of Intellectual Property owned by the
Company (or Classic, as the case may be) and material to the Business, or to the
financial condition or results of operations of the Company ("Owned Intellectual
Property"), the Company (or Classic, as the case may be) is the owner of the
entire right, title and interest in and to such Owned Intellectual Property and
is entitled to use such Owned Intellectual Property in the continued operation
of the Business; (c) with respect to each item of Intellectual Property licensed
to the Company (or Classic, as the case may be) that is material to the
Business, or to the financial condition or results of operations of the Company
("Licensed Intellectual Property"), the Company (or Classic, as the case may be)
has the right to use such Licensed Intellectual Property in the continued
operation of the Business in accordance with the terms of the license agreement
governing such Licensed Intellectual Property; (d) to the knowledge of the
Company (or Classic, as the case may be), the Owned Intellectual Property is
valid and enforceable, and has not been adjudged invalid or unenforceable in
whole or in part; (e) to the knowledge of the Company (or Classic, as the case
may be), no person is engaging in any activity that infringes upon or
misappropriates the Owned Intellectual Property; (f) the Owned Intellectual
Property and the Licensed Intellectual Property constitute all the Intellectual
Property used by the Company in the conduct of the Business and no other items
of Intellectual Property are material to the Business, (g) to the knowledge of
the Company (or Classic, as the case may be), each license of the Licensed
Intellectual Property is valid and enforceable, is binding on all parties to
such license, and is in full force and effect; (h) to the knowledge of the
Company (or Classic, as the case may be), no party to any license of the
Licensed Intellectual Property is in breach thereof or default thereunder; and
(i) neither the execution of this Agreement nor the consummation of any
transaction contemplated hereunder shall adversely affect any of the Company's
material rights with respect to the Owned Intellectual Property or the Licensed
Intellectual Property.
SECTION 3.17 Real Property. (a) The Company does not own any real property.
(b) Each parcel of real property leased by the Company (i) is leased free
and clear of all Encumbrances, other than Permitted Encumbrances, and (ii) is
neither subject to any governmental decree or order to be sold nor is being
condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor, to the knowledge of the Company,
has any such condemnation, expropriation or taking been proposed.
20
(c) All leases of real property leased for the use or benefit of the
Company to which the Company is a party, and all amendments and modifications
thereto, are in full force and effect and have not been modified or amended, and
there exists no default under any such lease by the Company, nor any event
which, with notice or lapse of time or both, would constitute a default
thereunder by the Company, except as would not prevent or materially delay the
Company from performing its obligations under this Agreement and the Ancillary
Agreements and would not, individually or in the aggregate, have a Material
Adverse Effect.
(d) There are no contractual or legal restrictions that preclude or
restrict in any material respect the ability to use any real property leased by
the Company for the purposes for which it is currently being used. There are no
material latent defects or material adverse physical conditions affecting the
real property, and improvements thereon, leased by the Company other than those
that would not prevent or materially delay Classic from performing its
obligations under this Agreement and the Ancillary Agreements and would not,
individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.18 Assets. (a) Except as disclosed in Section 3.18(a) of the
Disclosure Schedule or as otherwise provided in the representations and
warranties of the Company set forth herein, the Company (and with respect to the
Classic Contracts, Classic) owns, leases or has the legal right to use all the
properties and assets used or intended to be used in the conduct of the Business
or otherwise owned, leased or used by the Company and, with respect to contract
rights, is a party to and enjoys the right to the benefits of all contracts,
agreements and other arrangements used or intended to be used by the Company in
or in relating to the conduct of the Business, all of which properties, assets
and rights constitute Assets except for the Excluded Assets. The Company has
good and marketable title to, or, in the case of leased or subleased Assets,
valid and subsisting leasehold interests in, all the Assets, free and clear of
all Encumbrances, except (i) as disclosed in Section 3.18(a) of the Disclosure
Schedule; and (ii) Permitted Encumbrances.
(b) The Assets and the Excluded Assets constitute all the properties,
assets and rights forming a part of, used, held or intended to be used in, and
all such properties, assets and rights as are necessary in the conduct of, the
Business.
(c) Except as set forth in Section 3.18(c) of the Disclosure Schedule, the
Company (and with respect to the Classic Contracts, Classic) has the complete
and unrestricted power and unqualified right to sell, assign, transfer, convey
and deliver the Assets to the Purchaser without penalty or other adverse
consequences. Following the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements and the execution of the instruments
of transfer contemplated by this Agreement and the Ancillary Agreements, the
Purchaser will own, with good, valid and marketable title, or lease, under valid
and subsisting leases, or otherwise acquire the interests of the Company in the
Assets, free and clear of any Encumbrances, other than Permitted Encumbrances,
and without incurring any penalty or other adverse consequence, including,
without limitation, any increase in rentals, royalties, or license or other fees
imposed as a result of, or arising from, the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements.
21
SECTION 3.19 Consortia. Listed in Section 3.19 of the Disclosure Schedule
are the names and addresses of the most significant consortia of the Company (by
consortia revenue of the Company) for the twelve-month period ended December 31,
2001 and the travelled revenue generated by each such consortium during such
period. Except as disclosed in Section 3.19 of the Disclosure Schedule, the
Company has not received any notice or has any reason to believe that any
significant consortium of the Company has ceased, or will cease, to use the
products, equipment, goods or services of the Company, or has substantially
reduced, or will substantially reduce, the use of such products, equipment,
goods or services at any time.
SECTION 3.20 Suppliers. Set forth in Section 3.20 of the Disclosure
Schedule is a true and complete copy of the 2001 Vendor Productivity Report of
the Company, which accurately reflects the gross bookings for each supplier
listed therein for the calendar year 2001. Except as disclosed in Section 3.20
of the Disclosure Schedule, the Company has not received any notice or has any
reason to believe that any such supplier will not sell raw materials, supplies,
merchandise and other goods to the Company at any time after the Closing Date on
terms and conditions substantially similar to those used in its current sales to
the Company, subject only to general and customary price increases.
SECTION 3.21 Employee Benefit Matters. (a) Plans and Material Documents.
Section 3.21(a) of the Disclosure Schedule lists (i) all employee benefit plans
(as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) and all bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, termination, severance or other contracts
or agreements, whether legally enforceable or not, to which the Company is a
party, with respect to which the Company has any obligation or which are
maintained, contributed to or sponsored by the Company for the benefit of any
current or former employee, officer or director of the Business, (ii) each
employee benefit plan for which the Company could incur liability under Section
4069 of ERISA in the event such plan has been or were to be terminated, (iii)
any plan in respect of which the Company could incur liability under Section
4212(c) of ERISA and (iv) any contracts, arrangements or understandings between
Classic or any of its Affiliates and any employee of the Business, including,
without limitation, any contracts, arrangements or understandings relating to
the sale of the Business (collectively, the "Plans"). Each Plan is in writing
and Classic has furnished the Purchaser a complete and accurate copy of each
Plan and a complete and accurate copy of each material document prepared in
connection with each such Plan.
(b) Compliance with Applicable Law. Each Plan is now and always has been
operated in all respects in accordance with the requirements of all applicable
Law, including, without limitation, ERISA and the Code, and all persons who
participate in the operation of such Plans and all Plan "fiduciaries" (within
the meaning of Section 3(21) of ERISA) have always acted in accordance with the
provisions of all applicable Law, including, without limitation, ERISA and the
Code. The Company has performed all obligations required to be performed by it
under, is not in any respect in default under or in violation of, and the
Company has no knowledge of any default or violation by any party to, any Plan.
No legal action, suit or claim is pending or threatened with respect to any Plan
(other than claims for benefits in the ordinary course) and no fact or event
exists that could give rise to any such action, suit or claim.
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(c) Qualification of Certain Plans. Each Plan which is intended to be
qualified under Section 401(a) of the Code or Section 401(k) of the Code has
received a favorable determination letter from the IRS that it is so qualified
and each trust established in connection with any Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that it is so exempt, and no fact
or event has occurred since the date of such determination letter from the IRS
to adversely affect the qualified status of any such Plan or the exempt status
of any such trust.
(d) Absence of Certain Liabilities and Events. There has been no prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) with respect to any Plan. The Company has not incurred any liability for
any penalty or tax arising under Section 4971, 4972, 4980, 4980B or 6652 of the
Code or any liability under Section 502 of ERISA, and no fact or event exists
which could give rise to any such liability. The Company has not incurred any
liability under, arising out of or by operation of Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course), including, without limitation, any liability in connection
with (i) the termination or reorganization of any employee benefit plan subject
to Title IV of ERISA or (ii) the withdrawal from any multiemployer plan (within
the meaning of Section 3(37) or 4001(a)(3) of ERISA) or multiple employer plan
(within the meaning of 4063 or 4064 of ERISA), and no fact or event exists which
could give rise to any such liability. No complete or partial termination has
occurred within the five years preceding the date hereof with respect to any
Plan. No reportable event (within the meaning of Section 4043 of ERISA) has
occurred or is expected to occur with respect to any Plan subject to Title IV of
ERISA. No Plan had an accumulated funding deficiency (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of
the most recently ended plan year of such Plan. None of the assets of the
Company is the subject of any lien arising under Section 302(f) of ERISA or
Section 412(n) of the Code; the Company has not been required to post any
security under Section 307 of ERISA or Section 401(a)(29) of the Code; and no
fact or event exists which could give rise to any such lien or requirement to
post any such security.
(e) Plan Contributions and Funding. All contributions, premiums or payments
required to be made with respect to any Plan have been made on or before their
due dates. All such contributions have been fully deducted for income tax
purposes and no such deduction has been challenged or disallowed by any
government entity and no fact or event exists which could give rise to any such
challenge or disallowance. As of the Closing Date, no Plan which is subject to
Title IV of ERISA will have an "unfunded benefit liability" (within the meaning
of Section 4001(a)(18) of ERISA).
SECTION 3.22 Labor Matters. (a) Except as set forth in Section 3.22 of the
Disclosure Schedule, (i) the Company is not a party to any collective bargaining
agreement or other labor union contract applicable to employees of the Business
and currently there are no organizational campaigns, petitions or other
unionization activities seeking recognition of a collective bargaining unit
which could affect the Company, (ii) there are no controversies, strikes,
slowdowns or work stoppages pending or, to the best knowledge of the Company
after due inquiry, threatened between the Company and any employees of the
Business, (iii) and there are no unfair labor practice complaints pending
against the Company before the National Labor Relations Board or any other
Governmental Authority or any current union representation questions involving
employees of the Business.
23
(b) The Company is currently in compliance in all material respects with
all applicable Laws relating to the employment of labor, including those related
to wages, hours, collective bargaining and the payment and withholding of taxes
and other sums as required by the appropriate Governmental Authority.
SECTION 3.23 Taxes. Except as set forth in Section 3.23 of the Disclosure
Schedule (i) All returns and reports in respect of Taxes required to be filed
with respect to the Company (including the consolidated federal income tax
return of Classic and any state Tax return that includes the Company on a
consolidated or combined basis) ("Returns") have been timely filed; (ii) all
Taxes required to be shown on such Returns or otherwise due have been timely
paid; (iii) all such Returns are true, correct and complete in all material
respects; (iv) no adjustment relating to such Returns has been proposed formally
or informally by any Tax authority (and the Company has not received any
inquiries, orally or in writing, from any Tax authority concerning any such
adjustments) and, to the best knowledge of the Company (after due inquiry), no
basis exists for any such adjustment; (v) there are no Tax liens on any assets
of the Company; and (vi) neither Classic nor any subsidiary or Affiliate of
Classic is a party to any agreement or arrangement that would result, separately
or in the aggregate, in the payment of any "excess parachute payments" within
the meaning of Section 280G of the Code (without regard to Section 280G(b)(4) of
the Code).
SECTION 3.24 Insurance. Except as set forth in Section 3.24 of the
Disclosure Schedule, the Company maintains insurance coverage with reputable
insurers in such amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in businesses similar to that of
the Company (taking into account the cost and availability of such insurance).
SECTION 3.25 Full Disclosure. (a) The Company is not aware of any facts
pertaining to the Company, the Assets or the Business which would have or which
would likely have in the future a Material Adverse Effect on the Company, the
Assets or the Business and which have not been disclosed in this Agreement, the
Disclosure Schedule or the Classic SEC Reports or otherwise disclosed to the
Purchaser by the Company in writing.
(b) No representation or warranty of the Company in this Agreement or the
Ancillary Agreements, nor any statement or certificate furnished or to be
furnished to the Purchaser pursuant to this Agreement or the Ancillary
Agreements, or in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in the light of
the circumstances under which they were made, not misleading.
SECTION 3.26 Brokers. Except for Dresdner Kleinwort Xxxxxxxxxxx, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements based upon arrangements made by or on behalf of the
Company.
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SECTION 3.27 Board Approvals. The Company Board, by resolutions duly
adopted by unanimous written consent and not subsequently rescinded or modified
in any way, has duly (i) determined that this Agreement and the Ancillary
Agreements are fair to and in the best interests of the Company and its
stockholder and (ii) approved this Agreement and the Ancillary Agreements and
declared their advisability.
SECTION 3.28 Classic Destination Management. In the event that prior to the
Closing the Company, or subsequent to the Closing, the Purchaser, elects to
transfer or shut down the division of the Business known as Classic Destination
Management - Hawaii, there will be no material Liabilities to the Company, or,
as applicable, the Purchaser in connection with such transfer or shutting down.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CLASSIC
As an inducement to the Purchaser to enter into this Agreement, Classic
hereby represents and warrants to the Purchaser as follows:
SECTION 4.01 Organization, Authority and Qualification of Classic. Classic
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New York and has all necessary power and authority to enter
into this Agreement, the Liquidation and Indemnification Agreement and the Note
Purchase Agreement, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement, the Liquidation and Indemnification Agreement and
the Note Purchase Agreement by Classic, the performance by Classic of its
obligations hereunder and thereunder and the consummation by Classic of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of Classic. This Agreement has been, and upon their
execution the Liquidation and Indemnification Agreement and the Note Purchase
Agreement shall have been, duly executed and delivered by Classic, and (assuming
due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and upon their execution the Liquidation
and Indemnification Agreement and the Note Purchase Agreement will constitute,
legal, valid and binding obligations of Classic enforceable against Classic in
accordance with their respective terms, except that enforceability may be
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors rights generally and to general principles of equity.
SECTION 4.02 No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 4.03 have been obtained
and all filings and notifications listed in Section 3.04 of the Disclosure
Schedule have been made, the execution, delivery and performance of this
Agreement, the Liquidation and Indemnification Agreement and the Note Purchase
Agreement by Classic do not and will not (a) violate, conflict with or result in
the breach of any provision of the Certificate of Incorporation or By-laws (or
similar organizational documents) of Classic, (b) conflict with or violate in
any material respect (or cause an event which could have a Material Adverse
Effect as a result of) any Law or Governmental Order applicable to Classic or
any of its assets, properties or businesses, or
25
(c) conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the assets or properties of Classic
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to which
Classic is a party or by which any of such assets or properties is bound or
affected, except where such conflict, breach or violation would not,
individually or in the aggregate, have a Material Adverse Effect.
SECTION 4.03 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement, the Liquidation and Indemnification Agreement
and the Note Purchase Agreement by Classic do not and will not require any
material consent, approval, authorization or other order of, action by, filing
with or notification to any Governmental Authority, except (a) as described in
Section 3.04 of the Disclosure Schedule and (b) the notification requirements of
the HSR Act.
SECTION 4.04 SEC Filings; Financial Statements. (a) Classic has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 2000 (including, without limitation, all forms, reports and documents
in connection with the Tender Offer) (collectively, the "Classic SEC Reports").
The Classic SEC Reports (i) were prepared in all material respects in accordance
with either the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations promulgated thereunder, and (ii) did
not, at the time they were filed, or, if amended, as of the date of such
amendment, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in Classic SEC Reports was prepared in accordance
with U.S. GAAP applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in
all material respects, the consolidated financial position, results of
operations and cash flows of Classic and its consolidated subsidiaries as at the
respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments which have not had, and would not
have, a material adverse effect on the business, properties, prospects, and
financial condition of Classic).
SECTION 4.05 Full Disclosure. (a) Classic is not aware of any facts
pertaining to the Company, the Assets or the Business which would have or which
would likely have in the future a Material Adverse Effect on the Company, the
Assets or the Business and which have not been disclosed in this Agreement, the
Disclosure Schedule or the Classic SEC Reports or otherwise disclosed to the
Purchaser by Classic in writing.
(b) No representation or warranty of Classic in this Agreement, the
Liquidation and Indemnification Agreement or the Note Purchase Agreement nor any
statement or certificate furnished or to be furnished to the Purchaser hereunder
or thereunder, or in connection with the
26
transactions contemplated by this Agreement, the Liquidation and Indemnification
Agreement and the Note Purchase Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in the light of
the circumstances under which they were made, not misleading.
SECTION 4.06 Brokers. Except for Dresdner Kleinwort Xxxxxxxxxxx, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this
Agreement, the Liquidation and Indemnification Agreement and the Note Purchase
Agreement based upon arrangements made by or on behalf of Classic. Classic is
solely responsible for the fees and expenses of Dresdner Kleinwort Xxxxxxxxxxx.
SECTION 4.07 Cash Contribution; Restricted Cash. Between December 31, 2001
and the date hereof, Classic has (a) contributed the amount of $7,860,000 in
cash to the Company, evidence of which contribution has been provided to the
Purchaser and (b) forgiven all intercompany obligations owed to Classic by the
Company. In addition, certain cash of Classic (i) in the amount of $1,655,000
(the "Restricted Cash") is subject to restrictions in connection with the
collateralization of certain Classic letters of credit (the "Letters of Credit")
and will be transferred to the Company upon the removal of such restrictions
pursuant to Section 6.15 hereof and (ii) in the amount of $2,024,000 (the "LC
Collateral Amount") collateralizes certain additional Classic letters of credit
and will become unrestricted upon the provision of substitute collateral by the
Purchaser pursuant to Section 6.18.
SECTION 4.08 Board Approvals; Vote Required. (a) The Classic Board, by
resolutions duly adopted by unanimous written consent, in accordance with the
recommendation of the Special Committee of Classic's Board pursuant to the
resolutions duly adopted by unanimous vote of the Special Committee at a meeting
duly called and held and not subsequently rescinded or modified in any way, has
duly (i) determined that this Agreement, the Liquidation and Indemnification
Agreement and the Note Purchase Agreement are fair to and in the best interests
of Classic and its stockholders, (ii) approved this Agreement, the Liquidation
and Indemnification Agreement and the Note Purchase Agreement and declared their
advisability, (iii) recommended that the stockholders of Classic approve and
adopt this Agreement and directed that this Agreement and the transactions
contemplated hereby be submitted for consideration by Classic's stockholders at
the Stockholders' Meeting.
(b) The only vote of the holders of any class or series of capital stock of
Classic necessary to approve this Agreement and the transactions contemplated
hereby is the affirmative vote of the holders of two thirds of the outstanding
shares of common stock, par value $0.01, of Classic in favor of the approval and
adoption of this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Company and Classic to enter into this Agreement,
the Purchaser hereby represents and warrants to the Company and Classic as
follows:
SECTION 5.01 Organization and Authority of the Purchaser. The Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Washington and has all necessary corporate power and
authority to enter into this Agreement, the Liquidation and Indemnification
Agreement, the Note Purchase Agreement and the Ancillary Agreements, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement,
the Liquidation and Indemnification Agreement, the Note Purchase Agreement and
the Ancillary Agreements by the Purchaser, the performance by the Purchaser of
its obligations hereunder and thereunder and the consummation by the Purchaser
of the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of the Purchaser. This Agreement has been, and
upon their execution the Liquidation and Indemnification Agreement, the Note
Purchase Agreement and the Ancillary Agreements will be, duly executed and
delivered by the Purchaser, and (assuming due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and upon their execution the Liquidation and Indemnification Agreement, the Note
Purchase Agreement and the Ancillary Agreements will constitute, legal, valid
and binding obligations of the Purchaser enforceable against the Purchaser in
accordance with their respective terms, except that enforceability may be
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors rights generally and to general principles of equity.
SECTION 5.02 No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 5.03 have been obtained,
the execution, delivery and performance of this Agreement, the Liquidation and
Indemnification Agreement, the Note Purchase Agreement and the Ancillary
Agreements by the Purchaser do not and will not (a) violate, conflict with or
result in the breach of any provision of the Articles of Incorporation or
By-laws of the Purchaser, (b) conflict with or violate any Law or Governmental
Order applicable to the Purchaser or (c) conflict with, or result in any breach
of, constitute a default (or event which with the giving of notice or lapse or
time, or both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of the Purchaser pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Purchaser is a party
or by which any of such assets or properties are bound or affected which would
have a material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated by this Agreement, the Liquidation and Indemnification
Agreement, the Note Purchase Agreement and the Ancillary Agreements.
SECTION 5.03 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement, the Liquidation and Indemnification
Agreement, the Note Purchase Agreement and the Ancillary Agreements by the
Purchaser do not and will not require any consent, approval, authorization or
other order of, action by, filing with, or notification to, any Governmental
Authority, except the notification requirements of the HSR Act.
SECTION 5.04 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, the Liquidation and Indemnification
Agreement, the Note Purchase Agreement and the Ancillary Agreements based upon
arrangements made by or on behalf of the Purchaser.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Conduct of Business Prior to the Closing. (a) The Company
covenants and agrees that, except as described in Section 6.01(a) of the
Disclosure Schedule, between the date hereof and the time of the Closing, the
Company shall not conduct its business other than in the ordinary course and
consistent with the Company's prior practice. Without limiting the generality of
the foregoing, except as described in Section 6.01(a) of the Disclosure
Schedule, the Company shall (i) continue its advertising and promotional
activities, and pricing and purchasing policies, in accordance with past
practice; (ii) not shorten or lengthen the customary payment cycles for any of
its Payables or Receivables; (iii) use its best efforts to (A) preserve intact
its business organization and the business organization of the Business, (B)
keep available to the Purchaser the services of the employees of the Company,
(C) continue in full force and effect without material modification all existing
policies or binders of insurance currently maintained in respect of the Company
and the Business and (D) preserve its current relationships with its customers,
suppliers and other persons with which it has significant business
relationships; (iv) exercise, but only after notice to the Purchaser and receipt
of the Purchaser's prior written approval, any rights of renewal pursuant to the
terms of any of any leases or subleases which by their terms would otherwise
expire; and (v) not engage in any practice, take any action, fail to take any
action or enter into any transaction which could cause any representation or
warranty of the Company to be untrue or result in a breach of any covenant made
by the Company in this Agreement.
(b) The Company covenants and agrees that, prior to the Closing, without
the prior written consent of the Purchaser, the Company will not do any of the
things enumerated in the second sentence of Section 3.10 (including, without
limitation, clauses (i) through (xxviii) thereof).
SECTION 6.02 Access to Information. (a) From the date hereof until the
Closing, upon reasonable notice, the Company and each of the Company's officers,
directors, employees, agents, representatives, accountants and counsel shall:
(i) afford the officers, employees and authorized agents, accountants, counsel,
financing sources and representatives of the Purchaser reasonable access, during
normal business hours, to the offices, properties, plants, other facilities,
books and records of the Company and to those officers, directors, employees,
agents, accountants and counsel of the Company who have any knowledge relating
to the Company or the Business and (ii) furnish to the officers, employees and
authorized agents, accountants, counsel, financing sources and representatives
of the Purchaser such additional financial and operating data and other
information regarding the assets, properties and goodwill of the Company and the
Business (or legible copies thereof) as the Purchaser may from time to time
reasonably request.
29
(b) In order to facilitate the resolution of any claims made against or
incurred by the Company prior to the Closing, for a period of seven years after
the Closing, the Purchaser shall (i) retain the books and records of the Company
relating to periods prior to the Closing in a manner reasonably consistent with
the prior practice of the Company and Classic and (ii) upon reasonable notice,
afford the officers, employees and authorized agents and representatives of the
Company and Classic reasonable access (including the right to make, at the
Company's expense, photocopies), during normal business hours, to such books and
records.
(c) In order to facilitate the resolution of any claims made by or against
or incurred by the Purchaser after the Closing or for any other reasonable
purpose, for a period of seven years following the Closing, the Company and
Classic shall (i) cause to be retained all books and records of the Company
which are not transferred to the Purchaser pursuant to this Agreement and which
relate to the Company, its operations or the Business for periods prior to the
Closing and which shall not otherwise have been delivered to the Purchaser and
(ii) upon reasonable notice, cause to be afforded the officers, employees and
authorized agents and representatives of the Purchaser, reasonable access
(including the right to make photocopies at the Purchaser's expense), during
normal business hours, to such books and records.
SECTION 6.03 Confidentiality. Each of Classic and the Company agrees to,
and shall cause its agents, representatives, Affiliates, employees, officers and
directors to: (i) treat and hold as confidential (and not disclose or provide
access to any Person to) all information relating to trade secrets, processes,
patent applications, product development, price, customer and supplier lists,
pricing and marketing plans, policies and strategies, details of client and
consultant contracts, operations methods, product development techniques,
business acquisition plans, new personnel acquisition plans and all other
confidential information with respect to the Business and the Company, (ii) in
the event that Classic, the Company or any such agent, representative,
Affiliate, employee, officer or director becomes legally compelled to disclose
any such information, provide the Purchaser with prompt written notice of such
requirement so that the Purchaser may seek a protective order or other remedy or
waive compliance with this Section 6.03, (iii) in the event that such protective
order or other remedy is not obtained, or the Purchaser waives compliance with
this Section 6.03, furnish only that portion of such confidential information
which is legally required to be provided and exercise its best efforts to obtain
assurances that confidential treatment will be accorded such information, (iv)
promptly furnish (prior to the Closing) the Purchaser any and all copies (in
whatever form or medium) of all such confidential information then in the
possession of Classic, the Company or any of their agents, representatives,
Affiliates, employees, officers and directors and destroy any and all additional
copies then in the possession of Classic, the Company or any of their agents,
representatives, Affiliates, employees, officers and directors of such
information and of any analyses, compilations, studies or other documents
prepared, in whole or in part, on the basis thereof; provided, however, that
this sentence shall not apply to any information that, at the time of
disclosure, is available publicly and was not disclosed in breach of this
Agreement by Classic, the Company, their agents, representatives, Affiliates,
employees, officers or directors; provided further that, with respect to
Intellectual Property, specific information shall not be deemed to be within the
foregoing exception merely because it is embraced in general disclosures in the
public domain. In addition, with respect to Intellectual Property, any
combination of features shall not be deemed to be within the foregoing exception
merely because the individual features are in the public domain unless the
combination itself and its principle of operation are in the public domain. Each
of Classic and the Company agrees and acknowledges that remedies at law for any
breach of its obligations under this Section 6.03 are inadequate and that in
addition thereto the Purchaser shall be entitled to seek equitable relief,
including injunction and specific performance, in the event of any such breach.
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SECTION 6.04 Regulatory and Other Authorizations; Notices and Consents. (a)
Each of Classic and the Company shall use its best efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary for its execution and delivery of,
and the performance of its respective obligations pursuant to, this Agreement,
the Liquidation and Indemnification Agreement, the Note Purchase Agreement and
the Ancillary Agreements and will cooperate fully with the Purchaser in promptly
seeking to obtain all such authorizations, consents, orders and approvals. Each
of the parties hereto agrees to make an appropriate filing, if necessary,
pursuant to the HSR Act with respect to the transactions contemplated by this
Agreement within five Business Days of the date hereof and to supply as promptly
as practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to the HSR
Act.
(b) Each of Classic and the Company shall give promptly such notices to
third parties and use its best efforts to obtain such third party consents and
estoppel certificates as the Purchaser may in its sole and absolute discretion
deem necessary or desirable in connection with the transactions contemplated by
this Agreement, the Liquidation and Indemnification Agreement, the Note Purchase
Agreement and the Ancillary Agreements, including, without limitation, all third
party consents that are necessary or desirable in connection with the transfer
of the Material Contracts.
(c) The Purchaser shall cooperate and use all reasonable efforts to assist
Classic and the Company in giving such notices and obtaining such consents and
estoppel certificates; provided, however, that the Purchaser shall have no
obligation to give any guarantee or other consideration of any nature in
connection with any such notice, consent or estoppel certificate or to consent
to any change in the terms of any agreement or arrangement which the Purchaser
in its sole and absolute discretion may deem adverse to the interests of the
Purchaser or the Business.
(d) Neither Classic nor the Company knows of any reason why all the
consents, approvals and authorizations necessary for the consummation of the
transactions contemplated hereby will not be received.
(e) The Company, Classic and the Purchaser agree that, in the event any
consent, approval or authorization necessary or desirable to preserve for the
Business or the Purchaser any right or benefit under any lease, license,
contract, commitment or other agreement or arrangement to which the Company or
Classic is a party is not obtained prior to the Closing, the Company or Classic,
as appropriate, will, subsequent to the Closing, cooperate with the Purchaser in
attempting to obtain such consent, approval or authorization as promptly
thereafter as practicable. If such consent, approval or authorization cannot be
obtained, the Company or Classic, as appropriate, shall use its best efforts to
provide the Purchaser with the rights and benefits of the affected lease,
license, contract, commitment or other agreement or arrangement for the term of
such lease, license, contract or other agreement or arrangement, and, regardless
of whether Company or Classic, as appropriate, provides such rights and
benefits, the Purchaser shall assume the obligations and burdens thereunder;
provided, however, that the agreements of Classic and the Company in this
Section 6.04 shall not give the Purchaser the right to prevent Classic from
proceeding to wind-up and effect a liquidating distribution.
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SECTION 6.05 Notice of Developments. Prior to the Closing, each of Classic
and the Company shall promptly notify the Purchaser in writing of (i) all
events, circumstances, facts and occurrences arising subsequent to the date of
this Agreement which could result in any breach of its respective representation
or warranty or covenant in this Agreement or which could have the effect of
making any of its respective representations or warranties in this Agreement
untrue or incorrect in any respect and (ii) all other material developments
affecting the Assets, Liabilities, business, financial condition, operations,
results of operations, customer or supplier relations, employee relations,
projections or prospects of the Company or the Business.
SECTION 6.06 No Solicitation or Negotiation. Each of Classic and the
Company agrees that between the date of this Agreement and the earlier of (i)
the Closing and (ii) the termination of this Agreement, neither Classic nor the
Company nor any of their respective Affiliates, officers, directors,
representatives or agents will (a) solicit, initiate, consider, encourage or
accept any other proposals or offers from any Person (i) relating to any
acquisition or purchase of all or any portion of the capital stock of Classic or
the Company or assets of Classic or the Company, (ii) to enter into any business
combination with Classic or the Company or (iii) to enter into any other
extraordinary business transaction involving or otherwise relating to Classic or
the Company, or (b) participate in any discussions, conversations, negotiations
and other communications regarding, or furnish to any other Person any
information with respect to, or otherwise cooperate in any way, assist or
participate in, facilitate or encourage any effort or attempt by any other
Person to seek to do any of the foregoing. Each of Classic and the Company
immediately shall cease and cause to be terminated all existing discussions,
conversations, negotiations and other communications with any Persons conducted
heretofore with respect to any of the foregoing, other than as required by the
Exchange Act in connection with the Tender Offer. Each of Classic and the
Company shall notify the Purchaser promptly if any such proposal or offer, or
any inquiry or other contact with any Person with respect thereto, is made and
shall, in any such notice to the Purchaser, indicate in reasonable detail the
identity of the Person making such proposal, offer, inquiry or contact and the
terms and conditions of such proposal, offer, inquiry or other contact. Each of
Classic and the Company agrees not to, without the prior written consent of the
Purchaser, release any Person from, or waive any provision of, any
confidentiality or standstill agreement to which Classic or the Company is a
party.
SECTION 6.07 Use of Intellectual Property. (a) Each of Classic and the
Company acknowledges that from and after the Closing, the name "Classic Custom
Vacations" and all similar or related names, marks and logos (all of such names,
marks and logos being the "Trade Names") shall be owned by the Purchaser, that
none of Classic, the Company or any of their Affiliates shall have any rights in
the Trade Names, and that none of Classic, the Company or any of their
Affiliates will contest the ownership or validity of any rights of the Purchaser
in or to the Trade Names.
(b) Except as set forth in Section 6.07(b) of the Disclosure Schedule, from
and after the Closing, none of Classic, the Company or any of their Affiliates
shall use any of the Owned Intellectual Property or any of the Licensed
Intellectual Property.
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SECTION 6.08 Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
(i) make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the transactions contemplated by
this Agreement and (ii) use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws or otherwise to consummate
and make effective the transactions contemplated by this Agreement, including,
without limitation, using its reasonable best efforts to obtain all permits,
consents, approvals, authorizations, qualifications and orders of Governmental
Authorities and parties to contracts with the Company as are necessary for the
consummation of the transactions contemplated by this Agreement; provided that
the Purchaser will not be required by this Section 6.08 to take any action,
including entering into any consent decree, hold separate orders or other
arrangements, that (A) requires the divestiture of any assets of any of the
Purchaser, any of its subsidiaries or the Assets or (B) limits the Purchaser's
freedom of action with respect to, or its ability to retain, the Assets or any
portion thereof or any of the Purchaser's or its affiliates' other assets or
businesses. In case, at any time after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
SECTION 6.09 Information Statement. (a) As promptly as practicable after
the execution of this Agreement, (i) Classic shall prepare and file with the SEC
the information statement to be sent to the stockholders of Classic relating to
the meeting of Classic's stockholders (the "Stockholders' Meeting") to be held
to consider, among other things, the approval and adoption of this Agreement
(such information statement, as amended or supplemented, being referred to
herein as the "Information Statement"). The Purchaser shall furnish all
information concerning the Purchaser as Classic may reasonably request in
connection with such actions and the preparation of the Information Statement.
As promptly as practicable, Classic shall mail the Information Statement to its
stockholders.
(b) None of the Classic Board or any committee thereof shall withdraw or
modify, or propose to withdraw or modify, in a manner adverse to the Purchaser,
the approval or recommendation by the Classic Board or any committee thereof of
this Agreement, and the Information Statement shall include the recommendation
of the Classic Board to the stockholders of Classic in favor of approval and
adoption of this Agreement; provided, however, that the Classic Board may, at
any time prior to the Stockholders' Meeting, withdraw or modify any such
recommendation to the extent that the Classic Board determines, in its good
faith judgment after consultation with independent legal counsel (who may be
Classic's regularly engaged independent legal counsel), that the failure to so
withdraw or modify its recommendation would cause the Classic Board to breach
its fiduciary duties to Classic and its stockholders under applicable Law.
(c) No amendment or supplement to the Information Statement will be made by
the Purchaser or Classic without the approval of the other party (such approval
not to be unreasonably withheld or delayed). The Purchaser and Classic each will
advise the other, promptly after they receive notice thereof, of any request by
the SEC for amendment of the Information Statement or comments thereon and
responses thereto or requests by the SEC for additional information.
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(d) The information supplied by the Purchaser for inclusion in the
Information Statement shall not, at (i) the time the Information Statement (or
any amendment thereof or supplement thereto) is first mailed to the stockholders
of Classic, (ii) the time of the Stockholders' Meeting and (iii) the Closing,
contain any untrue statement of a material fact or fail to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If, at any time prior to the Closing, any event or circumstance
relating to the Purchaser, or its officers or directors, should be discovered by
the Purchaser which should be set forth in an amendment or a supplement to the
Information Statement, the Purchaser shall promptly inform Classic. All
documents that the Purchaser is responsible for filing with the SEC in
connection with the transactions contemplated by this Agreement will comply as
to form and substance in all material aspects with the applicable requirements
of the Securities Act and the rules and regulations thereunder and the Exchange
Act and the rules and regulations thereunder.
(e) The information supplied by Classic for inclusion in the Information
Statement shall not, at (i) the time the Information Statement (or any amendment
thereof or supplement thereto) is first mailed to the stockholders of Classic,
(ii) the time of the Stockholders' Meeting and (iii) the Closing, contain any
untrue statement of a material fact or fail to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If, at
any time prior to the Closing, any event or circumstance relating to Classic or
any of its subsidiaries, or their respective officers or directors, should be
discovered by Classic which should be set forth in an amendment or a supplement
to the Information Statement, Classic shall promptly inform the Purchaser. All
documents that Classic is responsible for filing with the SEC in connection with
the transactions contemplated by this Agreement will comply as to form and
substance in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the Exchange Act and
the rules and regulations thereunder.
SECTION 6.10 Stockholders' Meeting. Classic shall call and hold the
Stockholders' Meeting as promptly as practicable for the purpose of voting upon
the approval and adoption of this Agreement and Classic shall use its reasonable
best efforts to hold the Stockholders' Meeting as soon as practicable as
permitted under the Exchange Act, other applicable Law, or any stock exchange
requirements. Classic shall use its reasonable best efforts to take all action
necessary or advisable to secure the required vote or consent of its
stockholders, except in the event and to the extent that Classic's Board, in
accordance with Section 6.09(b), withdraws or modifies its recommendation to the
stockholders of Classic in favor of the approval and adoption of this Agreement.
SECTION 6.11 Liquidating Distribution. As soon as practicable after the
Closing Date, Classic shall effect a liquidating distribution to its
stockholders in accordance with the NYBCL and the Liquidation and
Indemnification Agreement. Such liquidating distribution shall be made after
payment of all amounts owed to any creditors of Classic and shall be made net of
any federal, state or local Taxes payable by Classic, the Company or any
Consolidated Corporation for all Tax periods (or portions thereof) ending at the
close of business on the day of such liquidating distribution.
34
SECTION 6.12 Excluded Liabilities. The Company will pay and discharge the
Excluded Liabilities as and when the same become due and payable.
SECTION 6.13 Bulk Transfer Laws. (a) The Purchaser hereby waives compliance
by the Company with any applicable bulk sale or bulk transfer laws of any
jurisdiction in connection with the sale of the Assets to the Purchaser (other
than any obligations with respect to the application of the proceeds herefrom).
(b) The Company and the Purchaser agree to take any action, including, but
not limited to, filing any forms or statements to protect the Purchaser from
potential liabilities as a transferee for Taxes (other than the Assumed Taxes)
of the Company.
SECTION 6.14 Conveyance Taxes. The Purchaser shall be liable for and shall
hold the Company and Classic harmless against any real property transfer or
gains, sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements. The Company, after the review and
consent by the Purchaser, shall file such applications and documents as shall
permit any such Tax to be assessed and paid on or prior to the Closing Date in
accordance with any available pre-sale filing procedure. The Purchaser shall
execute and deliver all instruments and certificates necessary to enable the
Company to comply with the foregoing. The Purchaser shall complete and execute a
resale or other exemption certificate with respect to the inventory items sold
hereunder, and shall provide the Company with an executed copy thereof.
SECTION 6.15 Contribution of Restricted Cash. As promptly as practicable,
but in any event within two (2) Business Days, following the removal of any
restrictions on all or any portion of the Restricted Cash which prevent Classic
from contributing the Restricted Cash to the Company, Classic shall contribute
to the Company that portion of the Restricted Cash which has become
unrestricted.
SECTION 6.16 Material Contracts. Within five (5) Business Days after the
date hereof, the Company shall deliver to the Purchaser a list of all Material
Contracts which are not, by their terms, cancelable by the Company upon sixty
(60) days notice.
SECTION 6.17 Welfare Benefits for Transferred Employees. As of the first
day of the month following the Closing Date, the Purchaser shall provide welfare
benefits under its welfare benefit plans to employees of the Business the
Purchaser employs as of the Closing (the "Transferred Employees"). Classic shall
continue to cover Transferred Employees under its welfare benefit plans up to
the last day of the month in which the Closing Date occurs and the Purchaser
shall fund (or reimburse Classic for the payment of) the administrative fee
associated with the claims run-off for 90 days thereafter. The Purchaser shall
reimburse Classic for the cost of providing welfare benefits to the Transferred
Employees from the Closing Date through the date Purchaser provides welfare
benefits to the Transferred Employees.
SECTION 6.18 Letters of Credit. At Closing, the Purchaser shall provide
substitute collateral (either in cash or a substitute letter of credit) in the
amount of the LC Collateral Amount for the letters of credit which the LC
Collateral Amount collateralizes so as to remove the restrictions from Classic's
cash which collateralizes such letters of credit.
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SECTION 6.19 Transfer of Classic Contracts. Prior to Closing, Classic shall
use commercially reasonable efforts to transfer or assign to the Company the
Classic Contracts.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01 Conditions to Obligations of Each Party. The obligations of
the parties hereto to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment or waiver (where permissible), at or prior
to the Closing, of each of the following conditions:
(a) Classic Stockholder Approval. This Agreement shall have been approved
and adopted by the requisite affirmative vote of the stockholders of Classic in
accordance with the NYBCL and Classic's Certificate of Incorporation;
(b) No Governmental Order. No Governmental Authority shall have enacted,
issued, promulgated or entered any Governmental Order which is then in effect
and has the effect of seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which is likely to render it
impossible or unlawful to consummate such transactions.
(c) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the purchase of the Assets contemplated hereby shall have
expired or shall have been terminated.
SECTION 7.02 Conditions to Obligations of each of Classic and the Company.
The obligations of each of Classic and the Company to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
or waiver (where permissible), at or prior to the Closing, of each of the
following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of the Purchaser contained in this Agreement shall have been true and
correct when made and shall be true and correct as of the Closing, with the same
force and effect as if made as of the Closing Date, except as would not have a
material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated by this Agreement other than such representations and
warranties as are made as of another date, which shall be true and correct as of
such date (provided, however, that if any portion of any representation or
warranty is already qualified by materiality, for purposes of determining
whether this Section 7.02(a) has been satisfied with respect to such portion of
such representation or warranty, such portion of such representation or warranty
as so qualified must be true and correct in all respects), and the covenants and
agreements contained in this Agreement to be complied with by the Purchaser on
or before the Closing shall have been complied with in all material respects,
and Classic and the Company shall have received a certificate from the Purchaser
to such effect signed by a duly authorized officer thereof;
36
(b) Resolutions. Classic and the Company shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of the
Purchaser, of the resolutions duly and validly adopted by the Board of Directors
of the Purchaser evidencing its authorization of the execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby;
(c) Incumbency Certificate. Classic and the Company shall have received a
certificate of the Secretary or an Assistant Secretary of the Purchaser
certifying the names and signatures of the officers of the Purchaser authorized
to sign this Agreement, the Liquidation and Indemnification Agreement and the
Ancillary Agreements and the other documents to be delivered hereunder and
thereunder; and
(d) Ancillary Agreements. The Purchaser shall have executed and delivered
to the Company each of the Ancillary Agreements to which it is a party.
SECTION 7.03 Conditions to Obligations of the Purchaser. The obligations of
the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment or waiver (where permissible), at or prior
to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of each of Classic and the Company contained in this Agreement shall
have been true and correct when made and shall be true and correct in all
material respects as of the Closing with the same force and effect as if made as
of the Closing, other than such representations and warranties as are made as of
another date, which shall be true and correct as of such date (provided,
however, that if any portion of any representation or warranty is already
qualified by materiality, for purposes of determining whether this Section
7.03(a) has been satisfied with respect to such portion of such representation
or warranty, such portion of such representation or warranty as so qualified
must be true and correct in all respects), and the covenants and agreements
contained in this Agreement to be complied with by each of Classic and the
Company on or before the Closing shall have been complied with in all material
respects, and the Purchaser shall have received a certificate of each of Classic
and the Company to such effect signed by a duly authorized officer thereof;
(b) Resolutions of Classic and the Company. The Purchaser shall have
received a true and complete copy, certified by the Secretary or an Assistant
Secretary of each of Classic and the Company, of the resolutions duly and
validly adopted by their respective Board of Directors evidencing such Board of
Directors' authorization of the execution and delivery, as applicable, of this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby;
(c) Incumbency Certificate of Classic and the Company. The Purchaser shall
have received a certificate of the Secretary or an Assistant Secretary of each
of Classic and the Company certifying the names and signatures of the officers
of Classic and the Company authorized to sign, as applicable, this Agreement,
the Liquidation and Indemnification Agreement and the Ancillary Agreements and
the other documents to be delivered hereunder and thereunder;
37
(d) Consents and Approvals. The parties hereto shall have received, each in
form and substance satisfactory to the Purchaser in its sole and absolute
discretion, all authorizations, consents, orders and approvals of all
Governmental Authorities and officials and all third party consents set forth in
Section 7.03(d) of the Disclosure Schedule (which schedule of consents the
Purchaser, acting reasonably, shall have the opportunity to add additional
consents to, such additional consents shall only be consents to Material
Contracts (excluding, however, Material Contracts cancelable at will, such as
travel agency/consortia contracts and hotel, air and ground contracts)), by
written notice to the Company, delivered within five (5) Business Days following
the delivery by the Company of the list contemplated by Section 6.16);
(e) Ancillary Agreements. The Company shall have executed and delivered to
the Purchaser each of the Ancillary Agreements to which it is a party;
(f) No Material Adverse Effect. No event or events shall have occurred, or
be reasonably likely to occur, which, individually or in the aggregate, have, or
could have, a Material Adverse Effect; and
(g) Note Purchase Agreement. The transactions contemplated by the Note
Purchase Agreement shall have been consummated.
ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.01 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by the Purchaser if, between the date hereof and the time scheduled for
the Closing: (i) an event or condition occurs that has resulted in or that may
be reasonably expected to result in a Material Adverse Effect, (ii) any material
representation or warranty of either Classic or the Company contained in this
Agreement shall not have been true and correct when made, (iii) either Classic
or the Company shall not have complied with any material covenant or agreement
to be complied with by it and contained in this Agreement and the Ancillary
Agreements; or (iv) either Classic or the Company makes a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or against
Classic or the Company seeking to adjudicate any of them a bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization; or
(b) by the Purchaser if the Closing shall not have occurred by June 30,
2002; provided, however, that the Purchaser shall have no right to terminate
this Agreement under this Section 8.01(b) if the Purchaser's failure to fulfill
any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to such date; or
(c) by any party hereto in the event that any Governmental Authority shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
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(d) by the mutual written consent of the parties hereto.
SECTION 8.02 Effect of Termination. (a) In the event of termination of this
Agreement as provided in Section 8.01, this Agreement shall forthwith become
void and there shall be no liability on the part of either party hereto except
(a) as set forth in Sections 6.03, 8.02(b) and 9.01 and (b) that nothing herein
shall relieve either party from liability for any breach of this Agreement.
SECTION 8.03 Waiver. Any party to this Agreement may (a) extend the time
for the performance of any of the obligations or other acts of any other party,
(b) waive any inaccuracies in the representations and warranties of any other
party contained herein or in any document delivered by any other party pursuant
hereto or (c) waive compliance with any of the agreements or conditions of any
other party contained herein, provided, however, that Classic and the Company
shall be deemed the same party for the purposes of this Section 8.03. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby. Any waiver of any term or condition
shall not be construed as a waiver of any subsequent breach or a subsequent
waiver of the same term or condition, or a waiver of any other term or
condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 9.02 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by cable, by telecopy, by telegram, by telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
(a) if to Classic or the Company:
Classic Vacation Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
39
with a copy to:
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: X. Xxxxx Xxxx, Esq.
(b) if to the Purchaser:
Expedia, Inc.
00000 XX Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy to:
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
SECTION 9.03 Public Announcements. No party to this Agreement shall make,
or cause to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other parties hereto,
and the parties shall cooperate as to the timing and contents of any such press
release or public announcement, except to the extent required by Law or by rules
of the Nasdaq National Market or the American Stock Exchange, in which case each
party shall agree to use reasonable efforts to consult with the other parties
hereto regarding the timing and contents thereof prior to any such release or
public announcement or communication.
SECTION 9.04 Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.05 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
40
SECTION 9.06 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, between the parties hereto with respect to the subject matter hereof and
thereof.
SECTION 9.07 Assignment. This Agreement may not be assigned by operation of
law or otherwise without the express written consent of the other parties hereto
(which consent may be granted or withheld in the sole discretion of the parties
hereto); provided, however, that the Purchaser may assign this Agreement to an
Affiliate of the Purchaser without the consent of Classic or the Company.
SECTION 9.08 No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 9.09 Amendment. This Agreement may not be amended or modified
except (a) by an instrument in writing signed by, or on behalf of, the parties
hereto or (b) by a waiver in accordance with Section 8.03.
SECTION 9.10 Governing Law. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any
Washington state court or any federal court sitting in the State of Washington
in any action arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action may be heard and
determined in such Washington state or federal court. Each party hereto hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
parties hereto further agree, to the extent permitted by law, that final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment.
(c) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
party hereto hereby irrevocably waives such immunity in respect of its
obligations with respect to this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by applicable
laws, any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement. Each party hereto
certifies that it has been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications set forth above in this Section.
41
SECTION 9.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
CLASSIC CUSTOM VACATIONS
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CLASSIC VACATION GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EXPEDIA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
43
EXHIBIT 1.01(a)
FORM OF ASSUMPTION AGREEMENT
EXHIBIT 1.01(a)
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of [_________], 2002 (this "Assumption
Agreement"), between CLASSIC CUSTOM VACATIONS, a California corporation (the
"Company") and EXPEDIA, INC., a Washington corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company, the Purchaser and Classic Vacation Group, Inc., a New
York corporation ("Classic"), have entered into an Asset Purchase Agreement,
dated as of January 22, 2002 (the "Asset Purchase Agreement"; unless otherwise
defined herein, capitalized terms shall be used herein as defined in the Asset
Purchase Agreement);
WHEREAS, pursuant to the Asset Purchase Agreement, the Purchaser has agreed
to assume certain liabilities and obligations of the Company with respect to the
Business; and
WHEREAS, the execution and delivery of this Assumption Agreement by the
Purchaser is a condition to the obligations of the Company to consummate the
transactions contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants set forth herein and in the Asset Purchase Agreement, and
intending to be legally bound hereby, the Purchaser and the Company hereby agree
as follows:
1. Assumption of Liabilities. Subject to Section 2 hereof, the
Purchaser hereby assumes and agrees to pay, perform and discharge when due
all Liabilities of the Company (including all Liabilities under the Classic
Contracts to the extent they relate to the Business, regardless of whether
consent is received for the assignment of such Classic Contracts, and
including the Assumed Taxes) as at the Closing Date arising out of or
relating to the Business, whether accrued or arising before or after the
Closing (the "Assumed Liabilities").
2. Excluded Liabilities. Notwithstanding the provisions of Section 1
hereof, the Company (or Classic, as applicable) shall retain, and shall be
responsible for paying, performing and discharging when due, and the
Purchaser shall not assume or have any responsibility for, all Liabilities
of the Company as of the Closing Date other than the Assumed Liabilities
(the "Excluded Liabilities"), including, without limitation:
(i) all Taxes (other than the Assumed Taxes) now or hereafter
owed by Classic or any Affiliate of the Company, including the
Company;
(ii) all Liabilities under the Classic Contracts which do not
relate to the Business;
(iii) all Liabilities under the Company Contracts which do not
relate to the Business;
(iv) all Liabilities relating to or arising out of the Excluded
Assets; and
(v) all obligations of the Company under this Agreement and the
Ancillary Agreements.
3. No Third Party Beneficiaries. This Assumption Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever, under or by reason of this
Assumption Agreement.
4. Assignment. This Assumption Agreement may not be assigned by
operation of Law or otherwise without the express written consent of the
Company and the Purchaser (which consent may be granted or withheld in the
sole discretion of the Company or the Purchaser); provided, however, that
the Purchaser may assign this Assumption Agreement to an Affiliate of the
Purchaser without the consent of the Company.
5. Counterparts. This Assumption Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
6. Governing Law. This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of Washington,
applicable to contracts executed in and to be performed entirely within
that state.
ii
IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Assumption Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CLASSIC CUSTOM VACATIONS
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EXPEDIA, INC.
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
iii
EXHIBIT 1.01(b)
FORM OF XXXX OF SALE AND ASSIGNMENT
EXHIBIT 1.01(b)
XXXX OF SALE AND ASSIGNMENT
XXXX OF SALE AND ASSIGNMENT, dated as of [_________], 2002 (this "Xxxx of
Sale and Assignment"), from CLASSIC CUSTOM VACATIONS, a California corporation
(the "Company") and CLASSIC VACATION GROUP, INC., a New York corporation
("Classic") to EXPEDIA, INC., a Washington corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company, the Purchaser and Classic have entered into an Asset
Purchase Agreement, dated as of January 22, 2002 (the "Asset Purchase
Agreement"; unless otherwise defined herein, capitalized terms shall be used
herein as defined in the Asset Purchase Agreement);
WHEREAS, the execution and delivery of this Xxxx of Sale and Assignment by
the Company and Classic is a condition to the obligations of the Purchaser to
consummate the transactions contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration to the Company and
Classic, receipt of which is hereby acknowledged, and pursuant to the Asset
Purchase Agreement, each of the Company and Classic, intending to be legally
bound hereby, does hereby agree as follows:
1. Sale and Assignment of Assets and Properties. (a) The Company (and,
for the purposes of clause (xiii) only, Classic) does hereby sell, assign,
transfer, convey, grant, bargain, set over, release, deliver, vest and
confirm unto the Purchaser, its successors and assigns, forever, the entire
right, title and interest of the Company (and, for the purposes of clause
(xiii) only, Classic) in and to the following property and assets (the
"Assets"):
(i) the Business as a going concern;
(ii) all rights in respect of leased Real Property;
(iii) all furniture, fixtures, equipment, machinery and other
tangible personal property used or held for use by the Company at the
locations at which the Business is conducted, or otherwise owned or
held by the Company at the Closing Date for use in the conduct of the
Business and not otherwise included in clause (ii) above;
(iv) all vehicles;
(v) all cash, cash equivalents and bank accounts (other than the
Purchase Price Bank Account) owned by the Company at the Closing Date;
(vi) all Receivables;
(vii) all books of account, general, financial, tax and personnel
records, invoices, shipping records, supplier lists, correspondence
and other documents, records and files and all computer software and
programs and any rights thereto owned, associated with or employed by
the Company or used in, or relating to, the Business at the Closing
Date, other than organization documents, minute and stock record books
and the corporate seal of the Company;
(viii) the goodwill of the Company relating to the Business;
(ix) all the Company's right, title and interest in, to and under
the Owned Intellectual Property and the Licensed Intellectual
Property;
(x) except for the Excluded Assets, all claims, causes of action,
choses in action, rights of recovery and rights of set-off of any kind
(including rights to insurance proceeds and rights under and pursuant
to all warranties, representations and guarantees made by suppliers of
products, materials or equipment, or components thereof), pertaining
to, arising out of, and ensuring to the benefit of the Company;
(xi) all sales and promotional literature, customer lists and
other sales-related materials owned, used, associated with or employed
by the Company at the Closing Date;
(xii) except for the Excluded Assets, all rights of the Company
under all Company Contracts;
(xiii) except for the Excluded Assets, all rights of Classic (or
its Affiliates, other than the Company) under all Classic Contracts;
(xiv) all municipal, state and federal franchises, permits,
licenses, agreements, waivers and authorizations held or used by the
Company in connection with, or required for, the Business, to the
extent transferable; and
(xv) except for the Excluded Assets, all the Company's right,
title and interest on the Closing Date in, to and under all other
assets, rights and claims of every kind and nature used or intended to
be used in the operation of, or residing with, the Business.
Each of the Company and Classic warrants that upon delivery to the
Purchaser of the Assets sold, assigned, transferred, conveyed, granted,
bargained, set over, released, delivered, vested and confirmed from the
Company and Classic to the Purchaser pursuant to this Xxxx of Sale and
Assignment, the Purchaser will own, with good and marketable title, or
lease, under valid and subsisting leasehold interests, the Assets, free and
clear of all Encumbrances, except as expressly contemplated by the Asset
Purchase Agreement, including, without limitation, the Exhibits and the
Disclosure Schedule that are a part thereof.
ii
2. Assets and Properties Not Sold and Assigned. The Assets shall
exclude the following assets owned by the Company (the "Excluded Assets"):
(i) the Purchase Price Bank Account; and
(ii) all rights of the Company under this Agreement and the
Ancillary Agreements.
3. Power of Attorney. Each of the Company and Classic hereby
constitutes and appoints the Purchaser, its successors and assigns, the
true and lawful attorney and attorneys of the Company and Classic, with
full power of substitution, in the name of the Purchaser or in the name and
stead of the Company and Classic, but on behalf of, for the benefit and at
the expense of the Purchaser, its successors and assigns:
(i) to collect, demand and receive any and all Assets hereby sold
and assigned to the Purchaser or intended so to be and to give
receipts and releases for and in respect of the same;
(ii) to institute and prosecute any and all actions, suits or
proceedings, at law, in equity or otherwise, which the Purchaser may
deem proper in order to collect, assert or enforce any claim, right or
title of any kind in or to the Assets hereby sold and assigned to the
Purchaser or intended so to be, to defend or compromise any and all
actions, suits or proceedings in respect of any of the Assets, and to
do all such acts and things in relation thereto as the Purchaser shall
deem advisable;
(iii) to take any and all other reasonable action designed to
vest more fully in the Purchaser the Assets hereby sold and assigned
to the Purchaser or intended so to be and in order to provide for the
Purchaser the benefit, use, enjoyment and possession of such Assets;
and
(iv) to do all reasonable acts and things in relation to the
Assets hereby sold and assigned.
Each of the Company and Classic acknowledges that the foregoing powers are
coupled with an interest and shall be irrevocable by it or upon its
subsequent dissolution or in any manner or for any reason. The Purchaser
shall be entitled to retain for its own account any amounts collected
pursuant to the foregoing powers, including any amounts payable as interest
with respect thereto. The Company shall from time to time pay to the
Purchaser, when received, any amounts which shall be received directly or
indirectly by the Company (including amounts received as interest) in
respect of any Assets sold and assigned to the Purchaser pursuant hereto.
4. Obligations and Liabilities Not Assumed. Nothing expressed or
implied in this Xxxx of Sale and Assignment shall be deemed to be an
assumption by the Purchaser of any Liabilities of the Company or Classic.
The Purchaser does not by this Xxxx of Sale and Assignment assume or agree
to pay, perform or discharge any Liabilities of the Company or Classic of
any nature, kind or description whatsoever. The terms and provisions of the
assumption of Liabilities by the Purchaser are set forth in the Assumption
Agreement dated as of the date hereof between the Purchaser and the
Company.
iii
5. No Third Party Beneficiaries. This Xxxx of Sale and Assignment
shall be binding upon and inure solely to the benefit of the parties hereto
and their permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or equitable
right, benefit or remedy of any nature whatsoever, under or by reason of
this Xxxx of Sale and Assignment.
6. Assignment. This Xxxx of Sale and Assignment may not be assigned by
operation of Law or otherwise without the express written consent of the
Company and the Purchaser (which consent may be granted or withheld in the
sole discretion of the Company or the Purchaser); provided, however, that
the Purchaser may assign this Xxxx of Sale and Assignment to an Affiliate
of the Purchaser without the consent of the Company or Classic.
7. Governing Law. This Xxxx of Sale and Assignment shall be governed
by, and construed in accordance with, the laws of the State of Washington.
iv
IN WITNESS WHEREOF, the Company and Classic have caused this Xxxx of Sale
and Assignment to be executed as of the date first written above by its officer
thereunto duly authorized.
CLASSIC CUSTOM VACATIONS
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
By
---------------------------
Name:
Title:
CLASSIC VACATION GROUP, INC.
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
By
---------------------------
Name:
Title:
v
CALIFORNIA )
) ss.:
COUNTY OF SAN XXXX )
On that [ ] day of [ ], 2002, before me personally came Xxxxxx X.
Xxxxxxxxx to me known, who, being by me duly sworn, did depose and say she
resides at [ ]; and that she is Executive Vice
President and Chief Financial Officer of Classic Custom Vacations, a California
corporation, and Classic Vacation Group, Inc., a New York corporation and the
corporations described in and which executed the foregoing instrument, and that
she had the authority to sign her name thereto on behalf of said corporations.
----------------------------------
Notary Public
[Notarial Seal]
EXHIBIT 3.05
REFERENCE BALANCE SHEET
