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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _________)*
Global Vacation Group, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
37937F 10 6
------------------------------------------------------------
(CUSIP Number)
Daniel A. Raskas, Esq.
Thayer Capital Partners
1455 Pennsylvania Avenue, N.W., Suite 350
Washington, D.C. 20004
(202) 371-0150
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 5, 1998
--------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box ___.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
<TABLE>
<CAPTION>
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 2 of 9 Pages
- --------------------- -----------------
- ------------------------------------------------------------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thayer Equity Investors III, L.P.
- ------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
----
(b)
----
- ------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
----
- ------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
9,457,249
NUMBER OF --------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY -0-
OWNED BY
EACH --------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 9,457,249
WITH
--------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,457,249
- ------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- ------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.1%
- ------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
<TABLE>
<CAPTION>
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 3 of 9 Pages
- --------------------- -----------------
- ------------------------------------------------------------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TC Equity Partners, L.L.C.
- ------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
----
(b)
----
- ------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
----
- ------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
9,457,249
NUMBER OF
SHARES -------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING -------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 9,457,249
-------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,457,249
- ------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- ------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.1%
- ------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 4
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 4 of 9 Pages
- --------------------- -----------------
Item 1. Security and Issuer.
This statement relates to shares of Common Stock, $.01 par value per
share ("Common Stock"), of Global Vacation Group, Inc., a New York corporation
(the "Issuer"), which has its principal executive offices at 1420 New York
Avenue, N.W., Suite 550, Washington, D.C. 20005.
Item 2. Identity and Background.
(a)-(c), (f). This statement is filed on behalf of both of the persons
named in paragraphs 1 and 2 below (together, the "Reporting Persons") pursuant
to their written agreement to the joint filing of this statement. The following
information is furnished with respect to each of the Reporting Persons and the
persons who control the Reporting Persons:
1. Thayer Equity Investors III, L.P.
Thayer Equity Investors III, L.P. ("Thayer") is a Delaware limited
partnership whose principal office address is 1455 Pennsylvania Avenue, N.W.,
Suite 350, Washington, DC 20004. Thayer is a private equity fund and its
principal business is making investments in the information technology and
services, travel and leisure services, telecommunications, and consumer products
industries. Paragraph 2 of this Item 2 contains information regarding the
general partner of Thayer and paragraphs 3 through 5 of this Item 2 contain
information regarding the persons controlling such general partner.
2. TC Equity Partners, L.L.C.
TC Equity Partners, L.L.C. ("TC Equity") is a Delaware limited liability
company whose principal office address is 1455 Pennsylvania Avenue, N.W., Suite
350, Washington, D.C. 20004. TC Equity is the sole general partner of Thayer and
its principal business is making investments in the information technology and
services, travel and leisure services, telecommunications, and consumer products
industries. Paragraphs 3 through 5 contain information regarding the principal
members of TC Equity.
3. Frederic V. Malek
Mr. Malek, a United States citizen, is one of the principal members of
TC Equity. Mr. Malek also is a director of the Issuer. His business address is
1455 Pennsylvania Avenue, N.W., Suite 350, Washington, DC 20004.
<PAGE> 5
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 5 of 9 Pages
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4. Carl J. Rickertsen
Mr. Rickertsen, a United States citizen, is one of the principal members
of TC Equity. Mr. Rickertsen also is a director of the Issuer. His business
address is 1455 Pennsylvania Avenue, N.W., Suite 350, Washington, DC 20004.
5. Paul G. Stern
Dr. Stern, a United States citizen, is one of the principal members of
TC Equity. His business address is 1455 Pennsylvania Avenue, N.W., Suite 350,
Washington, DC 20004.
(d) and (e). During the last five years, none of the Reporting Persons,
Messrs. Malek or Rickertsen or Dr. Stern has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or other Consideration.
Pursuant to an agreement dated as of March 18, 1998 by and among the
Issuer (then under the name Allied Bus Corp.), Thayer and Allied Tours Holding
Corp. ("Allied Tours") (the "Recapitalization Agreement"), Thayer used
investment capital contributed by TC Equity, as the general partner of Thayer,
and by the limited partners of Thayer, and their respective members, as the
case may be, to purchase shares of the Issuer's capital stock ("Old Stock")
from Allied Tours on March 27, 1998 in connection with the recapitalization of
the Issuer (the "Recapitalization") at an aggregate purchase price of
$24,721,470. Following this purchase and the redemption of additional shares of
Old Stock from Allied Tours by the Issuer, Thayer owned approximately 86.4% of
the outstanding shares of the Issuer's Old Stock. The Issuer then issued shares
of Common Stock and shares of Convertible Preferred Stock, $1,000 par value per
share ("Convertible Preferred Stock"), in respect of the Old Stock. As a
result, upon completion of the Recapitalization, Thayer owned 247,215 shares of
Common Stock, valued at $10 per share, and 22,249 shares of Convertible
Preferred Stock, valued at $1,000 per share.
On March 30, 1998, Thayer and certain other investors entered into an
Equity Purchase Agreement with the Issuer (the "Purchase Agreement"), and
between March 30, 1998 and May 5, 1998, Thayer purchased 252,285 shares of
Common Stock at a purchase price of $10 per share and 22,706 shares of
Convertible Preferred Stock at a purchase price of $1,000 per share for an
aggregate investment by Thayer under the Purchase Agreement of $25,228,850.
Thayer used investment capital contributed by TC Equity, as the general partner
of Thayer, and
<PAGE> 6
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 6 of 9 Pages
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by the limited partners of Thayer, and their respective members, as the case may
be, to purchase these shares of Common Stock and Convertible Preferred Stock
under the Purchase Agreement.
On July 31, 1998, the Issuer completed a 12.2-for-1 split of the Common
Stock (the "Stock Split") resulting in the issuance of an additional 5,594,400
shares of Common Stock to Thayer. On August 5, 1995, upon the closing of the
Issuer's initial public offering (the "IPO") the shares of Convertible Preferred
Stock were converted into shares of Common Stock, based on the price per share
of Common Stock in the IPO and after giving effect to a 15% per annum dividend
payable on the Convertible Preferred Stock (the "Conversion"). In the
Conversion, the Issuer issued 3,363,349 shares of Common Stock to Thayer in
respect of the 44,955 shares of Convertible Preferred Stock previously owned by
Thayer.
Item 4. Purpose of Transaction.
The Reporting Persons acquired their shares of Common Stock in
connection with the Recapitalization and under the Purchase Agreement for the
purpose of exerting a controlling influence over the Issuer. Messrs. Malek and
Rickertsen currently serve as directors of the Issuer.
The Reporting Persons do not have any present plans or proposals which
relate to or would result in any of the following actions: (a) the acquisition
or disposition of securities of the Issuer; (b) any extraordinary corporate
transactions involving the Issuer or any of its subsidiaries, such as a merger,
reorganization or liquidation; (c) a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries; (d) any change in the present
board of directors or management of the Issuer; (e) any material change in the
Issuer's present capitalization or dividend policy; (f) any other material
change in the Issuer's business or corporate structure; (g) changes in the
Issuer's charter or bylaws or any other actions which may impede the acquisition
of control of the Issuer by any person; (h) causing the Common Stock to be
delisted from the New York Stock Exchange; (i) causing a class of the Issuer's
equity securities to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any
action similar to any of those enumerated above.
<PAGE> 7
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 7 of 9 Pages
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Item 5. Interest in Securities of the Issuer.
(a)-(b) The aggregate number and percentage of outstanding shares of
Common Stock beneficially owned by each of the Reporting Persons are set forth
below. Each Reporting Person has the sole power to vote and to dispose of the
shares of Common Stock listed opposite its name.
<TABLE>
<CAPTION>
Name of Number of Shares Percent of Outstanding
Beneficial Owner Beneficially Owned Shares Owned (1)
---------------- ------------------ ----------------
<S> <C> <C>
Thayer Equity
Investors III, L.P. 9,457,249 64.1%
TC Equity
Partners, L.L.C. (2) 9,457,249 64.1%
</TABLE>
- ------------
(1) Based upon the 14,747,576 shares of Common Stock outstanding upon
completion of the IPO on August 5, 1998.
(2) TC Equity is the sole general partner of Thayer and has sole voting and
investment power with respect to the shares of Common Stock held of
record by Thayer.
(c) Other than in connection with the Stock Split and the Conversion,
the Reporting Persons did not effect any transactions in Common Stock during the
past sixty days.
(d)-(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In connection with the IPO, Thayer entered into a lock-up agreement (the
"Thayer Lock-up Agreement") in favor of Salomon Smith Barney, NationsBanc
Montgomery Securities LLC, BancAmerica Robertson Stephens and ING Baring Furman
Selz, the representatives of the underwriters for the IPO (the
"Representatives"), which provides that Thayer may not sell or otherwise dispose
of any shares of Common Stock until January 27, 1999 without the prior written
consent of the Representatives.
The Issuer, Thayer and certain other shareholders of the Issuer (Thayer
and such other shareholders being referred to herein collectively as the
"Original Shareholders") have entered into a Registration Rights Agreement dated
as of June 12, 1998 (the "Registration Rights Agreement"). Pursuant to the
Registration Rights Agreement, the Original Shareholders will have the right to
require the Company to register their shares under the Securities Act of 1933,
as amended (the "Securities Act"), in certain circumstances. If the Company
proposes
<PAGE> 8
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 8 of 9 Pages
- --------------------- -----------------
to register its securities under the Securities Act, either for its own account
or the account of others, the Original Shareholders will be entitled to notice
of such registration and to include their shares in such registration; provided,
among other conditions, that the underwriters for any such offering will have
the right to limit the number of such shares included in such registration,
subject to certain conditions. In addition, the holders of a majority of the
shares held by the Original Shareholders at any time will have the right to
require the Company to file under the Securities Act up to six registrations at
the Company's expense and an unlimited number of registrations at their own
expense.
Other than as described above, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with any person with
respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Joint Filing Agreement dated as of August 14, 1998.
Exhibit 2 Recapitalization Agreement dated as of March 18, 1998.
Exhibit 3 Purchase Agreement dated as of March 30, 1998.
Exhibit 4 Thayer Lock-Up Agreement dated as of June 12, 1998.
Exhibit 5 Registration Rights Agreement dated as of June 12, 1998.
Exhibit 6 Powers of Attorney for Thayer and TC Equity.
<PAGE> 9
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CUSIP No. 37937F 10 6 SCHEDULE 13D Page 9 of 9 Pages
- --------------------- -----------------
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: August 14, 1998
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
its General Partner
By: /s/ Frederic V. Malek
----------------------
Frederic V. Malek
Member
TC EQUITY PARTNERS, L.L.C.
By: /s/ Frederic V. Malek
----------------------
Frederic V. Malek
Member
<PAGE> 1
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the persons named below hereby agree to the joint filing on
behalf of each of them of a statement on Schedule 13D (including amendments
thereto) with respect to the common stock of Global Vacation Group, Inc. and
further agree that this Joint Filing Agreement be included as an Exhibit to such
statement.
IN WITNESS WHEREOF, the undersigned have executed this Joint Filing
Agreement as of August 14, 1998.
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
its General Partner
By: /s/ FREDERIC V. MALEK
----------------------------
Frederic V. Malek
Member
TC EQUITY PARTNERS, L.L.C.
By: /s/ FREDERIC V. MALEK
--------------------------
Frederic V. Malek
Member
<PAGE> 1
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EXHIBIT 2
RECAPITALIZATION AGREEMENT
BY AND AMONG
THAYER EQUITY INVESTORS, III, L.P.
AND CERTAIN OTHER INVESTORS
TO BE LISTED ON THE INVESTOR SCHEDULE
(THE "INVESTORS")
ALLIED BUS CORP.
(THE "COMPANY")
ALLIED TOURS HOLDING CORP.
("ALLIED PARENT")
AND
THE SHAREHOLDERS OF THE COMPANY
(THE "SHAREHOLDERS")
DATED MARCH 18, 1998
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<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS................................................................. 2
1.1 Definitions.................................................................... 2
ARTICLE II RECAPITALIZATION............................................................ 7
2.1 Stock Purchase................................................................. 7
2.2 Payment of Purchase Price...................................................... 8
2.3 The Financing.................................................................. 8
2.4 Redemption..................................................................... 8
2.5 Recapitalization............................................................... 8
2.6 Closing........................................................................ 8
2.7 Escrow Arrangements............................................................ 9
2.8 Intentionally Left Blank....................................................... 9
2.9 Closing Audit.................................................................. 9
2.10 Post-Closing Net Worth Adjustment............................................. 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
ALLIED PARENT AND SHAREHOLDERS..................................................... 10
3.1 Capitalization................................................................. 10
3.2 No Liens on Shares............................................................. 11
3.3 Subsidiaries................................................................... 11
3.4 Other Rights to Acquire Capital Stock.......................................... 11
3.5 Due Organization............................................................... 11
3.6 Due Authorization.............................................................. 11
3.7 Financial Statements........................................................... 12
3.8 Certain Actions................................................................ 13
3.9 Properties..................................................................... 14
3.10 Licenses and Permits.......................................................... 14
3.11 Intellectual Property......................................................... 15
3.12 Compliance with Laws.......................................................... 15
3.13 Insurance..................................................................... 15
3.14 Employee Benefit Plans........................................................ 16
(a) Employee Welfare Benefit Plans.......................................... 16
(b) Employee Pension Benefit Plans.......................................... 16
(c) Employment and Non-Tax Qualified Deferred Compensation
Arrangements......................................................... 16
3.15 Contracts and Agreements...................................................... 16
3.16 Claims and Proceedings........................................................ 17
3.17 Taxes......................................................................... 17
3.18 Personnel..................................................................... 18
3.19 Business Relations............................................................ 19
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
3.20 Accounts Receivable; Accounts Payables; Customer Deposits and Bookings........ 19
(a) Accounts Receivable..................................................... 19
(b) Accounts Payable........................................................ 20
(c) Customer Deposits; Bookings............................................. 20
3.21 Bank Accounts; Investments.................................................... 20
3.22 Customer Claims............................................................... 20
3.23 Brokers....................................................................... 20
3.24 Affiliated Transactions....................................................... 21
3.25 Funded Indebtedness; Letters of Credit; Undisclosed Liabilities............... 21
(a) Funded Indebtedness..................................................... 21
(b) Letters of Credit....................................................... 21
(c) Undisclosed Liabilities................................................. 21
3.26 Year 2000..................................................................... 21
3.27 Information Furnished......................................................... 22
ARTICLE IV THE INVESTORS' REPRESENTATIONS AND WARRANTIES.............................. 22
4.1 Due Organization of Thayer III................................................. 22
4.2 Due Authorization.............................................................. 22
4.3 No Brokers..................................................................... 22
4.4 Investment..................................................................... 23
ARTICLE V PRE-CLOSING COVENANTS OF THE COMPANY, ALLIED PARENT,
THAYER III AND SHAREHOLDERS........................................................ 23
5.1 Consents of Others............................................................. 23
5.2 Shareholders' Efforts.......................................................... 23
5.3 Powers of Attorney............................................................. 23
5.4 Conduct of Business Pending Closing............................................ 23
5.5 Access Before Closing.......................................................... 24
5.6 Investor Confidentiality....................................................... 24
ARTICLE VI POST-CLOSING COVENANTS...................................................... 24
6.1 General........................................................................ 24
6.2 Transition..................................................................... 25
6.3 Confidentiality................................................................ 25
6.4 Covenant Not to Compete........................................................ 25
6.5 Additional Matters............................................................. 26
6.6 Litigation Support............................................................. 28
6.7 Audits......................................................................... 28
6.8 Registration Rights............................................................ 28
ARTICLE VII CONDITIONS TO OBLIGATIONS OF PARTIES TO CONSUMMATE CLOSING................ 29
7.1 Conditions to the Investors' Obligations....................................... 29
(a) Covenants, Representations and Warranties............................... 29
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
(b) Consents................................................................ 29
(c) Leases.................................................................. 29
(d) Discharge of Indebtedness and Lien; Shareholder Loans................... 29
(e) Fee..................................................................... 30
(f) Transfer Taxes.......................................................... 30
(g) Financial Condition..................................................... 30
(h) Documents to be Delivered by Shareholders; Allied Parent and the
Company.............................................................. 30
(i) Opinion of Shareholder's Counsel................................. 30
(ii) Certificates.................................................... 30
(iii) Release........................................................ 30
(iv) Escrow Agreement................................................ 30
(v) Employment Agreements............................................ 31
(vi) Delivery of Purchased Shares.................................... 31
(vii) Redemption of Existing Common Stock............................ 31
(viii) Resignation of Directors...................................... 31
(ix) Termination of Shareholder Agreements........................... 31
(x) Consulting Agreement............................................. 31
(i) Company Equity Arrangements............................................. 31
(j) Restated Certificate of Incorporation................................... 31
(k) Liquidation of Sister Business.......................................... 32
7.2 Conditions to Shareholders', Allied Parent's and the Company's Obligations..... 32
(a) Covenants, Representations and Warranties............................... 32
(b) Consents................................................................ 32
(c) Documents to be Delivered by Investors.................................. 32
(ii) Escrow Agreement................................................ 32
(iii) Employment Agreements.......................................... 32
(iv) Consulting Agreement............................................ 33
(d) Company Equity Arrangements............................................. 33
(e) Payments to Allied Parent............................................... 33
ARTICLE VIII INDEMNIFICATION.......................................................... 33
8.1 Indemnification by Allied Parent and Shareholders.............................. 33
8.2 Defense of Claims.............................................................. 34
8.3 Escrow Claim................................................................... 34
8.4 Tax Audits, Etc. .............................................................. 35
8.5 Indemnification of Shareholders, Allied Parent and the Company................. 35
8.6 Limits on Indemnification...................................................... 35
ARTICLE IX TERMINATION................................................................ 36
9.1 Termination.................................................................... 36
9.2 Effect of Termination.......................................................... 37
ARTICLE X MISCELLANEOUS............................................................... 37
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
10.1 Modifications................................................................. 37
10.2 Notices....................................................................... 37
10.3 Counterparts; Facsimile Transmission.......................................... 38
10.4 Expenses...................................................................... 38
10.5 Binding Effect; Assignment.................................................... 39
10.6 Entire and Sole Agreement..................................................... 39
10.7 Governing Law................................................................. 39
10.8 Survival of Representations, Warranties and Covenants......................... 39
10.9 Invalid Provisions............................................................ 40
10.10 Public Announcements......................................................... 40
10.11 Remedies Cumulative.......................................................... 40
10.12 Third Parties................................................................ 40
10.13 No Strict Construction....................................................... 40
10.14 Joinder by Additional Investors.............................................. 40
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
LIST OF EXHIBITS
<S> <C>
Exhibit A Form of Restated Certificate of Incorporation
Exhibit B Form of Escrow Agreement
Exhibit C Opinion of the Company's and Shareholders' Counsel
Exhibit D [Intentionally Left Blank]
Exhibit E Form of Release
Exhibit F Form of Michael Fisher Employment Agreement
Exhibit F-1 Form of Gregory Fisher Employment
Exhibit F-2 Form of Gilbert Fishman Employment
Exhibit G Shareholders Accounts and Wire Transfer Instructions (Section 2.4)
Exhibit H Ownership of Shares (Section 3.1)
Exhibit I-1 Articles (Section 3.5)
Exhibit I-2 Bylaws (Section 3.5)
Exhibit I-3 Qualified Jurisdictions (Section 3.6)
Exhibit J List of Properties (Section 3.9)
Exhibit K List of Licenses and Permits (Section 3.10)
Exhibit L List of Intellectual Property (Section 3.11)
Exhibit m List of Insurance (Section 3.13)
Exhibit N List of Contracts (Section 3.15)
Exhibit O List of Personnel (Section 3.18)
Exhibit P List of Bookings (Section 3.20)
Exhibit Q [Intentionally Left Blank]
Exhibit R List of Bank Accounts and Investments (Section 3.21)
Exhibit S List of Letters of Credit (Section 3.25(b))
Exhibit T List of Indebtedness (Section 7.1(d))
Exhibit U Stan Fisher Consulting Agreement
</TABLE>
LIST OF SCHEDULES
INVESTOR SCHEDULE
ESCROW SCHEDULE
DISCLOSURE SCHEDULE
RECAPITALIZATION SCHEDULE
TAX PAYMENTS SCHEDULE
FINANCIAL STATEMENTS
GAAP EXCEPTIONS MEMO
-v-
<PAGE> 7
RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT (this "AGREEMENT") is entered into as of
March 18, 1998, by and among THAYER EQUITY INVESTORS III, L.P., a Delaware
limited partnership ("THAYER III"), on behalf of itself and certain other
investors who may execute a joinder hereto and shall be listed on the Investor
Schedule to this Agreement (Thayer III and the other signatory investors shall
be referred to herein individually as an "INVESTOR" and collectively as the
"INVESTORS"), ALLIED BUS CORP., a New York corporation (the "COMPANY") and
ALLIED TOURS HOLDING CORP., a New York corporation ("ALLIED PARENT"), and
Stanley Fisher, Michael Fisher, Gregory Fisher, and Francine Fishman
(collectively, the "SHAREHOLDERS").
RECITALS
Pursuant to this Agreement, the Company, which is engaged in the
wholesale travel sales business in the United States (the "BUSINESS"), will be
recapitalized in a series of transactions (the "TRANSACTIONS"). The Transactions
will occur in the following steps:
A. THE CURRENT CAPITALIZATION OF THE COMPANY
On the date of this Agreement, the Company's capitalization consists of
200 shares of common stock, no par value per share (the "CAPITAL STOCK"). Allied
Parent is the owner of 100 shares of Capital Stock, which stock represents all
of the issued and outstanding stock of the Company (the "EXISTING SHARES"). The
Shareholders own 100 shares of the capital stock of Allied Parent, which stock
represents all of the issued and outstanding shares of capital stock of Allied
Parent.
B. THE STOCK PURCHASE
The Investors desire to purchase from Allied Parent and Allied Parent
desires to sell to the Investors an aggregate of 57 shares of Capital Stock (the
"STOCK PURCHASE") for a purchase price of $433,710 per share (an aggregate
purchase price of $24,721,470), subject to adjustment as provided herein.
C. THE FINANCING
It is anticipated that the Company will enter into a credit agreement or
agreements with a financial institution or institutions (the "FINANCING") to be
arranged by Thayer III, which Financing shall provide for a loan or loans to the
Company on commercially reasonable terms in connection with the Transactions in
the principal amount of up to approximately $15,000,000 (the "LOAN PROCEEDS").
The closing of the Financing is not a condition precedent to the closing of the
Transactions, and if for any reason the Financing is not fully consummated, such
that some or all of the Loan Proceeds are not received by the Company, but all
of the remaining closing conditions to this Agreement are satisfied, then Thayer
III will be responsible for funding on commercially
<PAGE> 8
reasonable terms the sums necessary to consummate the Transactions (any such
other funds, together with any Loan Proceeds as necessary to consummate the
Transactions, shall be referred to herein as the "FINANCING PROCEEDS").
D. THE REDEMPTION
At Closing, 34 shares (the "REDEMPTION SHARES") of the Existing Shares
held by Allied Parent will be redeemed by the Company for a purchase price of
$433,710 per share (an aggregate redemption price of $14,746,140), subject to
adjustment and escrow holdbacks as provided herein (the "REDEMPTION").
E. THE RECAPITALIZATION
Following the Redemption, the Company will recapitalize itself (the
"RECAPITALIZATION") by amending and restating its Certificate of Incorporation
to authorize two classes of capital stock, (i) the Common Stock, $.01 par value
(the "COMMON STOCK") and (ii) the Preferred Stock, par value $1,000 per share
(the "PREFERRED STOCK"). Pursuant to the Recapitalization, each issued and
outstanding share of Capital Stock will be exchanged for (i) 4,337.1 shares of
Common Stock and (ii) 390.339 shares of Preferred Stock. A chart showing the
details of the Recapitalization is attached as the Recapitalization Schedule
hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto covenant and agree
as follows:
ARTICLE I
DEFINITIONS
A. DEFINITIONS. In this Agreement, the following terms have the meanings
specified or referred to in this Section 1.1 and shall be equally applicable to
both the singular and plural forms. Any agreement referred to below shall mean
such agreement as amended, supplemented and modified from time to time to the
extent permitted by the applicable provisions thereof and by this Agreement.
"AA" has the meaning set forth in Section 2.9 below.
"ACCOUNTS RECEIVABLE ADJUSTMENT" has the meaning set forth in Section
8.1 below.
"AFFILIATE" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"ADJUSTED CLOSING FINANCIAL STATEMENTS" has the meaning specified in
Section 2.9.
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<PAGE> 9
"BUSINESS" has the meaning specified in the first recital of the
Agreement.
"CAPITAL STOCK" has the meaning specified in Recital A of the Agreement.
"CLOSING" means the closing of the Stock Purchase followed by the
Redemption and subsequently the Recapitalization.
"CLOSING DATE" has the meaning specified in Section 2.6.
"CLOSING REDEMPTION PRICE" shall have the meaning assigned to such term
in Section 2.4(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" has the meaning specified in Recital E of this Agreement.
"COMPANY" has the meaning specified in the first paragraph of this
Agreement.
"CONFIDENTIAL INFORMATION" means (i) the terms and provisions of this
Agreement and the Transactions and (ii) all confidential information and trade
secrets of the Company or its Affiliates including, without limitation, any of
the same comprising the identity, lists or descriptions of any customers,
referral sources or organizations; financial statements, cost reports or other
financial information; contract proposals, or bidding information; business
plans and training and operations methods and manuals; personnel records; fee
structure; and management systems, policies or procedures, including related
forms and manuals. Confidential Information shall not include any information
(a) which is disclosed pursuant to subpoena or other legal process, (b) which
has been publicly disclosed, or (c) which is subsequently disclosed to any third
party not in breach of a confidentiality agreement.
"CONTRACTS" has the meaning specified in Section 3.15.
"COURT ORDER" means any judgment, order, award or decree of any foreign,
federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached to this
Agreement pursuant to which exceptions to Allied Parent's, the Shareholders' and
the Company's specific representations and warranties set forth in Article III
(and listed on a Section-by-Section basis) are disclosed to Investors pursuant
to said Article III.
"ENCUMBRANCE" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, restrictive covenant or other restrictions of any kind.
"ENVIRONMENTAL AND OSHA OBLIGATIONS" has the meaning specified in
Section 3.12.
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<PAGE> 10
"EQUITABLE EXCEPTIONS" shall have the meaning specified in Section 3.6.
"EQUITY AGREEMENTS" means those certain equity agreements between
Investors, the Company, Allied Parent, the Shareholders and certain executives
to be entered into as of the Closing Date, including without limitation, the
Shareholders Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" means The Bank of New York.
"ESCROW AGREEMENT" means the Escrow Agreement to be executed by and
among the Company, Allied Parent, the Shareholders, Thayer III and the Escrow
Agent in the form of Exhibit B.
"ESCROW NOTE" has the meaning specified in Section 2.4.
"ESCROW PERIOD" has the meaning specified in Section 2.7.
"ESCROW SUM" has the meaning specified in Section 2.7.
"EXISTING SHARES" has the meaning specified in Recital A of the
Agreement.
"FINANCIAL STATEMENTS" has the meaning specified in Section 3.7.
"FINANCING" has the meaning specified in Recital C of the Agreement.
"FINANCING PROCEEDS" has the meaning specified in Recital C of the
Agreement.
"FORCE MAJEURE" shall mean any failure or delay caused by acts of god,
flood, fire, war or terrorism or any failure or delay caused by a governmental
blockage of all currency transactions between a foreign Governmental Body and
the United States of America.
"FUNDED INDEBTEDNESS" means all (i) indebtedness of the Company for
borrowed money or other interest-bearing indebtedness; (ii) capital lease
obligations of the Company; (iii) obligations of the Company to pay the deferred
purchase or acquisition price for goods or services, other than trade accounts
payable in the ordinary course of business; (iv) indebtedness of others
guaranteed by the Company or secured by an Encumbrance on the Company's
property; and (v) indebtedness of the Company under extended credit terms of
more than 30 days from vendors provided to the Company.
"GAAP" shall mean generally accepted accounting principles, consistently
applied.
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<PAGE> 11
"GAAP EXCEPTIONS MEMO" shall have the meaning specified in Section 3.7.
"GOVERNMENTAL BODY" means any foreign, federal, state, local or other
governmental authority or regulatory body having jurisdiction over the Company,
Allied Parent and/or the Shareholders.
"GOVERNMENTAL PERMITS" has the meaning specified in Section 3.10.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended and the rules and regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"INDEMNIFIABLE COSTS" has the meaning specified in Section 8.1.
"INDEMNIFIED PARTIES" has the meaning specified in Section 8.1.
"INDEPENDENT ACCOUNTANTS" has the meaning specified in Section 2.9.
"INTELLECTUAL PROPERTY" shall mean all of the following: (i) patents,
patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; (v) trade secrets, confidential information
and know-how (including but not limited to ideas, formulae, compositions,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information); and (vi) computer
software (including but not limited to data, data bases and documentation).
"INVESTORS" has the meaning specified in the first paragraph of this
Agreement.
"KNOWLEDGE OF THE COMPANY" (whether or not capitalized) shall mean
actual knowledge, after reasonable inquiry, of the Shareholders and the
employees of the Company with responsibility for the applicable subject matter.
"KNOWLEDGE OF THE SHAREHOLDERS" (whether or not capitalized) shall mean actual
knowledge of the Shareholders after reasonable inquiry
"LEASES" shall mean the leases for the Company's offices located at (i)
165 West 46th Street, 10th Floor, New York, New York 10036; (ii) Suite Nos. 710
and 714 in 6151 West Century Boulevard, Los Angeles, California 90045; (iii) 407
Lincoln Road, Suite PH.N.W., Miami Beach, Florida 33139; and (iv) 2222 Kalakaua
Avenue, Part of 9th Floor, Honolulu, Hawaii.
"LOAN PROCEEDS" has the meaning specified in Recital C of the Agreement.
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<PAGE> 12
"MATERIAL" (whether or not capitalized) shall, where appropriate in
context of its use in making the representations and warranties set forth in
Article III, be deemed to mean an amount of money greater than $100,000.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means a material
adverse change or effect on the assets, properties, Business, operations,
liabilities, financial condition or prospects of the Company and its
subsidiaries, taken as a whole. In determining whether a "Material Adverse
Change" or "Material Adverse Effect" has occurred in the context of the use of
such terms in the Company's, Allied Parent's and Shareholders' representations
and warranties set forth in Article III, such terms shall refer to the
occurrence of any single event, or any series of related events, or set of
related circumstances, which results or may result in a loss to the Company, in
excess of $100,000 per occurrence or $250,000 in the aggregate.
"NET WORTH" shall equal the Company's total assets minus its total
liabilities.
"NET WORTH ADJUSTMENT" has the meaning specified in Section 2.10.
"OSHA" means the Occupational Safety and Health Act, 29 U.S.C. Sections
651 et seq., any amendment thereto, and any regulations promulgated thereunder.
"PERMITTED DISTRIBUTIONS" has the meaning specified in Section 3.8.
"PERMITTED EXCEPTION" means (a) liens for Taxes and other governmental
charges and assessments which are not yet due and payable, (b) liens of
landlords and liens of carriers, warehousemen, mechanics and materialmen and
other like liens arising in the ordinary course of business for sums not yet due
and payable, or (c) other liens or imperfections on property which are not
material in amount or do not materially detract from the value or the existing
use of the property affected by such lien or imperfection.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or Governmental Body.
"PREFERRED STOCK" has the meaning specified in Recital E of the
Agreement.
"PROJECTED NET WORTH" means a minus ($400,000).
"PURCHASE PRICE" has the meaning specified in Section 2.1.
"PURCHASED SHARES" has the meaning specified in Section 2.1.
"RECAPITALIZATION" has the meaning specified in Recital E of the
Agreement.
"REDEMPTION" has the meaning specified in Recital D of the Agreement.
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<PAGE> 13
"REDEMPTION PRICE" has the meaning specified in Section 2.4.
"REDEMPTION SHARES" has the meaning specified in Recital D of the
Agreement.
"REQUIREMENTS OF LAWS" means any foreign, federal, state and local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Body (including, without limitation, those
pertaining to electrical, building, zoning, environmental and occupational
safety and health requirements).
"SHAREHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"STOCK PURCHASE" has the meaning specified in Recital B of the
Agreement.
"TAX" or "TAXES" means any federal, state, local or foreign income,
alternative or add-on minimum, gross income, gross receipts, windfall profits,
severance, property, production, sales, use, transfer, gains, license, excise,
employment, payroll, withholding or minimum tax, transfer, goods and services,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amounts imposed thereon by any Governmental Body.
"TAX RETURN" means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return and declaration of estimated Tax.
"THAYER III" has the meaning specified in the first paragraph of this
Agreement.
"TRANSACTIONS" has the meaning specified in the beginning of the
recitals of this Agreement.
ARTICLE II
RECAPITALIZATION
A. STOCK PURCHASE. On the Closing Date and subject to the terms and
conditions set forth in this Agreement, Allied Parent shall sell and deliver to
the Investors an aggregate of 57 shares of the Capital Stock (the "PURCHASED
SHARES"), free and clear of all Encumbrances, other than the restrictions
imposed by federal and state securities laws. The total purchase price for the
Purchased Shares (the "PURCHASE PRICE") shall be equal to $24,721,470, subject
to any adjustment required to be made pursuant to Section 2.10 below.
B. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable by the
Investors or Thayer III as follows: (a) $21,350,470 of the Purchase Price will
be payable at the
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<PAGE> 14
Closing (as defined in Section 2.6) in cash by wire transfer of funds to Allied
Parent's account as specified in Exhibit G attached hereto and (b) the balance
of the Purchase Price ($3,371,000) will be paid in accordance with the Tax
Payments Schedule attached hereto by wire transfer of funds to Allied Parent's
or the Shareholders' accounts as specified in Exhibit G attached hereto as
updated from time to time following the Closing Date.
C. THE FINANCING. On the Closing Date, the Company shall consummate the
Financing and shall borrow an amount equal to the Financing Proceeds in order to
consummate the Redemption.
D. REDEMPTION. On the Closing Date and subject to the terms and
conditions set forth in this Agreement, the Company shall redeem the Redemption
Shares from Allied Parent. Subject to the terms of Section 2.7, which provision
requires certain holdbacks prior to the distribution of such price to Allied
Parent, the Redemption Shares shall be redeemed at a price of $433,710 per
share, for an aggregate gross redemption price of $14,746,140 (the "REDEMPTION
PRICE"). The Redemption Price shall be payable as follows:
1. an aggregate of $10,746,140 shall be paid at Closing by wire
transfer of funds to Allied Parent's account as specified in Exhibit G hereto
(the "CLOSING REDEMPTION PRICE"); and
2. $4,000,000 shall be paid to the Escrow Agent at Closing
pursuant to Section 2.7 below to serve as the Escrow Sum (as defined below) in
the form of a 120 day promissory note which bears interest at the rate of 8%
per annum in a form mutually agreed upon by Thayer III and Allied Parent (the
"ESCROW NOTE").
E. RECAPITALIZATION. Following the Stock Purchase and the Redemption and
on the Closing Date, the Company shall amend and restate its Certificate of
Incorporation to authorize the issuance of the two classes of the capital stock
(the Common Stock and the Preferred Stock) each having the rights and
preferences set forth in the Company's Restated Certificate of Incorporation in
substantially the form of Exhibit A attached hereto and as necessary to effect
the Transactions. Pursuant to such amendment, each share of Capital Stock issued
and outstanding after the Stock Purchase and the Redemption shall be exchanged
for (i) 4,337.1 shares of Common Stock and (ii) 390.34 shares of Preferred
Stock.
F. CLOSING. The Closing of the Transactions shall take place at 10:00
a.m., Eastern Time, at the offices of Hogan & Hartson L.L.P., 555 13th Street,
N.W. in Washington, D.C. on March 25, 1998, or on the date selected by Thayer
III (which date shall be as soon as practicable following the date on which all
of the conditions to Closing set forth in Sections 7.1 and 7.2 have been
satisfied) (the "CLOSING DATE").
G. ESCROW ARRANGEMENTS. Pursuant to the Escrow Agreement to be entered
into among Shareholders, Allied Parent, the Company, Thayer III and the Escrow
Agent, $4,000,000 of the Redemption Price shall be delivered to the Escrow Agent
at Closing pursuant to the Escrow Note. Upon payment of the Escrow Note by the
Company in immediately available funds on or prior to 120 days after the Closing
Date, such monies paid (which, together
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<PAGE> 15
with all interest accrued thereon, is hereinafter referred to as the "ESCROW
SUM") shall be held pursuant to the terms of the Escrow Agreement for payment
from such Escrow Sum of the amounts, if any, owing by Allied Parent to the
Investors or the Company pursuant to the provisions of the Net Worth Adjustment
or the Escrow Schedule attached hereto and the indemnification provisions of
Article VIII below. At the conclusion of the period ending ten days after
completion of the final Adjusted Closing Financial Statements and the resolution
of any disputes therein pursuant to Section 2.9 below, the Escrow Sum shall be
reduced to an amount equal to the sum of $2,000,000 in cash, plus the amount, if
any, reserved, but not then paid or resolved, pursuant to claims made against
the Escrow Sum by the Investors or the Company pursuant to the provisions of the
Net Worth Adjustment and the Escrow Schedule (such amount of reduction in the
Escrow Sum being referred to as the "ESCROW SUM REDUCTION") and (ii) on the
first anniversary of the Closing Date (such one-year period being referred to
herein as the "ESCROW PERIOD"), such remaining portion of the Escrow Sum not
theretofore claimed by or paid to the Investors or the Company in accordance
with the terms of the Escrow Agreement, the Escrow Schedule and this Agreement
(together with any interest on such remaining portion of the Escrow Sum) shall
be disbursed to Allied Parent. All disbursements pursuant to the Escrow Sum
Reduction or at the expiration of the Escrow Period shall be paid in cash to
Allied Parent at its account set forth in Exhibit G as updated from time to
time. Shareholders, Allied Parent, the Company and Thayer III agree that each
will execute and deliver such reasonable instruments and documents as are
furnished by any other party to enable such furnishing party to receive those
portions of the Escrow Sum to which the furnishing party is entitled under the
provisions of the Escrow Agreement and this Agreement.
H. [INTENTIONALLY LEFT BLANK].
I. CLOSING AUDIT. Within 120 days following the Closing Date, there
shall be delivered to Investors and to Shareholders an audit of the Company's
balance sheet and statements of income and cash flows as of and for the two
months ended February 28, 1998 (the "ADJUSTED CLOSING FINANCIAL STATEMENTS").
The Adjusted Closing Financial Statements shall be audited by Arthur Andersen,
LLP ("AA") in accordance with GAAP and then adjusted to be in accordance with
the Company's prior accounting practices. The cost of preparing the Adjusted
Closing Financial Statements shall be paid by the Company. In the event that
Allied Parent disputes any items or assumptions or methodologies regarding the
Adjusted Closing Financial Statements within thirty (30) days after Allied
Parent's receipt thereof, Allied Parent and Thayer III shall jointly select and
retain an independent "Big Six" accounting firm (the "INDEPENDENT ACCOUNTANTS")
to review the disputed matter(s) on the Adjusted Closing Financial Statements.
In conducting such review, the Company and AA shall provide the Independent
Accountants and, during the thirty (30) day period, Allied Parent, with
customary access to the work papers of AA utilized in preparing the Adjusted
Closing Financial Statements. The final determination of such disputed matter(s)
by the Independent Accountants shall be utilized to determine all adjustments
described in Section 2.10 below and shall be final and binding on the parties
for such purposes. The cost of retaining the Independent Accountants shall be
borne by Shareholders, except that the Company shall reimburse Shareholders for
one-half the cost of the Independent Accountants in the event that such review
results in at least a
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<PAGE> 16
$150,000 increase in the Company's Net Worth as reflected on the Adjusted
Closing Financial Statements prepared by AA.
J. POST-CLOSING NET WORTH ADJUSTMENT. The Redemption Price will be
adjusted upward or downward, on a dollar-for-dollar basis, to reflect the
increase or decrease, as the case may be, in Net Worth as reflected on the
Adjusted Closing Financial Statements from the Projected Net Worth (the "NET
WORTH ADJUSTMENT"). The Net Worth Adjustment shall be determined by AA. In the
event that the Net Worth Adjustment results in a decrease in the Redemption
Price, then the Escrow Agent or Allied Parent and the Shareholders shall pay
such amount to the Company in immediately available funds within ten (10)
business days of delivery of the Adjusted Closing Financial Statements as
finally determined in accordance with Section 2.9 above. Conversely, in the
event that the Net Worth Adjustment results in an increase in the Redemption
Price, then the Company shall pay such amount to Allied Parent to the account
set forth in Exhibit G hereto in immediately available funds within ten (10)
business days of delivery of the Adjusted Closing Financial Statements as
finally determined in accordance with Section 2.9 above.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY, ALLIED PARENT AND SHAREHOLDERS
Except as set forth on the Disclosure Schedule attached hereto (which
Disclosure Schedule contains a reasonably detailed description of each such
exception and references the applicable representation so qualified), the
Company, Allied Parent and Shareholders jointly and severally represent and
warrant to the Investors that:
A. CAPITALIZATION. The authorized capital stock of the Company
immediately prior to Closing consists of 200 shares of Capital Stock, 100 of
which being the Existing Shares are issued and outstanding. All of the Existing
Shares are duly authorized, validly issued, fully paid, and nonassessable. All
of the Existing Shares are owned of record and beneficially by Allied Parent.
All of the outstanding shares of Allied Parent are owned of record and
beneficially by the Shareholders in the amounts set forth on Exhibit H hereto.
None of the Existing Shares was issued or will be redeemed under this Agreement
in violation of any preemptive or preferential rights of any Person.
B. NO LIENS ON SHARES. Allied Parent owns the Existing Shares and
Shareholders own all of the Allied Parent shares, free and clear of any
Encumbrances other than the rights and obligations arising under this Agreement,
and none of the Existing Shares or the Allied Parent shares is subject to any
outstanding option, warrant, call, or similar right of any other Person to
acquire the same, and none of the Existing Shares or the Allied Parent shares is
subject to any restriction on transfer thereof except for restrictions imposed
by applicable federal and state securities laws. At Closing pursuant to the
Redemption and the Stock Purchase, Allied Parent will have full corporate power
and authority to convey good and marketable title to the
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<PAGE> 17
Redemption Shares and the Purchased Shares, free and clear of any Encumbrances
other than the restrictions imposed by federal and state securities laws.
C. SUBSIDIARIES. The Company does not own, directly or indirectly, any
capital stock or ownership interests in any Person. The Shareholders do not own
any capital stock or ownership interests in any other Person engaged in the
Business other than Allied Parent. Allied Parent does not own any capital stock
or ownership interests in any other Person other than the Company.
D. OTHER RIGHTS TO ACQUIRE CAPITAL STOCK. Except as set forth in this
Agreement in respect of Investors' rights to acquire the Purchased Shares, there
are no authorized or outstanding warrants, options, or rights of any kind to
acquire from the Company any equity or debt securities of the Company, or
securities convertible into or exchangeable for equity or debt securities of the
Company, and there are no shares of capital stock of the Company reserved for
issuance for any purpose nor any contracts, commitments, understandings or
arrangements which require the Company to issue, sell or deliver any additional
shares of its capital stock.
E. DUE ORGANIZATION. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of New York
and has full corporate power and authority to own and lease its properties and
assets and to carry on the Business as now conducted and as proposed to be
conducted through Closing. Allied Parent is a corporation duly organized,
validly existing, and in good standing under the laws of the State of New York
and has full corporate power and authority to own and lease its properties and
assets and to carry on the Business as now conducted and as proposed to be
conducted through Closing. Complete and correct copies of the Certificate of
Incorporation and Bylaws of the Company and Allied Parent, and all amendments
thereto, have been delivered to Investors and are attached hereto as Exhibits
I-1 and I-2. The Company is qualified to do business in the State of New York
and in each jurisdiction in which the nature of the Business or the ownership of
its properties requires such qualification except where the failure to be so
qualified does not and could not reasonably be expected to have a Material
Adverse Effect. The jurisdictions in which the Company is so qualified are
listed on Exhibit I-3 attached hereto.
F. DUE AUTHORIZATION. The Company, Allied Parent and the Shareholders
each have full power and authority to execute, deliver and perform this
Agreement and to carry out the Transactions. The execution, delivery, and
performance of this Agreement and the Transactions have been duly and validly
authorized by all necessary corporate action of the Company and Allied Parent.
This Agreement has been duly and validly executed and delivered by the Company,
Allied Parent and Shareholders and constitutes the valid and binding obligations
of the Company, Allied Parent and Shareholders, enforceable in accordance with
its terms, except to the extent that enforceability may be limited by laws
affecting creditors' rights and debtors' obligations generally, and legal
limitations relating to remedies of specific performance and injunctive and
other forms of equitable relief (the "EQUITABLE EXCEPTIONS"). The execution,
delivery, and performance of this Agreement and the Transactions (as well as all
other instruments, agreements, certificates, or other documents contemplated
hereby) by the Company, Allied Parent and Shareholders, do not (a) violate any
Requirements of Laws or any
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Court Order of any Governmental Body applicable to the Company, Allied Parent or
Shareholders, or their respective property, (b) violate or conflict with, or
permit the cancellation of, or constitute a default under, any material
agreement to which the Company, Allied Parent or Shareholders are a party, or by
which any of them or any of their respective property is bound, (c) permit the
acceleration of the maturity of any material indebtedness of, or indebtedness
secured by the property of, the Company, Allied Parent or Shareholders, (d)
violate or conflict with any provision of the charter or bylaws of the Company
or Allied Parent, or (e) except for filings or approvals under the HSR Act and
such consents, approvals, or registrations as may be required under applicable
state securities laws, require any consent, approval or authorization of, or
notice to, or declaration, filing or registration with, any Governmental Body or
other third party.
G. FINANCIAL STATEMENTS. The following financial statements of the
Company have been delivered to Investors by the Company: reviewed balance sheets
of the Company as of December 31, 1995, December 31, 1996 and unaudited balance
sheet as of December 31, 1997, and reviewed statements of income and cash flows
of the Company for the fiscal years ended December 31, 1995 and December 31,
1996 and unaudited statements of income and cash flow for the year ending
December 31, 1997 (collectively, the "FINANCIAL STATEMENTS"). Copies of the
Financial Statements are included in the Disclosure Schedule hereto. The
Financial Statements, including the Financial Statements as of and for the year
ending December 31, 1997 (the "MOST RECENT FINANCIAL STATEMENTS"), have been
prepared in accordance with GAAP, except as specifically set forth in the Rosen
Seymour Shapss Martin & Company LLP memorandum included in the Disclosure
Schedule hereto (the "GAAP EXCEPTIONS MEMO"). The Financial Statements
(including the notes thereto) have been prepared on a consistent basis
throughout the periods indicated and fairly present the financial position,
results of operations and changes in financial position of the Company as of the
indicated dates and for the indicated periods and are consistent with the books
and records of the Company (which books and records are correct and complete).
Since the date of the last of such Financial Statements, the Company has no
Material liabilities required by GAAP to be reflected on the Company's balance
sheet or notes thereto that are not so reflected in the Financial Statements
except as set forth in the GAAP Exceptions Memo, nor any other obligations
(whether absolute, contingent, or otherwise) which are (individually or in the
aggregate) Material (in amount or to the conduct of the Business); and neither
the Company nor Shareholders have Knowledge of any basis for the assertion of
any such Material liability or obligation. Since December 31, 1997, the Company
has not experienced any Material Adverse Change.
H. CERTAIN ACTIONS. Since December 31, 1997, the Company has not, except
as disclosed on any of the Financial Statements or notes thereto: (a) paid or
declared any dividends or distributions, or purchased, redeemed, acquired, or
retired any stock or indebtedness from Allied Parent or any Shareholder (other
than distributions to pay estimated income taxes of the Shareholders associated
with the income of the Company distributions of the Company's net income for the
fiscal year ended December 31, 1997; up to $900,000 of retained, pre-S
corporation earnings, less the aggregate amount of all debt owed by the
Shareholders to the Company; and additional distributions by the Company, all of
which shall be deemed to be made on or prior to February 28, 1998 (collectively
the "PERMITTED DISTRIBUTIONS"); provided that in
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<PAGE> 19
the event that payment of any portion of the Permitted Distributions would
result in any violation of the condition to the Closing contained in Section
7.1(g) hereof, then the Company shall pay such Permitted Distributions at
Closing in an amount not to exceed $2,000,000 out of the Financing Proceeds);
(b) made or agreed to make any loans or advances or guaranteed or agreed to
guarantee any loans or advances to any party whatsoever; (c) suffered or
permitted any Encumbrance to arise or be granted or created against or upon any
of its assets, real or personal, tangible or intangible; (d) canceled, waived,
or released or agreed to cancel, waive, or release any of its debts, rights, or
claims against third parties in excess of $25,000 individually or $50,000 in the
aggregate; (e) sold, assigned, pledged, mortgaged, or otherwise transferred, or
suffered any material damage, destruction, or loss (whether or not covered by
insurance) to, any assets (except in the ordinary course of the Business); (f)
amended its charter or bylaws; (g) paid or made a commitment to pay any
severance or termination payment to any employee or consultant; (h) made any
material change in its method of management operation, accounting or reporting
of income or deductions for tax purposes or any change outside the ordinary
course of the Business in the Company's working capital other than Permitted
Distributions; (i) made any material acquisitions, made any capital
expenditures, including, without limitation, replacements of equipment in the
ordinary course of the Business, or entered into commitments therefor, except
for capital expenditures or commitments therefor which do not, in the aggregate,
exceed $100,000; (j) made any investment or commitment therefor in any Person;
(k) made any payment or contracted for the payment of any bonus or other
compensation or personal expenses, other than (A) wages and salaries and
business expenses paid in the ordinary course of the Business, and (B) wage and
salary adjustments made in the ordinary course of the Business for employees who
are not officers, directors, or shareholders of the Company; (l) made, amended,
or entered into any written employment contract or created or made any material
change in any bonus, stock option, pension, retirement, profit sharing or other
employee benefit plan or arrangement; (m) made or entered into any vendor,
supply, sales, distribution, franchise, consortia or travel agency agreement
which involves annual consideration (or commissions) in excess of $100,000; (n)
made or entered into any agreement granting any Person any registration or offer
rights in respect of the Company's capital stock; (o) entered into any
non-competition agreement; (p) made or entered into any agreement or other
arrangement with any officer, director, shareholder, employee or Affiliate of
the Company or any of the foregoing Persons; (q) materially amended, experienced
a termination or received notice of actual or threatened termination or
non-renewal of any material contract, agreement, lease, franchise or license to
which the Company is a party that would or could reasonably be expected to have
a Material Adverse Effect; or (r) entered into any other material transactions
that would or could reasonably be expected to have a Material Adverse Effect.
I. PROPERTIES. Attached hereto as Exhibit J is a list containing a
description of each interest in real property (including, without limitation,
leasehold interests) and each item of personal property utilized by the Company
in the conduct of the Business having a book or fair market value in excess of
$20,000 as of the date hereof. Except for Permitted Exceptions, such real and
personal properties are free and clear of Encumbrances. Shareholders and the
Company have delivered to Investors copies of all real property leases and a
lien search obtained from the counties where the Company conducts business and
the New York Secretary of State office of all UCC liens of record against the
Company's personal property in the State of New
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York. All of the properties and assets necessary for continued operation of the
Business as currently conducted (including, without limitation, all books,
records, computers and computer software and data processing systems) are owned,
leased or licensed by the Company and are suitable for the purposes for which
they are currently being used. With the exception of used equipment and
inventory valued at no more than $20,000 in the aggregate on the Company's
Financial Statements, the physical properties of the Company, including the real
properties leased by the Company, are in operating condition and repair, normal
wear and tear excepted, and are free from any defects of a material nature.
Except for Permitted Exceptions, the Company has full and unrestricted legal and
equitable title to all such properties and assets. The operation of the
properties and Business of the Company in the manner in which they are now and
have been operated does not violate any zoning ordinances, municipal
regulations, or other Requirements of Laws, except for any such violations which
would not, individually or in the aggregate, have a Material Adverse Effect. To
the Knowledge of the Shareholders, except for Permitted Exceptions, no
restrictive covenants, easements, rights-of-way, or regulations of record impair
the uses of the properties of the Company for the purposes for which they are
now operated. All leases of real or personal property by the Company are legal,
valid, binding, enforceable and in full force and effect and will remain legal,
valid, binding, enforceable and in full force and effect on identical terms
immediately following the Closing, except for the Equitable Exceptions. All
facilities leased by the Company have received all approvals of any Governmental
Body (including Governmental Permits) required to be obtained by the Company in
connection with the operation of the Business and have been operated and
maintained in accordance with all Requirements of Laws applicable to the Company
as a lessee thereof. The Company owns no real property.
J. LICENSES AND PERMITS. Attached hereto as Exhibit K is a list of all
licenses, certificates, privileges, immunities, approvals, franchises,
authorizations and permits held or applied for by the Company from any
Governmental Body (herein collectively called "GOVERNMENTAL PERMITS") the
absence of which could, individually or in the aggregate, have a Material
Adverse Effect. The Company has complied in all material respects with the terms
and conditions of all such Governmental Permits, and the Company has not
received notification from any Governmental Body of violation of any such
Governmental Permit or the Requirements of Laws governing the issuance or
continued validity thereof. All of such Governmental Permits are valid and in
full force and effect. No additional Governmental Permit is required from any
Governmental Body thereof in connection with the conduct of the Business which
Governmental Permit, if not obtained, would have a Material Adverse Effect.
K. INTELLECTUAL PROPERTY. Attached hereto as Exhibit L is a list and
brief description of all Intellectual Property owned or utilized by the Company.
The Company has furnished Investors with copies of all license agreements to
which the Company is a party, either as licensor or licensee, with respect to
any Intellectual Property. The Company has good title to or the right to use all
the Intellectual Property and all inventions, processes, designs, formulae,
trade secrets and know-how necessary for the conduct of the Business, in the
Business as presently conducted without the payment of any royalty or similar
payment, and the Company is not infringing on any Intellectual Property right of
others, and neither the Company nor Shareholders are aware of any infringement
by others of any such rights owned by the Company.
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All licenses set forth on Exhibit L are valid and binding obligations of the
Company, and to the Knowledge of the Company the other parties thereto, and
enforceable against the Company, and to the Knowledge of the Company the other
parties thereto in accordance with their respective terms, except for the
Equitable Exceptions. The Company owns and possesses all right, title and
interest in and to, or has the right to use pursuant to a valid license, all
Intellectual Property necessary for the operation of the business of the Company
as presently conducted.
L. COMPLIANCE WITH LAWS. The Company has (i) complied in all material
respects with all Requirements of Laws, Governmental Permits and Court Orders
applicable to the Business and has filed with the proper Governmental Bodies all
statements and reports required by all Requirements of Laws, Governmental
Permits and Court Orders to which the Company or any of its employees (because
of their activities on behalf of the Company) are subject and (ii) to the
Knowledge of the Company, conducted the Business and is in compliance in all
material respects with all federal, state and local energy, public utility,
health, safety and environmental Requirements of Laws, Governmental Permits and
Court Orders including the Clean Air Act, the Clean Water Act, the Solid Waste
Act, the Comprehensive Environmental Response Compensation and Liability Act,
the Resource Conservation and Recovery Act, the Safe Drinking Water Act, OSHA,
the Toxic Substances Control Act and any similar state, local or foreign laws
(collectively "ENVIRONMENTAL AND OSHA OBLIGATIONS") and all other Governmental
Body requirements, except where any such failure to comply or file would not, in
the aggregate, have a Material Adverse Effect. No claim has been made by any
Governmental Body (and, to the Knowledge of the Company and Shareholders, no
such claim is anticipated) to the effect that the Business fails to comply, in
any respect, with any Requirements of Laws, Governmental Permit or Environmental
and OSHA Obligation or that a Governmental Permit or Court Order is necessary in
respect thereto.
M. INSURANCE. Attached hereto as Exhibit M is a list of all coverages
for fire, liability, or other forms of insurance and all fidelity bonds held by
or applicable to the Company. Copies of the binder for all such insurance
policies have been delivered to Investors. The insurance maintained by the
Company is adequate and customary for companies engaged in the Business. To the
best of the Company's and Shareholders' Knowledge, no event relating to the
Company has occurred which will result in (i) cancellation of any such insurance
coverages; (ii) a retroactive upward adjustment of premiums under any such
insurance coverages; or (iii) any prospective upward adjustment in such
premiums. All of such insurance coverages will remain in full force and effect
following the Closing. The Company is not in default under any such insurance
policies.
N. EMPLOYEE BENEFIT PLANS.
1. EMPLOYEE WELFARE BENEFIT PLANS. The Company does not maintain
or contribute to any "employee welfare benefit plan" as such term is defined in
Section 3(1) of ERISA. With respect to each such plan listed in the Disclosure
Schedule, (i) the plan is in material compliance with ERISA and all other
applicable Requirements of Laws; (ii) the plan has been administered in
accordance with its governing documents; (iii) neither the plan, nor any
fiduciary with respect to the plan, has engaged in any "prohibited transaction"
as defined in
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Section 406 of ERISA other than any transaction subject to a statutory or
administrative exemption; (iv) except for the processing of routine claims in
the ordinary course of administration, there is no material litigation,
arbitration or disputed claim outstanding; and (v) all premiums due on any
insurance contract through which the plan is funded have been paid.
2. EMPLOYEE PENSION BENEFIT PLANS. The Company does not maintain
or contribute to any arrangement that is or may be an "employee pension benefit
plan" relating to employees, as such term is defined in Section 3(2) of ERISA.
3. EMPLOYMENT AND NON-TAX QUALIFIED DEFERRED COMPENSATION
ARRANGEMENTS. The Company does not maintain or contribute to any retirement or
deferred or incentive compensation or stock purchase, stock grant or stock
option arrangement entered into between the Company and any current or former
officer, consultant, director or employee of the Company that is not intended
to be a tax qualified arrangement under Section 401(a) of the Code.
O. CONTRACTS AND AGREEMENTS. Exhibit N hereto contains a list and brief
description of all written or oral contracts, commitments, leases (including
without limitation the Leases), and other agreements (including, without
limitation, promissory notes, loan agreements, and other evidences of
indebtedness, guarantees, hedging agreements, off-balance sheet financing
arrangements, indemnity agreements, vendor contracts with airlines and other
carriers, hotels and resorts, agreements with rental car companies, marketing
agreements, consortia agreements, travel agency agreements, interface or similar
agreements pertaining to various airline or other computer reservation systems)
to which the Company is a party or by which the Company or its properties are
bound pursuant to which the obligations thereunder of either party thereto are,
or are contemplated as being, for any one contract, $150,000 or greater or any
contract or agreement prohibiting it from freely engaging in any business or
competing anywhere in the world (collectively, the "CONTRACTS"). The Company is
not and, to the best knowledge of Shareholders and the Company, no other party
thereto is in default (and no event has occurred which, with the passage of time
or the giving of notice, or both, would constitute a default by the Company)
under any of the Contracts, and the Company has not waived any right under any
of the Contracts. All of the Contracts to which the Company is a party are
legal, valid, binding, enforceable and in full force and effect and will remain
legal, valid, binding, enforceable and in full force and effect on identical
terms immediately after the Closing, except for the Equitable Exceptions. The
Company has not guaranteed any obligations of any other Person. The Company has
no present expectation or intention of not fully performing all of its
obligations under any Contract, the Company has no Knowledge of any breach or
anticipated breach by the other parties to any Contract and the Company has not
received notice of actual or threatened termination or non renewal of any
Contract.
P. CLAIMS AND PROCEEDINGS. There are no claims, actions, suits,
proceedings, or investigations pending or, to the Knowledge of the Shareholders
or the Company, threatened against or affecting the Company or any of its
properties or assets, at law or in equity, before or by any court, municipality
or other Governmental Body. To the extent any are disclosed on the Disclosure
Schedule, none of such claims, actions, suits, proceedings, or investigations,
if adversely determined, will individually or in the aggregate result in any
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<PAGE> 23
Material Adverse Effect to the Company. The Company has not been and the Company
is not now, subject to any Court Order, stipulation, or consent of or with any
court or Governmental Body. No inquiry, action or proceeding has been instituted
or, to the best knowledge and belief of the Shareholders or the Company,
threatened or asserted against the Shareholders, Allied Parent or the Company to
restrain or prohibit the carrying out of the Transactions or to challenge the
validity of the Transactions or any part thereof or seeking damages on account
thereof. To the Knowledge of the Company and Shareholders there is no basis for
any such valid claim or action.
Q. TAXES.
1. All Federal, foreign, state, county and local and other Taxes
due from the Company on or before the Closing have been paid and all Tax
Returns which are required to be filed by the Company on or before the date
hereof have been filed within the time and in the manner provided by all
Requirements of Laws or extensions were timely filed, and all such Tax Returns
are true and correct and accurately reflect the Tax liabilities of the Company.
No Tax Returns of the Company, Allied Parent or any of the Shareholders are
presently subject to an extension of the time to file. All Taxes, assessments,
penalties, and interest of the Company which have become due pursuant to such
Tax Returns or any assessments received have been paid or adequately accrued on
the Company's Financial Statements. The provisions for Taxes reflected on the
balance sheets contained in the Financial Statements are adequate to cover all
of the Company's Tax liabilities for the respective periods then ended and all
prior periods. The Company has not executed any presently effective waiver or
extension of any statute of limitations against assessments and collection of
Taxes, and there are no pending or threatened claims, assessments, notices,
proposals to assess, deficiencies, or audits with respect to any such Taxes of
which any of the Shareholders or the Company are aware. For Governmental Bodies
with respect to which the Company does not file Tax Returns, no such
Governmental Body has given the Company written notification that the Company
is or may be subject to taxation by that Governmental Body. The Company has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, shareholder, creditor,
independent contractor or other party. There are no Tax liens on any of the
property or assets of the Company.
2. Neither the Company nor any other corporation has filed an
election under Section 341(f) of the Code that is applicable to the Company or
any assets held by the Company. The Company has not made any payments, is not
obligated to make any payments, and is not a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Code Sec. 280G. The Company has not been a United States real
property holding corporation within the meaning of Code Sec. 897(c)(2) during
the applicable period specified in Code Sec. 897(c)(1)(A)(ii). The Company is
not a party to any Tax allocation or sharing agreement. During the past seven
years, the Company has not and has never been (nor does the Company have any
liability for unpaid Taxes because it once was) a member of an affiliated group
during any part of which return year any corporation other than the Company
also was a member of the affiliated group.
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3. No transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code and no stock transfer taxes, real
estate transfer taxes or similar taxes will be imposed upon the sale of the
Purchased Shares or the redemption of the Redemption Shares pursuant to this
Agreement.
4. The Company and Allied Parent have each made a valid election
under Section 1362 of the Code and any corresponding state or local provisions
to be an S corporation within the meaning of Section 1361 of the Code for all
taxable years (or portions thereof) beginning on or after December 31, 1982
with respect to the Company and since inception with respect to Allied Parent,
no such S election has been terminated (whether voluntarily, involuntarily or
inadvertently, including, without limitation, by taking any action defined in
Section 1362(d) of the Code) since such time. Allied Parent has made a valid
election for the Company to be qualified as a "Qualified Subchapter S
subsidiary" under Section 1361 of the Code and applicable state laws effective
as of the date that the Shareholders contributed the stock of the Company to
Allied Parent.
5. The Company will not be required to include any amount in
taxable income or exclude any item of deduction or loss from taxable income for
any taxable period (or portion thereof) ending after the Closing Date (i) as a
result of a change in method of accounting for a taxable period ending on or
prior to the Closing Date, (ii) as a result of any "closing agreement," as
described in Code Section 7121 (or any corresponding provision of state, local
or foreign income Tax law) entered into on or prior to the Closing Date, (iii)
as a result of any sale reported on the installment method where such sale
occurred on or prior to the Closing Date, and (iv) as a result of any prepaid
amount received on or prior to the Closing Date.
R. PERSONNEL. Attached hereto as Exhibit O is a list of the names and
annual rates of compensation of the directors and executive officers of the
Company, and of the employees of the Company whose annual rates of compensation
during the calendar year ended December 31, 1997 (including base salary, bonus
and incentive pay) exceed (or by December 31, 1998 are expected to exceed)
$60,000. Exhibit O also summarizes the bonus, profit sharing, percentage
compensation, company automobile, club membership, and other like benefits, if
any, paid or payable to such directors, officers, and employees during the
Company's calendar year ended December 31, 1997 and to the date hereof. Exhibit
O also contains a brief description of all material terms of employment
agreements to which the Company is a party and all severance benefits which any
director, officer or employee of the Company is or may be entitled to receive.
The employee relations of the Company are generally good and there is no pending
or, to the best knowledge of Shareholders or the Company, threatened labor
dispute or union organization campaign. None of the employees of the Company is
represented by any labor union or organization. The Company is in compliance in
all material respects with all Requirements of Laws respecting employment and
employment practices, terms and conditions of employment, and wages and hours,
and is not engaged in any unfair labor practices. Neither the Company or
Shareholders has been advised, or has good reason to believe, that any employee
will not agree to remain employed by the Company after the consummation of the
Transactions. There is no unfair labor practice claim against the Company before
the National Labor Relations Board, or
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any strike, dispute, slowdown, or stoppage pending or, to the Knowledge of the
Company and Shareholders, threatened against or involving the Company, and none
has previously occurred.
S. BUSINESS RELATIONS. Neither the Company nor Shareholders know or has
good reason to believe that any customer, supplier, travel agency, resort
operator or lodging or transportation company engaged in doing business with the
Company will cease to do business with the Company after the consummation of the
Transactions in the same manner and at the same levels as previously conducted
with the Company except for any reductions which do not result in a Material
Adverse Change. Neither Shareholders nor the Company has received any notice of
cancellation of any Material business arrangement between any Person and the
Company nor is the Company or Shareholders aware of any facts which could lead
them to believe that the Business will be subject to cancellation of any such
business arrangement.
T. ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLES; CUSTOMER DEPOSITS AND
BOOKINGS.
1. ACCOUNTS RECEIVABLE. All of the accounts, notes, and loans
receivable that have been recorded on the books of the Company are bona fide
and represent amounts validly due for goods sold or services rendered and,
subject to a $660,000 write-off already reflected in the Most Recent Financial
Statements and the possibility of an occurrence of a Force Majeure event, all
such amounts will be collected in full prior to December 31, 1998. With respect
to such accounts, notes, and loans receivable: (i) all are free and clear of
any Encumbrances; (ii) no claims of offset have been asserted in writing
against any of such accounts, notes, or loans receivable; and (iii) none of the
obligors thereto has given written notice that it will or may refuse to pay the
full amount or any portion thereof. Lists of the Company's accounts receivable
(A) as of December 31, 1997 (including any reconciliation to the accounts
receivable entry on the balance sheet included in the Most Recent Financial
Statements), (B) as of February 28, 1998, and (C) as of the day prior to the
Closing (or as of the most recent date available), will all be delivered at the
Closing and added to the Disclosure Schedule.
2. ACCOUNTS PAYABLE. The aggregate amount of accounts payable
reflected on the Most Recent Financial Statements are true and correct in all
material respects in accordance with GAAP except as adjusted for in the Net
Worth Adjustment and, after giving effect to such adjustment, accurately
reflect the accounts payables of the Company as of December 31, 1997. Lists of
the Company's accounts payable (A) as of December 31, 1997 (including any
reconciliation to the accounts payable entry on the balance sheet included in
the Most Recent Financial Statements), (B) as of February 28, 1998, and (C) as
of the day prior to the Closing (or as of the most recent date available), will
all be delivered at the Closing and added to the Disclosure Schedule.
3. BOOKINGS. Exhibit P sets forth, as of the date specified
therein all customer bookings as of such date on an aggregate basis
("BOOKINGS"). For the period since December 31, 1997 through February 28, 1998,
to the Knowledge of the Company and the Shareholders, the Company's actual
Bookings are not less than the Company's Bookings for the period December 31,
1996 through February 28, 1997.
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U. BANK ACCOUNTS; INVESTMENTS. Attached hereto as Exhibit R is a list of
all banks or other financial institutions with which the Company has an account
or maintains a safe deposit box, showing the type and account number of each
such account and safe deposit box and the names of the persons authorized as
signatories thereon or to act or deal in connection therewith. Exhibit R also
contains a list of all material investments by the Company in any funds,
accounts, securities, certificates of deposit or instruments of any Person. All
of such investments are customary in form and amount for reasonably prudent
treasury investments of comparable businesses, none of which involve any type of
derivative, option, hedging or other speculative instrument.
V. CUSTOMER CLAIMS. No written or oral claim for breach of contract or
otherwise by any customer (a "CUSTOMER CLAIM") has been made against the Company
since January 1, 1998 which could, individually or in the aggregate, result in
any Material Adverse Effect. The level of Customer Claims for the period since
December 31, 1997 through the date hereof is consistent (plus or minus 5%) with
past practices of the Company for the comparable period in 1997. To the
Knowledge of Shareholders and the Company, no state of facts exists, and no
event has occurred, which could reasonably be expected to form the basis of any
present claim against the Company for liability to any third party in connection
with vacation packages sold or services rendered by the Company, other than
Customer Claims arising in the ordinary course of the Business.
W. BROKERS. Neither the Company, Allied Parent nor Shareholders have
engaged, or caused to be incurred any liability to any finder, broker, or sales
agent in connection with the origin, negotiation, execution, delivery, or
performance of this Agreement or the Transactions.
X. AFFILIATED TRANSACTIONS. No officer, director, shareholder (including
the Shareholders and Allied Parent) or Affiliate of the Company or any
individual related by blood or marriage to any such Person, or any entity in
which any such Person owns any beneficial interest, is a party to any agreement,
contract, arrangement or commitment with the Company or engaged in any
transaction with the Company or has any interest in any property used by the
Company. No officer, director, or shareholder of the Company, Allied Parent or
any Affiliate of any such officer, director, or shareholder, has any ownership
interest in any competitor, supplier, or customer of the Company (other than
ownership of securities of a publicly-held corporation of which such Person
owns, or has real or contingent rights to own, less than five percent of any
class of outstanding securities) or any property used in the operation of the
Business.
Y. FUNDED INDEBTEDNESS; LETTERS OF CREDIT; UNDISCLOSED LIABILITIES.
1. FUNDED INDEBTEDNESS. Other than any Funded Indebtedness which
is to be repaid and discharged by Shareholders prior to Closing in accordance
with Section 7.1(d), the Company does not have any Funded Indebtedness.
2. LETTERS OF CREDIT. Other than those listed on Exhibit S, the
Company has no letters of credit, performance bonds or similar instruments
issued on or for its account for the benefit of any of its vendors or
otherwise.
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3. UNDISCLOSED LIABILITIES. The Company does not have any
liabilities in excess of $50,000 in the aggregate (whether absolute, accrued,
contingent or otherwise) of a nature required by GAAP to be reflected on a
corporate balance sheet or in the notes thereto, except as set forth in the
GAAP Exceptions Memo and except such liabilities which are accrued or reserved
against in the Financial Statements or disclosed in the notes thereto,
including without limitation any accounts payable or service liabilities of the
Company incurred prior to the Closing Date.
Z. YEAR 2000. To the Knowledge of the Company, all of the Material
computer software, computer firmware, computer hardware (whether general or
special purpose), and other similar or related items of automated, computerized,
and/or software system(s) that are used or relied on by the Company in the
conduct of its business will not malfunction, will not cease to function, will
not generate incorrect data, and will not produce incorrect results when
processing, providing, and/or receiving (i) date-related data into and between
the twentieth and twenty-first centuries and (ii) date-related data in
connection with any valid date in the twentieth and twenty-first centuries,
except for any malfunctions or generations of incorrect data or results that
would not individually or in the aggregate have a Material Adverse Effect.
AA. INFORMATION FURNISHED. The Company and Shareholders have made
available to Investors true and correct copies of all material corporate records
of the Company and all material agreements, documents, and other items listed on
the Schedules to this Agreement or referred to in Article III of this Agreement,
and neither this Agreement, the Schedules hereto, nor any written information,
instrument, or document delivered to Investors pursuant to this Agreement
contains any untrue statement of a Material fact or omits any Material fact
necessary to make the statements herein or therein, as the case may be, not
misleading.
ARTICLE IV
THE INVESTORS' REPRESENTATIONS AND WARRANTIES
The Investors jointly and severally represent and warrant to
Shareholders, Allied Parent and the Company as follows:
A. DUE ORGANIZATION OF THAYER III. Thayer III is a limited partnership
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and has full partnership power and authority to execute,
deliver and perform this Agreement and to carry out the Transactions.
B. DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary individual, partnership or
corporate action on the part of each Person comprising the Investors, as
appropriate, and the Agreement has been duly and validly executed and delivered
by each of the Investors and constitutes the valid and binding obligation of
each of the Investors, enforceable in accordance with its terms, except for the
Equitable Exceptions. The execution, delivery, and performance of this Agreement
and the Escrow
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Agreement (as well as all other instruments, agreements, certificates or other
documents contemplated hereby) by the Investors shall not (a) violate any
Requirements of Laws or Court Order of any Governmental Body applicable to any
Investor or its or his respective property, (b) violate or conflict with, or
permit the cancellation of, or constitute a default under any agreement to which
any Investor is a party or by which any Investor or its or his respective
property is bound, (c) permit the acceleration of the maturity of any
indebtedness of, or any indebtedness secured by the property of, any Investor,
(d) violate or conflict with any provision of the Certificate of Limited
Partnership of Thayer III or the charter or bylaws of any other Investor which
is a corporation or a partnership (as applicable), or (e) except for filings or
approvals under the HSR Act and such consents, approvals, or registrations as
may be required under applicable state securities laws, require any consent,
approval or authorization of, or notice to, or declaration, filing or
registration with, any Governmental Body or other third party.
C. NO BROKERS. The Investors have not engaged, or caused to be incurred
any liability for which Shareholders or Allied Parent may be liable to any
finder, broker or sales agent in connection with the origin, negotiation,
execution, delivery, or performance of this Agreement or the Transactions.
D. INVESTMENT. The Investors will each acquire the Purchased Shares for
investment and for its own account and not with a view to the distribution
thereof.
ARTICLE V
PRE-CLOSING COVENANTS OF THE COMPANY, ALLIED PARENT, THAYER III
AND SHAREHOLDERS
A. CONSENTS OF OTHERS. Prior to the Closing, the Company, Allied Parent
and Shareholders shall use their best efforts to obtain and to cause the Company
to obtain all authorizations, consents and permits required of the Company,
Allied Parent and Shareholders to permit them to consummate the Transactions. To
the extent required to consummate the Transactions or to ensure that the
Contracts shall remain in full force and effect following the Closing,
Shareholders shall have obtained the written consent or waiver of any "change of
control" type termination rights of any third party to any Contract. As promptly
as practicable after the date hereof, Thayer III, the Company and the
Shareholders shall make, or shall cause to be made, such filings as may be
required pursuant to the HSR Act with respect to the consummation of the
Transactions.
B. SHAREHOLDERS' EFFORTS. The Company and Shareholders shall use all
reasonable efforts to cause all conditions for the Closing to be met.
C. POWERS OF ATTORNEY. The Company and Shareholders shall cause the
Company to terminate at or prior to Closing all powers of attorney granted by
the Company, other than those relating to service of process, qualification or
pursuant to governmental regulatory or licensing agreements, or representation
before the IRS or other Governmental Bodies.
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D. CONDUCT OF BUSINESS PENDING CLOSING. From the date of this Agreement
to the Closing Date:
1. Except as otherwise contemplated by this Agreement, or as
Thayer III may otherwise consent to in writing, the Company and Shareholders
shall conduct the Business only in the ordinary course and shall not engage in
any material activity or enter into any material transaction which would cause
a breach of the representations and warranties contained in Article III.
2. Shareholders and the Company shall use their best efforts to
cause the Business to preserve substantially intact its current business
organization and present relationships with its customers, vendors, suppliers
and employees and to maintain all of its insurance currently in effect.
3. Shareholders and the Company shall give prompt notice to
Investors of any notice of material default received by the Company or the
Business subsequent to the date of this Agreement under any Contract or any
Material Adverse Change occurring prior to the Closing Date in the operation of
the Company or the Business.
4. Neither the Company, Allied Parent nor the Shareholders, nor
any of their representatives, shall solicit, encourage or discuss any
Acquisition Proposal (as hereinafter defined) or supply any non-public
information concerning the Company or the Business or the Company's assets to
any party other than Investors or their representatives. As used herein,
"ACQUISITION PROPOSAL" means any proposal other than the Transactions, for (i)
any merger or other business combination involving the Company or the Business,
(ii) the acquisition of the Company or a material equity interest in the
Company or a material portion of its assets, or (iii) the dissolution or
liquidation of the Company.
E. ACCESS BEFORE CLOSING. Prior to the Closing Date, Shareholders and
the Company agree that it will give, or cause to be given, to the Investors and
their representatives, during normal business hours and at the Investors'
expense, full and unrestricted access to the Company's personnel, independent
accountants, customers, suppliers, officers, agents, employees, assets,
properties, titles, contracts, corporate minute and other books, records, files
and documents of the Company with respect to the Business (including financial,
tax basis, budget projections, accountants' work papers and other information as
Investors may request).
F. INVESTOR CONFIDENTIALITY. Until the Closing Date, Thayer III agrees
to remain bound by the terms of the confidentiality provisions contained in the
December 8, 1997 letter of intent between Thayer III and the Company.
ARTICLE VI
POST-CLOSING COVENANTS
A. GENERAL. In case at any time after the Closing any further action is
legally necessary or reasonably desirable (as determined by Thayer III and
Shareholders) to carry out the
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purposes of this Agreement, each of the parties will take such further action
(including the execution and delivery of such further instruments and documents)
as any other party reasonably may request, all at the sole cost and expense of
the requesting party (unless the requesting party is entitled to indemnification
therefor under Article VIII below). The Shareholders acknowledge and agree that
from and after the Closing, the Company will be entitled to possession of all
documents, books, records, agreements, and financial data of any sort relating
to the Company, which shall be maintained at the chief executive office of the
Company; provided, however, that Shareholders shall be entitled to reasonable
access to and to make copies of such books and records at their sole cost and
expense and the Company will maintain all of the same for a period of at least
three (3) years after Closing. Thereafter, the Company will offer such
documentation to Shareholders before disposal thereof.
B. TRANSITION. For a period of four (4) years following Closing, the
Shareholders will not take any action (or cause any such action to be taken by
another Person) that primarily is designed or intended to have the effect of
discouraging any vendor (including without limitation any airline or other
carrier, hotel, resort or rental car company), lessor, licensor, customer,
travel agency, consortia member, supplier, or other business associate of the
Company from maintaining the same business relations with the Company after the
Closing as it maintained with the Company prior to the Closing. For a period of
four (4) years following Closing, the Shareholders will refer all customer
inquiries relating to the Business to the Company.
C. CONFIDENTIALITY. The Shareholders will treat and hold in confidence
and not disclose all Confidential Information and refrain from using any of the
Confidential Information except in connection with this Agreement or otherwise
for the benefit of the Company or Investors for a period of four (4) years from
the date of this Agreement, and deliver promptly to Investors or destroy, at the
written request and option of Thayer III, all tangible embodiments (and all
copies) of the Confidential Information which are in their possession except as
otherwise permitted herein. In the event that any Shareholder is requested or
required (by oral question or written request for information or documents in
any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar legal proceeding) to disclose any Confidential Information, such
Shareholder will notify the Company and Thayer III promptly of the request or
requirement.
D. COVENANT NOT TO COMPETE. For and in consideration of the allocation
of $50,000 of the Redemption Price paid to the Shareholders by the Company, each
Shareholder covenants and agrees, for a period of four (4) years from and after
the Closing Date, that he will not, directly or indirectly without the prior
written consent of the Company, for or on behalf of any entity:
1. become interested or engaged, directly or indirectly, as a
shareholder, bondholder, creditor, officer, director, partner, agent,
contractor with, employer or representative of, or in any manner associated
with, or give financial, technical or other assistance to, any Person, firm or
corporation for the purpose of engaging in the Business in competition with the
Company or any of its Affiliates, within the United States;
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2. enter into any agreement with, service, assist or solicit the
business of any customers of the Company or any of its Affiliates for the
purpose of providing wholesale travel services to such customers in competition
with the Company or any of its Affiliates in the United States or to cause them
to reduce or end their business with the Company or any of its Affiliates; or
3. hire, retain, or solicit the employment or services of
employees, consultants or representatives of the Company or any of its
Affiliates for the purpose of causing them to leave the employment of the
Company or any of its Affiliates;
provided, however, that no owner of less than five percent (5%) of the
outstanding stock of any publicly-traded corporation shall be deemed to be in a
violation of this Section 6.4 solely by reason thereof.
E. ADDITIONAL MATTERS.
1. The Shareholders shall cause the Company and Allied Parent to
file with the appropriate governmental authorities all Tax Returns required to
be filed by it for any taxable period ending prior to the Closing Date and the
Company and Allied Parent shall remit any Taxes (other than Taxes on income)
due in respect of such Tax Returns. In addition, Allied Parent and Shareholders
shall cause Rosen, Seymour, Shapss, Martin & Co. to prepare a short period tax
return for the Company covering the period January 1, 1998 through the Closing
Date. The cost of preparation of such short period tax return shall be paid for
by Shareholders.
2. Investors and Shareholders recognize that each of them will
need access, from time to time, after the Closing Date, to certain accounting
and Tax records and information held by Investors and/or the Company to the
extent such records and information pertain to events occurring on or prior to
the Closing Date; therefore, Investors agree to cause the Company to (A) use
its best efforts to properly retain and maintain such records for a period of
six (6) years from the date the Tax Returns for the year in which the Closing
occurs are filed or until the expiration of the statute of limitations with
respect to such year, whichever is later, and (B) allow each Shareholder and
his agents and representatives at times and dates mutually acceptable to the
parties, to inspect, review and make copies of such records as such other party
may deem necessary or appropriate from time to time, such activities to be
conducted during normal business hours and at the other party's expense.
3. The Shareholders and Allied Parent shall be liable for, and
shall indemnify and hold Investors and the Company harmless against, any Taxes
or other costs attributable solely to (i) a failure on the part of any
Shareholder to take all actions required of him under Section 6.5(a); (ii) a
failure on the part of the Company or Allied Parent to qualify, at or prior to
the Closing, as an "S corporation" for federal and/or state income Tax
purposes; or (iii) a change in accounting method of the Company reasonably
required by applicable Tax law (as determined by the Company's independent
accountants) as a result of any action or omission taken by Shareholders,
Allied Parent or the Company on or prior to the Closing Date in the event of
any final determination by the IRS or any state or local Tax authority that the
parties' characterization that the transactions contemplated by this Agreement
would be treated as an
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"asset sale" for tax purposes is invalid. Payment for such indemnification
provided in the preceding sentence shall be due and payable within 30 days
after a final determination of such matter has been made; provided, however,
that payment for indemnification under clause (iii) of the preceding sentence
(other than interest and penalties of the Company which shall be immediately
due and payable upon incurrence thereof by the Company) shall not be due and
payable until 10 days after Allied Parent's and/or Shareholders' receipt of a
tax refund or tax credit resulting from such change in accounting method as
described in the last sentence of this Section 6.5(c). The Shareholders' and
Allied Parent's indemnification of the Company under clause (iii) above shall
be an amount equal to the sum of (A) Allied Parent's and the Shareholders'
actual federal, state and local income tax refunds and/or credits solely as a
result of the decreased income resulting from the change in accounting method
and (B) all interest and penalties due to such change in accounting method. In
the event of any required change in accounting method, Allied Parent and the
Shareholders shall use their best efforts to obtain all Tax refunds or credits
from the appropriate Tax authorities as a result of the change in accounting
method by filing their then current Tax Returns with a provision for a credit
against that current year's or other year's Taxes (if permitted by applicable
Tax law) or by filing amended Tax Returns within 30 days of Allied Parent's
receipt of written notice from the Company of such accounting method change.
Thayer III shall have the right to review and approve any amended Tax Returns
or any provisions for credits against then current Taxes reflected on Tax
Returns made by the Shareholders or Allied Parent in connection therewith. In
the event any Tax authority disputes such refund or credit, Allied Parent shall
have the right to control (with the participation of Thayer III and the
Company) all matters or proceedings relating to such dispute. Allied Parent and
Shareholders shall pay to the Investors all refunds or credits obtained by
Allied Parent or Shareholders within ten days after (A) their receipt of a tax
refund from the IRS or any state or local Tax authority (with respect to
refunds for amended Tax Returns) with respect to any decreased income as a
result of the accounting method change or (B) the filing of any Tax Return
claiming a credit or similar benefit against then current Taxes in any Tax
Return as a result of the accounting method change.
4. Subject to the limitations described below, the
Shareholders and Allied Parent shall be liable for and shall repay to the
Investors the aggregate amount of all payments made by the Investors to the
Shareholders pursuant to the Tax Payments Schedule (the "GROSS-UP TAXES") in
the event of any final determination by the IRS or any state or local Tax
authority that the parties' characterization that the transactions contemplated
by this Agreement would be treated as an "asset sale" for tax purposes is
invalid. In the event of such final determination, Allied Parent and the
Shareholders shall use their best efforts to either (i) obtain a refund from
the appropriate Tax authorities of all Gross-Up Taxes paid to any Tax authority
through an amended Tax Return (such refund to be filed for within 30 days of
Shareholders' receipt of written notice from the Company or Investors of a
final determination) or (ii) file its then current Tax Returns with a provision
for a credit against that current year's or other year's Taxes for the
overpayments for Gross-Up Taxes. Thayer III shall have the right to review and
approve any amended Tax Returns or any provisions for credits against then
current Taxes reflected on Tax Returns made by the Shareholders or Allied
Parent in connection therewith. In the event any Tax authority disputes such
refund or credit, Allied Parent shall have the right to control (with the
participation of Thayer III and the Company) all matters or proceedings
relating
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to such dispute. Allied Parent and Shareholders shall pay to the Investors all
refunds or credits obtained by Allied Parent or Shareholders within five (5)
business days after (A) their receipt of a tax refund from the IRS or any state
or local Tax authority (with respect to refunds for amended Tax Returns) with
respect to any Gross-Up Taxes or (B) the filing of any Tax Return claiming a
credit or similar benefit against then current Taxes in any Tax Return with
respect to the overpayments of Gross-Up Taxes. The aggregate liability of Allied
Parent and the Shareholders to the Investors for Gross-Up Taxes shall be limited
to the actual amount of all refunds and/or credits received by Allied Parent
and/or the Shareholders from Tax authorities. Notwithstanding the foregoing, in
the event that Allied Parent or the Shareholders determine that any of such
Gross-Up Taxes are not for any reason required to be made to any Tax authority
and the parties characterization of the transactions contemplated by this
Agreement as an "asset sale" for Tax purposes remains valid, then the
Shareholders shall promptly reimburse the Investors for ninety percent (90%) of
all of such Gross-Up Taxes not paid by the Shareholders. Any such reimbursement
required by the preceding sentence shall be refunded to the Shareholders in the
event that such Gross-Up Taxes are later determined to be required to be paid by
Shareholders. Allied Parent and the Shareholders shall cause Rosen Seymour
Shapss Martin & Company LLP to certify to the Company the final amount of all
Gross-Up Taxes actually paid by the Shareholders.
5. The Shareholders shall maintain Allied Parent in existence
following the Closing Date for a period of at least four years; provided,
however, that at the Company's request, Allied Parent shall change its name so
that the words "Allied Tours" are removed therefrom.
F. LITIGATION SUPPORT. In the event and for so long as any party is
actively contesting or defending against any claim, suit, action or charge,
complaint, or demand in connection with (i) any transaction contemplated under
this Agreement or (ii) any fact, circumstance, status, condition, activity,
practice, occurrence, event, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other parties will
cooperate and make available themselves or their personnel, as applicable, and
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense.
G. AUDITS. Following the Closing, the Shareholders shall use their best
efforts to cause the Company, at the Company's expense, to deliver, or cause to
be delivered, to Investors an unqualified and unmodified audit report of Arthur
Andersen, LLP on the balance sheets of the Company as of December 31, 1995,
December 31, 1996, December 31, 1997 and the Closing Date, and audited
statements of operations and cash flows of the Company for the fiscal years then
ended and with respect to the period January 1, 1998 through the Closing Date,
which report shall be without limitation as to the scope of the audit.
Shareholders, in their capacities as officers and directors of the Company
during such periods, shall provide all management letters, reports or
representations reasonably requested by such auditors in connection with such
audits.
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H. REGISTRATION RIGHTS. Following the Closing, Thayer III and the
Company anticipate that they may enter into a registration rights agreement with
respect to shares of the Company's Common Stock. Upon execution thereof, Thayer
III and the Company each hereby agree to offer Allied Parent and the
Shareholders the right to become a party to such registration rights agreement,
in which event Allied Parent and the Shareholders shall receive customary
piggyback registration rights with respect to their shares of the Company's
Common Stock (including any shares of Common Stock issuable upon conversion of
the Preferred Stock). All customary registration expenses (other than
underwriting discounts and fees) in connection with any piggyback registration
will be at the Company's expense.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PARTIES TO CONSUMMATE CLOSING
A. CONDITIONS TO THE INVESTORS' OBLIGATIONS. The obligation of the
Investors under this Agreement to consummate the Closing is subject to the
conditions that:
1. COVENANTS, REPRESENTATIONS AND WARRANTIES. The Company,
Allied Parent and Shareholders shall have performed in all material respects
all obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by each
of them prior to or at the Closing Date. The representations and warranties of
the Company, Allied Parent and Shareholders set forth in this Agreement shall
be accurate in all material respects at and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
2. CONSENTS. All statutory requirements for the valid
consummation by the Company, Allied Parent and Shareholders of the Transactions
shall have been fulfilled and all authorizations, consents and approvals,
including expiration or early termination of all waiting periods under the HSR
Act and those of all federal, state, local and foreign governmental agencies
and regulatory authorities required to be obtained in order to permit the
consummation of the Transactions shall have been obtained in form and substance
reasonably satisfactory to Thayer III unless such failure could not reasonably
be expected to have a Material Adverse Effect. All approvals of the Boards of
Directors and shareholders of the Company and Allied Parent necessary for the
consummation of this Agreement and the Transactions shall have been obtained.
3. LEASES. Each of the Leases shall provide that the Company is
the lessee and that such Lease survives the Closing for the term of such Lease,
and copies of such Leases (and any assignments pursuant to which any of such
Leases have been assigned to the Company prior to the Closing Date) shall have
been provided to the Investors.
4. DISCHARGE OF INDEBTEDNESS AND LIENS; SHAREHOLDER LOANS.
Shareholders and the Company shall have provided for the payment in full by the
Company of all Funded Indebtedness of the Company at the Closing. Such Funded
Indebtedness, if any, as of December 31, 1997, is listed on Exhibit T hereto.
Shareholders shall have also provided for the
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termination of all Encumbrances of record on the properties of the Company,
except for Permitted Exceptions. All liens or UCC filings against the Company
or Affiliates of the Company which are engaged in the Business, shall have been
terminated as of the Closing. All outstanding loans or other amounts owed by
any Shareholder or Allied Parent to the Company shall have been repaid in full
on or prior to the Closing.
5. FEE. In consideration of investment banking services provided
by Thayer III's Affiliate, TC Management Partners LLC, in connection with the
Transactions, the Company shall pay to TC Management Partners LLC immediately
following the Closing a fee in the amount of $425,000.
6. TRANSFER TAXES. Shareholders shall be responsible for all
stock transfer or gains taxes imposed on Shareholders or Allied Parent incurred
in connection with this Agreement.
7. FINANCIAL CONDITION. The Company's Net Worth as projected at
the Closing shall be not less than ($400,000) and the Company shall continue to
have cash or cash equivalents on hand at the Closing in an amount not less than
$0.
8. DOCUMENTS TO BE DELIVERED BY SHAREHOLDERS, ALLIED PARENT AND
THE COMPANY. The following documents shall be delivered at the Closing by
Shareholders, Allied Parent and the Company:
(1) OPINION OF SHAREHOLDERS' COUNSEL. Investors shall
have received an opinion of counsel to the Company, Allied
Parent and Shareholders, dated the Closing Date, in
substantially the same form as the form of opinion that is
Exhibit C hereto.
(2) CERTIFICATES. Investors shall have received an
officer's certificate and a secretary's certificate of the
Company executed by officers of the Company, dated the Closing
Date, in a form mutually agreed upon by Thayer III and Allied
Parent, which certificates shall include a certification as to
the aggregate amount of Permitted Distributions.
(3) RELEASE. Shareholders and Allied Parent shall have
furnished the Company with a general release of liabilities,
excluding compensation and employee benefits as well as
obligations pursuant to this Agreement, in the form attached as
Exhibit E hereto.
(4) ESCROW AGREEMENT. Shareholders, Allied Parent and
the Company shall have delivered to Investors at the Closing the
duly executed Escrow Agreement in substantially the form
attached hereto as Exhibit G.
(5) EMPLOYMENT AGREEMENTS. Michael Fisher, Gregory
Fisher and Gilbert Fishman shall each have duly executed and
delivered Employment Agreements in substantially the same form
attached as Exhibits F-1,
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F-2 and F-3 hereto, pursuant to which he will be employed by the
Company following the Closing, and the Company shall have
amended its incentive compensation arrangements with Marilyn
Reis and Jane Rossmango to a reasonably equivalent incentive
arrangement.
(6) DELIVERY OF PURCHASED SHARES. At the Closing, Allied
Parent shall deliver to Investors the Purchased Shares.
(7) REDEMPTION OF EXISTING COMMON STOCK. Allied Parent
shall have delivered the stock certificate(s) representing the
Redemption Shares duly endorsed for transfer to the Company and
free and clear of all encumbrances, other than the restrictions
imposed by federal and state securities laws.
(8) RESIGNATION OF DIRECTORS. The Company shall deliver
the written resignations of all directors of the Company
effective as of the Closing.
(9) TERMINATION OF SHAREHOLDER AGREEMENTS. The Company
shall have provided evidence satisfactory to Thayer III of the
complete termination of all shareholder agreements among the
Shareholders, Allied Parent and/or the Company with respect to
the Company or the Existing Shares.
(10) CONSULTING AGREEMENT. Stanley Fisher shall have
executed and delivered a Consulting Agreement with the Company
in substantially the form attached as Exhibit U hereto, pursuant
to which he will be engaged as a consultant to the Company
following the Closing.
9. COMPANY EQUITY ARRANGEMENTS. The Equity Agreements shall have
been executed and delivered by the respective parties thereto.
10. RESTATED CERTIFICATE OF INCORPORATION. At the Closing
immediately following the Stock Purchase and the Redemption, the Company's
Certificate of Incorporation shall have been duly amended and restated to
include substantially all of the provisions set forth in Exhibit A attached
hereto and shall not have been further amended or modified.
11. LIQUIDATION OF SISTER BUSINESSES. The Shareholders shall
have assigned and conveyed to the Company all of the assets of Allied Tours,
Inc. and Allied Tours International, Inc. (including all trademarks and
tradenames) and such corporations shall either have been dissolved or their
certificates of incorporation shall have been amended to remove "Allied" from
their corporate names.
B. CONDITIONS TO SHAREHOLDERS', ALLIED PARENT'S AND THE COMPANY'S
OBLIGATIONS. The obligation of Shareholders, Allied Parent and the Company under
this Agreement to consummate the Closing is subject to the conditions that:
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1. COVENANTS, REPRESENTATIONS AND WARRANTIES. Investors shall
have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants contained in this
Agreement to be performed and complied with by Investors prior to or at the
Closing and the representations and warranties of Investors set forth in
Article IV hereof shall be accurate in all material respects, at and as of the
Closing Date, with the same force and effect as though made on and as of the
Closing Date.
2. CONSENTS. All statutory requirements for the valid
consummation by Investors of the Transactions shall have been fulfilled and all
authorizations, consents and approvals, including expiration or early
termination of all waiting periods under the HSR Act and those of all federal,
state, local and foreign governmental agencies and regulatory authorities
required to be obtained in order to permit the consummation by Investors of the
Transactions shall have been obtained unless such failure shall not have a
Material Adverse Effect on the Business.
3. DOCUMENTS TO BE DELIVERED BY INVESTORS. The following
documents shall be delivered at the Closing by Investors:
(1) ESCROW AGREEMENT. Investors shall have delivered to
Shareholders and Allied Parent at the Closing the duly executed
Escrow Agreement.
(2) EMPLOYMENT AGREEMENTS. Investors shall have caused
the Company to duly execute and deliver Employment Agreements
with each of Michael Fisher, Gregory Fisher and Gilbert Fishman
in the same form attached as Exhibits F-1, F-2 and F-3 hereto,
pursuant to which such Persons will be employed by the Company
following the Closing. The Employment Agreements with each of
Michael Fisher and Gregory Fisher shall provide that each will
receive an option grant upon consummation of an initial public
offering of the Company (so long as he is employed by the
Company at such date) for the exercise of up to an aggregate of
$1,000,000 of the Company's Common Stock at an exercise price
per share equal to the initial public offering price.
(3) CONSULTING AGREEMENT. The Investors shall have
caused the Company to execute and deliver a Consulting Agreement
with Stanley Fisher in substantially the form attached as
Exhibit U hereto, pursuant to which he will be engaged as a
consultant to the Company following the Closing.
4. COMPANY EQUITY ARRANGEMENTS. The Equity Agreements shall have
been executed and delivered by the respective parties thereto.
5. PAYMENTS TO ALLIED PARENT. Allied Parent shall have received
(i) the Closing Redemption Price for the Redemption Shares and (ii) the portion
of the Purchase Price payable to Allied Parent at Closing for the Purchased
Shares.
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ARTICLE VIII
INDEMNIFICATION
A. INDEMNIFICATION BY ALLIED PARENT AND SHAREHOLDERS. Except as provided
in Section 8.6, Shareholders and Allied Parent agree to jointly and severally
indemnify and hold harmless the Investors and the Company and each officer,
director, and Affiliate of the Investors and the Company, including without
limitation any successor of the Company (collectively, the "INDEMNIFIED
PARTIES") from and against any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs and expenses (including court costs
and reasonable attorneys' fees and expenses incurred in investigating and
preparing for any litigation or proceeding) (collectively, the "INDEMNIFIABLE
COSTS"), which any of the Indemnified Parties may sustain, or to which any of
the Indemnified Parties may be subjected, arising out of (A) any
misrepresentation, breach or default by Shareholders, Allied Parent or the
Company of or under any of the representations, covenants, agreements or other
provisions of this Agreement or any agreement or document executed in connection
herewith; (B) the Company's tortious acts or omissions to act prior to Closing
for which the Company did not carry liability insurance for themselves as the
insured party, whether or not such acts or omissions to act result in a breach
or violation of any representation or warranty; (C) any accounts receivable of
the Company in existence on the Closing Date (net of the $660,000 write-off for
bad debts already reflected in the Most Recent Financial Statements) which are
not collected prior to December 31, 1998 in accordance with the standards set
forth in the Escrow Schedule attached hereto (the "ACCOUNTS RECEIVABLE
ADJUSTMENT"); (D) any downward Net Worth Adjustment not paid to the Company
pursuant to a reduction of the Escrow Sum; and (E) any litigation matter
disclosed on Schedule 3.16 hereof. Determination of whether the Company, on the
one hand, or the Investors, on the other hand, is entitled to indemnification
hereunder shall be made by such parties in light of the economic impact or loss
caused by the matter which is the subject of the claim of indemnification. By
way of example, a claim of indemnification for breaches of the representation
made in Section 3.17 (Taxes) would impact the Company so that the Company would
be entitled to indemnification. A claim of indemnification based on a breach of
Section 3.1 (Capitalization) would affect the Investors' investment in the
Company directly (as opposed to derivatively), so that the Investors would be
entitled to indemnification.
B. DEFENSE OF CLAIMS. If any legal proceeding shall be instituted, or
any claim or demand made by a third Person, against any Indemnified Party in
respect of which Shareholders or Allied Parent may be liable hereunder, such
Indemnified Party shall give prompt written notice thereof to Shareholders and,
except as otherwise provided in Section 8.4 below, Shareholders shall have the
right to defend, or cause the Company or its successors to defend, any
litigation, action, suit, demand, or claim for which it may seek indemnification
unless, in the reasonable judgment of Thayer III, such litigation, action, suit,
demand, or claim, or the resolution thereof, is seeking injunctive or other
equity relief or damages which would have a Material Adverse Effect on
Investors, the Company or its successors, and such Indemnified Party shall
extend reasonable cooperation in connection with such defense, which shall be at
Shareholders' expense. In the event Shareholders fail or refuse to defend the
same within a reasonable length of time, the Indemnified Parties shall be
entitled to assume the defense thereof, and Shareholders and Allied Parent shall
be jointly and severally liable to repay the Indemnified
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Parties for all expenses reasonably incurred in connection with said defense
(including reasonable attorneys' fees and settlement payments). If Shareholders
shall not have the right to assume the defense of any litigation, action, suit,
demand, or claim in accordance with either of the two preceding sentences, the
Indemnified Parties shall, at Shareholders' expense, have the absolute right to
control the defense of and to settle, in their sole discretion and without the
consent of Shareholders, such litigation, action, suit, demand, or claim, but
Shareholders shall be entitled, at their own expense, to participate in such
litigation, action, suit, demand, or claim. The party controlling any defense
pursuant to this Section 8.2 shall deliver, or cause to be delivered to the
other party, copies of all correspondence, pleadings, motions, briefs, appeals
or other written statements relating to or submitted in connection with the
defense of any such litigation, action, suit, demand or claim, and timely notice
of any hearing or other court proceeding relating to such litigation, action,
suit, demand or claim. Notwithstanding the forgoing, in no event will the
Shareholders or Allied Parent settle any litigation matter disclosed on Schedule
3.16 if such settlement results in any monetary liability to the Company without
the Company's express written consent.
C. ESCROW CLAIM. If any claim for indemnification is made by an
Indemnified Party pursuant to this Article VIII prior to the expiration of the
Escrow Period, such Indemnified Party may first apply to the Escrow Agent
provided in Section 2.7 of this Agreement for reimbursement of such claim in
accordance with the provisions of the Escrow Agreement provided, however, the
Escrow Sum is not intended to be an exclusive remedy in the event Investors have
indemnification claims hereunder which exceed such amount.
D. TAX AUDITS, ETC. In the event of an audit of a Tax Return of the
Company with respect to which an Indemnified Party might be entitled to
indemnification pursuant to this Article VIII, the Shareholders and the Company
shall jointly control any and all such audits which may result in the assessment
of additional Taxes against the Company and any and all subsequent proceedings
in connection therewith, including appeals. Shareholders and Investors shall
cooperate fully in all matters relating to any such audit or other Tax
proceeding (including according access to all records pertaining thereto), and
will execute and file any and all consents, powers of attorney, and other
documents as shall be reasonably necessary in connection therewith. If
additional Taxes are payable by the Company as a result of any such audit or
other proceeding, Shareholders shall be responsible for and shall promptly pay
all Taxes, interest, and penalties for which any of the Indemnified Parties
shall be entitled to indemnification (subject to the limitations contained in
Section 6.5(c) in the event of any audit or proceeding relating to the
indemnification provided in Section 6.5(c)(iii) hereof).
E. INDEMNIFICATION OF SHAREHOLDERS, ALLIED PARENT AND THE COMPANY.
Investors agree to jointly and severally indemnify and hold harmless
Shareholders, Allied Parent and the Company and each officer, director,
Shareholder or Affiliate of the Company, from and against any Indemnifiable
Costs arising out of any material misrepresentation, breach or default by
Investors of or under any of the covenants, agreements or other provisions of
this Agreement or any agreement or document executed in connection herewith.
33
<PAGE> 40
F. LIMITS ON INDEMNIFICATION. All Indemnifiable Costs sought by any
party hereunder shall be net of any insurance proceeds received by such Person
with respect to such claim (less the present value of any premium increases
occurring as a result of such claim). Except for any claims for breach of the
representations, warranties and covenants of Allied Parent and the Shareholders
under Sections 3.1, 3.2, 3.3, 3.4, 3.6, 3.17 or 6.5(c) hereof (the
indemnification for which shall expire on the expiration of the applicable
statute of limitations and if so made, such claims, and all Indemnifiable Costs
incurred thereafter, shall continue after such date until finally resolved), the
right to make claims for indemnification provided under this Article VIII shall
expire two (2) years following the Closing Date (except for any claims for
Indemnifiable Costs made prior to such date which claims shall continue after
such date until finally resolved). The Shareholders and Allied Parent shall not
be obligated to pay any amounts for indemnification under this Article VIII
until the aggregate indemnification obligation sought by Investors hereunder
exceeds $250,000, whereupon Shareholders and Allied Parent shall be liable for
all amounts in excess of $250,000 for which indemnification may be sought;
provided, however, that Shareholders and Allied Parent shall not be obligated to
pay any amounts for indemnification under Section 8.1(E) until the aggregate
indemnification obligation sought by Investors thereunder exceeds $100,000,
whereupon Shareholders and Allied Parent shall be liable for all amounts in
excess of $100,000 for which indemnification may be sought. For purposes of
making claims for indemnification under Section 8.1(A), any requirement in any
representation or warranty that an event or fact be Material or have a Material
Adverse Effect, as appropriate, in order for such event or fact to constitute a
misrepresentation or breach of such representation or warranty shall be ignored.
Notwithstanding the foregoing, in no event shall the aggregate liability of
Shareholders and Allied Parent to Investors for breach of representations and
warranties exceed the sum of $6,500,000; provided, however, that such $6,500,000
limitation shall not include and shall not limit any claims for (i) the Accounts
Receivable Adjustment and the Net Worth Adjustment and (ii) breach of the
representations and warranties of the Shareholders and Allied Parent under
Sections 3.1, 3.2, 3.3, 3.4, 3.6, and 3.17 hereof; provided, further, that in no
event shall the aggregate liability of Shareholders and Allied Parent to
Investors or the Company with respect to any claims described in clauses (i) and
(ii) above exceed the sum of the Purchase Price and the Redemption Price.
However nothing in this Article VIII shall limit Investors or Shareholders in
exercising or securing any remedies provided by applicable statutory or common
law with respect to the conduct of Shareholders, Allied Parent or Investors in
connection with this Agreement or in the amount of damages that it can recover
from the other in the event that Investors successfully prove intentional fraud
or intentional fraudulent conduct in connection with this Agreement. All
Indemnified Costs paid by Shareholders shall be deemed to be a reduction of the
Purchase Price paid to Allied Parent by Investors hereunder.
ARTICLE IX
TERMINATION
A. TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
1. by the mutual written consent of all parties hereto;
34
<PAGE> 41
2. in writing by Thayer III on behalf of all Investors, if the
Company, Allied Parent or any of the Shareholders has breached in any material
respect any representation, warranty or covenant contained in this Agreement,
and in each case such breach has not been remedied within ten (10) business
days after receipt of notice specifying such breach and demanding such breach
to be remedied; or
3. in writing by the Shareholders and the Company, if Investors
have breached in any material respect any representation, warranty or covenant
contained in this Agreement, and in each case such breach has not been remedied
within ten (10) business days after receipt of notice specifying such breach
and demanding such breach to be remedied; or
4. in writing by either the Company and the Shareholders, on the
one hand, or Thayer III on behalf of all Investors, on the other hand, in the
event the Closing has not occurred on or before April 15, 1998, unless the
failure of such consummation or the failure to satisfy such condition, as
applicable, shall be due to a breach of any representation or warranty made by
the party or parties seeking to terminate this Agreement or the failure of such
party or parties to comply in all material respects with the agreements and
covenants contained herein to be performed by such party or parties.
B. EFFECT OF TERMINATION. If the Transactions are terminated pursuant to
Section 9.1 by notice in writing to the non-terminating party or parties, this
Agreement shall become void and of no further force and effect, except that (a)
such termination shall not relieve (i) any party from its covenants in respect
of confidentiality contained in Section 6.3 and (ii) any party then in breach of
any representation, warranty, covenant or agreement contained in this Agreement
from liability in respect of such breach and (b) Sections 10.4 and 10.7 shall
survive termination of this Agreement.
ARTICLE X
MISCELLANEOUS
A. MODIFICATIONS. Any amendment, change or modification of this
Agreement shall be void unless in writing and signed by all parties hereto. No
failure or delay by any party hereto in exercising any right, power or privilege
hereunder (and no course of dealing between or among any of the parties) shall
operate as a waiver of any such right, power or privilege. No waiver of any
default on any one occasion shall constitute a waiver of any subsequent or other
default. No single or partial exercise of any such right, power or privilege
shall preclude the further or full exercise thereof. Notwithstanding the
foregoing, Thayer III shall have the right to act on behalf of all Investors on
any amendment, change or modification to this Agreement or any right, power or
privilege of Investors hereunder without the consent of such Investors unless
such action would materially adversely effect the obligations of such Investors
under this Agreement.
35
<PAGE> 42
B. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
or 48 hours after deposited in the United States mail, first-class, postage
prepaid, or by facsimile addressed to the respective parties hereto as follows:
Investors:
c/o Thayer Equity Investors III, L.P.
1455 Pennsylvania Avenue, NW
Suite 350
Washington, D.C. 20004
Attention: Roger Ballou
Daniel Raskas
Christopher Temple
Fax No.: (202) 371-0391
Tel No.: (202) 371-0150
With a copy to:
Hogan & Hartson L.L.P.
Columbia Square
Thirteenth Street, NW
Washington, DC 20004-1109
Attention: Christopher J. Hagan or
Hovey Kemp
Fax No.: (202) 637-5910
Tel No.: (202) 637-5600
The Company, Allied Parent or Shareholders:
Allied Bus Corp.
165 W. 46th Street
10th Floor
New York, New York 10036
Attention: Stanley Fisher
Fax No.: (212) 869-5100
Tel No.: (212) 302-6129
36
<PAGE> 43
With a copy to:
Rosen & Reade, LLP
757 Third Avenue
New York, New York 10017-2049
Attention: Kevin P. Groarke
Fax No.: (212) 755-5600
Tel No.: (212) 303-9047
or to such other address as to any party hereto as such party shall designate by
like notice to the other parties hereto.
C. COUNTERPARTS; FACSIMILE TRANSMISSION. This Agreement may be executed
in several counterparts, each of which shall be deemed an original but all of
which counterparts collectively shall constitute one instrument, and in making
proof of this Agreement, it shall never be necessary to produce or account for
more than one such counterpart. Signatures of a party to this Agreement or other
documents executed in connection herewith which are sent to the other parties by
facsimile transmission shall be binding as evidence of acceptance of the terms
hereof or thereof by such signatory party, with originals to be circulated to
the other parties in due course.
D. EXPENSES. Each of the parties hereto will bear all costs, charges and
expenses incurred by such party in connection with this Agreement and the
consummation of the Transactions, provided, however, that Shareholders shall
bear all costs and expenses of (i) any broker involved in this transaction on
behalf of Shareholders, Allied Parent or the Company and (ii) all legal and
other expenses of Shareholders, Allied Parent or the Company with respect to
this Agreement and the Transactions.
E. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Company, Allied Parent, Investors and Shareholders,
their heirs, representatives, successors, and permitted assigns, in accordance
with the terms hereof. This Agreement shall not be assignable by the Company,
Allied Parent or Shareholders without the prior written consent of Thayer III on
behalf of all Investors. This Agreement shall be assignable by Thayer III on
behalf of the Investors to either (a) any lender providing financing to
Investors or the Company (but only with respect to Investors' rights under
Article II and Article VIII hereof) or (b) any Affiliate of Thayer III, provided
the Investors remain liable, in each case without the prior written consent of
Shareholders. In addition, following the Closing, Thayer III may assign any or
all of its rights hereunder, without the consent of the Shareholders, in
connection with any sale of all or substantially all of the assets, capital
stock, partnership interests or business of the Company or Thayer III (whether
effected by sale, exchange, merger, consolidation or other transaction) and
provided the acquiring party shall assume all of Thayer III's obligations
hereunder.
F. ENTIRE AND SOLE AGREEMENT. This Agreement and the other schedules and
agreements referred to herein, constitute the entire agreement between the
parties hereto and supersede all prior agreements, representations, warranties,
statements, promises, information,
37
<PAGE> 44
arrangements and understandings, whether oral or written, express or implied,
with respect to the subject matter hereof.
G. GOVERNING LAW. This Agreement and its validity, construction,
enforcement, and interpretation shall be governed by the substantive laws of the
State of New York, without giving effect to the principles of conflicts of laws
thereof.
H. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Regardless of
any investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, all covenants, agreements,
representations, and warranties and the related indemnities made hereunder or
pursuant hereto or in connection with the Transactions shall survive the Closing
for a period of two (2) years, provided (a) the representations and warranties
contained in Section 3.17 of this Agreement, and the related indemnities, shall
survive the Closing until the expiration of the applicable statutes of
limitations for determining or contesting Tax liabilities including any
extension of such periods plus sixty (60) days, (b) the representations,
warranties and covenants contained in Sections 3.1, 3.2, 3.3, 3.4, 3.6 and
6.5(c) of this Agreement, and the related indemnities, shall survive the Closing
indefinitely and not expire, (c) all covenants in this Agreement which have an
expiration date contained therein shall expire as of such date and (d) all other
covenants in this Agreement which do not have an expiration date shall expire
upon the expiration of the applicable statutes of limitations.
I. INVALID PROVISIONS. If any provision of this Agreement is deemed or
held to be illegal, invalid or unenforceable, this Agreement shall be considered
divisible and inoperative as to such provision to the extent it is deemed to be
illegal, invalid or unenforceable, and in all other respects this Agreement
shall remain in full force and effect; provided, however, that if any provision
of this Agreement is deemed or held to be illegal, invalid or unenforceable
there shall be added hereto automatically a provision as similar as possible to
such illegal, invalid or unenforceable provision and be legal, valid and
enforceable. Further, should any provision contained in this Agreement ever be
reformed or rewritten by any judicial body of competent jurisdiction, such
provision as so reformed or rewritten shall be binding upon all parties hereto.
J. PUBLIC ANNOUNCEMENTS. Neither Shareholders, Allied Parent nor the
Company (pre-Closing) shall make any public announcement of the Transactions
without the prior written consent of Thayer III, which consent shall not be
unreasonably withheld. Shareholders shall have the right to approve any public
announcement of the Transactions by Thayer III prior to the Closing Date.
K. REMEDIES CUMULATIVE. The remedies of the parties under this Agreement
are cumulative and shall not exclude any other remedies to which any party may
be lawfully entitled.
L. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any Person, other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement.
38
<PAGE> 45
M. NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
N. JOINDER BY ADDITIONAL INVESTORS. During the term of this Agreement,
to the extent the Investor Schedule is updated to the effect that additional
Investors will join Thayer III as Investors hereunder, Thayer III shall cause
all such Persons to become parties hereto, without the consent of the Company,
Allied Parent or the Shareholders, by execution and delivery of a counterpart of
this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
39
<PAGE> 46
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed as of the date and year first above written.
THE COMPANY:
ALLIED BUS CORP.
By: /s/ Stanley Fisher
------------------------------------
Stanley Fisher
President
ALLIED PARENT:
ALLIED TOURS HOLDING CORP.
By: /s/ Stanley Fisher
------------------------------------
Stanley Fisher
President
SHAREHOLDERS:
/s/ Stanley Fisher
--------------------------------------------
Stanley Fisher
/s/ Michael Fisher
--------------------------------------------
Michael Fisher
/s/ Gregory Fisher
--------------------------------------------
Gregory Fisher
/s/ Francine Fishman
--------------------------------------------
Francine Fishman
40
<PAGE> 47
INVESTORS:
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
Its: General Partner
By: /s/ Chris Temple
-----------------------------
Name:
The Exhibits and Schedules to this Recapitalization Agreement are not included
with this Schedule 13D. Thayer Equity Investors III, L.P. will provide these
exhibits and schedules upon the request of the Securities and Exchange
Commission.
41
<PAGE> 1
- --------------------------------------------------------------------------------
EXHIBIT 3
EQUITY PURCHASE AGREEMENT
BETWEEN
GLOBAL VACATION GROUP, INC.
(FORMERLY, ALLIED BUS CORP.)
AND
THAYER EQUITY INVESTORS III, L.P.
AND
CERTAIN OTHER PURCHASERS
DATED MARCH 30, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
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 Hart-Scott-Rodino 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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
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
</TABLE>
<TABLE>
<CAPTION>
LIST OF EXHIBITS
<S> <C>
Exhibit A Form of Senior Management Agreement
Exhibit B Shareholders Agreement
Exhibit C Professional Services Agreement
</TABLE>
- 2 -
<PAGE> 4
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"), THAYER EQUITY INVESTORS III, L.P., a Delaware limited partnership
("THAYER III"), and each of the other persons or entities set forth in the
Schedule of Purchasers attached hereto (collectively with Thayer 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, Thayer III, Allied Tours
Holding Corp. ("ALLIED PARENT"), and the shareholders of Allied Parent (the
"EXISTING SHAREHOLDERS"), Thayer 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, Thayer III will purchase from the
Company, and the Company will sell to Thayer 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."
<PAGE> 5
(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 Hogan & Hartson, LLP, 555 Thirteenth Street,
NW, Washington, D.C., 20004 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 Thayer 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 Thayer III in writing. Thayer III shall
accept or reject such Take-Down within 10 business days of receiving such
request. The Company and Thayer 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.
- 2 -
<PAGE> 6
(ii) SUBSEQUENT CLOSINGS. Subsequent Closings shall take place
on the Subsequent Closing Date at the offices of Hogan & Hartson LLP, 555
Thirteenth Street, NW, Washington, D.C. 20004, or at such other place as shall
be agreed to by Thayer 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 Thayer III stock certificates evidencing the shares of
Class A Preferred to be purchased by Thayer 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 Roger
Ballou, Raymond Lewis and Walter Berman (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
- 3 -
<PAGE> 7
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 Thayer 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 Thayer III pursuant to Section 1.3.
(ii) COMPLIANCE WITH APPLICABLE LAWS. The purchase of Stock by
Thayer III pursuant to such Subsequent Closing shall not be prohibited by any
applicable law or governmental regulation, shall not subject Thayer III to any
penalty, liability or, in Thayer 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 Thayer III
is subject.
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<PAGE> 8
(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 Thayer III.
ARTICLE III
COVENANTS
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
deliver to Thayer 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 Arthur Andersen, LLP or an independent accounting firm of
recognized national standing acceptable to Thayer 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 Thayer 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 Thayer III (so long as Thayer 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 Thayer 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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<PAGE> 10
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 Thayer 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) HART-SCOTT-RODINO COMPLIANCE. In connection with any transaction in
which the Company is involved which is required to be reported under the
Hart-Scott-Rodino 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, Thayer III shall use
its best efforts to
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<PAGE> 11
maintain the confidentiality of all nonpublic information obtained by Thayer III
pursuant to Section 3.1 or 3.2, which the Company has reasonably designated as
proprietary or confidential in nature; provided that Thayer 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 Hogan & Hartson 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 Hogan & Hartson 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 Thayer III a joinder to the Shareholders Agreement and to cause any of its
prospective
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<PAGE> 12
transferees to execute and deliver to the Company and Thayer 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 Thayer 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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<PAGE> 13
(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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<PAGE> 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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<PAGE> 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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<PAGE> 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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<PAGE> 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).
"THAYER III" means Thayer Equity Investors III, L.P.
ARTICLE VIII
MISCELLANEOUS
(a) EXPENSES. The Company agrees to pay, and hold Thayer 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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<PAGE> 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 Thayer 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 Thayer III under this Agreement and the agreements
contemplated hereby may be assigned by the Thayer 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 Thayer III, or any successor thereto.
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<PAGE> 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/o Thayer Capital Partners
1455 Pennsylvania Avenue NW, Suite 350
Washington, D.C. 20004
Attention: Chris Temple
Daniel Raskas
Tel No.: (202) 371-0150
Fax No.: (202) 371-0391
If to the Purchasers:
To each Purchaser at the address set forth in the
Schedule of Purchasers attached hereto
- 16 -
<PAGE> 20
with a copy to:
Hogan & Hartson, LLP
Thirteenth Street, N.W.
Washington, D.C. 20004
Attention: Christopher J. Hagan
Tel No.: (202) 637-5600
Fax No.: (202) 637-5910
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]
- 17 -
<PAGE> 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:
-----------------------
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, LLC.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
-------------------------------
Name:
-----------------------
Title:
-----------------------
- 18 -
<PAGE> 22
[OTHER PURCHASERS]
TC CO-INVESTORS, LLC
By: /s/ Christopher Temple
-----------------------------
Christopher Temple
Member
ALTOBELLO FAMILY LIMITED
PARTNERSHIP
By: Daniel J. Altobello
Its: General Partner
/s/ Daniel J. Altobello
------------------------------------
Daniel J. Altobello
/s/ Vernon E. Jordan, Jr.
------------------------------------
Vernon E. Jordan, Jr.
/s/ Jack F. Kemp
------------------------------------
Jack F. Kemp
/s/ Drew Lewis
------------------------------------
Drew Lewis
/s/ James D. Robinson, III
------------------------------------
James D. Robinson, III
- 19 -
<PAGE> 23
UEBERROTH FAMILY TRUST,
dated June 27, 1986
By: /s/ Peter Ueberroth
-----------------------------
Peter Ueberroth
Trustee
JOSEPH J. UEBERROTH REVOCABLE TRUST
By: /s/ Joseph Ueberroth
-----------------------------
Joseph Ueberroth
Trustee
/s/ Frank Zarb and Patricia Zarb
------------------------------------
Frank Zarb and Patricia Zarb
/s/ Eric A. Croson and Mari Jan Pitcher
------------------------------------
Eric A. Croson and Mari Jan Pitcher
/s/ Daniel F. Gillis
------------------------------------
Daniel F. Gillis
/s/ Steve McNeely
------------------------------------
Steve McNeely
/s/ Harry K. McCreery
------------------------------------
Harry K. McCreery
- 20 -
<PAGE> 24
PHILIP S. DAUBER AND ELAYNE A.
DAUBER, TRUSTEES
PSERD TRUST, dated March 11, 1986
By: /s/ Philip S. Dauber
--------------------------------
Philip S. Dauber
Trustee
/s/ Edward Mathias
---------------------------------------
Edward Mathias
/s/ Harry N. Walters
---------------------------------------
Harry N. Walters
/s/ Herman Porten
---------------------------------------
Herman Porten
The Exhibits and Schedules to this Equity Purchase Agreement are not included
with this Schedule 13D. Thayer Equity Investors III, L.P. will provide these
exhibits and schedules upon the request of the Securities and Exchange
Commission.
- 21 -
<PAGE> 1
EXHIBIT 4
GLOBAL VACATION GROUP, INC. LOCK-UP LETTER
June 12, 1998
SMITH BARNEY INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
BANCAMERICA ROBERTSON STEPHENS
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, NY 10013
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Global Vacation Group, Inc. (the "Company") and that the Underwriters propose to
reoffer the Shares to the public.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agree that without the prior written consent of Smith Barney
Inc. the undersigned will not (and, except as may be disclosed in the
Prospectus, will not announce or disclose any intention to) sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to purchase, or
otherwise transfer or dispose of, any shares of Common Stock, or any securities
convertible into or exercisable or exchangeable for Common Stock, for a period
of 180 days after the date of the final Prospectus relating to the offering of
the Shares to the public by the Underwriters. Prior to the expiration of such
period, the undersigned will not announce or disclose any intention to do
anything after the expiration of such period which the undersigned is
prohibited, as provided in the preceding sentence, from doing during such
period.
Notwithstanding the foregoing, the undersigned may transfer any or all
shares of Common Stock held by it (i) as a bona fide gift or gifts or (ii) as a
distribution to limited partners or shareholders of such person; provided the
transferee or transferees thereof agree(s) in writing as a condition precedent
to such transfer to be bound by the terms hereof. The transferor shall notify
Smith Barney, Inc. in writing prior to the transfer, and there shall be no
further transfer of such shares except in accordance with this letter agreement.
Moreover, notwithstanding any other provision of this letter agreement, the
undersigned may exercise during the 180 day period described above any option to
purchase shares of Common Stock,
<PAGE> 2
provided, however, that any shares so acquired shall be subject to the
provisions of this letter agreement.
The undersigned agrees that the provisions of this letter agreement
shall be binding also upon the successors, assigns, heirs and personal
representatives of the undersigned.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities of such transfer
would constitute a violation or breach of this letter agreement.
It is understood that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, you will release us from our obligations under this
letter agreement.
Very truly yours,
THAYER EQUITY INVESTORS III, L.P.
By:/s/ Carl J. Rickertsen
---------------------------------
Name: Carl J. Rickertsen
- 2 -
<PAGE> 1
EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is made as of June 12, 1998, by and
among GLOBAL VACATION GROUP, INC., a New York corporation (formerly, Allied Bus
Corp.) (the "COMPANY"), THAYER EQUITY INVESTORS III, L.P., a Delaware limited
partnership (the "INVESTOR"), and each other Person listed on the Schedule of
Holders attached hereto as Exhibit A (together with the Investor, the
"SHAREHOLDERS").
RECITALS:
A. The Company, the Investor and certain other Shareholders are parties
to an Equity Purchase Agreement dated March 30, 1998 (the "PURCHASE AGREEMENT").
In order to induce such Shareholders to enter into the Purchase Agreement, the
Company agreed to provide the registration rights set forth in this Agreement.
Any other Persons who purchase capital stock of the Company may, with the
consent of the Company's Board of Directors and the Investor, become parties to
this Agreement by executing a Joinder Agreement.
B. Unless otherwise provided in this Agreement, capitalized terms used
herein shall have the meanings set forth in Section 8 hereof.
AGREEMENT
The parties hereto agree as follows:
1. DEMAND REGISTRATIONS.
(a) REQUESTS FOR REGISTRATION. At any time after the earlier of
(i) 180 days after the closing of the Initial Public Offering or (ii) the first
anniversary of the date hereof, the holders of a majority of the Registrable
Securities may request registration under the Securities Act of all or any
portion of their Registrable Securities on Form S-1 or any similar long-form
registration ("LONG-FORM Registrations").
(b) LONG-FORM REGISTRATIONS. The holders of a majority of the
Registrable Securities shall be entitled to request (i) two Long-Form
Registrations in which the Company shall pay all Registration Expenses
("COMPANY-PAID LONG-FORM REGISTRATIONS") and (ii) an unlimited number of
Long-Form Registrations in which the holders of Registrable Securities included
in such registration shall pay their share of the Registration Expenses as set
forth in Section 5 hereof. A registration shall not count as one of the
permitted Company-paid Long-Form Registrations until it has become effective
and no Long-Form Registration shall count as one of the permitted Company-paid
Long-Form Registrations unless the holders of Registrable Securities are able
to register and sell at least 90% of the Registrable Securities
<PAGE> 2
requested to be included in such registration; provided that in any event the
Company shall pay all Registration Expenses in connection with any registration
initiated as a Company-paid Long-Form Registration whether or not it has become
effective and whether or not such registration has counted as one of the
permitted Company-paid Long-Form Registrations.
(c) SHORT-FORM REGISTRATIONS. In addition to the Long-Form
Registrations provided pursuant to Section l(b), the holders of a majority of
the Registrable Securities shall be entitled to request four registrations
under the Securities Act of all or part of their Registrable Securities on
Forms S-2 or S-3 or any similar short-form registration ("SHORT-FORM
REGISTRATIONS") in which the Company shall pay all Registration Expenses. After
the Company has become subject to the reporting requirements of the Securities
Exchange Act, the Company shall use its best efforts to make Short-Form
Registrations on Form S-3 available for the sale of Registrable Securities,
including, without limitation, as a "shelf registration" if so requested by the
holders of a majority of the Registrable Securities.
(d) DEMAND REGISTRATIONS. All registrations requested pursuant
to Sections l(a), (b) and (c) are referred to herein as "DEMAND REGISTRATIONS."
Demand Registrations shall be Short-Form Registrations whenever the Company is
permitted to use any applicable short form. Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered. Within ten days after receipt of any such request,
the Company shall give written notice of such requested registration to all
other holders of Registrable Securities and, except as provided in Section 1(e)
below, shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion
therein within 15 days after the receipt of the Company's notice.
(e) PRIORITY ON DEMAND REGISTRATIONS. The Company shall not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of
the Registrable Securities included in such registration. If a Demand
Registration is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the number of Registrable
Securities and, if permitted hereunder, other securities requested to be
included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the holders
of Registrable Securities making such Demand Registration, the Company shall
include in such registration: (i) first, the Investor Registrable Securities
requested to be included in such registration, pro rata among the holders of
such Investor Registrable Securities on the basis of the number of shares owned
by such holders; (ii) second, the Seller Registrable Securities requested to be
included in such registration, pro rata among the holders of such Seller
Registrable Securities on the basis of the number of shares owned by such
holders; (iii) third, the Management Registrable Securities requested to be
included in such registration, pro rata among the holders of such Management
Registrable Securities on the basis of the number of shares owned by such
holders; and (iv) fourth, other securities which are not Registrable Securities
requested to be included in such registration pursuant to contractual
registration rights ("OTHER REGISTRABLE SECURITIES"), pro rata among
- 2 -
<PAGE> 3
the holders thereof on the basis of the number of their securities requested to
be included therein. Without the consent of the Company and the holders of a
majority of the Registrable Securities included in such registration, any
Persons other than holders of Registrable Securities who participate in Demand
Registrations must pay their share of the Registration Expenses as provided in
Section 5 hereof.
(f) RESTRICTIONS ON LONG-FORM REGISTRATIONS. The Company shall
not be obligated to effect any Long-Form Registration within 180 days after the
effective date of a previous Long-Form Registration or a previous registration
in which the holders of Registrable Securities were given piggyback rights
pursuant to Section 2 and in which there was no reduction in the number of
Registrable Securities requested to be included. The Company may postpone for
up to 180 days the filing or the effectiveness of a registration statement for
a Demand Registration if the Company and the holders of a majority of the
Registrable Securities agree that such Demand Registration would reasonably be
expected to have a material adverse effect on any proposal or plan by the
Company or any of its subsidiaries to engage in any acquisition of assets
(other than in the ordinary course of business) or any merger, consolidation,
tender offer, reorganization or similar transaction; provided that in such
event, the holders of Registrable Securities initially requesting such Demand
Registration shall be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration shall not count as one of the permitted
Company-paid Long Form Registrations hereunder and the Company shall pay all
Registration Expenses in connection with such registration. The Company may
delay a Demand Registration hereunder only once in any twelve-month period.
(g) SELECTION OF UNDERWRITERS. The holders of a majority of
the Registrable Securities included in any Long-Form Registration, which is a
Demand Registration, shall have the right to select the investment banker(s)
and manager(s) to administer the offering.
(h) OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement, the Company shall not grant to any Persons the right to request the
Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without
the prior written consent of the holders of a majority of the Registrable
Securities.
2. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its securities under the Securities Act (other than the Initial
Public Offering or pursuant to a Demand Registration or a registration on Form
S-4, Form S-8 or any successor form) and the registration form to be used may
be used for the registration of Registrable Securities (a "PIGGYBACK
REGISTRATION"), the Company shall give prompt written notice (in any event
within three business days after its receipt of notice of any exercise of
demand registration rights other than under this Agreement) to all holders of
Registrable Securities of
- 3 -
<PAGE> 4
its intention to effect such a registration and shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 25 days after the
receipt of the Company's notice.
(b) PIGGYBACK EXPENSES. The Registration Expenses of the
holders of Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company shall include in
such registration (i) first, the securities the Company proposes to sell; (ii)
second, the Investor Registrable Securities requested to be included in such
registration, pro rata among the holders of such Investor Registrable
Securities on the basis of the number of shares owned by such holders; (iii)
third, the Seller Registrable Securities requested to be included in such
registration, pro rata among the holders of such Seller Registrable Securities
on the basis of the number of shares owned by such holders; (iv) fourth, the
Management Registrable Securities requested to be included in such
registration, pro rata among the holders of such Management Registrable
Securities on the basis of the number of shares owned by such holders; and (v)
fifth, Other Registrable Securities requested to be included in such
registration, pro rata among the holders thereof on the basis of the number of
Other Registrable Securities requested to be included therein; provided,
however that in any Piggyback Registration other than the Initial Public
Offering of the Company's Common Stock, the holders of Registrable Securities
shall be permitted to include in any such registration not less than 25% of the
number of shares of Common Stock proposed to be sold in such offering, unless
the holders of a majority of the Registrable Securities requesting such
Piggyback Registration agree in writing to reduce such position or to waive
their rights under this proviso.
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
Other Registrable Securities, and the managing underwriters advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the holders
of a majority of the Registrable Securities to be included in such
registration, the Company shall include in such registration (i) first, the
securities requested to be included therein by the holders of Other Registrable
Securities requesting such registration, (ii) second, the Investor Registrable
Securities requested to be included in such registration, pro rata among the
holders of such Investor Registrable Securities on the basis of the number of
shares owned by such holders; (iii) third, the Seller Registrable Securities
requested to be included in such registration, pro rata among the holders of
such Seller Registrable Securities on the basis of the number of shares owned
by such holders; (iv) fourth, the Management Registrable Securities requested
to be included in such registration, pro rata among the holders
- 4 -
<PAGE> 5
of such Management Registrable Securities on the basis of the number of shares
owned by such holders; and (v) fifth, any non-requesting Other Registrable
Securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of their securities requested to be
included therein.
(e) SELECTION OF UNDERWRITERS. If any Piggyback Registration is
an underwritten offering, the selection of investment banker(s) and manager(s)
for the offering must be approved by the Investor. Such approval shall not be
unreasonably withheld.
3. HOLDBACK AGREEMENTS.
(a) HOLDERS OF REGISTRABLE SECURITIES. Each holder of
Registrable Securities shall not effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 90-day period beginning on
the effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration in which Registrable Securities are included (except as
part of such underwritten registration), unless the underwriters managing the
Demand Registration or Piggyback Registration otherwise agree.
(b) THE COMPANY. The Company shall not effect any public sale
or distribution of any of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the seven days
prior to and during the 180-day period beginning on the first effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such Demand Registration or Piggyback Registration or
pursuant to registrations on Form S-4, Form S-8 or any successor form), unless
the underwriters managing the registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective; provided that before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company shall furnish to the
counsel selected by the holders of a majority of the Registrable Securities
included in such registration statement copies of all such documents proposed
to be filed, which documents shall be subject to the review and comment of such
counsel;
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and
- 5 -
<PAGE> 6
Exchange Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for a period of not less than 120
days, if applicable, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
provided, however, that if the Company is eligible to use Form S-3, the holders
of Registrable Securities may require the Company to keep such registration
effective as a "shelf registration" for a period of up to two years;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction;
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by
such registration statement as a NASDAQ "national market system security"
within the meaning of Rule llAa2-1 of the Securities and Exchange Commission
or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange
for at least two market makers to register as such with respect to such
Registrable Securities with the NASD;
- 6 -
<PAGE> 7
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities, which holder,
in the Company's sole and exclusive judgment, might be deemed to be an
underwriter or a controlling Person of the Company, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(m) subject to Section 4(d) above, use its best efforts to
cause any Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the sellers thereof to consummate the disposition
of such Registrable Securities;
- 7 -
<PAGE> 8
(n) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a majority of the
Registrable Securities being sold reasonably request; and
(o) if the offering is underwritten and at the request of any
seller of Registrable Securities, use its best efforts to furnish on the date
that Registrable Securities are delivered to the underwriters for sale pursuant
to such registration an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters
and to such seller, stating that such registration statement has become
effective under the Securities Act and that (i) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (ii) the registration statement, the
related prospectus and each amendment or supplement thereof comply as to form
in all material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial statements
contained therein) and (iii) to such other matters as reasonably may be
requested by counsel for the underwriters or by such seller or its counsel.
5. REGISTRATION EXPENSES.
(a) PAYMENT OF REGISTRATION EXPENSES. All expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of custodians, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"REGISTRATION EXPENSES"), shall be borne as provided in this Agreement, except
that the Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on, the NASD
automated quotation system.
(b) REIMBURSEMENT OF REGISTRATION EXPENSES. In connection with
each Demand Registration and each Piggyback Registration, the Company shall
reimburse the holders of Registrable Securities included in such registration
for the reasonable fees and disbursements of one counsel chosen by the holders
of a majority of the Registrable Securities included in such registration and
for the reasonable fees and disbursements of each additional counsel retained
by any holder of Registrable Securities for the purpose of rendering a legal
opinion on behalf of such holder in connection with any underwritten Demand
Registration or Piggyback Registration.
- 8 -
<PAGE> 9
(c) PAYMENT OF REGISTRATION EXPENSES BY HOLDERS OF REGISTRABLE
SECURITIES. To the extent Registration Expenses are not required to be paid by
the Company, each holder of securities included in any registration hereunder
shall pay its proportionate share of all Registration Expenses based upon the
ratio of the aggregate selling price of each holder's securities included
therein to the aggregate selling price of all securities to be so registered.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify, to the extent permitted by law, each holder of Registrable
Securities, its officers and directors and each Person who controls such holder
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are caused by or contained in any information furnished in writing to
the Company by such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished such holder
with a sufficient number of copies of the same. In connection with an
underwritten offering, the Company shall indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.
(b) INDEMNIFICATION BY THE HOLDERS OF REGISTRABLE SECURITIES.
In connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder shall furnish to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with any such registration statement or prospectus and, to
the extent permitted by law, shall indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder; provided that the obligation to indemnify shall be
individual, not joint and several, for each holder and shall be limited to the
net amount of proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) PROCEDURE FOR INDEMNIFICATION. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that the failure to give prompt
- 9 -
<PAGE> 10
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party) and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not
be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.
(d) SURVIVAL. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and shall survive the transfer of
securities. The Company also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the event
the Company's indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder unless such Person:
(a) in the case of a registration which is underwritten, agrees
to sell such Person's securities on the basis provided in the applicable
underwriting arrangement; provided, however, that no holder of less than 10% of
all Registrable Securities included in any underwritten registration (other
than an executive officer or director of the Company) shall be required to make
any representations or warranties to the Company or the underwriters (other
than representations and warranties regarding such holder, such holder's
ownership of stock and such holder's intended method of distribution) or to
undertake any indemnification obligations to the Company or the underwriters
with respect thereto, except as otherwise provided in Section 6 hereof;
(b) as expeditiously as possible, notifies the Company, at any
time when a prospectus relating to such Person's Registrable Securities is
required to be delivered under the Securities Act, of the happening of any
event as a result of which such prospectus contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading;
(c) complies with all reasonable requests made by the Company or
its counsel with respect to the registration of such Person's Registrable
Securities, including, without limitation, providing access to all relevant
books and records; and
- 10 -
<PAGE> 11
(d) completes, executes and delivers all questionnaires, powers
of attorney, indemnities, underwriting agreements and other usual and customary
documents necessary or appropriate with respect to the offering of such
Person's Registrable Securities, and in the case of a registration which is
underwritten, necessary or appropriate under the terms of such underwriting
arrangements (subject to the provision in Section 7(a) above).
8. DEFINITIONS.
(a) The term "INITIAL PUBLIC OFFERING" means the first
registered public offering of the Company's Common Stock by the Company under
the Securities Act with net proceeds to the Company of not less than $15
million.
(b) The term "INVESTOR REGISTRABLE SECURITIES" means all
Registrable Securities (i) initially issued by the Company to the Investor and
the other purchasers under the Purchase Agreement or the Recapitalization
Agreement and (ii) all other Registrable Securities subsequently acquired by
holders of Investor Registrable Securities. Investor Registrable Securities
will continue to be Investor Registrable Securities if held or acquired by any
holder of Registrable Securities other than a holder of Management Registrable
Securities.
(c) The term "MANAGEMENT AGREEMENT" means collectively those
certain Management Agreements dated March 30, 1998 between the Company and
Roger Ballou, Walter Berman and Raymond Lewis and those certain option
agreements dated March 30, 1998 with Daniel Raskas.
(d) The term "MANAGEMENT REGISTRABLE SECURITIES" means all
Registrable Securities initially held by officers, directors or employees of
the Company, including those issued under any Management Agreement to Roger
Ballou, Walter Berman, Raymond Lewis and Daniel Raskas. Management Registrable
Securities will continue to be Management Registrable Securities if held or
acquired by any holder of Registrable Securities other than a holder of
Investor Registrable Securities.
(e) The term "PERSON" means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust or unincorporated organization.
(f) The term "RECAPITALIZATION AGREEMENT" means that certain
Recapitalization Agreement dated March 18, 1998 among the Company, the Investor,
Allied Tours Holding Corp. and its shareholders.
(g) The term "REGISTRATION EXPENSES" has the meaning set forth
in Section 5 above.
(h) The term "REGISTRABLE SECURITIES" means (i) any Common Stock
issued pursuant to the Recapitalization Agreement, the Purchase Agreement, any
Management
- 11 -
<PAGE> 12
Agreement or any Seller Subscription Agreement (whether issued before or after
the date hereof), (ii) any other Common Stock issued or issuable with respect
to the securities referred to in clause (i) by way of a stock dividend or stock
split or in connection with an exchange or combination of shares,
recapitalization, merger, consolidation or other reorganization, and (iii) any
other shares of Common Stock held by Persons holding securities described in
clauses (i) and (ii), inclusive above, including, without limitation, any
shares of Common Stock issued upon conversion of the Company's preferred stock.
As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when they have been distributed to the public pursuant
to a offering registered under the Securities Act or sold to the public through
a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule then in force). For purposes of this
Agreement, a Person shall be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire such Registrable Securities (upon
conversion of any capital stock or upon exercise of any options or warrants or
in connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
(i) The term "SECURITIES ACT" means the Securities Act of 1933,
as amended, or any similar federal law then in force.
(j) The term "SECURITIES EXCHANGE ACT" means the Securities
Exchange Act of 1934, as amended, or any similar federal law then in force.
(k) The term "SELLER REGISTRABLE SECURITIES" means all
Registrable Securities issued pursuant to a Seller Subscription Agreement or
held by any former stockholder of any business acquired by the Company
(initially this shall mean Allied Tours Holding Corp., Ralph M. Caliri, William
W. Webber and James F. Miller). Seller Registrable Securities will continue to
be Seller Registrable Securities if held or acquired by any holder of
Registrable Securities other than a holder of Investor Registrable Securities
or Management Registrable Securities.
(l) The term "SELLER SUBSCRIPTION AGREEMENT" means any one of
the following: (i) that certain stock subscription agreement dated March 30,
1998 with Ralph M. Caliri and William W. Webber; (ii) that certain stock
subscription agreement dated May 4, 1998 with James F. Miller; or (iii) any
other stock subscription agreement for the purchase of restricted capital stock
of the Company by Persons who are seller(s) of businesses acquired by the
Company where such Persons have executed a Joinder Agreement.
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.
- 12 -
<PAGE> 13
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
shall not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration.
(c) REMEDIES. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(d) AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the Investor. Notwithstanding the foregoing,
in the event that the Investor holds less than 30% of the Registrable
Securities held by the Investor on the date immediately following the closing
of the Initial Public Offering then any amendment or waiver shall be approved
by the Company and the holders of a majority of all Registrable Securities.
(e) SUCCESSORS AND ASSIGNS. All covenants and agreements 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 assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of,
and enforceable by, any subsequent holder of Registrable Securities.
(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; FACSIMILE TRANSMISSION. 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. Each party to this
Agreement agrees that it will be bound by its own telecopied signature and that
it accepts the telecopied signature of each other party to this Agreement.
- 13 -
<PAGE> 14
(h) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(i) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law rules or
provisions (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, sent to the recipient by reputable overnight courier service
(charges prepaid) or 48 hours after deposited in the United States mail,
certified or registered to the recipient by postage prepaid or by facsimile.
Such notices, demands and other communications shall be sent to the Investor
and to each Shareholder at the addresses indicated on the Schedule of Holders
attached hereto and to the Company at the address of its corporate headquarters
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) NEW PARTIES. During the term of this Agreement, the Company
may, with the consent of the Company's Board of Directors and the Investor,
allow other Persons to become parties to this Agreement by executing a Joinder
Agreement, and the Schedule of Holders attached hereto as Exhibit A shall be
revised and updated accordingly.
(l) TERMINATION OF AGREEMENT. All registration rights granted
hereunder will expire and this Agreement will be terminated at such time as (i)
90% of the Registrable Securities originally issued by the Company to the
Investor pursuant to the Purchase Agreement and the Recapitalization Agreement
have been sold to the public (either in an offering registered under the
Securities Act or pursuant to Rule 144 promulgated under the Securities Act),
and (ii) the average daily trading volume of the Common Stock over the
six-month period immediately preceding the termination is at least one-quarter
of one percent (1/4%) of the Company's outstanding Common Stock.
[THIS SPACE INTENTIONALLY LEFT BLANK]
- 14 -
<PAGE> 15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GLOBAL VACATION GROUP, INC.
By: /s/ Roger H. Ballou
-------------------------------------
Name: Roger H. Ballou
Title: Chairman of the Board
and Chief Executive Officer
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, LLC
Its: General Partner
By: /s/ Carl J. Rickertsen
------------------------------------
Name: Carl J. Rickertsen
Title: Member
/s/ William W. Webber
------------------------------------------
William W. Webber
/s/ Ralph M. Caliri
------------------------------------------
Ralph M. Caliri
/s/ James F. Miller
------------------------------------------
James F. Miller
/s/ Roger H. Ballou
------------------------------------------
Roger H. Ballou
/s/ Walter S. Berman
------------------------------------------
Walter S. Berman
- 15 -
<PAGE> 16
/s/ J. Raymond Lewis, Jr.
------------------------------------------
J. Raymond Lewis, Jr.
ALLIED TOURS HOLDING CORP.
/s/ Michael Fisher
------------------------------------------
By: Michael Fisher
Its:
--------------------------------------
TC CO-INVESTORS, LLC
By: TC Management LLC
By:/s/ Carl J. Rickertsen
---------------------------------------
Name: Carl J. Rickertsen
Title: Member
Altobello Family Limited Partnership
By:/s/ Daniel Altobello
---------------------------------------
Name: Daniel Altobello
Title: General Partner
/s/ Vernon E. Jordan, Jr.
------------------------------------------
Vernon E. Jordan, Jr.
/s/ Jack F. Kemp
------------------------------------------
Jack F. Kemp
/s/ Drew Lewis
------------------------------------------
Drew Lewis
/s/ James D. Robinson, III
------------------------------------------
James D. Robinson, III
- 16 -
<PAGE> 17
Ueberroth Family Trust, dated June 27, 1986
By: /s/ Peter V. Ueberroth
------------------------------------------
Name: Peter V. Ueberroth
Trustee
Joseph J. Ueberroth Revocable Trust
By: /s/ Joseph J. Ueberroth
-----------------------------------
Joseph J. Ueberroth
Trustee
/s/ Frank Zarb /s/ Patricia Zarb
------------------------------------------
Frank Zarb and Patricia Zarb
/s/ Eric A. Croson /s/ Mari Jan Pitcher
------------------------------------------
Eric A. Croson and Mari Jan Pitcher
/s/ Steve McNeely
------------------------------------------
Steve McNeely
/s/ Harry J. McCreery
------------------------------------------
Harry J. McCreery
PSERD Trust
By: /s/ Philip S. Dauber
-----------------------------------
Name: Philip S. Dauber
Trustee
/s/ Edward Mathias
------------------------------------------
Edward Mathias
- 17 -
<PAGE> 18
/s/ Harry N. Walters
------------------------------------------
Harry N. Walters
/s/ Herman Porten
------------------------------------------
Herman Porten
/s/ Daniel F. Gillis
------------------------------------------
Daniel F. Gillis
- 18 -
<PAGE> 19
EXHIBIT A TO
REGISTRATION AGREEMENT
SCHEDULE OF HOLDERS
INVESTOR:
Thayer Equity Investors III, L.P.
c/o Thayer Equity Partners
1455 Pennsylvania Avenue, N.W.,
Suite 350
Washington, D.C. 20004
Attention: Chris Temple
OTHER SHAREHOLDERS:
<TABLE>
<S> <C>
Roger H. Ballou Edward Mathias
c/o Global Vacation Group, Inc. c/o The Carlyle Group
1420 New York Avenue, NW, Suite 550 1001 Pennsylvania Ave., NW
Washington, DC 20005 Washington, DC 20004
Walter Berman TC Co-Investors, LLC
c/o Global Vacation Group, Inc. c/o Thayer Capital Partners
1420 New York Avenue, NW, Suite 550 1455 Pennsylvania Avenue, NW
Washington, DC 20005 Suite 350
Washington, DC 20004
Vernon E. Jordan, Jr.
Partner Allied Tours Holding Corp.
Akin Gump c/o Global Vacation Group, Inc. -
1333 New Hampshire Ave., NW Allied Division
Suite 400 165 W. 46th Street
Washington, DC 20036 10th Floor
New York, NY 10036
Jack F. Kemp
Empower America Altobello Family Limited Partnership
1776 I St., NW, Suite 890 c/o Dan Altobello
Washington, DC 20006 Chairman
Onex Food Services, Inc.
J. Raymond Lewis, Jr. 6550 Rock Spring Drive
c/o Global Vacation Group, Inc. Bethesda, MD 20817
1420 New York Avenue, NW, Suite 550
Washington, DC 20005
</TABLE>
A-1
<PAGE> 20
<TABLE>
<S> <C>
Ralph M. Caliri James D. Robinson, III
8 Thackery Lane Chairman & CEO
Cherry Hill, NJ 08003 RRE Investors, LLC
126 East 56th Street, 22nd Fl.
Eric A. Croson and Mari Jan Pitcher New York, NY 10022
3006 Wild Meadow Drive
Durham, NC 27705 Ueberroth Family Trust
dated June 27, 1986
Daniel F. Gillis Peter V. Ueberroth
President & CEO Trustee
Software AG-Americas P.O. Box 100
11190 Sunrise Valley Drive Laguna Beach, CA 92652-0100
Reston, VA 20191-5424
Joseph J. Ueberroth Revocable Trust
Drew Lewis Joseph Ueberroth
P.O. Box 70 Trustee
Lederach, PA 19450 48 Lessay
Newport Coast, CA 92657
Harry McCreery
CFO William W. Webber
Software AG-Americas 210 W. Ritterhouse Square
11190 Sunrise Valley Drive Apt. 2701
Reston, VA 20191-5424 Philadelphia, PA 19103
Steve McNeely Harry N. Walters
1645 N. Vine Street 125 Thomas Dale
Suite 700 Williamsburg, VA 23185
Los Angeles, CA 90028
Frank G. and Patricia Zarb
James F. Miller 1165 Orio Drive
JFM Enterprises McLean, VA 22102
1301 West 22nd Street
Suite 1001
Oak Brook, IL 60521
Herman Porten
7 Harborage Island
Fort Lauderdale, FL 33316
PSERD Trust, dated March 11, 1986
Philip S. Dauber and Elayne R. Dauber,
Trustees
27930 Roble Alto
Los Altos Hills, CA 94022
</TABLE>
A-2
<PAGE> 21
JOINDER AGREEMENT
TO REGISTRATION RIGHTS AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the date
written below by the undersigned (the "JOINING PARTY") and the parties to the
Registration Rights Agreement, dated as of June 12, 1998 (the "REGISTRATION
AGREEMENT") among Global Vacation Group, Inc., Thayer Equity Investors III, L.P.
and the Shareholders. Capitalized terms used but not defined herein shall have
the meanings given such terms in the Registration Agreement.
Accordingly, the Joining Party hereby acknowledges, agrees and confirms
that, by its execution of this Joinder Agreement, the Joining Party will be
deemed to be a party to the Registration Agreement and shall have all of the
obligations of a "SHAREHOLDER" thereunder as if such Joining Party had executed
the Registration Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Registration Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: June 15, 1998
JOINING PARTY: 1995 WEBBER GRANDCHILDREN'S
IRREVOCABLE DEED OF TRUST
Address:
c/o William W. Webber By: /s/ William W. Webber
The Rittenhouse, Apt #2701 -------------------------
210 W. Rittenhouse Square Name: William W. Webber
Philadelphia, PA 19103 ------------------
Tel: (215) 732-2578 Title: Fiduciary of Trust
------------------
APPROVED BY:
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
---------------------------
Name:
----------------------
Its:
----------------------
<PAGE> 22
JOINDER AGREEMENT
TO REGISTRATION RIGHTS AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the
date written below by the undersigned (the "JOINING PARTY") and the parties to
the Registration Rights Agreement, dated as of June 12, 1998 (the "REGISTRATION
AGREEMENT") among Global Vacation Group, Inc., Thayer Equity Investors III,
L.P. and the Shareholders. Capitalized terms used but not defined herein shall
have the meanings given such terms in the Registration Agreement.
Accordingly, the Joining Party hereby acknowledges, agrees and confirms
that, by its execution of this Joinder Agreement, the Joining Party will be
deemed to be a party to the Registration Agreement and shall have all of the
obligations of a "SHAREHOLDER" thereunder as if such Joining Party had executed
the Registration Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Registration Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: June 15, 1998
JOINING PARTY: RALPH CALIRI TRUST
FBO ANDREA CALIRI
Address:
c/o Ralph M. Caliri By: /s/ David J. Moloznik
8 Thackery Lane ----------------------
Cherry Hill, NJ 08003 Name: David J. Moloznik
Tel: (609) 424-1518 ----------------------
Tax I.D. No.: Title: Trustee
----------------------- ----------------------
APPROVED BY:
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
-----------------------------
Name:
------------------------
Its:
------------------------
<PAGE> 23
JOINDER AGREEMENT
TO REGISTRATION RIGHTS AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the date
written below by the undersigned (the "JOINING PARTY") and the parties to the
Registration Rights Agreement, dated as of June 12, 1998 (the "REGISTRATION
AGREEMENT") among Global Vacation Group, Inc., Thayer Equity Investors III, L.P.
and the Shareholders. Capitalized terms used but not defined herein shall have
the meanings given such terms in the Registration Agreement.
Accordingly, the Joining Party hereby acknowledges, agrees and confirms
that, by its execution of this Joinder Agreement, the Joining Party will be
deemed to be a party to the Registration Agreement and shall have all of the
obligations of a "SHAREHOLDER" thereunder as if such Joining Party had executed
the Registration Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Registration Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: June 15, 1998
JOINING PARTY: RALPH CALIRI TRUST
FBO ERICA CALIRI
Address:
c/o Ralph M. Caliri By: /s/ David J. Moloznik
8 Thackery Lane -------------------------
Cherry Hill, NJ 08003 Name: David J. Moloznik
Tel: (609) 424-1518 ------------------
Tax I.D. No.: Title: Trustee
----------------------- ------------------
APPROVED BY:
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
---------------------------
Name:
----------------------
Its:
----------------------
<PAGE> 24
JOINDER AGREEMENT
TO REGISTRATION RIGHTS AGREEMENT
This Joinder Agreement (this "JOINDER AGREEMENT") is made as of the date
written below by the undersigned (the "JOINING PARTY") and the parties to the
Registration Rights Agreement, dated as of June 12, 1998 (the "REGISTRATION
AGREEMENT") among Global Vacation Group, Inc., Thayer Equity Investors III, L.P.
and the Shareholders. Capitalized terms used but not defined herein shall have
the meanings given such terms in the Registration Agreement.
Accordingly, the Joining Party hereby acknowledges, agrees and confirms
that, by its execution of this Joinder Agreement, the Joining Party will be
deemed to be a party to the Registration Agreement and shall have all of the
obligations of a "SHAREHOLDER" thereunder as if such Joining Party had executed
the Registration Agreement. The Joining Party hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Registration Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement
as of the date written below.
Date: June 15, 1998
JOINING PARTY: RALPH CALIRI TRUST
FBO CALIRI GRANDCHILDREN
Address:
c/o Ralph M. Caliri By: /s/ David J. Moloznik
8 Thackery Lane -----------------------------
Cherry Hill, NJ 08003 Name: David J. Moloznik
Tel: (609) 424-1518 ----------------------
Tax I.D. No.: Title: Trustee
--------------------- ----------------------
APPROVED BY:
THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
-----------------------------
Name:
-----------------------
Its:
-----------------------
<PAGE> 1
EXHIBIT 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Thayer Equity
Investors III, L.P., a limited partnership organized under the laws of the State
of Delaware (the "Partnership"), hereby constitutes and appoints Carl J.
Rickertsen, Paul G. Stern and Frederic V. Malek, and each of them (with full
power to each of them to act alone), its true and lawful attorneys-in-fact and
agents for it and on its behalf and in its name, place and stead, in all cases
with full power of substitution and resubstitution, in any and all capacities,
to sign, execute and affix its seal to and file with the Securities and Exchange
Commission (or any other governmental or regulatory authority) a Schedule 13D or
Schedule 13G, or both of such Schedules, under the Securities Exchange Act of
1934, as amended, or any other appropriate form and all amendments thereto with
all exhibits and any and all documents required to be filed with respect
thereto, relating to the Partnership's beneficial ownership of shares of the
common stock of Global Vacation Group, Inc., a corporation organized under the
laws of the State of New York, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the Partnership itself might or could
do, hereby ratifying and confirming all that said attorneys-in-fact and agents,
or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, a duly authorized member of the Partnership's
general partner has hereunto set his hand and seal, as of the date specified.
DATED: August 14, 1998 THAYER EQUITY INVESTORS III, L.P.
By: TC Equity Partners, L.L.C.
its General Partner
By: /s/ FREDERIC V. MALEK
-----------------------------
Frederic V. Malek
Member
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned TC Equity
Partners, L.L.C., a limited liability company organized under the laws of the
State of Delaware (the "Company"), hereby constitutes and appoints Carl J.
Rickertsen, Paul G. Stern and Frederic V. Malek, and each of them (with full
power to each of them to act alone), its true and lawful attorneys-in-fact and
agents for it and on its behalf and in its name, place and stead, in all cases
with full power of substitution and resubstitution, in any and all capacities,
to sign, execute and affix its seal to and file with the Securities and Exchange
Commission (or any other governmental or regulatory authority) a Schedule 13D or
Schedule 13G, or both of such Schedules, under the Securities Exchange Act of
1934, as amended, or any other appropriate form and all amendments thereto with
all exhibits and any and all documents required to be filed with respect
thereto, relating to the Company's beneficial ownership of shares of the common
stock of Global Vacation Group, Inc., a corporation organized under the laws of
the State of New York, and grants to each of them full power and authority to do
and to perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same as fully to all
intents and purposes as the Company itself might or could do, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, a duly authorized member of the Company
has hereunto set his hand and seal, as of the date specified.
DATED: August 14, 1998 TC EQUITY PARTNERS, L.L.C.
By: /s/ FREDERIC V. MALEK
---------------------------
Frederic V. Malek
Member
