FIRST AMENDMENT TO THE
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT to the Stock Purchase Agreement (the "Amendment")
is entered into as of November 21, 1997, by and among TRAVEL SERVICES
INTERNATIONAL, INC., a Delaware corporation, or its permitted assigns ("TSI" or
the "PURCHASER"), SHIP `N SHORE CRUISES, INC., a Florida corporation ("Ship `n
Shore"), SNS COACHLINE, INC., an Alaska corporation ("Coachline"), CRUISE TIME,
INC., a New York corporation ("Cruise Time"), CRUISE MART, INC., a Florida
corporation ("Cruise Mart"), SNS TRAVEL MARKETING, INC., a Florida corporation
("SNS") (each of Ship `n Shore, Coachline, Cruise Time, Cruise Mart and SNS
being referred to herein as a "Company" and, collectively, as the "Companies"),
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
R E C I T A L S
A. The parties hereto entered into a Stock Purchase Agreement (the
"AGREEMENT") dated as of October 28, 1997.
B. Section 12.1 of the Agreement provides that the Agreement may be
amended by a written instrument executed by each of the parties thereto.
C. The parties hereto desire to clarify the rights and obligations of
the parties under the Agreement and amend the terms of the Agreement in the
manner set forth in this Amendment.
A G R E E M E N T
In consideration of the foregoing premises and the mutual promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged hereby, the parties hereto, intending to be
bound legally, hereby agree as follows:
1. The recitals set forth above are true and correct in all respects
and are incorporated herein and made a part hereof.
2. All capitalized terms used in this Amendment without definition
shall have the meanings assigned thereto in the Agreement.
3. Section 1.2(a)(1) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(1) Except for transfers to immediate family members
who agree to be bound by the restrictions set forth in this
SECTION 1.2 (or trusts for the benefit of family members of
the Seller, the trustees of which so agree), during the period
(the "POOLING RESTRICTION PERIOD") beginning on the date
hereof and ending such
time as financial statements covering at least thirty (30)
days of post-acquisition combined operations of TSI and the
Companies have been published (which Pooling Restriction
Period shall not exceed six months), except as provided on
SCHEDULE 1.2 attached hereto, the Seller shall not sell,
assign, exchange, transfer, distribute, pledge, encumber or
otherwise dispose of (in each case, a "TRANSFER") any shares
of TSI Stock received by the Seller hereunder. Following the
Pooling Restriction Period, the Seller shall be free from the
restrictions of this SECTION 1.2(A)(1) to transfer the shares
of TSI Stock held by Seller, so long as such transfers are in
accordance with the Future Sale Procedures set forth in
SECTION 1.2(A)(2). The certificates evidencing the TSI Stock
delivered to the Seller pursuant to this Agreement shall bear
a legend substantially in the form set forth below and
containing such other information as TSI may deem necessary or
appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED, PLEDGED,
DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF, AND THE
ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED
SALE, ASSIGNMENT, EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE,
DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION, OTHER THAN IN
ACCORDANCE WITH SECTIONS 1.2 AND 2.10 OF THAT CERTAIN STOCK
PURCHASE AGREEMENT DATED AS OF OCTOBER 28, 1997, BY AND AMONG
ISSUER, SHIP `N SHORE CRUISES, INC., SNS COACHLINE, INC.,
CRUISE TIME, INC., CRUISE MART, INC., SNS TRAVEL MARKETING,
INC. AND THE SELLER NAMED THEREIN. UPON THE WRITTEN REQUEST OF
THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE
THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE
TRANSFER AGENT) AFTER THE DATES SPECIFIED IN SUCH AGREEMENT.
4. Section 11.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
"11.1 SURVIVAL. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained
herein or in any instrument or document delivered or to be delivered
pursuant to this Agreement, shall survive the execution of this
Agreement and the Closing notwithstanding any investigation heretofore
or hereafter made by or on behalf of any party hereto; provided,
however, that (a) the agreements and covenants set forth in this
Agreement shall survive and continue until all obligations set forth
therein shall have been performed and satisfied; and (b) all
representations and warranties shall survive and continue until the one
year anniversary of the Closing Date."
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5. All other terms and conditions of the Agreement shall remain
unchanged and in full force and effect.
6. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the undersigned have each executed this
Amendment as of the date first above-written.
PURCHASER:
TRAVEL SERVICES INTERNATIONAL, INC.:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief
Operating Officer
SELLER:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
THE COMPANIES:
SHIP `N SHORE CRUISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name:__________________________________________
Title:_________________________________________
SNS COACHLINE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name:__________________________________________
Title:_________________________________________
3
CRUISE TIME, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name:__________________________________________
Title:_________________________________________
CRUISE MART, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name:__________________________________________
Title:_________________________________________
SNS TRAVEL MARKETING, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name:__________________________________________
Title:_________________________________________
4
---------------------------------------------------
STOCK PURCHASE AGREEMENT
BY AND AMONG
TRAVEL SERVICES INTERNATIONAL, INC.,
SHIP 'N SHORE CRUISES, INC.
SNS COACHLINE, INC.
CRUISE TIME, INC.
CRUISE MART, INC.
SNS TRAVEL MARKETING, INC.
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DATED AS OF OCTOBER 28, 1997
---------------------------------------------------
TABLE OF CONTENTS
PAGE NO.
ARTICLE I
1.1 Purchase and Sale of Capital Stock.............................1
1.2 TSI Stock......................................................1
ARTICLE II
2.1 Organization, Qualification, etc...............................1
2.2 Subsidiaries...................................................1
2.3 Capital Stock..................................................1
2.4 Corporate Record Books.........................................1
2.5 Title to Stock.................................................1
2.6 Options and Rights.............................................1
2.7 No Bonus Shares................................................1
2.8 Predecessor Status, etc........................................1
2.9 Spin-off by the Companies......................................1
2.10 Agreement to Retain Shares....................................1
2.11 Certain Accounting Matters....................................1
2.12 Authorization, Etc............................................1
2.13 No Violation..................................................1
2.14 Financial Statements..........................................1
2.15 Accounts Payable; Accounts Receivable; Customer
Deposits........................................................1
2.16 Employees.....................................................1
2.17 Absence of Certain Changes....................................1
2.18 Contracts.....................................................1
2.19 True and Complete Copies......................................1
2.20 Title and Related Matters.....................................1
2.21 Litigation....................................................1
2.22 Tax Matters...................................................1
2.23 Compliance with Law and Applicable Government and
other Regulations..............................................1
2.24 ERISA and Related Matters.....................................1
2.25 Intellectual Property.........................................1
2.26 Environmental Matters.........................................1
2.27 Dealings with Affiliates......................................1
2.28 Banking Arrangements..........................................1
2.29 Insurance.....................................................1
2.30 Consents......................................................1
2.31 Investment Representations....................................1
2.32 Inventories...................................................1
2.33 Brokerage.....................................................1
2.34 Improper and Other Payments...................................1
i
2.35 Financial Condition at Closing................................1
2.36 Disclosure....................................................1
2.37 Significant Suppliers; Material Plans and
Commitments.....................................................1
ARTICLE III
3.1 Corporate Organization, etc....................................1
3.2 Authorization, Etc.............................................1
3.3 No Violation...................................................1
3.4 Governmental Authorities.......................................1
3.5 Issuance of TSI Stock..........................................1
ARTICLE IV
4.1 Regular Course of Business.....................................1
4.2 Amendments.....................................................1
4.3 Capital Changes; Pledges.......................................1
4.4 Dividends......................................................1
4.5 Capital and Other Expenditures.................................1
4.6 Cash and Cash Equivalents......................................1
4.7 Borrowing; RELEASE OF GUARANTEE................................1
4.8 Other Commitments..............................................1
4.9 Interim Financial Information..................................1
4.10 Full Access and Disclosure....................................1
4.11 Confidentiality...............................................1
4.12 Breach of Agreement...........................................1
4.13 Fulfillment of Conditions Precedent...........................1
ARTICLE V..................................................................1
5.1 Confidentiality................................................1
5.2 Full Access and Disclosure.....................................1
ARTICLE VI
6.1 Further Assurances.............................................1
6.2 Pooling Accounting; Tax Matters................................1
6.3 Agreement to Defend............................................1
6.4 Consents.......................................................1
6.5 No Solicitation or Negotiation.................................1
6.6 No Termination of Seller's Obligations by
Subsequent Incapacity, Etc.....................................1
6.7 Employment Agreements..........................................1
6.8 Public Announcements...........................................1
6.9 Deliveries After Closing.......................................1
6.10 Non-Competition Covenant......................................1
6.11 Non-disclosure; Confidentiality...............................1
6.12 Registration Rights...........................................1
6.13 Affiliates; Pooling Agreements................................1
ii
6.14 Advice of Changes.............................................1
ARTICLE VII
7.1 Representations and Warranties; Covenants and
Agreements......................................................1
7.2 No Injunction..................................................1
7.3 Third Party Consents...........................................1
7.4 Regulatory Approvals...........................................1
7.5 No Material Adverse Change.....................................1
7.6 Accountants' Letter............................................1
7.7 Opinion of Seller's Counsel....................................1
7.8 Employment Agreements..........................................1
7.9 Delivery of the Company Share Certificates.....................1
7.10 Creditor Consents.............................................1
7.11 Affiliate Agreements..........................................1
7.13 Lease of Facility............................................1
7.13 Certificate of Insurance......................................1
ARTICLE VIII
8.1 Representations and Warranties; Performance....................1
8.2 No Injunction..................................................1
8.3 Purchase Consideration.........................................1
8.4 Employment Agreements..........................................1
8.5 Loan Commitment................................................1
ARTICLE IX
9.1 Closing........................................................1
9.2 Closing Deliveries.............................................1
ARTICLE X
10.1 Methods of Termination........................................1
10.2 Procedure Upon Termination....................................1
ARTICLE XI
11.1 Survival......................................................1
11.2 Indemnification by the Seller.................................1
11.3 Indemnification by the Purchaser..............................1
11.4 Third-Party Claims............................................1
ARTICLE XII
12.1 Amendment and Modification....................................1
12..2 Entire Agreement.............................................1
12..3 Certain Definitions..........................................1
12.4 Notices.......................................................1
12.5 Exhibits and Schedules........................................1
12.6 Waiver of Compliance; Consents................................1
iii
12.7 Assignment....................................................1
12.8 Governing Law.................................................1
12.9 Consent to Jurisdiction; Service of Process...................1
12.10 Injunctive Relief............................................1
12.11 Headings.....................................................1
12.12 Pronouns and Plurals.........................................1
12.13 Construction.................................................1
12.14 Dealings in Good Faith; Best Efforts.........................1
12.15 Binding Effect...............................................1
12.16 Delays or Omissions..........................................1
12.17 Severability.................................................1
12.18 Expenses.....................................................1
12.19 Attorneys' Fees..............................................1
12.20 Counterparts.................................................1
iv
SCHEDULES
1.2 Allowed Pledge of TSI Shares
2.1 Jurisdictions of Qualification
2.2 Subsidiaries; Investments; Interests
2.13 Violations; Third Party Consents
2.14(a) Additional Liabilities
2.14(b) Liabilities covered by Insurance
2.15(a) Accounts Payable
2.15(b) Accounts Receivable
2.15(c) Customer Deposits
2.16 Employee Matters
2.18(a) Contracts
2.20 Real and Personal Property
2.21 Litigation
2.23(a) Permits and Licenses
2.23(b) Industry Affiliations and Memberships
2.24 ERISA, Benefit Plans and Other Matters
2.25(d) Software
2.26 Environmental Matters
2.27 Affiliated Transactions
2.28 Banking Arrangements
2.29 Insurance
2.30 Consents; Regulatory Approvals
2.31 Significant Customers and Material Plans and Commitments
6.13 Affiliates
7.4 Regulatory Approvals
7.10 Creditor Consents
v
EXHIBITS
2.1 The Companies' Articles of Incorporation, as amended, and By-laws
2.14 Financial Statements
6.7 Form of Employment Agreement
6.13 Form of Affiliate Letter Agreement
7.7 Opinion of Seller's Counsel
vi
STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of October 28,
1997, by and among TRAVEL SERVICES INTERNATIONAL, INC., a Delaware corporation,
or its permitted assigns ("TSI" or the "PURCHASER"), SHIP 'N SHORE CRUISES,
INC., a Florida corporation ("Ship 'n Shore"), SNS COACHLINE, INC., an Alaska
corporation ("Coachline"), CRUISE TIME, INC., a New York corporation ("Cruise
Time"), CRUISE MART, INC., a Florida corporation ("Cruise Mart"), SNS TRAVEL
MARKETING, INC., a Florida corporation ("SNS") (each of Ship 'n Shore,
Coachline, Cruise Time, Cruise Mart and SNS being referred to herein as a
"Company" and, collectively, as the "Companies"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who
constitutes the holder of all of the issued and outstanding shares of capital
stock of each of the Companies (the "SELLER").
WHEREAS, the Seller owns all of the issued and outstanding shares of
capital stock of each of the Companies;
WHEREAS, TSI desires to purchase and acquire from the Seller, and the
Seller desires to sell, transfer and deliver to TSI, all of the issued and
outstanding shares of capital stock of each of the Companies, upon the terms and
subject to the conditions set forth herein;
WHEREAS, upon the closing of the transactions contemplated by this
Agreement, the Companies shall be and become a wholly-owned subsidiaries of TSI;
WHEREAS, for federal income tax purposes, it is intended that the
transaction will qualify as a reorganization under the provisions of Section
368(a) (1)(B)of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for financial accounting purposes, it is intended that the
transaction will be accounted for as a pooling of interests transaction under
GAAP (as defined in SECTION 12.3); and
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived hereby and the premises, representations, warranties, covenants and
agreements herein contained, TSI, Seller and each of the Companies hereby agree,
intending to be legally bound, as follows:
ARTICLE I
PURCHASE OF CAPITAL STOCK
1.1 PURCHASE AND SALE OF CAPITAL STOCK .
Subject to the terms and conditions of this Agreement, Seller
agrees to sell, transfer and deliver to the Purchaser, and the Purchaser
agrees to purchase, acquire and accept delivery from Seller, all of the
issued and outstanding shares of capital stock (the "COMPANY Shares"),
of each of the Companies.
Upon the sale, transfer and delivery to the Purchaser by the
Seller of the Company Shares at the Closing (as such term is defined in
SECTION 9.1 hereof), and in consideration therefor, TSI shall deliver to
the Seller Certificates evidencing that number of shares of Common
Stock, par value $.01 per share, of TSI (the "TSI STOCK") determined by
dividing (i) $10,550,000, by (ii) the average closing price of a share
of TSI Stock as quoted on the Nasdaq National Market for the five
consecutive trading days which immediately precede the date of this
Agreement, as reported (absent manifest error in the printing thereof)
by the Wall Street Journal (Eastern Edition).
1.2 TSI STOCK. The Purchaser shall issue the TSI Stock to the Seller
subject to the conditions and restrictions set forth in this SECTION 1.2.
(a) Restrictions on Transfer
(1) Except for transfers to immediate family members who
agree to be bound by the restrictions set forth in this SECTION
1.2 (or trusts for the benefit of family members of the Seller,
the trustees of which so agree), during the period (the "POOLING
RESTRICTION PERIOD") beginning on the date hereof and ending such
time as financial statements covering at least thirty (30) days
of post-acquisition combined operations of TSI and the Companies
have been published, except as provided on SCHEDULE 1.2 attached
hereto, the Seller shall not sell, assign, exchange, transfer,
distribute, pledge, encumber or otherwise dispose of (in each
case, a "TRANSFER") any shares of TSI Stock received by the
Seller hereunder. Following the Pooling Restriction Period, the
Seller, in the aggregate, may transfer up to 50% of the shares of
TSI Stock, so long as such transfer is in accordance with the
Future Sale Procedures set forth in SECTION 1.2(A)(2). Following
the date which is six (6) months after the Closing Date, the
Seller shall be free from the restrictions of this SECTION
1.2(A)(1) to transfer the remaining shares of TSI Stock held by
such Seller, so long as such transfers are in accordance with the
Future Sale Procedures set forth in SECTION 1.2(A)(2). The
certificates evidencing the TSI Stock delivered to the Seller
pursuant to this Agreement shall bear a legend substantially in
the form set forth below and containing such other information as
TSI may deem necessary or appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED,
PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF,
AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY
ATTEMPTED SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT OR OTHER
DISPOSITION, OTHER THAN IN ACCORDANCE WITH SECTIONS 1.2
AND 2.10 OF THAT CERTAIN STOCK PURCHASE AGREEMENT DATED AS
OF OCTOBER __, 1997, BY AND AMONG ISSUER, SHIP 'N SHORE
CRUISES, INC., SNS COACHLINE, INC., CRUISE TIME, INC.,
CRUISE MART, INC., SNS TRAVEL MARKETING, INC. AND THE
SELLER NAMED THEREIN. UPON THE WRITTEN REQUEST OF THE
HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE
THIS
2
RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH
THE TRANSFER AGENT) AFTER THE DATES SPECIFIED IN SUCH
AGREEMENT.
(2) Except for transfers to family members who agree to
bound by the restrictions set forth in this SECTION 1.2 (or
trusts for the benefit of the Seller or their family members, the
trustees of which so agree), regardless of whether or not
transfers of such shares are restricted pursuant to the terms of
subsection (1) above, during the two-year period commencing on
the Closing Date, none of the Seller shall sell, assign,
exchange, transfer, distribute or otherwise dispose of, in any
transaction or series of transactions, more than 5,000 shares of
TSI Stock (in either case, a "Future Sale"), except in accordance
with this SECTION 1.2(A)(2). If Seller desires to make a Future
Sale, the Seller shall first provide written notice thereof to
TSI. Promptly after receipt of such notice by TSI, TSI shall
designate in writing to the Seller the names and other pertinent
information of at least two investment banks or market makers who
actively make a market of TSI's stock and through whom the Future
Sale may be made (subject to the volume restrictions in (i)
above); PROVIDED, HOWEVER, that the terms of such Future Sale
(including commissions) shall be competitive with what Seller
would receive in the absence of this SECTION 1.2(A)(2) from a
non-discount brokerage firm.
(3) No Seller shall transfer any shares of the TSI Stock
at any time if such transfer would constitute a violation of any
federal or state securities or "blue sky" laws, rules or
regulations (collectively, "SECURITIES LAWS"), or a breach of the
conditions to any exemption from registration of the TSI Stock
under any such Securities Laws, or a breach of any undertaking or
agreement of Seller entered into with TSI pursuant to such
Securities Laws or in connection with obtaining an exemption
thereunder, and TSI shall not transfer upon its books any shares
of TSI Stock unless prior thereto TSI shall have received an
opinion of counsel to Seller, in form and substance satisfactory
to TSI, of counsel, reasonably satisfactory to TSI, that such
transfer is in compliance with this SECTION 1.2 and the
Securities Laws.
(4) For purposes of this Agreement (and the restrictions
set forth in this SECTION 1.2), the term "TSI Stock" shall mean
and include (i) the shares of TSI Stock issued, granted, conveyed
and delivered to Seller pursuant to SECTION 1.1 hereof (the
"PRIMARY SHARES"), and (ii) any and all other or additional
shares of capital stock of TSI issued or delivered by TSI with
respect to the shares of TSI Stock described in clause (i)
hereof, including without limitation any shares of capital stock
of TSI issued or delivered with respect to such shares as a
result of any stock split, stock dividend, stock distribution,
recapitalization or similar transaction (the "ADDITIONAL
SHARES").
3
(b) REPRESENTATIONS. Seller understands that, in connection with
the issuance of the TSI Stock, TSI is relying upon the representations and
warranties being made by Seller to TSI in SECTION 2.31 hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANIES
The Seller and each of the Companies, jointly and severally, make the
following representations and warranties to the Purchaser, each of which shall
be deemed material (and the Purchaser, in executing, delivering and consummating
this Agreement, has relied and will rely upon the correctness and completeness
of each of such representations and warranties notwithstanding independent
investigation, if any):
2.1 ORGANIZATION, QUALIFICATION, ETC.
(a) Each of the Companies is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation (which are set forth on SCHEDULE 2.1 attached hereto) with full
corporate power and authority to carry on its business as it is now being
conducted and proposed to be conducted, and to own, operate and lease its
properties and assets.
(b) Each of the Companies is duly qualified or licensed to do
business in good standing in the jurisdictions set forth on SCHEDULE 2.1
attached hereto, those being every jurisdiction in which the conduct of such
Company's business, the ownership or lease of its properties, or the
transactions contemplated by this Agreement, require it to be so qualified,
registered or licensed and the failure to be so qualified or licensed would have
a Material Adverse Effect (as defined in SECTION 12.3).
(c) True, complete and correct copies of each of the Companies'
articles of incorporation and by-laws, as presently in effect, are attached
hereto as EXHIBIT 2.1.
2.2 SUBSIDIARIES. Except as set forth on SCHEDULE 2.2, none of the
Companies has any Subsidiaries (as defined in SECTION 12.3) nor any investment
or other interest in, or any outstanding loan or advance to or from, any Person
(as defined in SECTION 12.3), including any officer, director, shareholder or
Affiliate (as defined in SECTION 12.3).
2.3 CAPITAL STOCK. SCHEDULE 2.3 attached hereto sets forth as of the
date hereof the authorized capital stock of each of the Companies. The stock
record books of each of the Companies have been delivered to the Purchaser for
inspection prior to the date hereof and is complete and correct, and all
requisite Federal and State documentary stamps have been affixed thereon and
canceled. The Company Shares constitute all of the issued and outstanding shares
of capital stock of each of the Companies; and all of the Company Shares are
owned beneficially and of record by the Seller.
4
2.4 CORPORATE RECORD BOOKS. The corporate minute books of the Companies
have been made available to the Purchaser, are complete and correct and contain
all of the proceedings of the shareholders and directors of each of the
Companies.
2.5 TITLE TO STOCK. All of the issued and outstanding shares of the
capital stock of the Companies are, and immediately prior to the transfer to
Purchaser at the Closing will be, owned by the Seller (as set forth on SCHEDULE
1.1 hereto), are duly authorized, validly issued and fully paid, nonassessable,
and are free of all Liens (as defined in SECTION 12.3). Upon delivery of the
purchase price to the Seller at the Closing, Seller will convey, and the
Purchaser will own and hold, good and marketable title to the Company Shares
immediately prior to the Closing owned by Seller, free and clear of all Liens or
contractual restrictions or limitations whatsoever.
2.6 OPTIONS AND RIGHTS. There are no outstanding subscriptions, options,
warrants, rights, securities, contracts, commitments, understandings or
arrangements under which any of the Companies is bound or obligated to issue any
additional shares of its capital stock or rights to purchase shares of its
capital stock. There are no agreements, arrangements or understandings between
the Seller and/or any of the Companies and any other Person (as defined in
SECTION 12.3) regarding the Company Shares (or the transfer, disposition,
holding or voting thereof). The Seller does not have, or hereby waives, any
preemptive or other right to acquire shares of Company Shares that the Seller
has or may have had on the date hereof.
2.7 NO BONUS SHARES. None of the Company Shares were issued pursuant to
awards, grants or bonuses.
2.8 PREDECESSOR STATUS, ETC.. There are no predecessor companies of any
of the Companies, nor have any of the Companies acquired material assets of
another entity. None of the Companies have at any time been a subsidiary or
division of another corporation or a part of an acquisition which was later
rescinded.
2.9 SPIN-OFF BY THE COMPANIES. There has not been any sale or spin-off
of materials assets of any of the Companies, any subsidiary thereof or any
person or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with any
Company within the preceding two (2) years.
2.10 AGREEMENT TO RETAIN SHARES.
(a) Seller agrees not to transfer, sell or otherwise dispose of
or direct or cause the sale, transfer or other disposition of, or reduce
Seller's risk relative to, any of the Company Shares (except for the conversion
into TSI Stock in the transactions contemplated hereby) or TSI Stock held by
Seller or on Seller's behalf, whether owned on the date hereof or after
acquired, within the thirty (30) days prior to the Closing Date.
(b) Seller further agrees not to transfer, sell or otherwise
dispose of, or direct or cause the sale, transfer or other disposition of, or
reduce Seller's risk relative to, any TSI Stock held by Seller or on the
Seller's behalf or received by the Seller or on the Seller's behalf in or as a
result of the transactions contemplated hereby or otherwise, until after the
date (the "Expiration
5
Date") that is the earlier of the date that TSI shall have publicly released a
report in the form of a quarterly earnings report, registration statement filed
with the Securities and Exchange Commission (the "SEC"), a report filed with the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing, statement or
public announcement which includes the combined financial results (including
combined sales and net income) of TSI and the Companies for a period of at least
thirty (30) days of combined operations of TSI and the Companies following the
Closing Date.
2.11 CERTAIN ACCOUNTING MATTERS. To their knowledge, Neither the Seller,
nor any of the Companies, nor any of their affiliates, have taken or agreed to
take any action that (without regard to any action taken or agreed to be taken
by TSI or any of its affiliates) would prevent TSI from accounting for the
transactions contemplated hereby as pooling of interests business combinations
in accordance with GAAP and the criteria of Accounting Principles Board Opinion
No. 16 and the regulations of the SEC.
2.12 AUTHORIZATION, ETC. Each of the Companies has full power and
authority and the Seller has full capacity to enter into this Agreement and the
agreements and documents contemplated hereby and perform their respective
obligations hereunder and thereunder. The execution, delivery and performance of
this Agreement and all other agreements and transactions contemplated hereby
have been duly authorized by the Board of Directors and shareholders of each of
the Companies and no other corporate proceedings on its part are necessary to
authorize this Agreement and the transactions contemplated hereby. The Seller is
entering into this Agreement on the Seller's own volition, free from any undue
influence or coercion. Upon execution and delivery of this Agreement by the
parties hereto this Agreement and all other agreements contemplated hereby shall
constitute the legal, valid and binding obligation of each of the Companies and
the Seller party hereto, enforceable against each such party in accordance with
their respective terms.
2.13 NO VIOLATION. The execution and delivery by each of the Companies
and the Seller of this Agreement, and any and all other agreements contemplated
hereby, and the fulfillment of and compliance with the respective terms hereof
and thereof by the Companies and the Seller do not and will not, except as set
forth on SCHEDULE 2.13 attached hereto, (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) constitute a default or event of
default under (with due notice, lapse of time or both), (c) result in the
creation of any Lien upon the capital stock or assets of any of the Companies
pursuant to, (d) give any third party the right to accelerate any obligation
under, (e) result in a violation of, or (f) require any authorization, consent,
approval, exemption or other action by or notice to any court or Authority (as
defined in SECTION 12.3) pursuant to, the articles of incorporation or by-laws
of any of the Companies or any Regulation (as defined in SECTION 12.3), Order
(as defined in SECTION 12.3) or Contract (as defined in SECTION 12.3) to which
any of the Companies or the Seller is subject. The Companies and the Seller will
comply with all applicable Regulations and Orders in connection with the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
6
2.14 FINANCIAL STATEMENTS. Attached as EXHIBIT 2.14 hereto are the
following financial statements of each of the Companies prepared on a cash basis
applied on a consistent basis: (i) statements of assets and liabilities arising
from cash transactions for the fiscal years ended December 31, 1994, December
31, 1995 and December 31, 1996 (referred to herein as the "BALANCE SHEETS"),
(ii) statements of revenues and expenses arising from cash transactions for the
fiscal years ended December 31, 1994, December 31, 1995 and December 31, 1996
(referred to herein as the "STATEMENTS OF REVENUES AND Expenses"), and (iii)
statements of assets and liabilities arising from cash transactions, statement
of revenues and expenses arising from cash transactions for the eight months
ended August 31, 1997 (collectively, together with the Balance Sheets and the
Statements of Revenues and Expenses, referred to herein as the "FINANCIAL
STATEMENTS"). The statements of assets and liabilities arising from cash
transactions included in the Financial Statements reasonably reflect on a cash
basis the financial position of such Company at the respective dates thereof,
and the statements of revenues and expenses arising from cash transactions
included in the Financial Statements (x) reasonably reflect on a cash basis the
results of operations for the periods therein referred to, and (y) reasonably
reflect on a cash basis the financial condition of such Company at the
respective date of, and for the period covered by, such statements. Except as
set forth on SCHEDULE 2.14(A) attached hereto, none of the Companies have any
liability, whether accrued, absolute or contingent, of a type required to be
reflected on a balance sheet or described in the notes thereto in accordance
with GAAP, other than (i) liabilities which have been reflected or reserved
against in the Financial Statements, (ii) liabilities incurred in the ordinary
course of business since August 31, and (iii) liabilities covered by insurance
or reinsurance (a complete and detailed description of which is provided in
SCHEDULE 2.14(B)).
2.15 ACCOUNTS PAYABLE; ACCOUNTS RECEIVABLE; CUSTOMER DEPOSITS. SCHEDULE
2.15(A) sets forth a complete list of each Company's accounts payable and
accrued expense as of September 30, 1997. The accounts receivable of each of the
Companies reflected on SCHEDULE 2.15(B) attached hereto on the date hereof are
good and collectible except to the extent reserved against in the Financial
Statements (which reserves have been determined based upon actual prior
experience and are consistent with prior practice). All such accounts receivable
(except to the extent so reserved against) are valid, genuine and subsisting,
arise out of bona fide sales and deliveries of goods, performance of services or
other business transactions and are not subject to defenses, set-offs or
counterclaims. The customer deposits for future travel are either (i) held by
the Companies in cash or cash receivables or (ii) held by the cruise line
providing such travel. The customer deposits of the Companies are held as set
forth on SCHEDULE 2.15(C).
2.16 EMPLOYEES. The Companies have delivered to TSI an accurate list
(which is set forth on SCHEDULE 2.16) showing all officers, directors and key
employees of the Companies, listing all employment agreements with such
officers, directors and key employees and the rate of compensation (and the
portions thereof attributable to salary, bonus and other compensation,
respectively) of each of such persons (i) as of the end of such Company's most
recent fiscal year (the "BALANCE SHEET DATE") and (ii) as of the date hereof.
Each of the Companies has provided to TSI true, complete and correct copies of
any employment agreements for persons listed on SCHEDULE 2.16. Since the Balance
Sheet Date, there have been no increases in the compensation payable or any
special bonuses to any officer, director, key employee or other employee, except
7
ordinary salary increases implemented on a basis consistent with past practices,
except as set forth on SCHEDULE 2.16. Except as set forth on SCHEDULE 2.16,
Seller is not related by blood or marriage to, or otherwise affiliated with, any
person listed on SCHEDULE 2.16.
As of the date hereof, each of the Companies has approximately than
number of employees shown on SCHEDULE 2.16 attached hereto. The Companies have
been for the past four years, and currently are, in compliance with all Federal,
State and local Regulations and Orders affecting employment and employment
practices of the Companies (including those Regulations promulgated by the Equal
Employment Opportunity Commission), including terms and conditions of employment
and wages and hours. Except as set forth on SCHEDULE 2.16, (i) the Companies are
not bound by or subject to (and none of their assets or properties are bound by
or subject to) any arrangement with any labor union, (ii) no employees of any of
the Companies are represented by any labor union or covered by any collective
bargaining agreement, (iii) no campaign to establish such representation is in
progress and (iv) there is no pending or, to the best of the Companies'
knowledge, threatened labor dispute involving any of the Companies and any group
of its employees nor has any of the Companies experienced any labor
interruptions over the past three years. The Companies believe their
relationships with employees to be good.
2.17 ABSENCE OF CERTAIN CHANGES. Since September 30, 1997, there has not
been (a) any Material Adverse Change (as defined in SECTION 12.3) in the
business, prospects, financial condition, revenues, expenses, accounts
receivable, accounts payable or operations of any of the Companies; (b) any
damage, destruction or loss, whether covered by insurance or not, having a
Material Adverse Effect, with regard to any of the Companies' properties and
business; (c) any payment by any of the Companies to, or any notice to or
acknowledgment by any of the Companies of any amount due or owing to, any of the
Companies' carrier in connection with any liabilities under health insurance
covering employees of such Company, in each case, in excess of a reserve
therefor on the balance sheet for the fiscal year ended December 31, 1996
included in the Financial Statements; (d) any declaration, setting aside or
payment of any dividend or distribution (whether in cash, stock or property) in
respect of any of the Companies' capital stock, or any redemption or other
acquisition of such capital stock by any of the Companies; (e) any increase in
the rate of compensation or in the benefits payable or to become payable by any
of the Companies to its directors, officers, employees or consultants; (f) any
amendment, modification or termination of any existing, or entering into any
new, Contract or plan relating to any salary, bonus, insurance, pension, health
or other employee welfare or benefit plan for or with any directors, officers,
employees or consultants of any of the Companies; (g) any entry into any
material Contract not in the ordinary course of business, including without
limitation relating to any borrowing or capital expenditure; (h) any disposition
by any of the Companies of any material asset; (i) any adverse change in the
sales patterns, pricing policies, accounts receivable or accounts payable
relating to any of the Companies; (j) any write-down of the value of any
inventory having an aggregate value in excess of $5,000, or write-off, as
uncollectible, of any notes, trade accounts or other receivables having an
aggregate value in excess of $5,000; or (k) any change by any of the Companies
in accounting methods or principles. There has not been any material change in
the cash and cash equivalents of any of the Companies from the amounts
8
shown on such Company's balance sheet as of September 30, 1997 included in the
Financial Statements.
2.18 CONTRACTS.
(a) Each of the Companies has listed on SCHEDULE 2.18(A) all
written and oral contracts, commitments and similar agreements to which such
Company is a party or by which it or any of its properties are bound (including,
but not limited to, contracts with significant suppliers, customers, joint
venture or partnership agreements, contracts with any labor organizations and
strategic alliances), (a) in existence as of September 30, 1997 and (b) entered
into since September 30, 1997, and in each case has delivered true, complete and
correct copies of such agreements to TSI. The Companies' written or oral
material contracts, commitments and similar agreements include but are not
limited to, the following (if any):
(i) pension, profit sharing, bonus, retirement, stock
option, stock purchase or other plan providing for deferred or
other compensation to employees or any other employee benefit
plan (other than as set forth in SCHEDULE 2.24 hereto), or any
Contract with any labor union;
(ii) employment, consultation or other compensation
Contracts, which is not terminable on notice of 60 days' or less
by such Company without penalty or other financial obligation
(and, except as set forth on SCHEDULE 2.18(A), no officer or
employee of any of the Companies receives total salary, bonus
and other compensation from any of the Companies (singularly or
in combination with any of the other Companies) of $35,000.00 or
more per annum).
(iii) Contracts containing covenants or agreements
limiting the freedom of any of the Companies or any of its
employees to compete in any line of business presently conducted
by such Company with any Person or to compete in any such line
of business in any area;
(iv) Contracts with the Seller or with any affiliate or
relative of the Seller (except for any Contract disclosed in
SCHEDULE 2.18(A) pursuant to clauses (ii) or (iii) of this
SECTION 2.18(A));
(v) Contracts relating to or providing for loans to
officers, directors, employees or Affiliates;
(vi) Contracts under which any of the Companies have
advanced or loaned, or is obligated to advance or loan, funds to
any Person;
(vii) Contracts relating to the incurrence, assumption
or guarantee of any indebtedness, obligation or liability (in
respect of money or funds borrowed), including letters of
credit, or otherwise pledging, granting a security interest in
or placing a Lien on any asset of any of the Companies;
9
(viii) guarantees or endorsements of any obligation;
(ix) Contracts under which any of the Companies is
lessee of or holds or operates any property, real or personal,
owned by any other party;
(x) Contracts pursuant to which any of the Companies is
lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by any of the
Companies;
(xi) assignments, licenses, indemnifications or
Contracts with respect to any intangible property (including,
without limitation, any Proprietary Rights (as defined in
SECTION 12.3 hereto));
(xii) warranty Contracts with respect to its services
rendered (or to be rendered);
(xiii) Contracts or lease for, or with, any telephone
switch, long distance or toll-free telephone providers;
(xiv) Contracts with central reservation systems ("CRS")
(i.e., SABRE, APOLLO, SYSTEM ONE, etc.);
(xv) override agreements with travel agencies, other
customers or suppliers;
(xvi) Contracts which prohibit, restrict or limit in any
way the payment of dividends or distributions by any of the
Companies;
(xvii) Contracts under which any of the Companies have
granted any Person any registration rights (including piggyback
rights) with respect to any securities;
(xviii) Contracts for the purchase, acquisition or
supply of inventory and other property and assets, whether for
resale or otherwise;
(xix) Contracts with independent agents, brokers,
dealers or distributors;
(xx) sales, commissions, advertising or marketing
Contracts;
(xxi) Contracts providing for "take or pay" or similar
unconditional purchase or payment obligations;
(xxii) Contracts with Persons with which, directly or
indirectly, the Seller also has a Contract;
10
(xxiii) Governmental Contracts subject to
redetermination or renegotiation; or
(xxiv) any other Contract which is material to any of
the Companies' operations or business prospects, except those
which (x) were made in the ordinary course of business, and (y)
are terminable on 30 days' or less notice by such Company
without penalty or other financial obligation.
(b) Except as set forth on SCHEDULE 2.13, no consent of any party
to any Contract is required in connection with the execution, delivery
or performance of this Agreement, or the consummation of the
transactions contemplated hereby.
(c) Each of the Companies has performed in all material respects
all obligations required to be performed by it and is not in default in
any respect under or in breach of nor in receipt of any claim of default
or breach under any Contract listed on SCHEDULE 2.18(A); no event has
occurred which with the passage of time or the giving of notice or both
would result in a default, breach or event of non-compliance under any
material Contract to which such Company is subject (including without
limitation all performance bonds, warranty obligations or otherwise);
none of the Companies has any present expectation or intention of not
fully performing all such obligations; none of the Companies has any
knowledge of any breach or anticipated breach by the other parties to
any such Contract to which it is a party.
2.19 TRUE AND COMPLETE COPIES. Copies of all Contracts and documents
delivered and to be delivered hereunder by the Seller or the Companies are and
will be true and complete copies of such agreements, contracts and documents.
2.20 TITLE AND RELATED MATTERS.
(a) Each of the Companies has good and marketable title to all of
the properties and assets reflected in the balance sheets included in the
Financial Statements or acquired after the date thereof and for properties sold
or otherwise disposed of since the date thereof in the ordinary course of
business, free and clear of all Liens, except (i) statutory Liens not yet
delinquent, (ii) such imperfections or irregularities of title, Liens,
easements, charges or encumbrances as do not detract from or interfere with the
present use of the properties or assets subject thereto or affected thereby,
otherwise impair present business operations at such properties; or do not
detract from the value of such properties and assets, taken as a whole, or (iii)
as reflected in the balance sheets included in Financial Statements or the notes
thereto.
(b) Each of the Companies owns, and will on the Closing Date own,
good and marketable title to all the personal property and assets, tangible or
intangible, used in its business except as to those assets leased, all of which
leases are in good standing and no party is in default thereunder. None of the
assets belonging to or held by each of the Companies is or will be on the
Closing Date subject to any (i) Contracts of sale or lease, or (ii) Liens.
Except for normal breakdowns and servicing requirements, all machinery and
equipment regularly used by each of
11
the Companies in the conduct of its business is in good operating condition and
repair, ordinary wear and tear excepted.
(c) There has not been since September 30, 1997, and will not be
prior to the Closing Date, any sale, lease, or any other disposition or
distribution by any of the Companies of any of its assets or properties and any
other assets now or hereafter owned by it, except transactions in the ordinary
and regular course of business or as otherwise consented to by the Purchaser.
After the Closing, the Companies, as wholly-owned subsidiaries of the Purchaser,
will own, or have the unrestricted right to use, all properties and assets that
are currently used in connection with the business of the Seller.
(d) SCHEDULE 2.20 attached hereto sets forth a description of
all real and personal property owned or leased by each of the Companies.
2.21 LITIGATION. Except as set forth on SCHEDULE 2.21, there is no Claim
(as defined in SECTION 12.3) pending or, to the best knowledge of Seller and
each of the Companies, threatened against any of the Seller or the Companies
which, if adversely determined, would have a Material Adverse Effect on any of
the Companies. Nor is there any Order outstanding against any of the Seller or
the Companies having, or which, insofar as can reasonably be foreseen, in the
future may have, a Material Adverse Effect on the Companies.
2.22 TAX MATTERS.
(a) Each of the Companies has filed all federal, state, and local tax
reports, returns, information returns and other documents (collectively, the
"TAX RETURNS") required to be filed with any federal, state, local or other
taxing authorities (each a "TAXING AUTHORITY", collectively, the "TAXING
AUTHORITIES") in respect of all relevant taxes, including without limitation
income, premium, gross receipts, net proceeds, alternative or add-on minimum, ad
valorem, value added, turnover, sales, use, property, personal property
(tangible and intangible), stamp, leasing, lease, user, excise, duty, franchise,
transfer, license, withholding, payroll, employment, fuel, excess profits,
occupational and interest equalization, windfall profits, severance, and other
charges (including interest and penalties) (collectively, the "TAXES") and in
accordance with all tax sharing agreements to which the Seller or any of the
Companies may be a party. All Taxes required or anticipated to be paid for all
periods prior to and including the Closing Date have been paid, including any of
the Companies' Taxes that may be due or claimed to be due as a result of the
consummation of the transactions contemplated by this Agreement. All Taxes which
are required to be withheld or collected by any of the Companies have been duly
withheld or collected and, to the extent required, have been paid to the proper
Taxing Authority or properly segregated or deposited as required by applicable
laws. There are no Liens for Taxes upon any property or assets of any of the
Companies except for liens for Taxes not yet due and payable. Neither the Seller
nor any of the Companies has executed a waiver of the statute of limitations on
the right of the Internal Revenue Service or any other Taxing Authority to
assess additional Taxes or to contest the income or loss with respect to any Tax
Return. The basis of any depreciable assets, and the methods used in determining
allowable depreciation (including cost recovery), is correct and in compliance
with the Code.
12
(b) No audit of any of the Companies or any of the Companies' Tax
Returns by any Taxing Authority is currently pending or threatened, and no
issues have been raised by any Taxing Authority in connection with any Tax
Returns. No material issues have been raised in any examination by any Taxing
Authority with respect to any of the Companies which reasonably could be
expected to result in a proposed deficiency for any other period not so
examined, and there are no unresolved issues or unpaid deficiencies relating to
such examinations. The items relating to the business, properties or operations
of each of the Companies on the Tax Returns filed by or on behalf of each of the
Companies for all taxable years (including the supporting schedules filed
therewith), available copies of which have been supplied to the Purchaser, state
accurately the information requested with respect to each of the Companies and
such information was derived from the books and records of each of the
Companies.
(c) None of the Companies has made nor has become obligated to
make, nor will as a result of any event connected with the Closing become
obligated to make, any "excess parachute payment" as defined in Section 280G of
the Code (without regard to subsection (b)(4) thereof).
(d) The Seller shall cause each of the Companies to file all Tax
Returns and reports with respect to Taxes which are required to be filed for Tax
periods ending on or before the Closing Date (a "PRE-CLOSING TAX RETURN"), and
each of the Companies shall pay all Taxes due in respect of such Pre-closing Tax
Returns to the appropriate Taxing Authority; and each of the Companies shall pay
all costs associated with the preparation thereof.
2.23 COMPLIANCE WITH LAW AND APPLICABLE GOVERNMENT AND OTHER
REGULATIONS. Each of the Companies is presently complying in respect of its
operations, equipment, practices, real property, plants, laboratories,
structures, and other property, and all other aspects of its business and
operations, with all applicable Regulations and Orders, all Regulations relating
to the safe conduct of business, environmental protection, quality and labeling,
antitrust, Taxes, consumer protection, equal opportunity, discrimination,
health, sanitation, fire, zoning, building and occupational safety where such
failure or failures would individually or in the aggregate have a Material
Adverse Effect. There are no Claims pending, nor to the best knowledge of any of
the Companies are there any Claims threatened, nor has the Seller received any
written notice, regarding any violations of any Regulations and Orders enforced
by any Authority claiming jurisdiction over any of the Companies, including any
requirement of OSHA or any pollution and environmental control agency (including
air and water).
(a) SCHEDULE 2.23(A) attached hereto sets forth all permits,
licenses, provider numbers, orders, franchises, registrations and approvals
(collectively, "PERMITS") from all Federal, state, local and foreign
governmental regulatory bodies held by each of the Companies. The Permits listed
on SCHEDULE 2.23(A) are the only Permits that are required for each of the
Companies to conduct its business as presently conducted, except for those the
absence of which would not have any Material Adverse Effect on any of the
Companies. Each such Permit is in full force and effect and, to the best of the
knowledge of each of the Companies, no suspension
13
or cancellation of any such Permit is threatened and there is no basis for
believing that such Permit will not be renewable upon expiration.
(b) SCHEDULE 2.23(B) attached hereto sets forth all industry
affiliations and membership in industry groups (e.g., International Association
of Travel Agents ("IATA"), Airline Reporting Corporation ("ARC"), etc.) of the
Seller and/or any of the Companies. Neither any of the Companies nor the Seller
are in violation of any Regulation, rule or requirement of such affiliations or
memberships. Except as set forth on SCHEDULE 2.23(B), consent of any such
industry group is required for any of the Companies and the Seller to consummate
the transactions contemplated by this Agreement.
2.24 ERISA AND RELATED MATTERS.
(a) BENEFIT PLANS; OBLIGATIONS TO EMPLOYEES. Except as set forth
in SCHEDULE 2.24 hereto, neither the Companies, nor any ERISA Affiliate of the
Companies, is a party to or participates in or has any liability or contingent
liability with respect to:
(i) any "employee welfare benefit plan" or
"employee pension benefit plan" or "multi-employer plan" (as those terms are
respectively defined in Sections 3(1), 3(2) and 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"));
(ii) any retirement or deferred compensation
plan, incentive compensation plan, stock plan, unemployment compensation plan,
vacation pay, severance pay, bonus or benefit arrangement, insurance or
hospitalization program or any other fringe benefit arrangements for any
employee, director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not constitute an
"employee benefit plan" (as defined in Section 3(3) of ERISA); or
(iii) any employment agreement not terminable
on 30 days' or less written notice, without further liability.
Any plan, arrangement or agreement required to be
listed on SCHEDULE 2.24 for which the Seller or any ERISA Affiliate of the
Seller may have any liability or contingent liability is sometimes hereinafter
referred to as a "BENEFIT Plan". For purposes of this Section, the term "ERISA
AFFILIATE" shall mean any trade or business, whether or not incorporated, that
together with any of the Companies would be deemed a "SINGLE EMPLOYER" within
the meaning of Section 4001(b)(i) of ERISA.
(b) PLAN DOCUMENTS AND REPORTS. A true and correct copy of each
of the Benefit Plans listed on SCHEDULE 2.24, and all contracts relating
thereto, or to the funding thereof, including, without limitation, all trust
agreements, insurance contracts, investment management agreements, subscription
and participation agreements and record keeping agreements, each as in effect on
the date hereof, has been supplied to the Purchaser. In the case of any Benefit
Plan that is not in written form, the Purchaser has been supplied with an
accurate description of such Benefit Plan as in effect on the date hereof. A
true and correct copy of the three most recent annual reports and accompanying
schedules, the three most recent actuarial reports, and the most
14
recent summary plan description and Internal Revenue Service determination
letter with respect to each such Benefit Plan, to the extent applicable, and a
current schedule of assets (and the fair market value thereof assuming
liquidation of any asset which is not readily tradable) held with respect to any
funded Benefit Plan has been supplied to the Purchaser by the Companies, and
there have been no material changes in the financial condition in the respective
Plans from that stated in the annual reports and actuarial reports supplied.
(c) COMPLIANCE WITH LAWS; LIABILITIES. As to all Benefit Plans,
except as otherwise specified on SCHEDULE 2.24, each of the Companies is in
compliance in all material respects with the terms of all Benefit plans and
every Benefit Plan is in compliance with all of the requirements and provisions
of ERISA and all other laws and regulations applicable thereto, including
without limitation the timely filing of all annual reports or other filings
required with respect to such Benefit Plans. None of the assets of any Benefit
Plan are invested in employer securities or employer real property, as those
terms are defined in Section 407(d) of ERISA. There have been no "prohibited
transactions" (as described in Section 406 of ERISA or Section 4975 of the Code)
with respect to any Benefit Plan and neither the Companies nor any ERISA
Affiliate of the Companies has otherwise engaged in any prohibited transaction.
There has been no "accumulated funding deficiency" as defined in Section 302 of
ERISA, nor has any reportable event as defined in Section 4043(b) of ERISA
occurred with respect to any Benefit Plan. Actuarially adequate accruals for all
obligations or contingent obligations under the Benefit Plans are reflected in
each of the Companies' balance sheet for the fiscal year ended December 31, 1996
included in Financial Statements provided to the Purchaser and such obligations
include a pro rata amount of the contributions which would otherwise have been
made in accordance with past practices for the plan years which include the
closing date.
2.25 INTELLECTUAL PROPERTY.
(a) None of the Companies have any registered trade name, service
▇▇▇▇, patent, copyright or trademark related to its business.
(b) Each of the Companies has the right to use each Proprietary
Right listed in SCHEDULE 2.25, and except as otherwise set forth therein, each
of such Proprietary Rights is, and will be on the Closing Date, free and clear
of all royalty obligations and Liens. There are no Claims pending, or to the
best knowledge of the Seller, threatened, against the Seller or any of the
Companies that its use of any of the Proprietary Rights listed on SCHEDULE 2.25
infringes the rights of any Person. The Seller has no knowledge of any
conflicting use of any of such Proprietary Rights.
(c) None of the Companies is a party in any capacity to any
franchise, license or royalty agreement respecting any Proprietary Right and
there is no conflict with the rights of others in respect to any Proprietary
Right now used in the conduct of its business.
(d) INTERNAL SOFTWARE APPLICATIONS.
15
(i) SOFTWARE APPLICATIONS. The current software
applications used by the Companies in the operation of its business are set
forth and described on SCHEDULE 2.25(D) hereto (the "SOFTWARE"). All of the
Software used by the Companies is year 2000 compliant.
(ii) OWNED SOFTWARE. There is no Software that
has been designed or developed by any of the Companies' management information
or development staff or by consultants on the Companies' behalf.
(iii) LICENSED SOFTWARE. The Software, to
the extent it is licensed from any third party licensor or constitutes
"off-the-shelf" software, is held by the Companies legitimately.
(iv) NO ERRORS; NONCONFORMITY. Each of the
Companies warrants that, to its knowledge, the Software is free from any
significant software defect or programming or documentation error. The Software
operates and runs in a reasonable and efficient business manner, conforms to the
specifications thereof.
2.26 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 2.26: (a)
neither any of the Companies' business nor the operation thereof violates any
applicable Environmental Law (as defined in SECTION 12.3) and no condition or
occurrence (any accident, happening or event which occurs or has occurred at any
time prior to the Closing Date, which results in or could result in a claim
against any of the Companies or the Purchaser or creates or could create a
liability or loss for any of the Companies or the Purchaser) which, with notice
or the passage of time or both, would constitute a violation of any
Environmental Law; (b) each of the Companies is in possession of all
Environmental Permits (as defined in SECTION 12.3) required under any applicable
Environmental Law for the conduct or operation of such Company's business (or
any part thereof), and each of the Companies is in full compliance with all of
the requirements and limitations included in such Environmental Permits; (c)
none of the Companies has stored or used any pollutants, contaminants or
hazardous or toxic wastes, substances or materials on or at any property or
facility now or previously owned, leased or operated by any of the Companies
except for inventories of chemicals which are used or to be used in the ordinary
course of such Company's business (which inventories have been sorted or used in
accordance with all applicable Environmental Permits and all Environmental Laws,
including all so-called "Right to Know" laws); (d) none of the Companies has
received any notice from any Authority or any private Person that such Company's
business or the operation of any of its facilities is in violation of any
Environmental Law or any Environmental Permit or that it is responsible (or
potentially responsible) for the cleanup of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials at, on or beneath any
property or facility now or previously owned, leased or operated by such
Company, or at, on or beneath any land adjacent thereto or in connection with
any waste or contamination site; (e) none of the Companies is the subject of any
Federal, state, local, or private Claim involving a demand for damages or other
potential liability with respect to a violation of Environmental Laws or under
any common law theories relating to operations or the condition of any
facilities or property (including underlying groundwater) owned, leased, or
operated by any of the Companies; (f) none of the Companies has buried, dumped,
disposed, spilled or released any pollutants, contaminants or hazardous or
wastes,
16
substances or materials on, beneath or adjacent to any property or facility now
or previously owned, leased or operated by such Company or any property adjacent
thereto; (g) no by-products of any manufacturing or mining process employed in
the operation of the Companies' business which may constitute pollutants,
contaminants or hazardous or toxic wastes, substances or materials under any
Environmental Law are currently stored or otherwise located on any property or
facility now or previously owned, leased or operated by any of the Companies or
any property adjacent thereto; (h) no property or facility now or previously
owned, leased or operated by any of the Companies, is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any other federal or state list of sites requiring investigation or clean-up;
(i) there are no underground storage tanks, active or abandoned, including
petroleum storage tanks, on or under any property or facility now or previously
owned, leased or operated by any of the Companies; (j) none of the Companies has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for listing on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
federal or state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material Claims
against any of the Companies for any remedial work, damage to natural resources
or personal injury, including Claims under CERCLA; and (k) there are no
polychlorinated biphenyls, radioactive materials or friable asbestos present at
any property or facility now or previously owned or leased by any of the
Companies. Each of the Companies has timely filed all reports required to be
filed with respect to all of its property and facilities and has generated and
maintained all required data, documentation and records under all applicable
Environmental Laws.
2.27 DEALINGS WITH AFFILIATES. SCHEDULE 2.27 hereto sets forth a
complete list, including the parties, of all oral or written agreements and
arrangements to which any of the Companies is, will be or has been a party, at
any time from January 1, 1992 to the Closing Date, and to which any one or more
Affiliates is also a party.
2.28 BANKING ARRANGEMENTS. SCHEDULE 2.28 attached hereto sets forth the
name of each bank in or with which any of the Companies has an account, credit
line or safety deposit box, and a brief description of each such account, credit
line or safety deposit box, including the names of all Persons currently
authorized to draw thereon or having access thereto. Except as set forth on
SCHEDULE 2.28 attached hereto, none of the Companies has any liability or
obligation relating to funds or money borrowed by or loaned to any of the
Companies (whether under any credit facility, line of credit, loan, indenture,
advance, pledge or otherwise).
2.29 INSURANCE. SCHEDULE 2.29 attached hereto sets forth a list and
brief description, including dollar amounts of coverage, of all policies of
property, fire, liability, business interruption, workers' compensation and
other forms of insurance held by the Companies as of the date hereof, as well as
a schedule of Claims filed with each of the Companies' current insurance
carriers, including a history of such Claims and a description and estimated
dollar amount of any unresolved Claims. Such policies are valid, outstanding and
enforceable policies, as to which premiums have been paid currently. Neither the
Companies nor the Seller know of any state of facts, or of the occurrence of any
event which might reasonably (a) form the basis for any claim against any of the
Companies not fully covered by insurance for liability on account of
17
any express or implied warranty or tortuous omission or commission, or (b)
result in material increase in insurance premiums of any of the Companies. Any
individual life insurance policies on the life of either ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be assigned to Seller by the Companies prior to the Closing.
2.30 CONSENTS. There are no consents of governmental and other
regulatory agencies or authorities, foreign or domestic, required to be received
by or on the part of the Companies and the Seller to enable the Companies or the
Seller to enter into and carry out this Agreement in all material respects. All
such requisite consents have been, or prior to the Closing will have been,
obtained.
2.31 INVESTMENT REPRESENTATIONS. In connection with this Agreement or
any agreement or transaction contemplated hereby, Seller hereby represents and
warrants to TSI as follows:
(a) Seller has been offered, and up to the Closing Date and the
time(s) of issuance of the TSI Stock shall be offered, the opportunity to ask
questions of, and receive answers from, TSI and its Subsidiaries, and the Seller
have been given full and complete access to all available information and data
relating to the business and assets of TSI and its Subsidiaries, have obtained
such additional information about TSI and its Subsidiaries which the Seller have
deemed necessary in order to evaluate the opportunities, both financial and
otherwise, with respect to TSI and, except as set forth herein, have not relied
on any representation, warranty or other statement concerning the Purchaser and
its Subsidiaries in their evaluation of the decision to consummate the
transactions contemplated herein. On the basis of the foregoing, Seller is
familiar with the operations, business plans and financial condition of TSI.
(b) Seller understands that he must bear the economic risk of
the TSI Stock, if and when issued to Seller, for an indefinite period of time
because, except as provided in this Agreement, (i) Seller understands that TSI
proposes to issue and deliver the shares of TSI Stock issuable in accordance
with this Agreement, without compliance with the registration requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT") or the securities
law of any state, that for such purpose TSI will rely upon the representations,
warranties, covenants and agreements contained herein, as well as any additional
0representations, warranties, covenants, agreements and certifications requested
by TSI to be delivered by the Seller at such time(s) of issuance or reissuance
of the TSI Stock; and that such noncompliance with registration is not
permissible unless such representations and warranties are correct and such
covenants and agreements are performed at and as of the time of issuance; (ii)
Seller understands that, under existing rules of the SEC, there are substantial
restrictions in the transferability of her shares of TSI Stock; her shares of
TSI Stock may be transferred only if registered under the Securities Act or if
an exemption from such registration is available; Seller may not be able to
avail herself of the provisions of Rule 144 promulgated by the SEC under the
Securities Act with respect to the transfer of such shares; (iii) except as set
forth on SCHEDULE 1.2 attached hereto, the TSI Stock may not be sold,
transferred, pledged, or otherwise disposed of without the consent of TSI and an
opinion of counsel for or satisfactory to TSI that registration under the
Securities Act or any applicable state securities laws is not required; and (iv)
TSI neither has an obligation to register a
18
sale of the TSI Stock held by Seller nor has it agreed to do so in the future,
except as set forth in SECTION 6.12.
(c) Seller is an "accredited investor", as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act in that Seller,
as of the date of this Agreement, either (a) (either individually or jointly
with Seller's spouse) has a net worth in excess of $1,000,000; or (b) had an
individual income in excess of $200,000 in each of the two most recent years or
joint income with Seller's spouse in excess of $300,000 in each of those years,
and reasonably expects reaching the same income level in the current year.
(d) Seller is a sophisticated investor familiar with the type of
risks inherent in the acquisition of securities such as the shares of TSI Stock
and Seller's financial position is such that Seller can afford to retain her
shares of TSI Stock for an indefinite period of time without realizing any
direct or indirect cash return on Seller's investment.
(e) Seller received this Agreement and first learned of the
transactions contemplated hereby in Florida. Seller executed and will execute
all documents contemplated hereby in _____________, and intends that the laws of
Florida govern this transaction. Seller is a resident of _________.
(f) Seller is acquiring her shares of TSI Stock for Seller's own
account and not with a view to, or for sale in connection with, the distribution
thereof within the meaning of the Securities Act. Seller has no present plan,
intention, commitment, binding agreement or arrangement to dispose of any shares
or TSI Stock.
(g) Seller understands that the certificates evidencing her
shares of TSI Stock, when and if issued, will bear appropriate restrictive
legends.
2.32 INVENTORIES. The inventories (e.g. promotional items, gifts and
brochures), if reflected on the Financial Statements, and the inventories held
by each of the Companies on the date hereof, (i) do not include any items which
are not usable in the ordinary course of business of such Company, and (ii) have
been reflected on such balance sheets at the lower of cost or market value
(taking into account the usability or salability thereof). All such inventories
are owned free and clear and are not subject to any Lien except to the extent
reserved against or reflected in the Financial Statements. None of the Companies
is aware of any material adverse conditions affecting the supply of inventory
available to each of the Companies, and, to the best knowledge of each of the
Companies, the consummation of the transactions contemplated hereby will not
adversely affect any such supply.
2.33 BROKERAGE. Except as set forth on SCHEDULE 2.33, none of the
Companies nor the Seller has employed any broker, finder, advisor, consultant or
other intermediary in connection with this Agreement or the transactions
contemplated by this Agreement who is or might be entitled to any fee,
commission or other compensation from the Companies or the Seller, or from the
Purchaser or its Affiliates, upon or as a result of the execution of this
Agreement or the
19
consummation of the transactions contemplated hereby. Any fees, commissions or
compensation of any such persons so employed shall be paid by the Seller.
2.34 IMPROPER AND OTHER PAYMENTS. (a) None of the Companies, nor any
director, officer, employee thereof, nor, to each of the Companies' knowledge,
any agent or representative of the Companies nor any Person acting on behalf of
any of them, has made, paid or received any unlawful bribes, kickbacks or other
similar payments to or from any Person or Authority, (b) no contributions have
been made, directly or indirectly, to a domestic or foreign political party or
candidate, (c) no improper foreign payment (as defined in the Foreign Corrupt
Practices Act) has been made, and (d) the internal accounting controls of each
of the Companies are believed by each of the Companies' management to be
adequate to detect any of the foregoing under current circumstances.
2.35 FINANCIAL CONDITION AT CLOSING. At and as of Closing, each of the
Companies shall (i) have a minimum of $100,000 in cash on hand, (ii) have
positive stockholders' equity, (iii) be current on all bills and payables
according to standard trade terms, (iv) have all client deposits for future
travel held by the applicable supplier or held by each of the Companies in a
segregated cash or cash equivalent account (and such amount shall not be
considered for purposes of clause (i) of this SECTION 2.35), all calculated and
fairly presented in accordance with GAAP. Other than for a breach of this
representation by the Seller, there shall be no adjustments with respect hereto
after the Closing.
2.36 DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items prepared
for or supplied to the Purchaser by or on behalf of the Seller or the Companies
with respect to the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading.
2.37 SIGNIFICANT SUPPLIERS; MATERIAL PLANS AND Commitments. Each of the
Companies has delivered to TSI an accurate list (which is set forth on SCHEDULE
2.37) of (i) all significant suppliers, it being understood and agreed that a
"significant supplier", for purposes of this SECTION 2.37, means a suppliers
representing 5% or more of such Company's annual revenues as of the Balance
Sheet Date and as of September 30, 1997. Except to the extent set forth on
SCHEDULE 2.37, none of the Companies' significant customers (or persons or
entities that are sources of a significant number of customers) have canceled or
substantially reduced or, to the knowledge of each of the Companies, are
currently attempting or threatening to cancel a contract or substantially reduce
utilization of the services provided by any of the Companies. Each of the
Companies has also indicated on SCHEDULE 2.37 a summary description of all plans
or projects involving the opening of new operations, expansion of existing
operations, the acquisition of any personal property, business or assets
requiring, in any event, the payments of more than $25,000 by any of the
Companies.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows:
3.1 CORPORATE ORGANIZATION, ETC. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority to carry
on its business as it is now being conducted and to own, operate and lease its
properties and assets. The Purchaser is duly qualified or licensed to do
business in good standing in every jurisdiction in which the conduct of its
business, the ownership or lease of its properties, or the transactions
contemplated by this Agreement, require it to be so qualified or licensed and
the failure to be so qualified or licensed would have a Material Adverse Effect
on its business.
3.2 AUTHORIZATION, ETC. The Purchaser has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Purchaser has duly authorized
the execution, delivery and performance of this Agreement and the other
agreements and transactions contemplated hereby, and no other corporate
proceedings on its part are necessary to authorize this Agreement and the
transactions contemplated hereby. Upon execution and delivery of this Agreement
by the parties hereto this Agreement shall constitute the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms.
3.3 NO VIOLATION. The execution, delivery and performance by the
Purchaser of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Purchaser, do not and will not (a) conflict with or result in a material
breach of the terms, conditions or provisions of, (b) result in a violation of,
or (c) require any authorization, consent, approval, exemption or other action
by or notice to any Authority pursuant to, the certificate of incorporation or
by-laws of the Purchaser, or any Regulation to which the Purchaser is subject,
or any material Contract or Order to which the Purchaser or its properties are
subject. The Purchaser will comply with all applicable Regulations and Orders in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
3.4 GOVERNMENTAL AUTHORITIES. The Purchaser has complied in all material
respects with all applicable Regulations in connection with its execution,
delivery and performance of this Agreement and the agreements and transactions
contemplated hereby. The Purchaser is not required to submit any notice, report,
or other filing with any governmental authority in connection with its execution
or delivery of this Agreement or the consummation of the transactions
contemplated hereby. No authorization, consent, approval, exemption or notice is
required to be obtained by the Purchaser in connection with the execution,
delivery, and performance of this Agreement and the agreements and transactions
contemplated hereby.
3.5 ISSUANCE OF TSI STOCK. The shares of TSI Stock that are required to
be issued by TSI to the Seller, in accordance with the terms and subject to the
conditions set forth in this
21
Agreement, shall, upon issuance and delivery, be duly authorized, validly
issued, fully paid and non-assessable
ARTICLE IV
COVENANTS OF THE SELLER
From the date hereof until the Closing, except as otherwise consented to
or approved by the Purchaser in writing, each of the Companies covenants and
agrees that it shall act, and the Seller shall cause each of the Companies so to
act or refrain from acting where required hereinafter, to comply with the
following:
4.1 REGULAR COURSE OF BUSINESS.
(a) each of the Companies shall operate its business diligently
and in good faith and in the ordinary and usual course, consistent with past
management practices; shall maintain all of its respective properties in good
order and condition, shall maintain (except for expiration due to lapse of time)
all leases and Contracts in effect without change except as expressly provided
herein; shall comply with the provisions of all Regulations and Orders
applicable to such Company and the conduct of its respective business; shall not
cancel, release, waive or compromise any debt, Claim or right in its favor;
shall not alter the rate or basis of compensation of any of its officers,
directors, employees or consultants; shall maintain insurance and reinsurance
coverage as in effect on the date hereof up to the Closing Date; and shall
preserve the business of each of the Companies intact, and use its best efforts
to keep available for each of the Companies and the Purchaser the services of
the officers and employees of each of the Companies, and to preserve the good
will of clients, suppliers and others having business relations with each of the
Companies.
(b) Without limiting the generality of the foregoing paragraph,
each of the Companies shall not, from the date hereof until the Closing,
directly or indirectly, do or propose or agree to do any of the following
without the prior written consent of TSI:
(i) issue, sell, pledge, dispose of, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of any shares
of its capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest, of it;
(ii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, except for distributions to
shareholders, which (i) are consistent with past practice, (ii) do not
cause such Company to fail to meet the financial conditions set forth in
Section 2.35 and (iii) do not violate pooling of interests restrictions;
or
22
(iii) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock.
4.2 AMENDMENTS. Except as provided in SECTION 4.9 of this Agreement, no
change or amendment shall be made in the articles of incorporation or by-laws of
any of the Companies. None of the Companies shall merge with or into or
consolidate with any other corporation or Person, acquire substantially all of
the assets of any Person or change the character of its business.
4.3 CAPITAL CHANGES; PLEDGES. Except as contemplated under this
Agreement, none of the Companies shall issue or sell any shares of its capital
stock of any class or issue or sell any securities convertible into, or options,
warrants to purchase or rights to subscribe to, any shares of its capital stock
and none of the Companies shall pledge or otherwise encumber any shares of its
capital stock.
4.4 DIVIDENDS. None of the Companies shall declare, pay or set aside for
payment any dividend or other distribution in respect of its capital stock, nor
shall any of the Companies, directly or indirectly, redeem, purchase or
otherwise acquire any shares of its capital stock.
4.5 CAPITAL AND OTHER EXPENDITURES. None of the Companies shall make any
capital expenditures, or commitments with respect thereto in excess of $10,000.
4.6 CASH AND CASH EQUIVALENTS. Cash and cash equivalents shall be
preserved, and expended, solely in the ordinary and usual course of business
consistent with past practices.
4.7 BORROWING; RELEASE OF GUARANTEE. None of the Companies shall incur,
assume or guarantee any indebtedness, obligations or liabilities not reflected
on the Financial Statements (or the balance sheets included therein) except in
the ordinary course of business or for purposes of consummation of the
transactions contemplated by this Agreement and in any case only after
consultation with the Purchaser. In addition, the Seller and the Companies shall
use their best efforts to release Ship 'n Shore Cruises, Inc. from its guarantee
of the mortgage with respect to such facility (the "RELEASE").
4.8 OTHER COMMITMENTS. Except as set forth in this Agreement, incurred
or transacted in the ordinary course of business, or permitted in writing by the
Purchaser, none of the Companies shall enter into any transaction or make any
commitment or incur any obligation (including entering into any real property
leases).
4.9 INTERIM FINANCIAL INFORMATION. To the extent prepared in the
ordinary course of business, each of the Companies shall supply the Purchaser
with unaudited financial statements (including, without limitation, balance
sheets and statements of revenues and expenses) and information for each
calendar month, promptly following the conclusion of such month, and as the
Purchaser may otherwise reasonably request.
23
4.10 FULL ACCESS AND DISCLOSURE.
(a) Each of the Companies shall afford to the Purchaser and its
counsel, accountants and other authorized representatives reasonable access
during business hours to each of the Companies' facilities, properties, books
and records in order that the Purchaser may have full opportunity to make such
reasonable investigations as it shall desire to make of the affairs of each of
the Companies, including financial audits; and the Seller shall cause each of
the Companies' officers, employees and auditors to furnish on a timely basis
such additional financial and operating data and other information as the
Purchaser shall from time to time reasonably request including, without
limitation, any internal control recommendations applicable to each of the
Companies made by each of the Companies' independent auditors in connection with
any examination of each of the Companies' Financial Statements and books and
records.
(b) From time to time prior to the Closing Date, each of the
Companies shall promptly supplement or amend information previously delivered to
the Purchaser with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth herein or disclosed.
(c) In connection with any "due diligence" examination performed
by the Purchaser with respect to the business of each of the Companies, the
Seller shall fully cooperate and the results of such "due diligence" examination
shall be satisfactory to the Purchaser.
4.11 CONFIDENTIALITY. Seller and each of the Companies shall, and shall
cause its principals, officers and other personnel and authorized
representatives to, hold in confidence, and not disclose to any other party
without the Purchaser's prior consent, all written and oral information
furnished or disclosed by or received from the Purchaser or its officers,
directors, employees, agents, counsel and auditors in connection with the
transactions contemplated hereby except as may be required by applicable law or
as otherwise contemplated herein.
4.12 BREACH OF AGREEMENT. Neither Seller nor any of the Companies shall
take any action which, if taken on or prior to the Closing Date, would
constitute a breach of this Agreement.
4.13 FULFILLMENT OF CONDITIONS PRECEDENT. Each of the Companies and the
Seller shall use their best efforts to obtain at their expense, on or prior to
the Closing Date, all such waivers, Permits, consents, approvals or other
authorizations from third parties and Authorities, and to do all things as may
be necessary or desirable in connection with the transactions contemplated by
this Agreement in order to fully and expeditiously consummate the transactions
contemplated by this Agreement.
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ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees with each of the Companies and
the Seller that prior to the Closing or the termination of this Agreement:
5.1 CONFIDENTIALITY. The Purchaser shall, and shall cause its
principals, officers and other personnel and authorized representatives to, hold
in confidence, and not disclose to any other party without the Seller's prior
consent, all information received by it from the Seller or the Companies'
officers, directors, employees, agents, counsel and auditors in connection with
the transactions contemplated hereby except as may be required by applicable law
or as otherwise contemplated herein.
5.2 FULL ACCESS AND DISCLOSURE.
(a) The Purchaser shall afford to each of the Companies and
Seller, and their counsel, accountants and other authorized representatives an
opportunity to make such reasonable investigations as they shall desire to make
of the business of the Purchaser; and the Purchaser shall cause its officers,
employees and auditors to furnish such additional financial and operating data
and other information as the Seller shall from time to time reasonably request.
(b) From time to time prior to the Closing Date, the Purchaser
shall promptly supplement or amend information previously delivered to the
Companies and/or the Seller with respect to any matter hereafter arising which,
if existing or occurring at the date of this Agreement, would have been required
to be set forth herein or disclosed.
ARTICLE VI
OTHER AGREEMENTS
The parties hereto further agree, on or before the Closing Date, as
follows:
6.1 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the parties hereto shall use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Regulations to consummate and
make effective the transactions contemplated by this Agreement. In furtherance
and not in limitation of the preceding sentence, the parties hereto shall use
their best efforts to cause the Closing to take place on or before November 30,
1997. If at any time after the Closing Date the Purchaser shall consider or be
advised that any further deeds, assignments or assurances in law or in any other
things are necessary, desirable or proper to vest, perfect or confirm, of record
or otherwise, in the Purchaser (or the Companies, as appropriate), the title to
any property or rights of Seller acquired or to be acquired by reason of, or as
a result of, the acquisition, the Seller agrees to execute and deliver all such
proper deeds, assignments and assurances in law and do all things necessary,
desirable or proper to vest, perfect or confirm title to such property or
25
rights in the Purchaser (or the Companies, as appropriate) and otherwise to
carry out the purpose of this Agreement.
6.2 POOLING ACCOUNTING; TAX MATTERS. Each of the parties hereto shall
use its reasonable efforts to cause the transactions contemplated hereby to be
accounted for as a pooling of interests and to qualify as a reorganization under
the provisions of Section 368(a)(1)(B) of the Code. Each of the parties hereto
shall not, and shall use its reasonable efforts to cause its affiliates to not,
take any action that would adversely affect the ability of TSI to account for
the transactions contemplated hereby as a pooling of interests or to qualify as
a reorganization under the provisions of Section 368 of the Code.
6.3 AGREEMENT TO DEFEND. In the event any action, suit, proceeding or
investigation of the nature specified in SECTIONS 7.2 or 8.2 is commenced,
whether before or after the Closing Date, all the parties hereto agree to
cooperate and use their best efforts to defend against and respond thereto.
6.4 CONSENTS. Without limiting the generality of SECTION 6.1, each of
the parties hereto shall use their best efforts to obtain all permits,
authorizations, consents and approvals of all Persons and governmental
authorities necessary, proper or advisable in connection with the consummation
of the transactions contemplated by this Agreement prior to the Closing Date.
With respect to every material Contract of each of the Companies, even those
Contracts for which a consent or approval is not required under the terms of
such Contract, upon the execution and delivery of this Agreement, each party to
each such Contract shall, after consultation with and coordination by TSI, be
advised of the transaction contemplated hereby.
6.5 NO SOLICITATION OR NEGOTIATION. Unless and until this Agreement is
terminated, neither the Seller nor any of the Companies through its directors,
officers, employees, representatives, agents, advisors, accountants and
attorneys shall initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal with respect to, or engage in
negotiations concerning, or provide any confidential information or data to any
Person with respect to, or have any discussions with any Persons relating to,
any acquisition, business combination or purchase of all or any significant
asset of, or any equity interest in, each of the Companies, or otherwise
facilitate any effort or attempt to do or seek any of the foregoing, and shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Should any of the Companies or the Seller be contacted
with respect to any offer, inquiry or proposal, the Companies and the Seller
shall immediately advise the Purchaser in writing of the name, address and phone
number of the contact and the nature of the inquiry.
6.6 NO TERMINATION OF SELLER'S OBLIGATIONS BY SUBSEQUENT INCAPACITY,
ETC. Seller specifically agrees that the obligations of Seller hereunder,
including, without limitation, obligations pursuant to ARTICLE XI and SECTION
6.5 shall not be terminated by the death or incapacity of the Seller.
6.7 EMPLOYMENT AGREEMENTS. Each of the Companies and the Seller shall,
at or prior to the Closing, terminate any existing employment agreements between
any of the Companies
26
and Seller or ▇▇▇▇ ▇▇▇▇▇▇▇▇ and Seller and ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall each enter into
an Employment Agreement with TSI (or, at TSI's option, an affiliate or
subsidiary of TSI) in the form of EXHIBIT 6.7 attached hereto (the "EMPLOYMENT
AGREEMENTS").
6.8 PUBLIC ANNOUNCEMENTS. Neither Seller nor the Companies nor any
Affiliate, representative, employee or shareholder of any of such Persons, shall
disclose any of the terms of this Agreement to any third party (other than the
Purchaser's advisors and senior lending group and the Seller's advisors) without
the other parties' prior written consent unless required by any applicable law.
The form, content and timing of any and all press releases, public announcements
or publicity statements (except for any disclosures under or pursuant to Federal
or State securities laws in connection with the registration of TSI's securities
or otherwise) with respect to this Agreement or the transactions contemplated
hereby shall be subject to the prior approval of the Purchaser. No press
releases, public announcements or publicity statements shall be released by
either party without such prior mutual agreement.
6.9 DELIVERIES AFTER CLOSING. From time to time after the Closing, at
the Purchaser's request and without expense to the Companies and without further
consideration from the Purchaser or the Companies, the Seller shall execute and
deliver such other instruments of conveyance and transfer and take such other
action as the Purchaser reasonably may require to convey, transfer to and vest
in the Purchaser, and to put the Purchaser in possession of, any rights or
property to be sold, conveyed, transferred or delivered hereunder.
6.10 NON-COMPETITION COVENANT.
(a) As a material and valuable inducement for the Purchaser to
enter into this Agreement, pay and deliver the Purchase Price consideration and
consummate the transactions provided for herein, during the "RESTRICTED PERIOD"
(as hereinafter defined), Seller agrees, unless otherwise permitted by TSI in
writing, that she shall not, directly or indirectly, for herself or on behalf of
or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor or as a sales
representative, in any travel service business in direct competition
with TSI or any subsidiary or Affiliate of TSI (collectively with TSI,
the "TSI Entities" and each (including TSI), a "TSI Entity"), within the
United States or within 100 miles of any other geographic area in which
any TSI Entity conducts business, including any territory serviced by
any TSI Entity (the "RESTRICTED Territory");
(ii) solicit any person who is, at that time, or who has been
within one (1) year prior to that time, an employee of any TSI Entity
for the purpose or with the intent of enticing such employee away from
or out of the employ of any TSI Entity;
27
(iii) solicit any person or entity which is, at that time, or
which has been within one (1) year prior to that time, a customer or
supplier of any TSI Entity for the purpose of soliciting or selling
products or services in direct competition with any TSI Entity within
the Restricted Territory; or
(iv) solicit any prospective acquisition candidate, on Seller's
own behalf or on behalf of any competitor or potential competitor, which
candidate was, to Seller's knowledge, either called upon by any TSI
Entity or for which TSI made an acquisition analysis, for the purpose of
acquiring such entity. Notwithstanding the above, the foregoing covenant
shall not be deemed to prohibit Seller from acquiring as an investment
not more than two percent (2%) of the capital stock of a competing
business, whose stock is traded on a national securities exchange or
over-the-counter.
(b) As used in this Agreement, the term "RESTRICTED PERIOD"
shall mean and include the longer of (x) a period of five (5) years, from the
Closing to the fifth (5th) anniversary of the Closing, and (y) during such time
as Seller is employed by any TSI Entity and for a period of two (2) years
following the effective date of any termination of Seller's employment with any
such TSI Entity (regardless of the cause, reason or justification of any such
termination); PROVIDED, HOWEVER, should the period of restriction in the
Employment Agreement be reduced due to a termination by the Purchaser without
cause pursuant to Section 6(d) of the Employment Agreement, then the Restricted
Period shall equal the period of restriction in the Employment Agreement so
reduced.
(c) In recognition of the substantial nature of such potential
damages and the difficulty of measuring economic losses to TSI as a result of a
breach of the foregoing covenants, and because of the immediate and irreparable
damage that could be caused to TSI for which it would have no other adequate
remedy, Seller agrees that in the event of breach by Seller of the foregoing
covenant, TSI shall be entitled to specific performance of this provision and
co- injunctive and other equitable relief, and that Seller will be responsible
for the payment of court costs and reasonable attorneys' fees incurred by TSI in
seeking enforcement of the covenants set forth in this SECTION 6.10.
(d) It is agreed by the parties that the foregoing covenants in
this SECTION 6.10 impose a reasonable restraint on the Seller in light of the
activities and business of the TSI Entities on the date of the execution of this
Agreement and the current plans of the TSI Entities; but it is also the intent
of TSI and the Seller that such covenants be construed and enforced in
accordance with the changing activities, business and locations of the TSI
Entities, whether before or after the date of termination of the employment of
Seller. For example, if, during the Restricted Period, a TSI Entity engages in
new and different activities, enters a new business or establishes new locations
for its current activities or business in addition to or its existing activities
or business or the locations currently established therefor, then Seller will be
precluded from soliciting the customers or employees of such new activities or
business or from such new
28
location and from directly competing with such new business within 100 miles of
its then- established operating location(s) through the Restricted Period.
(e) The covenants in this SECTION 6.10 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall be reformed in accordance therewith.
(f) All of the covenants in this SECTION 6.10 shall be construed
as an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Seller against TSI, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by TSI of such covenants. Further, this SECTION 6.10 shall survive
the Closing and the termination of Seller's employment with a TSI Entity. It is
specifically agreed that the Restricted Period, during which the agreements and
covenants of the Seller made in this SECTION 6.10 shall be effective, shall be
computed by excluding from such computation any time during which the Seller is
in violation of any provision of this SECTION 6.10.
6.11 NON-DISCLOSURE; CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. By virtue of Seller's employment,
association or involvement with an TSI Entity, Seller may obtain confidential or
proprietary information developed, or to be developed, by an TSI Entity.
"Confidential Information" means all proprietary or business sensitive
information, whether in oral, written, graphic, machine-readable or tangible
form, and whether or not registered, and including all notes, plans, records,
documents and other evidence thereof, including but not limited to all: patents,
patent applications, copyrights, trademarks, trade names, service marks, service
names, "know-how," customer lists, details of client or consulting contracts,
pricing policies, operational methods, marketing plans or strategies, product
development techniques or plans, procurement and sales activities, promotion and
pricing techniques, credit and financial data concerning customers, business
acquisition plans or any portion or phase of any scientific or technical
information, discoveries, computer software or programs used or developed in
whole or in part by any TSI Entity (including source or object codes),
processes, procedures, formulas or improvements of any TSI Entity; algorithms;
computer processing systems and techniques; price lists; customer lists;
procedures; improvements, concepts and ideas; business plans and proposals;
technical plans and proposals; research and development; budgets and
projections; technical memoranda, research reports, designs and specifications;
new product and service developments; comparative analyses of competitive
products, services and operating procedures; and other information, data and
documents now existing or later acquired by an TSI Entity, regardless of whether
any of such information, data or documents qualify as a "trade secret" under
applicable Federal or State law. "Confidential Information" shall not include
(a) any information which is in the public domain during the period of service
by the Seller or becomes public thereafter, provided such information is not in
the public domain as a consequence of disclosure by the Seller in violation
29
of this Agreement, and (b) any information not considered confidential
information by similar enterprises operating in the travel service industry or
otherwise in the ordinary course.
(b) NON-DISCLOSURE. Seller agrees that, except as directed by
Seller's TSI Entity employer, as required or otherwise contemplated under this
Agreement or Seller's Employment Agreement or as otherwise required by law, he
will not at any time (during the term of Seller's employment by an TSI Entity or
at any time thereafter), except as may be expressly authorized by the TSI Entity
in writing, disclose to any Person or use any Confidential Information
whatsoever for any purpose whatsoever, or permit any Person whatsoever to
examine and/or make copies of any reports or any documents or software (whether
in written form or stored on magnetic, optical or other mass storage media)
prepared by her or that come into her possession or under her control by reason
of her employment by an TSI Entity or by reason of any consulting or software
development services he has performed or may in the future perform for an TSI
Entity which contain or are derived from Confidential Information. Seller
further agrees that while employed at an TSI Entity, no Confidential Information
shall be removed from the TSI Entity's business premises, without the prior
written consent of such TSI Entity. In addition, each of the Companies and the
Seller hereby acknowledges that it is aware of the restrictions imposed by
federal securities laws on persons possessing material non-public information
with respect to SEC reporting companies and agree that neither the Seller nor
any Affiliates (including each of the Companies) will effect any transactions in
the stock of TSI without compliance with such laws.
(c) TSI GROUP PROPERTY. As used in this Agreement, the term "TSI
GROUP PROPERTY" means all documents, papers, computer printouts and disks,
records, customer or customer lists, files, manuals, supplies, computer hardware
and software, equipment, inventory and other materials that have been created,
used or obtained by any TSI Entity, or otherwise belonging to any TSI Entity, as
well as any other materials containing Confidential Information as defined
above. Seller recognizes and agrees that:
(i) All the TSI Group Property shall be and remain the property
of the TSI Entity to which such belongs;
(ii) Seller will preserve, use and hold the TSI Group Property
only for the benefit of TSI and its Affiliates and to carry out the
business of the TSI Entity, TSI and its Affiliates; and
(iii) When Seller's employment is terminated, Seller will
immediately deliver and surrender to the TSI Entity all the TSI Group
Property, including all copies, extracts or any other types of
reproductions, which Seller has in her possession or control.
6.12 REGISTRATION RIGHTS. TSI will utilize its reasonable best efforts
to cause, as soon as practicable following the Closing Date but no later than
March 1, 1998, a registration statement to be filed under the Securities Act or
an existing registration statement to be amended for the purpose of registering
the TSI Stock (the "REGISTRATION STATEMENT") for resale by the Seller. TSI will
use its reasonable best efforts to have the Registration Statement become
30
effective and cause the TSI Stock to be registered for resale under the
Securities Act and registered, qualified or exempted under the state securities
laws of such jurisdictions as any Seller reasonably requests as soon as
reasonably practicable following the Closing Date, provided, however, that TSI
shall not be required to qualify to do business in any state or to consent to be
subject to general service of process in any state where it is not otherwise
required to be so qualified or subject. Seller agrees to use its best efforts to
assist TSI in the preparation of historical financial statements of the Company
in order to satisfy the requirements of the Securities and Exchange Commission
with respect to the Shelf Registration Statement. TSI will bear the costs
relating to the Shelf Registration Statement, other than selling commissions and
expenses that may be incurred by Seller in connection with any sale of the TSI
Stock. TSI undertakes to make all necessary filings to have the Shelf
Registration Statement become and remain effective as provided for herein. TSI
shall provide to Seller such copies of the Shelf Registration Statement and
related documents as Seller shall reasonably request.
6.13 AFFILIATES; POOLING AGREEMENTS. The Seller represents and warrants
that attached as SCHEDULE 6.13 is a list of all persons who could in connection
with the acquisition of each of the Companies by TSI be deemed to be
"affiliates" of each of the Companies for purposes of Rule 145 under the
Securities Act ("Rule 145") or applicable "pooling" accounting restrictions, and
the Seller shall promptly notify TSI of any change in such list from time to
time through the Closing Date. The Seller shall (and shall cause each person
listed or required to be listed on SCHEDULE 6.13 to) deliver to TSI, at least 10
days prior to the Closing Date, a written "affiliate" agreement, in the form of
EXHIBIT 6.13 hereto, restricting the disposition by such affiliate of the TSI
Stock to be received by such person pursuant hereto or in connection herewith,
as contemplated by Rule 145 and as required to qualify the acquisition for
pooling of interest accounting treatment and tax-free reorganization treatment
under the Code. In furtherance thereof, the Seller and each of the Companies
covenant and agree to (i) cause their auditors to be reasonably available and
(ii) execute and deliver any certificates or documents or instruments that the
Purchaser's independent auditors reasonably deem necessary, so that the
Purchaser's independent auditors could review or confirm any information
necessary in order to satisfy itself that the transaction will qualify for
pooling of interest accounting treatment and tax-free reorganization treatment
under the Code.
6.14 ADVICE OF CHANGES. The Seller, each of the Companies and the
Purchaser shall promptly advise the other parties orally and in writing to the
extent she or it has knowledge of (i) any representation or warranty made by it
contained in this Agreement that is qualified as to materiality becoming untrue
or inaccurate in any respect or any such representation or warranty that is not
so qualified becoming untrue or inaccurate in any material respect, (ii) the
failure by she or it to comply in any material respect with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement and (iii) any change or event having, or
which, insofar as can reasonably be foreseen, could reasonably be expected to
have a material adverse effect on such party or on the truth of their respective
representations and warranties or the ability of the conditions set forth in
ARTICLE VII or VIII to be satisfied; provided, however, that no such
notification shall affect the representations, warranties,
31
covenants or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Each and every obligation of the Purchaser under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by the Purchaser:
7.1 REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS. The
representations and warranties of the Seller and the Companies contained in
ARTICLE II and elsewhere in this Agreement and all information contained in any
exhibit, certificate, schedule or attachment hereto or in any writing delivered
by, or on behalf of, the Seller or the Companies to the Purchaser, shall be true
and correct both when made and at and as of the Closing Date, as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to "materiality", "material adverse effect" or "material adverse
change" set forth therein) does not have, and is not likely to have,
individually or in the aggregate, a material adverse effect on the Seller or any
of the Companies. The Seller and each of the Companies shall have performed and
complied with all agreements, covenants and conditions and shall have made all
deliveries required by this Agreement to be performed, delivered and complied
with by them prior to the Closing Date. Each of the Seller and the president of
each of the Companies shall have executed and delivered to the Purchaser a
certificate, dated the Closing Date, certifying to the foregoing.
7.2 NO INJUNCTION. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
7.3 THIRD PARTY CONSENTS. The Purchaser, the Seller and each of the
Companies shall have obtained all consents, approvals, waivers or other
authorizations with respect to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, such
that the Contracts and leases listed in SCHEDULE 2.13 hereto shall remain in
effect (without default, acceleration, termination, assignment, right of
termination or assignment, payment, increase in rates or compensation payable,
penalty, interest or other adverse effect) from and after the Closing Date as
such contracts and leases operated and were in effect before the Closing Date.
With respect to the material Contracts of each of the Companies for which notice
of the transaction had been, or should have been, delivered to the other party
thereto pursuant to SECTION 6.4 hereof; (a) all such parties to such Contracts
shall have been notified of the transactions contemplated hereby and (b) neither
the Purchaser nor Seller or any of the Companies shall have received any notice
of terminations or amendments of, or any indication from such party of their
intent to terminate or amend, such contract, unless such amendment shall not
adversely affect the Purchaser or the Seller.
32
7.4 REGULATORY APPROVALS. The Federal and State regulatory agencies or
authorities listed in SCHEDULE 7.4 hereto shall have approved the applications
listed in such Schedule with respect to the change of control represented by the
transactions contemplated by this Agreement, and such approval shall not impose
financial obligations on the Purchaser that are objectionable to it.
7.5 NO MATERIAL ADVERSE CHANGE. There shall have been no Material
Adverse Change since the date of this Agreement. The Purchaser shall have
received a certificate (which shall be addressed to the Purchaser), dated the
Closing Date, of the president and chief financial officer of each of the
Companies, certifying to the foregoing.
7.6 ACCOUNTANTS' LETTER. TSI shall have received a letter from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP and the Companies' auditors, in form and substance reasonably
satisfactory to TSI, to the effect that, as of the Closing Date, accounting for
the transaction as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations is appropriate if the
transaction is closed and consummated as contemplated by this Agreement.
7.7 OPINION OF SELLER'S COUNSEL. The Purchaser shall have received an
opinion of counsel to the Seller and each of the Companies (which will be
addressed to the Purchaser), dated the Closing Date, in the form of EXHIBIT 7.7
hereto.
7.8 EMPLOYMENT AGREEMENTS. Seller and ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have
terminated their existing employment agreements with each of the Companies and
shall have executed and delivered to the Purchaser Employment Agreements with
TSI in the forms of EXHIBIT 6.7 attached hereto.
7.9 DELIVERY OF EACH OF THE COMPANIES SHARE CERTIFICATES. The Seller and
each of the Companies shall have executed and delivered this Agreement, or a
counterpart hereof, and together shall have delivered at the Closing stock
certificates representing all of the Company Shares, duly endorsed for transfer
to the Purchaser, together with stock powers duly executed in blank.
7.10 CREDITOR CONSENTS. The creditors set forth on SCHEDULE 7.10 hereto
shall have agreed in writing with each of the Companies as to the amounts owed
in order for such creditors to have been paid in full and to release all Liens
in favor of such creditors. Each of the Companies shall have obtained from the
creditors set forth on SCHEDULE 7.10 and shall provide to the Purchaser at
Closing, such UCC termination statements, releases of mortgages and other
releases of Liens as shall be required by the Purchaser and its lenders.
7.11 AFFILIATE AGREEMENTS. The Purchaser shall have received executed
copies of all "affiliate" agreements required under SECTION 6.13 hereof, each of
which shall be in substantially the form attached hereto as EXHIBIT 6.13.
7.12 LEASE OF FACILITY. The Purchaser and the Seller shall have agreed
upon the terms and conditions of a lease agreement with respect to the facility
occupied by Ship'n Shore Cruises, Inc. and owned by Seller (the "FACILITY
LEASE"), such Facility Lease to be based on fair market
33
value rent payments and customary, arms-length terms and conditions. In
addition, the Purchaser shall have received the Release.
7.13 CERTIFICATE OF INSURANCE. The Purchaser shall have received from
the Seller and the Companies a certificate of insurance, in full force and
effect and reasonably satisfactory to the Purchaser, from National Interstate
Insurance Agency evidencing the Companies' insurance coverage with respect to
the buses owned by the Companies.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLER AND THE COMPANIES
Each and every obligation of the Seller and the Companies under this
Agreement shall be subject to the satisfaction, on or before the Closing Date,
of each of the following conditions unless waived in writing by the Seller and
the Companies:
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations and
warranties of the Purchaser contained in ARTICLE III and elsewhere in this
Agreement and all information contained in any exhibit, schedule or attachment
hereto, provided by the Purchaser to the Seller or the Companies, shall be true
and correct both when made and at and as of the Closing Date, as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to "materiality", "material adverse effect" or "material adverse
change" set forth therein) does not have, and is not likely to have,
individually or in the aggregate, a material adverse effect on the Purchaser.
The Purchaser shall have performed and complied in all material respects with
all agreements, covenants and conditions required by this Agreement to be
performed and complied with by it prior to the Closing Date. An authorized
officer of the Purchaser shall have delivered to the Seller and the Companies a
certificate, dated the Closing Date, certifying to the foregoing and certifying
that Purchaser is not aware of any breaches of a representation or warranty of
the Seller or the Companies other than those breaches set forth on a schedule
attached to such certificate which breaches shall be expressly waived by TSI.
8.2 NO INJUNCTION. No preliminary or permanent injunction or other
Order, decree or ruling issued by any Authority, or any Regulation promulgated
or enacted by any Authority shall be in effect, which would prevent the
consummation of the transactions contemplated hereby.
8.3 PURCHASE CONSIDERATION. Seller shall have received the consideration
(in the form of TSI Stock) required to be delivered at Closing and to which
Seller is entitled pursuant to SECTION 1.1 hereof.
8.4 EMPLOYMENT AGREEMENTS. TSI shall have executed and delivered to each
of the Seller and ▇▇▇▇ ▇▇▇▇▇▇▇▇ an Employment Agreement between TSI and such
person in the form of EXHIBIT 6.7 attached hereto.
34
8.5 LOAN COMMITMENT. The Seller shall have received a binding commitment
with respect to the making of a non-recourse loan to the Seller, subsequent to
the Closing, in the principal amount of one million dollars which commitment
shall not be subject to any material condition other than the delivery of the
TSI Stock at the Closing pursuant to the terms of this Agreement.
ARTICLE IX
CLOSING
9.1 CLOSING. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of ARTICLE X hereof, a closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held on or
before November 30, 1997, or on such other date which is mutually agreed upon in
writing following the satisfaction or waiver of the conditions to closing set
forth in ARTICLE VII and ARTICLE VIII hereof (the "CLOSING DATE").
9.2 CLOSING DELIVERIES. At the Closing,
(a) the Seller and the Companies shall deliver or cause to be
delivered to the Purchaser:
(i) a certificate or certificates evidencing all of the
Company Shares, duly endorsed for transfer with all necessary
transfer stamps affixed;
(ii) copies of all consents and approvals required by
SECTIONS 7.3, 7.4 and 7.10 (including UCC termination
statements, releases of mortgages or other releases of Liens);
(iii) the Opinion of Counsel required by SECTION 7.7;
(iv) the Officers' Certificates required by SECTIONS 7.1
and 7.5;
(v) the Employment Agreements required by SECTION 7.8;
(vi) the Affiliate Letters required by SECTION 7.11;
(vii) the Facility Lease and the Release required by
SECTION 7.12.
(viii) certificates, signed by the secretary of each of
the Companies, as to the articles of incorporation and by-laws
of each of the Companies, the resolutions adopted by the board
of directors and shareholders of each of the Companies in
connection with this Agreement, the incumbency of certain
officers of each of the Companies and the jurisdictions in which
each of the Companies is qualified to conduct business, in form
acceptable to the Purchaser;
(ix) certificates issued by the appropriate governmental
authorities evidencing the good standing, with respect to both
the conduct of business and the
35
payment of all franchise taxes, of each of the Companies as of a
date not more than 10 days prior to the Closing Date, as a
corporation organized under the laws of the state of such
Company's state of incorporation and as a foreign corporation
authorized to do business under the laws of the various
jurisdictions where it is so qualified; and
(x) such other certified resolutions, documents and
certificates as are required to be delivered by Seller or the
Companies pursuant to the provisions of this Agreement.
(b) The Purchaser shall deliver to the Seller and to the
Companies:
(i) the consideration (in the form of TSI Stock)
required to be paid or delivered to Seller at Closing in
accordance with SECTION 1.1;
(ii) the Officers' Certificate required by SECTION 8.1;
(iii) the Employment Agreements required by SECTION 8.4;
(iv) the Facility Lease; and
(v) such other certified resolutions, documents and
certificates as are required to be delivered by the Purchaser
pursuant to the provisions of this Agreement.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time:
(a) by mutual consent of the Purchaser, the Seller
and each of the Companies;
(b) by the Purchaser or all of the Seller and the Companies if
this Agreement is not consummated on or before November 30, 1997; PROVIDED,
HOWEVER, that if any party has breached or defaulted with respect to its
respective obligations under this Agreement on or before such date, such party
may not terminate this Agreement pursuant to this SECTION 10.1(B), and each
other party to this Agreement shall at its option enforce its rights against
such breaching or defaulting party and seek any remedies against such party, in
either case as provided hereunder and by applicable law; or
(c) by the Purchaser if as of the Closing Date (including any
extensions) any of the conditions specified in ARTICLE VII hereof shall not have
been satisfied or if any of the Companies or the Seller is otherwise in default
under this Agreement; or
36
(d) by the Seller if as of the Closing Date (including any
extensions) any of the conditions specified ARTICLE VIII hereof shall not have
been satisfied or if the Purchaser is otherwise in default under this Agreement.
10.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment pursuant to SECTION 10.1 hereof, and subject to the proviso
contained in SECTION 10.1(B), this Agreement shall terminate and shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) each party shall redeliver all documents and other material
of any other party relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing the same;
(b) all information received by any party hereto with respect to
the business of any other party or each of the Companies (other than information
which is a matter of public knowledge or which has heretofore been or is
hereafter published in any publication for public distribution or filed as
public information with any governmental authority) shall not at any time be
used for the advantage of, or disclosed to third parties by, such party to the
detriment of the party furnishing such information; and
(c) no party hereto shall have any further liability or
obligation to any other party under or in connection with this Agreement;
PROVIDED, HOWEVER, the non-breaching or non-defaulting party shall not be
foreclosed from bringing a Claim or cause of action or otherwise recovering from
the breaching or defaulting party if such breach or default arose from the fraud
or willful misrepresentation of the breaching party.
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
11.1 SURVIVAL. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (b) all
representations and warranties shall survive and continue until:
(1) with respect to the representations and warranties in
SECTIONS 2.22 (tax matters) and 2.24 (ERISA matters) and 2.26
(environmental matters), until sixty (60) days following the expiration
of the applicable statute of limitations;
(2) with respect to the representations and warranties in
SECTIONS 2.3 (capitalization), 2.5 (title to the Company Shares) and 2.6
(options and rights on
37
capital stock), these representations shall survive and continue forever
and without limitation; and
(3) with respect to all other representations and warranties,
the date upon which TSI receives from its outside auditors the audited
financial statements for TSI's fiscal year ending December 31, 1998 (the
"1998 AUDIT DATE"), except for representations, warranties and
indemnities for which an indemnification Claim shall be pending as of
the 1998 Audit Date, in which event such indemnities shall survive with
respect to such Claim until the final disposition thereof.
11.2 INDEMNIFICATION BY THE SELLER. Subject to this ARTICLE XI, the
Purchaser and its officers, directors, employees, shareholders, representatives
and agents shall be indemnified and held harmless by the Seller and each of the
Companies, jointly and severally, at all times after the date of this Agreement,
against and in respect of any and all damage, loss, deficiency, liability,
obligation, commitment, cost or expense (including the fees and expenses of
counsel) resulting from, or in respect of, any of the following:
(a) Any misrepresentation, breach of warranty, or non-fulfillment
of any obligation on the part of the Seller or any of the Companies under this
Agreement, any document relating thereto or contained in any schedule or exhibit
to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, other agreement or instrument by the Seller or any of the
Companies hereunder;
(b) Any and all liabilities of the Companies of any nature
whether accrued, absolute, contingent or otherwise, and whether known or
unknown, existing at the Closing Date to the extent not reflected and reserved
against in the balance sheet for the nine months ended September 30, 1997
included in the Financial Statements or not otherwise adequately disclosed in
this Agreement or the schedules or exhibits thereto, including, without
limitation:
(i) All Tax liabilities of the Companies, together with any
interest or penalties thereon or related thereto, through the Closing
Date and any Tax liability of the Companies arising in connection with
the transactions contemplated hereby. Any Taxes, penalties or interest
attributable to the operations of the Companies payable as a result of
an audit of any tax return shall be deemed to have accrued in the period
to which such Taxes, penalties or interest are attributable;
(ii) All environmental liabilities relating to any of the
Companies' properties, including federal, state and local environmental
liability, together with any interest or penalties thereon or related
thereto, through the Closing Date, but excluding any amount for which
there is an adequate accrual and reserve on the balance sheet for the
nine months ended September 30, 1997 included in the Financial
Statements; and
38
(c) All demands, assessments, judgments, costs and reasonable
legal and other expenses arising from, or in connection with any Claim incident
to any of the foregoing.
(d) All other Claims of the Purchaser shall be resolved in
accordance with SECTION 11.4.
11.3 INDEMNIFICATION BY THE PURCHASER. Subject to this ARTICLE XI, the
Seller and her heirs, assigns, representatives and agents shall be indemnified
and held harmless by the Purchaser, at all times after the date of this
Agreement, against and in respect of any and all damage, loss, deficiency,
liability, obligation, commitment, cost or expense (including the fees and
expenses of counsel) resulting from, or in respect of, any misrepresentation,
breach of warranty, or non-fulfillment of any obligation on the part of the
Purchaser under this Agreement, any document relating thereto or contained in
any schedule or exhibit to this Agreement or from any misrepresentation in or
omission from any certificate, schedule, other agreement or instrument by the
Purchaser hereunder.
11.4 THIRD-PARTY CLAIMS. Except as otherwise provided in this Agreement,
the following procedures shall be applicable with respect to indemnification for
third-party Claims. Promptly after receipt by the party seeking indemnification
hereunder (hereinafter referred to as the "INDEMNITEE") of notice of the
commencement of any (a) Tax audit or proceeding for the assessment of Tax by any
taxing authority or any other proceeding likely to result in the imposition of a
Tax liability or obligation or (b) any action or the assertion of any Claim,
liability or obligation by a third party (whether by legal process or
otherwise), against which Claim, liability or obligation the other party to this
Agreement (hereinafter the "INDEMNITOR") is, or may be, required under this
Agreement to indemnify such indemnitee, the indemnitee will, if a Claim thereon
is to be, or may be, made against the indemnitor, notify the indemnitor in
writing of the commencement or assertion thereof and give the indemnitor a copy
of such Claim, process and all legal pleadings. The indemnitor shall have the
right to participate in the defense of such action with counsel of reputable
standing. The indemnitor shall have the right to assume the defense of such
action unless such action (i) may result in injunctions or other equitable
remedies in respect of the indemnitee or its business; (ii) may result in
liabilities which, taken with other then existing Claims under this ARTICLE XI,
would not be fully indemnified hereunder; or (iii) may have an adverse impact on
the business or financial condition of the indemnitee after the Closing Date
(including an effect on the Tax liabilities, earnings or ongoing business
relationships of the indemnitee). The indemnitor and the indemnitee shall
cooperate in the defense of such Claims. In the case that the indemnitor shall
assume or participate in the defense of such audit, assessment or other
proceeding as provided herein, the indemnitee shall make available to the
indemnitor all relevant records and take such other action and sign such
documents as are necessary to defend such audit, assessment or other proceeding
in a timely manner. If the indemnitee shall be required by judgment or a
settlement agreement to pay any amount in respect of any obligation or liability
against which the indemnitor has agreed to indemnify the indemnitee under this
Agreement, the indemnitor shall promptly reimburse the indemnitee in an amount
equal to the amount of such payment plus all reasonable expenses
39
(including legal fees and expenses) incurred by such indemnitee in connection
with such obligation or liability subject to this ARTICLE XI.
Prior to paying or settling any Claim against which an indemnitor is, or
may be, obligated under this Agreement to indemnify an indemnitee, the
indemnitee must first supply the indemnitor with a copy of a final court
judgment or decree holding the indemnitee liable on such claim or failing such
judgment or decree, and must first receive the written approval of the terms and
conditions of such settlement from the indemnitor. An indemnitor shall have the
right to settle any Claim against it, subject to the prior written approval of
the indemnitee, which approval shall not be unreasonably withheld.
An indemnitee shall have the right to employ its own counsel in any
case, but the fees and expenses of such counsel shall be at the expense of the
indemnitee unless (a) the employment of such counsel shall have been authorized
in writing by the indemnitor in connection with the defense of such action or
Claim, (b) the indemnitor shall not have employed, or is prohibited under this
SECTION 11.4 from employing, counsel in the defense of such action or Claim, or
(c) such indemnitee shall have reasonably concluded that there may be defenses
available to it which are contrary to, or inconsistent with, those available to
the indemnitor, in any of which events such fees and expenses of not more than
one additional counsel for the indemnified parties shall be borne by the
indemnitor.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by a written agreement
signed by each of the Companies, the Purchaser and the Seller.
12.2 ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits hereto and the documents, annexes, attachments, certificates and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the agreements and
transactions contemplated by this Agreement and supersedes all prior agreements,
representations, warranties, promises, covenants, arrangements, communications
and understandings, oral or written, express or implied, between the parties
with respect to such transactions. There are no agreements, representations,
warranties, promises, covenants, arrangements or understandings between the
parties with respect to such transactions, other than those expressly set forth
or referred to herein.
12.3 CERTAIN DEFINITIONS.
"AFFILIATE" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or controlling
such Person, (b) any Person, directly or indirectly, in which such Person holds,
of record or beneficially, five percent or more of the equity or voting
securities, (c) any Person that holds, of record or beneficially, five percent
or more of the equity or voting securities of such Person, (d) any Person that,
through Contract,
40
relationship or otherwise, exerts a substantial influence on the management of
such Person's affairs, (e) any Person that, through Contract, relationship or
otherwise, is influenced substantially in the management of their affairs by
such Person, or (f) any director, officer, partner or individual holding a
similar position in respect of such Person.
"AUTHORITY" means any governmental, regulatory or administrative
body, agency, arbitrator or authority, any court or judicial authority, any
public, private or industry regulatory agency, arbitrator authority, whether
international, national, federal, state or local.
"CLAIM" means any action, claim, obligation, liability, expense,
lawsuit, demand, suit, inquiry, hearing, investigation, notice of a violation,
litigation, proceeding, arbitration, or other dispute, whether civil, criminal,
administrative or otherwise, whether pursuant to contractual obligations or
otherwise.
"CONTRACT" means any agreement, contract, commitment, instrument
or other binding arrangement or understanding, whether written or oral.
"ENVIRONMENTAL LAW" means any Regulation, Order, settlement
agreement or governmental requirement, which relates to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of mined
land, discharges, emissions, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous wastes, substances or materials, including (but not
limited to) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, the
Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution
Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any
so-called "Superlien" law, and any other similar Federal, state or local
statutes.
"ENVIRONMENTAL PERMIT" shall mean Permits, certificates,
approvals, licenses and other authorizations relating to or required by
Environmental Law and necessary or desirable for the Corporation's business.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis.
"LIEN" means any security interest, lien, mortgage, pledge,
hypothecation, encumbrance, Claim, easement, restriction or interest of another
Person of any kind or nature.
"MATERIAL ADVERSE CHANGE" means any development or change which
has, had or would have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any circumstances, state of facts
or matters which has, or might reasonably be expected to have, a material
adverse effect in respect of TSI's
41
or the Companies' (as the case may be) business, operations, properties, assets,
condition (financial or otherwise), results, plans, strategies or prospects.
"ORDER" means any decree, consent decree, judgment, award, order,
injunction, rule, consent of or by an Authority.
"PERSON" means any corporation, partnership, joint venture,
company, syndicate, organization, association, trust, entity, Authority or
natural person.
"PROPRIETARY RIGHTS" means any patent, patent application,
copyright, trademark, trade name, service ▇▇▇▇, service name, trade secret,
know-how, confidential information or other intellectual property or proprietary
rights.
"REGULATION" means any law, statute, rule, regulation, ordinance,
requirement, announcement or other binding action of or by an Authority.
"SUBSIDIARY" means any Person which the Purchaser or each of the
Companies, as the case may be, owns, directly or indirectly, 50% or more of the
outstanding stock or other equity interests.
12.4 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, two (2) business days after being
mailed, first class certified mail with postage paid, or by overnight receipted
courier service:
(a) If to the Seller or the Companies, to:
Ship 'n Shore Cruise, Inc.
SNS Coachline, Inc.
Cruise Time, Inc.
Cruise Mart, Inc.
SNS Travel Marketing, Inc.
c/o Ship 'n Shore Cruise, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇, CPA
▇'▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
42
and a further copy to:
▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other person or address as the Seller or each of the Companies shall
furnish by notice to the Purchaser in writing.
(b) If to the Purchaser to:
Travel Services International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Operating Officer
with a copy to:
Travel Services International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Senior Vice President and General Counsel
with a further copy to:
▇▇▇▇▇▇▇▇▇ Traurig ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other person or address as the Purchaser shall furnish by notice to
Seller in writing.
12.5 EXHIBITS AND SCHEDULES. The Exhibits and Schedules referred to in
this Agreement are attached hereto and incorporated herein by this reference.
Disclosure of a specific item in any one Schedule shall be deemed restricted
only to the Section of this Agreement to which such disclosure relates, except
where, and to the extent that, there is an explicit cross- reference in such
Schedule to another Schedule.
12.6 WAIVER OF COMPLIANCE; CONSENTS. Any failure of any party hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived in writing by the other
43
parties hereto, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing.
12.7 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that the Purchaser may assign its rights, interests and obligations
hereunder to any wholly- owned Subsidiary, and may grant Liens or security
interests in respect of its rights and interests hereunder, without the prior
approval of the Seller.
12.8 GOVERNING LAW. The Agreement shall be governed by the internal laws
of the State of Florida as to all matters, including but not limited to matters
of validity, construction, effect and performance.
12.9 CONSENT TO JURISDICTION; SERVICE OF PROCESS. Each of the Companies
and the Seller hereby irrevocably submit to the jurisdiction of the state or
federal courts located in Palm Beach County, Florida in connection with any
suit, action or other proceeding arising out of or relating to this Agreement
and the transactions contemplated hereby, and hereby agree not to assert, by way
of motion, as a defense, or otherwise in any such suit, action or proceeding
that the suit, action or proceeding is brought in an inconvenient forum, that
the venue of the suit, action or proceeding is improper or that this Agreement
or the subject matter hereof may not be enforced by such courts.
12.10 INJUNCTIVE RELIEF. The parties hereto agree that in the event of a
breach of any provision of this Agreement, the aggrieved party or parties may be
without an adequate remedy at law. The parties therefore agree that in the event
of a breach of any provision of this Agreement, the aggrieved party or parties
may elect to institute and prosecute proceedings in any court of competent
jurisdiction to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement. By
seeking or obtaining any such relief, the aggrieved party shall not be precluded
from seeking or obtaining any other relief to which it may be entitled.
12.11 HEADINGS. The article, section and other headings contained in
this Agreement are for reference purposes only and do not affect in any way the
meaning or interpretation of this Agreement (or any provision hereof).
12.12 PRONOUNS AND PLURALS. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular forms of nouns, pronouns, and verbs
include the plural and vice versa.
12.13 CONSTRUCTION. The parties acknowledge that each party has reviewed
and revised this Agreement and that the normal rule of construction to the
effect that any ambiguities are to
44
be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
12.14 DEALINGS IN GOOD FAITH; BEST EFFORTS. Each party hereto agrees to
act in good faith with respect to the other party in exercising its rights and
discharging its obligations under this Agreement. Each party further agrees to
use its best efforts to ensure that the purposes of this Agreement are realized
and to take all further steps as are reasonably necessary to implement the
provisions of this Agreement. Each party agrees to execute, deliver and file any
document or instrument necessary or advisable to realize the purposes of this
Agreement.
12.15 BINDING EFFECT. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the signatories to this
Agreement and each of their respective successors and permitted assigns.
12.16 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party hereto, upon any breach or default of any
other party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
12.17 SEVERABILITY. Unless otherwise provided herein, if any provision
of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
12.18 EXPENSES. All fees, costs and expenses (including, without
limitation, legal, auditing and accounting fees, costs and expenses) incurred in
connection with considering, pursuing, negotiating, documenting or consummating
this Agreement and the transactions contemplated hereby shall be borne and paid
solely by the party incurring such fees, costs and expenses, including the costs
of Purchaser's due diligence and the preparation of GAAP financial statements,
which shall be paid by Purchaser.
12.19 ATTORNEYS' FEES. If any party to this Agreement seeks to enforce
the terms and provisions of this Agreement, then the prevailing party in such
action shall be entitled to recover from the losing party all costs in
connection with such action, including without limitation reasonable attorneys'
fees, expenses and costs incurred with respect to trials, appeals and
collection.
45
12.20 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
* * * *
[Remainder of Page Intentionally Left Blank]
46
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
PURCHASER:
TRAVEL SERVICES INTERNATIONAL, INC.:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief
Operating Officer
SELLER:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
THE COMPANIES:
SHIP 'N SHORE CRUISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SNS COACHLINE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
47
CRUISE TIME, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
CRUISE MART, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SNS TRAVEL MARKETING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
48