EXHIBIT 10.54
STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT is entered into as of
January 22, 2002, by and among Classic Vacation Group, Inc., a New York
corporation ("SELLER"), GVG Technology, Inc. ("TECHNOLOGY"), a Delaware
corporation and a wholly owned subsidiary of the Seller ("GVG TECH"),
Globetrotters Vacations, Inc. (formerly known as MTI Vacations, Inc. and as
GVGAC No. 1, Inc.), a Delaware corporation ("COMPANY"), and Private Label
Travel, Inc., a Delaware corporation ("BUYER").
WHEREAS, the Seller owns all of the issued and outstanding
capital stock of the Company which consists of 1,000 shares of Common Stock of
the Company (the "SHARES");
WHEREAS, GVG Tech owns certain computer hardware as detailed on
Schedule 1 hereto (the "HARDWARE")
WHEREAS, the Seller desires to sell and the Buyer desires to
purchase all of the Shares, and GVG Tech desires to sell and the Buyer desires
to purchase the Hardware, all at the price and upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
1. DEFINITIONS
For all purposes of this Purchase Agreement, certain
capitalized terms specified in Exhibit B shall have the meanings set forth in
that Exhibit B, except as otherwise expressly provided.
2. SALE AND PURCHASE OF STOCK AND HARDWARE
2.1. SALE AND PURCHASE OF STOCK AND HARDWARE
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, the Seller
and GVG Tech agree to sell to the Buyer, and the Buyer agrees to purchase from
the Seller, (i) the Shares, and (ii) the Hardware, all at the purchase price
specified in SECTION 2.2.
2.2. PURCHASE PRICE
The aggregate purchase price for the Shares and the Hardware
shall be Ten Dollars ($10.00) (the "PURCHASE PRICE").
2.3. PAYMENT AT THE CLOSING
At the Closing, the Buyer shall deliver to the Seller, in
immediately available lawful U.S. funds, the Purchase Price.
2.4. GVG TECH AND TRIPS PRO
GVG Tech agrees to grant to the Company a royalty-free,
warranty-free, exclusive license, in substantially the form attached hereto as
Exhibit F, to use the TRIPS PRO software (the "LICENSE"). The License shall
have a perpetual term. ALL WARRANTIES UNDER THE LICENSE ARE DISCLAIMED,
INCLUDING WARRANTIES OF MERCHANTIBILITY OR FITNESS AND AGGREGATE LIABILITY FOR
THE LICENSOR UNDER THE LICENSE SHALL NOT EXCEED THE PRICE PAID FOR THE
LICENSE. The Buyer agrees to purchase and GVG Tech agrees to sell, on the
first anniversary of the Closing Date, the TRIPS PRO software assets currently
owned by Technology for an aggregate purchase price of Ten Dollars ($10.00)
(the "Tech Purchase"), provided, however, that the Buyer agrees to complete
the Tech Purchase as promptly as practicable at any time prior to the first
anniversary of the Closing Date upon thirty days written notice by Seller.
Until the Tech Purchase is completed, Seller and GVG Tech agree not to allow
any Encumbrances to exist on the software that is the subject of the License.
2.5. TRANSFER OF CERTAIN ASSETS
The parties agree that all assets and liabilities of the Company related to
Hyatt Vacations shall be transferred, conveyed and assigned prior to Closing
pursuant to that certain Xxxx of Sale, Assignment and Assumption Agreement
(the "ASSIGNMENT AND ASSUMPTION AGREEMENT") included as Exhibit C hereto, and
shall be accounted for on the financial reports, books and records of, Classic
Custom Vacations, Inc. If necessary to accurately reflect the assets and
liabilities of the Company related to Hyatt Vacations at Closing, the parties
shall make a mutually satisfactory post-closing adjustment to the assets and
liabilities transferred to Classic Custom Vacations to ensure that all the
assets and liabilities related to Hyatt Vacations as of the Closing Date have
been transferred to Classic Custom Vacations. The parties further agree that
any receivables or payables existing solely between the Seller (or any of its
Affiliates) and the Company as of December 31, 2001, shall be forgiven by the
Seller (or caused by the Seller to be forgiven in the case of its Affiliates)
and the Company at Closing.
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3. ADDITIONAL UNDERTAKINGS AND COVENANTS
The Buyer on the one hand, and the Seller, on the other hand,
hereby covenant and agree with each other as follows:
3.1. CONSENTS AND APPROVALS
(a) The Buyer, the Company, GVG Tech and the Seller shall
take all measures reasonably necessary or advisable to secure such consents,
authorizations and approvals of governmental and supragovernmental authorities
and of private persons or entities with respect to the transactions
contemplated by this Purchase Agreement, and to the performance of all other
obligations of such parties hereunder, as may be required by any applicable
statute or regulation of the United States or any country, state or other
jurisdiction or by any Agreement of any kind whatsoever to which the Buyer,
the Company or the Seller is a party or by which the Buyer, the Company, GVG
Tech or the Seller is bound.
(b) The Buyer, the Company, GVG Tech and the Seller shall
(i) cooperate in the filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to
applicable statutes, rules, regulations or orders of any governmental or
supragovernmental authority in connection with the transactions contemplated
by this Purchase Agreement and (ii) use their respective good faith efforts to
cause any applicable waiting periods thereunder to expire and any objections
to the transactions contemplated hereby to be withdrawn before the Closing.
3.2. OPERATION OF BUSINESS OF COMPANY
(a) Except as contemplated by this Purchase Agreement or as
reasonably required to carry out its obligations hereunder, the Company shall
use commercially reasonable efforts to, through the Closing Date, (i) preserve
its business organization and its present relationships with customers,
suppliers, consultants, employees and any other persons having business
relations with them; and (ii) maintain all of its Assets in customary repair
and condition.
(b) Except as contemplated by this Purchase Agreement or as
reasonably required to carry out its obligations hereunder, the Company shall,
through the Closing Date, conduct its business only in the Ordinary Course of
Business and, in addition, not: (i) issue any capital stock or any options,
warrants or other rights to subscribe for or purchase any of its capital stock
or any securities convertible into or exchangeable for their capital stock;
(ii)
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declare, set aside or pay any dividend or distribution with respect to its
capital stock to stockholders or its Affiliates; (iii) directly or indirectly
redeem, purchase or otherwise acquire any of its capital stock; (iv) effect a
split, reclassification or other change in or of any of its capital stock; (v)
amend its certificate or articles of incorporation or its bylaws; (vi) borrow
or agree to borrow any funds, or directly or indirectly guarantee or agree to
guarantee the obligations of others; (vii) enter into any Agreement which may
have a material effect on its business and operations; (viii) place, or allow
to be placed, an Encumbrance on any of its Assets; (ix) cancel any
indebtedness owing to the Company or any Claims which the Company may possess,
or waive any rights of substantial value; (x) sell, assign or transfer any
Intellectual Property; (xii) sell or otherwise dispose of any interest in any
Asset; (xiii) commit any act or omit to do any act, or engage in any activity
or transaction or incur any obligation (by conduct or otherwise), which
(individually or in the aggregate) reasonably could be expected to have a
material adverse effect on its business or Assets; or (xiv) make any loan or
advance to any stockholder, officer or director of Company or to any other
person, firm or corporation.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer as follows:
4.1. AUTHORIZATION
The execution, delivery and performance by Company of this
Purchase Agreement and all other Documents contemplated hereby, the
fulfillment of and compliance with the respective terms and provisions hereof
and thereof, and the consummation by Company of the transactions contemplated
hereby and thereby, do not and will not require any consent or approval of the
Seller that has not been or will not be, as applicable, obtained.
4.2. BINDING OBLIGATION
This Purchase Agreement constitutes a valid and binding
obligation of Company, enforceable in accordance with its terms; and each
Document to be executed by Company pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and
binding obligation of Company, enforceable in accordance with its terms.
4.3. ORGANIZATION
The Company is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
full corporate power and authority to own, lease and use its Assets and to
carry
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on its business as presently conducted. The Company owns no capital stock or
interest in any other entity.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to Buyer as follows:
5.1. TITLE TO COMMON STOCK
The Seller is, and on the Closing Date will be, the lawful
owner of all of the Shares. The Seller has, and on the Closing Date will have,
good, valid and marketable title, free and clear of all Encumbrances, to the
Shares, with full right and lawful authority to sell and transfer the Shares
to the Buyer pursuant to this Agreement.
5.2. AUTHORITY AND CAPACITY
The Seller has full legal right, capacity, power and authority
(corporate or otherwise) to execute this Purchase Agreement and to consummate
the transactions contemplated hereby.
5.3. BINDING OBLIGATION
This Purchase Agreement constitutes a valid and binding
obligation of the Seller, enforceable in accordance with its terms. Each
Document to be executed by the Seller pursuant hereto, when executed and
delivered in accordance with the provisions hereof, will be a valid and
binding obligation of the Seller, enforceable in accordance with its terms.
5.4. TAXES
The Seller has duly filed on behalf of the Company all Company
Tax Returns required to be filed by Company on or before the Closing Date with
respect to all applicable Taxes. No penalties or other charges are or will
become due with respect to any of the Company Tax Returns as the result of the
late filing thereof. All of the Company Tax Returns are (or, in the case of
returns becoming due after the date hereof and on or before the Closing Date,
will be) true and complete in all material respects. The Company will not
incur any post-Closing liability for Taxes solely as a result of being an
entity that has been consolidated with the Seller for Tax reporting purposes.
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5.5. EMPLOYEE BENEFIT MATTERS
Other than as a result of actions taken by any of the
shareholders of Buyer in their capacity as managers of the Company, or any
inaction in such capacity by shareholders of Buyer, the Company will not incur
any post-Closing liability as a result of any participation prior to the
Closing in any multiemployer plan as defined in Section 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or as a result of
any plan subject to Title IV of ERISA which covered any employees of the
Company (or any person, firm or corporation which was under common control
within the meaning of Section 4001(b) of ERISA with the Company during such
period of common control).
5.6. BALANCE SHEET
Attached as Schedule 6.6(a) is a copy of the unaudited balance
sheet of the Company dated December 31, 2001 (the "Balance Sheet"). The
Company has title to all Assets reflected on the Balance Sheet. Neither the
Seller nor the Officers or Directors of the Company set forth on Schedule
6.6(b) (the "OFFICERS OR DIRECTORS") has entered into any contract or incurred
any liability on behalf of the Company that is not disclosed on the Balance
Sheet or has not otherwise been disclosed to one of the Shareholders of the
Buyer. Other than the actions contemplated by this Agreement, since the date
of the Balance Sheet (December 31, 2001), neither the Seller nor the Officers
or Directors has taken any action or caused the Company to take any action
that would result in acquisition or disposition by the Company of any assets
or liabilities.
6. REPRESENTATIONS AND WARRANTIES OF GVG TECH
GVG Tech hereby represents and warrants to Buyer as follows:
6.1. TITLE TO HARDWARE
GVG Tech is, and on the Closing Date will be, the lawful owner
of the Hardware. GVG Tech has, and on the Closing Date will have, good, valid
and marketable title, free and clear of all Encumbrances, to the Hardware,
with full right and lawful authority to sell and transfer the Hardware to the
Buyer pursuant to this Agreement.
6.2. AUTHORITY AND CAPACITY
GVG Tech has full legal right, capacity, power and authority
(corporate or otherwise) to execute this Purchase Agreement and to consummate
the transactions contemplated hereby.
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6.3. BINDING OBLIGATION
This Purchase Agreement constitutes a valid and binding
obligation of GVG Tech, enforceable in accordance with its terms. Each
Document to be executed by GVG Tech pursuant hereto, when executed and
delivered in accordance with the provisions hereof, will be a valid and
binding obligation of GVG Tech, enforceable in accordance with its terms.
7. REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Seller as
follows:
7.1. AUTHORITY AND CAPACITY
The Buyer has full legal right, capacity, power and authority
(corporate or otherwise) to execute this Purchase Agreement and to consummate
the transactions contemplated hereby.
7.2. BINDING OBLIGATION
This Purchase Agreement constitutes a valid and binding
obligation of the Buyer, enforceable in accordance with its terms. Each
Document to be executed by the Buyer pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and
binding obligation of the Buyer, enforceable in accordance with its terms.
8. RESTRICTED SECURITIES
The Buyer represents, warrants and covenants as follows:
8.1. NO REGISTRATION UNDER THE SECURITIES ACT
The Buyer understands that the Shares to be purchased by it
under this Purchase Agreement have not been registered under the Securities
Act, in reliance upon exemptions contained in the Securities Act or
interpretations thereof, and cannot be offered for sale, sold or otherwise
transferred unless such Common Stock being acquired hereunder subsequently is
so registered or qualifies for exemption from registration under the
Securities Act.
8.2. ACQUISITION FOR INVESTMENT
The Shares are being acquired under this Purchase Agreement by
the Buyer in good faith solely for its own account, for investment and not
with
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a view toward resale or other distribution within the meaning of the
Securities Act. The Shares will not be offered for sale, sold or otherwise
transferred by the Buyer without either registration or exemption from
registration under the Securities Act.
8.3. EVALUATION OF MERITS AND RISKS OF INVESTMENT
The Buyer has such knowledge and experience in financial and
business matters that the Buyer is capable of evaluating the merits and risks
of Buyer's investment in the Shares being acquired hereunder. The Buyer
understands and is able to bear any economic risks associated with such
investment (including, without limitation, the necessity of holding the Shares
for an indefinite period of time, inasmuch as the Shares have not been
registered under the Securities Act). The Buyer has obtained such information
as he or she considered necessary or appropriate in order to evaluate a
proposed investment in the Company.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligations of the Seller under this Purchase Agreement are
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, and failure to satisfy any such condition shall excuse
and discharge all obligations of the Seller to carry out the provisions of
this Agreement, unless such failure is agreed to in writing by the Seller:
9.1. REPRESENTATIONS AND WARRANTIES
The representations and warranties made by the Buyer in this
Purchase Agreement or in any Document Furnished by the Buyer pursuant to this
Purchase Agreement shall be true and complete when made and on and as of the
Closing Date as though such representations and warranties were made on and as
of such date, except for any changes expressly permitted by this Agreement.
9.2. PERFORMANCE
The Buyer shall have performed and complied with all Agreements
and conditions required by this Purchase Agreement to be performed or complied
with by the Buyer prior to the Closing Date.
9.3. LEGAL PROCEEDINGS
No action or proceeding by or before any governmental authority
shall have been instituted or threatened (and not subsequently dismissed,
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settled or otherwise terminated) which is reasonably expected to restrain,
prohibit or invalidate the transactions contemplated by this Agreement, other
than an action or proceeding instituted or threatened by the Seller.
9.4. BUYER'S CERTIFICATE
The Buyer shall have delivered the Seller a certificate, dated
as of the Closing Date and executed by the Buyer, certifying to the
fulfillment of the conditions set forth in SECTIONS 10.1 through 10.3.
9.5. VAIL RESORTS AGREEMENT
Vail Resorts Management Company ("VRMC") shall have agreed to
the assignment to and assumption by the Company of the rights, duties and
obligations of GVG Tech under (i) the Standard Engagement Agreement dated
August 31, 1999, as amended, by and among GVG Tech and VRMC, (ii) the End User
Software License Agreement dated August 31, 1999, as amended, by and among GVG
Tech and VRMC and (iii) the Software Support Agreement dated August 31, 1999,
as amended, by and among GVG Tech and VRMC.
9.6. HYATT VACATIONS AGREEMENT
The Hyatt Corporation shall have agreed to the assignment and
assumption of the Company's rights, duties and obligations under the Agreement
between Hyatt Corporation and Globetrotters Vacations, Inc. effective January
1, 2000, with respect the Hyatt Vacations Program by Classic Custom Vacations,
Inc.
9.7. DOCUMENTS AT CLOSING
All documents required to be furnished by the Buyer to the
Seller prior to or at the Closing shall have been so furnished.
9.8. LANDLORD CONSENTS
LaSalle National Trust, N.A. as trustee ("LANDLORD"), under
that certain Office Lease dated April 30, 1998, between Landlord and Company
shall have provided written consent to the change of control transaction under
this Purchase Agreement and released Seller of all duties, obligations and
liabilities, if any, under the Lease. Landlord shall have consented under that
certain Office Lease dated April 30, 1998, between Landlord and Technology to
assignment and assumption of Technology's rights, duties and obligations under
such lease to the Company.
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9.9. CASH COLLATERAL FOR CERTAIN OUTSTANDING LETTERS OF CREDIT
The Buyer shall have provided cash collateral to the Seller in
immediately available lawful U.S. funds equal in amount to 103% of the
issuance amounts of those certain letters of credit listed on Exhibit D to the
Agreement (the "LETTERS OF CREDIT") and pursuant to the Pledge Agreement also
included in Exhibit D to the Agreement, with such cash collateral, less any
fees or bank charges levied on the Seller directly related to the Letters of
Credit, to be returned to the Buyer as promptly as practicable upon
termination or expiration of such Letters of Credit.
9.10. INSURANCE
The Buyer shall have provided written evidence of sufficient
property, casualty and professional liability insurance for the Company in
effect as of the Closing Date (as the Seller will cancel such policies related
to the Company as of the Closing Date).
9.11. HYATT OUTSOURCING AGREEMENT
The Seller shall have received a Hyatt Outsourcing Agreement in
substantially the form attached hereto as Exhibit E hereto executed by the
Company.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of the Buyer under this Purchase Agreement are
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, and failure to satisfy any such condition shall excuse
and discharge all obligations of the Buyer to carry out the provisions of this
Agreement, unless such failure is agreed to in writing by the Buyer:
10.1. REPRESENTATIONS AND WARRANTIES
The representations and warranties made by Seller, GVG Tech and
the Company in this Purchase Agreement or in any Document Furnished by Seller,
GVG Tech and/or the Company pursuant to this Purchase Agreement shall be true
and complete when made, and on and as of the Closing Date as though such
representations and warranties were made on and as of such date, except for
any changes expressly permitted by this Agreement.
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10.2. PERFORMANCE
The Seller, GVG Tech and the Company shall have performed and
complied with all Agreements and conditions required by this Purchase
Agreement to be performed or complied with prior to the Closing Date.
10.3. LEGAL PROCEEDINGS
No action or proceeding by or before any governmental authority
shall have been instituted or threatened (and not subsequently settled,
dismissed or otherwise terminated) which is reasonably expected to restrain,
prohibit or invalidate the transactions contemplated by this Purchase
Agreement other than an action or proceeding instituted or threatened by the
Buyer.
10.4. SELLER'S CERTIFICATE
The Seller shall have delivered to the Buyer a certificate,
dated as of the Closing Date and executed by the Seller, certifying to the
fulfillment of the conditions specified in SECTIONS 10.1 through 10.3.
10.5. HYATT OUTSOURCING AGREEMENT
The Buyer shall have received a Hyatt Outsourcing Agreement in
substantially the form attached hereto as Exhibit E hereto executed by the
Company.
10.6. DOCUMENTS AT CLOSING
All documents required to be Furnished by the Seller to the
Buyer prior to or at the Closing shall have been so Furnished.
10.7. ASSET TRANSFERS
The transfers described in Section 2.5 of this Purchase
Agreement shall have been completed.
10.8. RESIGNATIONS OF DIRECTORS AND OFFICERS
The Buyer shall have received the written resignations of all
of the members of the Board of Directors and Officers of Company (effective as
of the Closing).
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10.9. MATERIAL ADVERSE CHANGE
Other than as contemplated herein, including but not limited to
the transfers described in Section 2.5 hereof and the cash collateral
described in Section 9.9 hereof, regardless of the materiality thereof, since
the date hereof there shall have been no material adverse change in the
financial condition, assets, or liabilities of the Company.
11. CLOSING
11.1. CLOSING OF SALE AND PURCHASE
Subject to the terms and conditions of this Purchase Agreement,
the Closing shall take place at the offices of the Seller on the Closing Date.
11.2. DELIVERIES BY THE SELLER
At the Closing, the Seller shall deliver to the Buyer the
following:
(a) certificates representing the Shares being sold to the
Buyer pursuant to SECTION 2.1, duly endorsed in blank or with duly executed
stock powers attached (though such certificates may be delivered within 3 days
of Closing, if acceptable to Buyer);
(b) the certificates of incumbency and specimen signatures
of the signatory officers of Seller;
(c) a copy of the certificate of incorporation the Seller;
(d) a copy of the text of the resolutions adopted by the
board of directors of Seller authorizing the execution,
delivery and performance of this Agreement and the
consummation of all of the transactions contemplated by
this Agreement; and
(e) the certificate required by SECTION 10.4.
11.3. DELIVERIES BY COMPANY
At the Closing, Company shall deliver to the Buyer:
(a) the certificates of incumbency and specimen signatures
of the signatory officers of Company;
(b) a copy of the certificate of incorporation the Company
and a recently dated good standing certificate from the
Company's jurisdiction of formation;
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(c) a copy of the text of the resolutions adopted by the
board of directors of Company authorizing the execution,
delivery and performance of this Agreement and the
consummation of all of the transactions contemplated by
this Agreement; and;
(d) the minute book, the articles of incorporation and
bylaws of Company and all other books and records
reasonably requested by Buyer.
11.4. DELIVERIES BY GVG TECH
At the Closing, GVG Tech shall deliver to the Company:
(a) the Hardware;
(b) a copy of the text of the resolutions adopted by the
board of directors of GVG Tech authorizing the
execution, delivery and performance of this Agreement
and the consummation of all of the transactions
contemplated by this Agreement;
(c) a copy of the certificate of incorporation of GVG Tech;
and
(d) the certificates of incumbency and specimen signatures
of the signatory officers of GVG Tech.
11.5. DELIVERIES BY BUYER
At the Closing, the Buyer shall deliver the following:
(a) to the Seller, cash in the amount of the Purchase Price;
(b) the certificates of incumbency and specimen signatures
of the signatory officers of Buyer;
(c) a copy of the text of the resolutions adopted by the
board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement and the
consummation of all of the transactions contemplated by
this Agreement; and
(d) a copy of the certificate of incorporation the Buyer;
(e) the certificate required by SECTION 9.4.
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12. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
12.1. SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants, indemnities and
other Agreements made by any party to this Purchase Agreement herein or
pursuant hereto shall also be deemed made on and as of the Closing Date as
though such representations, warranties, covenants, indemnities and other
Agreements were made on and as of such date, and all such representations,
warranties, covenants, indemnities and other Agreements shall survive the
Closing for a period of one year and any investigation, audit or inspection at
any time made by or on behalf of any party hereto.
12.2. AGREEMENT OF SELLER TO INDEMNIFY
Subject to the conditions and provisions of this SECTION 12,
the Seller hereby agrees to indemnify, defend and hold harmless the Buyer and
any other Buyer Indemnified Persons from and against and in respect of all
Claims asserted against, resulting to, imposed upon or incurred by (i) the
Buyer (whether such Claims are by, against or relate to Company, GVG Tech, the
Seller or any other party, including, without limitation, a governmental
entity), directly or indirectly, by reason of or resulting from any
misrepresentation or breach of any representation or warranty, or
noncompliance with conditions or other Agreements, given or made by the Seller
in this Purchase Agreement or in the Exhibits attached hereto or in any
Document Furnished by or on behalf of the Seller pursuant to this Purchase
Agreement, or (ii) the Buyer or any other Buyer Indemnified Person for Claims
related to Friendly Holidays, Inc. resulting from any actions taken by
Friendly Holidays, Inc. prior to January 1, 2000. Notwithstanding the
foregoing, the Buyer shall not be entitled to bring a claim for
indemnification under this Section 12.2 following the one-year anniversary of
the Closing Date, provided, however, that Seller may notify Buyer that,
provided settlement of any obligations hereunder, Seller is in a position to
liquidate (the "Notice of Liquidation") in which case Buyer shall not be
entitled to bring a claim for indemnification under this Section 12.2
following the date thirty days after receipt of the Notice of Liquidation by
the Buyer. The aggregate liability not including the Assignment Expense (as
defined below) of the Seller for all Claims under this Section 12 shall not
exceed Two Hundred and Fifty Thousand Dollars ($250,000). In addition, for a
period of 60 days following Closing (the "Seller Period"), Seller agrees to
seek consent to assignment at the expense, if any, of Buyer, of Seller's
rights under that certain Software License with FlexiInternational Software,
Inc. (the "Flexi License") to the Company. Immediately after the Seller
Period, if Seller has failed to secure consent to assignment of such rights
under the Flexi License, for a 30-day period (the "Buyer Period") Buyer shall
have the right to seek consent to assignment, at the expense, if any, of Buyer
of such rights under the Flexi
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License or obtain a license for a replacement product performing the function
served by the software under the Flexi License. During such 90-day period
(including the Seller Period and the Buyer Period) but not thereafter, Seller
agrees to indemnify the Buyer or any other Buyer Indemnified Person for half
of the cost, if any, up to $50,000, related to the assignment of rights, or
the failure or inability to assign the rights, or cost of a replacement
product performing the function served by the software under the Flexi
License, to the Company under the Flexi License.
12.3. AGREEMENT OF THE BUYER TO INDEMNIFY
Subject to the conditions and provisions of this SECTION 12,
the Buyer hereby agrees to indemnify, defend and hold harmless the Seller and
any other Seller Indemnified Persons from and against and in respect of all
Claims asserted against, resulting to, imposed upon or incurred by the Seller
(whether such Claims are by, against or relate to the Buyer or any other
party, including, without limitation, a governmental entity), directly or
indirectly, by reason of or resulting from any misrepresentation or breach of
any representation or warranty, or noncompliance with any conditions or other
Agreements, given or made by the Buyer in this Purchase Agreement or in the
Exhibits or in any Document Furnished by or on behalf of the Buyer pursuant to
this Purchase Agreement. Notwithstanding the foregoing, the Seller shall not
be entitled to bring a claim for indemnification under this Section 12.3
following the one-year anniversary of the Closing Date or following the
delivery of a Notice of Liquidation by Seller. The aggregate liability of the
Buyer for all Claims under this Section 13 shall not exceed Two Hundred and
Fifty Thousand Dollars ($250,000).
12.4. CONDITIONS OF INDEMNIFICATION
The obligations and liabilities of the Seller and the Buyer
hereunder with respect to their respective indemnities pursuant to this
SECTION 12, resulting from any Claim shall be subject to the following terms
and conditions:
(a) The indemnified party shall give prompt written notice
to the indemnifying party of any Claim which is asserted against, resulting
to, imposed upon or incurred by such indemnified party and which may give rise
to liability of the indemnifying party pursuant to this SECTION 12, stating
(to the extent known or reasonably anticipated) the nature and basis of such
Claim and the amount thereof.
(b) The indemnified party may engage counsel or
representatives of its own choosing with respect to any such Claim, such
representation (including the compromise or settlement of any Claim) to be
undertaken on behalf of and for the account and risk of the indemnifying
party. In the event
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the indemnified party elects not to undertake such defense by its own
representatives, the indemnified party shall give prompt written notice of
such election to the indemnifying party, and the indemnifying party will
undertake the defense thereof by counsel or other representatives designated
by it whom the indemnified party determines in writing to be satisfactory for
such purposes. The consent of the indemnified party to the indemnifying
party's choice of counsel or other representative shall not be unreasonably
withheld.
(c) In the event that any Claim shall arise out of a
transaction or cover any period or periods wherein the Seller, on the one
hand, and the Buyer, on the other hand, shall each be liable hereunder for
part of the liability or obligation arising therefrom, then the parties shall,
each choosing its or his own counsel and bearing its or his own expense,
defend such Claim, and no settlement or compromise of such Claim may be made
without the joint consent or approval of the Buyer and the Seller (which
consent shall not be unreasonably withheld), except where the respective
liabilities and obligations of the Buyer and the Seller are clearly allocable
or attributable on the basis of objective facts.
12.5. REMEDIES CUMULATIVE
The remedies provided herein and under the Escrow Agreement
shall be cumulative and shall not preclude the assertion by the Seller or the
Buyer of any other rights or the seeking of any other remedies against the
other, or their respective successors or assigns.
13. POST-CLOSING MATTERS
(a) At the Seller's request and to the extent permitted by
the Code, at the Seller's sole expense, the Buyer and the Company agree to (A)
cooperate fully in the preparation and filing of an election under Code
Section 338(h)(10) with respect to the sale of the Common Stock hereunder and
(B) take all such action as is required in order to give effect to the
election for state, local, and foreign Tax purposes to the greatest extent
permitted by law. The Buyer and the Company agree not to amend any filings
related to the election without consent of the Seller. Seller shall be
responsible for, and shall indemnify and hold Buyer and the Company harmless
from, all Taxes owed by, attributable to or secured against the Company,
resulting from the Company being a member of an affiliated group filing a
consolidated, combined or unitary tax return, including, without limitation,
any taxes attributable to the deemed sale and liquidation of the Company
resulting from the filing of a Section 338(h)(10) election pursuant to Section
13(a) hereof, or the other transactions contemplated hereby, for all periods
ending on or before the Closing Date and that portion of any taxable period
through the Closing Date (a "STRADDLE PERIOD"). Taxes for a Straddle Period
shall be determined from the books and
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records of the company, and shall be apportioned between the pre-closing and
post-closing periods of the taxable period as though the taxable year of the
Company terminated at the close of business on the Closing Date. Seller,
Company and Buyer hereby agree to use all commercially reasonable efforts to
cooperate and assist one another as necessary for the filing of any tax return
related to the Company, the completion of any audit related to the Company or
the resolution of any other Tax-related issue. Buyer agrees to cause the
Company to maintain accurate and complete accounting and personnel books and
records for a period of time not shorter than the statute of limitations
applicable to tax or employee-related actions.
(b) As of the Closing Date, the Seller shall terminate (a)
all insurance coverage for the Company including, but not limited to, auto
insurance, workers compensation, travel agent errors and omissions insurance
and all property and casualty insurance coverage, and (b) any and all
professional memberships entered into on behalf of the Company by the Seller,
including but not limited to, the Company's membership in the United States
Tour Operators Association.
(c) For a period of one year following the Closing Date,
Company shall continue to host CMS software at no charge for the Seller.
(d) For a period of 60 days from the Closing Date, the
Seller shall use commercially reasonable efforts to maintain the following
services and functions for the benefit of the Company: (i) certain letters of
credit as reflected on Exhibit D hereto; and (ii) to the extent permissible
under such agreements, agreements with Delta Air Lines, United Air Lines,
Hertz, Sabre, Amadeus and MCI Communications. The Buyer agrees to cause
Company to cease use of all such services and functions within 60 days of the
Closing Date. During the 60-day period in which the Seller continues to
provide such services and functions, the Buyer agrees to promptly reimburse
the Seller upon request for payment of costs, fees and expenses related to
such services and functions, either in advance of services rendered or, in the
discretion of the Seller, to pay directly any charges related to such services
and functions in response to invoices from third-party service providers.
(e) Buyer agrees to, within 15 days of Closing, apply for
prompt transfer of the Airline Reporting Corporation appointment and use
commercially reasonable efforts to effect transfer of such appointment as
promptly as possible.
(f) Seller agrees to continue medical and dental insurance
coverage for the employees of the Company at Closing through January 31, 2002.
Buyer agrees to set up medical and dental insurance for the employees of
Company effective on or prior to March 1, 2002. Prior to set-up of the Buyer's
plan, employees of Company may elect for coverage under the COBRA
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statute. Buyer agrees to cause Company to collect any fees related thereto and
remit to Seller. Buyer agrees to cause the Company to reimburse Seller for the
administrative fees related to such medical and dental insurance plan
including the administrative costs related to the claims run-off during the
90-day run-off period, upon presentment of invoices therefor.
(g) The participation of the employees of the Company in the
Classic Vacation Group, Inc. 401(k) plan ceases at Closing. Buyer will set up
a replacement 401(k) plan within 60 days of Closing and the accounts of such
employees will be transferred from the Classic Vacation Group, Inc. 401(k)
plan into such new plan. If Buyer's 401(k) plan is not set up within 60 days
of Closing, Seller may, at its election, choose to treat such employees as
terminated rather than transfer the accounts of such employees into a Buyer
401(k) plan. Buyer agrees to cause the Company to reimburse Seller for any
administrative fees related to employees remaining under the Classic Vacation
Group, Inc. 401(k) plan, including the cost of transferring such employees to
such new plan, upon presentment of an invoice therefor. During the Transition
Period, Seller shall not charge the Company for corporate overhead expenses
associated with the provision of the foregoing.
(h) Seller shall not renew the letters of credit benefiting
the Company, which may be outstanding as of the Closing Date.
(i) For a period of 30 days following the Closing, the Buyer
and the Company agree to take or maintain the steps necessary to host the
email addresses currently used by Island Resort Tours, Inc.
(j) The Buyer and the Company agree that as of the Closing
Date Company employee Xx. Xxxxx Xxxxxxxxx will no longer be employed by the
Company and will instead be employed by Classic Custom Vacations. The Buyer
and the Company agree that, for a period of one year from and after the
Closing, neither Buyer nor the Company shall solicit Xx. Xxxxxxxxx either
directly or indirectly for employment with the Company or with any other
entity.
14. TERMINATION
14.1. TERMINATION
This Purchase Agreement may be terminated at any time before
the Closing Date under any one or more of the following circumstances:
(a) by the mutual consent of the parties hereto;
(b) by the Buyer or the Seller, by written notice of
termination to the other parties hereto, if the Closing has not occurred by
January 23, 2002;
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provided, that, Buyer shall be prohibited from terminating this Agreement
pursuant to this Section 14.1(b) if Buyer has failed to comply with all of
those conditions set forth in Article 9 for which Buyer is responsible and
Seller shall be prohibited from terminating this Agreement pursuant to this
Section 14.1(b) if Sellers and the Company have failed to comply with those
conditions set forth in Article 10.
14.2. EFFECT OF TERMINATION
In the event this Purchase Agreement is terminated as provided
in this SECTION 14, this Purchase Agreement shall forthwith become wholly void
and of no effect, and the parties shall be released from all future
obligations hereunder, except that Section 15.3, 15.6 and 15.8 shall survive
indefinitely. The parties hereto shall have any and all remedies to enforce
such obligations provided at law or in equity (including, without limitation,
specific performance).
15. MISCELLANEOUS
15.1. ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further Documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Purchase
Agreement.
15.2. NO BROKERS
Each of the parties hereto represents and warrants to the other
parties (and to each of them) that such party has not engaged any broker,
finder or agent in connection with the transactions contemplated by this
Purchase Agreement and has not incurred (and will not incur) any unpaid
liability to any broker, finder or agent for any brokerage fees, finders' fees
or commissions, with respect to the transactions contemplated by this Purchase
Agreement. Seller has engaged Dresdner Kleinwort Xxxxxxxxxxx as a financial
advisor on matters not specifically related to this Agreement but neither
Buyer nor Company shall incur any liability related to such engagement. Each
party agrees to indemnify, defend and hold harmless each of the other parties
from and against any and all claims asserted against such parties for any such
fees or commissions by any persons purporting to act or to have acted for or
on behalf of the indemnifying party.
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15.3. EXPENSES
Each party hereto shall pay its own expenses incident to this
Purchase Agreement and the transactions contemplated hereunder, including all
legal and accounting fees and disbursements.
15.4. ENTIRE AGREEMENT; AMENDMENT
This Purchase Agreement, including the Exhibits and other
Documents referred to herein or Furnished pursuant hereto, constitutes the
entire Agreement among the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior oral or written Agreements,
commitments or understandings with respect to the matters provided for herein.
No amendment, modification or discharge of this Purchase Agreement shall be
valid or binding unless set forth in writing and duly executed and delivered
by the party against whom enforcement of the amendment, modification, or
discharge is sought.
15.5. WAIVER
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Purchase Agreement or
under any other Documents Furnished in connection with or pursuant to this
Purchase Agreement shall impair any such right, power or privilege or be
construed as a waiver of any default or any acquiescence therein. No single or
partial exercise of any such right, power or privilege shall preclude the
further exercise of such right, power or privilege, or the exercise of any
other right, power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.
15.6. CONSENT TO JURISDICTION
(a) This Purchase Agreement and the duties and obligations
of the Buyer and the Seller hereunder and under each of the Documents referred
to herein shall be enforceable against any Buyer or the Sellers in the courts
of the United States of America and of the States of California and Illinois.
For such purpose, the Buyer and the Seller hereby irrevocably submit to the
non-exclusive jurisdiction of such courts, and agrees that all claims in
respect of this Purchase Agreement and such other Documents may be heard and
determined in any of such courts.
(b) The Buyer and the Seller hereby irrevocably agree that a
final judgment of any of the courts specified above in any action or
proceeding relating to this Purchase Agreement or to any of the other
Documents referred
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to herein or therein shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
15.7. SEVERABILITY
If any part of any provision of this Purchase Agreement or any
other Agreement or document given pursuant to or in connection with this
Purchase Agreement shall be invalid or unenforceable in any respect, such part
shall be ineffective to the extent of such invalidity or unenforceability
only, without in any way affecting the remaining parts of such provision or
the remaining provisions of this Purchase Agreement.
15.8. GOVERNING LAW
This Purchase Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Delaware
(excluding the choice of law rules thereof).
15.9. NOTICES
All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Purchase Agreement shall be in writing and shall be
hand delivered, sent by overnight courier or mailed by first-class, registered
or certified mail, return receipt requested, postage prepaid, or transmitted
by telegram, telecopy or telex, addressed as follows:
(i) If to the Buyer:
Private Label Travel, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
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(ii) If to the Company:
Globetrotters Vacations, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
(iii) If to the Seller:
Classic Vacation Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to:
X. Xxxxx Xxxx
Xxxxx & Xxxxxxx LLP
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000) 000-0000
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above,
or which shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answerback
being deemed conclusive, but not exclusive, evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
15.10. HEADINGS
Section headings contained in this Purchase Agreement are
inserted for convenience of reference only, shall not be deemed to be a part
of this Purchase Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
15.11. EXECUTION IN COUNTERPARTS
To facilitate execution, this Purchase Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the
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signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall
be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
Agreement. It shall not be necessary in making proof of this Purchase
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
15.12. LIMITATION ON BENEFITS
The covenants, undertakings and agreements set forth in this
Purchase Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto and their respective successors,
heirs, executors, administrators, legal representatives and permitted assigns,
except that the agreements set forth in SECTION 12 also shall be for the
benefit of, and enforceable by, the Buyer Indemnified Persons, the Seller
Indemnified Persons and their respective successors, heirs, executors,
administrators, legal representatives or permitted assigns.
15.13. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Purchase Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Purchase Agreement, or have caused this Purchase Agreement to be duly executed
on their behalf, as of the day and year first above written.
BUYER:
PRIVATE LABEL TRAVEL, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
COMPANY:
GLOBETROTTERS VACATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
SELLER:
CLASSIC VACATION GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
GVG TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
