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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 6, 1997
Bluegreen Corporation
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(Exact name of registrant as specified in its charter)
Massachusetts
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(State of incorporation or organization)
0-19292 03-0300793
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(Commission File Number) (I.R.S. Employer
Identification No.)
5295 Town Center Road, Boca Raton, Florida 33486
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (561) 361-2700
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Item 2. Acquisition or Disposition of Assets.
Effective September 30, 1997, pursuant to a Stock Purchase Agreement
executed on October 6, 1997 (the "Agreement"), a wholly-owned subsidiary (the
"Subsidiary") of Bluegreen Corporation ("Bluegreen") acquired all of the issued
and outstanding capital stock of RDI Group, Inc., a Florida corporation and
Resort Title Insurance Agency, Inc., a Florida corporation (collectively, with
RDI Group, Inc., "RDI"). Prior to the sale, RDI's stockholders were Jeffrey J.
Keim, Randy L. Keim and David Bidgood (collectively, the "Stockholders") The
aggregate consideration paid by the Subsidiary for all of the issued and
outstanding capital stock of RDI was $7,500,000. The purchase price was
determined as a result of arm's-length negotiations between Bluegreen and the
Stockholders. The Subsidiary paid $6,000,000 of the purchase price in cash and
$1,500,000 with a two year 9% promissory note from Bluegreen and the Subsidiary
(the "Seller Note") with a maturity date of October 3, 1999. Bluegreen borrowed
the $6,000,000 cash portion of the purchase price from Joseph Abeles, a director
of Bluegreen and Grace Brothers, Ltd., an affiliate of Bradford T. Whitmore, who
is also a director of Bluegreen, pursuant to a Note Purchase Agreement dated as
of September 11, 1997 (the "Note Agreement"). Pursuant to the Note Agreement,
Bluegreen executed two 8% convertible promissory notes in the aggregate
principal amount of $6,000,000 (the "8% Notes"). The 8% Notes have a maturity
date of September 11, 2002 and the outstanding balances of the 8% Notes are
convertible into Bluegreen's common stock at a conversion price of $3.92 per
share, subject to adjustment. Neither the 8% Notes nor any of the common stock
issuable upon the conversion thereof has been registered under the Securities
Act of 1933.
Headquartered in Fort Myers, Florida, RDI is a timeshare owner and
operator that, directly or through wholly-owned subsidiaries, owns and operates
time share resorts in Orlando, Florida and Wisconsin Dells, Wisconsin and
manages thirty other vacation ownership resorts.
In connection with the acquisition of RDI, (a) the Subsidiary was
granted an option to acquire the capital stock or assets of AmClub, Inc.
("AmClub"), a corporation owned by the Stockholders, which owns and operates a
timeshare resort in Virginia and (b) Bluegreen agreed to indemnify the
Stockholders for any future obligations in respect of guarantees executed by the
Stockholders of indebtedness of RDI and its affiliates (including AmClub). Also
in connection with the acquisition, each Stockholder entered into a three-year
employment agreement with Bluegreen providing for an annual base salary of
$180,000 and the grant by Bluegreen to the Stockholder of an incentive stock
option to acquire 60,000 shares of Bluegreen's common stock. The options vest
ratably over five years.
The Agreement, a form of Seller Note, the Note Purchase Agreement, a
form of the 8% Note and a form of Stockholder Employment Agreement are attached
hereto as Exhibits and each is incorporated herein by reference. The foregoing
description of this transaction is subject to, and qualified in its entirety by
reference to such Exhibits.
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
To be filed by amendment within 60 days of the date on which
this report must be filed pursuant to Item 7 of Form 8-K.
(b) Pro Forma Financial Information
To be filed by amendment within 60 days of the date on which
this report must be filed pursuant to Item 7 of Form 8-K.
(c) Exhibits
Exhibit A: Stock Purchase Agreement dated as of July 24, 1997 by and
among Bluegreen Corporation, BG/RDI Acquisition Corp. and
Randy L. Keim, Jeffrey J. Keim, and David Bidgood.
Exhibit B: Form of Seller Note executed by Bluegreen Corporation and
BG/RDI Acquisition Corp.
Exhibit C: Note Purchase Agreement dated September 11, 1997
by and among Joseph Abeles, Grace Brothers, Ltd and
Bluegreen relating to Convertible Notes due September
11, 2002.
Exhibit D: Form of 8% Convertible Note
Exhibit E: Form of Stockholder Employment Agreement.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BLUEGREEN CORPORATION
Date: October 20, 1997 By: /s/ John F. Chiste
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John F. Chiste, Chief Financial Officer
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EXHIBIT 99.A
CONFORMED EXECUTION COPY
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STOCK PURCHASE AGREEMENT
by and among
BLUEGREEN CORPORATION,
BG/RDI ACQUISITION CORP.
and
RANDY L. KEIM,
JEFFREY J. KEIM
and
DAVID BIDGOOD
Dated as of July 24, 1997
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Table of Contents
<TABLE>
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Page
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ARTICLE 1. PURCHASE AND SALE OF SHARES.......................................1
ARTICLE 2. PURCHASE PRICE AND PAYMENT........................................1
ss.2.1 Purchase Price...............................................1
ss.2.2 Payment......................................................2
ss.2.3 Allocation...................................................2
ARTICLE 3. REPRESENTATIONS OF THE STOCKHOLDERS...............................2
ss.3.1 Title.......................................................2
ss.3.2 Due Issuance................................................2
ss.3.3 Validity and Enforceability.................................2
ss.3.4 Capitalization..............................................3
ss.3.5 Organization, etc...........................................3
ss.3.6 Subsidiaries................................................3
ss.3.7 Power and Authority.........................................3
ss.3.8 Financial Statements........................................4
ss.3.9 Absence of Undisclosed Liabilities..........................4
ss.3.10 Litigation..................................................4
ss.3.11 Insurance...................................................4
ss.3.12 Fixed Assets................................................5
ss.3.13 Personal Property...........................................5
ss.3.14 Conduct of Business; Absence of Certain Changes.............5
ss.3.15 Tax Matters.................................................5
ss.3.16 Books and Records...........................................6
ss.3.17 Material Contracts..........................................6
ss.3.18 Authorizations and Compliance...............................8
ss.3.19 Labor Matters...............................................8
ss.3.20 ERISA; Benefit Plans. ......................................8
ss.3.21 Banking Relationships.......................................9
ss.3.22 Intangible Property........................................ 9
ss.3.23 Real Estate................................................10
ss.3.24 Receivables................................................11
ss.3.25 Environmental Matters......................................11
ss.3.26 Transactions with Affiliates...............................11
ss.3.27 Disclosure.................................................12
ss.3.28 Brokers....................................................12
ss.3.29 Warranties.................................................12
ss.3.30 No Other Income............................................12
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BLUEGREEN AND BUYER............12
ss.4.1 Organization...............................................12
ss.4.2 Authorization..............................................13
ss.4.3 Brokers....................................................13
ss.4.4 Investment Intent..........................................13
ss.4.5 Litigation.................................................13
ss.4.6 SEC Filings................................................13
ARTICLE 5. ACCESS TO INFORMATION; PUBLIC ANNOUNCEMENTS......................14
ss.5.1 Access.....................................................14
ss.5.2 Public Announcements.......................................14
ss.5.3 Hart-Scott Rodino Antitrust Improvements Act...............14
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ARTICLE 6. PRE-CLOSING COVENANTS OF RDI COMPANIES AND STOCKHOLDERS..........14
ss.6.1 Conduct of Business........................................14
ss.6.2 Continuing Obligation to Inform............................15
ss.6.3 Exclusivity................................................16
ss.6.4 Separate Breach............................................16
ARTICLE 7. ADDITIONAL COVENANTS. ...........................................16
ss.7.1 Efforts....................................................16
ARTICLE 8. COVENANT NOT TO COMPETE..........................................16
ss.8.1 Noncompetition.............................................16
ss.8.2 Proprietary Information....................................17
ss.8.3 Injunctive Relief..........................................17
ss.8.4 Limitation on Scope........................................17
ss.8.5 Name.......................................................18
ss.8.6 Legitimate Business Interests..............................18
ARTICLE 9. CONDITIONS TO OBLIGATIONS OF BLUEGREEN AND THE BUYER.............18
ss.9.1 Representations and Warranties; Covenants..................18
ss.9.2 Required Consents..........................................18
ss.9.3 No Adverse Proceedings.....................................18
ss.9.4 Opinion of Counsel.........................................19
ss.9.5 Stock Certificates.........................................19
ss.9.6 Environmental Review.......................................19
ss.9.7 Financing..................................................19
ss.9.8 Other Instruments..........................................19
ss.9.9 Real Property..............................................19
ss.9.10 No Material Adverse Change.................................19
ss.9.11 Employment and Noncompetition Agreements...................19
ss.9.12 Due Diligence..............................................19
ss.9.13 AmClub.....................................................19
ss.9.14 Financial Condition........................................19
ss.9.15 Restructure Agreement......................................20
ss.9.16 Payables...................................................20
ARTICLE 10. CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS...................20
ss.10.1 Representations and Warranties; Covenants..................20
ss.10.2 No Adverse Proceedings. ...................................20
ss.10.3 Opinion of Counsel.........................................20
ss.10.4 Deliveries at Closing. ....................................20
ss.10.5 Employment and Noncompetition Agreements...................20
ss.10.6 Required Consents..........................................20
ss.10.7 Stockholder Guaranties.....................................20
ARTICLE 11. CLOSING.........................................................21
ss.11.1 Date and Place of Closing..................................21
ss.11.2 Deliveries at Closing by the Stockholders..................21
ss.11.3 Deliveries at Closing by the Buyer and Bluegreen...........21
ARTICLE 12. SURVIVAL; INDEMNIFICATION.......................................21
ss.12.1 Survival...................................................21
ss.12.2 Indemnification by Stockholders............................21
ss.12.3 Indemnification by Buyer and Bluegreen.....................23
ss.12.4 Procedures for Indemnification of Third Party Claims.......23
ss.12.5 Set-off, Etc...............................................23
ARTICLE 13. TERMINATION OF AGREEMENT........................................24
ss.13.1 Termination................................................24
ss.13.2 Effect of Termination......................................24
ARTICLE 14. DEFINITIONS.....................................................25
ARTICLE 15. ESCROW PROVISIONS...............................................29
ss.15.1 Appointment of Escrow Agent................................29
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ss.15.2 The Deposit......................................................................................29
ss.15.3 Disposition of Deposit...........................................................................29
ss.15.4 Provisions as to Escrow Agent....................................................................29
ARTICLE 16. MISCELLANEOUS.........................................................................................30
ss.16.1 Notices..........................................................................................30
ss.16.2 Successors and Assigns...........................................................................31
ss.16.3 Entire Agreement; Amendments.....................................................................31
ss.16.4 Expenses.........................................................................................31
ss.16.5 Governing Law....................................................................................32
ss.16.6 Counterparts; Severability; Obligations..........................................................32
ss.16.7 No Waivers.......................................................................................32
ss.16.8 No Third Party Beneficiaries.....................................................................32
ss.16.9 Further Assurances...............................................................................32
ss.16.10 Agent of Sellers.................................................................................32
ss.16.11 Release..........................................................................................32
</TABLE>
Schedules 3.4 -- Capitalization
3.7 -- Required Consents
3.8 -- Financial Statements
3.9 -- Liabilities
3.10 -- Litigation
3.11 -- Insurance
3.12 -- Fixed Assets
3.13A - David Bidgood Office Computer
3.13B - Leased Equipment
3.14 -- Absence of Charges
3.15 -- Tax Matters
3.17 -- Material Contracts
3.18 -- Authorizations
3.19 -- Labor
3.20 -- Benefit Plans
3.21 -- Bank Relationships
3.22 -- Intangible Property
3.23 -- Timeshare Projects
3.24 -- Representations Regarding Accounts Receivable
3.26 -- Affiliated Transactions
3.29 -- Warranty Claims
4.2 -- Bluegreen Consents
15 -- Existing Liens
Exhibits A -- Form of Note
B -- Form of W&S Opinion
C -- Form of Employment Agreement
D -- Form of CH&S Opinion
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THIS STOCK PURCHASE AGREEMENT is made as of July 24, 1997 by and among
(a) Bluegreen Corporation, a Massachusetts corporation ("Bluegreen"), (b) BG/RDI
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of
Bluegreen (the "Buyer"), (c) Randy L. Keim, Jeffrey J. Keim and David Bidgood
(each, individually, a "Stockholder" and collectively the "Stockholders"), and
(d) Weinstock & Scavo, P.C. as Escrow Agent. Certain other terms used in this
Agreement are defined in Article 14 below.
PRELIMINARY STATEMENT
The Stockholders own, in the aggregate, one hundred percent (100%) of
the issued and outstanding capital stock of RDI Group, Inc., a Florida
corporation ("RDI Group"). RDI Group owns one hundred percent (100%) of the
issued and outstanding capital stock of Dellona Enterprises, Inc., a Wisconsin
corporation ("Dellona"), RDI Vacation Shoppe, Inc., a Florida corporation
("Vacation Shoppe"), Resort Development International, Inc., a Florida
corporation ("RDI"), RDI Resources, Inc., a Florida corporation ("RDI
Resources"), RDI Realty, Inc., a Florida corporation ("RDI Realty"), RDI Resort
Services Corp., a Florida corporation ("Resort Services"), and Vacations
Unlimited, Inc., a Florida corporation ("VUI"). In addition, Jeffrey J. Keim and
Randy L. Keim own in the aggregate one hundred percent (100%) of the issued and
outstanding capital stock of Resort Title Agency, Inc., a Florida corporation
("RDI Title"). Furthermore, Randy L. Keim, as of the date of execution hereof,
owns twenty five percent (25%) of the issued and outstanding capital stock of
AmClub, Inc., a Texas corporation ("AmClub"), and intends to acquire, as of the
Closing Date, one hundred percent (100%) of the issued and outstanding capital
stock of AmClub. In addition to the foregoing, Dellona owns one hundred percent
(100%) of the issued and outstanding capital stock of Resort Ownership, Inc., a
Florida corporation ("Resort Ownership"). Resort Services owns one hundred
percent (100%) of the issued and outstanding capital stock of Interval Resort
Property Management Company, a Florida corporation ("Interval Resort"). RDI
Group and RDI Title are each herein referred to as "Selling Company" and
collectively as the "Selling Companies." The Selling Companies, Dellona, Resort
Services, VUI, RDI Realty, Vacation Shoppe, RDI, RDI Resources, Resort Ownership
and Interval Resorts are herein individually referred to as an "RDI Company" and
such corporations are collectively referred to herein as the "RDI Companies". A
description of the organizational structure and capitalization of the RDI
Companies is set forth on Schedule 3.4 hereto. The Stockholders wish to sell,
and the Buyer wishes to buy, all of the issued and outstanding capital stock of
each Selling Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1. PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions of this Agreement, the Stockholders shall sell, transfer and assign
to the Buyer free and clear of all Liens, and the Buyer shall purchase from the
Stockholders, all shares of the issued and outstanding capital stock of each of
RDI Group and RDI Title (collectively, the "Shares").
ARTICLE 2. PURCHASE PRICE AND PAYMENT.
ss.2.1 Purchase Price. The aggregate purchase price for the Shares
shall be $7,500,000 (the "Purchase Price"). The portion of the Purchase Price to
be paid in cash at the Closing under ss.2.2 shall be paid without any deduction
for expenses; the Stockholders will pay the fees and expenses of Weinstock &
Scavo, P.C. to be borne by them under ss.16.4 from the cash portion of the
Purchase Price received by them on the Closing Date or before the Closing.
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ss.2.2 Payment. Upon the execution of this Agreement, $10,000 (together
with all interest earned thereon, the "Deposit") shall be delivered by the Buyer
to Weinstock & Scavo, P.C., counsel for the Stockholders (the "Escrow Agent"),
to be held in accordance with the terms of Article 15. At the Closing, the Buyer
shall pay the Purchase Price to the Agent for the benefit of the Stockholders as
follows: (a) an amount equal to the difference between $6,000,000 and the
Deposit by wire transfer of immediately available funds and (b) $1.5 million in
the form of a promissory note of the Buyer in the principal amount of $1.5
million, such note to be substantially in the form attached as Exhibit A hereto
(the "Note").
ss.2.3 Allocation. The aggregate amount of the Purchase Price shall be
allocated among the Shares as follows: $7.2 million to the RDI Group Shares and
$300,000 to the RDI Title Shares. Such allocation has been arrived at by
arm's-length negotiation and in the judgment of the parties properly reflects
the fair market value of the respective Shares. Such allocation will be binding
on each party for federal and state income tax purposes in connection with the
purchase and sale of the Shares and will be consistently reflected by each party
on its tax returns.
ARTICLE 3. REPRESENTATIONS OF THE STOCKHOLDERS. The Stockholders hereby
jointly and severally represent and warrant to the Buyer and Bluegreen that each
of the statements contained in this Article 3 (including the Schedules hereto)
is true and correct and will be true and correct as of the Closing Date:
ss.3.1 Title. The statements contained in the Preliminary Statement on
page 1 of this Agreement concerning the ownership of the RDI Companies are true
and correct. The statement contained in the Preliminary Statement on page 1 of
this Agreement concerning AmClub is true and correct. The record and beneficial
ownership of the Shares is as set forth on Schedule 3.4 (i.e. the Shares of RDI
Group are owned 42.5% by Randy L. Keim, 42.5% by Jeffrey J. Keim and 15.0% by
David Bidgood and the Shares of RDI Title are owned 50% by Randy L. Keim and 50%
by Jeffrey J. Keim). As of the date of this Agreement, certain of the Shares
have been pledged to FINOVA Capital Corporation (such pledge will be released
prior to the Closing). As of the Closing Date, each Stockholder will have good,
marketable and unencumbered title to the Shares of RDI Group and RDI Title to be
sold by such Stockholder hereunder and full legal right, power and authority to
enter into this Agreement and sell, transfer, assign and deliver such Shares as
herein agreed. Subject to receipt prior to the Closing Date of the Required
Consents by the Stockholders and the RDI Companies, the Buyer will, on transfer
and delivery of the Shares at the Closing, acquire good and marketable title to
such Shares, free and clear of any Liens, other than restrictions under
generally applicable securities laws. The existing stockholders' agreement among
the Stockholders shall be terminated prior to the Closing Date and be of no
further effect. No Stockholder has granted any option or right, or is a party to
any other agreement, which requires, or upon the passage of time or occurrence
of any event, may require such Stockholder to transfer any of the Shares being
sold by such Stockholder to anyone other than the Buyer.
ss.3.2 Due Issuance. The Shares are duly authorized, validly issued,
fully paid and nonassessable. Such Shares were issued in compliance with all
applicable securities laws and the transfer of such Shares to the Buyer pursuant
to this Agreement will not violate any such law.
ss.3.3 Validity and Enforceability. This Agreement constitutes, and
each other Transaction Document to be executed by the respective Stockholders in
accordance herewith will constitute upon its execution, the valid and binding
obligation of the respective Stockholders, enforceable against such Stockholders
in accordance with its terms. Except for the Required Consents (which shall be
obtained prior to the Closing), the execution, delivery and performance of this
Agreement and the other instruments and agreements contemplated hereby by the
Stockholders and the Selling Companies will not result in any violation of, be
in conflict with or constitute a default under, any Law, contract, agreement,
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instrument, judgment, decree or order to which any Stockholder or any RDI
Company is a party or by which any Stockholder or any RDI Company is bound or
the charter or bylaws of any RDI Company. Without limiting the foregoing, no
Stockholder is a party to any proceedings by or against such Stockholder in any
court, including without limitation under the U. S. Bankruptcy Code or any other
insolvency or debtor's relief law or involving the appointment of a trustee,
receiver or liquidator for him or any of his properties.
ss.3.4 Capitalization. Schedule 3.4 sets forth a complete and accurate
list of the authorized capital stock of each RDI Company. No RDI Company holds
any shares of its capital stock in its treasury. As of the Closing, each RDI
Company's issued and outstanding shares shall be held as set forth on Schedule
3.4. There are no outstanding options, warrants, convertible or exchangeable
securities or other rights that could obligate any RDI Company to issue or
purchase shares of its capital stock or other securities. No Person has any
right of first refusal or preemptive right in connection with the Shares or the
securities of any other RDI Company. Upon acquisition of the Shares hereunder,
the Buyer will own one hundred percent (100%) of the issued and outstanding
capital stock of each Selling Company and, indirectly, each other RDI Company.
Except for the RDI Companies, there are no other corporations, partnerships or
other Persons owned directly or indirectly by any Stockholder, any RDI Company
or any Affiliate of any of the foregoing which are engaged in any business which
is engaged in by any RDI Company; provided, however, that it is acknowledged and
agreed that Randy L. Keim owns and may acquire interests in AmClub as provided
above.
ss.3.5 Organization, etc. Each RDI Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was organized, and has full corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. Each RDI Company is duly qualified and authorized to do
business as a foreign corporation and is in good standing in each jurisdiction
in which such qualification or authorization is required. True, correct and
complete copies of the charter documents and By-laws of each RDI Company have
been delivered to BUYER.
ss.3.6 Subsidiaries. Except for the RDI Companies, no RDI Company has
any Subsidiaries and no RDI Company, directly or indirectly, owns or has the
right to acquire any equity interest in any Person (including without limitation
any partnership). Without limiting the foregoing, CMV, Inc. and Resort Aviation
Partnership have been dissolved and no RDI Company has any liabilities or
obligations in respect thereof. Except as disclosed on the Interim Balance Sheet
and for a $25,000 loan made by one of the RDI Companies to Randy L. Keim, none
of the RDI Companies has any investment in, loan to or advance of cash or other
extension of credit to any Person (other than the Timeshare Loans and advances
to employees in the ordinary course in an aggregate amount not in excess of
$5,000).
ss.3.7 Power and Authority. Each Selling Company has full corporate
power and authority and has taken all required corporate action necessary to
permit it to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party. This Agreement
constitutes, and each other Transaction Document to be executed and delivered by
any RDI Company in accordance herewith will constitute upon its execution, the
valid and legally binding obligation of RDI Group and/or the applicable RDI
Company, enforceable against RDI Group and/or the applicable RDI Company in
accordance with its terms. Except for the consents specified on Schedule 3.7
hereto (the "Required Consents"), no consent, order, approval, authorization,
declaration or filing, including, without limitation, any consent, approval, or
authorization of or declaration or filing with any governmental authority, any
party to a Material Contract or any other third party is required on the part of
any RDI Company or any Stockholder for or in connection with the execution,
delivery or performance by any Selling Company or any Stockholder of this
Agreement or the
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other Transaction Documents, the sale, transfer and assignment of the Shares
pursuant hereto, or to prevent a default in connection therewith.
ss.3.8 Financial Statements. Schedule 3.8 hereto includes the combined
audited balance sheets of RDI Group and its affiliates as of September 30, 1996
and 1995, and the combined related statements of income, stockholders' equity
and cash flows of RDI Group and its affiliates for the fiscal year or period
then ended (collectively, the "Audited Statements"). Also included in Schedule
3.8 is an unaudited combined balance sheet (the "Interim Balance Sheet") of RDI
Group and its affiliates as of May 31, 1997 (the "Balance Sheet Date") and the
combined related unaudited statements of operations, stockholders' equity and
cash flows of RDI Group and affiliates for the eight-month period then ended
(the "Interim Statements" and, collectively with the Audited Statements, the
"Financial Statements"). The Financial Statements and the notes thereto, if any,
were prepared in accordance with the books and records of RDI Group and GAAP
applied consistently with past practice (subject, in the case of the Interim
Statements, to normal year-end adjustments which in the aggregate are not
material). The Financial Statements (including the notes thereto) are complete
and accurate and fairly present the financial condition of RDI Group and its
subsidiaries at the respective dates thereof and the results of operations of
RDI Group and its subsidiaries for the respective periods indicated (subject in
the case of the Interim Statements to normal year-end adjustments which in the
aggregate are not material). Without limiting the foregoing, the charges,
accruals and reserves on the Interim Balance Sheet are adequate to cover all
unpaid Taxes for periods (including partial periods) ending on or prior to the
date of the Interim Balance Sheet (it being understood that the RDI Companies
have not established segregated cash accounts to satisfy such Tax obligations).
ss.3.9 Absence of Undisclosed Liabilities. Except (a) as and to the
extent reflected and reserved against in the Interim Balance Sheet or (b) for
current liabilities (other than for borrowed money) incurred in the ordinary
course of business consistent with past practice or (c) for obligations of
future performance under Material Contracts (and other contracts entered into in
the ordinary course of business which are not required to be listed on Schedule
3.17 as Material Contracts) or (d) disclosed on Schedule 3.9, no RDI Company has
or will have as of the Closing Date any liability or obligation, secured or
unsecured, whether accrued, absolute, contingent or otherwise, and including
without limitation, in respect of Taxes.
ss.3.10 Litigation. Except as disclosed on Schedule 3.10 hereto, there
is no litigation, action, suit, proceeding, unsatisfied judgment or
investigation pending or, to the knowledge of the Stockholders, threatened in or
before any court, arbitrator or administrative, governmental or regulatory
authority or body (a) against any RDI Company or any Stockholder or (b) which
relates to any Project, any Real Estate or to the transactions contemplated by
this Agreement. Except as set forth on Schedule 3.10, no RDI Company is subject
to any judgment, order, writ, injunction or decree.
ss.3.11 Insurance. Schedule 3.11 hereto sets forth a complete list of
all insurance policies held by any RDI Company covering any RDI Company or any
of its properties or assets and of all life insurance policies maintained for
any of its officers or employees, specifying the type of coverage, the amount of
coverage, the premium, the insurer and the expiration date of each such policy
(collectively, the "Insurance Policies"). Except as disclosed on Schedule 3.11,
all liability Insurance Policies are on an "occurrence" basis. True, correct and
complete copies of all of the Insurance Policies have been delivered to the
Buyer. The Insurance Policies are valid and in full force and effect. The
Insurance Policies are in amounts sufficient to avoid the operation of any
co-insurance provision. Schedule 3.11 also lists all outstanding bonds and other
surety arrangements issued or entered into in connection with the business of
any RDI Company.
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ss.3.12 Fixed Assets. Schedule 3.12 hereto sets forth a true, correct
and complete list of all material fixed assets of any RDI Company as of the date
hereof. There is no pending or, to the knowledge of the Stockholders, threatened
condemnation of any Real Property of any RDI Company.
ss.3.13 Personal Property. Except for the Permitted Encumbrances, each
RDI Company has good title to or a valid leasehold or license interest in each
item of personal property used by it in connection with its business (including
good and marketable title to all assets reflected on the Balance Sheet), free
and clear of all Liens. To the knowledge of the Stockholders, all material
operating assets and material equipment of each RDI Company are in good
operating condition and repair, normal wear and tear excepted. The assets and
properties of the RDI Companies include all assets currently used in the conduct
of their Business as currently conducted. David Bidgood owns certain office
computers located in the Indianapolis office of the RDI Companies and listed on
Schedule 3.13A. Except for the computers referred to in the preceding sentence,
no property used by any RDI Company is owned by any Stockholder. Schedule 3.13B
hereto sets forth a list of each piece of equipment leased by any RDI Company
which has an annual rental in excess of $10,000.
ss.3.14 Conduct of Business; Absence of Certain Changes. Except as
disclosed on Schedule 3.14 hereto, since April 30, 1997, each RDI Company has
conducted its business only in the usual and ordinary course, and (a) there has
not occurred any event, circumstance or condition which has had or which may
have (so far as the Stockholders can now reasonably foresee) a Material Adverse
Effect, (b) there has been no damage to or destruction or loss of physical
property (whether or not covered by insurance) which individually or in the
aggregate, exceeded $50,000, (c) no RDI Company has declared or paid any
dividend or made any distribution on its capital stock, or redeemed, purchased
or otherwise acquired any capital stock or any other equity interest, (d) except
for an increase in salary paid to officers (i.e. Randy L. Keim, Jeffrey J. Keim
and David Bidgood) approved in May 1997 at a per annum rate of $15,000 and for
raises paid to non-officer employees in the ordinary course of business
consistent with past practice, no RDI Company has increased the compensation of
any of its officers or directors, or the rate of pay of its employees as a
group, (e) as of the date of this Agreement there has been no resignation or
termination of employment of any key officer, consultant or employee of any RDI
Company, (f) there has been no sale, transfer or other disposition of assets or
commitment therefor other than sales in the ordinary course of business
consistent with past practice, (g) except as permitted by ss.3.6, there have not
been any loans made by any RDI Company to any of its employees, officers or
directors other than Timeshare Loans and travel advances and other advances made
in the ordinary course of business, (h) except for Permitted Encumbrances, no
Lien has been placed on any of any RDI Company's assets and (i) from the date of
the Interim Balance Sheet through the Closing Date, the charges, accruals and
reserves for unpaid Taxes for periods ending on or prior to the Closing will
continue to be accrued and reserved by each RDI Company in a manner consistent
with its usual and ordinary course.
ss.3.15 Tax Matters. The Stockholders have provided the Buyer with true
and correct copies of all tax returns (original and amended) of each RDI Company
for all open years. Except as stated hereinafter, each RDI Company has correctly
prepared and filed when due all tax and/or information returns required by Law
to be filed and has paid when due all Taxes owed by it, including without
limitation Taxes levied upon any of its properties, assets, income or
franchises. All such returns are, and all returns to be filed from the date
hereof until the Closing Date will be, true and correct and show all Taxes owed
in respect of any RDI Company for the relevant periods. Except for federal tax
returns for 1989, 1990 and 1991 (with respect to which the audit has been closed
and there is no further liability) and for the open Wisconsin sales tax matters
which are described on Schedule 3.15 hereto, no return of RDI Group or any RDI
Company has ever been audited by the Internal Revenue Service (the "IRS") or any
other
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governmental authority. Neither RDI Group nor any RDI Company has ever
filed a consent under ss.341(f) of the Internal Revenue Code of 1986, as amended
(the "Code"), nor, except for the Wisconsin sales tax matters referred to on
Schedule 3.15, has RDI Group or any RDI Company ever executed any waiver that
would have the effect of extending any applicable statute of limitations in
respect of any tax liabilities. The charges, accruals and reserves on each RDI
Company's books in respect of Taxes for all fiscal periods are (and for the
period through the Closing Date will be) adequate and there are no unpaid
assessments or any basis for the assessment of any additional Taxes, penalties
or interest for any period for which the due date has passed or audit thereof by
any taxing authority. The charges, accruals and reserves reflected on the
Interim Balance Sheet are adequate to cover all unpaid Taxes for all RDI
Companies for periods ending on or prior to the date of the Interim Balance
Sheet (it being understood that the RDI Companies have not established
segregated cash accounts to satisfy such Tax obligations). All Taxes which the
RDI Group or any RDI Company is required by Law to withhold or to collect for
payment have been duly withheld and collected and paid to the proper
governmental entity. Except for the open Wisconsin sales tax matters described
on Schedule 3.15 hereto (as to which the aggregate potential exposure to the RDI
Companies does not exceed $200,000), there are no tax Liens or claims pending or
threatened against the RDI Group or any RDI Company or its properties or assets.
There are no outstanding tax sharing agreements or other such arrangements
between the RDI Group, RDI Companies, the Stockholders and any other entity. The
tax basis of the assets of each RDI Company by category including the
classification of such assets as being depreciable or amortizable as reflected
in their respective tax returns and related work papers is true and correct in
all material respects. Notwithstanding any of the provisions contained in this
Agreement to the contrary, it is agreed that, if the Closing is consummated, the
open Wisconsin sales tax matters described on Schedule 3.15 shall be the
responsibility of and be paid by Bluegreen and Buyer, jointly and severally, and
any tax refunds from the IRS with respect to the overpayment of federal taxes
shall belong and be paid to Bluegreen and Buyer, as they, among themselves, may
determine. Notwithstanding the foregoing, if the Closing is consummated and if
the gross amount of any such tax refund does not equal at least one-half (1/2)
of the foregoing sales tax liability, then the Stockholders shall be responsible
and liable to Bluegreen and Buyer, jointly and severally, for the difference
between the tax refund and one-half (1/2) of the sales tax liability
aforereferenced.
ss.3.16 Books and Records. The general ledgers and books of account,
and all other books and records, of each RDI Company are complete and correct in
all material respects and have been maintained in accordance with good business
practice and applicable Law. All material corporate action of the board of
directors and stockholders of each RDI Company has been duly authorized in
accordance with applicable Law and the charter and by-laws of each RDI Company
and has been accurately recorded in all material respects in each RDI Company's
minute books.
ss.3.17 Material Contracts. Schedule 3.17 hereto contains a complete
and accurate list of all of the following contracts and agreements (whether
written or oral) of each RDI Company:
(a) agreements, contracts or instruments to which any RDI Company is a
party relating to the borrowing by any RDI Company of money, the capital lease
or purchase on an installment basis by any RDI Company of any property or asset
or the guarantee by any RDI Company of any of the foregoing;
(b) contracts under which the amount payable by any RDI Company with
respect to its business is dependent on the revenues or income or similar
measure of such RDI Company or any other Person;
(c) licenses, leases, contracts and other arrangements with respect to
any material property of any RDI Company as to which the value of the property,
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or the annual obligation of the Company to make payments exceeds $10,000 and all
contracts, agreements, commitments, purchase orders or other understandings or
arrangements with respect to which any RDI Company has any liability or
obligation (contingent or otherwise) involving more than $10,000;
(d) franchise, license, agency, sales representative, distributor,
broker and similar agreements to which any RDI Company is a party;
(e) contracts, agreements or other understandings or arrangements
(including without limitation those with respect to compensation) between any
RDI Company and any stockholder, officer, director, consultant, agent and/or
Affiliate of any RDI Company (or any spouse or relative of any of the
foregoing);
(f) contracts with any Person which purport to restrict the business
activities of any RDI Company or use of information in its business, including
without limitation any covenant not to compete or any contracts imposing
exclusive dealing obligations;
(g) management, operating, service, membership, joint venture,
partnership or teaming agreements or agreements with property owners
associations;
(h) barter, currency, interest rate swap, hedge or broker contract that
is not terminable by will, or by giving notice of 30 days or less, without
liability;
(i) any contract or agreement pursuant to which any RDI Company has
agreed to indemnify or hold harmless any other Person or to pay liquidated
damages of any kind;
(j) labor, union and similar contracts between any RDI Company and its
employees; and
(k) any other material agreement, lease, commitment, instrument, plan,
arrangement or contract entered into by any RDI Company or to which any of its
assets may be subject.
All the foregoing are herein called "Material Contracts." Such list
includes with respect to each Material Contract the names of the parties, the
date thereof, and its title or other general description. The Material Contracts
listed on Schedule 3.17 set forth the entire arrangement and understanding
between the applicable RDI Company and the respective third parties with respect
to the subject matter thereof and, except as indicated in such Schedule, there
have been no amendments or waivers or side or supplemental arrangements to or in
respect of any Material Contract. The Stockholders have furnished to Buyer true
and correct copies of all Material Contracts as currently in effect, and will
furnish any further information that the Buyer may reasonably request in
connection therewith. Each Material Contract is valid and binding and in full
force and effect. There is no event which has occurred or existing condition
which constitutes or which, with notice, the happening of an event and/or the
passage of time, would constitute a default or breach under any Material
Contract by any RDI Company or would cause the acceleration of any obligation of
any party thereto, give rise to any right of termination or cancellation or
cause the creation of any Lien by reason of the failure of any RDI Company to
fulfill the obligations thereunder. Although certain Material Contracts are
terminable by a party thereto, without cause, upon delivery of specified notice
under applicable law, the Stockholders have not received any such notice, no
Stockholder has knowledge of any such notice to be delivered and the
Stockholders do not have knowledge that any party to a Material Contract will
not fulfill its obligations thereunder in all material respects.
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ss.3.18 Authorizations and Compliance. Schedule 3.18 hereto sets forth
a complete and accurate list of all material licenses, franchises, permits,
consents, approvals, authorizations and orders of governmental authorities held
by any RDI Company which are in effect and which are used or useful to operate
its Business and/or own its assets (collectively, the "Authorizations"). The
Authorizations constitute all material licenses, franchises, permits,
registrations, consents, approvals, authorizations and orders required for the
conduct by any RDI Company of its Business as currently conducted and to own,
lease, use and operate its properties at the places and in the manner in which
the business is currently conducted. Except as provided in Schedule 3.10, each
RDI Company is in compliance with all Authorizations, and all of the
Authorizations are in full force and effect. Each RDI Company is, and has been,
in compliance with all statutes, laws, acts, codes, orders, judgments, decrees,
injunctions, regulations, rules, policies, guidelines, licenses, permits,
franchises, by-laws and ordinances (collectively, "Laws") applicable to it. No
RDI Company has received any notice from any governmental or regulatory
authority or otherwise of any alleged violation of or noncompliance with any
Law.
ss.3.19 Labor Matters. Except for any litigation set forth on Schedule
3.10, the RDI Companies are in compliance with all Laws with respect to
employment practices and prohibiting discrimination. No RDI Company is bound by
any union contracts, labor agreements or other similar agreements or
arrangements. Except as set forth on Schedule 3.10, there are no pending or
threatened claims between any RDI Company and any of its employees (including
without limitation any claim of discrimination or harassment), or any unresolved
labor grievances or unfair labor practice or labor arbitration proceedings
pending or threatened relating to any RDI Company. No present or former
director, officer or employee of or consultant to any RDI Company, as a result
of any of the transactions contemplated by this Agreement, is or would be
eligible to receive any bonus, commission, severance pay, lump sum or other
payment, compensation or other remuneration from any RDI Company of any kind.
Except as set forth on Schedule 3.19 hereto, there are no employment or
consulting contracts or arrangements by which any RDI Company is bound (other
than those terminable at will with no penalty or other payment required) with
any directors, officers, employees or consultants of or associated with any RDI
Company. Schedule 3.19 sets forth a complete list of all officers and employees
of and consultants to any RDI Company showing date of hire, hourly rate or
salary, commission arrangements or other basis of compensation. For purposes of
this ss.3.19 the term "employee" shall include independent contractors who spend
a majority of their working time on any RDI Company's business.
ss.3.20 ERISA; Benefit Plans. (a) Except as set forth on Schedule 3.20
hereto, no RDI Company offers, maintains or sponsors, or is required to make
contributions to any pension, profit sharing, thrift or other retirement plan,
employee stock ownership plan, deferred compensation, stock ownership, stock
purchase, performance share, bonus or other incentive plan, severance plan,
health or group insurance plan, welfare plan, or other compensation or benefit
plan, agreement, policy or understanding (a "Benefit Plan"), whether or not such
plan is intended to be qualified under Section 401(a) of the Code, including
without limitation any employee benefit plan within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
There are no compensation or benefit plans, agreements, commitments, practices
or arrangements of any type providing benefits to directors, officers or
employees of any RDI Company, or with respect to which any RDI Company has any
liability, other than the Benefit Plans. All Benefit Plans have been maintained
in accordance with the terms thereof and all applicable Laws.
(b) With respect to each Benefit Plan, the Stockholders have delivered
to the Buyer true and complete copies of: (i) any and all plan texts and
agreements (including, but not limited to, trust agreements, insurance contracts
and investment management agreements); (ii) any and all material employee
communications (including all summary plan descriptions and material
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modifications thereto); (iii) the two most recent annual reports, if applicable;
(iv) the most recent annual and periodic accounting of plan assets, if
applicable; (v) the most recent determination letter received from the IRS, if
applicable; and (vi) in the case of any unfunded or self-insured plan or
arrangement, a current estimate of accrued and anticipated liabilities
thereunder.
(c) With respect to each Benefit Plan: (i) if intended to qualify under
Section 401(a) of the Code, such plan so qualifies, and its trust is exempt from
taxation under Section 501(a) of the Code; (ii) such plan has been administered
and enforced in accordance with its terms and all applicable laws, regulations
and rulings in all material respects; (iii) no breach of fiduciary duty has
occurred with respect to which any RDI Company or any Benefit Plan may be liable
or otherwise damaged in any material respect; (iv) no material disputes nor any
audits or investigations by any governmental authority are pending or
threatened; (v) no "prohibited transaction" (within the meaning of either
Section 4975(c) of the Code or Section 406 of ERISA) has occurred with respect
to which any RDI Company or any Benefit Plan may be liable or otherwise damaged
in any material respect; (vi) all contributions, premiums, and other payment
obligations have been accrued on the consolidated financial statements of RDI
Group in accordance with generally accepted accounting principles, and, to the
extent due, have been made on a timely basis, in all material respects; (vii)
all contributions or benefit payments made or required to be made under such
plan meet the requirements for deductibility under the Code; (viii) each RDI
Company has expressly reserved in itself the right to amend, modify or terminate
such plan, or any portion of it, at any time without liability to itself; and
(ix) no such plan requires any RDI Company to continue to employ any employee or
director.
(d) No Benefit Plan is, or has ever been, subject to Title IV of ERISA.
With respect to each Benefit Plan which provides welfare benefits of the type
described in Section 3(1) of ERISA: (i) no such plan provides medical or death
benefits with respect to current or former employees or directors of any Company
beyond their termination of employment, other than coverage mandated by Sections
601-608 of ERISA and 4980B(f) of the Code; (ii) each such plan has been
administered in compliance with Sections 601-609 of ERISA and 4980B(f) of the
Code; (iii) no such plan is or is provided through a "multiple employer welfare
arrangement" within the meaning of Section 3(40) of ERISA; and (iv) no such plan
has reserves, assets, surpluses or prepaid premiums.
(e) The execution, delivery and performance of this Agreement and the
other Transaction Documents will not (i) entitle any individual to severance pay
or any lump sum or other payment payable by any RDI Company, or (ii) accelerate
the time of payment or vesting, or increase the amount of compensation or
benefits due to any individual payable by any RDI Company (it being understood
that the Stockholders may allocate the Purchase Price between and amongst
themselves as they agree).
ss.3.21 Banking Relationships. Schedule 3.21 hereto accurately
describes all arrangements which any RDI Company has with any banking or other
financial institution, indicating with respect to each such arrangement the type
of arrangement maintained and the person(s) authorized in respect thereof.
Except for powers of attorney granted to lenders listed on Schedule 3.21 in
connection with receivables credit facilities to collect receivables pledged
thereunder following an event of default, no RDI Company has any outstanding
powers of attorney of any nature. Except as set forth on Schedule 3.21, no RDI
Company has any obligation or liability (whether actual, accrued, accruing,
contingent or otherwise) as guarantor, surety, co-signor, endorser, co-maker,
indemnitor or otherwise) in respect of the obligation to any Person, except as
endorser or maker of checks in the ordinary course of business.
ss.3.22 Intangible Property. No RDI Company has any registered
trademarks or trade names, or any protected right to use any trademark or
tradename. The
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use by any RDI Company of any trademarks, service marks, trade names,
copyrights, franchises, licenses, logos, customer lists, processes, formulas,
recipes, software, trade secrets, know-how, inventions, discoveries, and all
rights with respect to the foregoing, which are used in the operation of the
Business as presently conducted does not infringe and has not infringed on the
rights of any other Person. Notwithstanding the foregoing, however, if the
Closing occurs the Stockholders shall not be responsible or liable for any costs
and expenses of acquiring additional software after the Closing or of a
changeover from use of existing software after the Closing.
ss.3.23 Real Estate. (a) Schedule 3.23 hereto contains the address of
all real property (the "Real Estate") owned or leased by any RDI Company. There
is no pending or, to the knowledge of the Stockholders, threatened condemnation,
eminent domain, adverse possession, special assessments or similar proceeding
with respect to all or any part of the Real Estate owned by any RDI Company.
(b) Except as set forth on title insurance policies which have been
delivered to the Buyer, the Real Estate is not located in any special flood
hazard area designated by any federal, state, county or local government
agencies having jurisdiction over the Real Estate. The Real Estate and all
Projects comply with all applicable Laws.
(c) There are no violations of, or uncured notices, suits, orders,
decrees or judgments relative to violations of, any easement, restrictive
covenant or other matter of record affecting the Real Estate or any part
thereof.
(d) To the extent the applicable property purports or is intended to
have such services/utilities, the Real Estate has available to its lot line,
without the need for easements over the land of others, public water, sewer and
drainage facilities and electricity, gas, cable television and telephone
utilities.
(e) The Real Estate is an independent unit which does not rely on any
facilities (other than the facilities of public utility and water companies)
located on any property not included in the Real Estate (A) to fulfill any
zoning, building code or other municipal requirement or any other governmental
regulation, or (B) except for unsold timeshare inventory, for structural support
or the furnishing to the improvements of any essential building systems. The
Real Estate has adequate, direct, indefeasible legal and practical access of
record for ingress from and egress to a public way. The HVAC, mechanical,
electrical and other building systems serving the Real Estate, as well as all
structural aspects of the Projects, are in good working order and free from
material defects.
(f) The primary intended use of the Real Estate as currently operated
is allowed as of right under all applicable Laws, including, without limitation,
those pertaining to zoning, environmental and land use matters.
(g) With respect to each Project and each property managed by any RDI
Company, Schedule 3.23 hereto sets forth the following: (1) a list of the
applicable bylaws, member agreements, restrictive covenants or other applicable
governing documents, (2) all ongoing duties and obligations of any RDI Company
(to the extent not set forth in the applicable management agreement, a copy of
which has been delivered to the Buyer), (3) a description of any uncompleted
development, upgrade or other similar work required to be completed by any RDI
Company (or any other Person) with respect to any timeshare interest which has
been sold and (4) the Person(s) responsible for managing the Project. Except as
set forth on Schedule 3.10, no RDI Company is in material default of any
obligation owed to any purchaser of a timeshare interest. All Projects have been
operated in accordance with the applicable governing documents and agreements
and with applicable Law. To the extent an RDI Company manages a timeshare
project but does not and has never owned it, the applicable RDI Company has
carried out its duties in accordance with Law and the applicable management
contract. To the
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extent there is any outstanding developer guaranty or any RDI Company otherwise
has any obligation with respect to the funding of any association, no membership
or association related to any Project or other property managed by any RDI
Company is insolvent or has any material funding deficiency.
ss.3.24 Receivables. The representations and warranties set forth on
Schedule 3.24 hereto are true and correct with respect to each Timeshare Loan
originated by any RDI Company. Except as set forth on Schedule 3.24 hereto, no
RDI Company has any accounts or loans receivable from any Person which is
affiliated with any RDI Company or from any director, officer or employee or
stockholder of any RDI Company and/or any Stockholder.
ss.3.25 Environmental Matters. Without limiting any other
representation or warranty contained herein, each RDI Company and each Project
and the conduct of the Business are and have been in compliance with all
Environmental Laws, including without limitation legal requirements relating to
the use, storage, handling, transport and disposal of Hazardous Materials.
Notwithstanding the foregoing, no representation or warranty under this ss.3.25
is made respecting any timeshare property or Real Property which is or has been
managed by an RDI Company but which has not been developed by any RDI Company.
None of the Projects or, to the knowledge of the Stockholders, timeshare
property which an RDI Company developed and at which an RDI Company owns
timeshare weeks has ever been used as a sanitary land fill or as a storage or
dump site for Hazardous Materials or is contaminated with any Hazardous
Materials or has located on or under it any underground storage facilities or
storage tanks. Neither any RDI Company nor, to the knowledge of the
Stockholders, any other Person, has ever caused or permitted any Hazardous
Materials to be disposed of on or under any Project or, to the knowledge of the
Stockholders, timeshare properties which an RDI Company developed and at which
an RDI Company owns timeshare weeks in any manner not permitted by all
applicable Laws, and no such real property has ever been used (by any RDI
Company or, to the knowledge of the Stockholders, any other Person) as (a) a
disposal site or permanent storage site for any Hazardous Materials or (b) a
temporary storage site for any Hazardous Materials which temporary storage
resulted in a release of Hazardous Materials or violated any Environmental Law.
All Hazardous Materials used or generated by any RDI Company or, to the
knowledge of the Stockholders, any business merged into or otherwise acquired by
any RDI Company have been generated, accumulated, stored, transported, treated,
recycled and disposed of in compliance with all applicable Environmental Laws.
No RDI Company has any liabilities with respect to Hazardous Materials, and no
facts or circumstances exist which could give rise to liabilities under any
applicable Environmental Law. None of this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby will result in any
obligations for environmental site assessment or cleanup, or notification to or
consent of any governmental agency or third party under any
transaction-triggered Environmental Law. Notwithstanding anything contained
herein to the contrary, the representations and warranties set forth in this
ss.3.25 shall not apply to (i) any properties managed but never owned by an RDI
Company or (ii) any properties, including timeshare weeks, not developed by an
RDI Company.
ss.3.26 Transactions with Affiliates. Except as described in Schedule
3.26 hereto, no officer, employee, director or shareholder of any RDI Company
or, to the knowledge the Stockholders, any of their respective Affiliates (an
"Interested Person") owned within the past two years, directly or indirectly,
any material interest in, or serves or served as an officer, employee or
director of, any customer, competitor or supplier of any RDI Company, or any
organization which had or has a material agreement or arrangement with any RDI
Company, and no Interested Person owns directly or indirectly any material asset
or property used in or necessary to the business. Except as set forth on
Schedule 3.26, and for employee benefits provided to the employees of the RDI
Companies generally, no RDI Company is a party to any contract or arrangement
with or is indebted, either directly or indirectly, to any Interested Person.
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ss.3.27 Disclosure. None of the representations, warranties or
statements of the Stockholders contained in this Agreement or the other
Transaction Documents or otherwise made in writing by or on behalf of the
Stockholders pursuant hereto or thereto contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading as
of the dates thereof. Other than competitive factors and economic conditions
impacting the time share industry generally and for future acts of God such as
hurricanes and similar natural disasters, there is no fact, event, or condition
known to the Stockholders which has had a Material Adverse Effect or which may
(so far as can now reasonably be foreseen) have a Material Adverse Effect which
has not been set forth in this Agreement and the schedules hereto.
ss.3.28 Brokers. Neither any RDI Company nor the Stockholders have
dealt with any broker, finder or similar agent with respect to the transactions
contemplated hereby and neither any of the RDI Companies nor the Buyer or
Bluegreen shall have any obligation to any such person as a result of any action
by any RDI Company and/or the Stockholders.
ss.3.29 Warranties. Except as set forth on Schedule 3.29 hereto and for
any claims set forth on Schedule 3.10, there are no existing or threatened
claims against any RDI Company alleging defects in the services, real estate
interests or products of any RDI Company, or alleging any failure of any RDI
Company's products, services or real estate interests to meet any warranties
made or deemed made.
ss.3.30 No Other Income. Except as expressly set forth on Schedule 3.30
hereto, none of the Stockholders has any earned income (or the right to receive
future compensation, whether fixed or contingent) from any source which would
result in a breach of his Employment Agreement to be entered into with
Bluegreen. This paragraph shall not be construed as prohibiting the Stockholders
from engaging in future activities that result in earned income to themselves,
so long as they are not in violation of their Employment Agreement or the terms
of Article 8 below. Provided that no Stockholder shall be required to spend any
business time or resources of Bluegreen, the Buyer or any RDI Company, the
Stockholders shall be entitled to receive and keep any deferred professional
fees or compensation in connection with the American Adventure, Inc. bankruptcy
and the Buyer and Bluegreen consent to the assignment of such compensation by
the applicable RDI Companies to the Stockholders, provided that the Stockholders
shall, jointly and severally, be responsible for any and all Taxes incurred or
arising in connection with such compensation or the assignment thereof to the
Stockholders. In addition, and not in limitation of the foregoing, it is
acknowledged and agreed that Randy L. Keim serves on and may, following the
Closing, continue to serve on the Board of Directors of American Adventure,
Inc., provided that he does not spend more than two (2) business hours otherwise
required to be devoted to Bluegreen and Buyer per month on American Adventure
matters and that his activities do not interfere with his obligations under his
Employment Agreement. The Stockholders represent and warrant that the deferred
professional fees or compensation from American Adventure referred to in this
paragraph is not reflected in the Financial Statements, and no cost or expense
incurred in connection with the services rendered will be paid by any RDI
Company.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BLUEGREEN AND BUYER.
Bluegreen and the BUYER hereby jointly and severally represent and warrant to
the Stockholders that each of the statements contained in this Article 4 is true
and correct and will be true and correct as of the Closing Date:
ss.4.1 Organization. Each of Bluegreen and the Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was incorporated and has full corporate power and
authority to own, lease and operate its properties and to carry on its business
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as now being conducted. Each of Bluegreen and the Buyer has full corporate power
and authority to execute and deliver this Agreement and the other Transaction
Documents to be executed by it and to consummate the transactions contemplated
hereby and thereby. True, correct and completed copies of (a) the charter
documents and By-laws of each of the Buyer and Bluegreen and (b) the stock
option plan of Bluegreen pursuant to which stock options will be granted to the
Stockholders on the Closing Date have been delivered to the Stockholders.
ss.4.2 Authorization. Except for any consents, approvals and
authorizations which Bluegreen may need to obtain in connection with its
financing of the Purchase Price and its other capital needs and obligations, the
execution and delivery of this Agreement and the other Transaction Documents to
which it is a party by Bluegreen and the Buyer, as applicable, and the
consummation by them of all transactions contemplated hereby and thereby, have
been duly authorized by all requisite corporate action. This Agreement
constitutes, and each other Transaction Document to be executed by the Buyer
and/or Bluegreen in accordance herewith will constitute upon its execution, the
valid and legally binding obligation of the Buyer and/or Bluegreen, as
applicable, enforceable against the Buyer and/or Bluegreen, as applicable, in
accordance with their respective terms. Subject to receipt of approval under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any
consents listed on Schedule 4.2 hereto, the execution and performance of this
Agreement and the other Transaction Documents by each of Bluegreen and the
Buyer, as applicable, will not, result in any violation of, be in conflict with
or constitute a default under any Law, contract, agreement instrument, judgment,
decree or order to which Bluegreen or the Buyer is a party or the charter of
bylaws of Bluegreen or the Buyer.
ss.4.3 Brokers. Neither the Buyer nor Bluegreen has dealt with any
broker, finder or similar agent with respect to the transactions contemplated by
this Agreement and neither any RDI Company nor the Stockholder shall have any
obligation to any such Person as a result of any action by Bluegreen and/or the
Buyer.
ss.4.4 Investment Intent. The Buyer is acquiring the Shares for its own
account for investment only, and not with a view to, or for sale in connection
with, any distribution of the Shares in violation of the Securities Act of 1933,
as amended, any rule or regulation under the Securities Act, or any state
securities laws. The Buyer has sufficient experience in business, financial and
investment matters to be able to evaluate the merits and risks involved in the
purchase of the Shares and to make an informed investment decision with respect
to such purchase. The Buyer understands that the Shares have not been registered
under the Securities Act and are therefore "restricted securities" within the
meaning of Rule 144 under the Securities Act, and the Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption is then available.
ss.4.5 Litigation. There is no litigation, action, suit, proceeding,
unsatisfied judgment or investigation pending, or to the knowledge of the Buyer
and Bluegreen, threatened in or before any court, arbitrator, or administrative,
governmental or regulatory authority or body which relates to the transactions
contemplated by this Agreement or could materially adversely affect the ability
of the Buyer or Bluegreen to perform hereunder.
ss.4.6 SEC Filings. Bluegreen has delivered to the Stockholders true
and correct copies of all reports filed by Bluegreen with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since March 30, 1997 (collectively, the "SEC
Filings"). As of their respective dates, none of the SEC Filings contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements contained
therein, in light of the circumstances in which they were made, not materially
misleading.
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ARTICLE 5. ACCESS TO INFORMATION; PUBLIC ANNOUNCEMENTS.
ss.5.1 Access. Each RDI Company and the Stockholders shall permit
Bluegreen and the Buyer and their counsel and other representatives access, upon
reasonable notice and during normal business hours, throughout the period prior
to the Closing, to all of the properties, books, contracts, commitments and
records of the RDI Companies and AmClub and to any key employees, officers,
advisors and consultants of any RDI Company and AmClub and shall furnish
Bluegreen and the Buyer during such period all such information concerning the
business affairs of the RDI Companies and AmClub as the Buyer or its counsel and
other representatives may reasonably request. If the transactions contemplated
by this Agreement are not consummated, all confidential or proprietary
information furnished by the Stockholders shall be kept in strict confidence and
shall not be used or disclosed by Bluegreen or the Buyer or any recipient, and
Bluegreen and the Buyer shall, and shall cause each such recipient to, return to
the Stockholders all copies of documents or records furnished hereunder;
provided, however, that the restriction on disclosure and use of such
confidential or proprietary information shall not apply to information which (a)
is lawfully and independently obtained by Bluegreen or the Buyer from a third
party which is not, to Bluegreen's knowledge, breaching a confidentiality
agreement with respect to such information, (b) was known by Bluegreen or the
Buyer prior to its disclosure by the Stockholders or any of the RDI Companies,
(c) is in the public domain or enters into the public domain through no fault of
Bluegreen or the Buyer, or (d) is independently developed by Bluegreen or the
Buyer without reference to information provided by the Stockholders. No
investigation or findings of Bluegreen or the Buyer shall diminish or affect the
representations and warranties of the Stockholders in this Agreement or in any
other Transaction Document or relieve any Stockholder of any of such
Stockholder's indemnification obligations respecting the representations and
warranties of the Stockholders set forth in Article 3.
ss.5.2 Public Announcements. Except for the press release to be issued
by Bluegreen upon execution of this Agreement, the parties agree that prior to
the Closing Date and, except as otherwise required by Law, neither party shall
issue any press release or other public announcement concerning this Agreement
and the purchase of the Shares without the prior written approval of the other
party (such approval not to be unreasonably withheld or delayed). Nothing herein
shall limit Bluegreen's ability to communicate with the employees of the RDI
Companies and AmClub (subject to compliance with ss.5.1) or the ability of any
party hereto to make such disclosures as they deem necessary in connection with
their efforts to secure financing and any necessary consents and approvals,
satisfy any condition to closing or to effectuate the transactions contemplated
hereby.
ss.5.3 Hart-Scott Rodino Antitrust Improvements Act. Notwithstanding
any of the provisions contained in this Agreement to the contrary, the filing
fee expenses of seeking approval under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, anticipated to be approximately Forth Five
Thousand No/100 Dollars ($45,000.00) shall, if the transaction contemplated by
this Agreement is not consummated, be paid one half (1/2) and one half (1/2) by
Bluegreen and Buyer on the one hand, and the Stockholders on the other hand.
This foregoing allocation shall not, however, require contribution by one party
to the other for any attorneys' fees, accountant fees, consulting fees or
professional fees related to the filing, and shall only be applicable to the
filing fee as set forth hereinabove. In the event that the transaction
contemplated by this Agreement is consummated, the filing fee expenses shall be
paid by Bluegreen and/or Buyer as they, among themselves, may determine.
ARTICLE 6. PRE-CLOSING COVENANTS OF RDI COMPANIES AND STOCKHOLDERS.
ss.6.1 Conduct of Business. Between the date of this Agreement and the
Closing, unless the Buyer and Bluegreen shall otherwise consent in writing:
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(a) Required Actions. Each RDI Company shall (and the Stockholders
shall cause each RDI Company to): (i) maintain its corporate existence and
conduct its business only in the usual and ordinary course; (ii) preserve its
business intact, retain its Authorizations, and preserve the existing contracts
and goodwill of its customers, suppliers, personnel and others having business
relations with it in the usual and ordinary course of its business; (iii) have
in effect and maintain at all times all insurance of the kinds, in the amounts
and with the insurers as is presently in effect or equivalent insurance in the
prudent and reasonable course of its business; (iv) maintain its books, accounts
and records in its usual, regular and ordinary manner; and (v) not willfully and
intentionally breach the representations and warranties of the Stockholders set
forth in Article 3 of this Agreement; and
(b) Prohibited Actions. Each RDI Company shall not (and the
Stockholders shall not permit any RDI Company to) do any of the following,
directly or indirectly: (i) terminate the services of any present employee,
consultant or agent except in the ordinary course of business or for good cause
shown, except that no key employee shall be terminated except for good cause
shown; (ii) amend its charter documents or by-laws; (iii) acquire or dispose of
any material properties or assets (other than sales of inventory in the ordinary
course of business consistent with past practice); (iv) subject any of its
properties or assets to any Lien (other than pursuant to existing credit
facilities in the ordinary course of business consistent with past practice);
(v) redeem, purchase or otherwise acquire any of its outstanding capital stock
or other securities or declare or pay any dividend or distribution on the
capital stock of any RDI Company; (vi) incur any indebtedness for borrowed
money, incur any liabilities (other than trade payables and other expenses
incurred in the ordinary course of business), issue any debt securities, make
any loans or advances to any Person or assume, guarantee or endorse or otherwise
become responsible for the obligation of any other Person; (vii) modify, amend,
cancel or terminate any Material Contract (or waive any material rights
thereunder), including the making of any prepayment on any existing obligation
other than in the ordinary course of business; (viii) make any change in the
accounting methods or practices employed by the RDI Companies, as at the date
hereof; (ix) enter into any contract or commitment, contingent or otherwise,
with respect to which any RDI Company has any liability or obligation involving
more than $25,000, contingent or otherwise, or which otherwise has any
continuing effect after the Closing (other than in the usual and ordinary course
of business consistent with past practice) or which may place any limitation on
the method of conducting or scope of the business; (x) increase the compensation
or benefits payable or to become payable to any officer, director, employee,
consultant or agent of any RDI Company or make or enter into any bonus payment
or arrangement with any officer, director, employee, consultant or agent (other
than bonus payments to which any RDI Company is committed as of the date of this
Agreement and which are disclosed herein, raises paid to non-officer employees
in the ordinary course of business consistent with past practice and the $15,000
per annum salary raises paid to Randy L. Keim, Jeffrey J. Keim and David Bidgood
in May, 1997); (xi) issue or authorize any securities or grant options, warrants
or other rights to acquire its securities; (xii) enter into any transaction with
an Affiliate or take any other action which would reasonably be expected to
adversely affect or detract from the value of the RDI Companies; and/or (xiii)
commit or agree to do any of the foregoing.
ss.6.2 Continuing Obligation to Inform. From time to time prior to the
Closing, the Stockholders will promptly deliver or cause to be delivered to the
Buyer supplemental information concerning events subsequent to the date hereof
which would render any statement, representation or warranty in this Agreement
or any information contained in any Schedule inaccurate or incomplete at any
time after the date hereof until the Closing Date provided that no such delivery
shall diminish or affect the representations and warranties of the Stockholders.
From time to time prior to the Closing Date, Bluegreen will, promptly after
filing, deliver or cause to be delivered to the Stockholders copies of any
reports filed
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by Bluegreen with the SEC under the Exchange Act. Each party agrees to notify
the others promptly if any Person shall institute, or expressly threaten to
institute, any litigation relating to, or which would adversely affect any
party's rights or ability to perform under, this Agreement.
ss.6.3 Exclusivity. The Stockholders will not, and will not permit any
RDI Company to, directly or indirectly, offer, solicit offers for or sell,
assign, pledge or otherwise transfer the Shares or the capital stock of any RDI
Company prior to the Closing or the termination of this Agreement in accordance
with Article 13 hereof. None of the RDI Companies and none of the Stockholders
will, directly or indirectly, through any officer, director, agent or otherwise,
(a) solicit, initiate or encourage submission of proposals or offers from any
person relating to any acquisition or purchase of all or any portion of the
assets of, or any equity interest in, any RDI Company or any equity investment,
merger, consolidation or business combination with any RDI Company, or (b)
participate in any discussions or negotiations regarding, or furnish to any
other person, any non-public information with respect to, or otherwise cooperate
in any way with, or assist or participate, facilitate or encourage, any effort
or attempt by any other Person to do or seek any of the foregoing. The
Stockholders will immediately disclose to the Buyer any unsolicited offer or
indication of interest covered by this ss.6.3.
ss.6.4 Separate Breach. Except for any willful and intentional breach
of any provision of this Article 6, any breach of any provision of this Article
6 shall be treated only as a breach of a representation and warranty contained
in this Agreement and not create or establish a separate breach or claim.
ARTICLE 7. ADDITIONAL COVENANTS.
ss.7.1 Efforts. Each party hereto covenants and agrees to use all
commercially reasonable efforts to obtain the satisfaction of the conditions to
the Closing specified in Article 9 and Article 10 of this Agreement. Without
limiting the foregoing, prior to the Closing each Stockholder will use its
reasonable efforts to have any and all Stockholder Guaranties released and as
soon as practicable after the date hereof the appropriate parties shall, in
accordance with ss.5.3 above, make all necessary filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Bluegreen will use
reasonable efforts to cooperate with the Stockholders in their efforts to have
the guarantees executed by the Stockholders of the indebtedness of the RDI
Companies released prior to the Closing provided that in no event shall
Bluegreen (a) be obligated to agree to itself guaranty any such indebtedness or
provide collateral security therefor, (b) be obligated to pay any funds to the
lender or otherwise provide credit support in order to obtain the release of the
Stockholder guaranties or (c) otherwise be required to enter into any agreement
or arrangement which it in good faith determines is not advisable.
ARTICLE 8. COVENANT NOT TO COMPETE.
ss.8.1 Noncompetition.
(a) Each Stockholder covenants that he will not, for a period
of two (2) years after employment of such Stockholder by Bluegreen
ceases for any reason (but if the term of the Employment Agreement
expires upon natural termination of the expiration of three (3) years
from the date of employment, then for a term of one (1) year from the
date of such termination) either individually or as a consultant to, or
employee, officer, director, stockholder, manager, partner or other
owner or participant in any business entity other than Bluegreen or its
subsidiaries, directly or indirectly (i) own, operate or sell a
timeshare project within thirty (30) miles of a timeshare property
developed and marketed by Bluegreen or any of its subsidiaries, (ii)
accept contracts of management of timeshare associations under
management to the RDI Company
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when those contracts existed at the time of Closing or are gained
during the time of employment of the Stockholders or (iii) accept a
management contract on a development within thirty (30) miles of any
timeshare development managed or developed by Bluegreen or any of its
subsidiaries, nor shall such Stockholders engage or participate in,
assist or consult with, in any manner or in any capacity, or have any
interest in or make any loan to, any Person or entity which is engaged
in any business that does any of the foregoing.
(b) In addition, for the applicable time period set forth in
paragraph (a) above, each Stockholder covenants that he will not,
directly or indirectly, either individually or as consultant to, or
employee, officer, director or stockholder, manager, partner or other
owner or participant in any business entity, other than Bluegreen or
its subsidiaries, directly or indirectly, solicit or endeavor to entice
away from any RDI Company, the Buyer and/or Bluegreen or otherwise
interfere with the business relationship of any RDI Company, the Buyer
and/or Bluegreen with (i) any Person who is, or was at any time after
May 1, 1997, employed by or associated with any RDI Company or
Bluegreen, or (ii) any Person who is, or was at any time after May 1,
1997, a customer or client of, or supplier to, any RDI Company,
Bluegreen, the Buyer or any of their Affiliates.
It is understood that the provision of services by any Stockholder to
AmClub shall not be subject to this ss.8.1.
ss.8.2 Proprietary Information. Subsequent to the Closing, the
Stockholders shall hold in confidence, and cause all of their Affiliates to hold
in confidence, all knowledge and information of a secret or confidential nature
or other information of a business, financial, marketing or other nature with
respect to the business of any RDI Company and shall not, directly or
indirectly, disclose, publish or make use of the same without the express
written consent of Bluegreen, except (a) to the extent that such information
shall have become public knowledge other than by breach of this Agreement by the
Stockholders, (b) as necessary to file tax returns or other required reports
with governmental agencies or (c) to the extent requested pursuant to or as
required by applicable Law.
ss.8.3 Injunctive Relief. The Stockholders acknowledge that any breach
or threatened breach of the provisions of this Article 8 will cause irreparable
injury to the Buyer and Bluegreen for which an adequate monetary remedy does not
exist. Accordingly, in the event of any such breach or threatened breach, each
of Bluegreen and the Buyer shall be entitled, in addition to the exercise of
other remedies, to seek and (subject to court approval) obtain injunctive
relief, without necessity of posting a bond, restraining the Stockholders from
committing such breach or threatened breach. Without limiting any injunctive or
other equitable remedy available to Bluegreen or the Buyer for a breach of
ss.8.1(b) above, if any Stockholder shall breach such clause, such Stockholder
shall be obligated to pay to Bluegreen as liquidated damages an amount equal to
two (2) times the aggregate annual compensation of the applicable person as of
the time of the wrongful act, it being agreed that the exact amount of monetary
damages would be difficult to compute.
ss.8.4 Limitation on Scope. The parties agree that the restrictive
covenants contained herein are reasonable under the circumstances and further
agree that the covenants contained in this Article 8 should be interpreted in
such a manner as to be effective and valid under applicable law. In the event
any provision of this Article 8 or portion thereof shall be held to be illegal
or unenforceable, the remainder of this Article 8 or such provision shall remain
in full force and effect. If any one or more of the provisions contained in this
Article 8 shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, such provision shall be construed by
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limiting or reducing it so as to be enforceable to the maximum extent compatible
with applicable law.
ss.8.5 Name. Following the Closing, no Stockholder shall use the RDI
name as part of the name of any business enterprise, except in connection with
his employment with the Buyer or Bluegreen.
ss.8.6 Legitimate Business Interests. Each party hereto acknowledges
that (x) there are legitimate business interests justifying the covenants
contained in this Article 8, including without limitation that the Stockholders
have and will have trade secrets, valuable confidential business or professional
information and substantial relationships with existing and prospective
customers, suppliers and others, customer goodwill and specialized training and
(y) the terms of this Article 8 are reasonably necessary to protect such
legitimate business interests. The provisions of this Article 8 and
non-competition terms contained in the employment agreements to be entered into
by the Stockholders as of the Closing Date are in addition to, and not in lieu
of, Article 8.
ARTICLE 9. CONDITIONS TO OBLIGATIONS OF BLUEGREEN AND THE BUYER. The
respective obligations of Bluegreen and the Buyer to consummate the transactions
provided for in this Agreement are expressly subject to the fulfillment, at or
prior to the Closing Date, of the following conditions precedent, each of which
may be waived in writing in the sole discretion of Bluegreen and the Buyer (if
the Closing is consummated, then the provisions of this Article 9 shall be
deemed to have been met or waived, it being understood that any decision by the
Buyer and Bluegreen to consummate the Closing shall not limit or in any way
derogate from any of the rights of the Buyer or Bluegreen under Article 12
below):
ss.9.1 Representations and Warranties; Covenants. The representations
and warranties of the Stockholders contained in Article 3, in the Schedules
hereto, in the AmClub Agreement and in all certificates delivered by the
Stockholders pursuant to this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same effect as though
made on and as of such date. Without limiting the foregoing, (a) the shares of
RDI Group shall be owned 42.5% by Randy L. Keim, 42.5% by Jeffrey J. Keim and
15.0% by David Bidgood and the shares of RDI Title shall be owned 50% by Randy
L. Keim and 50% by Jeffrey J. Keim and (b) all of the issued and outstanding
shares of AmClub shall have been acquired by Randy L. Keim on terms satisfactory
to the Buyer and Bluegreen. The RDI Companies and the Stockholders shall have
performed all obligations and complied in all material respects with all
covenants and conditions contained in this Agreement which by the terms hereof
are to be performed or complied with by the RDI Companies and/or the Stockholder
on or before the Closing Date, and the Buyer shall have received a certificate
signed by the Stockholders to such effect; provided that, absent willful and
intentional misrepresentation, no separate claim or separate cause of action
shall arise from or exist in respect of such certificate or the delivery or
content thereof.
ss.9.2 Required Consents. The Stockholders shall have obtained (on
terms reasonably satisfactory to the Buyer) and delivered to the Buyer all
consents, licenses, approvals and permits required to be obtained by them for
the consummation of the transactions contemplated hereby, and no such consent,
license, approval or permit shall have been withdrawn or suspended. The Buyer
and Bluegreen shall have obtained all consents, licenses, approvals and permits
required to be obtained by them for the consummation of the transactions
contemplated hereby, in form and substance reasonably satisfactory to Bluegreen
and the Buyer.
ss.9.3 No Adverse Proceedings. No action or proceeding by or before any
court or other governmental body shall have been instituted or threatened
against any of the parties to this Agreement by any governmental body or Person
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whatsoever which shall seek to restrain, prohibit or invalidate the transactions
contemplated by this Agreement.
ss.9.4 Opinion of Counsel. Bluegreen and the Buyer shall have received
an opinion of Weinstock & Scavo, P.C. counsel to the Stockholders and the RDI
Companies in substantially the form attached hereto as Exhibit B.
ss.9.5 Stock Certificates. The Stockholders shall have delivered to the
Buyer certificates representing the Shares, duly endorsed for transfer,
containing no legend or other restriction of any kind, and sufficient to vest in
the Buyer good and marketable title to the Shares, free and clear of all Liens,
other than restrictions under generally applicable securities laws. Without
limiting the foregoing, FINOVA Capital Corporation shall have released its Liens
on the Shares. The Stockholders shall have terminated any and all existing
stockholders agreements relating to the Shares.
ss.9.6 Environmental Review. Bluegreen and the Buyer shall have
received the results of an environmental, health, pollution and safety review of
the Christmas Mountain, Wisconsin and Orlando Sunshine, Florida properties and
the property owned by AmClub in Virginia and such results shall be satisfactory
to the Buyer and its financing sources.
ss.9.7 Financing. Bluegreen and the Buyer shall have obtained financing
in an amount sufficient to enable the Buyer to fund the purchase of the Shares,
to provide for their working capital needs and other obligations following the
Closing, and the terms and conditions of such financing shall be satisfactory to
Bluegreen and the Buyer.
ss.9.8 Other Instruments. The Stockholders shall have delivered such
other certificates, consents, instruments or agreements as are reasonably
requested by the Buyer or its counsel.
ss.9.9 Real Property. With respect to each Project, the Stockholders
shall have delivered to the Buyer a title insurance policy (or in lieu thereof a
title certificate reflecting all Liens on the Project) from a title insurance
company satisfactory to the Buyer, such policies (or certificates) to be in form
and substance satisfactory to the Buyer (including without limitation as to
affirmative covenants and other endorsements).
ss.9.10 No Material Adverse Change. Between the date of this Agreement
and the Closing Date, nothing shall have occurred that has had or will have a
Material Adverse Effect.
ss.9.11 Employment and Noncompetition Agreements. Each of the
Stockholders shall have entered into an employment and non-competition agreement
with Bluegreen and the Buyer, such agreement to be in substantially in the form
attached as Exhibit C hereto (each an "Employment Agreement").
ss.9.12 Due Diligence. The Buyer shall have completed its due diligence
review of the RDI Companies and AmClub, and the results of such review shall be
satisfactory to the Buyer.
ss.9.13 AmClub. The Buyer, AmClub, Inc. and Randy L. Keim shall have
entered into an agreement (the "AmClub Agreement") with respect to AmClub
providing, among other things, for the granting by Mr. Keim to the Buyer of an
option to acquire 100% of the issued and outstanding shares of AmClub, such
agreement to be mutually satisfactory in form and substance to the parties.
ss.9.14 Financial Condition. The financial condition of the RDI Group
shall not be less favorable than its financial condition as of the date of the
most recent audited balance sheet of the Selling Companies referred to in ss.3.8
hereof. Without limiting the foregoing, the combined net worth of the Selling
Companies
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as of the Closing Date shall not be less than $4.0 million and the Buyer shall
have received an unaudited combined balance sheet (the "Closing Balance Sheet")
as of the Closing Date prepared in accordance with GAAP.
ss.9.15 Restructure Agreement. Each RDI Company shall be in compliance
with the terms of the Loan Restructure Agreement referred to in Note 13 of the
notes to the Audited Statements, and the Buyer shall have received confirmation
satisfactory in form and substance to the Buyer from the applicable lender(s)
named therein that such agreement remains in full force and effect and the RDI
Companies will have the benefits thereof following the Closing.
ss.9.16 Payables. The Stockholders shall have delivered to the Buyer a
certified list of all accounts payable as of the Closing Date.
ARTICLE 10. CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS. The
obligations of the Stockholders to consummate the transactions provided for in
this Agreement are subject to the fulfillment, at or prior to the Closing Date,
of the following conditions precedent, each of which may be waived in writing at
the sole discretion of the Stockholders (if the Closing is consummated, then the
provisions of this Article 10 shall be deemed to have been met or waived, it
being understood that the Closing shall not limit or in any way derogate from
any of the rights of the Stockholders under Article 12 below):
ss.10.1 Representations and Warranties; Covenants. The representations
and warranties of the Buyer and Bluegreen contained in Article 4 and in all
certificates delivered by the Buyer and/or Bluegreen to the Stockholders
pursuant to this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though made on and as of such
date. Bluegreen and the Buyer shall have performed, on or before the Closing
Date, all obligations and complied in all material respects with all covenants
and conditions contained in this Agreement which by the terms hereof are to be
performed by Bluegreen and/or the Buyer on or before the Closing Date; and the
Stockholders shall have received a certificate signed by an officer of Bluegreen
and the Buyer to such effect.
ss.10.2 No Adverse Proceedings. The consummation of the transactions
contemplated hereby shall not violate any order, decree or judgment of any court
or governmental body having competent jurisdiction.
ss.10.3 Opinion of Counsel. The Stockholders shall have received an
opinion of Choate, Hall & Stewart, counsel to the Buyer and Bluegreen, dated as
of the Closing Date, in substantially the form attached hereto as Exhibit D.
ss.10.4 Deliveries at Closing. At the Closing, Bluegreen and the Buyer
shall have made the deliveries required under ss.11.3.
ss.10.5 Employment and Noncompetition Agreements. Bluegreen shall have
entered into the Employment Agreements referred to in ss.10.12 above, and each
Stockholder shall have received incentive stock options for the purchase of
60,000 shares of Bluegreen common stock. It is understood that such options are
in consideration of future services to be rendered by the Stockholders to
Bluegreen and are not partial consideration for the Shares. The Buyer and Randy
L. Keim shall have entered into the AmClub Agreement, which shall be mutually
satisfactory in form and substance to the parties.
ss.10.6 Required Consents. The Stockholders shall have obtained the
Required Consents and no such consent shall have been withdrawn or suspended.
ss.10.7 Stockholder Guaranties. With respect to each of the Stockholder
Guaranties, either (a) such guaranty shall have been released prior to the
Closing Date or (b) Bluegreen shall have agreed in writing to indemnify and hold
harmless the applicable Stockholder for any and all amounts which such
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Stockholder may, after the Closing Date, be required to pay under or in respect
of such guaranty.
ARTICLE 11. CLOSING.
ss.11.1 Date and Place of Closing. The consummation of the purchase and
sale of the Shares hereunder (the "Closing") shall be held at 10:00 a.m. on
August 28, 1997, at the offices of Bluegreen, Boca Raton, Florida, or at such
later time, date and place on or after the date on which the conditions
precedent set forth in Articles 9 and 10 have been satisfied (or waived) as the
parties shall mutually agree. The date of the Closing is referred to herein as
the "Closing Date". It is expressly understood that any decision by Bluegreen
and the Buyer to consummate the Closing shall not constitute a waiver of or
derogate from the rights of Bluegreen and the Buyer under Article 12 below.
ss.11.2 Deliveries at Closing by the Stockholders. At the Closing, and
upon satisfaction or waiver of the conditions set forth in Article 10 hereof,
the Stockholders shall deliver or cause to be delivered to the Buyer
certificates representing the Shares, duly endorsed, as provided in ss.9.5.
ss.11.3 Deliveries at Closing by the Buyer and Bluegreen. At the
Closing, and upon satisfaction or waiver of the conditions set forth in Article
9 hereof, the Buyer and Bluegreen shall deliver or cause to be delivered to the
Agent for the benefit of the Stockholders (a) the original Note and payment of
the cash Purchase Price as provided in ss.2.2 and (b) certified resolutions of
the Board of Directors of each of Bluegreen and the Buyer authorizing the
transactions contemplated hereby.
ARTICLE 12. SURVIVAL; INDEMNIFICATION.
ss.12.1 Survival. Unless otherwise stated herein, the representations,
warranties, covenants and agreements contained in this Agreement shall survive
the Closing and any investigation made by any party hereto, provided that no
action or claim for the breach or inaccuracy of any representation or warranty
contained in this Agreement or indemnification resulting from or relating to the
breach or inaccuracy of any representation or warranty contained in this
Agreement shall be made more than twenty four (24) months after the Closing
Date, except for (a) representations and warranties contained in ss.ss.3.1, 3.2,
3.4, 3.15, 3.20 and 3.25 herein, (b) claims of which the Stockholders have been
notified with reasonable specification by the Buyer within such twenty four (24)
month period and (c) claims for breaches of representations and warranties of
the Stockholders which were known by any Stockholder to be inaccurate at Closing
and which were not disclosed to the Buyer, it being understood that an action
covered under clauses (a), (b) and/or (c) may be commenced at any time until the
relevant applicable statutes of limitation shall have expired. Notwithstanding
the foregoing, any claim for indemnification with respect to the breach or
falsity of any representation or warranty contained in the AmClub Agreement may
be made within the applicable period set forth in the AmClub Agreement. It is
understood that a claim may be made prior to such time as the exact amount of
Loss shall have been determined.
ss.12.2 Indemnification by Stockholders. Subject to ss.12.1 and to the
balance of this ss.12.2, the Stockholders hereby jointly and severally indemnify
and hold the Buyer and Bluegreen harmless from and against any and all Losses of
any nature arising out of, resulting from or relating to (a) any breach or
inaccuracy of the representations or warranties of the Stockholders or the RDI
Companies set forth in Article 3 or any willful or intentional breach of any
covenant or agreement of the Stockholders or the RDI Companies contained in
ss.6.1 or ss.6.3 of this Agreement, and all costs and expenses (including
reasonable attorneys' fees) incurred in connection with the foregoing and/or (b)
any pending or threatened litigation disclosed herein or in existence as of the
Closing Date, including without limitation the matters set forth in Schedule
3.10 hereto,
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provided that the Stockholders shall not be liable under this clause (b) for
amounts owed with respect to the existing Wisconsin sales tax disputes referred
to in Schedule 3.15 except to the extent provided in the last two sentences of
ss.3.15. Notwithstanding anything contained in this ss.12.2 to the contrary, the
Stockholders shall not be liable under this ss.12.2 for claims for Losses (other
than Losses resulting from the willful or intentional breach of any covenant
contained in ss.6.1 or ss.6.3, with respect to which the Buyer and Bluegreen
shall be entitled to receive damages for all Losses from the first dollar)
unless and until the aggregate claims of the Buyer and Bluegreen for all
breaches and Losses (other than Losses resulting from the willful or intentional
breach of any covenant contained in ss.6.1 or ss.6.3, with respect to which the
Buyer and Bluegreen shall be entitled to receive damages for all Losses from the
first dollar) exceed $175,000, at which time the Buyer and Bluegreen shall be
entitled to receive damages for all Losses (i.e. from the first dollar),
provided, that, in the event indemnification is not available because the
aggregate claims do not exceed $175,000 the Buyer and Bluegreen shall be
entitled to indemnification with respect to the breach of any particular
representation or warranty, once the claims of the Buyer and Bluegreen therefor
exceed $60,000 (at which time the Stockholders shall be responsible for all
Losses from the first dollar). Also notwithstanding anything contained in this
ss.12.2, the term "Losses" shall not include any Loss, cost, damage or expense
incurred by the Buyer or Bluegreen with respect to not more than ten (10)
claims, events or circumstances, provided that any particular claim, event or
circumstance must represent Losses of less than $7,500 and any claim, event or
circumstance initially eligible for inclusion under this sentence shall be
excluded if the same facts or circumstances triggering the claim apply to more
than two other claims arising from the same events or circumstances and provided
further that the maximum aggregate Losses, costs, damages and/or expenses
covered by this sentence and excluded from the term "Losses" shall in no event
exceed $60,000.
Subject to the next sentence, the maximum aggregate liability of the
Stockholders to the Buyer and Bluegreen for Losses under this ss.12.2 for any
breach or inaccuracy of any representation or warranty shall not exceed
$1,500,000 (the "Cap"). The Cap set forth in the preceding sentence shall not
apply, and there shall be no limit with respect to Losses relating to (1) any
claim which is based on fraud, (2) any claim based on the breach or inaccuracy
of any representation or warranty set forth in the fifth, sixth, seventh and/or
eighth sentence of ss.3.1 of this Agreement or (3) any claim based on the breach
or inaccuracy of any representation or warranty set forth in the fourth, fifth,
sixth and/or seventh sentence of ss.3.4 of this Agreement.
The Buyer and Bluegreen agree that, absent a willful and intentional
breach of this Agreement, any facts or circumstances which give rise to that
which may be classified as a breach of a representation or warranty under this
Agreement shall solely be treated as a claim for breach of a representation or
warranty hereunder, and shall not be treated as a breach of contract, covenant
or agreement or other claim.
Notwithstanding any provision contained in this ss.12.2, any tax
resulting from forgiveness of notes pursuant to the Loan Restructure Agreement
entered into by and between any RDI Company and Oxford Finance, shall not be
deemed to be a breach of any representation or warranty or other provision of
this Agreement and following the Closing the same shall be payable by
Bluegreen/Buyer.
Notwithstanding anything contained above in this ss.12.2 to the
contrary, nothing contained in this ss.12.2 is or is intended to limit the
rights of Bluegreen and the Buyer or the obligations of any Stockholder with
respect to (x) any breach of Article 8 or (y) any willful or intentional breach
of any other surviving covenant or agreement set forth in this Agreement (other
than ss.6.1 or ss.6.3, as to which the above provisions of this ss.12.2 shall
apply). This paragraph shall override any inconsistent provision contained in
this ss.12.2.
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ss.12.3 Indemnification by Buyer and Bluegreen. Subject to ss.12.1, the
Buyer and Bluegreen hereby jointly and severally indemnify and hold the
Stockholders harmless from and against any and all Losses of any nature arising
out of, resulting from or relating to any breach or inaccuracy of the Buyer's or
Bluegreen's representations, warranties, covenants or agreements contained in
this Agreement, and all costs and expenses (including reasonable attorneys'
fees) incurred in connection with the foregoing.
ss.12.4 Procedures for Indemnification of Third Party Claims. (a) A
party or parties entitled to indemnification hereunder with respect to a third
party claim (the "Indemnified Party") will give the party or parties required to
provide such indemnification (the "Indemnifier") prompt written notice of any
legal proceeding, claim or demand instituted by any third party (in each case, a
"Claim") in respect of which the Indemnified Party is entitled to
indemnification hereunder.
(b) The Indemnifier shall have the right, by giving written notice to
the Indemnified Party within 10 days after receipt of notice from the
Indemnified Party and stating that it is responsible for such Claim, at its
option and expense, to defend against, negotiate, settle or otherwise deal with
any Claim with respect to which it is the Indemnifier and to have the
Indemnified Party represented by counsel, reasonably satisfactory to the
Indemnified Party, selected by the Indemnifier; provided that the Indemnified
Party may participate in any proceeding with counsel of its choice and at its
expense; provided further, that the Buyer, at any time when it believes in good
faith that any Claim with respect to which the Stockholders are defending is
having a material adverse effect on the Business, may assume the defense of and
settle such Claim in good faith and be fully indemnified therefor (subject to
the Cap, if applicable) and provided further, that the Indemnifier may not enter
into a settlement of any such Claim without the consent of the Indemnified Party
unless such settlement requires no more than a monetary payment for which the
Indemnified Party is fully indemnified to the extent required hereunder or
involves other matters not binding upon or affecting the Indemnified Party. If
and to the extent the Stockholders shall make a payment directly to any third
party with respect to a Claim, the payment made shall not be included as
"Losses" for purposes of the $175,000 and $60,000 baskets referred to in
ss.12.2. Any settlement or amount paid directly by Stockholders as
indemnification shall be applied to the cap (i.e. if the Stockholders pay out
One Hundred Thousand No/100 Dollars ($100,000.00), or a case is settled for One
Hundred Thousand and No/100 Dollars ($100,000.00), then the remaining liability
provided for under this Agreement shall be capped at One Million Four Hundred
Thousand and No/100 Dollars ($1,400,000.00)).
(c) The parties will cooperate fully with each other in connection with
the defense, negotiation or settlement of any Claim.
ss.12.5 Set-off, Etc. The Buyer and Bluegreen shall be entitled to
set-off against any amounts due or to become due under the Note any amounts for
which it is entitled to indemnification under this Article 12. The Buyer and
Bluegreen agree that, to the extent that Bluegreen and/or Buyer discover a
breach of a representation or warranty made by the Stockholders in Article 3
hereof prior to Closing, then Bluegreen and Buyer shall have the option of
consummating or not consummating the transaction contemplated by this Agreement.
If Bluegreen/Buyer proceed to consummate the transaction contemplated hereunder,
Bluegreen/Buyer will have the right to offset against the Note, at Closing or
thereafter, the Loss arising out of or resulting from any such breach, but there
shall be no reduction of the cash Purchase Price payable at Closing. In
addition, the amounts otherwise payable to the Agent for the benefit of the
Stockholders may be withheld and not paid to the Agent if a Stockholder violates
any covenant not to compete with the Buyer or any RDI Company. It is expressly
understood that the set-off rights with respect to the Note are not the sole
sources of
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satisfying Losses and the Stockholders shall be jointly and severally liable for
the full amount thereof.
ARTICLE 13. TERMINATION OF AGREEMENT.
ss.13.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing in the following
circumstances:
(a) by mutual written consent of the Stockholders and the Buyer;
(b) by the Buyer, if the Stockholders or the Selling Companies shall
have breached or failed to perform in any material respect any of their
obligations, covenants or agreements under this Agreement, or if any of the
representations and warranties of the Stockholders set forth in this Agreement
shall not be true in any material respect, and such breach, failure or
misrepresentation is not cured to the Buyer's reasonable satisfaction within 10
days after the Buyer gives the Stockholders written notice identifying such
breach, failure or misrepresentation;
(c) by the Stockholders, if the Buyer or Bluegreen shall have breached
or failed to perform in any material respect any of its obligations, covenants
or agreements under this Agreement, or any of the representations and warranties
of the Buyer and Bluegreen set forth in this Agreement shall not be true in any
material respect, and such breach, failure or misrepresentation is not cured to
the Stockholders' reasonable satisfaction within 10 days after the Stockholders
give the Buyer written notice identifying such breach, failure or
misrepresentation;
(d) by the Buyer, if the conditions set forth in Article 9 become
incapable of satisfaction;
(e) by the Stockholders, if the conditions set forth in Article 10
become incapable of satisfaction; or
(f) by the Stockholders or by the Buyer if the Closing shall not have
occurred on or before October 31, 1997, or such later date, if any, as the
Stockholders and the Buyer may agree in writing (provided that the term of this
Agreement shall, at the sole option of the Buyer and Bluegreen, be extended for
such further period as shall be necessary to close if the reason why the Closing
shall not have taken place is that the Required Consents have not yet been
obtained and may still be secured);
PROVIDED THAT this Agreement may not be terminated under this ss.13.1
by any party that is in breach of any representation or warranty or in violation
of any covenant or agreement contained herein.
ss.13.2 Effect of Termination. (a) If this Agreement is terminated (i)
under ss.13.1(a) or (ii) under ss.13.1(d) or ss.13.1 (e) herein at a time when
no party is in breach of a representation or warranty or in violation of a
covenant or agreement contained in this Agreement, all further obligations of
each party will terminate without further liability of any party hereto (other
than the provisions contained herein regarding the payment of expenses and
broker's fees and treatment of confidential and proprietary information).
(b) If this Agreement is terminated under ss.13.1(b), (c), (d), (e) or
(f) herein at a time when one or more parties is in willful breach of a
representation or warranty or in willful violation of a covenant or agreement
contained in this Agreement, the liabilities and obligations of the parties not
in breach or violation of this Agreement shall terminate, and the party or
parties which are in breach or violation of this Agreement shall remain liable
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for such breaches and violations, and nothing shall be deemed to restrict the
remedies available against such party or parties.
ARTICLE 14. DEFINITIONS. The following terms used in this Agreement
will have the meanings specified below (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, the
first Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling" controlled by" and "under common
control with"), as applied to any Person, means the possession, directly,
indirectly or beneficially, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent" has the meaning specified in ss.16.10.
"Agreement" means this Stock Purchase Agreement, as in effect from time
to time.
"AmClub" has the meaning specified on the first page of this Agreement.
"AmClub Agreement" has the meaning set forth in ss.9.13.
"Audited Statements" has the meaning specified in ss.3.8.
"Authorizations" has the meaning specified in ss.3.18.
"Balance Sheet Date" has the meaning specified in ss.3.8.
"Benefit Plan" has the meaning specified in ss.3.20.
"Bluegreen" has the meaning specified on the first page of this
Agreement.
"Business" means the business(es) conducted by the RDI Companies.
"Buyer" has the meaning specified on the first page of this Agreement.
"Cap" has the meaning set forth in ss.12.2.
"Claim" has the meaning specified in ss.12.4.
"Closing" has the meaning specified in ss.11.1.
"Closing Balance Sheet" has the meaning specified in ss.9.14.
"Closing Date" has the meaning specified in ss.11.1.
"Code" has the meaning specified in ss.3.15.
"Dellona" has the meaning specified on the first page of this
Agreement.
"Employment Agreement" has the meaning specified in ss.9.11.
"Environmental Laws" means the Resource Conservation and Recovery Act,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986,
the Federal Water Pollution Control Act, the Toxic Substances Control Act and
all other federal, state and local Laws relating to pollution, hazardous
substances, health, safety and/or the environment.
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"ERISA" has the meaning specified in ss.3.20.
"Escrow Agent" has the meaning specified in ss.2.2.
"Exchange Act" has the meaning specified in ss.4.6.
"Financial Statements" has the meaning specified in ss.3.8.
"GAAP" means those generally accepted accounting principles and
practices applied on a consistent basis which are recognized as such from time
to time by the American Institute of Certified Public Accountants acting through
its Accounting Principles Board or by the Financial Accounting Standards Board
or through other appropriate boards or committees thereof.
"Hazardous Materials" means (a) any asbestos insulation or other
material composed of or containing asbestos, (b) any substance, product or waste
constituting or containing oil, petroleum or petroleum constituents, and (c) all
hazardous, toxic or dangerous waste, substance, contaminant or material or other
words of similar import defined or treated as such in the Comprehensive
Environmental Response, Compensation and Liability Act, or any other federal,
state, local or other Environmental Law.
"Indemnified Party" has the meaning specified in ss.12.4.
"Indemnifier" has the meaning specified in ss.12.4.
"Insurance Policies" has the meaning specified in ss.3.11.
"Intangible Property" has the meaning specified in ss.3.21.
"Interested Person" has the meaning specified in ss.3.26.
"Interim Balance Sheet" has the meaning specified in ss.3.8.
"Interim Statements" has the meaning specified in ss.3.8.
"Interval Resort" has the meaning specified on the first page of this
Agreement.
"IRS" has the meaning specified in ss.3.15.
"Laws" has the meaning specified in ss.3.18.
"Lien" means any lien, mortgage, pledge, security interest, charge or
other encumbrance or restriction of any kind (including without limitation any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loss" means any and all direct or indirect losses, payments,
obligations, damages, claims, judgments, demands, liabilities, costs and
expenses (including without limitation reasonable attorneys' fees) paid or
incurred, or diminution in value or reduction in benefits or rights of any kind
or character that are reasonably expected to occur, including without limitation
penalties, interest payable, and any legal or other expenses reasonably incurred
in connection with investigating or defending any demands, claims, actions or
causes of action for breach or inaccuracy of the breach of the representations
or warranties, or the willful breach of any covenant contained in ss.6.1 or
ss.6.3 of this Agreement, that if adversely determined could reasonably be
expected to result in Losses, and all amounts paid in settlement of such claims
or actions; provided, however, that such Losses shall be net of any Associated
Tax Benefit (as defined below) and net of any insurance proceeds entitled to be
received by an Indemnified Party from a non-affiliated insurance company on
account of such loss (after taking into
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account any cost, including deductibles, incurred in obtaining such proceeds and
any increase in insurance premiums as a direct result of a claim relating to
such proceeds) and provided further that Losses shall not include an allocation
of internal overhead costs of the party seeking indemnification. As used herein,
the term "Associated Tax Benefit" means the cumulative reduction, if any, in
Taxes enjoyed by an indemnified party in any taxable year or years as a result
of the tax treatment of Losses, such reduction to be reduced (but not below
zero) by any incremental Taxes paid by the indemnified party by reason of the
inclusion of the indemnification payment in income if and to the extent required
by applicable law. The amount of the Associated Tax Benefit shall be computed by
the indemnifying party on such reasonable assumptions as it may select.
"Material Adverse Effect" means an effect which is materially adverse
to (a) the legality, validity or enforceability of this Agreement or the ability
of any Stockholder or any Selling Company to perform its obligations hereunder
or the ability of the Buyer to acquire the Shares or (b) the Business or (c) the
operations, properties, condition (financial or otherwise), business, profits,
operating results or prospects of the Business, or which in any case would have
such a material adverse effect after the Closing.
"Material Contracts" has the meaning specified in ss.3.17.
"Multiemployer Plan" has the meaning specified in ss.3.19.
"Multiple Employer Plan" has the meaning specified in ss.3.19.
"Overdue Accounts" has the meaning specified in ss.2.1.
"Permitted Encumbrances" means (a) statutory Liens for Taxes which are
not yet due and payable or which are being contested in good faith by
appropriate proceedings (it being understood that the RDI Company shall be
responsible for the payment of all amounts contested), (b) mechanics',
carriers', workmen's repairmen's or other Liens arising or incurred in the
ordinary course of business which are not yet due and payable or which are being
contested in good faith by appropriate proceedings (it being understood that the
RDI Company shall be responsible for the payment of all amounts contested), (c)
statutory Liens relating to deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, (d) easements and rights-of-way of records and minor charges or
encumbrances incurred in the ordinary course of business (other than to secure
indebtedness) which do not impair in any material respect the usefulness or the
value of the affected assets and (e) any interests or title of any lessor under
any lease under which the RDI Company is the lessee or (f) the existing Liens
listed on Schedule 15 hereto.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and government
entities.
"Project" means the following projects: Christmas Mountain, Wisconsin,
Orlando Sunshine, Florida and the AmClub property in Virginia.
"Purchase Price" has the meaning specified in ss.2.1.
"RDI", "RDI Company", "RDI Group", "RDI Title", "RDI Realty" and "RDI
Resources" have the respective meanings given to those terms on the first page
of this Agreement.
"Real Estate" has the meaning specified in ss.3.23.
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"Required Consents" has the meaning specified in ss.3.7.
"Resort Services" has the meaning specified on the first page of this
Agreement.
"SEC" and "SEC Filings" have the respective meanings specified in
ss.4.6.
"Selling Company" has the meaning specified on the first page of this
Agreement.
"Shares" has the meaning specified on the first page of this Agreement.
"Stockholders" has the meaning specified on the first page of this
Agreement.
"Stockholder Guaranties" means guaranties executed by one or more of
the Stockholders with respect to any indebtedness of the RDI Companies to any
third party lenders or any others, provided that the indebtedness has been
reflected in the Financial Statements or relates to trade indebtedness or lease
obligations of any RDI Company and provided further that in no event shall the
Stockholder Guaranties include any guaranty, direct or indirect, of any
indebtedness of AmClub owed to Liberty Bank and provided further that the
Stockholder Guaranties shall not include any guarantee executed by Randy L. Keim
with respect to indebtedness of AmClub outstanding as of the Closing Date if the
Buyer elects not to exercise the Buyer Option (as defined in the AmClub
Agreement).
"Subsidiary" of any Person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
stock or other equity interests entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.
"Taxes" means all taxes, charges, fees, levies or other assessments of
whatever kind or nature, including, without limitation, all net income, gross
income, gross receipts, premium, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, estimated,
severance, stamp, occupancy or property taxes, custom duties, fees, assessments
or charges of any kind whatever (together with any interest, penalty, or
addition to tax) imposed by any governmental authority (foreign or domestic).
"Timeshare Loan" means a purchase money loan made by an RDI Company to
a purchaser of a timeshare interest, as evidenced by the applicable Timeshare
Note.
"Timeshare Mortgage" means the mortgage, security agreement and all
other agreements and documents securing a Timeshare Note.
"Timeshare Note" means the promissory note or other document or
instrument which evidences the obligation of any purchaser of a timeshare
interest sold and financed by any RDI Company to repay the amount financed to
the applicable RDI Company.
"Transaction Documents" means this Agreement, the Note, the guaranty to
be executed by Bluegreen referenced to in ss.10.4, the Escrow Agreement and all
other agreements, certificates and instruments executed and delivered in
connection with the transactions contemplated by this Agreement, in each case as
originally executed and as amended from time to time.
"Vacation Shoppe" and "VUI" have the respective meanings set forth on
the first page of this Agreement.
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ARTICLE 15. ESCROW PROVISIONS.
ss.15.1 Appointment of Escrow Agent. The parties hereby designate
Weinstock & Scavo, P.C. to act as Escrow Agent hereunder and such firm hereby
accepts such appointment. The Escrow Agent shall be bound by the provisions of
this Article 15, but not by any other provisions of this Agreement. The parties
acknowledge that Weinstock & Scavo, P.C. has acted, and may continue to act, as
counsel to the RDI Companies and the Stockholders so long as such firm complies
with its duties as Escrow Agent.
ss.15.2 The Deposit. Upon the execution of this Agreement, the Buyer
has delivered to the Escrow Agent the Deposit as provided in Article 2 and the
Escrow Agent hereby acknowledges receipt thereof. The Escrow Agent shall invest
the Deposit in an interest-bearing bank account at a major Atlanta bank or in
so-called money market mutual funds as the Stockholders may in writing direct,
or, in the absence of such direction, as the Escrow Agent may, in its
discretion, determine. The Escrow Agent shall not be responsible for any loss
resulting from any such investment. All interest on the Deposit shall be added
to and become a part of the Deposit, and for tax purposes shall be reported as
income to Atlanta.
ss.15.3 Disposition of Deposit. The Escrow Agent shall hold the
Deposit and distribute it only as follows:
(a) Closing does not Occur.
(i) Delivery to Stockholders. If this Agreement
is properly terminated by the Stockholders pursuant to Article 13, then the
Escrow Agent shall deliver the Deposit to the Stockholders, and the Buyer and
Bluegreen shall have no further liabilities or obligations to the RDI Companies
or the Stockholders hereunder or with respect to the transactions contemplated
hereby.
(ii) Delivery to BUYER. If this Agreement is
terminated in any manner other than as specified in subparagraph (i) above, the
Escrow Agent shall deliver the Deposit to the Buyer.
(iii) Liquidated Damages. Notwithstanding any
other provision of this Agreement to the contrary, the parties expressly
acknowledge that the sum referred to above in subparagraph (i) to be paid over
to the Stockholders are agreed upon as liquidated damages and not as a penalty
and that such sums have been computed and estimated as a reasonable forecast of
probable actual loss to the Stockholders because of difficulty of estimating
with exactness the damages which would actually result, provided that this
sentence shall not apply in the event of any knowing misrepresentation or
willful breach of this Agreement by the Buyer or Bluegreen.
(b) Closing Occurs. If the Closing takes place as
contemplated hereunder, the Deposit shall be delivered to the Stockholders at
the Closing in partial payment of the Purchase Price.
ss.15.4 Provisions as to Escrow Agent.
(a) The Escrow Agent shall be protected in acting upon
any written notice, certificate, waiver, consent or other instrument or document
which the Escrow Agent believes to be genuine.
(b) It is understood and agreed that the duties of the
Escrow Agent hereunder are purely ministerial in nature and that the Escrow
Agent shall not be liable for any error or judgment, or for any act done or step
taken or omitted in good faith, or for anything which the Escrow Agent may do or
refrain from doing in connection with this Agreement, except that the Escrow
Agent shall be liable for its own gross negligence or willful misconduct. In no
event shall the
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Escrow Agent be required to account for any application of funds subsequent to
disposition therefor in accordance with this Agreement by the Escrow Agent.
(c) The Escrow Agent may consult with and obtain advice from
legal counsel in the event of any dispute or question as to the construction of
any of the provisions hereof or the Escrow Agent's duties hereunder, the Escrow
Agent shall incur no liability and shall be fully protected in acting in
accordance with the opinion of its legal counsel. The Escrow Agent shall not be
responsible in any manner whatsoever for any failure or inability of any of the
other parties hereto, or anyone else, to perform or comply with any provisions
of this Agreement.
(d) If at any time the Escrow Agent shall be in doubt as to
the party or parties entitled to receive any or all of the Escrow Deposit, the
Escrow Agent may apply to a court for a determination of the party or parties
entitled to receive the same, and the Escrow Agent shall incur no liability
therefor.
(e) If at any time the Escrow Agent shall receive conflicting
notices, claims, demands or instructions with respect to any disbursement from
the Escrow Deposit, or if for any other reason it shall be unable in good faith
to determine the party or parties entitled to receive a disbursement from the
Escrow Deposit, the Escrow Agent may refuse to make such disbursement until the
Escrow Agent shall have received instructions in writing signed by each of the
Buyer, Bluegreen and the Stockholders, or until directed by a final order of a
court (in an action brought by the Escrow Agent pursuant to paragraph (d) of
this ss.15.4 or by any other person), whereupon the Escrow Agent shall make such
disbursement in accordance with such instructions or order.
(f) The fees and expenses of the Escrow Agent shall be paid by
the Buyer and the Stockholders. The Buyer and the Stockholders shall indemnify
and hold harmless the Escrow Agent from and against all claims, losses, damages,
costs, liabilities or expenses, including court costs and reasonable attorneys'
fees, arising out of or in connection with the Escrow Agent's acceptance of, or
performance of it duties and obligations under, this Agreement, other than as a
result of willful misconduct or gross negligence on the part of the Escrow
Agent. The Buyer and the Stockholders shall be jointly and severally liable to
the Escrow Agent for all such amounts, but as between the Buyer and Stockholders
all amounts payable to the Escrow Agent hereunder shall be borne by them
equally.
(g) Upon effecting the disbursement and distribution of all of
the funds constituting the Deposit in accordance with the terms of this
Agreement, the Escrow Agent shall thereupon and thereafter be freed and
discharged of all obligations and liabilities hereunder.
ARTICLE 16. MISCELLANEOUS.
ss.16.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
delivered personally or sent by telecopy, federal express (or other reputable
overnight delivery service), registered or certified mail, postage prepaid,
addressed as follows or to such other address of which the parties may have
given notice:
To the Stockholders: c/o Randy L. Keim
12995 Cleveland Avenue
Suite 164
Ft. Myers, Florida 33907
With copies to: Weinstock & Scavo, P.C.
Suite 300
3405 Piedmont Road, N.E.
Atlanta, Georgia 30305
Attn: James J. Scavo, Esq.
Facsimile: (404) 231-1618
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To the Buyer
and/or Bluegreen:
Patrick E. Rondeau, Esq.
Director of Corporate Legal Affairs
Bluegreen Corporation
5295 Town Center Road
Boca Raton, Florida 33486
Facsimile: (561) 361-2800
With a copy to: Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attn: William P. Gelnaw, Jr., Esq.
Facsimile: (617) 248-4000
To the Escrow Agent: To it at the address provided above
for Weinstock & Scavo, P.C.
Any such notice or communication shall be deemed to have been given as
of the date received, in the case of personal delivery, or the date shown on the
receipt or confirmation thereof in all other cases.
ss.16.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except no party may assign its obligations hereunder without the
prior written consent of each other party; provided, however, that the Buyer and
Bluegreen may collaterally assign their respective rights hereunder which
survive the Closing to one or more of their lenders. Any assignment in
contravention of this provision shall be void.
ss.16.3 Entire Agreement; Amendments. This Agreement, all Schedules and
Exhibits hereto, and all agreements and instruments to be delivered by the
parties pursuant hereto represent the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and supersede all
prior oral and written and all contemporaneous oral negotiations, commitments
and understandings between such parties. This Agreement may be amended or
modified by a written instrument executed by each party hereto, provided that
the Agent, to the extent approved by the Stockholders, shall have the authority
to execute any waiver or modification on behalf of the Stockholders. The Buyer
and Bluegreen shall be entitled to rely on any writing delivered to them by the
Agent purporting to take or refrain from taking any action on behalf of the
Stockholders. If the provisions of any Schedule or Exhibit to this Agreement are
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control. The Exhibits and Schedules attached hereto or to be
attached hereafter are hereby incorporated as integral parts of this Agreement.
Capitalized terms used but not defined in the Schedules shall have the meanings
given to them in this Agreement.
ss.16.4 Expenses. Except as otherwise provided in ss.5.3, all legal and
other costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, provided that the reasonable fees and expenses incurred by counsel
to the Stockholders on or before June 4, 1997 shall, if the Closing shall occur,
be borne by the RDI Companies. In particular, the costs and expenses of counsel
and other advisors, and any brokers, finders, investment bankers or other
similar intermediaries, to any RDI Company or the Stockholders, and all other
transaction
31
<PAGE> 36
costs of any RDI Company and/or the Stockholders, shall be borne by the
Stockholders and paid out of the closing proceeds.
ss.16.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida, without
reference to application of conflicts of laws principles, and shall take effect
as a sealed instrument. Headings contained herein are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
ss.16.6 Counterparts; Severability; Obligations. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original, but all of which shall be one and the same document. If any provision
of this Agreement is unenforceable or illegal, such provision shall be enforced
to the fullest extent permitted by law and the remainder of the Agreement shall
remain in full force and effect. Unless otherwise expressly indicated herein,
all obligations of the Stockholders, on the one hand, and of the Buyer and
Bluegreen, on the other hand, hereunder shall be joint and several.
ss.16.7 No Waivers. No delay or failure to act on the part of any party
shall constitute a waiver of any provision of this Agreement, and no waiver in
any instance shall be effective in any other instance. No waiver shall be
effective unless in writing signed by the party or parties waiving a term or
provision of this Agreement. The rights provided are cumulative and not
exclusive of any rights provided by law.
ss.16.8 No Third Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon or give to
any Person other than the parties hereto any benefits, remedies or claims under
or by reason of this Agreement, all of which shall be for the sole and exclusive
benefit of the parties hereto.
ss.16.9 Further Assurances. Following the Closing, the Stockholders
will execute and deliver to the Buyer such documents and take such other
reasonable actions as the Buyer may reasonably request in order to consummate
the transactions contemplated hereby.
ss.16.10 Agent of Sellers. The Stockholders hereby appoint Randy L.
Keim, as their sole and exclusive agent (the "Agent") with respect to this
Agreement. In his capacity as agent, the Agent shall be authorized, in his
discretion, to consent to such amendments, modifications, waivers and revisions
to this Agreement on behalf of the Stockholders as are approved by the
Stockholders, and to take any and all actions on behalf of the Stockholders,
including without limitation executing closing certificates and documents, and
his signature shall be sufficient to evidence the approval of the Sellers
thereto. No Stockholder shall take any action with respect to this Agreement or
the matters contemplated hereby without the approval of the Agent. The Agent
shall not be liable to any Stockholder for any action taken by him in good faith
pursuant to this Agreement, and the Stockholders shall jointly and severally
indemnify the Agent from any losses, claims, damages and expenses arising out of
his service as agent hereunder.
ss.16.11 Release. Effective as of the Closing Date, each of the
Stockholders hereby releases each RDI Company and its officers, directors,
employees and Affiliates, from any and all claims, liabilities, obligations,
damages, expenses and other amounts of every kind and description, known or
unknown, contingent or otherwise, arising or existing on or prior to the Closing
Date.
Effective as of the Closing Date, the RDI Companies, on behalf of
itself and its officers, directors, employees and Affiliates hereby release each
of the Stockholders from any and all claims, liabilities, obligations, damages,
expenses
32
<PAGE> 37
and other amounts of every kind and description, known or unknown, contingent or
otherwise, arising or existing on or prior to the Closing Date, provided that
such release shall not apply to (a) the breach or inaccuracy of any
representation or warranty contained in this Agreement, (b) any claim based upon
or arising out of the gross negligence, wilful misconduct or criminal activity
of the Stockholders or any of them, (c) any loan or advance made by any RDI
Company to any Stockholder; (d) the obligation of any Stockholder to return any
property or asset of any RDI Company in the Stockholder's possession to the RDI
Company and (e) any action or inaction of any Stockholder which causes any RDI
Company to have any liability or obligation to any other person (including any
governmental or regulatory authority) if such liability is not reflected on the
Financial Statements and if such action or inaction, if it were taken by an
employee of Bluegreen and caused Bluegreen to have any liability or obligation
to another person, would, in such case, be asserted by Bluegreen against such
employee.
Notwithstanding the releases set forth in the two immediately preceding
paragraphs, no such release shall minimize the agreements between Bluegreen and
the Buyer and the Stockholders set forth in this Agreement or otherwise limit or
derogate from the rights of any party under this Agreement or any other
Transaction Document; such releases shall be limited to relationships between
the RDI Companies and the Stockholders and the RDI Companies' officers,
directors, employees and Affiliates as provided for hereinabove.
* * * * * *
33
<PAGE> 38
EXECUTED as of the date first above written.
/s/ RANDY L. KEIM
---------------------------------
RANDY L. KEIM
/s/ JEFFREY J. KEIM
---------------------------------
JEFFREY J. KEIM
/s/ DAVID BIDGOOD
---------------------------------
DAVID BIDGOOD
BLUEGREEN CORPORATION
By: /s/ George F. Donovan
------------------------------
RDI/BG ACQUISITION CORP.
By: /s/ Patrick E. Rondeau
------------------------------
WEINSTOCK & SCAVO, P.C., as Escrow Agent
By: /s/ James J. Scavo
------------------------------
James J. Scavo
Vice President
34
<PAGE> 39
SPOUSAL CONSENT
I, Barbara Keim, am the wife of Jeffrey J. Keim, who is a party to the
foregoing agreement. I am aware of the contents of the foregoing agreement and
hereby consent to it on behalf of our marital community.
/s/ Barbara Keim
------------------------
Barbara Keim
SPOUSAL CONSENT
I, Deanne C. Keim, am the wife of Randy L. Keim, who is a party to the
foregoing agreement. I am aware of the contents of the foregoing agreement and
hereby consent to it on behalf of our marital community.
/s/ Deanne C. Keim
------------------------
Deanne C. Keim
SPOUSAL CONSENT
I, Beth Bidgood, am the wife of David Bidgood, who is a party to the
foregoing agreement. I am aware of the contents of the foregoing agreement and
hereby consent to it on behalf of our marital community.
/s/ Beth Bidgood
------------------------
Beth Bidgood
35
<PAGE> 1
EXHIBIT 99.B
TRANSFER OR ASSIGNMENT OF THIS NOTE IS RESTRICTED AS PROVIDED HEREIN. BY ITS
ACCEPTANCE HEREOF, THE HOLDER AGREES NOT TO SELL OR TRANSFER THIS NOTE IN
VIOLATION OF ANY APPLICABLE SECURITIES LAWS. PAYMENT UNDER THIS NOTE IS SUBJECT
TO OFFSET AS PROVIDED HEREIN AND IN THE PURCHASE AGREEMENT REFERRED TO HEREIN.
BLUEGREEN CORPORATION
and
BG/RDI ACQUISITION CORP.
9% PROMISSORY NOTE
$1,500,000 October __, 1997
FOR VALUE RECEIVED, Bluegreen Corporation, a Massachusetts corporation
("Bluegreen"), and BG/RDI Acquisition Corp., a Delaware corporation
(collectively, the "Company"), hereby jointly and severally promise to pay to
Randy L. Keim, Jeffrey J. Keim and David Bidgood, or order, the aggregate
principal sum of One Million Five Hundred Thousand Dollars ($1,500,000),
together with interest, at the rate set forth below and calculated and paid as
described below, on the unpaid principal amount from the date hereof until the
unpaid principal sum shall have been paid in full.
This Note is issued pursuant to the terms of the Stock Purchase
Agreement dated as of July 24, 1997 (the "Purchase Agreement") by and among the
Company, Randy L. Keim, Jeffrey J. Keim, David Bidgood and certain other
parties, as partial consideration for the purchase of the Shares. Capitalized
terms used but not defined in this Note shall have the meanings ascribed to them
in the Purchase Agreement.
1. Payments and Computations. The principal amount of this Note shall
be payable as follows: (a) $250,000 on _________, 1998 (six months after the
Closing Date), (b) $250,000 on ___________, 1998 (twelve months after the
Closing Date) and (c) $1,000,000 on _________, 1999 (two years after the Closing
Date). Interest on the unpaid principal balance hereof (computed on the basis of
a 365-day year) shall accrue at the rate of 9% per annum and shall be payable in
arrears when principal payments are required to be made, and at maturity,
provided that following the occurrence and during the continuance of an Event of
Default, interest shall accrue at the rate of 13% per annum. Notwithstanding any
other provision of this Note, in no event shall the amount payable by the
Company as interest and premium on this Note exceed the highest lawful rate
permissible under any law applicable hereto.
In addition, if the Company shall fail to make any regularly scheduled
payment (whether principal or interest) within 10 days of when due (i.e. this
provision does not apply to any amount owed as a result of the acceleration of
the Company's obligations under this Note), a late fee of five percent (5%) of
such overdue payment will be charged. Notwithstanding anything herein to the
contrary, no default interest shall accrue and no late fee shall be due with
respect to any payment which is not made on a scheduled date as a result of any
claim for indemnification made pursuant to the Purchase Agreement or the AmClub
Agreement (including any unresolved claim made in good faith by the Company),
<PAGE> 2
whether or not it is ultimately determined that the Company is entitled to such
indemnification.
Payments of principal and interest hereon shall be made in lawful money
of the United States of America. Unless otherwise agreed by the Company and the
Stockholders, all payments and prepayments of principal of and interest on this
Note shall be made to a client trust account with Weinstock & Scavo, P.C. at the
address referred to in ss.16.1 of the Purchase Agreement. To the extent any
payment owed hereunder shall be owed on a day which is not a business day, such
payment shall be owed on the next business day.
2. Prepayments. The Company may at any time prepay all or a
portion of the unpaid principal amount of this Note without penalty or premium,
together with all accrued but unpaid interest on the amount so prepaid to the
date of prepayment.
3. Covenants. Until the principal of and interest on this Note
shall have been paid in full, the Company agrees that:
3.1 Information.
(a) Within 120 days after the end of each fiscal
year of Bluegreen, Bluegreen will furnish to the holder the consolidated balance
sheet of Bluegreen and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of earnings, stockholders' equity and cash
flows for such fiscal year, which financial statements shall reflect the
financial condition and results of operations of Bluegreen and its Subsidiaries,
all in reasonable detail and accompanied by an opinion thereon of independent
public accountants selected by Bluegreen.
(b) Within 60 days after the end of each of the
first three fiscal quarters of Bluegreen, Bluegreen will furnish to the holder
the unaudited consolidated balance sheet of Bluegreen and its Subsidiaries as of
the end of such quarter and the related unaudited consolidated statement of
earnings, stockholders' equity and cash flows for such quarter, which financial
statements shall fairly reflect the financial condition and results of
operations of Bluegreen and its Subsidiaries, shall be prepared in accordance
with generally accepted accounting principles (except for the omission of
footnotes and for normal year-end adjustments) consistently applied, shall be in
reasonable detail and shall be signed by the principal financial officer of
Bluegreen.
Bluegreen may satisfy its obligations under this Section 3.1 by delivering to
the Agent within the applicable time periods copies of reports containing such
information filed by Bluegreen pursuant to the Securities Exchange Act of 1934,
as amended.
3.2 Sale of Business. Bluegreen will not sell all or
substantially all of its assets or properties or consummate any merger or
consolidation with any other entity without either prepaying the Note in full or
the prior consent of the Agent, provided that Bluegreen may merge with a
Subsidiary or any other entity so long as Bluegreen is the surviving person in
the merger.
4. Events of Default. The following defines, for all purposes of
this Note, "Events of Default":
4.1 Bluegreen shall default in the payment of principal
of or interest on this Note for more than 10 days after the same becomes due and
payable, whether at maturity or at a date fixed for the payment of any
installment or prepayment thereof or otherwise;
2
<PAGE> 3
4.2 Bluegreen shall default in the performance of or
compliance with any term contained in Section 3 hereof and such default is not
cured within 30 days after notice thereof;
4.3 Bluegreen shall discontinue its business or shall
make an assignment for the benefit of creditors, or shall apply for or consent
to the appointment of or taking possession by a trustee, receiver or liquidator
(or other similar official) of Bluegreen or any substantial part of the property
of Bluegreen, or shall commence a case or have an order for relief entered
against it under the federal bankruptcy laws, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or if Bluegreen shall take any action to dissolve or liquidate Bluegreen;
or
4.4 If, within 90 days after the commencement against
Bluegreen of a case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, such case shall have been consented to or shall not have been
dismissed or all orders or proceedings thereunder affecting the operations or
the business of the Company and such Subsidiary stayed, or if the stay of any
such order or proceeding shall thereafter be set aside, or if within 90 days
after the entry of a decree appointing a trustee, receiver or liquidator (or
other similar official) of Bluegreen or any substantial part of the property of
Bluegreen, such appointment shall have been vacated;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, at the option of the Agent, exercised by written
notice to the Company, the principal of and accrued interest in respect of this
Note shall become forthwith due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Company.
In case of an Event of Default and the acceleration of the Company's
obligations hereunder, the Company will pay to the holder hereof such further
amount as shall be sufficient to cover the cost and expense of collection,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements. No course of dealing and no delay on the part of the holder
hereof in exercising any right shall operate as a waiver thereof or otherwise
prejudice the holder hereof's rights. No right conferred hereby upon the holder
hereof shall be exclusive of any other right referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise.
5. Notices. All communications under this Note shall be in
writing and shall be sent prepaid by first class mail or recognized overnight
delivery service to the respective addresses furnished by the holder and the
Company.
6. Waivers and Amendments. The provisions of this Note may be
waived or amended with the approval of the Company and Agent.
7. Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of Florida, without giving effect
to conflicts of laws principles.
8. Restriction on Assignments. This Note (and the holder's rights
to payment hereunder) may not be sold, assigned, transferred, pledged or
otherwise disposed of, directly or indirectly, except with the written
acknowledgment of the transferee delivered to the Company that such transferee
takes subject to the terms hereof and that payments under this Note are subject
to the set off rights referred to in Section 9.
3
<PAGE> 4
9. Setoff Rights. The holder hereof acknowledges and agrees by
accepting this Note that amounts payable hereunder by the Company may be set off
against amounts due to the Company under Article 12 of the Purchase Agreement
and under the terms of the AmClub Agreement (whether or not such amounts are due
by the holder hereof). If the Company determines to make a claim for
indemnification and elects to set off obligations owed under this Note, it shall
delay making any payment otherwise owed hereunder, notify the Agent in writing
of its determination and, to the extent possible, make an estimate (in good
faith and in its sole discretion) of the anticipated maximum potential exposure
relating to such claim (the "Estimated Amount"). If a good faith determination
cannot be made under the preceding sentence or the Estimated Amount exceeds the
outstanding principal balance, then, during the pendency of the unresolved claim
made by the Company, the Company shall not be obligated to make any payment
(principal or interest) otherwise owed under this Note. If a good faith estimate
can be made and the Estimated Amount is less than the outstanding principal,
then, for purposes of determining any payments owed under this Note prior to
such time as the claim is resolved, (a) the outstanding principal balance of
this Note shall be reduced by the Estimated Amount, (b) interest payments shall
be computed based on the outstanding principal balance reduced as provided in
clause (a), and (c) any interest which would otherwise have been due on an
earlier date shall be paid within 10 days after the date on which the
determination of the Estimated Amount is made, it being understood that the
Company shall have no obligation to make a payment of principal hereunder until
the matter is finally resolved.
When the final determination is made as to the indemnity claim, (a) the
outstanding principal balance will be appropriately reduced (to the extent the
claim is successful), (b) any interest in respect of outstanding principal shall
be recomputed and, to the extent owed, paid based on the principal as adjusted,
(c) if any claim is not covered by the outstanding principal (as recomputed) no
further payment shall be owed under this Note, (d) if the Agent received
interest payments it should not have received based on the outstanding principal
balance (as recomputed), the Stockholders shall, jointly and severally, promptly
return the amount of the overpayment together with interest thereon from the
date received at a rate of 9% per annum and (e) to the extent that, after giving
effect to any set off provided for herein, the Company shall be obligated to
make any payment hereunder which would otherwise have been due on an earlier
date, the Company shall make such payment within 10 days after the date on which
the set off occurs, provided that in no event shall the Company be required to
pay any default interest or any late fee or be considered in default so long as
such payment is made in such 10 day period. For purposes of satisfying the
Stockholders' indemnification obligations (and any applicable cap set forth in
the Purchase Agreement), only the amount of principal which is set off hereunder
shall be included (i.e. foregone interest and any amounts returned under clause
(d) above shall not be considered payments made).
It is understood that the Company may exercise its rights under this
Section 9 on multiple occasions and, to the extent multiple unresolved claims
exist at the same time, the Estimated Amounts of all such claims shall be
aggregated.
* * * * * *
4
<PAGE> 5
Executed as of the date first above written.
BLUEGREEN CORPORATION
By
---------------------------
(Title)
BG/RDI ACQUISITION CORP.
By
---------------------------
(Title)
5
<PAGE> 1
EXHIBIT 99.C
EXECUTION COPY
================================================================================
BLUEGREEN CORPORATION
Convertible Notes due September 11, 2002
-----------------------
NOTE PURCHASE AGREEMENT
-----------------------
Dated as of September 11, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
ss.1 AUTHORIZATION AND SALE OF NOTES....................................... 1
ss.1.1 Authorization.............................................. 1
ss.1.2 Sale of Securities......................................... 1
ss.1.3 Use of Proceeds............................................ 1
ss.1.4 Terms of the Notes......................................... 1
ss.1.5 Transfer and Exchange of Notes............................. 2
ss.1.6 Replacement of Notes....................................... 2
ss.2 CLOSING DATE; DELIVERY................................................ 2
ss.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... 2
ss.3.1 Organization and Standing.................................. 3
ss.3.2 Corporate Power............................................ 3
ss.3.3 Authorization.............................................. 3
ss.3.4 SEC Filing................................................. 3
ss.3.5 Conversion Shares.......................................... 4
ss.4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...................... 4
ss.4.1 Investment................................................. 4
ss.4.2 Organization and Authorization............................. 4
ss.4.3 Securities Law Representations............................. 4
ss.4.4 No Brokers................................................. 5
ss.5 CONDITIONS TO PURCHASERS' OBLIGATIONS................................. 5
ss.5.1 Representations and Warranties Correct..................... 5
ss.5.2 Performance................................................ 5
ss.5.3 Closing Certificates and Documents......................... 5
ss.5.4 Legal Matters.............................................. 5
ss.5.5 Closing of RDI Acquisition................................. 5
ss.5.6 Listing.................................................... 5
ss.5A. CONDITIONS TO COMPANY'S OBLIGATIONS................................... 5
ss.5A.1 Listing.................................................... 6
ss.5A.2 Closing of RDI Acquisition................................. 6
ss.5A.3 Representations............................................ 6
ss.5A.4 Consents................................................... 6
ss.6 COVENANTS OF THE COMPANY.............................................. 6
ss.6.1 Financial Information...................................... 6
ss.6.2 Insurance.................................................. 6
ss.6.3 Corporate Existence........................................ 6
ss.7 CONVERSION RIGHTS..................................................... 7
ss.7.1 Conversion Privilege....................................... 7
ss.7.2 Manner of Conversion....................................... 7
ss.7.3 Delivery of Stock Certificates; Fractional Shares;
Restrictive Legend......................................... 7
ss.7.4 Adjustment of Conversion Price in Certain Circumstances. .. 8
ss.7.4.1 Adjustment for Change in Capital Stock........... 8
ss.7.4.2 Adjustment of Rights Issue....................... 8
- -----------------------
</TABLE>
*For convenience of reference only, and not part of the Agreement.
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ss.7.4.3 Adjustment for Other Distributions.............. 9
ss.7.4.4 Adjustment for Share Issue...................... 9
ss.7.4.5 Adjustment for Convertible Securities Issue..... 10
ss.7.4.6 Voluntary Adjustment............................ 11
ss.7.4.7 Current Market Price............................ 11
ss.7.4.8 Consideration Received.......................... 12
ss.7.4.9 When Adjustment May Be Deferred................. 12
ss.7.4.10 When Adjustment Is Not Required................. 12
ss.7.4.11 Notice of Adjustment............................ 12
ss.7.4.12 Notice of Certain Transactions.................. 12
ss.7.4.13 Company Determination Final..................... 13
ss.8 DEFAULTS; REMEDIES.................................................... 13
ss.8.1 Events of Default.......................................... 13
ss.8.2 Remedies on Default, etc................................... 14
ss.9 DEFINITIONS........................................................... 14
ss.9.1 Certain Defined Terms...................................... 14
ss.9.2 Other Definitional Provisions.............................. 15
ss.10 RESTRICTIONS ON TRANSFERABILITY OF SECURITIES......................... 16
ss.10.1 Restrictions on Transferability............................ 16
ss.10.2 Legends and Transfers...................................... 16
ss.10.3 Notice of Proposed Transfers............................... 16
ss.11 MISCELLANEOUS......................................................... 17
ss.11.1 Notices.................................................... 17
ss.11.2 Governing Law; Severability................................ 17
ss.11.3 Binding Effect; Etc........................................ 17
ss.11.4 Execution in Counterparts; Interpretation.................. 17
ss.11.5 Entire Agreement........................................... 18
ss.11.6 Survival of Representations, Warranties, Etc............... 18
ss.11.7 Delays or Omissions........................................ 18
</TABLE>
Exhibits
A Form of Convertible Note
ii
<PAGE> 4
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT is made as of July 11, 1997 among
BLUEGREEN CORPORATION, a Massachusetts corporation (the "Company"), Grace
Brothers, Ltd. and Joseph C. Abeles (each a "Purchaser" and collectively the
"Purchasers").
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereby agree as follows:
ss.1 AUTHORIZATION AND SALE OF NOTES.
ss.1.1 Authorization. The Company has duly authorized the sale and
issuance of $6,000,000 aggregate principal amount of its 8% Convertible Notes
due September 11, 2002 (herein, together with any notes issued in exchange
therefor or substitution thereof, the "Notes"). The Notes are to be
substantially in the form attached to this Agreement as Exhibit A. The Notes are
convertible into shares of the Company's Common Stock as provided in ss.7 below.
The shares of Common Stock into which the Notes are convertible are referred to
herein as the "Conversion Shares". The Company has authorized and reserved and
covenants to continue to reserve, free of preemptive rights and other similar
contractual rights, a sufficient number of its authorized but unissued shares of
Common Stock to satisfy the conversion rights of the Holders of the Notes. The
Notes and the Conversion Shares are herein collectively referred to as the
"Securities".
ss.1.2 Sale of Securities. Subject to the terms and conditions hereof,
the Company will issue and sell to the Purchasers, and the Purchasers will
severally buy from the Company, $6,000,000 aggregate principal amount of the
Notes at an aggregate purchase price of $6,000,000. Grace Brothers, Ltd. shall
purchase $5.0 million aggregate principal amount of the Notes and Joseph C.
Abeles shall purchase $1.0 million aggregate principal amount of the Notes.
ss.1.3 Use of Proceeds. The Company will use the proceeds from the sale
of the Notes to finance the RDI Acquisition. None of the proceeds from the
issuance of the Notes will be used for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System or for any other purpose which would
violate the Exchange Act or any rule or regulation thereunder or any other
provision of any other applicable law, regulation or order.
ss.1.4 Terms of the Notes.
(a) Principal Payments. The entire principal balance of the Notes,
together with all accrued and unpaid interest thereon and all other amounts
owing with respect thereto, shall be due and payable on September 11, 2002. The
Company may not prepay the Notes without the prior consent of the Holder(s) of
the Notes to be prepaid. The Notes are convertible into the Conversion Shares as
provided in ss.7 below.
(b) Interest. The Notes shall bear interest (computed on the basis of
the actual number of days elapsed over a 365 day year) on the unpaid principal
amount thereof from the date of issuance thereof until and including the date
paid at the rate of eight percent (8%) per annum. The Company shall pay interest
accrued on each Note quarterly on September 11, December 11, March 11 and June
11 of each year, commencing December 11, 1997 and at maturity of the Notes, in
each case to and including the payment date in question. Notwithstanding the
foregoing, during the continuance of any Event of Default, interest on the
unpaid
<PAGE> 5
principal of and (to the extent permitted by law) on the unpaid interest on each
Note shall accrue at a rate of eleven percent (11%) per annum. Notwithstanding
anything contained herein to the contrary, in no event shall the amount paid or
agreed to be paid by the Company as interest and premium on the Notes exceed the
highest lawful rate permissible under any law applicable thereto.
(c) Manner and Time of Payments. All payments on each Note will be made
at such address as the Holder thereof shall have furnished to the Company in
writing and shall be made in immediately available funds by wire transfer to an
account designated in writing by the applicable Holder or by such other method
as the Company and the Holder shall agree, without any set-off, counterclaim,
charge or deduction. If any payment of principal or of interest on any Note
shall become due and payable on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
will be included in the computation of interest payable as part of such payment.
All payments on the Notes will be made to the holders on a pro rata basis.
ss.1.5 Transfer and Exchange of Notes. The Holder of any Note may,
prior to maturity or prepayment thereof, surrender such Note at the principal
office of the Company for transfer or exchange. Any Holder desiring to transfer
or exchange any Note shall notify the Company of such transfer or exchange.
Within ten (10) Business Days after such notice to the Company from a Holder of
its intention to make such exchange and without expenses to such Holder, the
Company shall issue in exchange therefor another Note or Notes, in such
denomination as requested by the Holder, for the same aggregate principal
amount, as of the date of such issuance, as the unpaid principal amount of the
Note or Notes so surrendered and have the same maturity and rate of interest,
containing the same provisions and subject to the same terms and conditions as
the Note or Notes so surrendered. Each new Note shall be made payable to such
Person or Persons, or assigns, as the Holder of such surrendered Note or Notes
may designate, and such transfer or exchange shall be made in such a manner that
no gain or loss of principal or interest shall result therefrom.
ss.1.6 Replacement of Notes. Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of any Note and, if
requested in the case of any such loss, theft or destruction, upon delivery of
an indemnity bond or other agreement or security reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Note, the Company will issue a new Note, of like tenor and amount and
dated the date to which interest has been paid, in lieu of such lost, stolen,
destroyed or mutilated Note.
ss.2 CLOSING DATE; DELIVERY. The closing of the purchase and sale of
the Notes hereunder shall be held at the offices of the Company at 10:00 a.m.,
local time on the date of the closing of the RDI Acquisition (the "Closing") or
at such other time and place upon which the Company and the Purchasers shall
agree (the date of the Closing is hereinafter referred to as the "Closing
Date"). At the Closing, the Company will deliver to each Purchaser one or more
Notes in the aggregate principal amount being acquired by such Purchaser and
registered in the name of the Purchaser (or its nominee), against payment to the
Company of the purchase price therefor by wire transfer of immediately available
funds to such account as the Company shall direct.
ss.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Purchasers that each of the following is true,
correct and complete on the date of this Agreement and on and as of the Closing
Date:
2
<PAGE> 6
ss.3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. The Company is duly qualified to conduct
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified would have a material adverse effect on
the Company.
ss.3.2 Corporate Power; Business. The Company has and will have at the
Closing Date all requisite legal and corporate power and authority and has taken
all required corporate action necessary for it to (a) own, lease and operate its
properties and assets and to carry on its business as now conducted and
presently proposed to be conducted, (b) execute, deliver and perform its
obligations under this Agreement, (c) sell and issue the Notes hereunder and (d)
otherwise carry out and perform its obligations under the terms of this
Agreement.
ss.3.3 Authorization.
(a) This Agreement is, and the Notes upon their execution will be, duly
and validly executed and delivered by the Company and the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency and other general
laws affecting the rights and remedies of creditors and except as enforcement
may be limited by general principles of equity whether applied in a court of law
or of equity.
(b) Except for such conflicts which have been duly waived and consents
which have been duly obtained, none of the execution and delivery of this
Agreement by the Company, the consummation by the Company of any of the
transactions contemplated hereby or the compliance by the Company with the
terms, conditions and provisions hereof will with or without the giving of
notice and/or the passage of time (i) violate, conflict with, result in a breach
of or in the loss of any benefit under, or constitute a default, an event of
default or an event creating rights of acceleration, termination or
cancellation, or result in the creation or imposition of any lien upon any
portion of the properties or under the Restated Articles of Organization or
Bylaws of the Company, or under any material indenture, note, agreement, lease,
license, franchise, judgment, order, decree or other authorization, right,
instrument or obligation to which the Company is a party or any of its
properties is subject or by which the Company is bound, or any statute,
ordinance, rule or regulation applicable to the Company or any of its assets, or
(ii) except as set forth on Schedule 3.3 require the approval, consent, license
or authorization of, or the making of any declaration, filing or registration
with, any third party or any foreign, federal, state or local court,
governmental authority or regulatory body (other than filings required under the
Exchange Act).
ss.3.4 SEC Filing. The Company has delivered to the Purchasers a true
and correct copy of the Company's Annual Report on Form 10-K for the fiscal year
ended March 30, 1997 filed with the SEC under the Exchange Act (together with
the information incorporated therein by reference, the "SEC Filing"). As of the
date of its filing with the SEC, the SEC Filing did not contain any untrue
statement of a material fact required to be stated therein or necessary in order
to make the statements contained therein, in light of the circumstances in which
they were made, not materially misleading.
3
<PAGE> 7
ss.3.5 Conversion Shares. The Company's authorized capital stock
consists of 90,000,000 shares of Common Stock, $.01 par value per share, and
1,000,000 shares of Preferred Stock, $.01 par value per share. The Company has
reserved not less than 1,530,613 shares of Common Stock for issuance upon
conversion of the Notes. Upon their issuance in accordance with the terms of
this Agreement and the Notes, the Conversion Shares will have been duly
authorized, validly issued and fully paid and nonassessable and will be free and
clear of any preemptive rights, liens, claims and encumbrances, other than under
this Agreement and applicable securities laws. Upon their issuance, the
Conversion Shares will be listed on the New York Stock Exchange.
ss.4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
severally (and not jointly and severally) hereby represents and warrants to the
Company that each of the following is true, correct and complete:
ss.4.1 Investment. Such Purchaser is acquiring the Securities for
investment for its own account and not with the view to, or for resale in
connection with, any distribution thereof in violation of the Securities Act or
any applicable securities laws.
ss.4.2 Organization and Authorization. If such Purchaser is a
corporation, partnership or other entity, such Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. The execution, delivery and performance of this Agreement have
been duly authorized by such Purchaser. This Agreement has been duly executed
and delivered by such Purchaser and is the valid and binding obligation of such
Purchaser, enforceable against such Purchaser in accordance with its terms.
ss.4.3 Securities Law Representations.
(a) Accredited Investor; Access to Data. Such Purchaser is an
"accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act and has sufficient familiarity with the business and
affairs of the Company to be able to evaluate the merits and risks of his
investment in the Company through the purchase of the Securities to be acquired
by him. Such Purchaser (or an affiliate thereof) is a director of the Company
and has had the opportunity to ask questions of and receive answers from
management of the Company concerning his acquisition of the Securities and the
terms of this Agreement, and to obtain any additional information, documents,
contracts, records and books relative to the Company, its business, assets,
financial condition, results of operation, liabilities (contingent or
otherwise), and his investment in the Company through the purchase of such
Securities. Such Purchaser has sufficient experience in business, financial and
investment matters to be able to evaluate the merits and risks involved in the
acquisition of the Securities to be acquired by him and to make an informed
investment decision with respect to such acquisition. Such Purchaser understands
an investment in the Securities involves certain risks and can afford a complete
loss of the value of such Securities and is able to bear the economic risk of
holding such Securities for an indefinite period.
(b) Restricted Securities. Such Purchaser understands that (i) the
Securities to be acquired by him have not been, and will not be, registered
under the Securities Act, and the Securities are therefore "restricted
securities" within the meaning of Rule 144 under the Act; (ii) such Securities
must be held indefinitely and cannot be sold, transferred or otherwise disposed
of unless they are subsequently registered under the Securities Act and
applicable state securities laws or an exemption from registration is then
available; (iii) in any event, the exemption from registration under Rule 144
will not be available for an extended period and even then will not be available
unless the terms and
4
<PAGE> 8
conditions of Rule 144 are complied with; (iv) there is now no registration
statement on file with the SEC or any state securities commission with respect
to the Securities and the Company has no obligation to register the Securities
under the Securities Act or any state securities laws; (v) no market now exists
for the Notes and no assurances can be given that a public market will ever
exist. Such Purchaser agrees, for the benefit of the Company, not to sell,
transfer or otherwise dispose of the Securities except in compliance with the
Securities Act. Such Purchaser understands that the Securities have not been,
and will not be, registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent of such Purchaser and the accuracy of such Purchaser's
representations contained herein.
ss.4.4 No Brokers. No investment bank, broker or finder is entitled to
any fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of such Purchaser.
ss.5 CONDITIONS TO PURCHASERS' OBLIGATIONS. The obligation of each
Purchaser to purchase the Note(s) to be acquired by such Purchaser is subject to
the fulfillment of the following conditions, the waiver of which shall not be
effective against such Purchaser unless such Purchaser consents in writing
thereto.
ss.5.1 Representations and Warranties Correct. The representations and
warranties made by the Company herein shall have been true and correct when
made, and shall be true and correct at and as of the Closing with the same force
and effect as though made on and as of such date.
ss.5.2 Performance. The consents listed in Schedule 3.3 shall have been
obtained and the Company shall have performed all agreements and complied with
all conditions contained in this Agreement required to be performed or complied
with by the Company prior to or at the Closing. The Company shall have obtained
any consents or waivers necessary to execute and deliver this Agreement and to
carry out the transactions contemplated hereby. All corporate and other action
and governmental filings necessary to effectuate the terms of this Agreement
shall have been made or taken. No condition or event shall exist which
constitutes a Default or an Event of Default.
ss.5.3 Closing Certificates and Documents. The Company shall have
delivered to such Purchaser such legal existence, certified copies of its
Charter, By-laws, minutes and compliance and other closing certificates as such
Purchaser or its counsel shall reasonably require.
ss.5.4 Legal Matters. All material matters of a legal nature which
pertain to this Agreement and the Note and the transactions contemplated hereby
and thereby shall be reasonably satisfactory to counsel to such Purchaser.
ss.5.5 Closing of RDI Acquisition. Contemporaneously with the Closing,
the RDI Acquisition shall have been consummated.
ss.5.6 Listing. The Shares shall have been listed on the New York Stock
Exchange and the Pacific Stock Exchange, subject to official notice of issuance.
ss.5A. CONDITIONS TO COMPANY'S OBLIGATIONS. The obligation of the
Company to sell the Notes is subject to the fulfillment of the following
conditions, the waiver of which shall not be effective against the Company
unless the Company consents in writing thereto.
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<PAGE> 9
ss.5A.1 Listing. The condition set forth in ss.5.6 shall have been
satisfied.
ss.5A.2 Closing of RDI Acquisition. Contemporaneously with the Closing,
the RDI Acquisition shall have been consummated.
ss.5A.3 Representations. The representations and warranties made by the
Purchasers in ss.4 hereof shall be true and correct when made, and shall be true
and correct on the Closing Date.
ss.5A.4 Consents. The Company shall have obtained the consents listed
on Schedule 3.3.
ss.6 COVENANTS OF THE COMPANY. Without limiting any other covenant or
provision hereof, the Company hereby covenants and agrees that, so long as the
Notes are outstanding, it will:
ss.6.1 Financial Information. If the Company shall no longer be
required to file periodic reports pursuant to the Exchange Act, the Company will
deliver the following reports to each Purchaser:
(a) As soon as practicable after the end of each fiscal year, and in
any event within 90 days thereafter, consolidated and consolidating balance
sheets of the Company and its subsidiaries, if any, as of the end of such fiscal
year, and consolidated and consolidating statements of operations and
consolidated statements of cash flows of the Company and its subsidiaries, if
any, for such year, prepared in accordance with GAAP and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and audited by independent public accountants selected by the
Company and reasonably satisfactory to the Purchaser.
(b) As soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company and in any event
within 45 days thereafter, an internally-prepared unaudited consolidated and
consolidating balance sheet of the Company and its subsidiaries, if any, as of
the end of each such quarterly period, and internally-prepared unaudited
consolidated and consolidating statements of operations and consolidated
statements of cash flows of the Company and its subsidiaries, if any, for such
period and for the current fiscal year to date, prepared in accordance with GAAP
(other than the absence of accompanying notes and the absence of accruals for
taxes), all in reasonable detail and duly certified by the principal financial
or accounting officer of the Company.
ss.6.2 Insurance. From and after the Closing, the Company shall, and
shall cause each subsidiary to, maintain insurance with responsible and
reputable insurance companies in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and owning similar
properties, provided that nothing contained in this ss.6.2 shall prevent the
Company from self- insuring to the extent the Board of Directors deems
advisable.
ss.6.3 Corporate Existence. The Company shall maintain its corporate
existence and other rights and franchises in full force and effect; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Company's Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the Company's
business or that the loss thereof could not have a material adverse effect on
the Company. The Company and each subsidiary shall keep adequate records and
books of account in which accurate and complete entries are made of all of its
6
<PAGE> 10
transactions in accordance with GAAP (except for the absence of accruals for
taxes during interim periods) and in which, for each fiscal year, all proper
reserves in connection with its business shall be made.
ss.7 CONVERSION RIGHTS.
ss.7.1 Conversion Privilege. The unpaid principal amount of any Note or
any portion thereof may, at the election of the Holder thereof, at any time on
or after the date of such Note, be converted in whole or in part, at a
conversion price per share of Common Stock equal to $3.92 (120% of the average
closing price of the Common Stock on the New York Stock Exchange during the
thirty (30) trading days immediately preceding but not including June 30, 1997)
(such conversion price, as adjusted and in effect at any time, being herein
called the "Conversion Price"), into the number of fully paid and nonassessable
Shares of Common Stock determined by dividing the principal amount so converted
by the Conversion Price in effect at the time of such conversion.
ss.7.2 Manner of Conversion.
(a) Any Note may be converted in full or in part by the Holder thereof
by surrender of such Note, with the notice of conversion attached thereto duly
executed by such Holder (specifying the portion of the principal amount thereof
to be converted in the case of a partial conversion), to the Company at the
address and in the manner specified in ss.11.1. Upon any partial conversion of a
Note, the Company at its expense will forthwith issue and deliver to or upon the
order of the Holder thereof a new Note or Notes in principal amount equal to the
unpaid and unconverted principal amount of such surrendered Note, such new Note
or Notes to be dated and to bear interest from the date to which interest has
been paid on such surrendered Note. Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which such
Note shall have been so surrendered to the Company; and at such time the rights
of the Holder of such Note as such shall, to the extent of the principal amount
thereof converted, cease, and the person or persons in whose name or names any
certificate or certificates for Conversion Shares shall be issuable upon such
conversion shall be deemed to have become the Holder or Holders of record
thereof.
(b) No payment or adjustment will be made for accrued interest with
respect to the principal portion of the Note converted or for dividends or
distributions on Conversion Shares issued upon conversion of a Note, and upon
conversion any accrued but unpaid interest and dividends or distribution shall
be forfeited.
ss.7.3 Delivery of Stock Certificates; Fractional Shares; Restrictive
Legend. As promptly as practicable after the conversion of any Note in full or
in part, and in any event within five (5) Business Days thereafter, the Company
will issue and deliver to the Holder of such Note a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
plus, in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then current Conversion
Price of one full share. Each certificate evidencing such shares may be stamped
or otherwise imprinted with a legend in the form set forth in ss.10.2. The
Company shall take all appropriate action to authorize and reserve enough Shares
to permit conversion of the Notes. All Shares which may be issued upon
conversion of the Notes shall be validly issued, fully paid and non-assessable
and free of any preemptive rights, liens, claims or encumbrances, other than
this Agreement and applicable securities laws.
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<PAGE> 11
ss.7.4 Adjustment of Conversion Price in Certain Circumstances. The
Conversion Price shall be adjusted in certain circumstances as provided below.
It is understood that the terms of this ss.7.4 are taken from the Indenture
dated as of May 15, 1987 relating to the Company's 8 1/4% Convertible
Subordinated Debentures due 2012 and shall be construed consistent with such
Indenture.
ss.7.4.1 Adjustment for Change in Capital Stock. If the Company:
(1) pays a dividend in its Shares;
(2) subdivides its outstanding Shares into a greater number of
Shares;
(3) combines its outstanding Shares into a smaller number of
Shares;
(4) distributes to all holders of its shares of its Capital
Stock other than Shares; or
(5) issues by reclassification of its Shares any shares of its
Capital Stock,
then the conversion privilege and the Conversion Price in effect immediately
prior to such action shall be adjusted so that the Holder of any Note thereafter
converted may receive the number of shares of Capital Stock of the Company which
such Holder would have owned immediately following such action if such Holder
had converted the Note immediately prior to such action.
For a dividend or distribution, the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment a Holder of a Note upon conversion of it may
receive shares of two or more classes of Capital Stock of the Company, the Board
of Directors shall determine the allocation of the adjusted Conversion Prices
between or among the classes of Capital Stock. After such allocation, the
conversion prices of the classes of Capital Stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Shares in this Agreement.
ss.7.4.2 Adjustment of Rights Issue. If the Company issues any rights
or warrants to all holders of Shares entitling them for a period expiring within
45 days after the record date mentioned below to purchase Shares (or securities
convertible into Shares) at a price per Share (or having a conversion price per
Share) less than the current market price per Share on that record date, the
Conversion Price shall be adjusted in accordance with the formula:
N x P
------
AC = C x O + ( M )
----------
O + M
where
AC = the adjusted Conversion Price.
C = the then current Conversion Price.
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<PAGE> 12
O = the number of Shares outstanding on the record date.
N = the number of additional Shares offered.
P = the offering or Conversion Price per Share of the
additional Shares.
M = the current market price per Share on the record date
mentioned below.
The adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately after the record
date for the determination of holders of Shares entitled to receive the rights
or warrants. If all of the Shares or securities convertible into Shares subject
to such rights or warrants have not been issued when such rights or warrants
expire, then the Conversion Price shall promptly be readjusted to the Conversion
Price which would then be in effect had the adjustment upon the issuance of such
rights or warrants been made on the basis of the actual number of Shares (or
securities convertible into Shares) issued upon the exercise of such rights or
warrants.
ss.7.4.3 Adjustment for Other Distributions. If the Company distributes
to all holders of Shares any assets or debt securities or any rights or warrants
to purchase securities, the Conversion Price shall be adjusted in accordance
with the formula:
AC = C x (O x M) - F
-------------
O x M
where
AC = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of Shares outstanding on the record date
mentioned below.
M = the current market price per Share on the record date
mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants distributed. The Board
of Directors shall determine the fair market value.
The adjustment shall be made successively whenever any such
distribution is made, and shall become effective immediately after the record
date for the determination of holders of Shares entitled to receive the
distribution.
This Section does not apply to cash dividends or cash distributions
paid out of current or retained earnings (however denominated) as shown on the
books of the Company maintained for reporting in accordance with GAAP. Also,
this Section does not apply to rights or warrants referred to in ss.7.4.2.
ss.7.4.4 Adjustment for Share Issue. If the Company issues Shares for a
consideration per Share less than the current market price per Share on the date
the Company fixes the offering price of such additional Shares, the Conversion
Price shall be adjusted in accordance with the formula:
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<PAGE> 13
P
---
AC = C x O + ( M )
----------
A
where
AC = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of Shares outstanding on the date the Company
fixes the offering price of such additional
P = the aggregate consideration received for the issuance of
such additional Shares.
M = the current market price per Share on the date the
Company fixes the offering price of such additional
A = the number of Shares outstanding on the date the Company
fixes the offering price of such additional Shares
issued without reflecting any of the changes in Capital
Stock referred to in ss.7.4.1.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This Section does not apply to (i) any of the transactions described in
ss.7.4.1, (ii) the conversion of Notes, or the conversion or exchange of other
securities convertible or exchangeable for Shares, (iii) Shares issued upon the
exercise of rights or warrants issued to the holders of Shares, (iv) Shares
issued to shareholders of any Person which merges into the Company in proportion
to their stock holdings of such Person immediately prior to such merger, upon
such merger, (v) Shares issued in a bona fide public offering pursuant to a firm
commitment underwriting or (vi) Shares issued pursuant to any present or future
stock option, stock purchase or other stock plan approved by the Company's Board
of Directors (including without limitation all existing stock and option plans)
and up to 545,308 Shares to be issued to management, key employees and sales
representatives of the Company pursuant to a written plan or agreement. (The
numbers of shares in clause (vi) shall be appropriately adjusted from stock
splits and stock dividends).
ss.7.4.5 Adjustment for Convertible Securities Issue. If the Company
issues any securities exercisable for, convertible into or exchangeable for
Shares (other than securities issued in transactions described in ss.7.4.2 and
ss.7.4.3 or the Notes) for a consideration per Share initially deliverable upon
exercise, conversion or exchange of such securities less than the current market
price per Share on the date of issuance of such securities, the Conversion Price
shall be adjusted in accordance with the formula:
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<PAGE> 14
P
---
AC = C x O + ( M )
---------
O + D
where
AC = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of Shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of
such securities.
M = the current market price per Share on the date of
issuance of such securities.
D = the maximum number of Shares deliverable upon
conversion or in exchange for such securities at the
initial coversion or exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance. If all of the
Shares deliverable upon exercise, conversion or exchange of such securities have
not been issued when such securities are no longer outstanding, then the
Conversion Price shall promptly be readjusted to the Conversion Price which
would then be in effect had the adjustment upon the issuance of such securities
been made on the basis of the actual number of Shares issued upon exercise,
conversion or exchange of such securities.
This Section does not apply to (i) convertible securities issued to
shareholders of any Person which merges into the Company in proportion to their
stock holdings of such Person immediately prior to such merger, upon such merger
or (ii) convertible securities issued in a bona fide public offering pursuant to
a firm commitment underwriting.
ss.7.4.6 Voluntary Adjustment. The Company from time to time may reduce
the Conversion Price by any amount for any period of time if the period is at
least 20 days and if the reduction is irrevocable during the period, including
any extension thereof.
Whenever the Conversion Price is reduced, the Company shall mail to
Noteholders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Conversion Price takes effect. The
notice shall state the reduced Conversion Price and the period it will be in
effect.
A reduction of the Conversion Price does not change or adjust the
Conversion Price otherwise in effect for purposes of this ss.7.
ss.7.4.7 Current Market Price. In Sections ss.7.4.2, ss.7.4.3, ss.7.4.4
and ss.7.4.5, the current market price per Share on any date is the average of
the last reported sales prices, on the principal exchange on which the Shares
are listed, or the mean of the closing bid and asked prices in the
over-the-counter market if the Shares are not then traded on an exchange, for 30
consecutive trading days
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<PAGE> 15
commencing 45 trading days before the date in question. In the absence of one or
more such quotations, the Company's Board of Directors shall determine the
current market price on the basis of such quotation as it considers appropriate.
ss.7.4.8 Consideration Received. For purposes of any computation
respecting consideration received pursuant of ss.7.4.4 and ss.7.4.5, the
following shall apply:
(i) in the case of the issuance of Shares for cash, the
consideration shall be the amount of such cash, provided that in no
case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the
issue or otherwise in connection therewith;
(ii) in the case of the issuance of Shares for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Company's Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a resolution adopted by the Board
of Directors which shall be filed with the clerk of the Company; and
(iii) in the case of the issuance of securities convertible
into or exchangeable for Shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (i) and (ii) of
this ss.7.4.8).
ss.7.4.9 When Adjustment May Be Deferred. No adjustment in the
Conversion Price need be made unless the adjustment would require an increase or
decrease of at least $.02 in the Conversion Price. Any adjustment which are not
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this ss.7 shall be made to the nearest cent
or to the nearest 1/100th of a Share, as the case may be.
ss.7.4.10 When Adjustment Is Not Required. Except as provided in
ss.7.4.2, ss.7.4.3, ss.7.4.4 and ss.7.4.5, no adjustment in the Conversion Price
shall be made because the Company issues, in exchange for cash, property or
services, Shares, or any securities convertible into or exchangeable for Shares,
or securities carrying the right to purchase Shares or such convertible or
exchangeable securities. Furthermore, no adjustment in the Conversion Price need
be made under this ss.7 for sale of Shares pursuant to a plan providing for
reinvestment of dividends or interest or in the event the par value of the
Shares is changed. To the extent the Notes become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
ss.7.4.11 Notice of Adjustment. Whenever the Conversion Price is
adjusted or reduced, the Company shall promptly mail to Noteholders a notice of
the adjustment, provided that such notice need not be separately provided to any
Noteholder if such Noteholder (or an affiliate of such Noteholder) is then a
member of the Company's Board of Directors.
ss.7.4.12 Notice of Certain Transactions. If: (1) the Company declares
or pays any dividend on, or makes any distribution to the holders of, any
Shares, other than a regular distribution of cash in an aggregate amount not
greater than
12
<PAGE> 16
the aggregate amount of cash distributed by the Company at the time of the
immediately preceding regular distribution plus 25% of such preceding amount, or
purchases, redeems or otherwise acquires or retires for value any Shares; (2)
the Company takes any action which would require an adjustment in the Conversion
Price; (3) the Company consolidates or merges with, or transfers all of
substantially all of its assets to, another Person, and holders of Shares must
approve the transaction; or (4) there is a dissolution or liquidation of the
Company,
the Company shall mail to the Noteholders a notice describing the action taken
and stating the proposed record or effective date, as the case may be. The
Company shall mail the notice at least 10 days before such date. Failure to mail
the notice or any defect in it shall not affect the validity of any transaction
referred to in clauses (1), (2), (3) or (4) of this Section. No notice need be
provided under this ss.7.4.12 to any Noteholder if, at the time such notice
would otherwise be required, the Noteholder (or one of its affiliates) is a
member of the Company's Board of Directors.
ss.7.4.13 Company Determination Final. Any determination which the
Company's Board of Directors must make pursuant to ss.7.4.1, ss.7.4.3, ss.7.4.7
or ss.7.4.8 shall be conclusive.
ss.8 DEFAULTS; REMEDIES.
ss.8.1 Events of Default. If any one or more of the following events
(each an "Event of Default") shall occur:
(a) The Company shall default in the payment of principal of or
interest on a Note for more than 10 days after the same becomes due and payable,
whether at maturity or at a date fixed for the payment of any installment or
prepayment thereof or otherwise;
(b) The Company shall default in the performance of or compliance with
any term contained in ss.6 hereof and such default is not cured within 30 days
after notice thereof, provided that, if the Company fails to maintain its
corporate existence pursuant to the first sentence of ss.6.3, then an Event of
Default shall exist immediately upon such failure;
(c) The Company shall discontinue its business or shall make an
assignment for the benefit of creditors, or shall apply for or consent to the
appointment of or taking possession by a trustee, receiver or liquidator (or
other similar official) of the Company or any substantial part of the property
of the Company, or shall commence a case or have an order for relief entered
against it under the federal bankruptcy laws, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or if the Company shall take any action to dissolve or liquidate the
Company; or
(d) If, within 90 days after the commencement against the Company of a
case under the federal bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
such case shall have been consented to or shall not have been dismissed or all
orders or proceedings thereunder affecting the operations or the business of the
Company and such Subsidiary stayed, or if the stay of any such order or
proceeding shall thereafter be set aside, or if within 90 days after the entry
of a decree appointing a trustee, receiver or liquidator (or other similar
official) of the Company or any substantial part of the property of the Company,
such appointment shall have been vacated;
13
<PAGE> 17
then, and in any such event, and at any time thereafter if any Event of Default
shall be continuing, the Noteholders of a majority of the outstanding principal
amount of the Notes may, by written notice to the Company, declare the principal
of and accrued interest in respect of the Notes, and all other amounts payable
under this Agreement and the Notes to be forthwith due and payable, whereupon
(i) the entire principal of and accrued interest in respect of the Notes and
(ii) all other amounts payable under this Agreement and the Notes shall become
forthwith due and payable without presentment, demand, protest, notice of intent
to accelerate, notice to accelerate or other notice of any kind, all of which
are hereby expressly waived by the Company.
ss.8.2 Remedies on Default, etc. In case any Event of Default shall
occur and be continuing, the Noteholders may proceed to protect and enforce
their rights by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in the Notes, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law. In case of a default in the payment of any principal of or
interest on the Notes, or in the payment of any other amount due hereunder, the
Company will pay to the Noteholders such further amount as shall be sufficient
to cover the reasonable costs and expenses of collection, including, without
limitation, reasonable attorneys' fees, expenses and disbursements. No course of
dealing and no delay on the part of the Noteholders in exercising any right
shall operate as a waiver thereof or otherwise prejudice their rights. No right
or remedy conferred hereby or by any Note upon the Purchasers or the Noteholders
shall be exclusive of any other right or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise; each and
every right and remedy shall be cumulative and in addition to every other right
and remedy.
ss.9 DEFINITIONS.
ss.9.1 Certain Defined Terms. The following terms used in this
Agreement will have the meanings specified below:
"Agreement" means this Note Purchase Agreement, as in effect from time
to time.
"Board of Directors" means the Company's Board of Directors, as from
time to time constituted.
"Business Day" means any day, excluding Saturday and Sunday and
excluding any other day which shall be in Boca Raton, Florida, a legal holiday
or a day on which banking institutions are authorized by law to close.
"Capital Stock" means capital stock or shares having the right to
participate in the residual equity of any Person or any participation or
interests in, or measured by, the profits of such Person.
"Closing" has the meaning specified in ss.2.
"Closing Date" has the meaning specified in ss.2.
"Company" has the meaning specified on the first page of this
Agreement.
"Conversion Price" has the meaning specified in ss.7.1.
14
<PAGE> 18
"Conversion Shares" has the meaning specified in ss.1.1.
"Default" means any event or circumstances which with notice and/or the
passage of time could result in an Event of Default.
"Event of Default" has the meaning specified in ss.8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such from time to time by the American
Institute of Certified Public Accountants acting through its Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof.
"Notes" has the meaning specified in ss.1.1.
"Noteholders" or "Holders" means any holder of a Note, including any
assignee thereof.
"Person" means and includes natural persons, corporations, limited
partnerships, limited liability company, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and government entities.
"Purchaser" or "Purchasers" have the respective meanings specified on
the first page of this Agreement.
"RDI Acquisition" means the acquisition by BG/RDI Acquisition Corp. of
100% of the issued and outstanding capital stock of RDI Group, Inc. and Resort
Title Agency, Inc. pursuant to the terms of a Stock Purchase Agreement dated as
of July 24, 1997 by and among the Company, BG/RDI Acquisition Corp., Randy L.
Keim, Jeffrey J. Keim and David Bidgood.
"SEC" means the Securities and Exchange Commission or any successor to
any of the functions thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock, $.01 par value per
share.
ss.9.2 Other Definitional Provisions. The "hereof," "herein" and
"hereunder" and terms of similar import will refer to this Agreement as a whole
and not to any particular provision of this Agreement. Section, clause and
Exhibit references contained in this Agreement are references to Sections,
clauses and Exhibits in or annexed to this Agreement, unless otherwise
specified. Whenever the term "including" is used in this Agreement (whether or
not that term is followed by the phrase "but not limited to" or "without
limitation" or words of similar effect) in connection with a listing of items
within a particular classification, that listing will be interpreted to be
illustrative only and will not be interpreted as a limitation on, or an
exclusive listing of, the items within that classification.
15
<PAGE> 19
ss.10 RESTRICTIONS ON TRANSFERABILITY OF SECURITIES.
ss.10.1 Restrictions on Transferability. The Notes and the Conversion
Shares shall not be sold, assigned, transferred or pledged except upon
satisfaction of the conditions specified in this ss.10, which conditions are
solely intended to ensure compliance with the provisions of the Securities Act
and other applicable securities laws. Each Purchaser will cause any proposed
purchaser, assignee, transferee, or pledgee of the Notes or the Conversion
Shares held by such Purchaser to agree to take and hold such securities subject
to the provisions and conditions of this ss.10.
ss.10.2 Legends and Transfers. Each Note shall bear the legend set
forth in the form of Note attached as Exhibit A hereto. Each certificate
representing the Conversion Shares shall (unless otherwise permitted by the
provisions of ss.10.3 below) be stamped or otherwise imprinted with a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SHARES AND RESTRICTING THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT
THE PRINCIPAL OFFICES OF THE CORPORATION.
ss.10.3 Notice of Proposed Transfers. The holder of each Note and of
each certificate representing Conversion Shares, by acceptance thereof, agrees
to comply in all respects with the provisions of this ss.10.3. Prior to any
proposed sale, assignment, transfer or pledge of any Note or any Conversion
Shares (other than (a) transfers not involving a change in beneficial ownership
or (b) transactions involving the distribution or transfer of Conversion Shares
by such Purchaser to any affiliate who agrees in writing to be bound by the
terms of this Agreement), unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the holder thereof
shall give written notice to the Company of such holder's intention to effect
such transfer, sale, assignment or pledge. Each such notice shall describe the
manner and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied, at such holder's expense by either
(i) a written opinion of legal counsel reasonably acceptable to the Company to
the effect that the proposed transfer of the Note or the Conversion Shares may
be effected without registration under the Securities Act, or (ii) a "no action"
letter from the SEC to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the SEC that
action be taken with respect thereto, whereupon the holder of such Securities
shall be entitled to transfer such Securities in accordance with the terms of
the notice delivered by the holder to the Company. Each certificate evidencing
the Conversion Shares transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144, the appropriate restrictive legend set
forth in ss.10.2 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for such holder and the Company
such legend is not required in order to establish compliance with any provision
of the Securities Act.
16
<PAGE> 20
ss.11 MISCELLANEOUS.
ss.11.1 Notices. All notices, approvals or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by registered or certified mail
(postage prepaid, return receipt requested), reputable overnight courier or
facsimile transmission, to the respective parties as follows:
(a) If to the Company, to
Bluegreen Corporation
5295 Town Center Road
Suite 400
Boca Raton, Florida 33486
Attention: Patrick E. Rondeau, Esq.
Vice President and Director of Corporate
Legal Affairs
Facsimile: (561) 361-2800
(b) If to the Purchasers, to them at their respective
addresses set forth in the signature page hereof
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof). A notice shall be deemed to have been given upon the earlier
to occur of (i) three (3) Business Days after the date on which it is deposited
in the U.S. mail or (ii) receipt by the party to whom such notice is directed.
ss.11.2 Governing Law; Severability. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO OR APPLICATION OF ANY CONFLICTS OF LAWS
PRINCIPLES) AND IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT. If for any
reason whatsoever any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.
ss.11.3 Binding Effect; Etc. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. All references to the term "Purchasers" contained in this Agreement
shall apply to the Purchasers and their respective successors, heirs and
assigns. Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their permitted successors and assigns
any rights, remedies, obligations or liabilities whatsoever under or by reason
of this Agreement.
ss.11.4 Execution in Counterparts; Interpretation. This Agreement may
be executed in multiple counterparts, each of which shall be considered an
original but all of which shall constitute one and the same agreement. The
descriptive headings herein are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this
17
<PAGE> 21
Agreement. The parties acknowledge and agree that this Agreement shall not be
construed in favor of one party more than the other(s) based upon which party
drafted the same, it being acknowledged that all parties hereto have contributed
substantially to the negotiation and preparation hereof.
ss.11.5 Entire Agreement. This Agreement delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein and supersede any prior understandings or
agreements covering the subject matter hereof and thereof.
ss.11.6 Survival of Representations, Warranties, Etc. All of the terms,
conditions, warranties, and representations contained in this Agreement shall
survive the execution and delivery hereof and the Closing Date.
ss.11.7 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any Noteholder upon any breach or default of
the Company under this Agreement, shall impair any such right, power or remedy
of such Noteholder nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Noteholder of any breach or default under this
Agreement, or any waiver on the part of any Noteholder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any Noteholder, shall be
cumulative and not alternative.
* * * * * * * * *
18
<PAGE> 22
EXECUTED as a sealed instrument as of the date first above written.
BLUEGREEN CORPORATION
By: /s/ George F. Donovan
-----------------------------
George F. Donovan, President
PURCHASERS:
GRACE BROTHERS, LTD.
By: /s/ Bradford T. Whitmore
-----------------------------
Address:
1560 Sherman Avenue
Suite 900
Evanston, Illinois 60201
/s/ Joseph C. Abeles
--------------------------------
JOSEPH C. ABELES
Address:
Abel Associates
220 E. 42nd Street
Suite 505
New York, New York 10017
19
<PAGE> 1
EXHIBIT 99.D
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAW. THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
BLUEGREEN CORPORATION
8% Convertible Note due September 11, 2002
No. September 11, 1997
---
BLUEGREEN CORPORATION, a Massachusetts corporation (the "Company"), for
value received, hereby promises to pay to ________________ or assigns, the
principal amount of _________________ ($___________) on September 11, 2002, with
interest (computed on the basis of the actual number of days elapsed over a
365-day year) on the unpaid balance of such principal amount at the rate of 8%
per annum from the date hereof, payable quarterly in arrears on December 11,
March 11, June 11 and September 11 of each year, commencing on December 11, 1997
and at maturity, whether by demand, declaration or acceleration; provided that
during the continuance of any Event of Default interest on the unpaid principal
of and (to the extent permitted by law) on the unpaid interest on each Note
shall accrue at a rate of eleven percent (11%) per annum and provided further
that in no event shall the amount paid or agreed to be paid by the Company as
interest and premium on this Note exceed the highest lawful rate permissible
under any law applicable hereto. Payments of principal and interest hereon shall
be made in lawful money of the United States of America by the method and at the
address for such purpose specified in the Note Purchase Agreement hereinafter
referred to.
This Note is one of the Company's 8% Convertible Notes due September
11, 2002, limited to $6,000,000 aggregate principal amount, issued pursuant to a
Note Purchase Agreement dated as of September 11, 1997 (as amended from time to
time, the "Note Purchase Agreement") between the Company and the purchasers
named therein, and the holder hereof is entitled to the benefits of the Note
Purchase Agreement and may enforce the agreements of the Company contained
therein and exercise the remedies provided for thereby or otherwise available in
respect thereof, all in accordance with and subject to the terms thereof.
Capitalized terms used but not defined in this Note shall have the meanings
given to them in the Note Purchase Agreement.
The outstanding principal balance of this Note is convertible at the
option of the holder hereof at any time after the date of this Note upon
surrender hereof, with the notice of conversion attached hereto duly executed,
at the principal executive office of the Company at the unpaid
<PAGE> 2
principal amount hereof or any portion of such principal amount into shares of
Common Stock of the Company as such shares shall be constituted at the time of
conversion, at the Conversion Price in effect upon the date of conversion, all
as provided in the Note Purchase Agreement.
In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement and the holder hereof shall have all of
the rights and remedies set forth in the Note Purchase Agreement.
The parties hereto, including the maker and all endorsers of this Note,
hereby waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance or enforcement
of this Note. The Company shall pay to the holder of this Note any and all
reasonable costs and expenses of collection on this Note following an Event of
Default, including reasonable attorneys' fees, expenses and disbursements.
This Note shall be governed by the laws of The Commonwealth of
Massachusetts and is executed as a sealed instrument under such laws.
BLUEGREEN CORPORATION
By:
-----------------------------
(Title)
2
<PAGE> 3
FORM OF ASSIGNMENT
[To be signed only upon transfer of Note]
For value received, the undersigned hereby sells, assigns and transfers
unto _______________________ the within Note, and appoints _____________________
Attorney to transfer such Note on the books of BLUEGREEN CORPORATION with full
power of substitution in the premises.
Date: _________________,_____.
----------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the Note)
Signed in the presence of
- -----------------------------
3
<PAGE> 4
NOTICE OF CONVERSION
[To Be Signed Only upon Conversion of Note]
To BLUEGREEN CORPORATION
The undersigned, the holder of the foregoing Note, hereby surrenders
such Note for conversion into shares of Common Stock of BLUEGREEN CORPORATION to
the extent of $_________* unpaid principal amount of such Note, and requests
that the certificates for such shares be issued in the name of, and delivered to
_________________________, whose address is____________________________________
Dated: ___________________, ____.
-----------------------------------
(Signature must confirm in all
respects to name of Holder as
specified on the face of the Note)
-----------------------------------
(Address)
- --------------------
*Insert here the unpaid principal amount of the Note (or, in the case of a
partial conversion, the portion thereof as to which the Note is being
converted). In the case of a partial conversion, a new Note or Notes will be
issued and delivered, representing the unconverted portion of the unpaid
principal amount of this Note, to or upon the order of the holder surrendering
such Note.
4
<PAGE> 1
EXHIBIT 99.E
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
October __, 1997, by and between Bluegreen Corporation (collectively with any of
its subsidiary corporations, "Bluegreen") and _______________ (the "Employee").
Introduction
BG/RDI Acquisition Corp. ("Buyer") and Bluegreen have entered into a
Stock Purchase Agreement dated as of July 24, 1997 (the "Purchase Agreement")
with the Employee, certain other individuals and the other corporations named
therein pursuant to which the Buyer is acquiring the Shares. This Agreement is
being entered into in connection with, and is a condition to, the closing of the
transactions contemplated by the Purchase Agreement. Capitalized terms used but
not defined herein shall have the meanings given to them in the Purchase
Agreement.
Bluegreen desires to retain the services of the Employee as of the
closing, and the Employee wishes to be employed by Bluegreen. The Employee has
detailed knowledge of various aspects of the Business and is in possession of
proprietary and confidential information concerning such Business. The
disclosure of such information or the engaging in competitive activities would
cause substantial harm to Buyer and Bluegreen.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Term. Bluegreen shall employ the Employee for a three-year
term commencing on the date of this Agreement and continuing until October __,
2000, unless earlier terminated pursuant to Section 7 (the "Employment Period").
Section 2. Duties. The Employee shall serve as a Vice President of
Bluegreen Resorts, Inc. and shall have such duties consistent with such position
and as the Board of Directors of Bluegreen (the "Board") or the officer of
Bluegreen from time to time designated by the Board for such purpose (the
"Senior Officer") shall from time to time determine. The Employee will report to
the Senior Officer (L. Nicholas Grey shall be the initial Senior Officer). The
Employee will be based in _______________, but acknowledges that a substantial
percentage of his time will be spent on travel for business purposes. The
Employee shall receive no additional compensation for any services rendered in
the event he serves as a director of Buyer, Bluegreen or any of their respective
subsidiaries. The Employee shall also not, directly or indirectly, receive any
compensation for any services provided by him to AmClub, Inc. It is understood
that the Employee may provide services to AmClub, Inc., and the same shall not
be deemed a breach of this Agreement.
Section 3. Full Time; Best Efforts. During the term of this Agreement,
the Employee shall use his best efforts to promote the interests of Bluegreen
and shall devote his full business time and efforts to its business and affairs.
The Employee shall not engage in any other activity which could reasonably be
expected to interfere with the performance of his duties, services and
responsibilities hereunder.
Section 4. Compensation. During the term of his employment with Buyer,
the Employee shall be entitled to receive a salary at the rate of $180,000
annually (the "Salary"), payable not less than monthly in arrears. Bluegreen may
<PAGE> 2
withhold from compensation payable to the Employee all applicable federal, state
and local withholding taxes. The Employee shall not receive any compensation
from any RDI Company other than as set forth in this Agreement.
Section 5. Benefits. The Employee will be entitled to such reasonable
and customary fringe benefits as are generally and regularly available to
employees of Bluegreen and its subsidiaries, including health insurance and four
(4) weeks of vacation per year. In addition, during the term of this Agreement,
Bluegreen will reimburse the Employee for the expenses listed on Exhibit A
attached hereto in an aggregate amount not to exceed $20,000 per annum. The
Employee will be entitled to reimbursement of all reasonable and necessary
business expenses incurred by him in the ordinary course of business on behalf
of Buyer, subject to presentation by the Employee of appropriate documentation
and approval by Buyer (or in accordance with policies approved by Bluegreen).
Bluegreen confirms and agrees that the Employee shall, with respect to his
duties hereunder, be entitled to indemnification as provided in Bluegreen's
Restated Articles of Organization.
Section 6. Confidentiality and Noncompetition. In consideration of the
other mutual promises contained herein, and to preserve the goodwill of Buyer
and Bluegreen in connection with the transactions contemplated by the Purchase
Agreement, the Employee agrees as follows:
(a) The Employee will not at any time, directly or indirectly,
disclose or divulge, except as required in connection with the performance of
his duties for Buyer and Bluegreen and except to legal counsel or as required or
requested by any governmental agency or pursuant to or in response to any threat
of legal process, any Confidential Information (as hereinafter defined) acquired
by him during or in connection with his affiliation with or employment by
Bluegreen, any of its subsidiaries or any RDI Company. As used herein,
"Confidential Information" means all trade secrets and all other information of
a business, financial, marketing, technical or other nature pertaining to
Bluegreen, any of its subsidiaries or any RDI Company, all financial information
on customers, lists of customers and customer leads, acquisition prospects and
all information on agreements with suppliers and vendors of Bluegreen, any of
its subsidiaries or any RDI Company, including information of others that
Bluegreen, any of its subsidiaries or any RDI Company has agreed to keep
confidential; provided, however, that Confidential Information shall not include
any information that has entered or enters the public domain through no fault of
the Employee or which the Employee is required to disclose by legal process or
to defend himself in a legal proceeding.
(b) The Employee shall make no use whatsoever, directly or
indirectly, of any Confidential Information, except as required in connection
with the performance of his duties for Bluegreen.
(c) Upon Bluegreen's request at any time and for any reason,
the Employee shall immediately deliver to Buyer all materials (including all
copies) in his possession which contain or relate to Confidential Information.
(d) During the term of this Agreement, and for two years after
such termination for any reason (but if the term of the Employment Agreement
expires upon natural termination of the expiration of three (3) years from the
date of employment, then for a term of one (1) year from the date of such
termination) either individually or as a consultant to, or employee, officer,
director, stockholder, manager, partner or other owner or participant in any
business entity other than Bluegreen or its subsidiaries, directly or indirectly
(i) own, operate or sell a timeshare project within thirty (30) miles of a
timeshare property developed and marketed by Bluegreen or any of its
subsidiaries, (ii) accept contracts of management of timeshare associations
under management to the RDI Company when those contracts existed at the time of
Closing or are gained
-2-
<PAGE> 3
during the time of employment of the Employee or (iii) accept a management
contract on a development within thirty (30) miles of any timeshare development
managed or developed by Bluegreen or any of its subsidiaries, nor shall such
Employee engage or participate in, assist or consult with, in any manner or in
any capacity, or have any interest in or make any loan to, any Person or entity
which is engaged in any business that does any of the foregoing.
(e) During the term of this Agreement, and the period after
such termination for any reason which applies under clause (d) above, the
Employee will not directly or indirectly, individually or as a consultant to, or
employee, officer, director, stockholder, manager, partner or other owner or
participant in any business entity other than Bluegreen, solicit or endeavor to
entice away from Bluegreen or any of its subsidiaries, or otherwise materially
interfere with the business relationship of any RDI Company or Bluegreen with,
(i) any person who is, or was within the four (4) month period immediately prior
to the termination of the Employee's employment with Bluegreen, employed by or
associated with any RDI Company or Bluegreen or (ii) any person or entity who
is, or was within the one year period immediately prior to the termination of
the Employee's employment with Bluegreen, a customer or client of, supplier to
or other party having material business relations with any RDI Company or
Bluegreen. Without limiting any injunctive or other equitable remedy available
to Bluegreen, if the Employee shall breach the terms of clause (i) of this
paragraph, the Employee shall be obligated to pay to Bluegreen as liquidated
damages an amount equal to two (2) times the aggregate annual compensation of
the applicable person as of the time of the wrongful act, it being agreed that
the exact amount of monetary damages would be difficult to compute.
(f) Without limiting the remedies available to Buyer or
Bluegreen, the Employee acknowledges that a breach of any of the covenants
contained in this Section 6 could result in irreparable injury to Bluegreen for
which there might be no adequate remedy at law, and that, in the event of such a
breach or threat thereof, Bluegreen shall be entitled to obtain a temporary
restraining order and/or a preliminary injunction and a permanent injunction
restraining him from engaging in any activities prohibited by this Section 6 or
such other equitable relief as may be required to enforce specifically any of
the covenants of this Section 6. The foregoing provisions of this Section 6
shall survive the termination of this Agreement and shall continue thereafter
indefinitely in full force and effect in accordance with the terms of this
Section 6.
(g) The Employee represents and warrants to Bluegreen that the
execution and delivery of this Agreement, and the performance of his obligations
hereunder, will not violate any agreement, obligation or commitment, including
without limitation any obligation to any former employer not to compete or not
to disclose or use confidential information, to which he is a party or by which
he is bound.
(h) All references to Bluegreen in this Section 6 shall
include any subsidiaries (direct or indirect) of Bluegreen engaged in the
business of sales, development, marketing or management of timeshare, including
the RDI Companies.
(i) Each party hereto acknowledges that (x) there are
legitimate business interests justifying the covenants contained in this Section
6, including without limitation that the Employee has and will have trade
secrets, valuable confidential business or professional information and
substantial relationships with existing and prospective customers, suppliers and
others, customer goodwill and specialized training and (y) the terms of this
Section 6 are reasonably necessary to protect such legitimate business
interests. The provisions of this Section 6 are in addition to, and not in lieu
of, the terms of Article 8 of the Purchase Agreement.
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Section 7. Termination. The Employee's employment with Buyer may be
terminated at any time by Buyer or Bluegreen with or without cause. As used
herein, "cause" shall mean the reasonable and good faith determination by the
Board, after at least 10 days' notice to the Employee and after the Employee has
had an opportunity to present his view of the relevant facts and circumstances
to the Board, that the Employee has (a) breached Section 6 of this Agreement,
breached his obligations hereunder to provide his full business, time and effort
to the business of Bluegreen or engaged in repetitive insubordination or
materially breached the AmClub Agreement, which breach or failure has not been
cured by the Employee within 30 days after notice of breach or failure is given
to the Employee, (b) engaged in criminal acts or gross or persistent misconduct
relative to the affairs of Buyer or Bluegreen or (c) engaged in acts materially
injurious to Buyer or Bluegreen or its/their reputation or acts of dishonesty
affecting Buyer or Bluegreen. The Employee's employment with Bluegreen may also
be terminated by Bluegreen upon the Employee's disability or death. As used
herein, "disability" shall mean illness (mental or physical) or accident which,
in the good faith and reasonable determination of the Board (or the Senior
Officer referred to in Section 2 above)based on the report of a reputable
physician, renders the Employee unable to perform his duties for six (6) months
during any twelve (12) month period.
If the Employee's employment is terminated for any reason, Bluegreen
shall have no further obligation to make any payments or provide any benefits to
the Employee hereunder except for (i) payments of Salary and vacation that had
accrued but had not been paid prior to the date of termination of his employment
and (ii) if the Employee's employment is terminated by Bluegreen without cause
(as defined above) additional payments of Salary during the scheduled balance of
this Agreement, payable in the same installments (and subject to the same
withholdings) as if such employment had not been so terminated. Nothing
contained herein shall limit the Employee's right following the termination of
the Employee's employment for any reason to receive such medical benefits as to
which he may be entitled under the Consolidated Omnibus Budget Reconciliation
Act (COBRA) or any other benefits that the Employee is entitled to under Law.
Section 8. Equity. Upon the execution of this Agreement, Bluegreen and
the Employee will enter into a stock option agreement substantially in the form
attached as Exhibit B hereto pursuant to which Bluegreen will grant the Employee
an incentive stock option for the purchase of up to 60,000 shares of Bluegreen's
common stock, subject to the terms and conditions set forth therein.
Section 9. Enforceability, etc. This Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision hereof shall be prohibited or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provisions shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent permitted by applicable law.
Section 10. Notices. Any notice or other communication given pursuant
to this Agreement shall be in writing and shall be personally delivered, sent by
overnight courier or express mail, or mailed by first class certified or
registered mail, postage prepaid, return receipt requested to the parties at
their respective addresses set forth in the Purchase Agreement, or to such other
address as the parties shall have designated by notice to the other parties.
Section 11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida, without
regard to their choice of law provisions.
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Section 12. Amendments and Waivers. No amendment or waiver of this
Agreement or any provision hereof shall be binding upon the party against whom
enforcement of such amendment or waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver by either party of a breach
of any provision of this Agreement by the other party shall not operate and be
construed as a waiver or a continuing waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other party.
Section 13. Binding Effect. This Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective heirs, executors
and administrators, successors and assigns, except that it may not be assigned
by either party without the other party's consent, provided that Bluegreen may
assign this agreement to any entity that acquires substantially all of
Bluegreen's assets.
Section 14. Entire Agreement. This Agreement constitutes the final and
entire agreement of the parties with respect to the matters covered hereby and
replaces and supersedes all other agreements and understandings relating hereto.
Section 15. Counterparts. This Agreement may be executed in any number
of counterparts, and with counterpart signature pages, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
* * * * * * * *
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument as of the date first above written.
BLUEGREEN CORPORATION
By:
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(Title)
---------------------------------
Employee
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