SHAREHOLDERS' AGREEMENT AND IRREVOCABLE PROXY
AGREEMENT, made and entered into as of the 17th day of January 2000, by and
among Teri Nadler, residing at 6645 Northwest 48th Manor, Coral Springs, Florida
33067, Scott B. Ugell, residing at 155 North Main Street, New City, New York
10956, Jean Hickman, residing at 3780 SW 19th Street, Fort Lauderdale, Florida
33312, Alicia Torrealba, residing at 1965 South Ocean Drive, Apartment 2J,
Hallandale, Florida 33309, Karyn Mcknight, 10020A Main Street, #177, Bellevue,
Washington 98004, Carol Nelson, residing at 1625 3rd Street South, Naples,
Florida 34102-7423and Ken Nelson, 1625 3rd Street South, Naples, Florida
34102-7423, collectively referred to as the "Shareholders" and Vista Vacations
International, Inc. " (the Corporation") with offices at 5653 NW 29th Street,
Margate, Florida 33063, a corporation organized pursuant to the laws of the
State of Florida.
W I T N E S S E T H:
WHEREAS, the Corporation was incorporated on November 12, 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. 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.
2. 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
Nadler 765
Ugell 400
Hickman 180
Nelson 75
Torrealba 60
Mcknight 20
(b) 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 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 year. 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.
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(c) Each Shareholder has heretofore invested in the capital of the
Corporation. 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
or other value to the Corporation, at the Corporation's option, additional
amounts at such times and upon such conditions as shall be agreed upon by a 2/3
vote majority of the outstanding shares of stock.
3. Management of the Corporation and Voting.
(a) Each Shareholder agrees, from and after the date hereof to elect Teri
Nadler and Scott B. Ugell 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 $10,000, 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:
Teri Nadler President, Chief Executive Officer
Jean Hickman Operations, Finance and Corporate Treasurer
Alicia Torrealba Executive Director of CLIA/Agent Education
Corporate Secretary
Scott B. Ugell 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) In furtherance of the foregoing, each Shareholder hereby grants to the
other Shareholders, for the duration of the term hereof; an irrevocable proxy to
vote all of the shares of the Corporation owned by such Shareholder in
accordance with the provisions and agreements contained in this Section 3.
(e) 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.
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4. 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.
(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.
5. 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.
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(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.
(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 Term
life insurance policy which shall be purchased by said corporation in
amounts of death benefits no less than $1,000,000.00 for shareholder Teri
Nadler, and $500,000.00 for shareholder Scott B. Ugell, 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.
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Nothing herein shall be deemed to require the Corporation to purchase any
shares.
6. 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 New
York, 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.
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.
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7. 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
divestiture 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 New York 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.
(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.
8. 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.
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(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.
(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
him, 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.
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9. 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.
10. 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.
11. 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 January 17, 2000 among Teri Nadler, Scott B. Ugell, Jean
Hickman, Carol Nelson, Ken Nelson, Alicia Torrealba and Karyn Mcknight., the
Corporation, a copy of which is on file with the Secretary of the Corporation."
12. 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.
13. 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.
14. 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.
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(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.
15. 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.
16. 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.
17. 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.
18. . 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 New York without regard to its principles of conflict of laws.
19. 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 New York now or hereafter enacted,
including, without limitation; the New York 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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20. 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.
21. 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. Seal
By: /s/ Teri Nadler
By: /s/ Scott B. Ugell
By: /s/ Jean Hickman
By: /s/ Carol Nelson
By: /s/ Ken Nelson
By: /s/ Alicia Torrealba
By: Karyn Mcknight
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