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EXHIBIT 3
EQUITY PURCHASE AGREEMENT
BETWEEN
GLOBAL VACATION GROUP, INC.
(FORMERLY, ALLIED BUS CORP.)
AND
XXXXXX EQUITY INVESTORS III, L.P.
AND
CERTAIN OTHER PURCHASERS
DATED MARCH 30, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE I AUTHORIZATION AND CLOSING.......................................... 1
1.1 Authorization of the Stock.......................................... 1
1.2 Purchase and Sale of the Stock at Initial Closing................... 2
(a) Initial Purchase............................................. 2
(b) Use of Proceeds of Initial Purchase.......................... 2
(c) Initial Closing.............................................. 2
1.3 Subsequent Take-Downs of Class A Preferred.......................... 2
(a) Request for Takedowns........................................ 2
(b) Subsequent Closings.......................................... 3
(c) Termination.................................................. 3
ARTICLE II CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING.............. 3
2.1 Initial Closing Conditions.......................................... 3
(a) Representations and Warranties, Covenants.................... 3
(b) Management Agreements........................................ 4
(c) Shareholders Agreement....................................... 4
(d) Professional Services Agreement.............................. 4
(e) Compliance with Applicable Laws.............................. 4
(f) Waiver....................................................... 4
2.2 Subsequent Closing Conditions....................................... 4
(a) Representations and Warranties, Covenants.................... 4
(b) Compliance with Applicable Laws.............................. 5
(c) Waiver....................................................... 5
ARTICLE III COVENANTS........................................................ 5
3.1 Financial Statements and Other Information.......................... 5
3.2 Inspection of Property.............................................. 6
3.3 Restrictions........................................................ 6
3.4 Unrelated Business Taxable Income................................... 8
3.5 Xxxx-Xxxxx-Xxxxxx Compliance........................................ 8
3.6 Confidentiality..................................................... 8
3.7 Termination......................................................... 8
ARTICLE IV TRANSFER OF RESTRICTED SECURITIES................................. 9
4.1 Transfer of Restricted Securities................................... 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 10
5.1 Organization and Corporate Power.................................... 10
5.2 Capital Stock and Related Matters................................... 10
5.3 Subsidiaries; Investments........................................... 11
5.4 Authorization; No Breach............................................ 11
5.5 Violation of Laws................................................... 11
5.6 Governmental Consent, etc. ......................................... 11
5.7 Disclosure.......................................................... 11
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ARTICLE VI PURCHASER'S REPRESENTATIONS AND WARRANTIES........................ 12
6.1 Purchaser's Investment Representations.............................. 12
6.2 Authorization; No Breach............................................ 12
6.3 Brokerage........................................................... 13
6.4 Governmental Consent, etc........................................... 13
ARTICLE VII DEFINITIONS...................................................... 13
ARTICLE VIII MISCELLANEOUS................................................... 16
8.1 Expenses............................................................ 16
8.2 Remedies............................................................ 16
8.3 Consent to Amendments............................................... 16
8.4 Survival of Representation and Warranties........................... 16
8.5 Successors and Assigns.............................................. 17
8.6 Severability........................................................ 17
8.7 Counterparts........................................................ 17
8.8 Descriptive Headings; Interpretation................................ 17
8.9 Governing Law....................................................... 17
8.10 Notices............................................................ 18
8.11 Entire Agreement................................................... 18
LIST OF EXHIBITS
Exhibit A Form of Senior Management Agreement
Exhibit B Shareholders Agreement
Exhibit C Professional Services Agreement
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PURCHASE AGREEMENT
THIS AGREEMENT is made as of March 30, 1998, between GLOBAL VACATION
GROUP, INC., a New York corporation (formerly, Allied Bus Corp.) (the
"COMPANY"), XXXXXX EQUITY INVESTORS III, L.P., a Delaware limited partnership
("XXXXXX III"), and each of the other persons or entities set forth in the
Schedule of Purchasers attached hereto (collectively with Xxxxxx III, the
"PURCHASERS" and individually a "PURCHASER"). Except as otherwise indicated
herein, capitalized terms used herein are defined in Section 7 hereof.
RECITALS:
A. The Company was formed in 1959 for the purpose of engaging in the
vacation package and tour business.
B. Pursuant to a Recapitalization Agreement dated March 18, 1998 (the
"RECAPITALIZATION AGREEMENT") by and among the Company, Xxxxxx III, Allied Tours
Holding Corp. ("ALLIED PARENT"), and the shareholders of Allied Parent (the
"EXISTING SHAREHOLDERS"), Xxxxxx III has acquired an aggregate of (i) 22,249
shares of the Company's Class A Preferred Stock, par value $1,000 per share (the
"CLASS A PREFERRED"), and (ii) 247,215 shares of the Company's Common Stock,
$.01 par value per share (the "COMMON").
C. At the Initial Closing, the Purchasers desire to purchase from the
Company, and the Company desires to sell to the Purchasers (i) an aggregate of
1,227.64 shares of Class A Preferred and (ii) an aggregate of 266,425.4 shares
of the Common, in the amount set forth opposite each Purchaser's name on the
Schedule of Purchasers attached hereto.
D. At the Subsequent Closings, if any, Xxxxxx III will purchase from the
Company, and the Company will sell to Xxxxxx III, up to an aggregate of 22,751
additional shares of the Class A Preferred.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AUTHORIZATION AND CLOSING
(a) AUTHORIZATION OF THE STOCK. The Company shall authorize the issuance
and sale to the Purchasers of up to an aggregate of 23,978.64 shares of Class A
Preferred and an aggregate of 266,425.4 shares of Common, each having the rights
and preferences set forth in Exhibit A attached hereto. The Class A Preferred
and the Common are collectively referred to herein as the "STOCK."
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(b) PURCHASE AND SALE OF THE STOCK AT INITIAL CLOSING.
(i) INITIAL PURCHASE. Subject to the terms and conditions set
forth in this Section 1.2 and in Section 2.1, at the Initial Closing, the
Company shall sell to each Purchaser and, each Purchaser shall purchase from
the Company:
(A) that number of shares of the Class A Preferred set
forth opposite such Purchaser's name in the Schedule of
Purchasers attached hereto, at a purchase price of $1,000 per
share; and
(B) that number of shares of the Common set forth
opposite such Purchaser's name set forth in the Schedule of
Purchasers attached hereto, at a purchase price of $10 per
share.
(ii) USE OF PROCEEDS OF INITIAL PURCHASE. The funds obtained by
the Company from the Purchasers at the Initial Closing shall, together with
debt financing provided by The Bank of New York ("LENDER") pursuant to the
Credit Agreement (the "CREDIT AGREEMENT") dated March 27, 1998, as amended,
between Lender, the Company and its Subsidiaries, be used to (i) finance the
Company's costs of consummating the acquisition of Haddon Holidays, Inc.
("HADDON") and (ii) provide funds for the Company's working capital
requirements.
(iii) INITIAL CLOSING. The closing of the purchase and sale of
the Stock to be purchased pursuant to Sections 1.2(a) (the "INITIAL CLOSING")
shall take place at the offices of Xxxxx & Xxxxxxx, LLP, 000 Xxxxxxxxxx Xxxxxx,
XX, Xxxxxxxxxx, X.X., 00000 at 10:00 a.m. on March 30, 1998 or at such other
place or on such other date as may be mutually agreeable to the Company and the
Purchasers. At the Initial Closing, the Company shall deliver to each Purchaser
stock certificates evidencing the Stock to be purchased by such Purchaser,
registered in such Purchaser's name, upon payment of the purchase price thereof
by, at the Company's option, either a cashier's or certified check, or by wire
transfer of immediately available funds to such account as designated by the
Company.
(c) SUBSEQUENT TAKE-DOWNS OF CLASS A PREFERRED.
(i) REQUEST FOR TAKEDOWNS. The Company may from time to time
request that Xxxxxx III purchase from the Company up to 22,751 additional
shares of Class A Preferred at a purchase price of $1,000 per share (an
aggregate purchase price of $22,751,000) (such purchases are referred to as
"TAKE-DOWNS"). Such requests shall be made in conjunction with and for the
purpose of funding future acquisitions of vacation package tour businesses by
the Company and shall be presented to Xxxxxx III in writing. Xxxxxx III shall
accept or reject such Take-Down within 10 business days of receiving such
request. The Company and Xxxxxx III shall agree upon a date (the "SUBSEQUENT
CLOSING DATE") for the closing (the "SUBSEQUENT CLOSING") of the additional
shares of Class A Preferred to be purchased in connection with such Take-Down.
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(ii) SUBSEQUENT CLOSINGS. Subsequent Closings shall take place
on the Subsequent Closing Date at the offices of Xxxxx & Xxxxxxx LLP, 000
Xxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000, or at such other place as shall
be agreed to by Xxxxxx III and the Company. At a Subsequent Closing, upon the
satisfaction of the provisions of this Section 1.3 and of Section 2.2, the
Company shall deliver to Xxxxxx III stock certificates evidencing the shares of
Class A Preferred to be purchased by Xxxxxx III registered in its name, upon
payment of the purchase price thereof by, at the Company's option, either a
cashier's or certified check, or by wire transfer of immediately available
funds to such account as designated by the Company.
(iii) TERMINATION. The provisions of this Section 1.3 shall
terminate on the earlier to occur of the following events: (i) the written
consent of the holders of greater than 50% of the outstanding shares of Class A
Preferred and the Company; (ii) a Drag-Along Sale (as defined in the
Shareholders Agreement); (iii) a merger or other business combination involving
the Company in which the holders of the Company's capital stock immediately
prior to the effective time of such merger or business combination own less
than 50% of the capital stock of the surviving corporation (determined on a
fully-diluted basis) immediately after the effective time of such merger or
business combination; or (iv) the closing of an IPO Event (as defined in the
Shareholders Agreement).
ARTICLE II
CONDITIONS OF THE PURCHASERS' OBLIGATIONS
AT CLOSINGS
(a) INITIAL CLOSING CONDITIONS. The obligation of the Purchasers to
purchase and pay for the Stock at the Initial Closing is subject to the
satisfaction as of the Initial Closing of the following conditions:
(i) REPRESENTATIONS AND WARRANTIES, COVENANTS. The
representations and warranties contained in Section 5 hereof shall be true and
correct at and as of the Initial Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated herein; and
the Company shall have performed in all material respects all of the covenants
required to be performed by it hereunder prior to the Initial Closing.
(ii) MANAGEMENT AGREEMENTS. The Company shall have entered into
a senior management agreement, in form and substance substantially similar to
Exhibit A attached hereto (the "MANAGEMENT AGREEMENTS"), with each of Xxxxx
Xxxxxx, Xxxxxxx Xxxxx and Xxxxxx Xxxxxx (the "EXECUTIVES"), the Management
Agreements shall not have been amended or modified and shall be in full force
and effect as of the Initial Closing, and each Executive shall have purchased
the Stock, if any, proposed to be purchased by him thereunder.
(iii) SHAREHOLDERS AGREEMENT. The Purchasers and the Executives
shall have executed a joinder agreement to the Shareholders Agreement (the
"SHAREHOLDERS
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AGREEMENT") in form and substance substantially similar to Exhibit B attached
hereto, and the Shareholders Agreement shall be in full force and effect as of
the Initial Closing.
(iv) PROFESSIONAL SERVICES AGREEMENT. The Company and TC
Management Partners, L.L.C., a Delaware limited liability company, shall have
entered into a Professional Services Agreement in form and substance
substantially similar to Exhibit C attached hereto (the "PROFESSIONAL SERVICES
AGREEMENT"), and the Professional Services Agreement shall be in full force and
effect as of the Initial Closing.
(v) COMPLIANCE WITH APPLICABLE LAWS. The purchase of Stock by
the Purchasers hereunder shall not be prohibited by any applicable law or
governmental regulation, shall not subject the Purchasers to any penalty,
liability or, in the Purchasers' sole judgment, other onerous conditions under
or pursuant to any applicable law or governmental regulation, and shall be
permitted by laws and regulations of the jurisdictions to which the Purchasers
are subject.
(vi) WAIVER. Any condition specified in this Section 2.1 may be
waived only if such waiver is set forth in a writing executed by the
Purchasers.
(b) SUBSEQUENT CLOSING CONDITIONS. The obligation of Xxxxxx III to
purchase and pay for shares of Class A Preferred at a Subsequent Closing in
connection with a Take-Down is subject to the satisfaction as of the Subsequent
Closing of the following conditions:
(i) REPRESENTATIONS AND WARRANTIES, COVENANTS. The
representations and warranties contained in Section 5 hereof shall be true and
correct in all material respects at and as of the Subsequent Closing as though
then made, except:
(A) to the extent expressly made as of an earlier date;
(B) to the extent of changes caused by the transactions
expressly contemplated herein (including the acquisition of
Haddon) or by the transactions for which such Take-Down is being
made (or for which prior Take-Downs have been made) and the
Company shall have performed in all material respects all of the
covenants required to be performed by it hereunder prior to the
Subsequent Closing; and
(C) to reflect the fact that additional shares of Class
A Preferred have been issued to Xxxxxx III pursuant to Section 1.3.
(ii) COMPLIANCE WITH APPLICABLE LAWS. The purchase of Stock by
Xxxxxx III pursuant to such Subsequent Closing shall not be prohibited by any
applicable law or governmental regulation, shall not subject Xxxxxx III to any
penalty, liability or, in Xxxxxx III's sole judgment, other onerous conditions
under or pursuant to any applicable law or governmental regulation, and shall
be permitted by laws and regulations of the jurisdictions to which Xxxxxx III
is subject.
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(iii) WAIVER. Any condition specified in this Section 2.2 may be
waived only if such waiver is set forth in a writing executed by Xxxxxx III.
ARTICLE III
COVENANTS
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
deliver to Xxxxxx III so long as it holds any Investor Stock:
(i) as soon as available but in any event within 45 days after
the end of each quarterly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and for the period from
the beginning of the fiscal year to the end of such quarter, and consolidating
and consolidated balance sheets of the Company and its Subsidiaries as of the
end of such quarterly period, all prepared in accordance with generally
accepted accounting principles, consistently applied, subject to the absence of
footnote disclosures and to normal year-end adjustments;
(ii) within 120 days after the end of each fiscal year,
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such fiscal year, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of the end
of such fiscal year, setting forth in each case comparisons to the annual
budget and to the preceding fiscal year, all prepared in accordance with
generally accepted accounting principles, consistently applied, and accompanied
by (i) with respect to the consolidated portions of such statements (except
with respect to budget data), an opinion containing no exceptions or
qualifications (except for qualifications regarding specified contingent
liabilities) of Xxxxxx Xxxxxxxx, LLP or an independent accounting firm of
recognized national standing acceptable to Xxxxxx III, and (ii) a copy of such
firm's annual management letter to the Board;
(iii) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials
provided hereunder); and
(iv) with reasonable promptness, such other information and
financial data concerning the Company and its Subsidiaries as Xxxxxx III may
reasonably request.
Each of the financial statements referred to in Sections 3.1 (a) and (b)
shall be true and correct in all material respects as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit adjustments (none of
which would, alone or in the aggregate, be materially adverse to the
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financial condition, operating results, assets, operations or business
prospects of the Company and its Subsidiaries taken as a whole).
(b) INSPECTION OF PROPERTY. The Company shall permit any representatives
designated by Xxxxxx III (so long as Xxxxxx III holds any Investor Stock), upon
reasonable notice and during normal business hours and such other times as any
such holder may reasonably request, to (i) visit and inspect any of the
properties of the Company and its Subsidiaries, (ii) examine the corporate and
financial records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom and (iii) discuss the affairs, finances and accounts of any
such corporations with the directors, officers, key employees and independent
accountants of the Company and its Subsidiaries.
(c) RESTRICTIONS. Except as expressly contemplated by the purchase
agreements relating to the acquisition of Haddon, this Agreement, the
Recapitalization Agreement or an agreement to be entered into in connection with
a transaction for which a Take-Down is being made, the Company shall not without
the prior written consent of either (x) a majority of the members of the
Company's Board of Directors (the "BOARD") appointed by Xxxxxx III pursuant to
any resolution of the Board or (y) the holders of a majority of the outstanding
Investor Preferred or, in the event no Investor Preferred is outstanding,
without the prior written consent of the holders of a majority of the Investor
Common:
(i) directly or indirectly declare or pay any dividends or make
any distributions upon any of its equity securities, other than payments of
dividends on, or redemption payments in respect of, the Class A Preferred
pursuant to the Certificate of Incorporation;
(ii) except pursuant to the Management Agreements and the
Shareholders Agreement, directly or indirectly redeem, purchase or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise acquire, any
of the Company's equity securities (including, without limitation, warrants,
options and other rights to acquire equity securities),
(iii) except as expressly contemplated by the Management
Agreements authorize, issue, sell or enter into any agreement providing for the
issuance (contingent or otherwise), or permit any Subsidiary to authorize,
issue, sell or enter into any agreement providing for the issuance (contingent
or otherwise) of, (i) any notes or debt securities containing equity features
or (ii) any equity securities (or any securities convertible into or
exchangeable for any equity securities) or rights to acquire any equity
securities, other than the issuance of equity securities by a Subsidiary to the
Company or another Subsidiary;
(iv) merge or consolidate with any Person or permit any
Subsidiary to merge or consolidate with any Person (other than a wholly owned
Subsidiary);
(v) sell, lease or otherwise dispose of, or permit any
Subsidiary to sell, lease or otherwise dispose of, more than 5% of the
consolidated assets of the Company and its Subsidiaries (computed on the basis
of book value, determined in accordance with generally accepted accounting
principles consistently applied, or fair market value, determined by the
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Board in its reasonable good faith judgment) in any transaction or series of
related transactions (other than sales of inventory in the ordinary course of
business);
(vi) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation, any
reorganization into partnership form);
(vii) acquire, or permit any Subsidiary to acquire, any material
interest in any business (whether by a purchase of assets, purchase of stock,
merger or otherwise), or enter into any material joint venture;
(viii) enter into, or permit any Subsidiary to enter into, the
ownership, active management or operation of any business other than the
operation of leisure and travel service businesses;
(ix) enter into, or permit any Subsidiary to enter into, any
transaction with any of its or any Subsidiary's officers, directors, employees
or Affiliates or any individual related by blood, marriage or adoption to any
such Person or any entity in which any such Person or individual owns a
beneficial interest, except for normal employment arrangements and benefit
programs on reasonable terms and except as otherwise expressly contemplated by
this Agreement, the Management Agreements and the Professional Services
Agreement; or
(x) create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, Indebtedness exceeding
the amounts approved therefor by the Board in the annual budget.
(d) UNRELATED BUSINESS TAXABLE INCOME. The Company shall not engage in
any transaction which is reasonably likely to cause Xxxxxx III or any of its
limited partners which are exempt from income taxation under Section 501(a) of
the IRC and, if applicable, any pension plan that any such trust may be a part
of, to recognize unrelated business taxable income as defined in Section 512 and
Section 514 of the IRC.
(e) XXXX-XXXXX-XXXXXX COMPLIANCE. In connection with any transaction in
which the Company is involved which is required to be reported under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time to
time (the "HSR ACT"), the Company shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice which may
be required to comply with the HSR Act, and shall promptly furnish all materials
thereafter requested by any of the regulatory agencies having jurisdiction over
such filings, in connection with the transactions contemplated thereby. The
Company shall take all reasonable actions and shall file and use reasonable best
efforts to have declared effective or approved all documents and notifications
with any governmental or regulatory bodies as may be necessary or may reasonably
be requested under federal antitrust laws for the consummation of the subject
transaction; provided that this Section 3.5 shall not be interpreted as
requiring the Company to divest of any lines of business or other assets.
(f) CONFIDENTIALITY. Except as otherwise required by law or judicial
order or decree or by any governmental agency or authority, Xxxxxx III shall use
its best efforts to
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maintain the confidentiality of all nonpublic information obtained by Xxxxxx III
pursuant to Section 3.1 or 3.2, which the Company has reasonably designated as
proprietary or confidential in nature; provided that Xxxxxx III may disclose
such information to other Purchasers (who shall be bound by this provision) or
in connection with the sale or transfer, or proposed sale or transfer, of any
shares of Investor Stock, if the transferee or proposed transferee agrees in
writing to be bound by the provisions hereof.
(g) TERMINATION. Upon (i) a Drag-Along Sale (as defined in the
Shareholders Agreement), (ii) an IPO Event (as defined in the Shareholders
Agreement) or (iii) such time as the Investor Common constitutes less than 10%
of the fully-diluted Common Stock, Section 3.1, 3.2 and 3.3 shall terminate
without further action and shall be of no further force and effect.
ARTICLE IV
TRANSFER OF RESTRICTED SECURITIES
(a) TRANSFER OF RESTRICTED SECURITIES.
(i) Restricted Securities are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) Rule 144 or Rule
144A of the Securities Act (or any similar rule or rules then in force) if such
rule or rules are available and (iii) subject to the conditions specified in
Section 4.1(b) below, any other legally available means of transfer.
(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in Section 4.1(a)(i) or (ii)
above), the holder thereof shall deliver written notice to the Company
describing in reasonable detail the transfer or proposed transfer, together
with an opinion of Xxxxx & Xxxxxxx LLP, or other counsel which (to the
Company's reasonable satisfaction) is knowledgeable in securities law matters
to the effect that such transfer of Restricted Securities may be effected
without registration of such Restricted Securities under the Securities Act. In
addition, if the holder of the Restricted Securities delivers to the Company an
opinion of Xxxxx & Xxxxxxx LLP, or such other counsel that no subsequent
transfer of such Restricted Securities shall require registration under the
Securities Act, the Company shall promptly upon such contemplated transfer
deliver new certificates for such Restricted Securities which do not bear a
customary Securities Act legend. If the Company is not required to deliver new
certificates for such Restricted Securities not bearing such legend, the holder
thereof shall not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions
contained in this Section 4.1 and Section 6.1.
(iii) Upon the request of the Purchaser, the Company shall
promptly supply to the Purchasers or their respective prospective transferees
all information regarding the Company required to be delivered in connection
with a transfer pursuant to Rule 144A of the Securities Act.
(iv) Each Purchaser agrees to execute and deliver to the Company
and Xxxxxx III a joinder to the Shareholders Agreement and to cause any of its
prospective
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transferees to execute and deliver to the Company and Xxxxxx III a joinder to
the Shareholders Agreement prior to making any transfer of Stock.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchasers to enter into this Agreement
and purchase the Stock, the Company hereby represents and warrants to the
Purchasers that:
(a) ORGANIZATION AND CORPORATE POWER. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
New York and is qualified to do business in every jurisdiction in which the
failure to so qualify might reasonably be expected to have a material adverse
effect on the financial condition, operating results, assets, operations or
business prospects of the Company and its Subsidiaries taken as a whole. The
Company has all requisite corporate power and authority and all material
licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this
Agreement.
(b) CAPITAL STOCK AND RELATED MATTERS.
(i) As of the Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of 6,100,000 shares of
stock, of which (i) 100,000 shares shall be designated as Class A Preferred
(27,439.64 shares of which shall be issued and outstanding, 22,751 shares of
which shall be reserved for issuance to Xxxxxx III pursuant to Section 1.3
hereof, and 425 shares of which shall be reserved for issuance to Executives);
(ii) 6,000,000 shares shall be designated as Common Stock (of which 615,174.37
shares shall be issued and outstanding, 5,000 shares shall be reserved for
issuance in connection with the acquisition of Haddon, and 2,777.75 shares
shall be reserved for issuance to future managers). As of the Closing, the
Company shall not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or
any warrants, options or other rights to acquire its capital stock, except
pursuant to this Agreement and the Management Agreements. As of the Closing,
all of the outstanding shares of the Company's capital stock shall be validly
issued, fully paid and nonassessable.
(ii) Based in part on the investment representations of (i) the
Purchasers in Section 6.1 hereof, (ii) the Executives in paragraph l(d) of the
Management Agreements, and (iii) the purchasers in the Haddon Subscription
Agreement, the Company has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any of its
capital stock, and the offer, sale and issuance of the Stock hereunder and
pursuant to Section 1.3 hereof do not and will not require registration under
the Securities Act or any applicable state securities laws.
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(c) SUBSIDIARIES; INVESTMENTS. Prior to the Haddon acquisition, the
Company did not own or hold any shares of stock or any other security or
interest in any other Person.
(d) AUTHORIZATION; NO BREACH. The execution, delivery and performance of
this Agreement, the Management Agreements, the Shareholders Agreement, the
Professional Services Agreement, the Recapitalization Agreement and all other
agreements contemplated hereby to which the Company is a party have been duly
authorized by the Company. This Agreement, the Management Agreements, the
Shareholders Agreement, the Professional Services Agreement, the
Recapitalization Agreement and all other agreements contemplated hereby each
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms. The execution and delivery by the Company of this
Agreement, the Management Agreements, the Shareholders Agreement, the
Professional Services Agreement, the Recapitalization Agreement and all other
agreements contemplated hereby to which the Company is a party, the offering,
sale and issuance of the Stock hereunder and pursuant to Section 1.2(a), the
Amended and Restated Certificate of Incorporation and the fulfillment of and
compliance with the respective terms hereof and thereof by the Company do not
and will not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in the creation of
any lien, security interest, charge or encumbrance upon the Company's capital
stock or assets pursuant to, (iv) give any third party the right to modify,
terminate or accelerate any obligation under, (v) result in a violation of, or
(vi) require any authorization, consent, approval, exemption or other action by
or notice to any court or administrative or governmental body pursuant to, the
Certificate of Incorporation or bylaws of the Company, or any law, statute, rule
or regulation to which the Company is subject, or any agreement, instrument,
order, judgment or decree to which the Company is a party or by which it is
bound.
(e) VIOLATIONS OF LAWS. Except as set forth in the Disclosure Schedule
to the Recapitalization Agreement, the Company has not (i) violated any laws or
governmental rules or regulations, which violation would reasonably be expected
to have a material adverse effect upon the financial condition, operating
results, assets, operations or business prospects of the Company; (ii) received
notice of any such material violation; or (iii) become subject to any material
clean up liability, and the Company has no reason to believe it may become
subject to any material clean up liability, under any federal, state or local
environmental law, rule or regulation.
(f) GOVERNMENTAL CONSENT, ETC. Except for approvals under the HSR Act,
no material permit, consent, approval or authorization of, or declaration to or
filing with, any governmental authority is required in connection with the
execution, delivery and performance by the Company of this Agreement or the
other agreements contemplated hereby, or the consummation by the Company of any
other transactions contemplated hereby or thereby.
(g) DISCLOSURE. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates or other items prepared
or supplied to the Purchasers by or on behalf of the Company with respect to the
transactions contemplated
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14
hereby contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained herein or therein not misleading.
There is no fact which the Company has not disclosed to the Purchasers in
writing and of which any of its officers, directors or executive employees is
aware and which has had or might reasonably be anticipated to have a material
adverse effect upon the existing or expected financial condition, operating
results, assets, customer or supplier relations, employee relations or business
prospects of the Company.
ARTICLE VI
PURCHASERS REPRESENTATIONS AND WARRANTIES
As a material inducement to the Company to enter into this Agreement,
each Purchaser hereby represents and warrants to the Company, with respect to
itself and not jointly, as follows:
(a) PURCHASER'S INVESTMENT REPRESENTATIONS. Such Purchaser (i) is
acquiring the Restricted Securities purchased hereunder or acquired pursuant
hereto for its own account with the present intention of holding such securities
for purposes of investment, (ii) has no intention of selling such securities in
a public distribution in violation of the federal securities laws or any
applicable state securities laws and (iii) is an "accredited investor" as
defined in the Securities Act; provided that nothing contained herein shall
prevent such Purchaser and subsequent holders of Restricted Securities from
transferring such securities in compliance with the provisions of Article IV
hereof. Each certificate for Restricted Securities shall be imprinted with a
customary securities legend in a form provided by the Company's counsel.
(b) AUTHORIZATION; NO BREACH. The execution, delivery and performance of
this Agreement, the Shareholders Agreement and all other agreements contemplated
hereby to which such Purchaser is a party have been duly authorized by such
Purchaser. This Agreement, the Shareholders Agreement and all other agreements
contemplated hereby to which a Purchaser is a party each constitutes a valid and
binding obligation of such Purchaser, enforceable in accordance with its terms.
The execution and delivery by such Purchaser of this Agreement, the Shareholders
Agreement and all other agreements contemplated hereby to which such Purchaser
is a party, and compliance with the respective terms hereof and thereof by such
Purchaser do not and will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon such Purchaser's capital stock or assets pursuant to, (iv) give any third
party the right to modify, terminate or accelerate any obligation under, (v)
result in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body pursuant to, the charter or organizational documents of such
Purchaser, if applicable, or any law, statute, rule or regulation to which such
Purchaser is subject, or any agreement, instrument, order, judgment or decree to
which such Purchaser is a party or by which it is bound.
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15
(c) BROKERAGE. Other than the Professional Services Agreement, there are
no claims for brokerage commissions, finders, fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon such Purchaser. Such Purchaser shall pay,
and hold the Company harmless against, any liability, loss or expense
(including, without limitation, attorneys, fees and out-of-pocket expenses)
arising in connection with any such claim.
(d) GOVERNMENTAL CONSENT, ETC. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by such
Purchaser of this Agreement or the other agreements contemplated hereby, or the
consummation by such Purchaser of any other transactions contemplated hereby or
thereby.
ARTICLE VII
DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings set forth below:
"AFFILIATE" of any particular person or entity means any other person or
entity controlling, controlled by or under common control with such particular
person or entity.
"CERTIFICATE OF INCORPORATION" means the Company's amended and restated
certificate of incorporation filed with the Secretary of State of the State of
New York on March 30, 1998.
"CLASS A PREFERRED" has the meaning set forth in Recital B of this
Agreement.
"COMMON" has the meaning set forth in Recital B of this Agreement.
"COMMON STOCK" means collectively, the Common and any other class of the
Company's common stock, $.01 par value per share.
"CREDIT AGREEMENT" has the meaning set forth in Section 1.2(b).
"EXISTING SHAREHOLDERS" has the meaning set forth in Recital B of this
Agreement.
"HSR ACT" has the meaning set forth in Section 3.5.
"INDEBTEDNESS" means all indebtedness for borrowed money (including
purchase money obligations) maturing one year or more from the date of creation
or incurrence
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16
thereof or renewable or extendible at the option of the debtor to a date one
year or more from the date of creation or incurrence thereof, all indebtedness
under revolving credit arrangements extending over a year or more, all
capitalized lease obligations and all guarantees of any of the foregoing.
"INITIAL CLOSING" has the meaning set forth in Section 1.2(c).
"INVESTOR COMMON" means (i) the Common Stock issued hereunder and (ii)
any Common Stock issued or issuable with respect to the Common Stock referred to
in clause (i) above by way of stock dividends or stock splits or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares of Investor Common, such shares
shall cease to be Investor Common when they have been (a) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering, them or (b) distributed to the public through a broker,
dealer or market maker pursuant to Rule 144 under the Securities Act (or any
similar rule then in force).
"INVESTOR PREFERRED" means (i) the Class A Preferred issued hereunder
and (ii) any Class A Preferred issued or issuable with respect to the Class A
Preferred referred to in clause (i) above by way of stock dividends or stock
splits or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares of Investor
Preferred, such shares shall cease to be Investor Preferred when they have been
(a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) distributed to the
public through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar rule then in force) or (c) redeemed by the
Company.
"INVESTOR STOCK" means the Investor Preferred and the Investor Common.
"IRC" means the Internal Revenue Code of 1986, as amended, and any
reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"MANAGEMENT AGREEMENTS" has the meaning set forth in Section 2.1(b).
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PROFESSIONAL SERVICES AGREEMENT" has the meaning set forth in Section
2.1(d).
"RECAPITALIZATION AGREEMENT" has the meaning set forth in Recital D.
"RESTRICTED SECURITIES" means (i) the Stock issued hereunder and (ii)
any securities issued with respect to the securities referred to in clause (i)
above by way of a stock
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17
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Restricted Securities, such securities shall cease to be Restricted
Securities when they have (A) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them,
(B) become eligible for sale pursuant to Rule 144(k) (or any similar provision
then in force) under the Securities Act or (C) been otherwise transferred and
new certificates for them not bearing a customary Securities Act legend have
been delivered by the Company in accordance with Section 4.1(b). Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the Company, without expense, new securities
of like tenor not bearing a customary Securities Act legend.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental body or
agency succeeding to the functions thereof.
"SHAREHOLDERS AGREEMENT" has the meaning set forth in Section 2.1(c).
"STOCK" has the meaning set forth in Section 1.1 of this Agreement.
"SUBSEQUENT CLOSING DATE" has the meaning set forth in Section 1.3(a).
"SUBSEQUENT CLOSING" has the meaning set forth in Section 1.3(a).
"SUBSIDIARY" means any corporation of which the securities having a
majority of the ordinary voting power in electing the board of directors or
otherwise are, at the time as of which any determination is being made, owned by
the Company either directly or through one or more Subsidiaries.
"TAKE DOWNS" has the meaning set forth in Section 1.3(a).
"XXXXXX III" means Xxxxxx Equity Investors III, L.P.
ARTICLE VIII
MISCELLANEOUS
(a) EXPENSES. The Company agrees to pay, and hold Xxxxxx III harmless
against liability for the payment of, (i) the fees and expenses of its counsel
arising in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated by this Agreement (including
but not limited to fees and expenses arising with respect to any subsequent
purchase of Stock pursuant to Section 1.3 hereof), (ii) the fees and
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18
expenses incurred with respect to any amendments or waivers (whether or not the
same become effective) under or in respect of this Agreement, the Management
Agreements, the Shareholders Agreement, the Professional Services Agreement, the
other agreements contemplated hereby and the Certificate of Incorporation, (iii)
stamp and other taxes which may be payable in respect of the execution and
delivery of this Agreement or the issuance, delivery or acquisition of any
shares of Stock purchased hereunder or in accordance with Section 1.3 hereof,
and (iv) the fees and expenses incurred with respect to the interpretation or
enforcement of the rights of Xxxxxx III granted under this Agreement, the
Management Agreements, the Shareholders Agreement, the Professional Services
Agreement, the other agreements contemplated hereby and the Certificate of
Incorporation and the Company's bylaws.
(b) REMEDIES. Each holder of Investor Stock shall have all rights and
remedies set forth in this Agreement and the Certificate of Incorporation and
all rights and remedies which such holders have been granted at any time under
any other agreement or contract and all of the rights which such holders have
under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
(c) CONSENT TO AMENDMENTS. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of a majority of the outstanding shares of Investor Common. No other
course of dealing between the Company and the holder of any Stock or any delay
in exercising any rights hereunder or under the Certificate of Incorporation
shall operate as a waiver of any rights of any such holders. For purposes of
this Agreement, shares of Stock held by the Company or any Subsidiaries shall
not be deemed to be outstanding.
(d) SURVIVAL OF REPRESENTATION AND WARRANTIES. All representations and
warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by any Purchasers or on their behalf.
(e) SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not. In addition, and whether or not any express assignment has
been made, the provisions of this Agreement which are for the Purchaser's
benefit as a purchaser or holder of Stock are also for the benefit of, and
enforceable by, any permitted subsequent holder of such Stock. The rights and
obligations of the Xxxxxx III under this Agreement and the agreements
contemplated hereby may be assigned by the Xxxxxx III at any time, in whole or
in part, to any investment fund managed by TC Management Partners, L.L.C. or any
other Affiliate of Xxxxxx III, or any successor thereto.
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19
(f) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating, the
remainder of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
(h) DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a Section
of this Agreement. The use of the word "including" in this Agreement shall be by
way of example rather than by limitation.
(i) GOVERNING LAW. This Agreement and the exhibits and schedules hereto
shall be governed by and construed in accordance with the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York.
(j) NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient by reputable express service (charges prepaid), 24 hours after being
sent by overnight courier service (charges prepaid), 48 hours after being
deposited to the recipient by United States mail, first class, postage prepaid,
or sent by facsimile. Such notices, demands and other communications shall be
sent to the Purchasers and to the Company at the address indicated below:
If to the Company:
Global Vacation Group, Inc.
c/x Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
If to the Purchasers:
To each Purchaser at the address set forth in the
Schedule of Purchasers attached hereto
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20
with a copy to:
Xxxxx & Xxxxxxx, LLP
Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(k) ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
GLOBAL VACATION GROUP, INC.
By: [SIGNATURE APPEARS HERE]
-------------------------------
Name:
-----------------------
Title:
-----------------------
XXXXXX EQUITY INVESTORS III, L.P.
By: TC Equity Partners, LLC.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
-------------------------------
Name:
-----------------------
Title:
-----------------------
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22
[OTHER PURCHASERS]
TC CO-INVESTORS, LLC
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------
Xxxxxxxxxxx Xxxxxx
Member
XXXXXXXXX FAMILY LIMITED
PARTNERSHIP
By: Xxxxxx X. Xxxxxxxxx
Its: General Partner
/s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxx
------------------------------------
Xxxx X. Xxxx
/s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
/s/ Xxxxx X. Xxxxxxxx, III
------------------------------------
Xxxxx X. Xxxxxxxx, III
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23
XXXXXXXXX FAMILY TRUST,
dated June 27, 1986
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Xxxxx Xxxxxxxxx
Trustee
XXXXXX X. XXXXXXXXX REVOCABLE TRUST
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Xxxxxx Xxxxxxxxx
Trustee
/s/ Xxxxx Xxxx and Xxxxxxxx Xxxx
------------------------------------
Xxxxx Xxxx and Xxxxxxxx Xxxx
/s/ Xxxx X. Xxxxxx and Mari Xxx Xxxxxxx
------------------------------------
Xxxx X. Xxxxxx and Mari Xxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx XxXxxxx
------------------------------------
Xxxxx XxXxxxx
/s/ Xxxxx X. XxXxxxxx
------------------------------------
Xxxxx X. XxXxxxxx
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24
XXXXXX X. XXXXXX AND XXXXXX X.
XXXXXX, TRUSTEES
PSERD TRUST, dated March 11, 1986
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Trustee
/s/ Xxxxxx Xxxxxxx
---------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
The Exhibits and Schedules to this Equity Purchase Agreement are not included
with this Schedule 13D. Xxxxxx Equity Investors III, L.P. will provide these
exhibits and schedules upon the request of the Securities and Exchange
Commission.
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