<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 31, 1996
COMMISSION FILE NUMBER 0-25990
----------------------------------------------------------------
INTRAV, INC.
(Exact name of registrant as specified in its charter)
----------------------------------------------------------------
MISSOURI 43-1323155
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7711 BONHOMME AVENUE, ST. LOUIS, MISSOURI 63105
(Address of principal executive offices)
(314) 727-0500
(Registrant's telephone number, including area code)
NO CHANGES
(Former name, former address and former fiscal year,
if changed since last report)
----------------------------------------------------------------
<PAGE> 2
ITEM 2. ACQUISITION OF ASSETS
- ------------------------------------------------------------------------------
Intrav, Inc. (the "Company") completed the acquisition of Clipper Cruise Line
on December 31, 1996, which had been announced on November 13, 1996. The
Stock Purchase Agreement included an initial payment of $10.2 million and the
assumption of $5.0 million of indebtedness owed by the Clipper Cruise Line
operating companies. These amounts are subject to adjustment under the
agreement. An additional payment of up to $3.0 million may be paid to the
extent the cumulative net cruise revenues of the Clipper Cruise Line
operation exceed $70.0 million by December 31, 2000. Stifel, Nicolaus &
Company of St. Louis issued an opinion to the Board of Directors, as to the
fairness to the shareholders of the Company, from a financial point of view,
of the consideration to be paid to acquire Clipper Cruise Line.
The Company acquired Clipper Cruise Line from a company controlled by Barney
A. Ebsworth, Chairman of the Board and major stockholder of INTRAV. The
Company financed the acquisition from its working capital, including a $3.0
million draw on its revolving line of credit.
Financial statements reflecting this acquisition as of December 31, 1996 will
be filed no later than March 15, 1997.
ITEM 5. OTHER EVENTS
- ------------------------------------------------------------------------------
In connection with the Company's acquisition of Clipper Cruise Line, the
Company entered into a $10.0 million revolving credit facility agreement with
Boatmen's National Bank of St. Louis on December 31, 1996.
----------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTRAV, INC.
(Registrant)
Date: January 14, 1997 /s/ Michael A. DiRaimondo
---------------------------------
Michael A. DiRaimondo
Senior Vice President and Chief
Financial Officer
<PAGE> 3
EXHIBIT INDEX
These exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K:
Exhibit No. Description
- ----------- -----------
4 Revolving Credit Agreement, dated December 31, 1996,
between the Registrant and Boatmen's National Bank of
St. Louis. In accordance with Item 601(b)(4)(iii) of
Regulation S-K, such agreement has been omitted. The
Registrant will furnish a copy of such agreement to the
Commission upon request.
10 Agreement for Purchase and Sale of Stock by and among
Intrav, Inc., Clipper Cruise Line, Inc., Republic Cruise
Line, Inc., Liberty Cruise Line, Inc., Clipper Adventure
Cruises, Inc., and Windsor, Inc. dated November 13, 1996,
as amended by that certain First Amendment, dated
December 18, 1996.
<PAGE> 1
AGREEMENT FOR PURCHASE AND SALE OF STOCK
BY AND AMONG
INTRAV, INC.,
CLIPPER CRUISE LINE, INC.,
REPUBLIC CRUISE LINE, INC.,
LIBERTY CRUISE LINE, INC.,
CLIPPER ADVENTURE CRUISES, INC.
AND WINDSOR, INC.
DATED NOVEMBER 13, 1996
<PAGE> 2
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
-----------
1.1 Certain Defined Terms. . . . . . . . . . . . . 1
---------------------
1.2 Adjustments upon Changes in Capitalization . . 6
------------------------------------------
ARTICLE II
PURCHASE, SALE AND OTHER CLOSING TRANSACTIONS
---------------------------------------------
2.1 Purchase and Sale. . . . . . . . . . . . . . . 6
-----------------
2.2 Stock Purchase Price . . . . . . . . . . . . . 6
--------------------
2.3 Adjustment to Purchase Price . . . . . . . . . 6
----------------------------
2.4 Closing Note . . . . . . . . . . . . . . . . . 7
------------
2.5 Certain Acquired Company Loan Repayments to
-------------------------------------------
Seller . . . . . . . . . . . . . . . . . . . . 8
------
2.6 Seller to Make Loans to Certain Acquired
----------------------------------------
Companies to Retire a Certain Acquired
--------------------------------------
Company Debt . . . . . . . . . . . . . . . . . 8
------------
2.7 Seller Additional Capital Contribution to
-----------------------------------------
Certain Acquired Companies . . . . . . . . . . 9
--------------------------
2.8 Paul H. Duynhouwer ("PHD") Payment . . . . . . 9
----------------------------------
ARTICLE III
CLOSING
-------
3.1 Closing. . . . . . . . . . . . . . . . . . . . 9
-------
3.2 Deliveries of Seller at Closing. . . . . . . . 9
-------------------------------
3.3 Deliveries of Purchaser at Closing . . . . . . 9
----------------------------------
ARTICLE IV
REPRESENTATIONS AND
-------------------
WARRANTIES OF SELLER AS TO THE ACQUIRED COMPANIES
-------------------------------------------------
4.1 Capital Stock. . . . . . . . . . . . . . . . . 10
-------------
4.2 Organization, Standing and Qualification . . . 10
----------------------------------------
4.3 Subsidiaries and Other Ownership Interests . . 10
------------------------------------------
4.4 Authorization and Binding Effect . . . . . . . 11
--------------------------------
4.5 Corporate Documents. . . . . . . . . . . . . . 11
-------------------
4.6 No Breach of Other Agreements. . . . . . . . . 11
-----------------------------
4.7 Government Consents and Approvals. . . . . . . 12
---------------------------------
4.8 Financial Statements . . . . . . . . . . . . . 12
--------------------
4.9 Indebtedness, Liens and Guarantees . . . . . . 12
----------------------------------
4.10 Absence of Undisclosed Liabilities . . . . . . 12
----------------------------------
4.11 Accounts Receivable. . . . . . . . . . . . . . 13
-------------------
4.12 Absence of Certain Changes . . . . . . . . . . 13
--------------------------
<PAGE> 3
4.13 Real Property. . . . . . . . . . . . . . . . . 14
-------------
4.14 Vessels. . . . . . . . . . . . . . . . . . . . 15
-------
4.15 Material Tangible Personal Property. . . . . . 15
-----------------------------------
4.16 Intellectual Property. . . . . . . . . . . . . 16
---------------------
4.17 Use of Property. . . . . . . . . . . . . . . . 16
---------------
4.18 Insurance. . . . . . . . . . . . . . . . . . . 17
---------
4.19 Permits. . . . . . . . . . . . . . . . . . . . 17
-------
4.20 Material Agreements. . . . . . . . . . . . . . 17
-------------------
4.21 Consents . . . . . . . . . . . . . . . . . . . 18
--------
4.22 Claims and Litigation. . . . . . . . . . . . . 18
---------------------
4.23 Tax Returns and Liabilities. . . . . . . . . . 18
---------------------------
4.24 Employees. . . . . . . . . . . . . . . . . . . 19
---------
4.25 Employee Pension and Welfare Benefits and
-----------------------------------------
Fringe Benefits. . . . . . . . . . . . . . . . 20
---------------
4.26 Environmental Matters. . . . . . . . . . . . . 24
---------------------
4.27 Disclosure . . . . . . . . . . . . . . . . . . 25
----------
4.28 Brokers. . . . . . . . . . . . . . . . . . . . 25
-------
4.29 Operation in Accordance With Law . . . . . . . 25
--------------------------------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
5.1 Title to Shares. . . . . . . . . . . . . . . . 26
---------------
5.2 Organization and Standing. . . . . . . . . . . 26
-------------------------
5.3 Authorization and Binding Effect . . . . . . . 26
--------------------------------
5.4 Absence of Litigation. . . . . . . . . . . . . 26
---------------------
5.5 No Breach of Other Agreements. . . . . . . . . 26
-----------------------------
5.6 Government Consents and Approvals. . . . . . . 27
---------------------------------
5.7 Investment Intent. . . . . . . . . . . . . . . 27
-----------------
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
6.1 Organization and Standing. . . . . . . . . . . 27
-------------------------
6.2 Authorization and Binding Effect . . . . . . . 27
--------------------------------
6.3 No Breach. . . . . . . . . . . . . . . . . . . 28
---------
6.4 Absence of Litigation. . . . . . . . . . . . . 28
---------------------
6.5 Government Consents and Approvals. . . . . . . 28
---------------------------------
6.6 Brokers. . . . . . . . . . . . . . . . . . . . 28
-------
6.7 Investment Intent. . . . . . . . . . . . . . . 28
-----------------
ARTICLE VII
COVENANTS OF THE ACQUIRED COMPANIES AND SELLER
----------------------------------------------
7.1 Affirmative Covenants. . . . . . . . . . . . . 29
---------------------
<PAGE> 4
7.2 Negative Covenants . . . . . . . . . . . . . . 30
------------------
7.3 Maintenance of the Vessels . . . . . . . . . . 33
--------------------------
7.4 Right of Access and Inspection . . . . . . . . 33
------------------------------
7.5 Consents . . . . . . . . . . . . . . . . . . . 33
--------
7.6 Standstill, Etc. . . . . . . . . . . . . . . . 33
----------------
7.7 Further Assurances . . . . . . . . . . . . . . 33
------------------
ARTICLE VIII
CONDITIONS TO CLOSING
---------------------
8.1 Conditions Precedent to Purchaser's
-----------------------------------
Obligations. . . . . . . . . . . . . . . . . . 34
-----------
8.2 Conditions Precedent to Seller's Obligations . 37
--------------------------------------------
ARTICLE IX
INDEMNIFICATION AND TAX MATTERS
-------------------------------
9.1 Survival . . . . . . . . . . . . . . . . . . . 38
--------
9.2 Indemnification. . . . . . . . . . . . . . . . 39
---------------
9.3 Tax Matters. . . . . . . . . . . . . . . . . . 41
-----------
ARTICLE X
TERMINATION
-----------
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Expenses . . . . . . . . . . . . . . . . . . . 42
--------
11.2 Survival . . . . . . . . . . . . . . . . . . . 42
--------
11.3 Headings . . . . . . . . . . . . . . . . . . . 43
--------
11.4 Schedules. . . . . . . . . . . . . . . . . . . 43
---------
11.5 Entire Agreement . . . . . . . . . . . . . . . 43
----------------
11.6 Governing Law. . . . . . . . . . . . . . . . . 43
-------------
11.7 Succession and Assignment. . . . . . . . . . . 43
-------------------------
11.8 Notices. . . . . . . . . . . . . . . . . . . . 43
-------
11.9 Amendments . . . . . . . . . . . . . . . . . . 44
----------
11.10 Severability . . . . . . . . . . . . . . . . . 44
------------
11.11 Notification Respecting Closing. . . . . . . . 44
-------------------------------
11.12 Waivers. . . . . . . . . . . . . . . . . . . . 44
-------
11.13 References . . . . . . . . . . . . . . . . . . 45
----------
11.14 Specific Performance; Breach . . . . . . . . . 45
----------------------------
11.15 No Third-Party Beneficiaries . . . . . . . . . 45
----------------------------
11.16 Counterparts . . . . . . . . . . . . . . . . . 45
------------
11.17 Retention of Records . . . . . . . . . . . . . 45
--------------------
11.18 Article II Redetermination by Seller . . . . . 45
------------------------------------
<PAGE> 5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of
November 13, 1996, and is by and among INTRAV, INC., a Missouri
corporation (the "Purchaser"), CLIPPER CRUISE LINE, INC., a
Delaware corporation ("Clipper Cruise Line"), REPUBLIC CRUISE LINE,
INC., a Delaware corporation ("Republic"), LIBERTY CRUISE LINE,
INC., a Delaware corporation ("Liberty"), CLIPPER ADVENTURE
CRUISES, INC., a Delaware corporation ("Clipper Adventure
Cruises"), and WINDSOR, INC., a Missouri corporation (the
"Seller"). Clipper Cruise Line, Republic, Liberty and Clipper
Adventure Cruises are collectively referred to herein as the
"Acquired Companies" and individually as an "Acquired Company".
WHEREAS, Seller is the beneficial and of record owner of one
hundred percent (100%) of the issued and outstanding shares of
Common Stock of each of the Acquired Companies (the "Acquired
Company Shares"); and
WHEREAS, Seller desires to sell to Purchaser and Purchaser
desires to purchase from Seller, all of the Acquired Company
Shares;
NOW, THEREFORE, in consideration of the premises and the
covenants, agreements, representations and warranties herein
contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 Certain Defined Terms. As used in this Agreement,
---------------------
the following terms shall have the following meanings:
(a) "Acquired Companies" shall have the meaning
set forth in the first paragraph hereof.
(b) "Acquired Company Shares" shall have the
meaning set forth in the preamble hereof.
(c) "Affiliates" shall mean an entity which,
directly or indirectly, owns or controls, is
owned or controlled by or is under common
ownership or control with another entity. As
used herein, "control" means the power to
direct the management or affairs of an entity,
and "ownership" means the beneficial ownership
of fifty percent (50%) or more of the equity
securities of the entity.
<PAGE> 6
(d) "Agreement" shall mean this Stock Purchase
Agreement, including all exhibits and
schedules hereto, as may be amended from time
to time.
(e) "Business" shall mean the business of an
Acquired Company as conducted during the three
(3) year period prior to the date of this
Agreement without regard to "World Discoverer"
vessel operations, which were terminated in
1995.
(f) "CERCLA" shall mean the Comprehensive
Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(g) "Claims Notice" has the meaning set forth in
Section 9.2(c).
(h) "Closing" shall mean the consummation of the
transactions contemplated herein in accordance
with Section 3.1.
(i) "Closing Date" shall mean the date on which
the Closing occurs or is to occur.
(j) "Closing Note" shall have the meaning set
forth in Section 2.2.
(k) "Closing Payment" shall have the meaning set
forth in Section 2.2.
(l) "Closing Repayment Amounts" shall have the
meaning set forth in Section 2.5.
(m) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(n) "Common Stock" shall mean the voting common
stock of an Acquired Company.
(o) "Consent" shall have the meaning set forth in
Section 4.21.
(p) "Controlled Group" shall have the meaning set
forth in Section 4.25(c).
(q) "Earn-Out Period" shall mean the four (4)
Fiscal Years beginning on January 1, 1997 and
ending December 31, 2000.
(r) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
(s) "Employees" shall have the meaning set forth
in Section 4.24.
<PAGE> 7
(t) "Employee Benefit Plan" shall mean all Plans
that are "employee benefit plans" as defined
in Section 3(3) of ERISA.
(u) "Environmental Law" shall mean any Federal,
state, or local law, statute, regulation,
ordinance, judgment, order, injunction,
decree, or other requirement of any
governmental body or court --
i. that relates to or otherwise imposes liability
or standards of conduct concerning a
discharge, emission, release or threatened
release of noises, odors, electromagnetic
radiation, pollutants or contaminants, or any
toxic or hazardous wastes, substances or
materials, whether as matter or energy, into
ambient air, water, or land, or
ii. otherwise relating to the manufacture,
handling, processing, generation,
distribution, use, treatment, storage,
disposal, cleanup, transport or handling of
pollutants or contaminants, or toxic or
hazardous wastes, substances, or materials,
-- including, without limitation, CERCLA, RCRA, the
Toxic Substances Control Act, the Clean Water Act,
the Clean Air Act, any so-called "Superlien" law,
any so-called "Right to Know" law, and other laws
concerning noise, pollution, solid wastes,
hazardous wastes, pollutants or contaminants,
spills or other releases of toxic or hazardous
substances, transportation of hazardous substances,
materials, constituents, and wastes or otherwise
related to treatment, storage, cleanup, disposal or
handling of such pollutants, hazardous substances,
materials, constituents, or wastes and occupational
or employee health and safety, each as has been or
may in the future be amended, and all regulations
promulgated pursuant thereto.
(v) "Environmental Permit" shall mean any license,
permit, authorization, approval, qualification,
franchise, registration, concession, manifest, or
filing required by or pursuant to any applicable
Environmental Law.
(w) "Financial Statements" shall have the meaning set
forth in Section 4.8.
(x) "Fiscal Year" shall mean the twelve (12) month
period beginning on January 1 and ending the
following December 31.
(y) "GAAP" shall mean generally accepted accounting
principles.
(z) "Indemnified Person" has the meaning set forth in
Section 9.2(c).
3
<PAGE> 8
(aa) "Indemnifying Party" has the meaning set forth in
Section 9.2(c).
(ab) "Insurance Policies" shall have the meaning set
forth in Section 4.18.
(ac) "Intellectual Property" shall mean all patents,
inventions, trademarks, trade names, service marks,
trade designations, copyrights, and applications
therefor, and trade secrets, know-how and formulae
in the possession of or used by an Acquired
Company.
(ad) "Leases" shall have the meaning set forth in
Section 4.13.
(ae) "Lien" means any security interest, lien (including
tax lien), pledge, claim, charge, escrow,
encumbrance, option, forfeiture, penalty,
restriction, right of first refusal, action in law
or equity, community property right or other
marital right, mortgage, security agreement, voting
trust, transfer restriction under any shareholder
agreement or similar agreement, arrangement,
contract, commitment, understanding or obligation,
whether or not relating in any way to credit or the
borrowing of money.
(af) "Loss" means any expense (including reasonable
attorneys' fees and disbursements), fine, penalty,
loss, claim, damage, liability, suit, deficiency,
judgment or amount paid in settlement, including,
without limitation, any thereof in connection with
any threatened, pending or completed claim,
dispute, suit, proceeding or investigation (whether
civil, criminal, administrative, investigative or
otherwise).
(ag) "Material Adverse Effect", when used in connection
with any party to this Agreement, means any change
or effect that, when taken together with all other
adverse changes and effects that are within the
scope of the representations and warranties made by
such party in this Agreement is, or is reasonably
likely to be materially adverse to the business,
operations, properties, financial condition, assets
or liabilities (including, without limitation,
contingent liabilities) of that party.
(ah) "Material Agreements" shall mean those agreements
set forth on Schedule 4.20.
(ai) "PBGC" shall mean the Pension Benefit Guaranty
Corporation.
(aj) "Permits" shall mean governmental licenses,
permits, approvals, product registrations and
authorizations.
4
<PAGE> 9
(ak) "Plans" shall mean the employee benefit,
compensation, termination and other plans and
agreements identified on Schedule 4.25.
(al) "Person" means any corporation, partnership, person
or other entity or group.
(am) "Purchaser" shall mean Intrav, Inc., a Missouri
corporation.
(an) "Purchase Price" shall have the meaning set forth
in Section 2.2.
(ao) "RCRA" shall mean the Resource Conservation and
Recovery Act of 1976, as amended.
(ap) "Real Property" shall have the meaning set forth in
Section 4.13.
(aq) "Regulated Substance" shall mean any chemical or
substance regulated under any Environmental Law or
Environmental Permit including, without limitation,
any "pollutant or contaminant" or "hazardous
substance" as those terms are defined in CERCLA,
any "hazardous waste" as that term is defined in
RCRA, and any other hazardous or toxic wastes,
substances, or materials, petroleum (including
crude oil and refined and unrefined fractions
thereof), PCBs, infectious waste, special waste,
pesticides, fungicides, solvents, herbicides,
flammables, explosives, asbestos and asbestos-
containing material, and radioactive materials,
whether injurious by themselves or in combination
with other materials.
(ar) "Revenues" shall mean those revenues historically
recorded by Clipper Cruise Line under General
Ledger Account No. 4111 of the financial accounting
records of such company.
(as) "Seller" shall mean Windsor, Inc., a Missouri
corporation.
(at) "Tax Return" means all returns, declarations,
reports, estimates and information returns required
to be filed by or for the Seller or the Acquired
Companies with any government or governmental
agency in the United States or elsewhere which
relate to the payment of any Tax or Taxes.
(au) "Tax" or "Taxes" means all federal, state and local
taxes of any kind whatsoever, whether payable
directly, by withholding or otherwise, including
without limitation, income, profits, premium, rent,
occupation, property, license, excise, sales,
windfall profits, use, conveyance, customs, duties,
value added, gross receipts, franchise, ad valorem,
intangibles, severance, transfer, employment,
payroll-related, withholding,
5
<PAGE> 10
stamp and estimated taxes, together with any
interest, penalties, additions to tax or
additional amounts imposed by any taxing authority
with respect thereto; provided, however, excluded
from the meaning of "Tax" or "Taxes" with respect
to each Acquired Company, shall be income,
franchise or other Taxes of any jurisdiction where
the sole activity of such Acquired Company in such
jurisdiction consists of operating, selling and/or
marketing cruises and/or tours.
(av) "Vessel" or "Vessels" shall mean that certain 207-
foot twin screw passenger vessel named M/V
Nantucket Clipper, Official Number 677685 and that
certain 254-foot twin screw passenger vessel named
M/V Yorktown Clipper, Official Number 928931 and
each of them.
1.2 Adjustments upon Changes in Capitalization. For all
------------------------------------------
purposes of this Agreement, "the Acquired Company Shares" shall
mean and include all shares of Common Stock of an Acquired Company
in the form existing on the date hereof and all securities or
property issued or exchanged with respect thereto from and after
the date of this Agreement upon any reorganization,
recapitalization, reclassification, merger, consolidation, spin-
off, partial or complete liquidation, stock dividend, split-up,
sale of assets, distribution to shareholders or combination of such
Acquired Company's capital stock or any other similar change in its
capital structure. In the event of any such change in the number
of shares of Common Stock, the number and kind of Acquired Company
Shares shall be appropriately adjusted to restore to the Purchaser
its rights and privileges hereunder.
ARTICLE II
PURCHASE, SALE AND OTHER CLOSING TRANSACTIONS
---------------------------------------------
2.1 Purchase and Sale. Upon the terms and subject to the
-----------------
conditions set forth in this Agreement, Seller agrees to sell,
assign, transfer and deliver to Purchaser, and Purchaser agrees to
purchase, receive and accept from Seller, the Acquired Company
Shares.
2.2 Stock Purchase Price. The aggregate purchase price
--------------------
(the "Purchase Price") that Purchaser shall pay Seller for the
Acquired Company Shares and the performance of the Seller's
obligations set forth herein shall be the sum of (i) Ten Million
Two Hundred Thousand Dollars ($10,200,000) (the "Closing Payment"),
subject to Section 11.18 hereof, to be paid by cashier's check or
wire transfer of immediately available funds at Closing, and (ii)
Three Million Dollars ($3,000,000) to be paid in accordance with
the terms and conditions of a promissory note in substantially the
form attached hereto as Exhibit A (the "Closing Note") as described
in Section 2.4 below.
2.3 Adjustment to Purchase Price. Attached as Exhibit B
----------------------------
is the projected combined balance sheet of the Acquired Companies
at December 31, 1996 (the "Projected Balance Sheet"). No later
than March 31, 1997, the Purchaser shall cause the preparation of
a combined balance
6
<PAGE> 11
sheet of the Acquired Companies at December 31, 1996 certified by an
independent public accounting firm agreeable to Purchaser and Seller
(the "Audited Balance Sheet"). In the event that the Stockholder's
Equity of the Acquired Companies as set forth on the Audited Balance
Sheet is more than three percent (3%) greater than the Stockholder's
Equity set forth on the Projected Balance Sheet, Purchaser shall
promptly pay to Seller in cash the amount over such three percent
(3%). In the event that the Stockholder's Equity set forth on the
Audited Balance Sheet is more than three percent (3%) less than the
Stockholder's Equity set forth on the Projected Balance Sheet, Seller
shall promptly pay to Purchaser in cash the amount over such three
percent (3%).
2.4 Closing Note.
------------
(a) The Closing Note shall have the following terms and
provisions:
i. Three Million Dollars ($3,000,000) of principal
payment;
ii. no interest prior to default, after which
interest shall accrue at twelve percent (12%)
per annum;
iii. fully assignable by the holder and negotiable,
subject to restrictions and limitations of
applicable securities laws; and
iv. payments are only required to be made as
follows:
A) if, at any time during the Earn-Out Period,
the cumulative, total Revenues earned by
Clipper Cruise Line during the Earn-Out Period
reach Seventy Million Dollars ($70,000,000),
then Purchaser shall pay Seller one hundred
percent (100%) of the Revenues earned by
Clipper Cruise Line during the Earn-Out Period
that exceed Seventy Million Dollars
($70,000,000); provided that in no event shall
the amount of the Earn-Out Payment exceed
Three Million Dollars ($3,000,000).
B) within sixty (60) days after the end of each
Fiscal Year within the Earn-Out Period,
Purchaser shall prepare and deliver to Seller
an "Annual Earn-Out Payment Statement." An
Annual Earn-Out Payment Statement shall, at a
minimum, set forth: (1) the total Revenues
earned by Clipper Cruise Line during the
immediately preceding Fiscal Year, and (2) the
cumulative total Revenues earned by Clipper
Cruise Line since the beginning of the Earn-
Out Period. If, based on an Annual Earn-Out
Payment Statement, any amount of the Earn-Out
Payment is due and
7
<PAGE> 12
unpaid, then, upon delivery of such Annual
Earn-Out Payment Statement, Purchaser shall pay
Seller such amount(s) due in immediately
available funds as directed by Seller.
(b) Purchaser covenants and agrees that during the
Earn-Out Period, Purchaser and any successor-in-
interest to Purchaser, shall operate the Acquired
Companies either (i) as wholly-owned subsidiaries,
or (ii) as separate and identifiable operating
divisions, and Purchaser shall record the Revenues
in a manner that is consistent with the manner in
which Seller has caused the Revenues historically
to be recorded. Seller and its accountants or
other representatives shall have access to the
financial records of such subsidiary or division
once a year after receipt of the Annual Earn-Out
Payment Statement, upon reasonable notice and at
reasonable time for the purpose of verifying the
Revenues, and Purchaser shall maintain such records
until March 31, 2001. Purchaser further covenants
and agrees that in the event Purchaser or any
successor-in-interest sells any of such
subsidiaries or assets of such divisions, the
effect of which would materially adversely affect
the Revenues, or the Purchaser or any successor-in-
interest discontinues or modifies the operations of
such subsidiaries or divisions, the effect of which
would materially adversely affect the Revenues,
then the Closing Note shall immediately become due
and payable in full. The Closing Note shall
contain provisions consistent with the foregoing.
2.5 Certain Acquired Company Loan Repayments to Seller.
--------------------------------------------------
At Closing, Purchaser shall cause the following Acquired Companies
to make payment to Seller of the following portions of outstanding
loans (the "Closing Repayment Amounts") from the Seller to such
Acquired Companies:
(a) Due from Liberty in the principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000),
subject to Section 11.18; and
(b) Due from Clipper Cruise Line in the principal
amount of Three Million Five Hundred Thousand
Dollars ($3,500,000), subject to Section 11.18.
2.6 Seller to Make Loans to Certain Acquired Companies to
-----------------------------------------------------
Retire a Certain Acquired Company Debt. Prior to the Closing, Seller
- --------------------------------------
shall make the following loans to the following Acquired Companies and the
following Acquired Companies shall use such funds to retire the debt, all
described below:
(a) Approximately Three Million Nine Hundred Seventy
Thousand Dollars ($3,970,000) to Republic to retire
United States Government Guaranteed Ship Financing
Bonds; and
8
<PAGE> 13
(b) Approximately Six Million Seven Hundred Forty-Seven
Thousand Dollars ($6,747,000) to Liberty to retire
United States Government Guaranteed Ship Financing
Bonds.
2.7 Seller Additional Capital Contribution to Certain
-------------------------------------------------
Acquired Companies. At or prior to the Closing, Seller
------------------
shall forgive all outstanding loans to the Acquired
Companies, as contributions to capital, other than:
(a) As set forth in Section 2.5 hereinabove; and
(b) Loan repayment of One Hundred Thousand Dollars
($100,000) from Clipper Cruise Line to Seller.
2.8 Paul H. Duynhouwer ("PHD") Payment. On or before
----------------------------------
Closing, Clipper Cruise Line shall accrue and deduct on the
Seller's 1996 Consolidated Income Tax Returns the payment to PHD of
a one-time deferred compensation obligation in connection with the
sale of the Acquired Companies, in the amount of One Million
Dollars ($1,000,000), which Purchaser agrees to cause Clipper
Cruise Line to pay to PHD between January 1, 1997 and January 15,
1997. Purchaser shall not claim any income tax deduction for such
payment.
ARTICLE III
CLOSING
-------
3.1 Closing. The closing ("Closing") of the purchase and
-------
sale of stock contemplated by this Agreement shall take place at
10:00 a.m., on December 31, 1996, or such other time or on such
other date as the parties may agree (the "Closing Date") at the
offices of Purchaser at 7711 Bonhomme Avenue, St. Louis, Missouri
63105.
3.2 Deliveries of Seller at Closing. At the Closing,
-------------------------------
Seller will deliver or cause to be delivered to Purchaser
certificates evidencing the Acquired Company Shares, duly endorsed
in blank or accompanied by stock powers duly executed in blank, in
form satisfactory to the Purchaser and sufficient to permit the
transfer of the Acquired Company Shares to Purchaser.
3.3 Deliveries of Purchaser at Closing. At the Closing,
----------------------------------
Purchaser will deliver or cause to be delivered to Seller (i) the
Closing Payment and Closing Repayment Amounts, by cashier's check
or wire transfer, in immediately available funds to an account
designated by Seller, and (ii) the Closing Note.
9
<PAGE> 14
ARTICLE IV
REPRESENTATIONS AND
-------------------
WARRANTIES OF SELLER AS TO THE ACQUIRED COMPANIES
-------------------------------------------------
Seller hereby represents and warrants to Purchaser that the
following statements are true and correct as of the date hereof:
4.1 Capital Stock. The authorized capital of Clipper
-------------
Cruise Line consists of 500 shares of Common Stock, $1.00 par
value, of which 500 shares are issued and outstanding as of the
date hereof and will be issued and outstanding as of the Closing
Date. The authorized capital of Republic consists of 500 shares of
Common Stock, $1.00 par value, of which 500 shares are issued and
outstanding as of the date hereof and will be issued and
outstanding as of the Closing Date. The authorized capital of
Liberty consists of 500 shares of Common Stock, $1.00 par value, of
which 500 shares are issued and outstanding as of the date hereof
and will be issued and outstanding as of the Closing Date. The
authorized capital of Clipper Adventure Cruises consists of 3,000
shares of Common Stock, $1.00 par value, of which 500 shares are
issued and outstanding as of the date hereof and will be issued and
outstanding as of the Closing Date. There are no treasury shares
of stock of any Acquired Company. All issued and outstanding
Common Stock of each Acquired Company are owned of record by the
Seller, free and clear of all Liens. All the outstanding shares of
Common Stock of each Acquired Company are duly authorized, validly
issued, fully-paid and nonassessable and free of any preemptive
rights in respect thereto. There are no outstanding subscriptions,
options, rights, warrants, convertible securities or other
agreements or commitments obligating any Acquired Company to issue
or to transfer from treasury any additional shares of stock of such
Acquired Company nor obligating such Acquired Company to create or
issue any options, rights, warrants, or other securities of such
Acquired Company.
4.2 Organization, Standing and Qualification. Each
----------------------------------------
Acquired Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation. Each Acquired Company has full power and authority
to conduct its Business and to own and use its properties and
assets in the manner in which, and in the jurisdiction where, such
properties and assets were heretofore owned or used, and are now,
and are presently planned to be, owned or used. Each Acquired
Company is duly qualified to do business in all jurisdictions
listed on Schedule 4.2, which are the only jurisdictions in
------------
which the character or location of the properties owned, leased,
held or operated by it or the nature of its Business makes such
qualifications necessary (other than jurisdictions for which
failure to qualify would not have a Material Adverse Effect on such
Acquired Company or jurisdictions where operating, selling or
marketing of cruise operations and/or tours is the only activity
conducted by an Acquired Company in such jurisdiction).
4.3 Subsidiaries and Other Ownership Interests. None of
------------------------------------------
the Acquired Companies owns, directly or indirectly, or has any
option or right to own, and none of the Acquired
10
<PAGE> 15
Companies controls, or has an option or right to control, any shares
of capital stock or other security or ownership interest in any
corporation, partnership, joint venture or other enterprise.
4.4 Authorization and Binding Effect. All corporate
--------------------------------
action, required to be taken by the Seller to authorize the
transactions contemplated by this Agreement has been, or will have
been as of Closing, taken, and no other corporate proceedings on
the part of the Seller are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. The Seller has
all requisite corporate power to perform this Agreement and the
transactions contemplated hereby and the further documents,
instruments and agreements referred to or provided for herein.
This Agreement constitutes a valid and binding obligation of the
Seller, and, assuming due execution and delivery by the other
signatories hereto, is enforceable against it in accordance with
the terms and conditions hereof, except that (i) such
enforceability may be limited by bankruptcy, insolvency,
reorganization, rehabilitation, moratorium or similar laws now or
hereafter in effect affecting creditors' rights generally, and (ii)
specific performance and injunctive and other forms of equitable
relief and the enforceability of waivers and other remedies may be
subject to compliance with statutory requirements and rules,
equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
4.5 Corporate Documents. Each of the Acquired Companies
-------------------
has furnished to Purchaser (i) true, correct and complete copies of
the Articles of Incorporation and Bylaws of such Acquired Company,
including all amendments thereto, (ii) the minute book(s) of such
Acquired Company containing all minutes of proceedings, consents,
actions and meetings of the shareholders and Board of Directors of
such Acquired Company, and (iii) the stock transfer book of such
Acquired Company containing records of all stock issuances and
transfers of all securities of such Acquired Company.
4.6 No Breach of Other Agreements. Except as set forth
-----------------------------
on Schedule 4.6, the execution and delivery of this Agreement
------------
and the consummation of the transactions contemplated hereby do not
and shall not result in the creation or imposition of any Lien or
other right of any other party with respect to any property or
asset of any Acquired Company and do not and shall not constitute
an assignment or a violation of, or be in conflict with, or
constitute a default under, or require any consent or approval with
respect to (i) any note, indenture, mortgage, loan agreement, lien,
license or other evidence of indebtedness of the Seller or any
Acquired Company or security therefore, (ii) any term or condition
of the Articles of Incorporation or Bylaws of the Seller or any
Acquired Company, (iii) any lease, contract, purchase or other
obligation to which the Seller or any Acquired Company is a party
or by which the Seller or any Acquired Company or its property or
assets is bound, or (iv) any ordinance, statute or other law or any
judgment, order, decree, permit, license, award, citation, rule,
regulation, publicly available policy, standard, official
interpretation or publicly available guidelines of any court,
arbitrator, tribunal or governmental authority to which the Seller
or any Acquired Company is bound, except for violations that,
either individually or in the aggregate, would not have a Material
Adverse Effect on such Acquired Company or Purchaser.
11
<PAGE> 16
4.7 Government Consents and Approvals. Except as set
---------------------------------
forth on Schedule 4.7, neither the execution and delivery of this
Agreement by the Seller or any Acquired Company, the consummation
by the Seller or any Acquired Company of the transactions
contemplated hereby nor compliance by the Seller or any Acquired
Company with any of the provisions hereof will require any consent,
waiver, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority
("Government Consent and Approval").
4.8 Financial Statements. Schedule 4.8 contains a
-------------------- ------------
true and correct copy of the audited financial statements
(consisting of Combined Balance Sheets, Combined Statements of
Income, Combined Statements of Shareholder's Equity (Deficit), and
Combined Statements of Cash Flows) of the combined Acquired
Companies for the fiscal years ended December 31, 1994 and December
31, 1995, and the unaudited financial statements (consisting of
Combined Balance Sheets, Combined Statements of Income and Retained
Earnings and Combined Statements of Cash Flows) of the combined
Acquired Companies for the interim period ended September 30, 1996
(all of which including the notes thereto, are collectively
referred to herein as the "Financial Statements"). The Financial
Statements (i) are in accordance with the books and records of the
Acquired Companies, (ii) have been prepared in accordance with GAAP
consistently applied throughout the periods involved, except for
certain accruals and year end adjustments with respect to interim
periods, (iii) fairly present the financial condition of the
combined Acquired Companies as of their respective dates and the
results of operations of the combined Acquired Companies for the
periods then ended, and (iv) do not omit to state or reflect any
material fact concerning the Business of any of the Acquired
Companies, or concerning the combined Acquired Companies, required
to be stated or reflected therein or necessary to make the
statements made therein not misleading in light of the
circumstances in which made.
4.9 Indebtedness, Liens and Guarantees. Schedule 4.9
---------------------------------- ------------
describes (i) all indebtedness owed to or by each Acquired Company
for borrowed money, (ii) all properties and assets of each such
Acquired Company mortgaged, pledged or otherwise hypothecated as
security for the payment of any of such indebtedness, (iii) all
guarantees by such Acquired Company of any of the indebtedness,
liabilities, obligations or commitments of any party, (iv) all
accounts payable of such Acquired Company individually in excess of
$50,000 as of September 30, 1996, and (v) all agreements and
commitments relating to any of the foregoing. There exists no
default or other event which, with the passage of time or notice or
both, would constitute a default with respect to any such
indebtedness, mortgage, pledge, other hypothecation or guarantee.
All accounts payable set forth on the Combined Balance Sheet of the
combined Acquired Companies dated September 30, 1996 have been or
will be promptly paid when due or paid in conformity with customary
trade terms and were incurred in the ordinary course of business.
Except as otherwise set forth on Schedule 4.9, all indebtedness
------------
of any Acquired Company set forth on Schedule 4.9 and to any
------------
bank, insurance company, or other financial institution may be
prepaid at any time without penalty.
4.10 Absence of Undisclosed Liabilities. The Acquired
----------------------------------
Companies do not have any liabilities or obligations whatsoever,
accrued, absolute, contingent or otherwise, except (i) as and
12
<PAGE> 17
to the extent specifically reflected or accrued against in the
Financial Statements, (ii) to the extent set forth on Schedule 4.10
-------------
or other Schedule to this Agreement, or (iii) for contractual
obligations for purchases or sales of goods and services and other
obligations incurred in the ordinary course of an Acquired Company's
Business which (x) are not required to be set forth in a Schedule
hereto or (y) were entered into after the date hereof but before the
Closing Date.
4.11 Accounts Receivable. The accounts receivable of
-------------------
each of the Acquired Companies reflected on the Financial
Statements as of the date thereof and on the accounting records of
the Acquired Companies and all accounts receivable arising after
such date are valid and arose from bona fide transactions in the
ordinary course of the Business of the applicable Acquired Company
and have been recorded in accordance with historical revenue
recognition policy. No account receivable has been assigned or
pledged to any other entity. All accounts receivable are or are
reasonably expected to be collectable, net of applicable reserves,
in the ordinary course of business as the Business of each Acquired
Company is presently being conducted.
4.12 Absence of Certain Changes. Since September 30,
--------------------------
1996, except as set forth in Schedule 4.12 hereto or as
-------------
otherwise set forth in this Agreement and the Schedules hereto,
there has not been:
(a) Any material adverse change in the financial
condition or the operations, properties, assets,
Business or prospects of any of the Acquired
Companies;
(b) Any declaration, setting aside or payment of any
dividend or any distribution (in cash or in kind)
to any shareholder of any of the Acquired Companies
with respect to any securities of any such Acquired
Company, or any direct or indirect redemption,
purchase or other acquisition by any Acquired
Company of any of its securities;
(c) Any increase in compensation or other remuneration
in excess of Fifteen Thousand Dollars ($15,000) in
the aggregate payable to or for the benefit of or
committed to be paid to or for the benefit of any
shareholder, director, officer, agent or employee
of any Acquired Company, or in any benefits granted
under any employee benefit plan with or for the
benefit of any such shareholder, director, officer,
agent or employee other than payments to crew
members in the ordinary course of business.
(d) Any transaction entered into or carried out by any
Acquired Company other than in the ordinary course
of the Business of such Acquired Company;
(e) Any borrowing other than through any Acquired
Company's regular line of credit described on
Schedule 4.9, any incurrence of any other
------------
indebtedness, contingent or otherwise, or any
endorsement, assumption or
13
<PAGE> 18
guarantee of payment or performance of any loan or
obligation of any other individual, firm, corporation
or other entity by an Acquired Company;
(f) Any change made by an Acquired Company in its
methods of conducting its Business or of
accounting;
(g) Any grant by an Acquired Company of any Lien with
respect to any properties or assets, tangible or
intangible, of such Acquired Company;
(h) Any sale, lease or disposition of, or any agreement
to sell, lease or dispose of, any properties or
assets held for use, used or useful in the Business
of an Acquired Company, other than sales, leases or
dispositions in the ordinary course of the Business
of such Acquired Company for fair equivalent value;
(i) Any modification or termination of any Material
Agreement;
(j) Any purchase by an Acquired Company of capital
assets which, either individually or in the
aggregate with respect to related assets, is in
excess of Ten Thousand Dollars ($10,000);
(k) Any loan or advance made by an Acquired Company to
any individual, firm, corporation or entity except
for advances not material in amount and advances
made in the ordinary course of the Business of such
Acquired Company; or
(l) Any binding commitment or agreement by an Acquired
Company or Seller to do any of the foregoing items
(b) through (k).
4.13 Real Property.
-------------
(a) No Acquired Company owns any real property of any
kind, character or description.
(b) Schedule 4.13 contains a true and complete
-------------
description of all real property of which any of
the Acquired Companies is a tenant, including all
buildings, improvements and fixtures thereon (the
"Real Property"). True correct and complete copies
of all leases of all Real Property (the "Leases")
have been delivered to Purchaser. With respect to
each Lease, no event or condition currently exists
which would give rise to a material repair or
restoration obligation on the part of tenant if
such Lease were to terminate. Neither Seller nor
any Acquired Company has any knowledge of any event
or condition which currently exists which would
create a
14
<PAGE> 19
legal or other impediment to the use of the Real
Property as currently used, or would increase the
additional charges or other sums payable by a
lessee under any of the Leases (including, without
limitation, any pending Tax reassessment or other
special assessment affecting the Real Property).
Except as otherwise set forth on Schedule 4.13,
-------------
all buildings, improvements and fixtures which
comprise a part of the Real Property as to which
Seller or any Acquired Company is responsible for
the maintenance and repair thereof are in good
condition, maintenance and repair, ordinary wear
and tear excepted.
(c) There is no Person other than an Acquired Company
in or entitled to possession of the Real Property.
(d) None of the Real Property is in violation in any
material respects of any public or private
restriction or any law or any building, zoning,
health, safety, fire or other law, ordinance, code
or regulation, and no notice from any governmental
body has been served upon Seller or any Acquired
Company or upon any of the Real Property claiming
any violation in any material respects of any such
law, ordinance, code or regulation or requiring or
calling to the attention of Seller or any Acquired
Company the need for any work, repair,
construction, alterations or installation on or in
connection with the Real Property which has not
been complied with.
4.14 Vessels. Each of the Vessels is in Good Working
-------
Order, in class and with all outstanding certificates valid on the
date hereof. For purposes of this Agreement, "Good Working Order"
shall include full performance compliance of all systems with the
specifications listed with respect to each Vessel, as set forth on
Schedule 4.14 hereto.
- -------------
4.15 Material Tangible Personal Property. Schedule 4.15
----------------------------------- -------------
sets forth all material tangible personal property used in
the Business of each of the Acquired Companies as of September 30,
1996. Except as otherwise set forth on Schedule 4.15, each
-------------
Acquired Company has good and valid title to its material tangible
personal property, free and clear of all Liens. Such material
tangible personal property is in good order and condition, ordinary
wear and tear excepted, without material defect, fit for the
purposes for which the applicable Acquired Company has at any time
heretofore used, or is now using, it in its respective Business.
The material tangible personal property is not in need of
maintenance or repair other than ordinary and routine maintenance
and repair. True and current copies all leases pursuant to which
any Acquired Company leases material tangible personal property
have been delivered to Purchaser, together with all exhibits,
amendments, supplements and riders thereto. There are no breaches
or defaults, nor has there occurred any event which with the
passage of time would constitute a breach or default, under any of
such leases. Such leases were duly and validly entered into by the
applicable Acquired Company (and, to the best of Seller's and such
Acquired Company's knowledge, by the lessor(s) thereunder) and are
valid, binding, and in full force and effect.
15
<PAGE> 20
4.16 Intellectual Property.
---------------------
(a) Schedule 4.16 sets forth a complete list and
-------------
brief description of the Intellectual Property
which is now owned, used, or held for use by any
Acquired Company. Except as otherwise indicated on
Schedule 4.16, all Intellectual Property used
-------------
by an Acquired Company is owned by such Acquired
Company and is free and clear of all Liens and is
held and used by such Acquired Company without
conflict with the rights of others. Except as set
forth on Schedule 4.16, no Acquired Company has
-------------
granted any license or rights to any other entity
with respect to the Intellectual Property.
(b) The Intellectual Property constitutes all such
items necessary to carry on the Business of each
Acquired Company as heretofore conducted. To the
best of Seller's and each Acquired Company's
knowledge, nothing sold or used in the Business of
such Acquired Company infringes any trademark,
trade name, copyright, patent or trade secret of
any other person.
(c) Except as specifically disclosed on Schedule 4.16,
-------------
each Acquired Company and its successors and
assigns has a perpetual right, without infringing
any patent, United States or foreign, any other
right of any party or necessitating or making
desirable any royalty or other payment by such
Acquired Company to any party, to use the
Intellectual Property in the manner at any time
heretofore used, now used, or planned to be used by
such Acquired Company.
(d) There exists no contest, litigation, infringement,
fraud, misappropriation or misuse, pending, or to
the knowledge of the Seller threatened or in
prospect, of any Intellectual Property, or any
license or agreement therefor, which is necessary
for or related to the Business of any Acquired
Company.
4.17 Use of Property. The properties and assets owned
---------------
or leased by each Acquired Company constitute all of the properties
and assets required to enable such Acquired Company to conduct its
Business as currently being conducted. None of the properties and
assets owned or leased by the Acquired Companies including, without
limitation, those reflected in the Financial Statements, is subject
to any ordinance, other law, rule, regulation, publicly available
policy or publicly available guideline, encumbrance, or restriction
which prevents, or might reasonably be expected to prevent, the
manner in which such properties and assets and the Business of such
Acquired Company are now used or enjoyed or planned to be used or
enjoyed by such Acquired Company.
16
<PAGE> 21
4.18 Insurance. Schedule 4.18 constitutes a
--------- -------------
complete and accurate schedule of all insurance policies, binders
and bonds held by each Acquired Company or covering any of the
properties or assets of any Acquired Company or the Business of
such Acquired Company and now in force (including, without
limitation, public liability, product liability, property damage,
workers' compensation, fidelity bond, theft, forgery and other
coverage) (the "Insurance Policies"). Schedule 4.18 shows the
-------------
identities of the insurers, the amount and nature of insurance, all
pending claims filed under the Insurance Policies, and all claims
and lawsuits made or filed during the last two (2) years in excess
of Twenty-Five Thousand Dollars ($25,000) with respect to each
Acquired Company which have been paid or settled other than health
insurance claims paid or payable in the ordinary course of business
as reflected in such Acquired Company's records. True, current and
complete copies of all Insurance Policies have been provided to
Purchaser. No notice of cancellation or termination has been
received with respect to the Insurance Policies. There has not
been any inaccuracy in any application for such Insurance Policies
which will affect the coverage thereunder. There has not been any
failure to pay premiums when due.
4.19 Permits. All of the Permits material to the
-------
Business of each Acquired Company are described in Schedule 4.19.
-------------
The Permits are in full force and effect and no suspension
or cancellation of any of them is threatened. The Permits
constitute all material governmental permits, licenses, approvals,
product registrations and authorizations required by each Acquired
Company to occupy its respective real property, use its other
assets and conduct its Business as occupied, used and conducted
prior to the Closing Date. Complete and correct copies of the
Permits have been provided to Purchaser.
4.20 Material Agreements. Set forth on Schedule 4.20
------------------- -------------
is a list of each written or oral contract, agreement,
indenture, evidence of indebtedness, contingent or otherwise, to
which each Acquired Company is a party and which:
(a) Has a contract term of twelve months or more or
involves total consideration of more than Fifty
Thousand Dollars ($50,000);
(b) Contains any severance or termination payment
liabilities or obligations or any other employee
benefit provision, and the amounts which are or may
become payable under each such agreement;
(c) Prohibits or contractually restricts the ability of
such Acquired Company to engage in its Business or
any other business or to compete with any entity;
(d) Involves any debt obligation for borrowed money,
including guarantees;
(e) Involves any outstanding loan to any entity not
made in the ordinary course of business;
17
<PAGE> 22
(f) Involves the acquisition of any other business or
company; or
(g) Is between such Acquired Company and the Seller or
an Affiliate of the Seller.
True and complete copies of all written Material Agreements and
written summaries of all oral Material Agreements have been
furnished to Purchaser. With regard to the Material Agreements,
except as otherwise set forth on Schedule 4.20, (i) to the best
-------------
of Seller's and each Acquired Company's knowledge, no event has
occurred or is continuing which, upon the passage of time or the
giving of notice, or both, could constitute an event of default by
such Acquired Company with respect to any Material Agreement, and
no written or oral claim of any such default has been made against
such Acquired Company with respect to any Material Agreement; (ii)
each of the Material Agreements is valid, binding and enforceable
against the Acquired Company which is a party to such Agreement and
the other parties thereto, except (y) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditor's rights
generally, and (z) as limited by laws relating to the applicability
of specific performance, injunctive relief or other equitable
remedies; and (iii) neither Seller nor any Acquired Company has
received any written notice or been informed that any party to any
of the Material Agreements intends to cancel or terminate such
Material Agreement.
4.21 Consents. Schedule 4.21 sets forth all
-------- -------------
Material Agreements and leases, licenses or Permits which are
material to the Business and which, absent the approval or consent
of a third party prior to the Closing of the transaction herein (a
"Consent"), will be subject as a result of the Closing (with or
without the passage of time, notice or both) to cancellation,
termination, additional payment, alteration of terms, additional
rights in any third party or additional obligations on an Acquired
Company.
4.22 Claims and Litigation. Except as set forth on
---------------------
Schedule 4.22, there are no material claims, actions, suits,
- -------------
proceedings or governmental investigations pending or threatened
by, against Seller or any Acquired Company, the properties or
assets of any Acquired Company or the Business of any Acquired
Company, or questioning or challenging the validity of this
Agreement or any of the transactions contemplated hereby, and, to
the best knowledge of Seller and each Acquired Company, there has
been no occurrence of any event giving rise to any such claim,
action, suit, proceedings or investigation. There are no
outstanding judgments, orders, decrees, awards, or citations of any
court, arbitrator, tribunal or governmental authority affecting any
of the properties or assets of any Acquired Company or the Business
of any Acquired Company.
4.23 Tax Returns and Liabilities. Schedule 4.23
--------------------------- -------------
lists all jurisdictions in which each Acquired Company files Tax
Returns, either separately or as a member of a group of
corporations, and the type of Tax Returns filed therein. Each
Acquired Company has properly and timely filed or caused to be
filed with the appropriate tax authorities all Tax Returns required
by law to be filed with respect to such Acquired Company, either
separately or as a
18
<PAGE> 23
member of a group of corporations, and has paid
or made provisions for the payment of all amounts due whether or
not reflected on the returns as filed. Except as set forth on
Schedule 4.23, there is no liability, absolute or contingent,
- -------------
for any unpaid Taxes, or any set of facts which exists or has
existed and would likely constitute grounds for the assessment of
any further Tax liability against any Acquired Company. There is
no tax lien upon any property or asset of any Acquired Company,
whether owned or leased. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to
any Tax Return for any period. Each Acquired Company withheld and
duly paid to the appropriate governmental authority all Taxes
required to be withheld by such Acquired Company pursuant to any
ordinance, statute or other law or any judgment, order, decree,
rule or regulation of any court, tribunal or governmental
authority. Notwithstanding any other representation or warranty to
the contrary, Seller's only liability under this Agreement with
respect to Taxes or Tax Returns shall be specifically as set forth
in this Section 4.23.
4.24 Employees.
---------
(a) Schedule 4.24 contains a complete and correct
-------------
list of the names and titles of all the employees
who perform services for or on behalf of any
Acquired Company ("Employees").
(b) Except as set forth on Schedule 4.24:
-------------
i. none of the Employees is represented by any
labor union;
ii. there is no pending labor strike, work
stoppage, slow down, other labor trouble or
interference with or impairment of the
Business of any Acquired Company (including,
without limitation, any organizational drive);
iii. there is no pending or threatened
representation petition respecting the
Employees;
iv. no Acquired Company is a party to any
collective bargaining agreement;
v. there are no outstanding binding or any other
commitment or agreement to effect any general
wage or salary increase for any of the
Employees;
vi. the employment of all Employees is terminable
at will except as may be provided by state
law;
vii. none of the persons employed by any Acquired
Company is provided under contract with a
third party (excluding clerical
19
<PAGE> 24
workers or workers made available under
contracts disclosed on a schedule hereto);
viii. all sums due for employee compensation and
benefits and all vacation time owing any
Employees have been duly and adequately
accrued on the accounting records of the
Acquired Companies and are reflected on the
Financial Statements as of the date thereof,
and all vacation time owing any Employees is
accrued in accordance with applicable state
law;
ix. in accordance with the Immigration Reform and
Control Act of 1986 and related statutes and
regulations, each Acquired Company has
properly verified the identity and
authorization to work in the United States and
properly completed and retained INS forms I-9
for all employees and consultants; and
x. there is not now pending or threatened any
charge or complaint against any Acquired
Company by or with the National Labor
Relations Board or any representative of an
Acquired Company with respect to any unfair
labor practice as defined in the National
Labor Relations Act, as amended, and neither
Seller nor any Acquired Company knows of any
factual basis for any such charge or
complaint.
(c) No Acquired Company has violated in any
material respects any law, regulation or order
relating to employment, wages, hours,
employment discrimination and occupational
safety and has not received any unresolved
complaint from any federal or state agency or
regulatory body alleging violations of any
such laws or regulations.
(d) Schedule 4.24 sets forth a true, correct
-------------
and complete list of all contracts,
arrangements and agreements or, to the
knowledge of Seller and each Acquired Company,
understandings or proposed transactions of
such Acquired Company with regard to the
Employees and/or consultants. Such Acquired
Company has provided Purchaser with true,
correct and complete copies of all such
contracts, arrangements and agreements with
regard to the Employees and/or consultants.
4.25 Employee Pension and Welfare Benefits and Fringe
------------------------------------------------
Benefits.
- --------
(a) Schedule 4.25 includes a correct and
-------------
complete list of all pension, deferred
compensation, retirement income, profit
sharing, thrift-savings, incentive
compensation, stock bonus, stock option, cash
bonus, employee stock ownership, severance
pay, medical, disability, life insurance,
welfare or
20
<PAGE> 25
vacation plans of any kind and any
Employee Pension Benefit Plan or Employee
Welfare Benefit Plan (as defined in Title I of
ERISA), insurance contracts providing employee
benefits, or any other trust fund or funding
vehicle for employee benefits or any
combination of the foregoing maintained,
sponsored or contributed to by any Acquired
Company, for any employees or former employees
of any Acquired Company (each individually, a
"Plan" and collectively the "Plans"). No
Acquired Company currently sponsors or
contributes to, or in the past has sponsored
or contributed to, any defined benefit plan
(as defined in Section 414(j) of the Code or
in Section 3(35) of ERISA), or other plan that
is subject to the minimum funding standards of
Section 412 of the Code or Section 302 of
ERISA or any voluntary Employees' beneficiary
association (as defined in Section 501(a)(q)
of the Code). The Acquired Companies have
furnished Purchaser complete and correct
copies of all Plan documents (including copies
of all trust instruments for related trusts)
for all Plans, together with (i) the most
recent actuarial, trustee and financial
reports prepared with respect to any Plan;
(ii) the most recent annual report, if any,
filed with any government agency and all
Internal Revenue Service or Department of
Labor rulings and letters that pertain to any
such Plan; and (iii) the most recent Internal
Revenue Service letter, if any, relating to
the qualification of any such Plan under
Section 401(a) or Section 501(c) of the Code,
as applicable. Except as specified on
Schedule 4.25, the annual reports so furnished
by the Acquired Companies fairly present the
financial condition of such Plans and such
benefits of the respective participants
accrued under the related Plans. All reports
and documents provided hereunder do not
contain any untrue statement of any material
fact relating to Plan assets, accrued
benefits, or the benefit payable to
participants and beneficiaries of such Plans.
(b) All Plans that are Employee Benefit Plans in
which one or more Employees participate,
comply in all material respects with ERISA to
the extent required. All Plans comply with
the Code where applicable for tax-qualified or
tax-favored treatment, and have been timely
amended to comply with the Tax Reform Act of
1986 and any other legislation or regulation
requiring amendments to the Plans. Each Plan
that is an Employee Benefit Plan has been
administered in compliance with and has
complied with the reporting, disclosure and
fiduciary duty requirements of Title I of
ERISA in all material respects. Neither any
Acquired Company nor any administrator or
fiduciary of any Plan (or agent of any of the
foregoing) has engaged in any transaction or
acted or failed to act in any manner which
would subject themselves or such Acquired
Company to any liability for a breach of
fiduciary duty under ERISA. Each Employee
Pension Benefit Plan sponsored or maintained
by or contributed to by any Acquired Company
for any employee or former
21
<PAGE> 26
employee of such Acquired Company that is
intended to be qualified under Section 401(a) of
the Code have been the subject of a favorable
determination letter issued by the Internal
Revenue Service holding that such plan and
funding instrument are so qualified and
nothing has occurred which would cause such
letters to become invalid. All related trusts
are exempt from federal income tax under
Section 501(a) of the Code. No
representations or communications, oral or
written, with respect to participation,
eligibility for benefits, vesting, benefit
accrual or coverage under any Plan have been
made to employees or former employees of any
Acquired Company which (i) are not in
accordance with the terms and conditions of
such Plan; and (ii) could have any material
Adverse economic consequences to such Acquired
Company other than payments to employees
pursuant to the terms of the Plans. No
Acquired Company has any liability under any
Plan that is not reflected on the Financial
Statements (other than normally unrecorded
liabilities under a Plan for sick leave,
holiday, education, bonus, vacation, incentive
compensation and other benefits or awards,
provided that such liabilities are not in any
event material). Neither any Acquired
Company, the Plans nor to the knowledge of
Seller any fiduciary or administrator thereof
or any parties in interest or disqualified
persons with respect to the Plans has engaged
in a "prohibited transaction" within Section
406 of ERISA or, where applicable, Section
4975 of the Code for which no exemption is
applicable and there has been no reduction or
curtailment of accrued benefits or accruals
with respect to any of the Plans.
(c) All contributions required for all Plans for
all plan years ending prior to the Closing
Date have been made or adequate accruals for
all contributions with respect to the Plans
are reflected in the Financial Statements.
None of the Acquired Companies has incurred
any liability to the Internal Revenue Service
or otherwise with respect to any such Plan
currently or previously maintained by members
of the controlled group of companies (as
defined in Section 414(b) and (c) of the Code)
(the "Controlled Group") that includes the
Acquired Companies that has not been satisfied
in full, and no condition exists that presents
a material risk to the Acquired Companies or
any member of the Controlled Group of
incurring such a liability.
(d) With respect to any group health plan (as
defined in Section 607 of ERISA) maintained by
or contributed to by any Acquired Company,
neither such Acquired Company nor any of its
officers, directors, employees or agents has
engaged in any action or failed to act in such
a manner that, as a result of such act or
failure to act: (i) the ability of such
Acquired Company to deduct contributions to
such a plan would be impaired, (ii) the
ability of any employee of such Acquired
Company to
22
<PAGE> 27
exclude from income for federal income tax
purposes employer-provided benefits under such a
plan would be impaired, and (iii) the employer
would be subject to a tax under Section 4980B of
the Code or any liability under Part 6 of Title
I of ERISA. No Acquired Company nor any of
their directors, officers, employees or agents
have engaged in any action or failed to act in
any manner that would subject the Company to
liability under the Medicare Secondary Payor
Provisions of Section 1862(b) of the Social
Security Act and Section 5000 of the Code.
(e) Except as set forth on Schedule 4.25, with
-------------
respect to all former employees of the
Acquired Companies who may have terminated or
have been terminated at any time prior to the
Closing Date, none of the Acquired Companies
has failed to pay or fulfill any obligation in
connection with, nor is it currently liable
for: any severance pay; pension funding
deficit; insurance premium (including, without
limitation, any unfunded liability for any
retiree medical, disability or life insurance
plan or program); other payment or obligation
for any Employee Pension Benefit Plan or
Employee Welfare Benefit Plan; Payroll Practice,
as defined in DOL Reg. Section 2510.3-1(b);
any and all other plans, arrangements and
practices for the benefit of such former or
current employees (including, without
limitation, any workers' compensation,
unemployment compensation, disability or life
insurance benefit program), whether or not any
of same are required by any federal, state or
local laws, rules, regulations, policies or
guidelines; and all other costs and expenses
connected with any of the forgoing.
(f) To the best knowledge of Seller and each of
the Acquired Companies, there are no claims,
lawsuits, arbitrations or appeals, pending or
threatened, by a current or former employee of
such Acquired Company, or by such an
employee's beneficiary, involving any Plan, or
such Acquired Company, Plan fiduciaries or
administrators involving the Plans, nor is
there any reasonable basis to anticipate any
claim involving any such Plan which would
likely be successfully maintained against such
Acquired Company or any fiduciaries or
administrators of the Plan.
(g) Each Acquired Company has complied in all
material respects with the applicable
requirements of Part 6 of Title I of ERISA and
Section 4980B of the Code (pertaining to COBRA
continuation of coverage).
(h) Except as set forth on Schedule 4.25, no
-------------
Acquired Company has any obligation to
provide, nor has it expressed any intention to
provide, any employee of such Acquired Company
with any medical, life insurance, or similar
benefit following his or her retirement or
termination of
23
<PAGE> 28
employment (or to his or her beneficiary
subsequent to death), except as required by Part
6 of Title I of ERISA and Section 4980B of the
Code.
(i) No obligation shall arise under any Plan,
including severance or separation pay plans or
arrangements or policies, that obligates any
Acquired Company or any Plan, trust or plan
funding vehicle to make any payments, accrue
any additional benefits or liabilities, or
provide any subsidies or compensations
whatsoever as a result of Closing.
(j) No changes have been made to any of the Plans
which are not already described in the Plan
documents provided pursuant to Section 4.25(a)
and none will be made through the Closing
Date.
4.26 Environmental Matters. Except as disclosed in
---------------------
Schedule 4.26:
- -------------
(a) Each Acquired Company is in compliance in all
material respects with all Environmental Laws
in connection with the conduct of its
Business.
(b) To the best of Seller's and each Acquired
Company's knowledge, such Acquired Company has
no liability under any Environmental Law with
respect to the operations of its Business, the
Real Property, or other properties of such
Acquired Company which is material to the
operations of its Business or the financial
condition of such Acquired Company.
(c) There has been no past, and there is no
current or presently anticipated, storage,
disposal, generation, manufacture, refinement,
transportation, production or treatment of a
Regulated Substance by any Acquired Company
that is not in compliance in all material
respects with all applicable Environmental
Laws. There has been no spill, discharge,
leak, emission, injection, escape, dumping or
release of any kind onto any Real Property, or
into the environment surrounding any Real
Property, of any Regulated Substance by any
Acquired Company.
(d) To the best of Seller's and each Acquired
Company's knowledge, there are no proceedings
pending or threatened in which the operation
of the Business is alleged to constitute a
violation of any Environmental Law or
Environmental Permit; and there are no
outstanding judgments, decrees or orders
affecting the operation or conduct of the
Business of any of the Acquired Companies.
(e) Neither Seller nor any Acquired Company has
received any notice from any governmental
regulatory authority or any private person or
entity that either the assets of such Acquired
Company or its conduct or operation of its
Business is in violation of any Environmental
Law or any
24
<PAGE> 29
Environmental Permit, or that it is
responsible (or potentially responsible) for
the cleanup of any Regulated Substance.
4.27 Disclosure.
----------
(a) No representation, warranty, covenant or
agreement made by Seller or any Acquired
Company contained in this Agreement and no
statement or description contained in any
Schedule hereto, certificate or exhibit
provided or delivered by Seller or any
Acquired Company to Purchaser pursuant to this
Agreement or in connection with the
transactions contemplated hereby contains any
untrue statement of a material fact or omits
to state a material fact necessary in order to
make the statements and descriptions contained
herein or therein not misleading.
(b) There are no material written or oral
agreements or commitments or other properties
or assets of any kind necessary for the
Business as currently being conducted by any
of the Acquired Companies, which are not
owned, licensed or leased by such Acquired
Company and not described herein.
(c) For purposes of this Article IV, any item
disclosed herein or elsewhere in this
Agreement, or in any schedule or exhibit
required under this Agreement, shall be deemed
disclosed for purposes of each representation,
warranty, covenant and schedule of or referred
to in this Article IV.
4.28 Brokers. Seller and the Acquired Companies have
-------
not had and are not having any dealings with, and have not received
and are not receiving any services from, any finder, broker, agent
or other similar party, who is or will be entitled to a commission,
fee or other payment of any nature in connection with this
Agreement or any of the transactions contemplated hereby.
4.29 Operation in Accordance With Law. Except as set
--------------------------------
forth on Schedule 4.29, none of the Acquired Companies is in
-------------
default under or in violation of any provision of its Articles of
Incorporation or Bylaws or, to the best of Seller's and such
Acquired Company's knowledge, any applicable statute, law,
ordinance, decree, order, injunction, rule, directive or regulation
of any government or the provisions of any franchise or license
material to its business.
25
<PAGE> 30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Purchaser that the
following statements are true and correct as of the date hereof.
5.1 Title to Shares. Seller is the record and beneficial
---------------
owner of all of the Acquired Company Shares and will own such
Acquired Company Shares free and clear of all Liens at Closing.
Delivery to Purchaser of certificates representing the Acquired
Company Shares (endorsed by Seller to Purchaser or accompanied by
stock powers to Purchaser executed by Seller) shall pass good and
marketable title to the Acquired Company Shares to Purchaser, free
and clear of all Liens.
5.2 Organization and Standing. Seller is a corporation
-------------------------
duly organized, validly existing and in good standing under the
laws of the state of Missouri.
5.3 Authorization and Binding Effect. All corporate
--------------------------------
action, required to be taken by Seller to authorize the
transactions contemplated by this Agreement has been taken. Seller
has all requisite corporate power to perform this Agreement and the
transactions contemplated hereby and the further documents,
instruments and agreements referred to or provided for herein.
This Agreement constitutes valid and binding obligations of Seller,
and, assuming due execution and delivery by the other signatories
thereto (other than the Acquired Companies), is enforceable against
it in accordance with the terms and conditions hereof, except that
(i) such enforceability may be limited by bankruptcy, insolvency,
reorganization, rehabilitation, moratorium or similar laws now or
hereafter in effect affecting creditors' rights generally, and (ii)
specific performance and injunctive and other forms of equitable
relief and the enforceability of waivers and other remedies may be
subject to compliance with statutory requirements and rules,
equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
5.4 Absence of Litigation. There is no claim, action,
---------------------
proceeding or investigation pending or, to the best knowledge of
Seller, threatened against, relating to or affecting Seller, any of
the Acquired Companies, or any of their respective properties or
rights, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign
that, if determined adversely to Seller or any such Acquired
Company, would materially impair the ability or obligation of
Seller to perform fully on a timely basis its obligations under
this Agreement.
5.5 No Breach of Other Agreements. Except as set forth
-----------------------------
on Schedule 5.5, the execution and delivery of this Agreement
------------
and the consummation of the transactions contemplated hereby do not
and shall not result in the creation or imposition of any Lien with
respect to the Acquired Company Shares, and do not and shall not
constitute an assignment or a violation of, or be in conflict with,
or constitute a default under, or require any consent or approval with
26
<PAGE> 31
respect to (i) any note, indenture, mortgage, loan agreement,
lien, license or other evidence of indebtedness of Seller or
security therefor, (ii) any term or condition of the Articles of
Incorporation or Bylaws of Seller, (iii) any agreement or other
obligation to which Seller is a party or by which Seller is bound,
or (iv) any ordinance, statute or other law or any judgment, order,
decree, permit, license, award, citation, rule, regulation,
publicly available policy, standard, official interpretation or
publicly available guidelines of any court, arbitrator, tribunal or
governmental authority to which Seller is bound, except for
violations that, either individually or in the aggregate, would not
have a Material Adverse Effect on the Acquired Companies or
Purchaser.
5.6 Government Consents and Approvals. Except as set
---------------------------------
forth in Schedule 5.6, neither the execution and delivery of this
Agreement by Seller, the consummation by Seller of the transactions
contemplated hereby nor compliance by Seller with any of the
provisions hereof will require any consent, waiver, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority.
5.7 Investment Intent. Seller is acquiring the Closing
-----------------
Note for its own account and not with any present intention of
making any distribution or resale of all or any portion thereof
other than that Seller may sell, distribute as a dividend, or
otherwise transfer the Closing Note to its shareholder or Seller
may pledge or transfer such Closing Note to a bank or other third
party investor, subject to restrictions and limitations of
applicable securities laws.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to Seller that the
following statements are true and correct as of the date hereof and
shall continue to be through the Closing Date:
6.1 Organization and Standing. Purchaser is a
-------------------------
corporation duly organized, validly existing and in good standing
under the laws of the state of Missouri.
6.2 Authorization and Binding Effect. All corporate
--------------------------------
action, required to be taken by Purchaser to authorize the
transactions contemplated by this Agreement shall have been taken
as of the Closing Date. Purchaser has all requisite corporate
power to perform this Agreement and the transactions contemplated
hereby and the further documents, instruments and agreements
referred to or provided for herein. This Agreement and the Closing
Note constitute valid and binding obligations of Purchaser, and,
assuming due execution and delivery by the other signatories if
applicable, are enforceable against it in accordance with the terms
and conditions hereof and thereof, except that (1) such
enforceability may be limited by bankruptcy, insolvency,
reorganization, rehabilitation, moratorium or similar laws now or
hereafter in effect affecting creditors' rights generally, and (2)
specific performance and injunctive and other forms of equitable
relief and the enforceability of waivers and other remedies may be
subject to
27
<PAGE> 32
compliance with statutory requirements and rules, equitable
defenses and to the discretion of the court before which any
proceeding therefore may be brought.
6.3 No Breach. The execution and delivery of this
---------
Agreement and the consummation of the transactions contemplated
hereby do not and shall not constitute a violation of or be in
conflict with, or constitute a default under, or require any
consent or approval with respect to (i) any note, indenture,
mortgage, loan agreement, lien, license or other evidence of
indebtedness of Purchaser or security therefor, (ii) any term or
condition of the Articles of Incorporation or Bylaws of Purchaser,
(iii) any agreement or other obligation to which Purchaser is a
party or by which Purchaser is bound, or (iv) any ordinance,
statute or other law or judgment, order, decree, permit, license,
award, citation, rule, regulation, publicly available policy,
standard, official interpretation or publicly available guidelines
of any court, arbitrator, tribunal or governmental authority to
which Purchaser is bound, except for violations that, either
individually or in the aggregate, would not have a material adverse
effect on the Seller.
6.4 Absence of Litigation. There is no claim, action or
---------------------
proceeding pending or, to the best of Purchaser's knowledge,
threatened against, relating to or affecting Purchaser, or any of
its properties or rights, before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign that, if determined adversely to Purchaser,
would materially impair the ability or obligation of Purchaser to
perform fully on a timely basis its obligations under this
Agreement.
6.5 Government Consents and Approvals. Neither the
---------------------------------
execution and delivery of this Agreement by Purchaser, the
consummation by Purchaser of the transactions contemplated hereby
nor compliance by Purchaser with any of the provisions hereof and
thereof will require any consent, waiver, approval, authorization
or permit of, or filing with or notification to, any governmental
or regulatory authority.
6.6 Brokers. Purchaser has not had and is not having any
-------
dealings with, and has not received and is not receiving any
services from, any finder, broker, agent or other similar party who
is or will be entitled to a commission, fee or other payment of any
nature in connection with this Agreement or any of the transactions
contemplated hereby.
6.7 Investment Intent. Purchaser is purchasing the
-----------------
Acquired Company Shares for its own account and not with any
present intention of making any distribution or resale thereof.
28
<PAGE> 33
ARTICLE VII
COVENANTS OF THE ACQUIRED COMPANIES AND SELLER
----------------------------------------------
Each Acquired Company and Seller further covenant with
Purchaser as follows:
7.1 Affirmative Covenants. Except as otherwise set forth
---------------------
in this Agreement and Schedules hereto, from the date hereof to the
Closing Date, such Acquired Company shall and the Seller shall
cause such Acquired Company to:
(a) Continue to collect all accounts receivable
consistent with the past practices of such
Acquired Company;
(b) Conduct its Business in the ordinary course in
substantially the same manner as heretofore
conducted and in conformity with all
applicable laws, rules and regulations, and
use its assets in the usual, regular and
ordinary course and in the same manner as
heretofore used;
(c) Immediately notify Purchaser of any material
change in the ordinary and normal conduct of
its Business or any change or events which
would reasonably be expected to cause a
material change in the information concerning
the Acquired Companies set forth in Exhibit B
hereto, any material emergency with respect to
its Business, or any occurrence which does or
would reasonably be expected to cause any of
the representations or warranties made by such
Acquired Company or Seller herein (and in each
Schedule hereto and certificate or exhibit
provided or delivered to Purchaser pursuant to
this Agreement or in connection with the
transactions contemplated hereby) to be
incomplete or incorrect, or any of the
covenants or agreements made by, or other
obligations of, such Acquired Company or
Seller contained herein to be breached;
(d) Maintain such Acquired Company's assets in
good operating condition and repair, normal
wear and tear excepted;
(e) Maintain in force all Insurance Policies;
(f) Use the best efforts to (i) maintain and
develop goodwill between such Acquired Company
and the customers and suppliers and other
parties with whom such Acquired Company has
had, has or will have, or may have prospects
of having, contractual or commercial
relationships, and (ii) otherwise maintain its
Business and its organization;
(g) Promptly pay and discharge, prior to the date
on which any penalties, interest or liens
commence or attach thereto, all lawful taxes,
assessments
29
<PAGE> 34
and governmental charges or levies
imposed on any of the properties or assets of
such Acquired Company or on its Business;
provided that any such tax, assessment, charge
or levy need not be paid if, and to the extent
that, the validity or amount thereof should be
then contested by such Acquired Company in
good faith by appropriate action; and
(h) Promptly pay when due (or in conformity with
customary trade terms) such Acquired Company's
liabilities, obligations, and commitments in
connection with its Business, timely perform
all obligations and commitments of such
Acquired Company, and promptly notify
Purchaser of any actual or alleged default by
such Acquired Company with respect to such
liabilities, obligations, and commitments.
7.2 Negative Covenants. Except as otherwise set forth in
------------------
this Agreement and the Schedules hereto, from the date hereof and
to the Closing Date, and except as provided herein or as is
necessary to complete the transactions contemplated herein, in
either case with Purchaser's prior consent, none of the Acquired
Companies nor Seller shall:
(a) (i) Solicit, directly or indirectly, any
inquiries or proposals, (ii) participate,
directly or indirectly, in any negotiations or
discussions, (iii) or provide, directly or
indirectly, any information, concerning the
sale of any of the Acquired Company Shares, a
merger, consolidation or business combination
that includes any Acquired Company or any
portion thereof, or any sale of all or any
portion of the assets of any Acquired Company;
provided that if any such inquiries or
proposals should be received, directly or
indirectly, by any Acquired Company or Seller,
then Purchaser shall immediately be notified
thereof;
(b) Cause any material change in the financial
condition, properties, assets, obligations,
commitments or operations of such Acquired
Company or in its Business (other than changes
in the ordinary and normal course of its
Business) or any other event or condition of
any nature that, individually or in the
aggregate, has been or will be materially
adverse to the financial condition,
properties, assets, obligations, commitments
or operations of such Acquired Company or to
its Business.
(c) Cause any change in such Acquired Company's
system of accounting employed in preparing the
Financial Statements, except as set forth on
Schedule 7.2(c);
---------------
(d) Issue or sell or obligate itself to issue or
sell any shares of such Acquired Company's
stock or other securities, whether pursuant to
an employee benefit plan or otherwise;
30
<PAGE> 35
(e) Cause such Acquired Company, directly or
indirectly, to declare, reserve, set aside or
pay any dividend or other distribution or
cause any split, reverse split, combination,
reclassification, redemption, purchase or
other acquisition with respect to any security
of such Acquired Company or any option to
purchase such Acquired Company's securities
(Seller hereby waives all rights to any such
declarations, reservations, setting aside,
payment, split, reverse split, combination
reclassification, redemption, purchase or
acquisition);
(f) Except as set forth on Schedule 7.2(f),
---------------
cause any sale, transfer or other disposition
(including, without limitation, any direct or
indirect creation, occurrence, assumption or
permitting of the existence of any mortgage,
pledge, other hypothecation, deposit,
conditional sale, lease or title retention, or
the making of any agreement or commitment
relating to any of the foregoing) including,
without limitation, any sale, transfer or
other disposition between such Acquired
Company and Seller or any Affiliate of Seller
of, or with respect to, any interest in any of
such Acquired Company's properties or assets
(whether now owned or hereafter acquired)
other than:
i. liens for taxes, assessments or governmental
charges or levies incurred in the ordinary and
normal course of such Acquired Company's
Business and not yet due and payable, all of
which shall be paid, discharged or released as
of the Closing Date;
ii. contingent liabilities arising out of the
endorsement in the ordinary and normal course
of such Acquired Company's Business of
negotiable instruments in the course of
collection; or
iii. in the ordinary course of business.
(g) Cause any amendment or modification (or
agreement relating thereto) of such Acquired
Company's Articles of Incorporation or Bylaws;
(h) Make any significant change in the methods,
price or terms of sale of the goods or
services sold in the conduct of such Acquired
Company's Business or in the billing for such
goods or services;
(i) Cause the cancellation or termination of any
relationship with any customer, licensor,
licensee, lessor, supplier or distributor or
give any notice that any such relationship may
be canceled or terminated out of the ordinary
course of business;
31
<PAGE> 36
(j) Cause any material changes in the manner of
conducting such Acquired Company's Business;
(k) Grant a salary increase, or authorize or pay
any bonus or other benefit payable or to
become payable under any bonus, insurance, or
Plan, or cause such Acquired Company to make
any loan or advance, to any former or current
officer, director or employee of such Acquired
Company, except for discretionary bonuses and
salary adjustments and 401(k) matching
contributions not to exceed Two Hundred
Thousand Dollars ($200,000) in the aggregate
for all Acquired Companies, changes to PHD's
employment agreement if consented to by
Purchaser and payments to crew members in the
ordinary course of business.
(l) Make or enter into any agreement or other
commitment for any expenditures for capital
assets, other than for ordinary and routine
maintenance and repairs, which maintenance and
repair expenditures are not required to be
capitalized;
(m) Cause such Acquired Company to enter into any
transaction not disclosed in, or contemplated
by, this Agreement (including, without
limitation, any change in the contingent
obligations of such Acquired Company by way of
guaranty, endorsement, indemnity, warranty or
otherwise) other than in the ordinary and
normal course of its Business;
(n) Take any action that does or may cause any of
the representations or warranties made by such
Acquired Company or Seller herein (or in any
Schedule hereto or certificate provided or
delivered to Purchaser pursuant to this
Agreement, to be incomplete or incorrect, or
any of the covenants or agreements made by, or
other obligations of, such Acquired Company or
Seller contained herein to be breached;
(o) Cause any change in the terms and conditions
of the Insurance Policies;
(p) Any other term or condition hereof to the
contrary notwithstanding, take any action not
consistent with the past practices of such
Acquired Company or its Business;
(q) Cause any other event or condition of any
character materially and adversely to affect
the condition (financial or other), assets,
operations, earnings, prospects or business of
such Acquired Company or its Business; or
32
<PAGE> 37
(r) From the date hereof, without the prior
written consent of Purchaser, issue any debt
instruments, execute any notes or other
evidences of indebtedness or borrow any
monies.
7.3 Maintenance of the Vessels. From the date hereof to
--------------------------
the Closing Date, Clipper Cruise Line shall use due diligence to
maintain and repair the Vessels in accordance with good commercial
marine practice and in accordance with its normal practices.
7.4 Right of Access and Inspection. From the date hereof
------------------------------
to the Closing Date, Purchaser may, after giving reasonable notice
to an Acquired Company, through its employees, agents and
representatives, during normal working hours as it deems necessary
or advisable, make or cause to be made such investigation of such
Acquired Company's assets and liabilities and its Business as
Purchaser shall deem advisable. During such period Seller and such
Acquired Company shall furnish promptly to Purchaser all
information concerning such Acquired Company's assets and
liabilities and its Business as Purchaser may reasonably request.
Seller and such Acquired Company will fully cooperate with
Purchaser's investigative efforts including making offices and
reasonable secretarial support available to Purchaser's employees,
agents and representatives.
7.5 Consents. As soon as reasonably practicable after
--------
the execution and delivery of this Agreement, and in any event on
or before the Closing Date, the Acquired Companies shall use their
best efforts to obtain the Consents and will furnish to Purchaser
executed copies of those Consents. Seller and each Acquired
Company shall use its best efforts to obtain or make all consents,
approvals, authorizations or orders of, or filings with, any
governmental agency required for the consummation of the
transactions contemplated herein.
7.6 Standstill, Etc. From the date hereof to the Closing
---------------
Date, Seller covenants and agrees that, without the prior written
consent of Purchaser, it will not (i) sell, pledge, encumber,
assign, transfer, exchange or otherwise dispose of, or enter into
any contract, option or other arrangement or understanding with
respect to the sale, tender, pledge, encumbrance, assignment,
transfer, exchange or disposition of, any of the Acquired Company
Shares; (ii) acquire any additional shares of Common Stock or other
securities of any Acquired Company, or warrants, options or other
rights to purchase any shares of Common Stock or such other
securities; or (iii) grant any proxies with respect to the Acquired
Company Shares, deposit any Acquired Company Shares into a voting
trust or enter into a voting agreement with respect to any Acquired
Company Shares.
7.7 Further Assurances. At any time and from time to
------------------
time for a reasonable period of time after the Closing, at
Purchaser's reasonable request, Seller will duly execute,
acknowledge and deliver all such reasonable additional instruments
or documents considered necessary or desirable by Purchaser to
evidence, effect, finalize, record or perfect the transactions
contemplated by this Agreement, and will take such other action
consistent with the terms of this Agreement, at Seller's expense,
for the purpose of better assigning, transferring
33
<PAGE> 38
and conveying to Purchaser, or reducing to Purchaser's possession, any
or all of the Acquired Company Shares.
ARTICLE VIII
CONDITIONS TO CLOSING
---------------------
8.1 Conditions Precedent to Purchaser's Obligations. The
-----------------------------------------------
obligations of Purchaser to close under this Agreement are, at
Purchaser's option, subject to the fulfillment prior to (or
simultaneously with) Closing, or waiver in writing thereof, of each
of the following conditions:
(a) The representations and warranties made by
each Acquired Company and Seller shall have
been true and correct in all material respects
when made and shall be true and correct in all
material respects as of Closing, and each
Acquired Company and Seller shall have
delivered certification to Purchaser to that
effect;
(b) The covenants and agreements made by, and
other obligations of, each Acquired Company
and Seller contained herein shall have been
performed in all material respects to the
extent that such Acquired Company or Seller
was or is obligated to perform them prior to
or on the Closing Date, and each Acquired
Company and the Seller shall have delivered
certification to Purchaser to that effect;
(c) Each Acquired Company and Seller shall deliver
a certificate, dated the Closing Date, signed
by the President of such Acquired Company and
the President of the Seller, respectively,
certifying that the conditions specified in
this Section 8.1 have been fulfilled and that
no material adverse change has occurred in the
financial condition of such Acquired Company
from that shown in the Financial Statements;
(d) Each Acquired Company shall deliver a
certificate, dated the Closing Date, signed by
the Secretary, certifying that the Bylaws of
such Acquired Company attached thereto are
complete and correct;
(e) Each Acquired Company shall deliver a (i)
Certificate of Good Standing of such Acquired
Company from the Secretary of State of the
state of such Acquired Company's incorporation
and all states where such Acquired Company is
qualified to do business; and (ii) Articles of
Incorporation of such Acquired Company,
certified by the Secretary of State of the
state of such Acquired Company's
incorporation;
(f) Seller shall deliver a certificate, dated the
Closing Date, signed by the Secretary of
Seller, certifying that the Bylaws of Seller
attached thereto
34
<PAGE> 39
are complete and correct and an attached copy
of the minutes of meetings, or consents in
lieu of meetings, of Seller's Board of
Directors authorizing or ratifying the
transactions contemplated herein;
(g) Seller shall deliver a (i) Certificate of Good
Standing of Seller from the Secretary of State
of the state of Seller's incorporation and all
states where Seller is qualified to do
business; and (ii) Articles of Incorporation
of Seller, certified by the Secretary of State
of the state of Seller's incorporation;
(h) Seller shall have delivered to Purchaser
certificates evidencing the Acquired Company
Shares, duly endorsed in blank or accompanied
by stock powers duly executed in blank, in
form satisfactory to the Purchaser and
sufficient to permit the transfer of Acquired
Company Shares to Purchaser.
(i) Liberty shall be the sole owner of and have
sole title to that certain 254-foot twin screw
passenger vessel named M/V Yorktown Clipper,
Official Number 928931, which Vessel shall be
documented in the name of Liberty under the
laws of the United States, and Liberty shall
own such Vessel free and clear of any Liens.
(j) Republic shall be the sole owner of and have
sole title to that certain 207-foot twin screw
passenger vessel named M/V Nantucket Clipper,
Official Number 677685, which Vessel shall be
documented in the name of Republic under the
laws of the United States, and Republic shall
own such Vessel free and clear of any Liens.
(k) With respect to each of the Vessels, such
Vessel shall not be an actual, constructive,
agreed to or compromised total loss, there
shall have been no other loss, damage or
casualty to any Vessel which is not covered by
insurance (except applicable deductibles), and
such Vessel shall be in the same condition as
it was on the date of this Agreement, ordinary
wear and tear not affecting class excepted.
If there has been any such loss covered by
insurance which has not been fully repaired
prior to Closing, Seller and the Acquired
Company which is the owner of the Vessel
shall, concurrently with the Closing, assign
to Purchaser all insurance proceeds relating
thereto (except to the extent of amounts
allocable to repairs already performed by
Seller or such Acquired Company or for which
Seller or such Acquired Company is obligated
to pay), and shall pay to Purchaser any then
applicable deductible.
35
<PAGE> 40
(l) Each Acquired Company shall have delivered to
Purchaser duly executed resignations for the
officers and directors of such Acquired
Company as specified by Purchaser, effective
on or before the Closing Date.
(m) Each Acquired Company shall have delivered to
Purchaser copies of all Consents with respect
to such Acquired Company.
(n) The Acquired Companies shall have delivered to
Purchaser estoppel certificates executed on
behalf of each lessor under the Leases, in
form and substance reasonably satisfactory to
Purchaser.
(o) Each Acquired Company shall have delivered to
Purchaser Uniform Commercial Code Search
Reports of Form UCC-11 with respect to such
Acquired Company from the states and local
jurisdictions where the principal places of
business, the Real Property, and the other
properties and assets of such Acquired Company
are permanently located.
(p) The opinion of Stifel, Nicolaus & Company,
Incorporated, dated as of November 13, 1996
with respect to the transactions contemplated
by this Agreement from a financial point of
view, shall not have been withdrawn.
(q) All consents, approvals, authorizations or
orders of, or filings with, any governmental
agency required for the consummation of the
transactions contemplated herein shall have
been obtained or made;
(r) Seller shall deliver a written opinion of
Seller's and the Acquired Companies' legal
counsel, dated as of the Closing Date, in the
form of Exhibit C attached hereto;
(s) Each Acquired Company shall deliver such
Acquired Company's corporate minute books and
stock transfer records, any other books and
records of such Acquired Company, and the
corporate seal of such Acquired Company;
(t) No claim, action, suit, proceeding or
governmental investigation shall have been
threatened or instituted questioning or
challenging the validity of this Agreement or
the transactions contemplated hereby;
(u) Any and all other actions, consents, or
approvals, governmental or otherwise, which in
the reasonable opinion of Purchaser are
necessary in the circumstances (including,
without limitation, those things necessary to
permit or enable any Acquired Company upon or
after the consummation of the transactions
contemplated herein to conduct any part or all
of its business and activities in the manner
in which such activities and business
36
<PAGE> 41
have been conducted by such Acquired Company
prior to the Closing Date) shall have been
duly obtained; and
(v) Seller and the Acquired Companies shall
deliver such additional opinions,
certificates, consents and other documents as
Purchaser or counsel for Purchaser may
reasonably request.
(w) No event or events shall have occurred, or be
reasonably likely to occur, which,
individually or in the aggregate, have, or
could reasonably be expected to have, a
Material Adverse Effect on any of the Acquired
Companies.
8.2 Conditions Precedent to Seller's Obligations. The
--------------------------------------------
obligations of Seller to close under this Agreement are, at
Seller's option, subject to the fulfillment prior to (or, where
specifically so stated, simultaneously with) the Closing Date, or
waiver in writing thereof, of each of the following conditions:
(a) The representations and warranties made by
Purchaser shall have been true and correct in
all material respects when made and shall be
true and correct in all material respects as
of Closing, and Purchaser shall have delivered
certification to the Seller to that effect;
(b) The covenants and agreements made by, and
other obligations of, Purchaser contained
herein shall have been performed in all
material respects to the extent that Purchaser
was or is obligated to perform them prior to
or on the Closing Date, and Purchaser shall
have delivered certification to the Seller to
that effect;
(c) Purchaser shall deliver a certificate, dated
the Closing Date, signed by an authorized
officer of the Company, certifying that the
conditions specified in this Section 8.2 have
been fulfilled;
(d) Purchaser shall deliver a (i) Certificate of
Good Standing of Purchaser from the Secretary
of State of the state of its incorporation and
all states where it is qualified to do
business; and (ii) its Articles of
Incorporation certified by the Secretary of
State of the state of its incorporation;
(e) Purchaser shall deliver a certificate, dated
the Closing Date, signed by the Secretary of
Purchaser, certifying that the Bylaws of
Purchaser attached hereto are complete and
correct and an attached copy of the minutes of
meetings, or consents in lieu of meetings, of
Purchaser's Board of Directors authorizing or
ratifying the transactions contemplated
herein;
37
<PAGE> 42
(f) Purchaser shall deliver a written opinion of
Purchaser's legal counsel, dated as of the
Closing Date, in the form of Exhibit D
attached hereto;
(g) All consents, approvals, authorizations or
orders of, or filings with, any governmental
agency required for the consummation of the
transactions contemplated herein shall have
been obtained or made;
(h) Each Acquired Company shall have obtained all
Consents with respect to such Acquired
Company; and
(i) No claim, action, suit, proceeding or
governmental investigation shall have been
threatened or instituted questioning or
challenging the validity of this Agreement or
the transactions contemplated hereby.
ARTICLE IX
INDEMNIFICATION AND TAX MATTERS
-------------------------------
9.1 Survival. Subject to the limitations and other
--------
provisions of this Agreement, the representations and warranties of
the parties hereto contained herein shall survive the Closing and
shall remain in full force and effect only during the periods
specified below, regardless of any investigation made by or on
behalf of any of the parties hereto. Neither the period of
survival nor the liability of Seller with respect to Seller's
representations and warranties as set forth herein shall be reduced
by any investigation made at any time by or on behalf of Purchaser.
If written notice of a claim has been given in accordance with this
Agreement prior to the expiration of the applicable representations
and warranties by Purchaser to Seller, then the relevant
representations and warranties shall survive as to such claim,
until such claim has been finally resolved. Once the survival
period for a representation and warranty has ended, any and all
claims under such representation or warranty, not previously given
in accordance with this Agreement, shall be forever barred. The
following are the survival periods for the representations and
warranties:
(a) The representations and warranties of the
Seller contained in Section 5.1 shall survive
indefinitely;
(b) The representations and warranties of Seller
specified in Section 4.23, but only with
respect to Taxes which are federal income
taxes and Missouri state income taxes with
respect to which Seller and one or more of the
Acquired Companies are jointly and severally
liable, shall survive until the expiration of
all applicable statutes of limitations
periods, and if none then for a period of ten
(10) years;
38
<PAGE> 43
(c) All other representations and warranties of
Seller shall survive until a date thirty (30)
days after completion of the Audited Balance
Sheet, but in no event later than April 30,
1997; and
(d) The representations and warranties of
Purchaser shall survive until a date thirty
(30) days after completion of the Audited
Balance Sheet, but in no event later than
April 30, 1997, except for Purchaser's
obligation under Section 9.2(b)(ii) below.
9.2 Indemnification.
---------------
(a) Subject to the other terms and conditions of
this Agreement, Seller agrees to indemnify
Purchaser and any Affiliate thereof, and any
director, officer or employee of the foregoing
against and hold each of them harmless from
all Losses arising out of the breach of any
representation or warranty.
(b) Subject to the other terms and conditions of
this Agreement, Purchaser agrees to indemnify
Seller and any Affiliate thereof and any
employee, officer or director of the
foregoing, against and hold each of them
harmless from all Losses arising out of (i)
the breach of any representation or warranty
of Purchaser, and (ii) any obligation of
Seller to the International Airlines Travel
Agent Network in connection with any
obligation of any of the Acquired Companies
which relate to events occurring after the
Closing, with respect to the guaranty by
Seller of such obligations of the Acquired
Companies, or any obligation of Seller with
respect to an Acquired Company letter of
credit with respect to the Airline Recording
Corporation and the American Airlines Air/Sea
Fare and Marketing Agreement.
(c) Promptly, but in no event later than thirty
(30) days, after receipt by any party hereto
(the "Indemnified Person") of notice of
------------------
any demand, claim or circumstances which, with
lapse of time, would or might give rise to a
claim or the commencement (or threatened
commencement) of any action, proceeding or
investigation that may result in a Loss, the
Indemnified Person shall give notice thereof
(the "Claims Notice") to any party or
-------------
parties obligated to provide indemnification
pursuant to this Section 9.2 (the
"Indemnifying Party"). Any claim arising
------------------
under this Agreement, for which there is not a
timely Claims Notice given in accordance with
this Section 9.2(c), shall be forever barred.
The Claims Notice shall describe such
threatened claim or demand in reasonable
detail, and shall indicate the amount
(estimated, if necessary) of the Loss that has
been or may be suffered by the Indemnified
Person. The Indemnifying Party shall have the
right to direct, through counsel of its own
choosing, the defense or settlement of any
such claim or proceeding
39
<PAGE> 44
at its own expense. If the Indemnifying Party
elects to assume the defense of any such
claim, the Indemnified Person may participate
in such defense, but in such case the
expenses of the Indemnified Person shall be
paid by the Indemnified Person; provided,
--------
however, that if there exists or is
-------
reasonably likely to exist a conflict of
interest that would make it inappropriate in
the reasonable judgment of the Indemnified
Person, for the same counsel to represent
both the Indemnified Person and the
Indemnitor, then the Indemnified Person
shall be entitled to retain its own counsel,
in each jurisdiction for which the Indemnified
Person determines counsel is required, at the
expense of the Indemnitor. Such Indemnified
Person shall cooperate with the Indemnifying
Party in the defense or settlement thereof,
and shall make available to the Indemnifying
Party any documents or other papers within its
control that are necessary or appropriate for
such defense, and the Indemnifying Party shall
reimburse the Indemnified Person for all its
reasonable out-of-pocket expenses in
connection therewith. If the Indemnifying
Party elects to direct the defense of any such
claim, the Indemnified Person shall not pay,
or permit to be paid, any part of any claim
arising from such asserted liability unless
the Indemnifying Party consents in writing to
such payment or unless the Indemnifying Party,
subject to the last sentence of this Section
9.2(c), withdraws from the defense of such
asserted liability or unless a final judgment
from which no appeal may be taken by or on
behalf of the Indemnifying Party is entered
against the Indemnified Person for such
liability. If the Indemnifying Party shall
fall to defend, or if after commencing or
undertaking any such defense fails to
prosecute or withdraws from such defense, the
Indemnified Person shall have the right to
undertake the defense or settlement thereof,
at the Indemnifying Party's expense. If the
Indemnified Person assumes the defense of any
such claim or proceeding pursuant to this
Section 9.2(c) and proposes to settle such
claim or proceeding prior to a final judgment
thereon or to forego appeal with respect
thereto, then the Indemnified Person shall
give the Indemnifying Party prompt notice
thereof and the Indemnifying Party shall have
the right to participate in the settlement or
assume or reassume the defense of such claim
or proceeding.
(d) No claim for indemnification under Section
9.2(a) or Section 9.2(b) shall be made until
the aggregate amount of such claims equals or
exceeds One Hundred Thousand Dollars
($100,000).
(e) Except for the adjustment in the purchase
price as set forth in Section 2.3, Purchaser's
obligation under Section 2.8, Purchaser's
obligation under Section 11.17, Purchaser's
and Seller's obligations under Section 9.3 and
the obligations of Purchaser under the Closing
Note, the indemnification specified in this
Article IX shall be the sole remedy subsequent
to the
40
<PAGE> 45
closing for the persons specified in
Section 9.2(a) and 9.2(b) for breaches of the
representations and warranties under this
Agreement (including the items referenced in
Section 11.4)
(f) Without limiting any other remedy available to
any Indemnified Person, each Indemnified
Person that shall have suffered a Loss as to
which it shall be entitled to indemnification,
shall be entitled to satisfy, either in whole
or in part, such right to indemnification by
setting off or recouping the amount of such
Loss, or any portion thereof, against any
obligation that any Indemnified Person or any
Affiliate thereof shall have to pay money to
the Indemnifying Party.
(g) Notwithstanding any contrary provision in this
Agreement, in no event shall the aggregate
liability of Seller under this Agreement
(including the items in Section 11.4) exceed
the amount of the stock purchase price
actually paid under Section 2.2.
(h) Notwithstanding any contrary provision in this
Agreement, in no event shall Seller have any
liability for any matter to the extent the
Loss therefrom is reimbursed by insurance and
Purchaser agrees to keep all insurance
currently in force with respect to the
Acquired Companies in force following the
Closing.
9.3 Tax Matters.
-----------
(a) Preparation and Filing of Consolidated
--------------------------------------
Federal and State of Missouri Income Tax
----------------------------------------
Return for Seller and the Acquired
----------------------------------
Companies. Seller shall prepare and timely
---------
file a federal and State of Missouri
consolidated income tax return including
Seller and each of the Acquired Companies for
the period ending on the Closing Date and
shall pay the Tax liability with respect
thereto.
(b) Purchaser's Actions. Purchaser agrees
-------------------
that it will not make any election under Code
Section 338 with respect to the transactions
contemplated by this Agreement or take any
other action, or cause any of the Acquired
Companies to take any action, which might have
the affect of increasing any Tax liability of
Seller for any period ending on or prior to
the Closing Date.
(c) Amended Returns and Adjustments.
-------------------------------
Purchaser and each of the Acquired Companies
agree, that none of them shall permit or cause
the filing of any amended Tax Return, or the
agreement to any adjustment or assessment with
any taxing authority, of any Acquired Company,
for any period ending on or prior to the
Closing Date, if Seller may have any liability
41
<PAGE> 46
with respect thereto, either under this
Agreement or by operation of law, without the
prior written consent of Seller.
(d) Control of Future Audits and Other
----------------------------------
Proceedings. In the case of any audit,
-----------
examination or other proceeding
("Proceedings") with respect to Taxes for
which Seller is or may be liable pursuant to
this Agreement, Purchaser shall promptly
inform Seller, and shall afford Seller, at
Seller's expense, the opportunity to control
the conduct of such Proceeding. Purchaser
shall execute or cause to be executed powers
of attorney or other documents necessary to
enable Seller to take all actions desired by
Seller with respect to such Proceeding to the
extent such Proceeding may affect the amount
of Taxes for which Seller is liable pursuant
to this Agreement.
(e) Future Refunds. Any income Tax Refunds in
--------------
respect of a consolidated income Tax Return
year of Seller and any or all of the Acquired
Companies ending on or before the Closing
Date, paid at any time in the future, shall be
the sole property of Seller.
ARTICLE X
TERMINATION
-----------
If, pursuant to Sections 8.1 or 8.2, Purchaser or Seller,
respectively, should opt not to close this Agreement, such party or
parties, at its option, may terminate this Agreement without
further obligation or liability to the other party hereto,
effective upon giving ten business days' notice of such termination
to such other party and giving the other party a reasonable time,
not to exceed ten days, to satisfy such condition or conditions.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Expenses. Each party hereto shall be liable for
--------
any fees, expenses and costs incurred by it prior to the Closing
Date in connection with the transactions contemplated herein,
including but not limited to legal, accounting, investment banking
fees and expenses, appraisal fees and expenses.
11.2 Survival. All statements contained in any exhibit
--------
or schedule hereto, or in any certificate or other instrument
delivered by or on behalf of either party pursuant to this
Agreement, shall be deemed representations and warranties under
this Agreement. The representations, warranties and covenants made
by the parties hereto in this Agreement and in the exhibits or
schedules hereto or in any certificate or other instrument
delivered pursuant hereto shall survive the Closing Date as set
forth in Section 9.1.
42
<PAGE> 47
11.3 Headings. The headings set forth in this Agreement
--------
are for convenience only and do not qualify or affect the terms or
conditions hereof.
11.4 Schedules. The Schedules hereto and each
---------
certificate, exhibit, list, summary or other document provided or
delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby are incorporated herein by this
reference and made a part hereof.
11.5 Entire Agreement. This Agreement constitutes the
----------------
entire agreement and understanding between the parties hereto with
respect to the subject matters hereof.
11.6 Governing Law. Except as expressly provided herein
-------------
to the contrary, this Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Missouri,
without regard to the conflict of laws principles thereof.
11.7 Succession and Assignment. This Agreement shall be
-------------------------
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided,
however, that this Agreement may not be assigned by any party
without the prior written consent of the other parties, and any
such attempted assignment without such consent shall be null, void
and without effect.
11.8 Notices. All notices or other communications which
-------
are required or permitted hereunder shall be in writing and shall
be deemed to have been given and duly received (i) on the date
given if delivered personally or by cable, telegram, telex or
telecopy, or (ii) on the date received if mailed by overnight
express or registered or certified mail, postage prepaid and return
receipt requested, addressed to the persons at the addresses set
forth below (or to such other address as any party hereto shall
notify the other parties hereto); provided, however, that notice of
termination of this Agreement shall be effective only upon actual
delivery of such notice to the party entitled to the same:
If to Purchaser or, after Closing, an Acquired Company:
-------------------------------------------------------
Intrav, Inc.
7711 Bonhomme
St. Louis, Missouri 63105
Attention: Chief Financial Officer
Telecopier: (314) 727-2533
43
<PAGE> 48
With a copy to:
Peper, Martin, Jensen, Maichel and Hetlage
720 Olive Street, 24th Floor
St. Louis, Missouri 63101
Attention: John R. Short and Stuart E. Funderburg
Telecopier: (314) 621-4834
If to Seller or, prior to Closing, an Acquired Company:
-------------------------------------------------------
Clipper Cruise Line, Inc.
Republic Cruise Line, Inc.
Liberty Cruise Line, Inc.
Clipper Adventure Cruises, Inc. or
c/o Rosenblum, Goldenhersh, Silverstein & Zaft, P.C.
7733 Forsyth Boulevard, 4th Floor
St. Louis, Missouri 63105-1812
Attention: Jay Alan Nathanson and David V. Capes
Telecopier: (314) 726-6786
11.9 Amendments. No amendment, modification or waiver
----------
of any term or condition of this Agreement shall be valid or of any
force or effect unless made by written instrument signed by the
parties hereto, specifying the exact nature of such amendment,
modification or waiver. Any waiver by any party of any provision
of this Agreement shall not imply a subsequent waiver of that or
any other provision.
11.10 Severability. If any term or condition of this
------------
Agreement should be held invalid by a court, arbitrator or tribunal
of competent jurisdiction in any respect, such invalidity shall not
affect the validity of any other term or condition hereof. If any
term or condition of this Agreement should be held to be
unreasonable as to time, scope or otherwise by such a court,
arbitrator or tribunal, it shall be construed by limiting or
reducing it to the minimum extent so as to be enforceable under
then applicable law. The parties hereto acknowledge that they
would have executed this Agreement with any such invalid term or
condition excluded or with any such unreasonable term or condition
so limited or reduced.
11.11 Notification Respecting Closing. Any party shall
-------------------------------
promptly notify the other parties in the event that such party has
reason to believe that it cannot close the transactions
contemplated hereby.
11.12 Waivers. No such waiver or failure to insist upon
-------
strict compliance with any obligation, covenant, agreement or
condition shall operate as a waiver of, or an estoppel with respect
to, any subsequent or other failure.
44
<PAGE> 49
11.13 References. Unless otherwise specifically
----------
indicated, all references to Section and Article numbers refer to
Section and Article numbers in this Agreement and all references to
Schedules or Exhibits refer to Schedules or Exhibits, respectively,
to this Agreement. The words "herein," "hereof,", "hereunder," and
words of similar import refer to this Agreement as a whole and not
to any particular section or subdivision. Unless the context
clearly indicates, words used in the singular include the plural,
words in the plural include the singular, and the word "including"
mean "including but not limited to."
11.14 Specific Performance; Breach. The parties hereto
----------------------------
agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached, irreparable damages would occur, no adequate remedy at
law would exist and damages would be difficult to determine, and
that the parties shall be entitled to specific performance of the
terms hereof if the parties are entitled to such relief by law, in
addition to any other remedy at law or equity.
11.15 No Third-Party Beneficiaries. Nothing in this
----------------------------
Agreement shall confer any rights upon any person who or entity
which is not a party or an assignee of a party to this Agreement.
11.16 Counterparts. This Agreement may be executed in
------------
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same document.
11.17 Retention of Records. Purchaser agrees that it
--------------------
shall retain all of the books, records, and files of the Acquired
Companies for at least seven (7) years following the Closing and
shall provide Seller and its representatives access to the same,
and the right to photocopy the same, at the expense of Seller.
11.18 Article II Redetermination by Seller.
------------------------------------
Notwithstanding any provision to the contrary in Article II or
elsewhere in this Agreement, Seller shall have the right to
redetermine the amounts of the Closing Payment and the Closing
Repayment Amounts, subject to the following: (i) the sum of the
Closing Payment and the Closing Repayment Amounts shall at all
times equal Fifteen Million Two Hundred Thousand Dollars
($15,200,000) as adjusted in Section 2.3 of this Agreement; (ii)
following such redetermination, the tax basis of Seller in each of
the Acquired Companies and the excess loss account of Seller in
each of the Acquired Companies shall approximate zero; and (iii)
Seller shall provide Purchaser with written notice of the results
of any such redetermination within seventy-five (75) days following
the Closing Date.
[Signatures on Following Page]
45
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
INTRAV, INC.
By: /s/ Larry R. Nolan
---------------------------
Name: Larry R. Nolan
-------------------------
Title: President & CEO
------------------------
CLIPPER CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
REPUBLIC CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
46
<PAGE> 51
LIBERTY CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
CLIPPER ADVENTURE CRUISES, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: Secretary
------------------------
WINDSOR, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
47
<PAGE> 52
FIRST AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE
OF STOCK BY AND AMONG INTRAV, INC., CLIPPER CRUISE LINE, INC.,
REPUBLIC CRUISE LINE, INC., LIBERTY CRUISE LINE, INC.,
CLIPPER ADVENTURE CRUISES, INC. AND WINDSOR, INC.
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "First
Amendment") is dated as of December 18, 1996 and is by and among
the Purchaser, Clipper Cruise Line, Republic, Liberty, Clipper
Adventure Cruises and Seller.
WHEREAS, the parties to this First Amendment entered into a
Stock Purchase Agreement dated November 13, 1996 (the
"Agreement"); and
WHEREAS, all the parties to the Agreement desire to amend
the Agreement in accordance with the terms of this First
Amendment.
NOW, THEREFORE, in consideration of the premises and the
agreements and covenants contained herein, the parties hereto
agree as follows:
1. The defined terms used in this First Amendment shall
have the meanings ascribed to them in the Agreement unless otherwise
defined in this First Amendment.
2. The Agreement is amended by deleting Section 2.8 of the
Agreement with no substitution therefor. Seller represents and
warrants that the one-time deferred compensation obligation to
Paul H. Duynhouwer, as referenced in the deleted Section 2.8,
shall be paid by Clipper Cruise Line on or before 12/31/96.
3. As amended hereby, the parties hereto confirm that the
Agreement is in full force and effect as of the date hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
INTRAV, INC.
By: /s/ Larry R. Nolan
---------------------------
Name: Larry R. Nolan
-------------------------
Title: President and CEO
------------------------
CLIPPER CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
<PAGE> 53
REPUBLIC CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
LIBERTY CRUISE LINE, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
CLIPPER ADVENTURE CRUISES, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
WINDSOR, INC.
By: /s/ Wayne L. Smith II
---------------------------
Name: Wayne L. Smith II
-------------------------
Title: President
------------------------
- 2 -
