Vista Vacations International Shareholders Agreement
SHAREHOLDERS' AGREEMENT AND IRREVOCABLE PROXY
AGREEMENT, made and entered into as of the 13th day of November 1998 , by
and among XXXXX XXXXXX, residing at 0000 Xxxxxxxxx 00xx Xxxxx, Xxxxx Xxxxxxx,
Xxx, 00000, and XXXXXX XXXXXXX, residing at 000 X. Xxxxx Xxxx Xx., Xxxxxx Xxxx.
00000, XXXX XXXXXXX, residing at 0000 XX 00xx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx
00000, XXXXXX XXXXXXXXX residing at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxx 0X,
Xxxxxxxxxx, Xxxxxxx 00000, collectively referred to as the "Shareholders" and
Vista Vacations International, Inc., (the "Corporation") with offices at 0000
Xxxxxxxxx 00xx Xxxxx, Xxxxx Xxxxxxx, Xxx, 00000.
W I T N E S S E T H:
WHEREAS, the Corporation was incorporated on November 13, 1998 and is
presently in good standing; and
WHEREAS, the Shareholders desire to provide for the contemplated business
of the Corporation and assure the continuity of management of the Corporation
and its business, and in furtherance thereof, to place certain restrictions on
the sale, transfer or other disposition of the shares of the Corporation now
owned or hereafter acquired by each of them;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereby agree as follows:
1. Offices
(a) Principal Office: The principal office of the Corporation in the State
of Florida shall be located at 0000 Xxxxxxxxx 00xx Xxxxx, Xxxxx Xxxxxxx, XX
00000. The Corporation may have such other offices, either within or without
Florida, as the Shareholders may designate or as the business of the Corporation
may from time to time require.
(b) Registered Office: The registered office of the Corporation, required
by the laws of Florida, may, but need not, be identical with the Principal
Office in the state of Florida. The address of the initial registered office of
the Corporation is 0000 Xxxxxxxxx 00xx Xxxxx, Xxxxx Xxxxxxx, XX 00000, and the
initial registered agent at such address is XXXXXX. The registered office and
the registered agent may ne changed from time to time by action of the
Shareholders and by filing the prescribed form with the Florida Secretary of
State.
2. Meetings and Management
(a) Operations: The Corporation is to be managed by its Shareholders. The
day to day affairs and all business in the ordinary course of the Corporation
may be carried out by any Shareholder without the consent of the other
Shareholder(s). However, any action by the Corporation that requires either the
disbursement of Corporation funds un excess of Ten Thousand ($10,000.00)
Dollars, the adjustment, but not the initial setting of any compensation of
distribution of any Shareholder, or the sale of all, or substantially all of the
Corporation's assets, shall require the vote and written approval of those
Shareholders owning a seventy (70%) percent or greater interest in the
Corporation. All other actions taken by the Corporation shall require the vote
and approal of the Shareholders owning a majority in interest on the
Corporation.
(b) Meetings: Corporation decisions and actions that need to be decided by
a majority or seventy (70%) percent or greater in interest of the Shareholders,
as the case may be, shall be decided at meetings regularly called with notice to
all Shareholders. For purposes of determining a "majority in interest", a
Shareholder's interest will be his interest in the profits and losses of the
Corporation as set forth herein and a majority will mean fifty-one (51%) percent
or more.
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(c) Notice of Meeting: Written or telephonic notice stating the place, day
and hour of the meeting, the purposes for which the meeting is called shall be
delivered not less than three (3) days before the date of the meeting, either
personally or by mail, by or at the direction of any Shareholder, to each other
Shareholder or record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the Shareholder at his address as it appears on the books of the
Corporation, with postage thereon prepaid. When all the Shareholders of the
Corporation are present at any meeting, or if those not present sign in writing
a waiver of notice of such meeting, or subsequently ratify all the proceedings
thereof, the transactions of such meting are as valid as if a meeting were
formally called and notice had been given.
Procedure: The Shareholders may adopt rules of procedure for the
Corporation --------- meetings, which rules shall not be inconsistent with this
agreement.
Informal Action of Shareholders: Unless otherwise provided by law, any
action required to be taken at a meeting of the Shareholders, or any other
action which may be taken at a meeting of the Shareholders, may be taken without
a meeting if a consent in writing, setting forth the action taken, shall be
signed by all Shareholders entitled to vote with respect to the subject matter
thereof.
(d) Telephonic Meeting: Shareholders of the Corporation may participate in
any meeting of the Shareholders by means of conference telephone or similar
communication of all persons participating in such meeting can hear one another
for the entire discussion or the matter(s) to be voted upon. Participating in a
meeting pursuant to this Section shall constitute presence at such meeting.
3. Management Restrictions
(a) Loans: No loans other than the loan made by Xxxxxx Xxxxxxx, as
evidenced by a Security and Pledge Agreement, dated November 13, 1998, to the
Corporation shall be contracted on behalf of the Corporation and no evidences of
indebtedness shall be issued in its name other than in the ordinary course of
business, unless authorized by a resolution of the Shareholders. Such authority
may be general or confided to specific instances.
(b) Contracts: The Shareholders may authorize any Shareholder or agent of
the Corporation to enter into any contract or execute any instrument in the name
of and behalf of the Corporation, and such authority may be general or confined
to specific instances. Any Shareholder may enter into contracts in the ordinary
course of business, unless restricted by resolution of the Corporation.
(c) Banking: The Corporation shall maintain bank accounts in the
Corporation's name in a bank chosen by the Shareholders. Checks and drafts shall
be drawn on the Corporation's bank account for Corporation purposes only and
shall be signed by a Shareholder or designated agent. NOTWITHSTANDING the
foregoing, however, all checks, drafts, contracts and instruments, valued in
excess of Ten Thousand ($10,000.00 ) Dollars, must contain the dual signatures
of Xxxx Xxxxxx and any other Shareholder or designated agent.
4. Prior Shareholders' Agreements.
All prior agreements and understandings among the parties hereto with
respect to the subject matter hereof are hereby terminated and are of no further
force or effect.
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5. Shareholders; Subchapter S Election.
(a) The Shareholders own the following number of shares of the common stock
of the corporation, being 100% of the total issued and outstanding shares of the
Corporation:
Shareholder Number of Shares
XXXXXX 765
XXXXXXX 375
XXXXXXX 00
XXXXXXXXX 00
Xxxxxxxx Xxxxx 000
(x) The parties hereto specifically acknowledge that it is contemplated
that the Corporation will elect to be treated as an "S corporation," as defined
in Section 1361 of the Internal Revenue Code of 1986, as amended (the "Code") on
both a ~federal and state level, and as such, agrees to promptly file with the
proper authorities all documents necessary to effectuate the same. Thereafter,
the Corporation shall make distributions from its cash flow or shall use its
best efforts to obtain financing, if necessary, for it to make annual cash
distributions to its Shareholders, whether characterized as salary, bonus,
incentive compensation, or otherwise, on or before April 13 of each year
following a year (the "Prior Year') with respect to which the Corporation had
Taxable Income (as defined below), in an amount at least equal to each
Shareholder's percentage shareholdings in the Corporation multiplied by the
product of: (x) the sum of the highest marginal federal income tax rate and the
Highest Effective Florida Tax Rate (as defined below) applicable to individuals
with respect to income earned during the Prior Year; multiplied by (y) the
amount of the Corporation's Taxable Income for the Prior ear. For purposes of
this Agreement, the Corporation's "Taxable Income" shall mean, with respect to
any year, its gross income for that year minus all deductions allowed for that
year (determined without excluding the items described in Section 1366(a)( l)(A)
of the Code, and the "Highest Effective Florida Tax Rate" shall mean, with
respect to any year, the highest marginal Florida State income tax rate
applicable to individuals for that year multiplied by the excess of 100% over
the highest marginal Federal income tax rate applicable to individuals for that
year.
(c) Only Shareholder Xxxxxxx has heretofore invested in the capital of the
Corporation , in the amount of $100,000.00. $10,000.00 has been deposited with
Xxxxx X. Xxxxx, Attorney Trust Account, subject to an Escrow Agreement dated on
or about November 5, 1998. Shareholder Xxxxxxx shall contribute the remaining
balance with the execution of this agreement. Each Shareholder agrees that, at
any time and from time to time, the Corporation may require each such
Shareholder to lend or contribute in cash to the capital of the Corporation, at
the Corporation's option, additional amounts at such times and upon such
conditions as shall be agreed upon by both Shareholders.
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6. Management of the Corporation and Voting.
(a) Each Shareholder agrees, from and after the date hereof to elect Xxxx
Xxxxxx and directors of the Corporation, and to continue to vote for the
election of such directors during the term of this Agreement. In the event
either such director dies, is adjudicated incompetent or resigns, the successor
holder(s) of the shares formerly held by such director shall be entitled to
designate, by majority vote, a director to fill the vacancy, whom all of the
Shareholders shall also elect as a director. The Shareholders shall continue to
vote for such successor director(s) and remaining named directors during the
term of this Agreement. Notwithstanding the foregoing, (I) the unanimous consent
of the board shall be required in order to approve a merger, divestiture, sale
by the Corporation of all or substantially all its assets, or any corporate
expenditure in excess of $5000, or any corporate borrowing in any account which
borrowing is not made in the ordinary course of business (by way of illustration
and not by way of limitation, either Shareholder acting individually may
establish a documentary letter of credit arrangement with a bank or similar
financial institution and may borrow thereunder provided such activity is
incident to the Corporation's ordinary business dealings and is itself in the
ordinary course of such business dealings).
(b) The Shareholders, whether in their capacities as directors or by so
instructing their respective designated directors, further agree to cause the
election of the following persons as officers of the Corporation throughout the
term of this Agreement:
Xxxx Xxxxxx President Chief Executive Officer
Xxxx Xxxxxxx Vice President Operations and Finance
Xxxxx XxXxxxxx Vice President Education and Communication
Xxxxxx Xxxxxxxxx Executive Director of Clia/Agent Educational
Tour Operations
Xxxxx X. Xxxxx Vice President, General Counsel
(c) Notwithstanding Subsections (a) and (b) above, in the event any
Shareholder shall sell all of his shares of the Corporation, such Shareholder
will, at that time, resign as an officer and director of the Corporation or, if
applicable, cause his designee to resign as such.
(d) So long as the Corporation shall have in effect a valid "S corporation"
election, each Shareholder agrees that, in his capacity as a director and/or
officer of the Corporation, he shall not vote for or otherwise cause the
Corporation to engage in any transaction that would result in the termination of
the Corporation's status as an "S corporation" for Federal or Florida State tax
purposes. Nothing contained herein shall preclude the Shareholders from voting
to terminate the Corporation's status as an "S corporation," as permitted by
applicable law.
7. Restrictions on Sale or Other Disposition of Shares.
(a) Except as specifically provided in Subsection (b) hereof; no
Shareholder shall sell, assign, transfer, mortgage, pledge, encumber, grant a
security interest, or in any other manner dispose of any shares of stock of the
Corporation (or any right or interest therein) which may now or hereafter be
owned by such Shareholder, without first offering all of his shares for purchase
as set forth in Section 5 below, at the purchase price determined and payable in
accordance with the provisions of Section 6 hereof. Except as otherwise provided
in Section 5 hereof; or as all Shareholders and the Corporation may otherwise
agree in writing, no Shareholder shall at any time offer less than all of his
shares of stock of the Corporation for purchase as set forth below, whether to
parties hereto or third parties.
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(b) Notwithstanding anything to the contrary contained herein, so long as
the Corporation shall continue to have a valid election to be taxed as an "S
corporation," no transfers of any shares of the Corporation shall be made to any
person or entity which does not quality as an eligible shareholder of an "S
Corporation," nor shall any other transfer be permitted which would result in
the termination of the Corporation's status as an "S corporation" for Federal or
Florida State tax purposes.
(c) Any transfer of shares in violation of this Section 4 shall be
conclusively deemed null and void.
(d) Notwithstanding anything contained herein to the contrary, Xxxxxx
agrees not to sell , pledge, encumber or assign any of her shares in said
Corporation until Xxxxxxx os repaid for her loan along with applicable interest,
if any.
8. Sale of Shares.
(a) If at any time, a Shareholder shall desire to dispose of any or all of
his shares of the Corporation, such Shareholder (the "Offeror") shall first
offer to sell all of the shares then owned by such Offeror to the other
Shareholders, pro rata to their respective shareholdings, at the price and upon
the terms and conditions hereinafter set forth. The other Shareholders shall
have a period of 30 days from the receipt of the offer in which to accept or
reject such offer, in whole or in part, by written notice to the Offeror and
each other Shareholder. In the event any of such remaining Shareholders declined
to purchase his full pro-rata portion of the shares so offered within 30 days
from receipt of such offer, the other remaining Shareholders may agree to
purchase the balance of such shares (or his or their pro-rata portion, as the
case may be) within a further 60-day period. If the remaining Shareholders
together fail to purchase all of the shares of the Offeror (unless all parties
have agreed in writing to a partial sale), the Offeror shall be entitled to sell
or otherwise dispose of the remainder of his shares of stock to any third party
on terms not more favorable to such third party than those provided herein, for
a period of 30 days from the date the last offer made hereunder shall expire,
and provided that such third party agrees in writing to be bound by all of the
terms and conditions of this Agreement. At the end of such 30 day period, the
Offeror shall advise the other parties hereto in writing as to the consummation
of a sale of all of his shares in a bona fide transaction during such period.
(b) In the event that a proposed third party purchaser offers to purchase
such shares at a lower price or upon terms and conditions which are more
favorable to such third party than those previously offered by the Offeror to
the other Shareholders pursuant hereto, the Offeror shall give written notice of
the terms of the third party offer to the remaining Shareholders who shall have
the right to purchase all such shares on the terms offered by such third party,
in accordance with the provisions of Subsection (a) above, except that the
offering periods in Subsection (a) at the end thereof shall be limited to five
(5) business days.
(c) Each offer made hereunder and notice of acceptance or rejection shall
be made in writing and mailed to the Corporation and each of the Shareholders.
(d) Any subsequent transfer of the shares sold hereunder, whether to the
remaining Shareholders or third parties, shall be subject to and in accordance
with the terms hereof.
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(e) There shall survive the sale of any shares by any party hereto the
liability of such selling Shareholder for his pro-rata portion of any taxes,
penalties, fines or assessments (not included in the value of the shares sold)
which may be imposed on the Corporation by any federal, state or local
government or any agency, department or bureau thereof after the date of such
sale, by reason of its corporate operations up to such date. Conversely, the
selling Shareholder shall be entitled to his pro rata portion of any refund,
credit or reduction on account of any tax, fine or assessment imposed prior to
such date, for which no credit was given in the computation of the total value
of the shares sold.
(f) Upon a sale of all of a Shareholder's shares, the employment of such
Shareholder by the Corporation, if any, shall be terminated on the Closing Date
of such sale (as hereinafter defined). Any loans or debentures payable by the
selling Shareholder to the Corporation as of the Closing Date, whether or not
then due and payable in accordance with their terms, shall be paid and at a rate
of 50 percent at closing and the balance within six (6) months, and discharged
by the selling Shareholder, on the Closing Date, in cash.
(g) It is agreed that in effectuating any purchase of shares hereunder by
the Corporation: (I) the Corporation shall first utilize its then available
surplus to purchase all or so much of the shares which the Corporation has
elected to purchase as is possible, provided such purchase does not violate
applicable law; and (ii) the Corporation and the remaining Shareholders shall
promptly take those steps necessary to reduce the capital of the Corporation to
the extent necessary to increase the surplus available for the purchase of any
balance of shares unpurchased, provided such reduction does not violate
applicable law and provided further, however, that if the Shareholders, other
than the selling Shareholder, so desire, they may in lieu of effecting a
reduction of the stated capital of the Corporation, elect to contribute to the
Corporation a sufficient amount of cash or property to enable the Corporation to
purchase such shares or to make any payment or payments due hereunder. Solely
for the purpose of effecting such reduction in stated capital, the Shareholders
grant to, and are hereby deemed to have executed in favor of each other:
(A) An irrevocable proxy to vote all of the shares of the Corporation
owned by the grantor of the proxy in favor of a reduction in stated capital
at a meeting of the Shareholders of the Corporation held to vote upon and
authorize such reduction in stated capital or in any action taken without a
meeting; and
(B) An irrevocable power of attorney to execute and file any and all
documents required to be signed and filed by the grantor of the power of
attorney in order to effect the requisite reduction in stated capital.
(C) Notwithstanding anything contained herein to the contrary, in the
event of death of either of any shareholder, the estate of said shareholder
shall be bound by the terms of this agreement to relinquish any rights it
has to the shares of said company in exchange for the benefit of a life
insurance policy which shall be purchased by said corporation in amounts of
death benefits no less than $1,000,000.00 for shareholder Xxxx Xxxxxx, for
a period of coverage for not less than 15 years from the date of this
agreement. Such life insurance policies' death benefit amount may be
increased periodically by vote of the Board of Directors, as may the length
of coverage, or even the kind of coverage from term coverage to whole life
or otherwise.
Nothing herein shall be deemed to require the Corporation to purchase any
shares.
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(D) Notwithstanding anything contained herein the contary, a unanimous
vote of the shareholders shall be required to waive any of the provisions
of the above Section "8" entitled " SALE OF SHARES"
9. Purchase Price; Payment by Corporation and/or Remaining Shareholder(s)
(a) The purchase price of any shares of the Corporation sold to remaining
Shareholder(s) pursuant to Section 3 hereunder shall be the certificate value
("Certificate Value") thereof as hereafter defined. For the purpose of this
Agreement, the Certificate Value of each share of the Corporation owned by the
Shareholders shall be determined by each Shareholder's respective "shareholder's
equity" in the Corporation as carried on the Corporation's balance sheet at the
time of disposition. The Certificate Value shall be the product of the selling
Shareholder's "shareholder's equity" multiplied by (I) one, during the period
from the date hereof through and including the second anniversary date hereof or
(ii) two, during the period beginning the day after the second anniversary date
hereof and at all times thereafter. For purposes of this Agreement, such
determination shall be made by the regular certified public accountants for the
Corporation (with or without an audit as shall, in the judgment of such
accountants, be appropriate) and shall be final, conclusive and binding on all
of the parties hereto, including the personal or legal representatives of any
deceased or disabled party. Such determination shall be made in accordance with
generally accepted accounting principles and, to the extent consistent
therewith, in accordance with the regular methods and practices employed by the
Corporation in keeping its books; provided, however, that there shall not be
included in the calculation of net earnings or net losses hereunder the net
proceeds (actual proceeds less cash surrender value) realized from any insurance
policy owned on the life of a deceased Shareholder.
(b) The purchase price of such shares, as so determined pursuant to
subparagraph (a) above, shall be paid by the purchaser's execution and delivery
to the selling Shareholder, his legal representative, personal representative or
heirs, as the case may be (the "Selling Shareholder") of a non-negotiable
installment promissory note, in the principal amount of such purchase price (or
balance thereof as provided below), bearing interest on the unpaid principal
balance at the rate of 1% per annum above the "prime rate" of the Bank of
Florida, or any successor thereto, and payable in equal consecutive monthly
installments of principal and interest over a two (2) year period, the first
such payment commencing two (2) months following the Closing Date; provided,
however, that if such sale shall take place at anytime on or after the second
anniversary date of the date hereof the purchaser(s) of such shares being sold
by the selling Shareholder shall be required to pay, on or before the Closing
Date, in certified funds or by wire transfer, a down payment on such purchase
price equal to 35% of such purchase price. Such note shall provide that (i) in
the event of a sale of the assets of the Corporation or the dissolution and
liquidation of the Corporation, the unpaid balance of such note, together with
accrued interest, shall become due and payable forthwith, (ii) in the event of a
default in the payment of any installment of principal or interest due
thereunder, the entire unpaid balance thereof together with accrued interest,
shall become due and payable at the election of the holder of the note on ten
(10) days' prior written notice to the maker, unless such default is cured
within such ten (10) day period, and (iii) the principal balance thereof
together with accrued interest thereon, may be prepaid at any time, in whole or
in part, without premium or penalty.
In the event the sale of shares results from the death or disability of a
Shareholder, all proceeds obtained by any purchaser of such shares from any life
insurance policy(ies) or disability insurance policy(ies) maintained by such
purchaser on the life of the selling Shareholder shall first be paid to the
estate of such Shareholder, or to such Shareholder if disabled, and such amount
shall be credited against (and reduce) the purchase price payable pursuant to
the foregoing.
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(c) (i) The closing of any sale and purchase of shares hereunder shall take
place at the offices of the Corporation within ten (10) days after delivery of
the filial acceptances pursuant to Section 4 hereto at a time to be designated
(the "Closing Date"). In connection therewith, the Shareholders agree to execute
an escrow agreement in form and substance satisfactory to them and the
attorney(s) in connection with the escrow provided for below and agree to
indemnify such attorney(s) and hold him (them) harmless from and against any
liability arising from such escrow except for such attorney(s)' willful
misconduct or gross negligence.
(ii) On the Closing Date, the selling Shareholder shall deliver the
certificates representing the shares being sold, endorsed in blank or
accompanied by stock powers endorsed in blank to the selling Shareholder's
attorneys, together with all necessary instruments of transfer and necessary tax
stamps affixed, to be held by sash attorneys in escrow pending payment of the
full purchase price. The selling Shareholder shall also on such date deliver to
the Corporation his immediate resignation (or the immediate resignation of his
designee, as the case may be) as an officer and director of the Corporation. All
such shares sold hereunder shall be pledged by the purchaser to secure full
payment of the note. During the period of sash escrow and pledge, the selling
Shareholder shall not be entitled to vote the shares sold except on the issue of
dissolution, and shall not receive any distributions on or have any rights of a
shareholder with respect to such shares. In the case of a purchase from a
personal representative of a deceased Shareholder, the certificates representing
such shares shall also be accompanied by a certificate of the appointment of the
representative, a certified copy of the Will, if any, an affidavit to the effect
that all legacies, debts, claims and taxes have been paid or are amply provided
for, and other applicable State tax waivers and releases of tax liens. Upon due
proof being finished to such attorneys of payment of the frill purchase price,
said certificates shall be delivered to the purchaser(s).
(iii) in the event of a default in the making of such payments, not cured
within the ten (10) day cure period referred to above, the parties agree that if
the selling Shareholder so elects by written notice to the Corporation and
remaining Shareholder(s) during the continuation of such default, the remaining
Shareholder(s) will cause the Corporation and its subsidiaries, if any, to be
liquidated and dissolved, and the selling Shareholder shall be entitled to
receive the entire unpaid amount of the note, plus interest, prior to any
distribution of the net assets of the Corporation to the remanding
Shareholder(s). Such liquidation and dissolution shall be achieved through an
orderly program calculated to protect the interests of each of the
Shareholder(s) and shall take place over a period of time not to exceed one (1)
year following the date of the default. To accomplish such liquidation and
dissolution, each of the Shareholders hereby grant to, and is deemed to have
executed in favor of the selling Shareholder; (A) an irrevocable proxy to vote
all of the shares of the Corporation owned by the grantor of the proxy in favor
of such liquidation and dissolution by a written consent of Shareholders without
a meeting or at a meeting of the Shareholders held for the purpose of author-
such liquidation and dissolution; and (B) an irrevocable power of attorney to
execute and file any and all documents required to be signed and filed by the
grantor of the power in order to effectuate the liquidation and dissolution of
the Corporation.
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In the alternative, if no demand for dissolution and liquidation is made,
the selling Shareholder shall have the right to demand and enforce collection of
the balance of the note, with interest thereon, or, upon ten (10) days' prior
written notice to the purchaser and the Corporation and without advertisement,
to sell, assign, grant options to purchase, and/or deliver the pledged shares or
any part thereof in such manner as the selling Shareholder, in his/her
discretion, may deem proper, In any public or private sale, for cash, credit or
future delivery, and to apply the net proceeds of such sale, after deducting the
costs of sale, including reasonable attorney's fees and disbursements, to the
payment of the unpaid principal of the note together with accrued interest. Any
such sale shall be fee and clear of the restrictions imposed by this Agreement.
Upon any sale of the pledged shares or any part thereof the selling Shareholder
or any third party may purchase the same for his own account without
accountability to the maker of the note and free and discharged of any equity of
redemption. In the event there shall be a balance remaining, after the payment
of the entire balance of the note plus accrued interest and all such costs and
expenses, such excess proceeds shall be paid to the maker of the note.
10. Deemed Offers of Sale.
(a) In the event of the death of a Shareholder, the personal representative
of such deceased Shareholder shall be deemed to have offered all of the shares
of the Corporation owned by such Shareholder for sale pursuant to Section 5
hereto as of the date of death of such Shareholder.
(b) In the event of the disability of a Shareholder, such individual shall
be deemed to have offered all of the shares of the Corporation owned by such
Shareholder for sale pursuant to Section 5 hereof as of the last day of the
"Disability Period" (as defined below).
(c) For purposes of this Section 7, an individual shall be considered
disabled if he or she shall become incapacitated by reason of a physical or
mental disability with the result that he or she is unable to devote his or her
customary time and energy to the affairs of the Corporation for a period of six
(6) consecutive months, or for any shorter periods aggregating six (6) months
during any period of twelve (12) consecutive months (the "Disability Period"). A
Shareholder shall be entitled to receive his/her ordinary compensation
arrangement during the Disability Period less any payment received by him,
directly or indirectly, on account of any disability insurance policy .
(d) In the event that the shares owned by any Shareholder are subject to
divesture by a court of competent jurisdiction, including, by way of example and
not Limitation, an award pursuant to the equitable distribution provisions of
the Domestic Relations Law of the State of Florida or the similar laws of any
other jurisdiction, such Shareholder shall be deemed to have made a voluntary
offer, pursuant to Section 5 hereof to sell that portion of his shares in the
Corporation subject to divestiture, as of the date of the applicable court
order. Notwithstanding Subsection (b) below, such Shareholder shall immediately
give written notice of the existence of such court order to the other parties
hereto, and the time periods specified in Section 5 shall run from the date such
notice is given.
(e) In the event (I) a petition shall be filed by or against any
Shareholder for relief pursuant to any law for the relief of debtors, (li) a
Shareholder shall make an assignment for the benefit of his creditors, or (ii)
there shall be a levy of execution under a judgment against any Shareholder,
unless the same shall be dismissed, withdrawn, satisfied, released or cured
within thirty (30) days, such Shareholder tutu be deemed to have made an
irrevocable offer to sell all of his shares of the Corporation pursuant to
Section 5 hereof as of the date of such event.
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(f) Notwithstanding the provisions of Section 5 to the contrary, notices
required to be given by the selling Shareholder pursuant to Section 5 shall not
be required for the purposes of offers deemed to be made pursuant to ibis
Section 7, but shall be deemed given as of the date the oiler is deemed made
pursuant to this Section 7.
11. Restrictive Covenant.
(a) During the term of this Agreement, each Shareholder shall devote so
much of his/her time and attention and apply his skill and knowledge to the
business of the Corporation as shall be necessary to fulfill all his obligations
thereto. In addition, for a period of three (3) years after the Closing Date of
any sale of shares by a Shareholder, such Shareholder shall not, directly or
indirectly, engage or participate in, or be in any manner connection with, any
'other business which is similar to or competes with any business operations or
activities of the Corporation or any of its divisions, subsidiaries or
affiliated companies or act as a director, officer, partner, consultant, or
employee for or make any financial investment in any other firm, corporation or
other such enterprise anywhere in the United States, without the express written
approval of the Corporation. Nothing contained herein, however, shall restrict
any Shareholder from making any investments in any business or enterprise whose
securities are listed on a national securities exchange or active traded in the
over-the-counter market, which business or enterprise is or might be, directly
or indirectly, in competition with the business operations of the Corporation;
provided, however, that such investment does not give Shareholder the right to
control or influence the policy decisions of such business.
(b) During the term of this Agreement and at all times thereafter, no
Shareholder may divulge, furnish or make accessible to anyone (other than in the
regular course of business of the Corporation or at the request of the
Corporation) any knowledge or information with respect to confidential or secret
methods, data, ideas, creations, hardware, software, programs, codes, formulae,
plans, materials and processes (including improvements and enhancements thereof)
of the Corporation or any of its divisions, subsidiaries, affiliates or outside
contractors including, without limitation, any customer or client lists,
telephone leads, prospect lists, advertising and sales promotion materials,
forms or literature and manufacturing processes (collectively, "Intangible
Property"). Moreover, each Shareholder agrees that any Intangible Property that
he may conceive, make, invent, develop or suggest during the term of this
Agreement (whether individually or jointly with any other person or persons),
relating in any way to the business or activities of the Corporation shall be
the sole, exclusive and absolute property of the Corporation. Such Shareholder
will immediately disclose any Intangible Property to the Corporation, except
where the same is lawfully protected from disclosure as the trade secret of a
third parry or by any other lawful bar to such disclosure. Each Shareholder
further agrees that without either remuneration (except out-of-pocket expenses)
and whether or not such Shareholder is still employed by or owns shares of the
Corporation, he will, at the Corporation's request, execute and deliver any
documents and give reasonable assistance which may be essential or desirable to
secure to, assign, and vest in the Cow oration the sole and exclusive right,
title and interest in and to such Intangible Property including, in those
instances where the Corporation determines in its sole discretion, to apply for
letters patent of the United States of America and (or other countries, patent
applications, copyright applications, assignments, affidavits, priority claims
or otherwise now or hereafter essential or desirable in the opinion of
Corporation in obtaining, maintaining and (or defending such patents, copyrights
or other proprietary tights and in securing to and vesting in the Corporation
the sole and exclusive right, title and interest in and to such rights.
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(c) Each Shareholder agrees that during the term of this Agreement and for
a period of three (3) years after the Closing Date of any sale of shares by ham,
he will not:
(i) Directly or indirectly solicit, raid, entice or induce any other
Shareholder or employee of the Corporation or of any of its divisions,
subsidiaries or affiliated companies to be employed by any other person, firm or
corporation; or
(ii) Directly or indirectly approach any such Shareholder or employee for
such purposes; or
(iii) Authorize or knowingly approve the taking of such actions by other
persons on behalf of any such person, firm or corporation or assist any such
person, firm or corporation in taking such action.
(d) Each Shareholder agrees that during the term of this Agreement he will
not enter into on behalf of the Corporation or cause the Corporation to enter
into, directly or indirectly, any transaction with any business organization in
which he or any member of his immediate family may be interested as a partner,
trustee, director, officer, employee, shareholder, other equity holder, lender
of money or guarantor, unless the material acts as to his interest and as to the
transaction are disclosed or are known to the Corporation.
(e) In the event of a judicial determination of the unreasonableness,
illegality or unenforceability of all or any part of these covenants with regard
to tame, geographical limitations or prohibited activities, it is agreed by the
parties that their intention is that this Agreement should be considered to be
effective within judicially determined reasonable limits, time and prohibited
activities.
12. Specific Performance.
Inasmuch as the shares of the Corporation cannot be readily purchased or
sold on the open market, irreparable damage would result in the event this
Agreement is not specifically embraced. Therefore, the sights to, or obligations
of; purchase and sale of shares hereunder shall be enforceable in a court of
equity, or other tribunal of competent jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for and granted in
connection therewith. Such remedies and all other remedies provided for in this
Agreement shall, except where otherwise specifically provided, be cumulative and
not exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.
13. After-Acquired Shares.
The terms and provisions of this Agreement shall apply to all of the shares
of the Corporation now owned or which may hereafter be issued to the
Shareholders in consequence of any additional issuance, purchase, exchange or
reclassification of shares, corporate reorganization, or any other form of
recapitalization, consolidation, merger, share split-up, share dividend or
distribution or which are acquired by the Shareholders in any other manner
whatsoever.
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14. Legend.
Each certificate representing shares of the Corporation owned by the
parties hereto or by any persons subject to the provisions of this Agreement
shall have stamped, printed or typed thereon the following legend: "This
certificate and the shares represented hereby are subject to and transferable
only in accordance with the provisions of a certain Shareholders' Agreement
dated as of September 19, 1997 among Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxxx, the
Corporation, a copy of which is on file with the Secretary of the Corporation."
15. Agreement by Corporation.
The Corporation hereby agrees that it will not at any time permit any
transfer to be made on its books or records of the certificates representing the
shares of any Shareholder unless such transfer is made pursuant to and is in
accordance with the terms and conditions of this Agreement.
16. Terminal.
This Agreement shall terminate upon the earliest of
(a) The unanimous consent in writing of all of the then shareholders of the
Corporation; or
(b) The expiration of thirty (30) days after a petition in bankruptcy shall
have been filed by or against the Corporation and such petition shall not have
been discharged during such thirty (30) day period; or upon an assignment by the
Corporation for the benefit of its creditors; or upon the expiration of thirty
(30) days after the commencement of any proceeding under any Act of Congress or
state governmental authority for the relief of debtors seeking the relief or
readjustment of indebtedness either through reorganization, composition,
extension or otherwise, and such proceeding involving the Corporation as debtor
shall not have been vacated within such thirty (30) day period; or upon the
voluntary or involuntary dissolution of the Corporation; or
(c) The sale of all or substantially all the Corporation's assets.
17. Finances: Records.
(a) All cash; checks and instruments fir the payment of monies shall be
deposited in the Corporation's bank account(s) as may be selected by the Board
of Directors.
(b) The directors and officers of the Corporation shall cause the
accountants for the Corporation to deliver each Shareholder, not less frequently
than annually and no later than by March 15th of the succeeding year (unless the
Corporation shall have validly and timely filed for an extension of its filing
due date on all Federal, state and local tax returns based upon income required
to be filed by it, in which event such date shall be deferred to the latest
effective date of such filing extensions); true and complete copies of Schedule
K-1 to Form 1120S and/or such other or additional forms as the Corporation may
be required to file, in order fir each shareholder to adequately prepare his
individual tax returns. The first such statement shall be delivered within 73
days following the end of the Corporation's first fiscal year.
(c) The parties agree that each party hereto shall have the right, during
normal business hours, to have the books of the Corporation examined and/or
audited by a certified public accountant of his choosing, at his own expense.
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(d) The parties have reviewed a set of papers collectively referred to as
Schedule "A" which is incorporated by reference herein, and made a part hereof.
Said Schedule "A" titled "VISTA VACATIONS INTERNATIONAL BUSINESS PLAN", dated
October, 1998 is a business plan that was prepared for the purpose of analyzing
the viability of entering into such a business venture, and is the sole the
criteria used by the parties to determine the financial model to be employed by
the parties. The parties agree to follow said plan, and to substantially follow
the costs, budgets and projections, especially that of salaries stated therein.
18. Complete Agreement and Survival of Covenants.
This Agreement constitutes the complete understanding among the parties
hereto with respect to its subject matter and no alteration, modification or
amendment of any of the provisions hereof shall be valid unless made in writing
and signed by all of the parties hereto. Termination of this Agreement shall
have no effect on the rights of any party against any other party hereunder in
respect of acts or omissions prior to such termination, or upon the obligations
of any party which are specifically stated to or necessarily extend beyond the
date of termination.
19. Successors and Assigns.
Neither this Agreement nor any of the rights and obligations hereunder
shall be assignable by any party hereto except with the prior written consent of
all other parties hereto. All of the terms of this Agreement shall inure to the
benefit of and shall be binding upon the heirs, personal representatives, legal
representatives, successors and permitted assigns of the individual parties
hereto and upon the successors and permitted assigns of the Corporation.
20. Notices.
All notices, offers and other communications made under or pursuant to the
terms of this Agreement shall be in writing and shall be sent by certified mail,
return receipt requested, postage prepaid, via Federal Express or similar
overnight courier service (provided it gives receipts for all packages picked
up) or personally delivered against receipt, to the respective addresses of the
parties as first set forth herein, or to such other address as shall hereafter
be designated by any party for the giving of such notices, by written notice to
the other parties given in accordance herewith.
21. This Agreement, its performance and the rights, obligations and
remedies of the parties hereto, shall be construed and governed by the laws of
the State of Florida without regard to its principles of conflict of laws.
22. Amendment of Certificate of Incorporation or By-laws.
Each Shareholder agrees that he will consent to and approve any amendment
of the Certificate of incorporation or By-Laws of the Corporation which may be
necessary or advisable in order to conform any of the provisions of this
Agreement or any amendments hereto to the applicable laws of the State of
Florida now or hereafter enacted, including, without limitation; the Florida
Business Corporation Law. Each Shareholder further agrees to vote his shares of
the Corporation and to execute and deliver such documents as may be necessary in
order to implement the provisions of the preceding sentence. In furtherance of
the foregoing, each Shareholder hereby grants to the other Shareholder(s), for
the duration of the Term hereof, an irrevocable proxy to vote all the shares of
the Corporation owned by such Shareholder in accordance with the terms and
provisions of this Section 19.
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23. Construction.
As the context so requires, terms herein in the masculine form shall be
construed as including the feminine form as well as neater and the singular form
shall include the plural and vice versa.
24. Counterparts.
This Agreement maybe executed in any number of counterparts, each of which
shall be an original, but all of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
VISTA VACATIONS INTERNATIONAL, INC.,
[corporate seal]
By: /s/ Xxxx Xxxxxx, President
By: /s/ Xxxx Xxxxxxx, Treasurer
By: /s/ Xxxxxx Xxxxxxxxx, Secretary
By: /s/ Xxxxxx X. Xxxxxxx
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