MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement"), by and among (i)
Vacation Properties International, Inc., a Delaware corporation ("VPI"), (ii)
Whistler Chalets Limited (the "Company"), a British Columbia corporation and a
wholly-owned subsidiary of Whistler Chalet Holding Corp. ("Whistler Holding"), a
Canadian corporation and a subsidiary of VPI, (iii) Whistler Blackcomb Central
Reservations, Inc., a British Columbia corporation (the "Management Company"),
and (iv) J. Xxxxxxx XxXxxxx (or such other person as shall be appointed to such
position by Management Company, if acceptable to and consented to in writing by
the Company, "Manager"), is hereby entered into as of this [___] day of
[________], 1998, and shall be effective as of the date of the consummation of
the initial public offering of the common stock of VPI.
R E C I T A L S
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A. As of the date of this Agreement, the Company is engaged primarily in the
business of providing residential property management, rental and sales services
and hotel management services.
B. Management Company is retained hereunder by the Company in a confidential
relationship wherein Management Company and Manager, in the course of providing
management services to the Company, has and will continue to become familiar
with and aware of information as to the Company's and VPI's customers, specific
manner of doing business, including the processes, techniques and trade secrets
utilized by the Company and VPI, and future plans with respect thereto, all of
which has been and will be established and maintained at great expense to the
Company and VPI; this information is a trade secret and constitutes the valuable
good will of the Company and VPI.
A G R E E M E N T S
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In consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, the parties hereto
hereby agree as follows:
1. MANAGEMEMENT SERVICES AND DUTIES.
(a) The Company hereby retains Management Company to provide Manager to
perform the services and duties of a President of the Company. As such, Manager
shall have responsibilities, duties and authority reasonably accorded to and
expected of a President of the Company and will report directly to the Board of
Directors of the Company (the "Board"). Management Company and Manager hereby
accept such obligations upon the terms and conditions herein contained and,
subject to paragraph 1(c) hereof, Manager agrees to devote Manager's full
working time, attention, and efforts to promote and further the business of the
Company.
(b) Manager shall faithfully adhere to, execute and fulfill all
policies established by the Company.
(c) Neither Management Company nor Manager shall, during the term of
their respective provision of services hereunder, be engaged in any other
business activity pursued for gain, profit or other pecuniary advantage if such
activity interferes with their duties and responsibilities hereunder. The
foregoing limitations shall not be construed as prohibiting Manager from making
personal investments in such form or manner as will neither require Manager's
services in the operation or affairs of the companies or enterprises in which
such investments are made nor violate the terms of paragraph 3 hereof.
2. FEES.
For all services rendered by Management Company and Manager, the
Company shall compensate Management Company as follows:
(a) Base Management Fee. The base management fee to Management Company
shall be Canadian $60,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures but not less frequently than
monthly.
(b) Incentive Bonus Plan. For 1998 and subsequent years, it is the
Company's intent to develop a written Incentive Bonus Plan (which may be VPI's
Incentive Bonus Plan) setting forth the criteria under which Management Company
will be eligible to receive year-end bonus awards.
(c) Executive Perquisites, Benefits and Other Compensation. Management
Company shall be entitled to receive additional benefits and compensation from
the Company in such form and to such extent as specified below:
(i) Company shall reimburse Management Company for payment of
all premiums for coverage for Manager under health, hospitalization,
disability, dental, life and other insurance plans, such benefits
provided indirectly to Manager under this clause shall be at least
equal to such benefits provided to VPI executives.
(ii) Reimbursement to Management Company for all necessary and
customary business travel and other out-of-pocket expenses reasonably
incurred by Management Company and/or Manager in the performance of
Management Company and Manager's services pursuant to this Agreement,
plus additional reimbursements to Management Company of up to Canadian
$15,000 of expenses incurred by Manager at his discretion. All
reimbursable expenses shall be appropriately documented in reasonable
detail by Management Company and/or Manager, as the case may be, upon
submission of any request for reimbursement, and in a format, time and
manner consistent with the Company's expense reporting policy.
(iii) The Company shall reimburse Management Company for the
provision of such executive perquisites as may be available to or
deemed appropriate for Manager by the Board.
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3. NON-COMPETITION.
(a) Neither Management Company nor Manager shall, during the period of
their performance of services with the Company, and for a period of two (2)
years immediately following the termination of (x) in the case of Management
Company, Management Company's services or (y) in the case of any Manager, such
Manager's services under this Agreement (the "Noncompetition Period"), for any
reason whatsoever, directly or indirectly, for himself or 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 residential property management, rental or sales
business or hotel management business in direct competition with the
Company or VPI or any subsidiary of either the Company or VPI, within
100 miles of the locations in which the Company or VPI or any of the
Company's or VPI's subsidiaries conducts any residential property
management, rental or sales business or hotel management business (the
"Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Company or VPI (including the respective
subsidiaries thereof) in a sales representative or managerial capacity
for the purpose or with the intent of enticing such employee away from
or out of the employ of the Company or VPI (including the respective
subsidiaries thereof), provided that Manager shall be permitted to call
upon and hire any member of his or her immediate family;
(iii) call upon any person or entity which is at that time, or
which has been, within one (1) year prior to that time, a customer of
the Company or VPI (including the respective subsidiaries thereof)
within the Territory for the purpose of providing residential property
management, rental or sales services or hotel management services to
property owners and/or renters in direct competition with the Company
or VPI or any subsidiary of the Company or VPI within the Territory; or
(iv) call upon any prospective acquisition candidate, on
Management Company's or Manager's own behalf or on behalf of any
competitor in the residential property management, rental or sales
business or hotel management business, which candidate, to Manager's
actual knowledge after due inquiry, was called upon by the Company or
VPI (including the respective subsidiaries thereof) or for which, to
Manager's actual knowledge after due inquiry, the Company or VPI (or
any subsidiary thereof) made an acquisition analysis, for the purpose
of acquiring such entity, unless the Company or VPI (or any subsidiary
thereof) has expressly declined to pursue such acquisition candidate or
at least one (1) year has elapsed since the Company or VPI (or any
subsidiary thereof) has taken any action with respect to pursuing such
acquisition candidate.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Management Company or Manager from acquiring as an investment not
more than two percent (2%) of the capital
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stock of a competing business whose stock is traded on a national securities
exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the
Company and VPI as a result of a breach of the foregoing covenant, and because
of the immediate and irreparable damage that could be caused to the Company and
VPI for which they would have no other adequate remedy, Management Company and
Manager each agree that the foregoing covenant may be enforced by VPI or the
Company in the event of breach by either of them, by injunctions and restraining
orders.
(c) It is agreed by the parties hereto that the foregoing covenants in
this paragraph 3 impose a reasonable restraint on Management Company and Manager
in light of the activities and business of the Company or VPI (including VPI's
other subsidiaries) on the date of the execution of this Agreement and the
current plans of the Company or VPI (including VPI's other subsidiaries); but it
is also the intent of the Company, VPI, Management Company and Manager that such
covenants be construed and enforced in accordance with the changing locations of
the Company and VPI (including VPI's other subsidiaries) throughout the
Noncompetition Period. For example, if, during the Noncompetition Period, the
Company or VPI (including VPI's other subsidiaries) establishes new locations
for its current activities or business in addition to the locations currently
established therefor, then Management Company and Manager will be precluded from
soliciting customers or employees from such new locations and from directly
competing within 100 miles of such new locations through the Noncompetition
Period.
It is further agreed by the parties hereto that, in the event that
Management Company or Manager, as the case may be, shall cease to be retained
hereunder, and shall enter into a business or pursue other activities not in
competition with the Company or VPI (including VPI's other subsidiaries), or
similar activities, or business in locations the operation of which, under such
circumstances, does not violate clause (i) of this paragraph 3, and in any event
such new business, activities or location are not in violation of this paragraph
3 or of Management Company's or Manager's obligations, as the case may be, under
this paragraph 3, if any, Management Company or Manager, as the case may be,
shall not be chargeable with a violation of this paragraph 3 if the Company or
VPI (including VPI's other subsidiaries) shall thereafter enter the same,
similar or a competitive (i) business, (ii) course of activities or (iii)
location, as applicable.
(d) The covenants in this paragraph 3 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 thereby be reformed.
(e) All of the covenants in this paragraph 3 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 Management Company and/or Manager
against the Company or VPI (including the subsidiaries thereof), whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by VPI or the Company of such covenants. It is specifically agreed
that the Noncompetition Period, during which the agreements and covenants of
Management Company and Manager made in this paragraph 3
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shall be effective, shall be computed by excluding from such computation any
time during which a court of competent jurisdiction or other arbitrator or
mediator has determined that Management Company or Manager, as the case may be,
is in violation of any provision of this paragraph 3.
4. PLACE OF PERFORMANCE.
Manager shall not be required to relocate for performance of services
hereunder.
5. TERM; TERMINATION; RIGHTS ON TERMINATION.
The term of this Agreement shall begin on the date hereof and continue
for three (3) years, and, unless terminated sooner as herein provided, shall
continue thereafter on a year-to-year basis on the same terms and conditions
contained herein in effect as of the time of renewal (such initial three year
period and any extensions thereof being referred to herein as the "Term"). This
Agreement and Management Company's services may be terminated in any one of the
following ways:
(a) Death. The death of Manager shall immediately terminate this
Agreement with no severance compensation due to Manager's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Manager shall have been absent from Manager's full-time
duties hereunder for one hundred twenty (120) consecutive days, then thirty (30)
days after receiving written notice (which notice may occur before or after the
end of such one hundred twenty (120) day period, but which shall not be
effective earlier than the last day of such one hundred twenty (120) day
period), the Company may terminate Management Company's obligations hereunder
provided Manager is unable to resume Manager's full-time duties at the
conclusion of such thirty (30) day notice period. Also, Management Company may
terminate Management Company's and Manager's obligations hereunder if Manager's
health should become impaired to an extent that makes the continued performance
of Manager's duties hereunder hazardous to Manager's physical or mental health
or life, provided that Management Company shall have furnished the Company with
a written statement from a qualified doctor to such effect and provided,
further, that, at the Company's request made within thirty (30) days of the date
of such written statement, Manager shall submit to an examination by a doctor
selected by the Company who is reasonably acceptable to Manager or Manager's
doctor and such doctor shall have concurred in the conclusion of Manager's
doctor. In the event this Agreement is terminated as a result of Manager's
disability, neither Management Company nor Manager shall have any right to any
severance compensation.
(c) Good Cause. The Company may terminate the Agreement ten (10) days
after delivery of written notice to Management Company for good cause, which
shall be: (1) Management Company's or Manager's willful, material, and
irreparable breach of this Agreement; (2) Management Company's or Manager's
failure to adequately perform, continuing for ten (10) days after receipt of
written notice stating the alleged failure with reasonable specificity and the
need to cure, any of Management Company's or Manager's material duties and
responsibilities hereunder; (3) Management Company's or Manager's willful
dishonesty, fraud, or misconduct which adversely affects the operations or
reputation of the Company or VPI; (4) Management Company's or Manager's
conviction in a court of competent jurisdiction of a felony or any misdemeanor
other than a minor traffic violation; or (5) chronic alcohol
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abuse or illegal drug use by Manager, provided that in the case of any
termination pursuant to clauses (1) or (2), such termination must be approved by
at least two-thirds of the members of the Board of Directors of VPI. In the
event of a termination for good cause, as enumerated above, neither Management
Company nor Manager shall have any right to any severance compensation.
(d) Without Good Cause. Management Company and Manager may only be
terminated without good cause by the Company during the Term hereof if such
termination is approved by at least two-thirds of the members of the Board of
Directors of VPI. Should Management Company and Manager be terminated by the
Company without good cause during the Term, Management Company shall be entitled
to continue to receive from the Company the base management fee at the rate then
in effect for whatever time period is remaining under the Term of this Agreement
or for one (1) year, whichever period is longer. Any termination without good
cause by the Company shall operate to shorten the Noncompetition Period to one
(1) year immediately following the date of such termination. Further, should
Management Company and Manager be terminated by the Company without good cause
at any time during or after the Term, Management Company shall be entitled to
waive Management Company's right to receive severance compensation (by a written
waiver delivered to the Company on the effective date of termination), and, in
such case, the non-competition provisions of paragraph 3 shall not apply.
(e) By Management Company. At any time after the commencement of
services, Management Company may, without "good reason" (as defined below),
terminate this Agreement and Management Company's and Manager's obligations
without good reason, effective thirty (30) days after written notice is provided
to the Company. If Management Company resigns or otherwise terminates Management
Company's and Manager's obligations without good reason, Management Company
shall receive no severance compensation. If Management Company's termination is
for good reason (defined as the Company's failure to pay Management Company on a
timely basis the amounts to which it is entitled under this Agreement or as a
result of any other material breach of this Agreement by the Company, as
determined by a court of competent jurisdiction or pursuant to the provisions of
paragraph 16 below), the Company shall pay all amounts and damages to which
Management Company may be entitled as a result of such breach, including
interest thereon and all reasonable legal fees and expenses and other costs
incurred by Management Company and Manager to enforce their rights hereunder in
addition to any severance compensation to which Management Company may be
entitled to hereunder, as calculated pursuant to Section 5(d) hereof. Further,
none of the provisions of paragraph 3 hereof shall apply in the event this
Agreement is terminated as a result of such a breach by the Company.
(f) Change in Control of VPI, the Company, Management Company or
Whistler Holding. In the event of a "Change in Control" (as defined below) of
VPI, the Company, Management Company or Whistler Holding during the Term, refer
to paragraphs 12 & 13 below.
(g) No Severance Compensation Directly to Manager. Severance
compensation, if any, is to be paid only to Management Company, and Manager
shall have no right to receive any severance compensation in any event.
Upon termination of this Agreement for any reason provided above,
Management Company shall be entitled to receive all compensation earned and all
benefits and reimbursements due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
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payable to Management Company only to the extent and in the manner expressly
provided above or in paragraph 12 hereof. All other rights and obligations of
VPI, the Company, Management Company and Manager under this Agreement shall
cease as of the effective date of termination, except that the Company's
obligations under paragraph 9 hereof and Management Company's and Manager's
obligations under paragraphs 3, 6, 7, 8 and 10 hereof shall survive such
termination in accordance with their terms.
6. RETURN OF COMPANY PROPERTY.
All records, designs, patents, business plans, financial statements,
manuals, memoranda, lists and other property delivered to or compiled by
Management Company and/or Manager by or on behalf of the Company, VPI or their
representatives, vendors or customers which pertain to the business of the
Company or VPI shall be and remain the property of the Company or VPI, as the
case may be, and be subject at all times to their discretion and control.
Likewise, all correspondence, reports, records, charts, advertising materials
and other similar data pertaining to the business, activities or future plans of
the Company or VPI which is collected by Management Company and/or Manager shall
be delivered promptly to the Company without request by it upon termination of
Management Company's and Manager's services hereunder.
7. INVENTIONS.
Management Company and/or Manager shall disclose promptly to VPI and
the Company any and all significant conceptions and ideas for inventions,
improvements and valuable discoveries, whether patentable or not, which are
conceived or made by Management Company and/or Manager, solely or jointly with
another, during the Term or within one (1) year thereafter, and which are
directly related to the business or activities of the Company or VPI and which
Management Company and/or Manager conceives as a result of Manager's
relationship with the Company. Management Company and Manager hereby assign and
agree to assign all of Management Company's and/or Manager's interests therein
to the Company or its nominee. Whenever requested to do so by the Company,
Management Company and/or Manager, as the case may be, shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
8. TRADE SECRETS.
Management Company and Manager agree that they will not, during or
after the Term of this Agreement with the Company, disclose the specific terms
of the Company's or VPI's relationships or agreements with their respective
significant vendors or customers or any other significant and material trade
secret of the Company or VPI, whether in existence or proposed, to any person,
firm, partnership, corporation or business for any reason or purpose whatsoever.
9. INDEMNIFICATION.
In the event Management Company or Manager is made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than
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an action by the Company or VPI against Management Company or Manager), by
reason of the fact that Management Company or Manager is or was performing
services under this Agreement, then the Company shall indemnify Management
Company or Manager, as the case may be, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, as actually
and reasonably incurred by Management Company or Manager in connection
therewith. In the event that Management Company or Manager and the Company are
made a party to the same third-party action, complaint, suit or proceeding, the
Company or VPI agrees to engage competent legal representation, and Management
Company and/or Manager, as the case may be, agree(s) to use the same
representation, provided that if counsel selected by VPI shall have a conflict
of interest that prevents such counsel from representing Management Company or
Manager, Management Company or Manager may engage separate counsel and the
Company or VPI shall pay all reasonable attorneys' fees and expenses of such
separate counsel.
10. NO PRIOR AGREEMENTS.
Management Company and Manager hereby represent and warrant to the
Company that the execution of this Agreement by Management Company and Manager
and their being retained by the Company and the performance of their duties
hereunder will not violate or be a breach of any agreement with a former
employer, client or any other person or entity. Further, Management Company and
Manager each agrees to indemnify the Company for any claim, including but not
limited to attorneys' fees and expenses of investigation, by any such third
party that such third party may now have or may hereafter come to have against
the Company based upon or arising out of any noncompetition agreement, invention
or secrecy agreement between Management Company or Manager and such third party
which was in existence as of the date of this Agreement.
11. ASSIGNMENT; BINDING EFFECT.
Management Company and Manager each understands that they have been
selected for provision of management services by the Company on the basis of
Manager's personal qualifications, experience and skills. Neither Management
Company nor Manager, therefore, shall assign all or any portion of their
performance under this Agreement. Subject to the preceding two (2) sentences and
the express provisions of paragraph 12 below, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and assigns.
12. CHANGE IN CONTROL OF COMPANY AND/OR VPI.
(a) Unless Management Company and/or Manager elect to terminate this
Agreement pursuant to (c) below, Management Company and/or Manager understand
and acknowledge that the Company and/or VPI may be merged or consolidated with
or into another entity and that such entity shall automatically succeed to the
rights and obligations of the Company and/or VPI hereunder or that the Company
and/or VPI may undergo another type of Change in Control. In the event such a
merger or consolidation or other Change in Control is initiated prior to the end
of the Term, then the provisions of this paragraph 12 shall be applicable.
(b) In the event of a pending Change in Control wherein the Company
and/or VPI and Management Company and/or Manager have not received written
notice at least five (5) business days
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prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of the
Company's and/or VPI's business and/or assets that such successor is willing as
of the closing to assume and agree to perform the Company's and/or VPI's
obligations under this Agreement in the same manner and to the same extent that
the Company and/or VPI is hereby required to perform, then such Change in
Control shall be deemed to be a termination of this Agreement by the Company
without cause during the Term and the applicable portions of paragraph 5(d) will
apply; however, under such circumstances, the amount of the severance payment
due to Manager shall be triple the amount calculated under the terms of
paragraph 5(d) and shall be payable in a lump-sum payment and the noncompetition
provisions of paragraph 3 shall not apply.
(c) In any Change in Control situation, Management Company and/or
Manager may elect to terminate this Agreement by providing written notice to the
Company at least five (5) business days prior to the anticipated closing of the
transaction giving rise to the Change in Control. In such case, the applicable
provisions of paragraph 5(d) will apply as though the Company had terminated the
Agreement without cause during the Term; however, under such circumstances, the
amount of the severance payment due to Manager shall be double the amount
calculated under the terms of paragraph 5(d) and shall be payable in a lump-sum
payment and the noncompetition provisions of paragraph 3 shall all apply for a
period of two (2) years from the effective date of termination. Manager shall
have the right to waive Manager's right to receive the severance compensation
payable under this paragraph 12(c) (by a written waiver delivered to the Company
on or before the effective date of the termination), in which case the
noncompetition provisions of paragraph 3 shall not apply.
(d) For purposes of applying paragraph 5 hereof under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due Manager must be paid in
full by the Company at or prior to such closing. Further, Manager will be given
sufficient time and opportunity to elect whether to exercise all or any of
Manager's vested options to purchase VPI Common Stock, including any options
with accelerated vesting under the provisions of VPI's 1998 Long-Term Incentive
Plan, such that Manager may convert the options to shares of VPI Common Stock at
or prior to the closing of the transaction giving rise to the Change in Control,
if Manager so desires.
(e) A "Change in Control" shall be deemed to have occurred if any of
the following shall have occurred unless the transaction or event shall have
been approved by at least two-thirds (2/3) of the Board of Directors of VPI:
(i) any person or entity, other than VPI or an employee
benefit plan of VPI, acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended) of any voting security of the Company or VPI and
immediately after such acquisition such person or entity is, directly
or indirectly, the Beneficial Owner of voting securities representing
50% or more of the total voting power of all of the then-outstanding
voting securities of the Company or VPI;
(ii) the following individuals no longer constitute a majority
of the members of the Board of Directors of VPI: (A) the individuals
who, as of the closing date of VPI's initial public
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offering, constitute the Board of Directors of VPI (the "Original
Directors"); (B) the individuals who thereafter are elected to the
Board of Directors of VPI and whose election, or nomination for
election, to the Board of Directors of VPI was approved by a vote of at
least two-thirds (2/3) of the Original Directors then still in office
(such directors becoming "Additional Original Directors" immediately
following their election); and (C) the individuals who are elected to
the Board of Directors of VPI and whose election, or nomination for
election, to the Board of Directors of VPI was approved by a vote of at
least two-thirds (2/3) of the Original Directors and Additional
Original Directors then still in office (such directors also becoming
"Additional Original Directors" immediately following their election);
(iii) the stockholders of VPI shall approve a merger,
consolidation, recapitalization or reorganization of VPI, a reverse
stock split of outstanding voting securities, or consummation of any
such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 75% of the total
voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of outstanding voting
securities of VPI immediately prior to the transaction, with the voting
power of each such continuing holder relative to other such continuing
holders not substantially altered in the transaction; or
(iv) the stockholders of VPI shall approve a plan of complete
liquidation of VPI or an agreement for the sale or disposition by VPI
of all or a substantial portion of VPI's assets (i.e., 50% or more of
the total assets of VPI).
(f) Management Company and Manager must be notified in writing by the
Company at any time that the Company anticipates that a Change in Control may
take place.
13. CHANGE IN CONTROL OF MANAGEMENT COMPANY AND/OR WHISTLER HOLDING.
In any Management Company Change in Control situation, Company may
elect to terminate this Agreement by providing written notice to the Management
Company at least five (5) business days prior to the anticipated closing of the
transaction giving rise to the Change in Control. In such case, the applicable
provisions of paragraph 5(c) will apply as though the Management Company had
terminated the Agreement with good cause during the Term.
(a) A "Management Company Change in Control" shall be deemed to have
occurred if any of the following shall have occurred unless the transaction or
event shall have been approved by at least two-thirds (2/3) of the Board of
Directors of VPI:
(i) any person or entity, other than Whistler Holding or an
employee benefit plan of Whistler Holding, acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of
the Management Company or Whistler Holding and immediately after such
acquisition such person or entity is, directly or indirectly, the
Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of
the Management Company or Whistler Holding;
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(ii) the following individuals no longer constitute a majority
of the members of the Board of Directors of Management Company or
Whistler Holding: (A) the individuals who, as of the closing date of
VPI's initial public offering, constitute the Board of Directors of
Management Company or Whistler Holding (the "Original Whistler
Directors"); (B) the individuals who thereafter are elected to the
Board of Directors of Management Company or Whistler Holding and whose
election, or nomination for election, to the Board of Directors of
Management Company or Whistler Holding was approved by a vote of at
least two-thirds (2/3) of the Original Whistler Directors then still in
office (such directors becoming "Additional Original Whistler
Directors" immediately following their election); and (C) the
individuals who are elected to the Board of Directors of Management
Company or Whistler Holding and whose election, or nomination for
election, to the Board of Directors of Management Company or Whistler
Holding was approved by a vote of at least two-thirds (2/3) of the
Original Whistler Directors and Additional Original Whistler Directors
then still in office (such directors also becoming "Additional Original
Whistler Directors" immediately following their election);
(iii) the stockholders of Management Company or Whistler
Holding shall approve a merger, consolidation, recapitalization or
reorganization of Management Company Whistler Holding, a reverse stock
split of outstanding voting securities, or consummation of any such
transaction if stockholder approval is not obtained, other than any
such transaction which would result in at least 75% of the total voting
power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being Beneficially Owned
by at least 75% of the holders of outstanding voting securities of
Management Company or Whistler Holding immediately prior to the
transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in
the transaction; or
(iv) the stockholders of Management Company or Whistler
Holding shall approve a plan of complete liquidation of Management
Company or Whistler Holding or an agreement for the sale or disposition
by Management Company or Whistler Holding of all or a substantial
portion of Management Company's or Whistler Holding's assets (i.e., 50%
or more of the total assets of Management Company or Whistler Holding).
(b) Company must be notified in writing by the Management Company at
any time that the Management Company anticipates that a Management Company
Change in Control may take place.
14. COMPLETE AGREEMENT.
This Agreement is not a promise to retain future services. This
Agreement supersedes any other agreements or understandings, written or oral,
among the Company, VPI, Management Company and Manager, and neither Management
Company nor Manager has any oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement.
This written Agreement is the final, complete and exclusive statement
and expression of the agreement between the Company, Management Company and
Manager and of all the terms of this
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Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Agreement
may not be later modified except by a written instrument signed by a duly
authorized officer of the Company, Management Company and Manager, and no term
of this Agreement may be waived except by a written instrument signed by the
party waiving the benefit of such term.
15. NOTICE.
Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:
To the Company: Vacation Properties International, Inc.
0000-X Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxxx
To Management Company and/or Manager:
J. Xxxxxxx XxXxxxx
x/x Xxxxxxxx Xxxxxxx Xxxxxxx
Xxxxx 000
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Marked: "Personal and Confidential"
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this paragraph 15.
16. SEVERABILITY; HEADINGS.
If any portion of this Agreement is held invalid or inoperative, the
other portions of this Agreement shall be deemed valid and operative and, so far
as is reasonable and possible, effect shall be given to the intent manifested by
the portion held invalid or inoperative. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
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17. ARBITRATION.
Any unresolved dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three (3) arbitrators in Memphis, Tennessee in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then in
effect. The arbitrators shall not have the authority to add to, detract from or
modify any provision hereof nor to award punitive damages to any injured party.
The arbitrators shall have the authority to order back-pay, severance
compensation, vesting of options (or cash compensation in lieu of vesting of
options), reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrators determine that
Management Company and/or Manager, as the case may be, was terminated without
disability or good cause, as defined in paragraphs 5(b) and 5(c) hereof,
respectively, or that the Company has otherwise materially breached this
Agreement. A decision by a majority of the arbitration panel shall be final and
binding. Judgment may be entered on the arbitrators' award in any court having
jurisdiction. The direct expense of any arbitration proceeding shall be borne by
the Company.
18. GOVERNING LAW.
This Agreement shall in all respects be construed according to the laws
of the province of British Columbia.
19. COUNTERPARTS.
This Agreement may be executed simultaneously in two (2) or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Whistler Chalets Limited
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Vacation Properties International, Inc.,
a Delaware corporation
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Whistler Blackcomb Central Reservations, Inc.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
/s/ J. Xxxxxxx XxXxxxx
----------------------------------------------------
J. Xxxxxxx XxXxxxx, Individually
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