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EXHIBIT 10.10
MANAGEMENT AGREEMENT
This Management Agreement, dated as of this 27th day of
November, 1996, (this "Agreement") is by and between Booth Creek Ski Holdings,
Inc, a Delaware corporation (the "Company"), and Booth Creek, Inc., a Delaware
corporation (the "Management Company").
RECITALS
A. The Company and its subsidiaries are engaged in the
business of owning and operating ski resorts and related businesses.
B. The management of the Management Company has
extensive experience and expertise in the operation of ski resorts and
businesses related thereto.
C. The Company has requested that the Management Company
provide management services to the Company, Booth Creek Ski Group, Inc., of
which the Company is a wholly owned subsidiary ("Group"), and the Company's
subsidiaries in connection with their ownership and operation of the ski
resorts and related businesses.
D. The Management Company and the Company desire to set
forth their respective agreements regarding the management services to be
provided by the Management Company to the Company and the compensation and
reimbursement to be received by the Management Company therefor.
NOW THEREFORE, intending to be legally bound hereby, in
consideration of the premises and mutual agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Appointment
(a) Subject to Section 6 hereof, the Company hereby
appoints the Management Company to manage and supervise, directly or
indirectly, where applicable, certain aspects of its businesses and operations
including, without limitation, the duties and responsibilities set forth in
Sections 2 and 3 hereof, and agrees that during the term hereof the Management
Company may take such actions as it deems reasonably necessary to render such
management services to the Company, Group and its subsidiaries. The Company
shall, and shall cause Group and its subsidiaries to, cooperate with the
Management Company and reasonably assist the Management Company as required to
enable the Management Company to discharge its duties and responsibilities
hereunder.
(b) The Management Company hereby accepts such
appointment by the Company and agrees to act in accordance with the duties and
responsibilities set forth in this Agreement and to take such actions as may
reasonably be required to discharge such duties and responsibilities.
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2. Board of Directors' Meetings
If requested by the officers or directors of the Company,
Group or of any subsidiary of the Company, the Management Company will have its
management personnel attend meetings of the respective boards of directors of
each such companies, and advise such boards with respect to the conduct of the
business and affairs of such companies.
3. Management Services
The Management Company shall provide general management advice
with respect to the following:
(a) financial services including, without limitation,
cash management, accounting and data processing systems and procedures,
budgeting, equipment purchases, business forecasts, treasury functions and
investor relations;
(b) the preparation by Group, the Company or its
subsidiaries of: (1) consolidated unaudited financial statements of Group, the
Company and its subsidiaries as of the end of each month and quarter of each
fiscal year, (2) annual cash flow budgets and projections, and (3) any other
reports or statements required by institutional investors of Group or
reasonably requested by the board of directors of the Company;
(c) tax matters including, without limitation,
preparation of local, state and federal tax returns, participation in tax
audits or reviews and resolution of tax claims;
(d) legal matters including, without limitation,
negotiation of contracts, preparation of documents, supervision of
investigations, litigation and similar matters, environmental matters and
government regulatory matters;
(e) corporate finance matters including, without
limitation, divestitures, acquisitions, debt and equity financing and capital
expenditures;
(f) administration and operation matters including,
without limitation, unified management of the ski resorts, research, marketing
and promotion;
(g) personnel matters including, without limitation,
employee benefit and retirement plan administration, employee relations,
insurance administration, employment policies and procedures and public
relations;
(h) business insurance matters including, without
limitation, procurement of directors and officers, casualty, crime, fiduciary,
automobile, property, general liability, medical, life and disability
insurance; and
(i) employment of consultants, contractors and agents to
perform services on behalf of the Group, the Company or any of its
subsidiaries.
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4. Fees and Reimbursement of Expenses and Payment
In consideration for the services rendered by the
Management Company hereunder to the Company, the Company agrees to compensate
and pay the Management Company as set forth in this Section 4.
(a) Base Compensation: The Company shall pay the
Management Company the sum of $350,000 per annum (the "Base Compensation")
payable on a monthly basis in advance.
(b) Certain Operations Costs. The Company shall pay the
Management Company amounts necessary to cover operations costs (other than
office operations costs but including, without limitation, reasonable travel
and entertainment costs) of the Management Company attributable to, arising out
of, in connection with, or related to management services rendered to the
Company or any of its subsidiaries by the Management Company.
(c) Third Party Reimbursement: The Company shall
reimburse the Management Company for any other costs or expenses incurred by
the Management Company for independent third party professionals or persons
with respect to its management services set forth in Sections 2 and 3 hereof.
(d) Operating Bonus: In addition to the amounts
identified above, the Company shall pay to the Management Company an operating
bonus (the "Operating Bonus") for each fiscal year that begins during the Term
(as defined in Section 5 below) beginning with the fiscal year which commences
on November 1, 1996, on the terms and conditions set forth in this Section
4(d). The Operating Bonus for each fiscal year shall be paid within 15 days
after Group receives its fiscal year-end audited financial statements for that
fiscal year. For the current fiscal year and for each full fiscal year that
ends during the Term, the Operating Bonus shall be an amount equal to the
product of (i) 2.5% multiplied by (ii) the excess of (x) Consolidated EBITDA
(as defined below) for such fiscal year, over (y) $25 million. For any fiscal
year that begins during and ends after the Term, the Operating Bonus shall be
an amount equal to the product of (1) an amount equal to the product of (i)
2.5% multiplied by (ii) the excess of (x) Consolidated EBITDA for such fiscal
year, over (y) $25 million, multiplied by (2) a fraction, the numerator of
which is the number of days from the beginning of the fiscal year through the
end of the Term, and the denominator of which is 365. "Consolidated EBITDA"
shall have the meaning assigned thereto in those certain Securities Purchase
Agreements dated the date hereof by and between Group and each of Xxxx Xxxxxxx
Mutual Life Insurance Company and CIBC WG Argosy Merchant Fund 2, L.L.C. (The
"Securities Purchase Agreements"). Notwithstanding anything to the contrary,
the Operating Bonus to be paid for any fiscal year shall not exceed $400,000.
(e) Notwithstanding anything to the contrary set forth
herein, the reimbursements to be paid by the Company to the Management Company
hereunder shall not be in lieu of, and the Company shall be directly liable
for, any expenses incurred by the Company, Group or any of its subsidiaries, or
by the Management Company on behalf of Company, Group or any of its
subsidiaries, for services rendered to Company, Group or any of its
subsidiaries by unaffiliated third parties whether or not such third parties
are retained by the Management Company.
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(f) The Management Company shall invoice the Company on a
monthly basis for the respective amounts allocable to such parties and payable
pursuant to Section 4(b) and 4(c), and such parties agree to pay such invoices
on a net 30-day basis.
(g) The Company acknowledges and agrees that (i) the
Management Company's obligation to perform the management services set forth
herein, and (ii) the Management Company's election to pay any third parties any
amounts due and owing by the Company, Group or any subsidiary for any fees,
expenses or costs of any kind is contingent upon and subject to the Management
Company's receipt of its compensation due hereunder and reimbursement from
Company, Group and its subsidiaries in consideration for the management
services rendered to Company, Group and its subsidiaries in amounts which the
Management Company, in its sole and absolute discretion, considers sufficient
to cover any expenditures by the Management Company hereunder.
(h) The Management Company acknowledges that the
obligation of the Company to make the payments hereunder to Management Company
is subject to the provisions of the Securities Purchase Agreements, including
without limitation Section 14.6 thereof.
5. Term.
The term of this Agreement (the "Term") shall commence on the
date hereof and continue until date of termination (the "Termination Date") of
this Agreement as provided in Section 6 hereof.
6. Termination
This Agreement may be terminated as follows:
(a) the Management Company may terminate this Agreement
if the Company fails or refuses (by act or omission) to comply with or perform
in any material respect its obligations under this Agreement and such failure
or refusal continues unremedied for more than sixty (60) days after written
notice thereof has been given to such failing or refusing party by the
Management Company;
(b) the Company may terminate this Agreement upon the
failure or refusal (by act or omission) of the Management Company to comply
with or perform in any material respect its obligations under this Agreement
and such failure or refusal continues unremedied for more than ninety (90) days
after written notice thereof has been given to the Management Company by the
Company; or
(c) the Company may terminate this Agreement as a result
of a reasonable determination by the Company that the Management Company, its
officers or employees have committed a criminal felony or an act of
embezzlement with respect to the funds or property of the Company which could
have been prevented by prudent management by the Management Company;
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provided, however, that, notwithstanding any termination of this Agreement, the
obligations of each party hereunder for services rendered or payments made by
the Management Company prior to such termination shall expressly survive any
termination of this Agreement and remain in full force and effect.
In addition, this Agreement shall terminate automatically upon
consummation of the sale of all or substantially all of the assets or stock of
Booth Creek Ski Group, Inc. and its subsidiaries on a consolidated basis.
Any party hereto terminating this Agreement shall send written
notice of such termination to the other party hereto.
7. Limitation of Liability; Indemnification
(a) To the fullest extent permitted by law, the
Management Company and any officer, director, employee, agent or attorney of
the Management Company (collectively, the "Indemnitees") shall not have any
liability to any of Group, the Company or any of their subsidiaries for any
loss, damage, cost or expense (including, without limitation, any court costs,
attorneys' fees and any special, indirect, consequential or punitive damages of
Group, the Company or any of their subsidiaries) allegedly arising out of the
Management Company's management services rendered to Group, the Company or any
of their subsidiaries hereunder or Indemnities' acts, conduct or omissions in
connection with the Management Company's management services rendered to
Group, the Company or any of their subsidiaries hereunder; provided, however,
that this provision shall not apply if such loss, damage, cost or expense
arises out of (i) an act of embezzlement or commission of a criminal felony by
the Management Company or (ii) willful misconduct or gross negligence by the
Management Company.
(b) To the fullest extent permitted by law, the Company
agrees to indemnify the Indemnitees and hold the Indemnitees harmless against,
any loss, damage, cost or expense (including, without limitation, court costs
and reasonable attorneys' fees) which the Indemnitees may sustain or incur by
reason of any threatened, pending or completed investigation, action, claim,
demand, suit, proceeding or recovery by any person (other than the Indemnitees)
allegedly arising out of the Management Company's management services rendered
to Group, the Company or any of their subsidiaries hereunder or the
Indemnitees' acts, conduct or omissions in connection with the Management
Company's management services rendered to Group, the Company or any of their
subsidiaries hereunder, except in any instance in which the Indemnitees would
not be exempted from liability under Section 7(a) hereof.
(c) Any Indemnitee shall as promptly as practicable
notify the Company of a claim as to which indemnification is sought by such
Indemnitee; provided, however, that the Company shall not be relieved of its
obligations hereof by reason of the failure by such Indemnitee to give such
notice to the Company except to the extent that such failure interferes with or
adversely affects the Company's or defense in connection with such claim. The
Company shall have the right in its sole discretion to defend or compromise any
claim for which indemnification is sought under this Section 7, and such
Indemnitee shall reasonably cooperate with all reasonable requests of the
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Company in connection therewith; provided, however, if (i) the Indemnitee has
been advised by counsel that an actual or potential conflict of interest could
exist were such Indemnitee to be represented by counsel for the Company or (ii)
such Indemnitee has been indicted or otherwise charged in a criminal complaint,
such Indemnitee may have separate counsel, the reasonable fees and expenses of
counsel engaged on behalf of such Indemnitee to be borne by the Company. An
Indemnitee, at any time and at its own expense, may participate in any judicial
proceeding controlled by the Company pursuant to this Section 7(d). To the
extent that an Indemnitee would be entitled to indemnifications under this
Section 7 but a court determines the undertaking to indemnify and hold harmless
set forth in this Section 7 is unenforceable because it is violative of any law
or public policy, the Company shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities and obligations incurred by the
Indemnitees or any of them.
8. Notices
All notices and other communications to any of the parties
hereto required or permitted under the Agreement (including, without
limitation, any termination notice) shall be in writing and shall be deemed to
have been given (a) when delivered to the addressee in person, (b) when sent by
facsimile after confirmation of receipt, (c) when sent via overnight mail, one
business day after being sent, or (d) three (3) business days after being
deposited in the United States mail, first class postage prepaid, registered or
certified mail, addressed to the respective addressee(s) at the following
addresses:
If to the Management Company: 0000 X. Xxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
If to the Company: 0000 X. Xxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
or, to such other address as any party hereto shall previously have designated
by written notice to the other parties hereto in accordance with this Section
8.
Any notice or other communication sent by telecopier or
similar facsimile telecommunication shall be confirmed promptly by the sending
of a copy of such notice or other communication to the addressee thereof by
United States mail, first class postage prepaid, registered or certified mail.
9. Amendment; Assignment; Binding Effect
This Agreement may be amended or modified only by a written
instrument signed by all the parties hereto. No party shall assign or transfer
this Agreement, in whole or in part, or any of such party's rights or
obligations hereunder, to any other person or entity without the prior written
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consent of the other parties hereto. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
10. Waiver; Severability
The failure of a party hereto to insist in any instance upon
the strict and punctual performance of any provision of this Agreement shall
not constitute a continuing waiver of such a provision. No party shall be
deemed to have waived any right, power or privilege under this Agreement or any
provisions hereunder unless such waiver shall have been in writing and duly
executed by the party to be charged with such waiver, and such waiver shall be
a waiver only with respect to the specific instance involved and shall in no
way impair the rights of the waiving party or the obligations of any other
party in any other respect or at any other time. If any provision of this
Agreement shall be waived, or be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain binding and in full force and effect.
11. No Recourse Against Others
Notwithstanding anything contained in this Agreement to the
contrary, a director, officer or employee, as such, of the Management Company
shall not have any liability for any obligations of the Management Company,
Group, the Company or any of the Company's subsidiaries, as the case may be,
under this Agreement or for any claim based upon, in respect of, or by reason
of such obligations or its creation.
12. GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE RIGHTS
OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
13. Entire Agreement
This Agreement constitutes the entire Agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, either oral or written, with respect
thereto.
14. Counterparts
This Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all of which counterparts together
shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
BOOTH CREEK SKI HOLDINGS, INC.
BY: /s/ Xxxxxxx X. Xxxxx
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ITS:
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BOOTH CREEK, INC.
BY: /s/ Xxxxxxx X. Xxxxx
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ITS:
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