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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): August 14, 1998
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.)
4960 BLUE LAKE DRIVE, BOCA RATON, FLORIDA 33431
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (561) 912-8000
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Item 5. OTHER EVENTS
SECURITIES PURCHASE AGREEMENT
On August 14, 1998, Bluegreen Corporation, a Massachusetts corporation
(the "Company"), entered into a Securities Purchase Agreement dated as of August
14, 1998 (the "Purchase Agreement") by and among the Company, Morgan Stanley
Real Estate Investors III, L.P., Morgan Stanley Real Estate Fund III, L.P.,
("MSREF"), MSP Real Estate Fund, L.P., ("MSP"), and MSREF III Special Fund,
L.P., (collectively, the "Funds") pursuant to which the Funds purchased
2,941,177 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), representing approximately 12.6% if the outstanding Common
Stock, for an aggregate of $25,000,000 (the "Initial Closing").
PURCHASE OF ADDITIONAL COMMON STOCK
Pursuant to the Purchase Agreement, subject to satisfaction or waiver
of certain conditions thereto, the Company has the right to require the Funds,
during the 18-month period commencing on August 14, 1998 (the "Commitment
Period"), to purchase from the Company at any time and from time to time up to
an additional 2,941,176 shares (subject to adjustment in certain circumstances)
of Common Stock (the "Remaining Shares") at a purchase price per share equal to
$8.50 (subject to adjustment in certain circumstances). If, on or prior to the
expiration of the Commitment Period, the Company has not offered to sell to the
Funds all of the Remaining Shares and the Company has satisfied certain
conditions, or if at any time during the Commitment Period the Funds receive
notice from the Company of the occurrence of, or the execution by the Company of
a definitive agreement which will result in, a Change of Control (as defined in
the Purchase Agreement) of the Company, the Funds will have the right to
purchase any or all of the Remaining Shares not previously sold to the Funds at
a purchase price per share equal to $8.50 (subject to adjustment in certain
circumstances).
In accordance with the rules of the New York Stock Exchange, the
Purchase Agreement requires that the stockholders of the Company approve any
issuance of shares of Common Stock to the Funds if the shares proposed to be
issued, when added to the shares of Common Stock previously issued to the Funds
(or their Permitted Transferees (as defined in the Purchase Agreement)) under
the Purchase Agreement, results in the Funds (and their Permitted Transferees)
owning an aggregate of 20% or more of the number of shares of Common Stock
issued and outstanding on August 14, 1998 (excluding any shares of Common Stock
issued to the Funds on August 14, 1998 at the Initial Closing, such date on
which the Funds (or their Permitted Transferees) will own 20% or more of such
stock being the "Threshold Date"). The Purchase Agreement requires the Company
to take all action necessary to convene a meeting of its shareholders as soon as
practicable (but in no event later than the earlier to occur of (x) November 30,
1998, or (y) the Threshold Date).
BOARD OF DIRECTORS AND BOARD COMMITTEES
As required by and simultaneously with the execution of the Purchase
Agreement, the Company (i) opted into the provisions of ss.50A of Chapter 156 of
the Massachusetts General Laws providing for staggered boards of directors and
amended its bylaws to provide for a staggered board of directors and (ii)
increased the number of directors serving on the Company's board of directors by
two. As required by the Purchase Agreement, the vacancies created by such
increase have been filled by two persons designated by the Funds, Michael J.
Franco and John A. Henry. For so long as the Funds or their
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Permitted Transferees own at least 70% of the aggregate number of shares of
Common Stock theretofore actually issued to the Funds (or their Permitted
Transferees) under the Purchase Agreement (the "Required Interest"), MSREF and
MSP will have the right to designate two directors on the management slate of
nominees to the Company's Board of Directors (the "MSREF Designees"). If the
Funds (and their Permitted Transferees) own less than the Required Interest but
own, in the aggregate, at least 50% of the aggregate number shares of Common
Stock theretofore actually issued to the Funds (or their Permitted Transferees)
under the Purchase Agreement (the "Minimum Interest"), MSP will have the right
to designate one director on the management slate of nominees to the Company's
Board of Directors. The MSREF Designees have the right to serve on any standing
committee of the Board to the extent their participation on such committee would
not exceed their proportionate representation of the full Board. Upon his
election, Mr. Franco was appointed to the Compensation Committee and the Audit
Committee.
AGREEMENT TO VOTE OF FUNDS
The Funds have agreed to vote, and to cause any Permitted Transferees
to vote, all of their shares of Common Stock for the election of the management
slate of nominees (other than the MSREF Designees) to the Company's Board of
Directors for so long as the Funds (and their Permitted Transferees) own, in the
aggregate, at least the Minimum Interest and the MSREF Designees are serving on
the Company's Board of Directors.
TAKING OF CERTAIN ACTIONS
For so long as the Funds own at least the Required Interest, certain
material actions by the Company or its subsidiaries, including: the
consolidation or merger of the Company; the sale of substantially all the assets
of the Company; the sale of assets of the Company (or certain Company
subsidiaries) or the purchase of the business, assets or securities of another
person where the aggregate consideration exceeds $50,000,000; the issuance of
certain securities of the Company senior or, in certain circumstances, on par
with the Common Stock; the issuance of stock of the Company's subsidiaries
(other than pursuant to certain employee option plans); the occurrence of
indebtedness having a material effect on the total market capitalization ratio
of the Company; the declaration or payment of dividends (other than stock
dividends) on the Common Stock; any amendment to the charter or bylaws of the
Company that would conflict with the Purchase Agreement; entry into a material
line of business materially different from the timeshare/residential land
business and the entry into transactions with certain affiliates (other than
Company subsidiaries) will require the affirmative vote of one of the MSREF
Designees, or if the Funds do not have a representative on the Board of
Directors as a result of the failure of the Company to nominate the MSREF
Designees or failure of the shareholders of the Company to elect the MSREF
Designees, then such action shall require the approval of the Funds and
Permitted Transferees holding a majority of the shares of Common Stock issued
pursuant to the Purchase Agreement. Moreover, for so long as the Funds own at
least the Required Interest, Morgan Stanley, Dean Witter & Co. or an affiliate
thereof shall have the exclusive right to act as advisor or underwriter to the
Company in connection with certain material transactions for which the Company
elects to use the services of an investment or financial advisor.
PREEMPTIVE RIGHTS
Each of the Funds (and their Permitted Transferees) have the right to
purchase their proportionate share of any issuance (subject to certain
exceptions) by the Company for cash of (i) any of its capital stock, (ii) any
rights, options or warrants to purchase any such capital stock or any securities
that are or
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may become convertible or exercisable into Common Stock and (iii) any securities
that are or may become convertible or exercisable into Common Stock.
RESTRICTIONS ON SALE OR TRANSFER
Subject to certain exceptions, the Funds and their Permitted
Transferees have agreed not to offer, sell, transfer, assign, pledge or
hypothecate any shares of Common Stock issued to them prior to the earlier of
(i) August 14, 2000 or (ii) six months following the date on which the Funds
have purchased all the shares of Common Stock to be purchased by them under the
Purchase Agreement, but in no event earlier than February 14, 2000.
VOTING AND COOPERATION AGREEMENT
Pursuant to the Voting and Cooperation Agreement (the "Voting
Agreement"), dated as of August 14, 1998, among the Funds and certain directors,
officers and certain related parties of the Company in their capacities as
shareholders of the Company (collectively, the "Stockholders"), each Stockholder
has agreed (i) if stockholder approval is sought, to vote or cause to be voted
all shares of Common Stock which such Stockholder has the power to vote or in
respect of which such Stockholder has the power to direct the vote in favor of
the sale and issuance of shares of Common Stock to the Funds under the Purchase
Agreement, (ii) to vote or cause to be voted all shares of Common Stock which
such Stockholder has the power to vote or in respect of which such Stockholder
has the power to direct the vote in favor of the MSREF Designees, (iii) not to
take any direct or indirect action to remove either of the MSREF Designees from
the Company's Board of Directors without cause and (iv) to vote all of the
shares of Common Stock which such Stockholder has the power to vote or in
respect of which such Stockholder has the power to direct the vote in a manner
such that the Company's Restated Articles of Organization and Amended and
Restated Bylaws do not, at any time, conflict with the provisions of the Voting
Agreement or the Purchase Agreement. See "Purchase Agreement -- Purchase of
Additional Common Stock" above.
REGISTRATION RIGHTS AGREEMENT
The shares of Common Stock issued and issuable to the Funds under the
Purchase Agreement have not been registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Pursuant to the
Registration Rights Agreement, dated as of August 14, 1998, among the Funds and
the Company, after a specified period the Company is required to effect a shelf
registration of shares of Common Stock held by the Funds, any of their Permitted
Transferees and certain of their assignees (collectively, the "Registration
Persons"). In addition, subject to certain conditions and limitations, the
Registration Persons have the right (i) to require the Company to register
shares of Common Stock held by such Registration Person and (ii) when the
Company proposes to register Common Stock to include shares of Common Stock held
by such Registration Person in such registration of Common Stock.
AMENDED AND RESTATED BYLAWS
As required by and simultaneously with the execution of the Purchase
Agreement, the Board of Directors of the Company approved an amendment and
restatement of the Company's bylaws. The amended and restated bylaws differ from
the previous bylaws in that they classify the Board of Directors and limit the
ability to remove directors and fill vacancies. See "Board of Directors and
Board
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Committees." In addition to the foregoing, the amended and restated bylaws
provide (i) for an increase in the ownership interest required to call a special
meeting of stockholders from 10% to 25% and (ii) that shares of stock to which a
nominee has no voting authority as to a particular question or questions brought
before a meeting of stockholders will not be deemed to be cast with respect to
such question or questions, but will be counted for purposes of determining if a
quorum is present.
The foregoing descriptions of Company's Amended and Restated By-Laws,
the Purchase Agreement, the Registration Rights Agreement, and the Voting
Agreement are subject to and qualified in their entirety by reference to such
documents which are attached hereto as Exhibits 3.3, 10.131, 10.132 and 10.133,
respectively, and are incorporated herein by this reference.
Item 7. FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit Description of Exhibit
3.3 Amended and Restated By-Laws of Bluegreen Corporation
10.131 Purchase Agreement dated as of August 14, 1998 by and among the
Bluegreen Corporation, Morgan Stanley Real Estate Investors III,
L.P., Morgan Stanley Real Estate Fund III, L.P., MSP Real Estate
Fund, L.P. and MSREF III Special Fund, L.P.
10.132 Registration Rights Agreement, dated as of August 14, 1998, among
Morgan Stanley Real Estate Investors III, L.P., Morgan Stanley Real
Estate Fund III, L.P., MSP Real Estate Fund, L.P. and MSREF III
Special Fund, L.P. and Bluegreen Corporation
10.133 Voting and Cooperation Agreement, dated as of August 14, 1998, among
Morgan Stanley Real Estate Investors III, L.P., Morgan Stanley Real
Estate Fund III, L.P., MSP Real Estate Fund, L.P., MSREF III Special
Fund, L.P. and certain shareholders of the Bluegreen Corporation
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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: August 31, 1998 By: /s/ ANTHONY M. PULEO
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Anthony M. Puleo, Chief Accounting Officer
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EXHIBIT 3.3
AMENDED AND RESTATED BY-LAWS
OF
BLUEGREEN CORPORATION
(FORMERLY PATTEN CORPORATION)
ARTICLE I
STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders shall
be held within six months after the end of the corporation's fiscal year on such
date, and at such place and time, as may be determined each year by the board of
directors. If in any year the annual meeting is not held within the period
specified above, a special meeting in lieu thereof may be held at a later time
and any elections held or business transacted at such meeting shall have the
same force and effect as if held or transacted at the annual meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders may
be called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least 25% in interest of the capital stock entitled to
vote thereat. Such application shall specify the purposes for which the meeting
is to be called and may designate the date, hour and place of such meeting,
provided, however, that no such application shall designate a date not a full
business day or an hour not within normal business hours as the date or hour of
such meeting without the approval of the president or the board of directors.
SECTION 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
any where within, but not without, the United States.
SECTION 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
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SECTION 5. ACTION AT A MEETING. Except as otherwise provided by the
articles of organization, at any meeting of the stockholders a majority of all
shares of stock then issued, outstanding and entitled to vote (including shares
as to which a nominee has no voting authority as to certain matters brought
before the meeting) shall constitute a quorum for the transaction of any
business. Though less than a quorum be present, any meeting may without further
notice be adjourned to a subsequent date, and at any such adjourned meeting any
business may be transacted which might have been transacted at the original
meeting.
When a quorum is present at any meeting, the affirmative vote of a
majority of the shares of stock present or represented and entitled to vote
shall be necessary and sufficient to the determination of any questions brought
before the meeting, unless a larger vote is required by law, by the articles of
organization or by these by-laws, provided, however, that any election by
stockholders shall be determined by a plurality of the votes cast by the
stockholders entitled to vote in such election. Shares as to which a nominee has
no voting authority as to a particular question or questions brought before the
meeting will not be deemed to be cast with respect to such question or
questions.
Except as otherwise provided by law or by the articles of organization
or by these by-laws, each holder of record of shares of stock entitled to vote
on any matter shall have one vote for each such share held of record by him and
a proportionate vote for any fractional shares so held by him. Stockholders may
vote either in person or by proxy. No proxy dated more than six months before
the meeting named therein shall be valid and no proxy shall be valid after the
final adjournment of such meeting. A proxy with respect to stock held in the
name of two or more persons shall be valid if executed by any one of them unless
at or prior to the exercise of the proxy the corporation receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a stockholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving its invalidity
shall rest on the challenger.
Any election by stockholders and the determination of any other
questions to come before a meeting of the stockholders shall be by ballot if so
requested by any stockholder entitled to vote thereon but need not be otherwise.
SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the stockholders may be taken without a meeting if
all stockholders entitled to vote on the matter consent to the action in writing
and the written consents are filed with the records of the meetings of
stockholders. Such consents shall be treated for all purposes as a vote at a
meeting.
ARTICLE II
DIRECTORS
SECTION 1. NUMBER AND ELECTION. There shall be a board of not less than
three directors. Except as otherwise provided by law or by the articles of
organization, the number of directors shall
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be determined from time to time by the board of directors. Directors shall be
elected, at the annual meeting of the stockholders by such stockholders as have
the right to vote thereon. No director need be a stockholder. Notwithstanding
the above, if there be only two stockholders the number of directors may be not
less than two, and whenever there shall be only one stockholder the number of
directors may not be less than one. No decrease in the number of directors
constituting the board of directors shall shorten the term of any incumbent
director.
SECTION 2. TERM. The provisions of Chapter 156B, Section 50A of the
Massachusetts General Laws with respect to staggered terms for directors shall
apply to this corporation. To the extent any provisions of these by-laws is
inconsistent with the provisions of Chapter 156B, Section 50A of the
Massachusetts General Laws, the provisions of such Chapter 156B, Section 50A
shall govern. The directors of this corporation shall be classified, with
respect to the time for which they severally hold office, into three classes, as
nearly equal in number as possible; the term of office of those of the first
class ("Class I Directors") to continue until the first annual meeting of
stockholders following the January 1, 1999 and until their successors are duly
elected and qualified; the term of office of those of the second class ("Class
II Directors") to continue until the second annual meeting of stockholders
following January 1, 1999 and until their successors are duly elected and
qualified; and the term of office of those of the third class ("Class III
Directors") to continue until the third annual meeting of stockholders following
January 1, 1999 and until their successors are duly elected and qualified. At
each annual meeting of stockholders, the successors to the class of directors
whose term expires at that meeting shall be elected to hold office for a term
continuing until the annual meeting held in the third year following the year of
their election and until their successors are duly elected and qualified.
SECTION 3. RESIGNATIONS. Any director may resign by delivering his
written resignation to the corporation at its principal office or to the
president or clerk or if there by one, to the secretary. Such resignation shall
become effective at the time or upon the happening of the condition, if any,
specified therein or, if no such time or condition is specified, upon its
receipt.
SECTION 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office only for cause (as defined in
Section 50A of Chapter 156B of the Massachusetts General Laws) by the
affirmative vote of a majority of the shares issued, outstanding and entitled to
vote in the election of directors. At any meeting of the board of directors any
director may be removed from office for cause by vote of a majority of the
directors then in office. A director may be removed for cause only after a
reasonable notice and opportunity to be heard before the body proposing to
remove him.
SECTION 5. VACANCIES. Vacancies and newly created directorships,
whether resulting from an increase in the size of the board of directors, from
the death, resignation, disqualification or removal of a director or otherwise,
shall be filled solely by the affirmative vote of a majority of directors then
in office, even though less than a quorum of the board of directors. Any
director elected in accordance with this Section 5 shall hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred or the new directorship was created and until such director's successor
shall have been elected and qualified.
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SECTION 6. REGULAR MEETINGS. Regular meetings of the board of directors
may be held at such times and places within or without The Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders shall be held without
notice immediately after and at the same place as the annual meeting of the
stockholders or the special meeting held in lieu thereof. If in any year a
meeting of the board of directors is not held at such time and place, any
elections to be held or business to be transacted at such meeting may be held or
transacted at any later meeting of the board of directors with the same force
and effect as if held or transacted at such meeting.
SECTION 7. SPECIAL MEETINGS. Special meetings of the board of directors
may be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without The Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
SECTION 8. ACTION AT A MEETING. At any meeting of the board of
directors, a majority of the directors then in office shall constitute a quorum.
Though less than a quorum be present, any meeting may without further notice be
adjourned to a subsequent date or until a quorum be had. When a quorum is
present at any meeting a majority of the directors present may take any action
on behalf of the board except to the extent that a larger number is required by
law, by the articles of organization or by these by-laws.
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the directors may be taken without a meeting if
all the directors consent to the action in writing and the written consents are
filed with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
SECTION 10. POWERS. The board of directors shall have and may exercise
all the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
SECTION 11. COMMITTEES. The board of directors may elect from the board
an executive committee or one or more other committees and may delegate to any
such committee or committees
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any or all of the powers of the board except those which by law, by the articles
of organization or by these by-laws may not be so delegated. Such committees
shall serve at the pleasure of the board of directors. Except as the board of
directors may otherwise determine, each such committee may make rules for the
conduct of its business, but, unless otherwise determined by the board or in
such rules, its business shall be conducted as nearly as may be as is provided
in these by-laws for the conduct of the business of the board of directors.
SECTION 12. MEETING BY TELECOMMUNICATIONS. Members of the board of
directors or any committee elected thereby may participate in a meeting of such
board or committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in a meeting can hear each
other at the same time and participation by such means shall constitute presence
in person at the meeting.
ARTICLE III
OFFICERS
SECTION 1. ENUMERATION. The officers of the corporation shall consist
of a president, a treasurer and a clerk and such other officers, including
without limitation a chairman of the board of directors, a secretary and one or
more vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
SECTION 2. QUALIFICATIONS. No officer need be a stockholder or a
director. The same person may hold at the same time one or more offices unless
otherwise provided by law. The clerk shall be a resident of Massachusetts unless
the corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
SECTION 3. ELECTIONS. The president, treasurer and clerk shall be
elected annually by the board of directors at its first meeting following the
annual meeting of the stockholders. All other officers shall be chosen or
appointed by the board of directors.
SECTION 4. TERM. Except as otherwise provided by law, by the articles
of organization or by these by-laws, the president, treasurer and clerk shall
hold office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
SECTION 5. RESIGNATIONS. Any officer may resign by delivering his
written resignation to the corporation at its principal office or to the
president or clerk, or, if there be one, to the secretary. Such resignation
shall be effective at the time or upon the happening of the condition, if any,
specified therein or, if no such time or condition is specified, upon its
receipt.
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SECTION 6. REMOVAL. Any officer may be removed from office with or
without cause by vote of a majority of the directors then in office. An officer
may be removed for cause only after a reasonable notice and opportunity to be
heard before the board of directors.
SECTION 7. VACANCIES. Vacancies in any office may be filled by the
board of directors.
SECTION 8. CERTAIN DUTIES AND POWERS. The officers designated below,
subject at all times to these by-laws and to the direction and control of the
board of directors, shall have and may exercise the respective duties and powers
set forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of the
board of directors, if there be one, shall, when present, preside (or
designate the person to preside) at all meetings of the board of
directors.
THE PRESIDENT. The President shall have such powers as may
from time to time be delegated by the board of directors. The president
shall preside at all meetings of the stockholders and of the board of
directors, if he is present, unless there be a chairman of the board of
directors who is present at the meeting in which event the chairman
shall preside. The president shall be the chief executive officer of
the corporation.
THE TREASURER. The treasurer shall have such duties and
responsibilities as may be given to the officer by the Board of
Directors or by the chief executive officer.
THE CHIEF FINANCIAL OFFICER. The chief financial officer shall
have such duties and responsibilities as may be given to the officer by
the Board of Directors or by the chief executive officer.
THE CLERK. The clerk shall keep a record of all proceedings of
the stockholders and, if there be no secretary, shall also keep a
record of all proceedings of the board of directors. In the absence of
the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant
clerk, if there be one, otherwise a clerk pro tempore designated by the
person presiding at the meeting, shall perform the duties of the clerk
at such meeting.
THE SECRETARY. The secretary, if there be one, shall keep a
record of all proceedings of the board of directors. In the absence of
the secretary, if there be one, from any meeting of the board of
directors, an assistant secretary, if there be one, otherwise a
secretary pro tempore designated by the person presiding at the
meeting, shall perform the duties of the secretary at such meeting.
SECTION 9. OTHER DUTIES AND POWERS. Each officer, subject at all times
to these by-laws and to the direction and control of the board of directors,
shall have and may exercise, in addition to the duties and powers specifically
set forth in these by-laws, such duties and powers as are
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prescribed by law, such duties and powers as are commonly incident to his office
and such duties and powers as the board of directors may from time to time
prescribe.
ARTICLE IV
CAPITAL STOCK
SECTION 1. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
SECTION 2. CERTIFICATES. Each stockholder shall be entitled to a
certificate or certificates stating the number and the class and the designation
of the series, if any, of the shares held by him, and otherwise in form approved
by the board of directors. Such certificate or certificates shall be signed by
the president or a vice president and by the treasurer or an assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer agent, or by a registrar, other than a director, officer or employee of
the corporation. In case any officer who has signed or whose facsimile signature
has been placed on such certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a time when such shares
are subject to any restriction on transfer pursuant to the articles of
organization, these by-laws or any agreement to which the corporation is a party
shall have the restriction noted conspicuously on the certificate and shall also
set forth on the face or back of the certificate either (i) the full text of the
restriction or (ii) a statement of the existence of such restriction and a
statement that the corporation will furnish a copy thereof to the holder of such
certificate upon written request and without charge.
Every certificate issued for shares of stock at a time when the
corporation is authorized to issue more than one class or series of stock shall
set forth on the face or back of the certificate either (i) the full text of the
preferences, voting powers, qualifications and special and relative rights of
the shares of each class and series, if any, authorized to be issued, as set
forth in the articles of organization or (ii) a statement of the existence of
such preferences, powers, qualifications and rights and a statement that the
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
SECTION 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by
7
<PAGE> 8
these by-laws, the corporation shall be entitled to treat the record holder of
any shares of stock as shown on the books of the corporation as the holder of
such shares for all purposes, including the right to receive notice of and to
vote at any meeting of stockholders and the right to receive any dividend or
other distribution in respect of such shares.
SECTION 4. RECORD DATE. The board of directors may fix in advance a
time, which shall be not more than sixty (60) days before the date of any
meeting of stockholders or the date for the payment of any dividend or the
making of any distribution to stockholders or the last day on which the consent
or dissent of stockholders may be effectively expressed for any purpose, as the
record date for determining the stockholders having the right to notice of and
to vote at such meeting and any adjournment thereof or the right to receive such
dividend or distribution or the right to give such consent or dissent, and in
such case only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
SECTION 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 1. FISCAL YEAR. The fiscal year of the corporation shall begin
on the first Monday following the closest Sunday to March 31 of any calendar
year and end on the closest Sunday to March 31 of any calendar year.
SECTION 2. CORPORATE SEAL. The seal of the corporation shall be in such
form as shall be determined from time to time by the board of directors.
SECTION 3. CORPORATION RECORDS. The original, or attested copies, of
the articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and the stock and transfer records, which shall
contain the names of all stockholders and the record address and the amount of
stock held by each, shall be kept in The Commonwealth of Massachusetts at the
principal office of the corporation in said Commonwealth or at an office of the
transfer agent or of its clerk or of its resident agent, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection by any stockholder for any proper purpose but not
if the purpose for which such inspection is sought is to secure a list of
stockholders or other information for the purpose of selling said list or
information or copies thereof or of using the same for a purpose other than the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
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<PAGE> 9
SECTION 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
SECTION 5. INDEMNIFICATION. To the extent that there are sums available
to be utilized for payment under any policy of insurance held by the
corporation, of fees, costs, charges or expenses of any officer or director of
the corporation who is a defendant in any action which is covered or which may
be covered by any policy of insurance held by the corporation, the corporation
shall not make payment to the officers or directors of such fees, costs or
expenses.
This by-law is intended solely to require the advancement of such fees,
costs, charges or expenses by the carrier, up to and including the policy
limited to and to the extent to require advancement thereof without regard to
any limitation or exception contained in any policy. This by-law in no way
affects the obligation of the corporation to any officer or director entitled to
payment of fees or expenses by the corporation.
ARTICLE VI
CONTROL SHARE STATUTE
The provisions of Chapter 110D of the Massachusetts General Laws
("Chapter 110D") shall not apply to control share acquisitions (as defined in
Chapter 110D) of the corporation.
ARTICLE VII
AMENDMENTS
These by-laws may be amended or repealed at any annual or special
meeting of the stockholders by the affirmative vote of a majority of the shares
of capital stock then issued, outstanding and entitled to vote provided notice
of the proposed amendment or repeal is given in the notice of the meeting.
If authorized by the articles or organization, these by-laws may also
be amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
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<PAGE> 1
EXHIBIT 10.131
SECURITIES PURCHASE AGREEMENT
by and among
MORGAN STANLEY REAL ESTATE FUND III, L.P.,
MORGAN STANLEY REAL ESTATE INVESTORS III, L.P.,
MSP REAL ESTATE FUND, L.P.,
MSREF III SPECIAL FUND, L.P.
and
BLUEGREEN CORPORATION
Dated as of August 14, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I.
DEFINITIONS..............................................................................................1
Section 1.01. Definitions...............................................................................1
ARTICLE II.
SALE AND PURCHASE OF COMMON STOCK........................................................................8
Section 2.01. Sale and Purchase of the Common Stock.....................................................8
Section 2.02. Closing...................................................................................8
Section 2.03. Post-Closing Purchases....................................................................8
Section 2.04. Use of Proceeds..........................................................................10
ARTICLE III.
REPRESENTATIONS AND WARRANTIES..........................................................................10
Section 3.01. Representations and Warranties of the Company............................................10
Section 3.02. Representations and Warranties of Purchasers.............................................26
ARTICLE IV.
ADDITIONAL AGREEMENTS OF THE PARTIES....................................................................28
Section 4.01. Taking of Necessary Action...............................................................28
Section 4.02. Conduct of Business......................................................................28
Section 4.03. Financial Statements and Other Reports...................................................29
Section 4.04. Access...................................................................................30
Section 4.05. Lost, Stolen, Destroyed or Mutilated Securities..........................................31
Section 4.06. No Termination of Obligations Upon Change of Control.....................................31
Section 4.07. Restrictions on Sale or Transfer; Legend.................................................31
Section 4.08. Further Assurances.......................................................................33
Section 4.09. Solicitation.............................................................................33
Section 4.10. Board Representation.....................................................................33
Section 4.11. Board of Directors Approvals.............................................................36
Section 4.12. Preemptive Rights........................................................................37
Section 4.13. Adjustments..............................................................................39
Section 4.14. [Reserved]...............................................................................39
Section 4.15. Financing Fees; Advisory Fees............................................................39
Section 4.16. Shareholder Approval.....................................................................40
Section 4.17. Notices of Purchasers....................................................................41
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE V.
<S> <C>
CONDITIONS OF CLOSING...................................................................................41
Section 5.01. Conditions of Purchase at Closing........................................................41
Section 5.02. Conditions of Sale at Closing............................................................42
Section 5.03. Conditions of Purchase of Remaining Shares...............................................43
Section 5.04. Conditions of Sale of Remaining Shares...................................................45
ARTICLE VI.
[RESERVED]..............................................................................................46
ARTICLE VII.
MISCELLANEOUS...........................................................................................46
Section 7.01. Survival of Representations and Warranties...............................................46
Section 7.02. Notices..................................................................................46
Section 7.03. Entire Agreement; Amendment..............................................................48
Section 7.04. Counterparts.............................................................................48
Section 7.05. Governing Law............................................................................48
Section 7.06. Public Announcements.....................................................................48
Section 7.07. Expenses.................................................................................48
Section 7.08. Indemnification..........................................................................49
Section 7.09. Successors and Assigns...................................................................50
Section 7.10. Jurisdiction.............................................................................50
Section 7.11. Specific Performance.....................................................................51
Section 7.12. Captions.................................................................................51
Section 7.13. Severability.............................................................................51
Section 7.14. Mutual Waiver of Jury Trial..............................................................51
Section 7.15. Exculpation..............................................................................51
Section 7.16. Obligations..............................................................................51
Section 7.17. Schedules................................................................................51
EXHIBITS
Exhibit A - Form of Notice of Issuance
Exhibit B - Form of Registration Rights Agreement
Exhibit C - Form of Shareholder Voting Agreements
Exhibit D - Form of Legal Opinion of Company Counsel
Exhibit E - Amendment to Company Bylaws
</TABLE>
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<PAGE> 4
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated
as of August 14, 1998, by and among MORGAN STANLEY REAL ESTATE FUND III, L.P., a
Delaware limited partnership ("MSREF III"), MORGAN STANLEY REAL ESTATE INVESTORS
III, L.P., a Delaware limited partnership ("MSREI"), MSP REAL ESTATE FUND, L.P.,
a Delaware limited partnership ("MSP"), MSREF III SPECIAL FUND, L.P., a Delaware
limited partnership ("MSREF Special") (MSREF III, MSREI, MSP and MSREF Special
are herein referred to individually as a "Purchaser" and collectively as
"Purchasers") and BLUEGREEN CORPORATION, a Massachusetts corporation (the
"Company"). Capitalized terms not otherwise defined where used herein shall
have the meanings ascribed thereto in Article I.
WHEREAS, Purchasers desire to purchase from the Company, and
the Company desires to sell to Purchasers, in the manner and subject to the
terms and conditions (including, without limitation, the conditions set forth in
Section 2.03(c)) set forth in this Agreement, shares of its Common Stock for an
aggregate purchase price of up to $50,000,000;
WHEREAS, the Company and Purchasers desire to set forth
certain agreements herein.
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and
intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
"AFFILIATE" or "AFFILIATE" shall mean, with respect to any
Person, any other Person which directly or indirectly controls or is
controlled by or is under common control with such Person. As used in
this definition, "control" (including its correlative meanings,
"controlled by" and "under common control with") shall mean possession,
directly or indirectly, of power to direct or cause the direction of
management or policies of such Person, whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise.
"ANCILLARY DOCUMENTS" shall mean the Registration Rights
Agreement and Shareholder Voting Agreements.
"APPLICABLE LAW" shall mean all applicable provisions of all
(i) constitutions, treaties, statutes, laws (including common law),
rules, regulations, administrative positions, ordinances, codes or
orders of any Governmental Entity, self-regulating organization,
securities exchange or other securities trading system, (ii) Consents
of, with or from any Governmental Entity, and (iii) orders, decisions,
injunctions, judgments, awards and decrees of or agreement with any
Governmental Entity.
<PAGE> 5
"BOARD OF DIRECTORS" or "BOARD" shall mean the duly elected
and qualified board of directors of the Company.
"BUSINESS DAY" shall mean any day, other than a Saturday,
Sunday or a day on which banking institutions in the City of New York
or Boca Raton, Florida are authorized or obligated by law or executive
order to close.
"CALCULATION DATE" shall mean the first date on which all the
shares of Common Stock to be sold pursuant to Sections 2.01 and 2.03 of
this Agreement shall have been acquired by Purchasers.
"CAPITALIZED LEASE OBLIGATIONS" means an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with GAAP.
"CHANGE OF CONTROL" shall mean (i) any sale, lease, exchange
or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company
and its Subsidiaries; or (ii) a majority of the Board of Directors of
the Company shall consist of Persons who are not Continuing Directors
of the Company; or (iii) the acquisition by any Person or Group (as
defined in Section 13(d) of the Exchange Act, but excluding Purchasers
or the Permitted Transferees or any of their respective Affiliates) of
the power, directly or indirectly, to vote or direct the voting of
securities having more than 50% of the total voting power for the
election of directors of the Company or of any direct or indirect
holding company thereof.
"CLOSING" and "CLOSING DATE" shall have the meanings set forth
in Section 2.02(a).
"CLOSING SHARE PRICE" shall mean $8.50 per share of Common
Stock. During the Commitment Period and for shares of Common Stock not
yet sold to Purchasers, the Closing Share Price shall be adjusted in
accordance with Section 4.13 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"CO-INVESTMENT PARTNERSHIP" shall mean any investment fund
sponsored by Morgan Stanley, Dean Witter & Co. or its Affiliates to
co-invest alongside Purchasers.
"COMMITMENT PERIOD" shall mean the 18 month period commencing
on the Closing Date.
"COMMON STOCK" shall mean the Common Stock, par value $.01 per
share, of the Company.
"COMPANY ENVIRONMENTAL REPORTS" shall have the meaning set
forth in Section 3.01(t)(vi).
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<PAGE> 6
"COMPANY PROPERTY" shall mean all real property directly or
indirectly owned or leased by the Company and the Company Subsidiaries.
"COMPANY SUBSIDIARY" and "COMPANY SUBSIDIARIES" shall have the
meanings set forth in Section 3.01(d).
"CONSENTS" shall mean any consent, approval, authorization,
waiver, permit, grant, franchise, concession, agreement, license,
exemption or order of registration, certificate, declaration or filing
with, or report or notice to, any Person or Governmental Entity.
"CONTINUING DIRECTOR" shall mean, as of the determination
date, any Person who (i) was a member of the Board of Directors of the
Company on the Closing Date (after giving effect to the provisions of
Section 4.10), or (ii) was nominated for election or elected to the
Board of Directors of the Company with the affirmative vote of a
majority of the Continuing Directors of the Company who were members of
the Board of Directors at the time of such nomination or election.
"CURRENCY AGREEMENT" shall mean, in respect of a Person, any
foreign exchange contract, currency swap agreement or other similar
agreement as to which such Person is a party or a beneficiary.
"DEVELOPMENT PROPERTIES" shall have the meaning set forth in
Section 3.01(r)(ix).
"ENVIRONMENTAL CLAIM" shall have the meaning set forth in
Section 3.01(t)(vii).
"ENVIRONMENTAL LAWS" shall have the meaning set forth in
Section 3.01(t)(vii).
"ENVIRONMENTAL PERMITS" shall have the meaning set forth in
Section 3.01(t)(i).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time, consistently
applied.
"GOVERNMENTAL ENTITY" shall mean any court, department, body,
board, bureau, administrative agency or commission or other
governmental authority or instrumentality, whether federal, state,
local or foreign.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in
Section 3.01(t)(vii).
"INDEBTEDNESS" shall mean, with respect to any Person on any
date of determination (without duplication), (i) the principal of and
premium (if any) in respect of indebtedness of such Person for borrowed
money, (ii) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto) (other than
3
<PAGE> 7
obligations with respect to letters of credit securing obligations
(other than obligations described in clauses (i), (ii) and (v)) entered
into in the ordinary course of business of such Person to the extent
that such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third business
day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit), (iv) all obligations of
such Person to pay the deferred and unpaid purchase price of property
or services (except trade payables and other accrued expenses incurred
in the ordinary course of business), which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
(v) all Capitalized Lease Obligations of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
PROVIDED, HOWEVER, that if such obligations have not been assumed, the
amount of such Indebtedness shall be deemed to be the lesser of the
principal amount of the obligations or the fair market value of the
pledged property or assets, (vii) all Indebtedness of other Persons to
the extent guaranteed by such Person, and (viii) to the extent not
otherwise included in this definition, obligations under Currency
Agreements and Interest Rate Agreements. Unless specifically set forth
above, the amount of Indebtedness of any Person at any date shall be
the outstanding principal amount of all unconditional obligations as
described above, as such amount would be reflected on a balance sheet
prepared in accordance with GAAP, and the maximum liability of such
Person, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations described above at such date.
"INTEREST RATE AGREEMENT" means with respect to any Person any
interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such
Person is party or a beneficiary.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale
or other title retention agreement or lease in the nature thereof).
"MATERIAL ADVERSE EFFECT" shall mean any event, circumstance,
change, development or effect which individually or in the aggregate
would have a material adverse effect on (i) the assets, business,
properties, liabilities, condition (financial or otherwise), or results
of operations of the Company and the Company Subsidiaries taken as a
whole, (ii) the ability of the Company or any Company Subsidiary to
perform its obligations under this Agreement or the Ancillary Documents
or (iii) the validity or enforceability of this Agreement or any of the
Ancillary Documents or the rights or remedies of Purchasers hereunder
and thereunder.
"MAXIMUM SHARES" shall mean that number of shares of Common
Stock equal to $50,000,000 divided by the Closing Share Price, rounded
up to the next whole number in the event the foregoing calculation
results in a fractional share.
4
<PAGE> 8
"MINIMUM INTEREST" shall mean ownership by Purchasers (or
Permitted Transferees) of at least 50% of the aggregate number of
shares of Common Stock theretofore actually issued to Purchasers (or
Permitted Transferees) pursuant to Sections 2.01 and 2.03 of this
Agreement (as may be adjusted for any dividends payable in shares of
Common Stock or any stock split or reverse stock split, combination,
consolidation or reclassification of the Common Stock), but excluding
any shares of Common Stock issued to Purchasers (or any Permitted
Transferees) upon exercise of the preemptive rights set forth in
Section 4.12.
"MINIMUM SHARES" shall mean that number of shares of Common
Stock equal to $25,000,000 divided by the Closing Share Price, rounded
up to the next whole number in the event the foregoing calculation
results in a fractional share.
"MSDW" shall have the meaning set forth in Section 4.15(a).
"NOTICE OF ISSUANCE" shall mean the notice delivered by the
Company to Purchasers in accordance with the provisions of Section
2.03, which shall be substantially in the form attached hereto as
EXHIBIT A.
"PARITY SECURITIES" shall mean any stock of any class or
classes of the Company deemed to rank on a parity with the Common
Stock, either as to dividends or upon liquidation, if the holders of
such class or classes shall be entitled to receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of
the Company, as the case may be, without preference or priority, one
over the other, as between the holders of such stock and the holders of
shares of Common Stock.
"PERMITS" shall have the meaning set forth in Section 3.01(p).
"PERMITTED INTEREST" shall mean ownership by Purchasers (or
Permitted Transferees) of at least 33 1/3% of the aggregate number of
shares of Common Stock theretofore actually issued to Purchasers (or
Permitted Transferees) pursuant to Sections 2.01 and 2.03 of this
Agreement (as may be adjusted for any dividends payable in shares of
Common Stock or any stock split or reverse stock split, combination,
consolidation or reclassification of the Common Stock), but excluding
any shares of Common Stock issued to Purchasers (or Permitted
Transferees) upon exercise of the preemptive rights set forth in
Section 4.12.
"PERMITTED LIENS" shall mean any Lien that constitutes a
"Permitted Lien" under the Indenture for the Senior Notes as in effect
on the date hereof.
"PERMITTED TRANSFEREE" shall mean any Purchaser, Affiliate of
Purchasers, any Co- Investment Partnership and The Morgan Stanley
Special Situations Investment Program and the constituent investors
therein or Affiliates thereof (provided that MSDW or any Subsidiary or
Affiliate thereof has the sole power to vote and dispose of any shares
of Common Stock held by any constituent investors) or Affiliates of
such constituent investors).
"PERSON" or "PERSON" shall mean an individual, corporation,
association, partnership, group (as defined in Section 13(d)(3) of the
Exchange Act), trust, joint venture, business
5
<PAGE> 9
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"PROJECTS" shall have the meaning set forth in Section
3.01(r)(ix).
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration
Rights Agreement to be executed by the Company and Purchasers at the
Closing, which shall be substantially in the form attached hereto as
EXHIBIT B, as amended from time to time in accordance with the terms
thereof.
"REMAINING SHARES" shall have the meaning set forth in Section
2.03(a).
"REQUIRED INTEREST" shall mean ownership by Purchasers (or
Permitted Transferees) of at least 70% of the aggregate number of
shares of Common Stock theretofore actually issued to Purchasers (or
Permitted Transferees) pursuant to Sections 2.01 and 2.03 of this
Agreement (as may be adjusted for any dividends payable in shares of
Common Stock or any stock split, reverse stock split, combination,
consolidation or reclassification of the Common Stock), but excluding
any shares of Common Stock issued to Purchasers (or Permitted
Transferees) upon exercise of the preemptive rights set forth in
Section 4.12.
"REQUIRED SHAREHOLDER APPROVAL" shall have the meaning set
forth in Section 5.03(i).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SECURITIES FILINGS" shall have the meaning set forth in
Section 3.01(h).
"SEC" shall mean the United States Securities and Exchange
Commission.
"SENIOR NOTES" shall mean the 10.5% senior secured notes due
April 1, 2008 of the Company dated April 1, 1998 in the aggregate
original principal amount of $110,000,000.
"SENIOR OFFICER'S CERTIFICATE" shall have the meaning set
forth in Section 4.03(a).
"SENIOR SECURITIES" shall mean any stock of any class or
classes of the Company deemed to rank prior to the Common Stock, either
as to dividends or upon liquidation, if the holders of such class or
classes shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Company, as the case may be, in preference or priority to the holders
of Common Stock.
"SHAREHOLDER VOTING AGREEMENT" shall mean the Voting and
Cooperation Agreement to be executed by Purchasers and the Persons
listed on SCHEDULE 5.01(i) hereto which shall be substantially in the
form attached hereto as EXHIBIT C, as amended from time to time in
accordance with the provisions thereof.
"SUBSEQUENT CLOSING" shall have the meaning set forth in
Section 5.03(b).
6
<PAGE> 10
"SUBSEQUENT CLOSING DATE" shall have the meaning set forth in
Section 2.03(b).
"SUBSIDIARY" shall mean, with respect to any corporation (the
"parent") any other corporation, association or other business entity
of which 50% or more of the shares of the voting stock are owned or
controlled, directly or indirectly, by the parent or one or more
Subsidiaries of the parent, or by the parent and one or more of its
Subsidiaries.
"SURVIVING PERSON" shall mean the continuing or surviving
Person of a merger, consolidation or other corporate combination, the
Person receiving a transfer of all or a substantial part of the
properties and assets of the Company, or the Person consolidating with
or merging into the Company in a merger, consolidation or other
corporate combination in which the Company is the continuing or
surviving Person, but in connection with which the Common Stock of the
Company is exchanged or converted into the securities of any other
Person or the right to receive cash or any other property.
"TAX" means any federal, state, local or foreign taxes,
including, but not limited to, income, gross receipts, windfall
profits, premium, value added, severance, stamp, occupation, property,
environmental (including Taxes under Code Section 59A), production,
sales, use, license, excise, franchise, payroll, employment,
withholding or similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such
penalties.
"TAX RETURNS" means any return, report, information return
form, declaration, claim for refund, statement or other document
(including any amendments thereto and including any schedule or
attachment thereto) in connection with Taxes that are required to be
filed with any Governmental Entity or other tax authority, or sent or
provided to another party under Applicable Law.
"THRESHOLD DATE" shall mean the Business Day on which the
Company issues to Purchasers (or Permitted Transferees) any shares of
Common Stock that, when added to the shares of Common Stock previously
issued to Purchasers (or Permitted Transferees) under the terms of this
Agreement, results in the ownership by Purchasers (and Permitted
Transferees) of an aggregate of 20% or more of the issued and
outstanding shares of Common Stock on the Closing Date (but excluding
any shares of Common Stock issued to Purchasers or Permitted
Transferees on the Closing Date).
"TIMESHARE/RESIDENTIAL BUSINESS" shall mean the business of
(i) acquiring, developing, marketing, operating and financing vacation
ownership interests at resorts, (ii) acquiring residential land parcels
and developing, marketing and financing subdivided residential lots to
retail customers, and (iii) any other business incidental to any of the
foregoing, whether or not conducted by the Company or any Company
Subsidiary on the Closing Date including, without limitation, the title
company business.
"TOTAL DEBT TO TOTAL MARKET CAPITALIZATION RATIO" means as of
any particular date, the ratio of (i) the Company's total Indebtedness
(but excluding any Indebtedness arising from pledged or hypothecated
receivables (land or timeshare) of the Company or any
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<PAGE> 11
Company Subsidiary) (less unrestricted cash of the Company) to (ii) the
Company's total market capitalization (i.e., market value of the issued
and outstanding Common Stock) plus the Company's total Indebtedness.
"TRANSFER" shall have the meaning as set forth in Section
4.07(a).
ARTICLE II.
SALE AND PURCHASE OF COMMON STOCK
Section 2.01. SALE AND PURCHASE OF THE COMMON STOCK. At the
Closing, subject to all of the terms and conditions of this Agreement, including
the satisfaction or waiver of the conditions set forth in Sections 5.01 and
5.02, and in reliance upon the representations, warranties, covenants and
agreements of the parties set forth herein, the Company shall sell to
Purchasers, and Purchasers shall purchase from the Company, that number of
shares of Common Stock (which shall be a whole number of shares) equal to the
Minimum Shares for an aggregate purchase price equal to such number of shares of
Common Stock to be purchased multiplied by the Closing Share Price.
Section 2.02. CLOSING.
(a) Subject to the satisfaction or waiver of the
conditions set forth in Sections 5.01 and 5.02 of this Agreement, the
purchase and sale of the shares of Common Stock pursuant to Section
2.01 (the "Closing") shall take place at the offices of Jones, Day,
Reavis & Pogue, counsel to Purchasers, at 599 Lexington Avenue, 32nd
Floor, New York, New York 10017, on August __, 1998 (the "Closing
Date"), or at such other time and place as may be mutually agreed upon
in writing by Purchasers and the Company.
(b) At the Closing, (i) the Company will deliver to
Purchasers certificates for the shares of Common Stock to be sold and
issued in accordance with the provisions of Section 2.01 registered in
the respective names and proportions set forth in a notice delivered by
Purchasers to the Company at least two Business Days prior to the
Closing Date; (ii) Purchasers shall deliver the aggregate purchase
price for the shares to be sold and issued and each Purchaser, in full
payment for such shares of Common Stock, will deliver to the Company in
immediately available funds via wire transfer to such account or
accounts as the Company shall specify in writing to Purchasers at least
two Business Days prior to the Closing Date, an amount equal to its pro
rata share of the purchase price to be paid by such Purchaser as set
forth in the notice described in clause (i) above; and (iii) each party
shall take or cause to be taken such other actions, and shall execute
and deliver such other instruments or documents, as shall be required
under Article V hereof.
Section 2.03. POST-CLOSING PURCHASES.
(a) Subject to all of the terms and conditions of
this Agreement, including the satisfaction or waiver of the conditions
set forth in Sections 5.03 and 5.04 hereof, the Company shall, at its
election, sell to Purchasers, and Purchasers shall purchase from the
Company, at any time and from time to time prior to expiration of the
Commitment Period
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up to an aggregate number of shares of Common Stock equal to the
Maximum Shares less the Minimum Shares (the "Remaining Shares") for a
purchase price per share equal to the Closing Share Price. In the event
that the determination of the number of shares of Common Stock to be
issued at any Subsequent Closing Date would result in a fractional
share of Common Stock being issued to Purchasers, such fractional share
shall be rounded up to the next whole number and such adjusted amount
shall constitute the number of shares of Common Stock to be issued to
Purchasers on such Subsequent Closing Date. If at any time the Company
desires to sell and issue all or any portion of such Remaining Shares
to Purchasers and has obtained approval of the Board of Directors to
issue such Remaining Shares, the Company shall deliver a Notice of
Issuance to each Purchaser not less than 15 Business Days prior to the
proposed date of the sale and purchase set forth therein which shall
set forth the number of shares of Common Stock to be sold and purchased
(which shall have an aggregate minimum purchase price of $1,000,000
unless the minimum purchase price of any Remaining Shares left after
giving effect to such purchase and sale shall be less than $1,000,000,
in which case the number of shares of Common Stock to be purchased and
sold shall be all of the unsold Remaining Shares), the aggregate
purchase price thereof (which shall be equal to such number of shares
of Common Stock to be sold and purchased multiplied by the Closing
Share Price) and any other information required to be stated therein.
All such unsold Remaining Shares shall be sold and purchased pursuant
to not more than two Notices of Issuance per month each for an
aggregate minimum purchase price of $1,000,000 (or the remaining amount
in the case of the last sale and purchase) and shall be sold and
purchased prior to expiration of the Commitment Period. Purchasers'
obligations to purchase any of the Remaining Shares as requested by the
Company pursuant to a Notice of Issuance shall be subject to the
satisfaction or waiver of the conditions set forth in Section 5.03 of
this Agreement.
(b) Purchasers shall purchase the number of Remaining
Shares set forth in a Notice of Issuance delivered to Purchasers on the
day (which shall be a Business Day and shall not be less than 15
Business Days after delivery of the Notice of Issuance to such
Purchaser) and at the location set forth therein, or at such other time
and place as may be mutually agreed upon in writing by Purchasers and
the Company. On each such date (each a "Subsequent Closing Date"), (i)
the Company will deliver to Purchasers certificates for such Remaining
Shares to be purchased registered in the respective names and
denominations set forth in a notice delivered by Purchasers to the
Company at least two Business Days prior to the Subsequent Closing
Date, and (ii) the Purchasers, in full payment for such Remaining
Shares, will deliver to the Company in immediately available funds via
wire transfer to such account or accounts as the Company shall specify
in writing to Purchasers at least two Business Days prior to the
Subsequent Closing Date, an amount equal to the purchase price to be
paid by the Purchasers (which shall be equal to the number of Remaining
Shares to be purchased by the Purchasers on such Subsequent Closing
Date multiplied by the Closing Share Price).
(c) In the event that (i) on or prior to expiration
of the Commitment Period, the Company has not offered to sell to
Purchasers all of the Remaining Shares or (ii) Purchasers receive
notice from the Company in accordance with Section 4.06 hereof of the
occurrence of, or the execution by the Company of a definitive
agreement which will result in a Change of Control and the satisfaction
or waiver of all conditions of closing (other
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<PAGE> 13
than the conditions which can only be satisfied on the closing date of
such transaction) required under the terms of such definitive
agreement, then, in each such case, and subject to the satisfaction of
the conditions set forth in Section 5.04, Purchasers shall have the
right, but not the obligation, to purchase any or all Remaining Shares
not sold to Purchasers as of such date at a purchase price per share
equal to the Closing Share Price, and the closing for the sale and
issuance shall take place within 15 Business Days following expiration
of the Commitment Period or receipt of the notice described in clause
(ii) above hereof, as the case may be. Notwithstanding the foregoing,
Purchasers' right to purchase any Remaining Shares upon expiration of
the Commitment Period under clause (i) above shall be subject to
satisfaction of either of the following conditions (which shall not be
conditions to Purchasers' right to purchase any Remaining Shares under
clause (ii) above) in addition to those set forth in Sections 5.03 and
5.04 hereof:
(i) the Company achieving total revenues of
at least $220,000,000 for the 12-month period ended on the
last day of the third full fiscal quarter after the Closing
Date; or
(ii) the Company achieving net income
(excluding write-offs) of at least $15,000,000 for the
12-month period ended on the last day of the third full fiscal
quarter after the Closing Date.
Section 2.04. USE OF PROCEEDS. The proceeds to be received by
the Company from the sale and issuance of any shares of Common Stock to
Purchasers hereunder shall be used for purposes of funding future acquisitions
and development plans, expanding the Company's operations, repaying existing
Indebtedness of the Company or any Company Subsidiary and such other items as
the Board of Directors may approve from time to time. Notwithstanding the
foregoing, the Company may utilize up to $34,000,000 of the proceeds for
purposes of funding the repurchase of all or any portion of the Company's 8.25%
convertible subordinated debentures due 2012 in accordance with the Company's
right to call such debentures and the holders' option to elect to receive cash
in lieu of shares of Common Stock as payment thereof.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, Purchasers as follows:
(a) ORGANIZATION AND GOOD STANDING. The Company and
each Company Subsidiary is a corporation or partnership duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it was incorporated or organized and has all
requisite power and authority (corporate or otherwise) to own, operate
and lease its properties and to carry on its business as it is now
being conducted. The Company and each Company Subsidiary is duly
licensed or qualified as a foreign corporation to transact business and
is in good standing under the laws of each other jurisdiction in which
its ownership or lease of assets or conduct of its business requires
such qualification, except
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<PAGE> 14
where the failure to be so licensed or qualified in any such
jurisdiction would not have a Material Adverse Effect.
(b) AUTHORIZATION. The Company has full corporate
power and authority to enter into this Agreement and the Ancillary
Documents and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and
each Ancillary Document and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board
of Directors of the Company. Other than as set forth in Section 4.16,
no shareholder approval or other corporate proceedings on the part of
the Company are necessary to authorize the execution, delivery and
performance of this Agreement and each Ancillary Document and the
transactions contemplated hereby and thereby. This Agreement has been,
and on or prior to the Closing Date each Ancillary Document will be,
duly and validly executed and delivered by the Company. This Agreement
constitutes, and upon its execution on or prior to the Closing Date
each Ancillary Document will constitute, a valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity.
(c) CAPITALIZATION. SCHEDULE 3.01(c) sets forth as of
the date hereof (i) the authorized capital stock of the Company, the
number of shares of each class of capital stock issued and outstanding
and the number of shares of Common Stock reserved for issuance in
connection with employee benefit, stock option and dividend
reinvestment plans, and (ii) all options, warrants, convertible
securities, subscriptions, scrip calls, contracts, undertakings,
arrangements and commitments to issue which may result in the issuance
of equity securities of the Company, in each case setting forth the
identity (which may be by class) of the holder thereof, the exercise or
similar price and the date of expiration or termination thereof. All of
the issued and outstanding shares of the Company's capital stock have
been duly and validly authorized and issued and are fully paid and
non-assessable and have been issued in compliance with all applicable
requirements of law and are not subject to any preemptive or similar
rights. Other than as set forth in SCHEDULE 3.01(c) or pursuant to this
Agreement, as of the date hereof (i) there are no options, warrants,
subscriptions, scrip calls, commitments or other agreements which
obligate the Company to issue, sell or transfer, or repurchase, redeem
or otherwise acquire any equity securities of the Company, (ii) there
are no outstanding securities or rights convertible into or
exchangeable for shares of any capital stock of the Company, and (iii)
there are no contracts, commitments, understandings or arrangements
which obligate the Company to issue additional shares of its capital
stock or equity securities or rights convertible into or exchangeable
for shares of any capital stock of the Company, or options, warrants or
rights to purchase or acquire any additional shares of its capital
stock. Except as set forth in SCHEDULE 3.01(c), as of the date hereof,
there are no contracts, agreements or understandings between the
Company and any Person granting such Person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
Person or to require the Company to include such securities in any
other registration statement filed by the Company under the Securities
Act. The Company has duly and validly reserved from its issued and
outstanding shares of Common Stock the Maximum Shares. The shares of
Common Stock to be sold and issued to Purchasers during the
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<PAGE> 15
Commitment Period will, when issued to and paid for by Purchasers in
accordance with this Agreement, be duly and validly authorized and
issued and will be fully paid and non-assessable and will have been
issued in compliance with all applicable requirements of law and not be
subject to any preemptive or similar rights.
(d) CAPITALIZATION OF COMPANY SUBSIDIARIES. SCHEDULE
3.01(d) lists as of the date hereof all Subsidiaries of the Company and
their respective jurisdictions of incorporation or formation
(collectively, the "Company Subsidiaries" and each individually a
"Company Subsidiary"). Except as set forth in SCHEDULE 3.01(d), as of
the date hereof the Company owns, directly or indirectly, all the
shares of outstanding capital stock of, or all partnership interests
in, each Company Subsidiary. Except as set forth on SCHEDULE 3.01(d),
as of the date hereof there are no loans from the Company to any
Company Subsidiary or from any Company Subsidiary to the Company.
Except as set forth in SCHEDULE 3.01(d), as of the date hereof (i)
there are no outstanding options, warrants, scrip calls, subscriptions,
commitments or other agreements which obligate any Company Subsidiary
to issue, sell or transfer, or repurchase, redeem or otherwise acquire
any securities of such Company Subsidiary, (ii) there are outstanding
no securities or rights convertible into or exchangeable for shares of
any capital stock of, or partnership interests in, any Company
Subsidiary and (iii) there are no contracts, commitments,
understandings or arrangements which obligate any Company Subsidiary to
issue additional shares of its capital stock or partnership interests
or options, warrants or rights to purchase or acquire any additional
shares of its capital stock or partnership interests. All of the issued
and outstanding shares of capital stock of each of the Company
Subsidiaries are duly authorized, validly issued, fully paid and
non-assessable and have been issued in compliance with all applicable
requirements of law, and, as of the date hereof, except as set forth in
SCHEDULE 3.01(D), are owned by the Company free and clear of any Lien,
preemptive rights, purchase options, purchase rights, calls, exchange
rights or other claims with respect thereto. Except as set forth in
SCHEDULE 3.01(D) and for loans made to customers, including the Company
Subsidiaries listed therein, as of the date hereof none of the Company
or the Company Subsidiaries own directly or indirectly any interest or
investment in any corporation, partnership, joint venture, business,
trust or Person (other than investments in short-term investment
securities).
(e) NO VIOLATION. Except as set forth in SCHEDULE
3.01(e), the execution, delivery and performance by the Company of this
Agreement and the Ancillary Documents, the consummation of the
transactions by the Company contemplated hereby and thereby and the
compliance by the Company with any of the provisions hereof and thereof
will not conflict with, violate or result in a breach of any provision
of, require a Consent under, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of or accelerate the
performance required by, or result in a right of termination or
acceleration under, (i) any provision of the articles of organization,
certificate of incorporation, bylaws or other governing instrument of
the Company or any Company Subsidiary or (ii) (x) any mortgage, note,
indenture, deed of trust, lease, loan agreement, warrant, registration
rights agreement or other agreement or instrument binding on the
Company or any Company Subsidiary or (y) assuming that the clearances,
filings, Consents and approvals specified in SCHEDULE 3.01(f) have been
obtained or made and any waiting period applicable thereto has expired
or been terminated, any permit, concession, grant, franchise, license,
judgment, order, decree, ruling, injunction,
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<PAGE> 16
statute, law, ordinance, rule, regulation or administrative position of
any Governmental Entity, self-regulating organization, securities
exchange or securities trading system or any other Person, in the case
of (x) or (y), binding on or otherwise applicable to the Company, the
Company Subsidiaries or their respective properties or assets, and the
result of which could reasonably be expected to have a Material Adverse
Effect.
(f) CONSENTS. Except as set forth in SCHEDULE
3.01(f), no Consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required in connection with the execution, delivery and performance of
this Agreement and the Ancillary Documents by the Company and the
consummation of the transactions by the Company hereunder and
thereunder, including, without limitation, any required filings with
the Federal Trade Commission ("FTC") and the Department of Justice
("DOJ") referred to in Section 4.01.
(g) FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED
LIABILITIES.
(i) The Company has previously delivered to
Purchasers copies of (a) the consolidated balance sheet of the
Company and the Company Subsidiaries at March 30, 1997 and
March 29, 1998, and the related consolidated statements of
operations, statements of shareholders' equity and cash flows
for the fiscal years ended March 31, 1996, March 30, 1997 and
March 29, 1998, inclusive, as reported in the Company's Annual
Report on Form 10-K for the fiscal year ended March 29, 1998,
filed by the Company with the SEC under the Exchange Act, in
each case accompanied by the audit report of Ernst & Young
LLP, independent public accountants of the Company, and (b)
the unaudited consolidated balance sheet of the Company and
the Company Subsidiaries at June 28, 1998 and the related
unaudited consolidated statement of operations, statements of
shareholders' equity and cash flows for the three month period
then ended. All of such financial statements fairly present
the consolidated financial position of the Company and the
Company Subsidiaries as of the dates shown and the results of
the consolidated operations, statements of shareholders'
equity and cash flows of the Company and the Company
Subsidiaries for the respective fiscal periods or as of the
respective dates therein set forth, in each case subject, as
to interim statements, to changes resulting from year-end
adjustments (none of which will be material in amount and
effect). All of such financial statements have been prepared
in accordance with GAAP consistently applied during the
periods involved, except as otherwise set forth in the notes
thereto. The Company has provided to Purchasers the fiscal
year 1999 budget (for the fiscal year ending March 31, 1999)
of the Company which was prepared in good faith and was based
upon assumptions which the Company believed were reasonable.
Purchasers understand that the Company's actual results may
vary from the budget and no assurances can be given that the
Company will meet its projections. As of the date hereof, the
Company is not aware of any facts or circumstances which would
cause the Company not to attain the projections of aggregate
sales and net income set forth in the 1999 budget.
(ii) As of the date hereof and except as
otherwise contemplated by this Agreement, the Company and the
Company Subsidiaries have no liabilities
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or obligations of any nature (absolute, accrued, contingent or
otherwise) whether due or to become due, which are not fully
reflected or reserved against in the balance sheet as of June
28, 1998 included in such financial statements, except for
liabilities that may have arisen in the ordinary course of
business and consistent with past practice and that, either
individually or in the aggregate, do not have and could not
reasonably be expected to have a Material Adverse Effect.
(h) SECURITIES FILINGS. The Company has filed all
reports, registration statements, proxy statements, schedules, forms
and other documents, together with any amendments and supplements
required to be made with respect thereto, that were required to be
filed with (i) the SEC under the Securities Act or the Exchange Act and
(ii) any applicable state securities authorities (all such reports,
statements, schedules, forms and other documents are referred to herein
collectively as the "Securities Filings"). As of their respective
dates, the Securities Filings, including any financial statements
contained therein, complied in all material respects with all of the
rules and regulations of the SEC promulgated under the Securities Act
or the Exchange Act and of any other regulatory authority with which
they were filed, and, except as disclosed on SCHEDULE 3.01(h), none of
the Securities Filings contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading and
were complete and accurate in all material respects. Except for general
market and economic conditions applicable to the Company's industries
in general, there are no facts known to the Company existing as of the
date hereof peculiar to the Company or any Company Subsidiary which the
Company has not disclosed in the Securities Filings or to Purchasers or
their counsel in writing which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(i) COMPLIANCE WITH APPLICABLE LAW. Neither the
Company nor any Company Subsidiary is in breach of, default under, or
violation of its Restated Articles of Organization, certificate of
incorporation, bylaws or other governing instrument or any law,
statute, order, rule, regulation, policy or guideline of any
Governmental Entity applicable to the Company or any Company
Subsidiary, other than such defaults or violations which, either
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. The business of the Company and of each
Company Subsidiary has been, and is currently being, conducted in
compliance with all Applicable Laws of any Governmental Entity,
including, without limitation, state condominium statutes, state time
share statutes, the Federal Trade Commission Act, the Truth-in-Lending
Act and Regulation Z promulgated thereunder, the Fair Housing Act, the
Fair Debt Collection Practices Act, the Equal Credit Opportunity Act
and Regulation B promulgated thereunder, the Interstate Land Sales Full
Disclosure Act, the Home Mortgage Disclosure Act and Regulation C
promulgated thereunder, the Civil Rights Acts of 1964 and 1968,
building codes, land use laws, environmental laws, federal and state
telemarketing laws, and seller of travel or travel agency laws, except
where the failure to comply, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(j) LEGAL PROCEEDINGS. There are no legal,
administrative, arbitration or other proceedings, claims, actions,
inquiries or governmental investigations of any nature
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pending against the Company or any Company Subsidiary as of the date
hereof or to which the Company or any Company Subsidiary or any of
their assets are subject as of the date hereof that were required to be
disclosed in the Securities Filings which were not so disclosed, and,
to the knowledge of the Company, there has not been threatened any such
proceeding, claim, action, inquiry or governmental investigation
against the Company or any Company Subsidiary, in each case which,
either individually or in the aggregate, would, if adversely
determined, have a Material Adverse Effect. Except as set forth in
SCHEDULE 3.1(j), as of the date hereof, neither the Company nor any
Company Subsidiary is subject to any outstanding order, writ, judgment,
injunction, or decree of any Governmental Entity.
(k) EMPLOYEE BENEFITS.
(i) Each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any other
material employee plan, agreement or arrangement that is
maintained or otherwise contributed to by the Company or the
Company Subsidiaries for the benefit of their employees
(collectively, "Company Plans") has been administered and is
in material compliance with the terms of such plan and all
Applicable Laws. Each of the Company Plans (including
amendments thereto) in existence as of the date hereof is
fully described in or has been included as an exhibit to the
Securities Filings or is otherwise set forth in SCHEDULE
3.01(k).
(ii) As of the date hereof, there are no
pending or, to the knowledge of the Company, threatened,
actions, claims or lawsuits which have been asserted or
instituted involving or arising out of the Company Plans, with
respect to the operation or administration of such plans
(other than routine benefit claims).
(iii) Neither the Company nor any Company
Subsidiary has incurred, and no event has occurred which would
be reasonably likely to result in, any material unfunded
liability under ERISA or the Code with respect to any Company
Plan (other than routine expenses related to administration of
the Company Plans and payment of routine benefit claims),
including, but not limited to, liability resulting from a
complete or partial withdrawal from a multiemployer plan
within the meaning of Section 3(37) of ERISA or a termination
of a Company Plan which is covered by Title IV of ERISA, but
which is not a multiemployer plan.
(iv) No Company Plan exists which could
result in the payment to any employee of the Company or any
Company Subsidiary of any money or other property or rights or
accelerate or provide any other rights or benefits to any such
employee as a result of the transaction contemplated by this
Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Section 280G of the
Code.
(v) As of the date hereof, neither the
Company nor any Company Subsidiary contributes to or is
obligated to contribute to, or has contributed to or has been
obligated within the past five years to contribute to, any
multiemployer plan within the meaning of Section 3(37) of
ERISA.
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(vi) Except as disclosed in the Securities
Filings or set forth on SCHEDULE 3.01(k), as of the date
hereof, neither the Company nor any Company Subsidiary
maintains any plans or programs providing post-retirement
medical benefits (except as required by law), death benefits
or other post-retirement welfare benefits.
(vii) The Internal Revenue Service has
issued a letter for each Company Plan existing as of the date
hereof that is intended to be qualified under Section 401(a)
of the Code, determining that such plan is so qualified and is
exempt from tax under Section 501(a) of the Code, and nothing
has occurred since the date of such determination letter that
has adversely affected such qualification.
(l) ABSENCE OF CERTAIN CHANGES. Except as set forth
in the Securities Filings or on SCHEDULE 3.01(l), since March 29, 1998
and through the date hereof, the business of the Company and each
Company Subsidiary has been operated in the ordinary course of business
and consistent with past practice and, except as set forth in the
Securities Filings or in SCHEDULE 3.01(l) or as specifically provided
in this Agreement or the Ancillary Documents:
(i) except for circumstances affecting the
Company's industry generally, there has been no event,
condition or change that individually or in the aggregate has
had or could reasonably be expected in the foreseeable future
to have a Material Adverse Effect;
(ii) neither the Company nor any Company
Subsidiary has sold or transferred any of the assets it owns
except in the ordinary course of business and consistent with
past practice (it being understood that the sale of
receivables is in the ordinary course);
(iii) neither the Company nor any Company
Subsidiary has incurred any Indebtedness other than
Indebtedness (x) to sellers of real property and to trade
creditors incurred in the ordinary course of business and
consistent with past practice, (y) under the Senior Notes, and
(z) under the existing credit facilities with Heller
Financial, Inc., Foothill Capital Corporation and Finova
Capital Corporation;
(iv) neither the Company nor any Company
Subsidiary has changed its accounting policies or procedures
as in effect on March 29, 1998;
(v) except as contemplated by this
Agreement, neither the Company nor any Company Subsidiary has
amended or in any way altered its Restated Articles of
Organization, certificate of incorporation, bylaws,
partnership agreement or other governing document (provided
that the foregoing shall not apply to the reorganization and
restructuring of certain Company Subsidiaries on the terms
previously disclosed to Purchasers);
(vi) the Company has not (A) changed the
number of shares of authorized capital stock of the Company,
(B) except as contemplated by this
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Agreement, issued or granted any option, warrant, call,
commitment, subscription, right to purchase or agreement of
any character relating to the authorized or issued and
outstanding capital stock of the Company or any Company
Subsidiary, or any securities convertible into shares of such
stock (except for grants of options to purchase Common Stock
approved by the Company's Board of Directors to be granted
pursuant to director or employee benefit plans of the
Company), (C) split, combined or reclassified any shares of
the capital stock of the Company, (D) declared, set aside or
paid any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of
the capital stock of the Company, or (E) redeemed or otherwise
acquired any shares of such capital stock;
(vii) the Company has not increased the
number of directors of the Board other than as required by
Section 4.10 hereof;
(viii) neither the Company nor any Company
Subsidiary has acquired any real estate assets, or any other
assets other than in the ordinary course of business and
consistent with past practice;
(ix) neither the Company nor any Company
Subsidiary has entered into employment agreements with any
employee (other than an agreement terminable at will without
any financial penalty), or granted any increase in the
compensation (including employee benefits) of any employee,
except for increases (A) in the ordinary course of business
and consistent with past practice, (B) as a result of
collective bargaining or (C) as required by any employment or
other agreement, policy or plan currently in effect; and
(x) neither the Company nor any Company
Subsidiary has agreed, whether in writing or otherwise, to
take any action that, if taken, would render any of the
representations set forth in this SECTION 3.01(l) untrue in
any material respect.
(m) DISCLOSURE. Neither this Agreement nor any
Ancillary Document nor any certificate or disclosure statement
delivered by or on behalf of the Company or the Company Subsidiaries
prior to the date hereof, nor any other written materials delivered by
the Company to Purchasers prior to the date hereof in connection with
the transactions contemplated hereby and identified in SCHEDULE
3.01(m), as of the date thereof contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. Other than
competitive factors and economic conditions affecting the Company's
industry generally, there are no facts known to the Company existing as
of the date hereof which the Company has not disclosed to Purchasers or
their counsel in writing which would cause any of the materials
described in SCHEDULE 3.01(m) to contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
(n) SECURITIES LAW MATTERS. None of the Company, the
Company Subsidiaries or any of their respective Affiliates or any other
Person acting on their behalf
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has, in connection with the offer and sale of the Common Stock
hereunder, engaged in (a) any form of general solicitation or general
advertising (as those terms are used within the meaning of Rule 502(c)
under the Securities Act), (b) assuming the accuracy of Purchasers'
representations in Section 3.02(d), any action involving a public
offering within the meaning of Section 4(2) of the Securities Act, or
(c) assuming the accuracy of Purchasers' representations in Section
3.02(d), and compliance by Purchasers and the Permitted Transferees
with the terms hereof, any action that would require the registration
under the Securities Act of the offering and sale of the Common Stock
pursuant to this Agreement or that would violate applicable state
securities or "blue sky" laws. The Company has not made and will not
make, directly or indirectly, any offer or sale of Common Stock of the
same or similar classes as the Common Stock if, as a result of such
offer or sale, the offer and sale of the Common Stock contemplated
hereby could fail to be entitled to exemption from the registration
requirements of the Securities Act. As used herein, the terms "offer"
and "sale" have the meanings specified in Section 2(3) of the
Securities Act.
(o) BROKERS AND FINDERS. Except in connection with
the "fairness opinion" obtained by the Company in connection with the
transactions contemplated hereby, neither the Company nor any Company
Subsidiary nor any of their respective officers, directors, Affiliates,
employees or agents has utilized any broker, finder, placement agent or
financial advisor or incurred any liability for any fees or commissions
in connection with any of the transactions contemplated hereby or by
the Ancillary Documents except as provided in this Agreement.
(p) LICENSES AND PERMITS. The Company and the Company
Subsidiaries possess all material licenses, franchises, permits,
certificates, Consents, orders, approvals and authorizations
(collectively, the "Permits") and have made all declarations and
filings with all Governmental Entities necessary under law or otherwise
to conduct their businesses as currently being conducted, and each such
Permit is valid and subsisting and in full force and effect, except
where the failure to possess or do any of the foregoing could not
reasonably be expected to have a Material Adverse Effect. No
negotiation, application, action or proceeding is pending for the
renewal or modification of any material Permits which in any case could
reasonably be expected to have a Material Adverse Effect, and no
application, petition, objection, opposition, action or proceeding is
pending or, to the knowledge of the Company, threatened that may result
in the denial of an application for renewal, revocation, modification,
nonrenewal or suspension of any Permit, the issuance of a
cease-and-desist order, or the imposition of any administrative or
judicial sanction with respect to the Company or the Company
Subsidiaries which in any case could reasonably be expected to have a
Material Adverse Effect. The Timeshare/Residential Business of the
Company and the Company Subsidiaries is being operated in accordance
with all applicable Permits, except where the failure to comply could
not reasonably be expected to have a Material Adverse Effect.
(q) MATERIAL AGREEMENTS. Each contract, agreement,
understanding, arrangement and commitment (the "Contracts") which is
existing on the date hereof and is Material to the business, results of
operations, financial condition, prospects or operations of the Company
and the Company Subsidiaries is described in or has been included as an
exhibit to the Securities Filings or is otherwise set forth on SCHEDULE
3.01(q), including,
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without limitation, all Contracts for Indebtedness. A true and correct
copy of each Contract set forth in SCHEDULE 3.01(q) has been delivered
or made available to Purchasers including, without limitation, all
amendments and supplements thereto and any schedules and exhibits
attached thereto. For purposes of this Section 3.01(q), a Contract is
deemed "Material" if such Contract (i) has a maturity of one year or
more and (ii) involves (or could reasonably be expected to involve) (x)
in the case of any Contracts for the sale or purchase of any real
property or timeshare inventory or any Contracts relating to
construction or renovation or capital expenditures or capital additions
or improvements, a dollar amount in excess of $2,000,000 per annum or
(y) in the case of any other Contracts not described in (x), a dollar
amount in excess of $1,000,000 per annum. Each Contract referred to
above and existing on the date hereof is a valid, binding and
enforceable agreement of the Company or a Company Subsidiary and, no
event has occurred that has caused, or with the passage of time or
giving of notice would cause, nor has the execution of this Agreement
caused, or will the transactions contemplated under this Agreement
cause the Company or any Company Subsidiary to be in default under a
material provision, or give rise to a right of acceleration, or
termination under any Contract, the result of which could reasonably be
expected to have a Material Adverse Effect.
(r) PROPERTIES AND INSURANCE.
(i) The Securities Filings or SCHEDULE
3.01(r)(i) set forth all of the material real property
directly or indirectly owned or leased by the Company and the
Company Subsidiaries as of the date hereof. Each of the
Company and each Company Subsidiary has good and marketable
title in fee simple to all such Company Property owned by it
and good and valid title to all personal property owned by it
that is material to its business, in each case, free and clear
of all Liens other than the Permitted Liens, those Liens
disclosed on SCHEDULE 3.01(r)(i) and those Liens which would
not, either individually or in the aggregate, have a Material
Adverse Effect. The Company and the Company Subsidiaries have
in full force and effect property damage, liability and other
insurance with financially sound and reputable insurers at
levels of coverage reasonable and customary in the Company's
industry and, as of the date hereof, there is no material
claim by the Company or any Company Subsidiary pending under
any such insurance policies as to which coverage has been
questioned, denied or disputed by the underwriters of such
policies. Except as set forth in SCHEDULE 3.01(r), policies of
title insurance (issued on customary American Land Title
Association forms) have been issued by national title
insurance companies insuring the fee simple title of the
Company or the Company Subsidiaries, as the case may be, to
each of the Company Properties in amounts at least equal to
the original cost thereof subject only to Permitted Liens,
such policies are in full force and effect and no claim has
been made under any such policy, and the Company is not aware
of any fact or information which would constitute a defense by
the issuer of any such policy or an exclusion from coverage,
except where the failure to have such insurance could not
reasonably be expected to have a Material Adverse Effect. True
and correct copies of all such policies together with all
exceptions referenced therein have been made available by the
Company to Purchasers.
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(ii) Except as set forth in SCHEDULE
3.01(r)(ii), as of the date hereof, there is no uninsured
physical damage to any Company Property in excess of $50,000.
Except as set forth in SCHEDULE 3.01(r)(ii), as of the date
hereof each improved Company Property is in good operating
condition and repair and is structurally sound and free of
defects, with no alterations or repairs being required thereto
under Applicable Laws or insurance company requirements and
consists of sufficient land, parking areas, driveways and
other improvements and lawful means of access and utility
service and capacity to permit the use thereof in the manner
and for the purposes for which it is presently devoted, except
where the failure of any of the foregoing could not reasonably
be expected to have a Material Adverse Effect. The Company has
made available to Purchasers true and complete copies of all
engineering reports, inspection reports, maintenance plans and
other documents relating to the condition of any Company
Property prepared for the Company or otherwise in the
Company's or a Company Subsidiary's possession.
(iii) Except as set forth in SCHEDULE
3.01(r)(iii), and except as could not either individually, or
in the aggregate, reasonably be expected to have a Material
Adverse Effect, (A) no condemnation, eminent domain or
rezoning proceedings are pending or threatened with respect to
any of the Company Properties; (B) no road widening or change
of grade of any road adjacent to any Company Property is
underway or has been proposed; (C) there is no proposed change
in the assessed value of any Company Property; (D) no special
assessment has been made or threatened against any Company
Property; and (E) no Company Property is subject to any
"impact fee" or to any agreement with any Governmental Entity
to pay for sewer extension, oversizing utilities, lighting or
like expenses or charges for work or services by such
Governmental Entity.
(iv) Each of the Company Properties is an
independent unit which does not rely on any facilities located
on any property not included in such Company Property to
fulfill any municipal or governmental requirement or for the
furnishing to such Company Property of any essential building
systems, utilities or customary amenities, other than
facilities the benefit of which inures to the Company
Properties pursuant to one or more valid easements, or
facilities which are located on or abutting Company Properties
and are sufficient to serve more than one property adequately
and lawfully. Each of the improved timeshare Company
Properties is served by public water and sanitary systems and
all other utilities, and each of the improved timeshare
Company Properties has lawful access to public roads, in all
cases sufficient for the current use and occupancy of each
Company Property. All parcels of land included in each Company
Property that purport to be contiguous are contiguous and are
not separated by strips, gaps or gores. No improvements
constituting a part of any Company Property encroach on real
property not constituting a part of such Company Property or
an abutting Company Property except where such encroachments
could not reasonably be expected to have a Material Adverse
Effect.
(v) The Company has made available to
Purchasers each survey, study or report prepared by or for the
Company or any Company Subsidiary in
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<PAGE> 24
connection with any Company Property's compliance or
non-compliance with the requirements of the Americans with
Disabilities Act (the "ADA"), other than routine
correspondence and memoranda.
(vi) SCHEDULE 3.01(r)(vi) sets forth a
complete and accurate list of all Material (as defined in
Section 3.01(q) of this Agreement) commitments, letters of
intent, agreements, or similar written understandings existing
as of the date hereof made or entered into by the Company or
any Company Subsidiary to sell, mortgage, pledge or
hypothecate any Company Property or to otherwise enter into a
Material (as defined in Section 3.01(q) of this Agreement)
transaction in respect of the ownership or financing of any
Company Property or to purchase or acquire an option, right of
first refusal or similar right in respect of any real
property, which has not yet been reduced to a written
contract. The Company has made available to Purchasers a true
and correct copy of each such Material commitment, letter of
intent or other understanding.
(vii) Except as restricted by the existing
credit facilities with Heller Financial, Inc., Finova Capital
Corporation and Foothill Capital Corporation and by the Senior
Notes and except as set forth in SCHEDULE 3.01(r)(vii), as of
the date hereof, the Company and Company Subsidiaries have the
right to sell, transfer, lease, and finance, without
limitations, the Company Properties.
(viii) The Company has provided to
Purchasers a capital expenditure budget for each Material
Company Property set forth in the Securities Filings which
describes the capital expenditures which the Company has
budgeted for such Company Property for the period ending March
31, 1999. The Company believes, as of the date hereof, that
the costs and the schedules set forth therein are reasonable
estimates and projections. Purchasers understand that the
Company's actual results may vary from the budget and no
assurances can be given that the Company will meet its
projections. As of the date hereof, the Company is not aware
of any facts or circumstances which would cause the Company to
exceed the capital expenditure budget in the aggregate.
(ix) The Securities Filings or SCHEDULE
3.01(r)(i) disclose each material Company Property and
SCHEDULE 3.01(r)(ix) contains a list of each property which,
as of the date hereof, the Company has under letter of intent
or option which is Material (as defined in Section 3.01(q) of
this Agreement), which consists of or includes a material
amount of undeveloped land or which is intended to be or is in
the process of being developed or materially rehabilitated
("Development Properties") and a brief description of the
development or material rehabilitation intended by the Company
or any Company Subsidiary to be carried out or completed
therein (collectively, the "Projects"). Each Development
Property is zoned for the lawful development thereon of the
Project. The Company has obtained, or has no reason to believe
it will not be able to obtain in the ordinary course of
business, all Permits, licenses, Consents and authorizations
required for the lawful development or rehabilitation thereon
of such Project, except where the failure to obtain such
Permits, licenses, Consents and authorizations could not
reasonably be expected to
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have a Material Adverse Effect. The Company has made available
to Purchasers all feasibility studies, soil tests, due
diligence reports and other studies, tests or reports
performed by or for the Company, or otherwise in the
possession of the Company, which relates to the Development
Properties.
(s) TAXES. Each of the Company and each Company
Subsidiary has filed all federal, state and local income and franchise
Tax Returns which are required to be filed and all such Tax Returns are
correct and complete in all material respects. The Company and each
Company Subsidiary has paid all Taxes shown thereon to be due and all
other taxes and assessments known to the Company or any such Company
Subsidiary to be payable by it, except to the extent the same have
become due and payable but are not yet delinquent or to the extent the
same are being contested in good faith and except to the extent any
such failure would not have a Material Adverse Effect. To the extent
that Tax liabilities and assessments have accrued but have not yet
become payable, such Tax liabilities have been adequately reflected as
liabilities on the books of the Company and the Company Subsidiaries
and adequate reserves have been established for the payment thereof.
SCHEDULE 3.01(s) sets forth the fiscal year through which the
consolidated Federal Income Tax Returns of the Company and the Company
Subsidiaries have been examined and reported on by the Internal Revenue
Service. To the Company's knowledge, there exists no dispute with the
Internal Revenue Service with respect to the consolidated Federal
Income Tax Returns of the Company and the Company Subsidiaries which,
if adversely determined, would have a Material Adverse Effect. Except
as set forth on SCHEDULE 3.01(s), the Company is not subject to any
audit by any Governmental Entity with regard to any Tax nor has any
Governmental Entity asserted against the Company any liability for any
Tax due and payable, but not paid, the result of which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect. As of the date hereof, none of the Company and the Company
Subsidiaries (i) has been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common
parent of which is the Company), or (ii) has any liability for the
taxes of any Person (other than any taxes of the Company and the
Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign law), as a transferee
or successor, by contract or otherwise.
(t) ENVIRONMENTAL MATTERS.
(i) Each of the Company and each Company
Subsidiary has obtained, and now is in compliance with and
maintains as currently valid and effective all permits
required under the Environmental Laws (the "Environmental
Permits") in connection with the operation of its businesses
and properties, all of which Environmental Permits are listed
in SCHEDULE 3.01(t), except where the failure to do any of the
foregoing could not reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the Conclusions
sections of the Company Environmental Reports, each of the
Company and each Company Subsidiary, and each property of the
Company and the Company Subsidiaries is, has been, and will be
in compliance with all terms and conditions of the
Environmental Permits and all Environmental Laws, except where
the failure to do any of the foregoing could not reasonably be
expected to have a Material Adverse Effect.
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(ii) Each of the Company and each Company
Subsidiary has provided to Purchasers all written information
and written communications (whether from a Governmental
Entity, citizens' group, tenant, employee or other person)
prepared or received by them or in its possession or control
as of the date hereof regarding (x) alleged or suspected
noncompliance in any material respect of any of the Company
Properties with any Environmental Laws or Environmental
Permits or (y) alleged or suspected material liability of the
Company or the Company Subsidiaries under any Environmental
Law.
(iii) There are no environmental Liens,
encumbrances or restrictions on any of the Company Properties
and, to the Company's knowledge, no actions by any
Governmental Entity or by any Persons have been, or are in
process of being, taken which are reasonably likely to subject
any Company Property to such Liens, encumbrances or
restrictions, except for such Liens, encumbrances or
restrictions which, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect.
(iv) No Environmental Claim with respect to
the operations or the businesses of the Company or the Company
Subsidiaries, or with respect to any Company Properties, has
been asserted or, to the Company's knowledge, threatened, and
no circumstances exist with respect to the Company or the
Company Subsidiaries or the Company Properties that would
reasonably be expected to result in any liability or any
Environmental Claim being asserted, in any such case, against
(i) the Company or the Company Subsidiaries, or (ii) any
Person whose liability for any Environmental Claims the
Company or the Company Subsidiaries has or may have retained
or assumed contractually, by operation of law or otherwise,
except any Environmental Claim which, either individually or
in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(v) Except as disclosed in SCHEDULE 3.01(t)
or set forth in the Conclusions sections of the Company
Environmental Reports and except for events or circumstances
which could not reasonably be expected to have a Material
Adverse Effect, (i) no generation, storage, handling,
disposal, treatment, spillage or release of Hazardous
Substances in violation of any law has occurred or is
occurring on the Company Properties, whether conducted or
caused by Company or the Company Subsidiary, their
predecessors, tenants or any other parties, and none of the
Company or the Company Subsidiaries has been notified or
anticipates being notified of potential responsibility in
connection with any such activity or with any site that has
been placed on, or proposed to be placed on, the National
Priorities List or its state or foreign equivalents pursuant
to the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Sections 9601 et seq., or
analogous state or foreign laws, (ii) no Hazardous Substances
are present on, in or under any Company Property in a manner
or condition that is reasonably likely to give rise to an
Environmental Claim, (iii) none of the Company or the Company
Subsidiaries has released or arranged for the release of any
Hazardous Substances at any location, (iv) no underground
storage tanks, above-ground storage tanks, surface
impoundments, disposal areas, pits, ponds, lagoons, open
trenches or disused
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<PAGE> 27
industrial equipment are present at any Company Property, (v)
no transformers, capacitators, ballasts or other equipment
containing polychlorinated biphenyls (PCBs) are present at any
Company Property, except for any such transformers,
capacitors, ballasts or other equipment owned by any utility
company, and (vi) no asbestos or asbestos-containing material,
no radon, no lead-based paint and no lead in drinking water is
present at any Company Property and no employee, agent,
contractor or subcontractor of the Company or the Company
Subsidiaries is now or has in the past been exposed to friable
asbestos or asbestos-containing material, radon, lead-based
paint or lead in drinking water at the Company Property.
(vi) The Company has provided Purchasers
access to true and complete copies of all existing Phase I
environmental reports, Phase II environmental reports, and all
other reports, materials and data prepared by or for the
Company or the Company Subsidiaries or otherwise in the
possession of any of them with respect to the environmental
condition of any Company Property owned as of the date hereof
(collectively, the "Company Environmental Reports").
(vii) For purposes hereof, the terms listed
below shall have the following meanings:
(A) "Environmental Claim" shall mean any
investigation or notice (written or oral) or claims
by any person including, without limit, any
Government Entity, neighbors, employees and tenants,
alleging potential liability (including potential
liability for investigatory costs, cleanup costs,
governmental response costs, natural resources
damages, property damages, personal injuries or
fatalities, or penalties) arising out of, based on or
resulting from (I) the presence, generation,
transportation, treatment, use, storage, disposal or
release of Hazardous Substances or the threatened
release of Hazardous Substances at any location, or
(II) activities or conditions forming the basis of
any violation, or alleged violation of, or liability
or alleged liability under, any Environmental Law.
(B) "Environmental Laws" shall mean federal,
state, local, provincial, municipal and foreign laws,
ordinances, principles of common law, rules, bylaws,
orders, governmental policies, statutes, regulations,
agreements and treaties relating to the pollution or
protection of the environment or of flora or fauna or
their habitat or of human health and safety, or to
the cleanup or restoration of the environment,
including, but not limited to, any laws relating to
(I) generation, treatment, storage, disposal or
transportation of wastes, emissions or discharges or
protection of the environment from the same, (II)
exposure of Persons to, or release or threat of
release of, Hazardous Substances, and (III) the
safety and health of workers and employees.
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(C) "Hazardous Substances" shall
mean all chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum or any fraction thereof,
petroleum products, asbestos, radon and hazardous
substances (as defined in Section 101(14) of CERCLA,
42 U.S.C. Sections 6601(14)), or solid or hazardous
wastes as now defined and regulated under any
Environmental Laws.
(u) ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither
the Company nor any Company Subsidiary nor, to the Company's knowledge,
any officer or director purporting to act on behalf of the Company or
any Company Subsidiary has at any time: (i) made any contributions to
any candidate for political office, or failed to disclose fully any
such contributions, in violation of law, (ii) made any payment of funds
to, or received or retained any funds from, any state, federal or
foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
allowed by Applicable Law, (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment or (v) engaged in any material transaction, maintained any bank
account or used any material amount of corporate funds except for
transactions, bank accounts and funds which have been and are reflected
in the normally maintained books and records of the Company and the
Company Subsidiaries.
(v) BOOKS OF ACCOUNT; COMPANY CHARTER AND BYLAWS.
(i) The books of account and other financial
records of the Company and each Company Subsidiary are in all
material respects true and complete, have been maintained in
accordance with good business practices, and are accurately
reflected in all material respects in the financial statements
included in the Securities Filings.
(ii) The Company has previously delivered or
made available to Purchasers true and complete copies of the
Restated Articles of Organization and bylaws of the Company,
as amended, and the charters, bylaws, partnership agreements,
joint venture agreements or other governing documents of each
Company Subsidiary, in each case, as amended through the date
hereof.
(iii) The minute books and other corporate
records of the Company and each Company Subsidiary have been
made available to Purchaser, contain in all material respects
accurate records of all meetings held prior to the date hereof
and accurately reflect in all material respects all other
corporate action of the shareholders and board of directors
and any committees of the board of directors of the Company
and the Company Subsidiaries which are corporations and all
actions of the partners of the Company Subsidiaries which are
partnerships or joint ventures, through the date hereof.
(w) OPERATING COMPANY STATUS. The Company is
primarily engaged, directly or through majority-owned Company
Subsidiaries, in the production or sale of a
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product or service other than the investment of capital, within the
meaning of the plan assets regulations issued by the Department of
Labor (29 C.F.R. Section 2510.3-101).
(x) HSR COMPLIANCE. As of the date hereof, all assets
of the Company and the Company Subsidiaries on a consolidated basis
which do not constitute (a)(i) real property that is used primarily for
office or residential purposes, including a vacation ownership interest
in a resort, or (ii) assets incidental to the ownership of such real
property, in either case, within the meaning of Section 802.2(d) of the
Rules, Regulations and Interpretations under the HSR Act (the "HSR
Rules"), or (b) a hotel or motel (other than a hotel or motel that
includes a gambling casino), improvements to any such hotel or motel,
including golf, swimming, tennis, restaurant, health club or parking
facilities (but excluding ski facilities) or assets incidental to the
ownership of any such hotel or motel, within the meaning of Section
802.2(e) of the HSR Rules or (c) real property used primarily as a golf
course or a swimming or tennis club facility or assets incidental to
the ownership of any such property, within the meaning of Section
802.2(b) of the HSR Rules (collectively, "Non-Exempt Assets"), do not
have a value in excess of $15,000,000.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
The Purchasers, jointly and severally, represent and warrant to, and agree with,
the Company as follows:
(a) ORGANIZATION. Each Purchaser is a limited
partnership validly existing and in good standing under the laws of its
jurisdiction of organization. Each Purchaser has a term continuing
until at least December 31, 2007 and the Purchasers have sufficient
capital to satisfy their obligations under this Agreement.
(b) AUTHORIZATION; NO CONFLICTS. Each Purchaser has
full power and authority to enter into this Agreement and the Ancillary
Documents to which it is a party and to consummate the transactions
hereby and thereby. The execution, delivery and performance by each
Purchaser of this Agreement and the Ancillary Documents to which it is
a party and the consummation of the transactions contemplated hereby
and thereby have been authorized by all necessary action on the part of
Purchasers. This Agreement has been, and on or prior to the Closing
Date the Ancillary Documents to which each Purchaser is a party will
be, executed and delivered by such Purchaser and this Agreement is, and
upon the execution on or prior to the Closing Date the Ancillary
Documents to which each Purchaser is a party will be, the valid and
binding obligation of such Purchaser, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights generally and to general principles of
equity. The execution, delivery and performance by each Purchaser of
this Agreement and the Ancillary Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby
and the compliance by each Purchaser with any of the provisions hereof
and thereof will not conflict with, violate or result in a breach of
any provision of, require a Consent under, or constitute a default (or
an event, which, with notice or lapse of time or both, would constitute
a default) under, (i) any organizational document of any Purchaser or
(ii) any mortgage, note, indenture, deed of trust, lease, loan
agreement or other agreement or instrument of any Purchaser, or (iii)
assuming that the clearances, filings, Consents and approvals specified
in SCHEDULE 3.01(d) have been obtained or made and any waiting period
applicable thereto has expired
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or been terminated, any permit, concession, grant, franchise, license,
judgment, order, decree, ruling, injunction, statute, law, ordinance,
rule or regulation binding or applicable to any Purchaser or its
respective properties or assets.
(c) CONSENTS AND APPROVALS. Except as set forth in
SCHEDULE 3.01(f), no Consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required on the part of Purchasers in connection with the execution,
delivery and performance by each Purchaser of this Agreement and the
Ancillary Documents to which it is a party and the consummation of the
transactions hereby and thereby.
(d) INVESTMENT INTENT; SUITABILITY. Each Purchaser is
acquiring the Common Stock solely for its own account for investment
and not with a view to any distribution thereof in violation of the
Securities Act. Each Purchaser is an "accredited investor" as such term
is defined in Rule 501 under the Securities Act. No Purchaser shall
Transfer any Common Stock or other securities acquired pursuant to this
Agreement except in compliance with all Applicable Law.
(e) INVESTIGATION BY PURCHASERS. Each Purchaser
acknowledges that it has had an opportunity to ask questions of and
receive answers from the Company regarding the Company and the Company
Subsidiaries and their respective businesses, assets, results of
operations and financial condition and the terms and conditions of the
issuance of the Common Stock. Notwithstanding anything contained herein
to the contrary, no investigation by Purchasers shall in any way affect
Purchasers' right to rely upon the Company's representations,
warranties and covenants contained herein.
(f) INVESTMENT EXPERIENCE. Each Purchaser (a) has
such knowledge, experience and skill in evaluating and investing in
common stocks and other securities, based on actual participation in
financial, investment and business matters, so that it is capable of
evaluating the merits and risks of an investment in the Common Stock,
(b) has such knowledge, experience and skill in financial and business
matters that it is capable of evaluating the merits and risks of
investment in the Company and the suitability of the Common Stock as an
investment, and (c) can bear the economic risk of an investment in the
Common Stock. Each Purchaser understands that an investment in the
Common Stock on the terms set forth in this Agreement is speculative
and involves certain risks and uncertainties. Each Purchaser has (i)
received a copy of the Offering Memorandum dated March 27, 1998
relating to the Senior Notes and reviewed the "Risk Factors" set forth
therein and (ii) reviewed the Securities Filings.
(g) BROKERS AND FINDERS. None of the Purchasers nor
any of their officers, directors, employees, Affiliates or agents has
utilized any broker, finder, placement agent or financial advisor or
incurred any liability for any fees or commissions in connection with
any of the transactions contemplated hereby or by the Ancillary
Documents.
(h) COMPANY COMMON STOCK. As of the date hereof,
Purchasers do not own any shares of Common Stock.
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ARTICLE IV.
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 4.01. TAKING OF NECESSARY ACTION. Each of the parties
hereto agrees to use all reasonable efforts to take or cause to be taken all
action and to do or cause to be done all things necessary, proper or advisable
under Applicable Law to consummate and make effective the transactions
contemplated by this Agreement. Without limiting the foregoing, the Company and
Purchasers will, and the Company shall cause the Company Subsidiaries to, each
use all reasonable efforts to make all filings and obtain all Consents of
Governmental Entities which may be necessary or, in the opinion of Purchasers or
the Company, as the case may be, advisable for the consummation of the
transactions contemplated by this Agreement and the Ancillary Documents,
including, but not limited to, any filings with the FTC or DOJ under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act").
Section 4.02. CONDUCT OF BUSINESS. Except as otherwise
required to perform its obligations under this Agreement or in any agreement
contemplated herein, from the date hereof through the Closing Date, the Company
shall, and shall cause each of the Company Subsidiaries to:
(a) conduct its operations in the ordinary course of
business in a first-class manner and consistent with past practice;
(b) unless required pursuant to the terms of this
Agreement or the Ancillary Agreements, or consented to in writing by
Purchasers, not amend or in any way alter its Restated Articles of
Organization, certificate of incorporation, bylaws, partnership
agreement or other governing document (provided that the foregoing
shall not restrict the reorganization and restructuring of certain of
the Company Subsidiaries on the terms previously disclosed to
Purchasers);
(c) not engage in any other act, other than in the
ordinary course of business and consistent with past practice, that
could reasonably be expected to have a Material Adverse Effect or in
any way delay or impair consummation of the transactions contemplated
by this Agreement and the Ancillary Documents;
(d) not change the number of shares of the authorized
capital stock of the Company, issue or grant any option, warrant, call,
commitment, subscription, right to purchase or agreement of any
character relating to the authorized or issued capital stock of the
Company or any Company Subsidiary, or any securities convertible into
shares of such stock (except for grants of options to purchase Common
Stock approved by the Board of Directors to be granted pursuant to
existing Company Plans), split, combine or reclassify any shares of the
capital stock of the Company, declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any
combination thereof) in respect of the capital stock of the Company, or
redeem or otherwise acquire any shares of such capital stock;
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(e) not increase the number of directors of the Board
of Directors of the Company without the express written consent of
Purchasers other than as required by Section 4.10;
(f) not sell or transfer any of the assets it owns,
except in the ordinary course of its business and consistent with past
practice (it being understood that sales of loan receivables shall be
deemed in the ordinary course of business);
(g) except for seller financing and borrowings under
the Company's existing credit facilities with Heller Financial, Inc.,
Foothill Capital Corporation and Finova Capital Corporation, not incur
any Indebtedness other than Indebtedness to trade creditors incurred in
the ordinary course of business and consistent with past practice;
(h) not change its accounting policies or procedures
in any material manner;
(i) not do any other act which would reasonably be
expected to cause any representation or warranty in this Agreement to
be or become untrue in any material respect.
Section 4.03. FINANCIAL STATEMENTS AND OTHER REPORTS. For so
long as Purchasers or the Permitted Transferees own any shares of Common Stock
(except in the case of (d) below which shall apply only for so long as
Purchasers and the Permitted Transferees own in the aggregate at least the
Permitted Interest), the Company covenants that it will deliver to Purchasers or
the Permitted Transferees (PROVIDED, HOWEVER, that delivery to any Permitted
Transferee of any financial statements or other reports shall be made only to a
wholly-owned (excluding the ownership interests of MSDW employees and
consultants) MSDW entity as general partner, investment advisor or other
representative on behalf of the Permitted Transferees), as the case may be:
(a) as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, consolidated statements of
operations, statements of shareholders' equity and cash flows of the
Company for the period from the beginning of the then current fiscal
year to the end of such quarterly period, and a consolidated balance
sheet of the Company at the end of such quarterly period setting forth
in each case in comparative form figures for the corresponding period
or date in the preceding fiscal year, together with a certificate from
a senior officer of the Company ("Senior Officer's Certificate") to the
effect that such financial statements have been prepared in accordance
with GAAP consistently applied during the periods involved (except as
otherwise indicated in the notes thereto and subject to year-end
adjustments) and that such financial statements fairly present the
results of operations and changes in financial position, shareholders'
equity, cash flows and financial position of the Company and the
Company Subsidiaries as of and for the period then ended; PROVIDED
HOWEVER, that delivery pursuant to clause (c) below of a copy of the
Company's periodic report on Form 10-Q for such period filed with the
SEC shall be deemed to satisfy the requirements of this clause (a);
(b) as soon as practicable and in any event within 90
days after the end of each fiscal year, a consolidated balance sheet of
the Company as of the end of such fiscal
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year and the related consolidated statements of operations, statements
of shareholders' equity and cash flows for such fiscal year, setting
forth in each case in comparative form the corresponding figures from
the preceding fiscal year, together with the audit report of Ernst &
Young LLP, or other independent public accountants of recognized
standing selected by the Company; PROVIDED, HOWEVER, that delivery
pursuant to clause (c) below of a copy of the Annual Report on Form
10-K of the Company for such fiscal year filed with the SEC shall be
deemed to satisfy the requirements of this clause (b);
(c) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its shareholders and to its lenders and copies of all
such registration statements, other than registration statements
relating to employee benefit or dividend reinvestment plans, and all
such regular and periodic reports on Forms 10-K, 10-Q and 8-K (or
similar or substitute forms) as it shall file with the SEC; and
(d) from time to time such additional information
regarding results of operations, financial condition, business or
prospects of the Company and the Company Subsidiaries as Purchasers or
the Permitted Transferees may reasonably request.
Section 4.04. ACCESS.
(a) Between the date hereof and the Closing Date and
in order to permit Purchasers to complete their due diligence
examination of the Company and the Company Subsidiaries, the Company
shall permit representatives of Purchasers to have full access: (i) to
inspect the facilities and properties of the Company and any of the
Company Subsidiaries, (ii) to examine the corporate books, records,
agreements and files of the Company or any of the Company Subsidiaries
and make copies or extracts therefrom and (iii) to consult with the
directors, officers or other employees of the Company and any of the
Company Subsidiaries and the Company's independent auditors and legal
counsel, all upon reasonable notice and at such reasonable times as the
Purchasers may reasonably request.
(b) For so long as Purchasers or the Permitted
Transferees own, in the aggregate, at least the Permitted Interest, the
Company will permit representatives of each Purchaser and any Permitted
Transferee (PROVIDED, HOWEVER, that in the case of access rights by
Permitted Transferees, access rights shall be granted only to a
wholly-owned (excluding the ownership interests of MSDW employees and
consultants) MSDW entity as general partner, investment advisor or
other representative on behalf of the Permitted Transferees) to visit
and inspect any of the properties of the Company or any of the Company
Subsidiaries, to examine the corporate books, records, agreements and
files of the Company and the Company Subsidiaries and make copies or
extracts therefrom and to advise and consult with the principal
officers of the Company regarding the affairs, finances and accounts of
the Company and the Company Subsidiaries, all upon reasonable notice
and at such reasonable times any Purchaser or such wholly-owned MSDW
entity may reasonably request.
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Section 4.05. LOST, STOLEN, DESTROYED OR MUTILATED SECURITIES.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificate for any security of the Company
owned by Purchasers or the Permitted Transferees and, in the case of loss, theft
or destruction, upon delivery of an undertaking by the holder thereof to
indemnify the Company (and, if requested by the Company, the delivery of an
indemnity bond sufficient in the judgment of the Company to protect the Company
from any loss it may suffer if a certificate is replaced), or, in the case of
mutilation, upon surrender and cancellation thereof, the Company will issue a
new certificate for an equivalent number of shares of Common Stock or other
security of like tenor, as the case may be.
Section 4.06. NO TERMINATION OF OBLIGATIONS UPON CHANGE OF
CONTROL. The Company shall promptly notify Purchasers and the Permitted
Transferees (but in the case of the Permitted Transferees, such notice shall be
sent only to a wholly-owned (excluding the ownership interests of MSDW employees
and consultants) MSDW entity as general partner, investment advisor or other
representative on behalf of the Permitted Transferees) (i) of the execution by
the Company of a definitive agreement with any Person which will result in a
Change of Control, (ii) of the satisfaction or waiver of all conditions of
closing (other than conditions which can only be satisfied on the closing date
of such transaction) required under the terms of such definitive agreement, and
(iii) immediately upon consummation of a Change of Control. Upon a Change of
Control of the Company, all rights and obligations of Purchasers and any
Permitted Transferee who owns any shares of Common Stock hereunder (including,
without limitation, all registration rights under the Registration Rights
Agreement) shall continue in full force and effect unless such Purchasers or
Permitted Transferees, as the case may be, dispose of their respective shares of
Common Stock as part of such Change of Control.
Section 4.07. RESTRICTIONS ON SALE OR TRANSFER; LEGEND.
(a) Prior to the earlier to occur of (x) the second
anniversary of the Closing Date or (y) six months following the
Calculation Date, but in no event earlier than the date that is 18
months from the Closing Date (the "Lock-up Period"), none of the
Purchasers or Permitted Transferees will, directly or indirectly,
offer, sell, transfer, assign, pledge, hypothecate (provided that
nothing herein to the contrary shall restrict the bona fide pledge or
hypothecation of any shares of Common Stock issued to Purchasers or any
Permitted Transferee prior to the expiration of the Lock-up Period or
the foreclosure of any such pledge or hypothecation so long as any
pledgee remains subject to the provisions of this Section 4.07; upon
any foreclosure of such pledge, the pledgee shall not have any rights
or obligations under this Agreement but shall constitute a Purchaser
under the Registration Rights Agreement) or otherwise dispose of (any
such act, a "Transfer") any shares of Common Stock purchased hereunder,
except for, and subject in each case to, compliance with all Applicable
Law and receipt of any necessary governmental Consents, (i) a Transfer
by Purchaser to a Permitted Transferee, provided that prior to such
Transfer each such Permitted Transferee consents in writing to be bound
by the restrictions on Transfer set forth in this Section 4.07, makes
the representations and warranties set forth in the first sentence of
Section 3.02(d) and in Section 3.02(f) to the Company and assumes all
other rights and obligations of such Purchaser under this Agreement and
the Registration Rights Agreement; (ii) a Transfer to the Company or to
a wholly-owned direct or indirect subsidiary of the Company; and (iii)
a Transfer pursuant to a sale, merger or consolidation in which the
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Company is a constituent corporation, or upon a Change of Control as
provided in Section 4.07(b).
(b) Subject to Section 4.07(c), following the Lock-up
Period or the consummation of a Change of Control or delivery of notice
that the events described in Section 4.06(i) and (ii) have occurred,
each Purchaser and Permitted Transferee may, in its sole discretion,
freely and without any limitations, transfer any shares of Common Stock
owned by it, subject to compliance with all Applicable Law (including,
without limitation, compliance with the Securities Act), PROVIDED,
HOWEVER, that if the transaction to which notice is provided under
Sections 4.06(i) and (ii) is terminated, Purchasers' and the Permitted
Transferees' right to Transfer any shares of Common Stock held by them
shall be again subject to the provisions of this Section 4.07.
(c) Each Purchaser acknowledges and agrees that as of
the date hereof the shares of Common Stock have not been registered
under the Securities Act or the securities laws of any state, that the
shares of Common Stock will be characterized as "restricted securities"
under federal securities laws and that under such laws and applicable
regulations the shares of Common Stock cannot be sold or otherwise
disposed of or otherwise Transferred without registration under the
Securities Act or an exemption therefrom. Each Purchaser acknowledges
that, except as provided in the Registration Rights Agreement, none of
the Purchasers or Permitted Transferees has any right to require the
Company to register the Common Stock. Each Purchaser further
acknowledges and agrees that each certificate of Common Stock to be
issued to Purchasers or any Permitted Transferee hereunder shall bear
the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN ABSENCE OF (I) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR (II) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED. THIS CERTIFICATE IS ISSUED PURSUANT TO AND
SUBJECT TO THE RESTRICTIONS ON TRANSFER, VOTING AND OTHER PROVISIONS OF A
SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST __, 1998 BETWEEN THE COMPANY
AND THE PURCHASERS REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE
COMPANY. EXCEPT AS PROVIDED IN SUCH SECURITIES PURCHASE AGREEMENT, THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE AND ANY PURPORTED TRANSFER
IN VIOLATION OF THE PROVISIONS OF SUCH SECURITIES PURCHASE AGREEMENT SHALL BE
VOID AND OF NO FORCE AND EFFECT.
Any holder of the Common Stock may request the Company to
remove the legend described herein from the certificates evidencing such Common
Stock by submitting to the Company such certificates, together with an opinion
of counsel reasonably satisfactory to the Company to the effect that such legend
is no longer required under the Securities Act.
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Section 4.08. FURTHER ASSURANCES. The Company and Purchasers
shall execute and deliver, or cause to be executed and delivered, such
additional instruments and other documents and shall take such further actions
as the Company or Purchasers, as the case may be, may reasonably request to
effectuate, carry out and comply with all of the terms of this Agreement and the
Ancillary Documents and the transactions contemplated hereby and thereby,
including, without limitation, making application as soon as practicable for all
Consents required in connection with the transactions contemplated hereby and
diligently pursuing the receipt of such Consents in good faith.
Section 4.09. SOLICITATION. From the date hereof until the
Closing Date, neither the Company nor any of the Company Subsidiaries shall, and
the Company shall direct and use its reasonable best efforts to cause its
directors, officers, employees, agents and representatives not to, initiate,
solicit or encourage, directly or indirectly, any inquiries with respect to, or
the making of, any Investment Proposal or engage in any negotiations concerning,
provide any nonpublic information or data to, or have any discussions with, any
Person (other than Purchasers) relating to, an Investment Proposal, or enter
into any agreement with respect to, or otherwise take any action to effect or
facilitate any effort or attempt to make or implement an Investment Proposal. On
the date hereof, the Company and the Company Subsidiaries shall terminate all
existing negotiations and discussions with any Person (other than Purchasers)
relating to any Investment Proposal. For purposes of this Section 4.09, an
"Investment Proposal" shall mean any proposal for the sale, exchange or issuance
by the Company, whether in a private or public offering, of any shares of Common
Stock or other securities or any securities, options, rights or warrants
convertible into or exchangeable for any Common Stock (other than options
granted in the ordinary course and shares issued upon exercise of options or
upon conversion of outstanding convertible debt securities) or other equity
securities of the Company or any sale of all or a material portion of the assets
of the Company (other than sales in the ordinary course of business) or merger
with or into any other Person (whether or not the Company is the Surviving
Person, but excluding any merger of a Company Subsidiary with and into the
Company or any other Company Subsidiary) or any financing or any investment
banking or financing services (other than as set forth in SCHEDULE 3.01(r)(vi)
or as contemplated by this Agreement) involving the Company or any of the
Company Subsidiaries.
Section 4.10. BOARD REPRESENTATION.
(a) On or prior to the Closing Date, the Board of
Directors of the Company shall be expanded by two positions, and
Michael J. Franco and John A. Henry shall be appointed to fill the
vacancies created by such expansion with Mr. Henry designated as a
Class I director and Mr. Franco designated as a Class III director.
Thereafter, for so long as Purchasers and the Permitted Transferees
own, in the aggregate, at least the Required Interest, Purchasers shall
be entitled to designate an aggregate of two directors on the
management slate of nominees to the Company's Board of Directors (the
"Purchaser Designees") (with MSP having the right to designate one
director and MSREF III having the right to designate one director)
except the foregoing number of directors shall be reduced to the extent
one or more Purchaser Designees have been elected to and are serving on
the Board of Directors and are in a class of directors not currently
standing for re-election. In the event that the aggregate interest
owned by Purchasers and the Permitted Transferees shall be less than
the Required Interest but equal to or greater than the Minimum Interest
and Purchasers currently have two Purchaser Designees serving on the
Board of Directors, then Purchasers shall cause one of the two
Purchaser Designees to resign within 10 Business
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Days, the Board of Directors shall be reduced by one member and
thereafter MSP shall be entitled to designate one member on the
management slate of nominees to the Company's Board of Directors (until
such time as the aggregate interest owned by Purchasers and the
Permitted Transferees shall be less than the Minimum Interest,
whereupon Purchasers shall within 10 Business Days cause the remaining
Purchaser Designee to resign and Purchasers shall have no further
rights under this Section) except the foregoing shall not apply to the
extent MSP's Purchaser Designee has been elected to and is serving on
the Board of Directors and is in a class of directors not currently
standing for re-election. At least 90 days prior to each annual meeting
of shareholders at which a Purchaser Designee will stand for election,
MSREF III and MSP, as the case may be, shall provide written notice to
the Company indicating the Purchaser Designee to be nominated by each
such Purchaser at such annual meeting, and such notice shall set forth
as to each Person proposed for nomination all information relating to
such Persons that is required to be disclosed in solicitations of
proxies for election of directors pursuant to Regulation 14A under the
Exchange Act (including such Person's written consent to being named in
the related proxy statement as a nominee and to serving as a director
if elected).
(b) The Company shall use its reasonable best efforts
at all times to take such action as is necessary to ensure that the
nominating committee of the Board of Directors (or the full Board if
there is no nominating committee) of the Company shall nominate and
recommend to the shareholders of the Company and the shareholders of
the Company shall elect the Purchaser Designees to the Board of
Directors. As a condition precedent to the inclusion of any Purchaser
Designee on any slate of nominees to be recommended to shareholders by
the Board of Directors pursuant to Section 4.10(a), the nominating
committee of the Board (or the full Board if there is no nominating
committee) may review the information provided pursuant to Section
4.10(a) to evaluate in good faith such Purchaser Designee's character
and fitness to serve as a director. If the nominating committee (or the
full Board if there is no nominating committee) determines in good
faith that any such Purchaser Designee lacks the character or fitness
to serve as a director based on applicable legal and reasonable
commercial standards, the nominating committee (or the full Board if
there is no nominating committee) shall inform the Purchaser who
nominated such Purchaser Designee of such determination, and such
Purchaser shall then have the right to propose an alternative Purchaser
Designee who is reasonably acceptable to the Company. All Purchaser
Designees elected to the Board of Directors shall receive, during the
period in which they serve, any and all benefits (including, without
limitation, any director compensation and grants of stock options under
the 1998 Non-Employee Director Plan) provided to the other members of
the Board of Directors of the Company.
(c) If at any time Purchasers and the Permitted
Transferees are entitled to designate one or more nominees to the Board
of Directors pursuant to this Section 4.10 and Purchasers do not have a
representative on the Board, so long as Purchasers and the Permitted
Transferees own, in the aggregate, at least the Minimum Interest, the
Company shall permit two representatives (or in the case that
Purchasers are entitled to designate only one nominee to the Board,
only one representative) of Purchasers (which representatives shall be
acceptable to the Company in its reasonable discretion) to attend, but
not vote, as observers at each meeting of the Board of Directors or any
committee of the Board empowered to act with full authority of the
entire Board, including telephonic meetings,
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provided that each such representative executes and delivers to the
Company a confidentiality agreement in a form reasonably satisfactory
to the Company prior to attendance at any such meetings. The Company
shall cause notice of any meeting of the Board of Directors or any such
committee of the Board to be delivered to any such representatives at
the same time and in the same manner as notice is given to the members
of the Board of Directors. Such representatives will be entitled to
receive all written materials given to the members of the Board of
Directors in connection with such meetings at the time such materials
and information are given to the Board of Directors. The Company shall
reimburse such representatives for his or her reasonable out-of-pocket
expenses incurred in connection with attending meetings of the Board of
Directors or any such committee of the Board.
(d) For so long as any Purchaser or Permitted
Transferee has the right to designate at least one director on a
management slate of nominees to the Company's Board of Directors, the
Company shall use reasonable best efforts to cause the Board of
Directors and the shareholders of the Company not to increase the
number of members of the Board of Directors above nine without the
prior written consent of each Purchaser and Permitted Transferee
(unless such increase is required to comply with Applicable Law), which
consent may be withheld in each Purchaser's and Permitted Transferee's
reasonable discretion. In the event of a vacancy (either by death,
removal or resignation) of a director other than a Purchaser Designee
which does not cause the total number of directors to be less than
seven, the Company shall use reasonable best efforts to cause the Board
of Directors not to appoint a replacement to fill such vacancy without
the prior written consent of each Purchaser and Permitted Transferee
(unless required to comply with Applicable Law and the Company's
bylaws), which consent may be withheld in each Purchaser's and
Permitted Transferee's reasonable discretion.
(e) Each Purchaser Designee shall be entitled to
serve on any standing committee of the Board except to the extent the
Purchaser Designee's participation would cause the Purchaser Designees'
participation on such committee to exceed their proportionate
representation on the full Board, PROVIDED, HOWEVER, that at least one
Purchaser Designee may serve on each standing committee selected in
accordance with this subsection (e). Subject to the preceding sentence,
MSREF III and MSP shall each have the right to select the committees of
the Board on which its Purchaser Designee will serve. The Company shall
use its reasonable best efforts at all times as is necessary to ensure
that each Purchaser Designee is appointed to all such committees of the
Board of Directors.
(f) For so long as Purchasers and the Permitted
Transferees own, in the aggregate, at least the Minimum Interest and
the Purchaser Designees are serving on the Board of Directors,
Purchasers shall, and shall cause the Permitted Transferees, to vote
all of their shares of Common Stock at any regular or special meeting
of the shareholders of the Company (and any adjournments thereof)
called for the purpose of electing directors to the Board, or, to the
extent permitted by the Company's Restated Articles of Organization and
Amended and Restated Bylaws and by Applicable Law, in any written
consent executed in lieu of such a meeting of shareholders, for
election of the management slate of nominees (other than the Purchaser
Designees) to the Company's Board of Directors. The Purchasers shall
and shall cause the Permitted Transferees to vote all of their shares
of Common Stock
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at any regular or special meeting of the shareholders of the Company
(and any adjournments thereof) called for the purpose of approving the
issuance of the shares under this Agreement in favor of such issuance
and the transactions contemplated by this Agreement.
(g) Subject to availability on reasonable terms and
at a reasonable cost, for so long as any Purchaser Designee remains on
the Board of Directors, the Company shall use reasonable best efforts
to maintain directors' and officers' liability insurance with
financially sound and reputable insurers at a level of coverage of at
least $10,000,000.
(h) It is understood and agreed that the Company's
Board of Directors is subject to fiduciary duties under Applicable Law,
and that the Company's shareholders have rights with respect to the
composition of the Board of Directors under Applicable Law and the
Company's Amended and Restated Bylaws. Accordingly, for purposes of
this Section 4.10, all obligations of the Company under paragraphs (a),
(b), (d) and (e) hereof shall be deemed to be "to use reasonable best
efforts" to cause the intended action to be taken, recognizing that the
Company cannot guaranty what action its Board of Directors or
stockholders may take in the future.
Section 4.11. BOARD OF DIRECTORS APPROVALS. Notwithstanding
anything contained in the Company's Restated Articles of Organization or its
bylaws, for so long as Purchasers and the Permitted Transferees own, in the
aggregate, at least the Required Interest, the following actions by the Company
or any Company Subsidiary shall require the affirmative vote of at least one of
the Purchaser Designees prior to the effectiveness or consummation of such
action (provided that if Purchasers do not have a representative on the Board of
Directors as a result of the failure of the Company to nominate any Purchaser
Designee or failure of the shareholders of the Company to elect any Purchaser
Designee, then such action shall require the approval of the Purchasers and
Permitted Transferees holding a majority of the shares of Common Stock issued
pursuant to this Agreement):
(a) the consolidation or merger of the Company with
or into another Person (other than a merger of a Company Subsidiary
into the Company or another Company Subsidiary); the sale of all or
substantially all of the assets of the Company; or, except for sales of
receivables under the existing purchase facility with Heller Financial,
Inc. or its permitted successors or assigns, (up to an aggregate of
$200,000,000) the sale, assignment, transfer, lease, conveyance or
other disposal of property or assets of the Company or the Company
Subsidiaries in one or more related transactions where the aggregate
consideration paid exceeds $50,000,000;
(b) the purchase or other acquisition of the
business, assets or securities of any other Person (whether by merger,
another form of business combination or otherwise) in one or more
related transactions where the aggregate consideration paid (exclusive
of any future development costs) exceeds $50,000,000;
(c) the issuance of any Senior Securities, or
authorization of the issuance of any securities convertible into or
exchangeable for, or options, warrants or other rights to acquire, any
Senior Securities;
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(d) except for any issuances (i) to Purchasers or a
Permitted Transferee pursuant to this Agreement or (ii) of securities
upon conversion or exercise of any options, notes or debentures
outstanding as of the date hereof or (iii) grants of options or
issuances of securities upon exercise thereof pursuant to any existing
director or employee stock option or stock benefit plan approved by the
Company's Board of Directors, the issuance of Parity Securities, or
authorization of the issuance of any securities convertible into or
exchangeable for, or options, warrants or other rights to acquire, any
Parity Securities, in each case, in excess of 8% of the then issued and
outstanding shares of Common Stock or at a price per share that is less
than the Closing Share Price, or at any time prior to expiration of the
Commitment Period unless the Maximum Shares have been issued to
Purchasers or the shareholders have failed to approve the issuance of
any shares of Common Stock to be issued to Purchasers in accordance
with this Agreement on or after the Threshold Date at the meeting
referred to in Section 4.16;
(e) the incurrence of any Indebtedness by the Company
or any Company Subsidiary in an aggregate principal amount which would
cause the Total Market Capitalization Ratio of the Company to be equal
to or greater than 50%;
(f) the declaration or payment of any dividend (other
than a stock dividend) or distribution on the shares of Common Stock,
or the repurchase, redemption or other acquisition of shares of Common
Stock (other than in connection with "cashless" exercises of options);
(g) any amendment to the Restated Articles of
Organization or bylaws of the Company which could reasonably be
expected to conflict with the terms of this Agreement;
(h) the entry into a material line of business that
is unrelated to or materially different from the Timeshare/Residential
Business;
(i) the entry into any transaction with any Affiliate
other than transactions entered into with Company Subsidiaries; and
(j) the authorization or issuance of any capital
stock of any Company Subsidiary, or any options, rights, warrants or
securities convertible into or exchangeable for any capital stock of
any Company Subsidiary (other than pursuant to employee stock option
plans in existence as of the date hereof).
Section 4.12. PREEMPTIVE RIGHTS.
(a) In the event the Company proposes to undertake an
issuance of New Securities (as defined below) for cash after the date
hereof, each Purchaser and Permitted Transferee that owns any shares of
Common Stock on the date of issuance shall have the right to purchase
its "proportionate share" of such New Securities on the terms and
conditions set forth herein. Each Purchaser and Permitted Transferee
that owns any shares of Common Stock on such date shall also have the
right of over allotment such that, if any Purchaser or Permitted
Transferee fails to exercise its rights hereunder to purchase its
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<PAGE> 41
proportionate share of New Securities to the fullest extent permitted,
the other Purchasers and Permitted Transferees may purchase its
proportionate share of New Securities that such Purchaser or Permitted
Transferee elected not to purchase. For purposes of this Section 4.12,
each Purchaser's and Permitted Transferee's "proportionate share" means
the number of New Securities proposed to be issued and sold multiplied
by a fraction, the numerator of which is the number of shares of Common
Stock issued to such Purchaser or Permitted Transferee pursuant to
Article II hereof and held on such date by such Person (determined (i)
during the Commitment Period, assuming that the Maximum Shares have
been issued to the Purchasers or their Permitted Transferees and (ii)
after the Commitment Period, based on the actual number of shares
issued pursuant to Article II hereof and then held on such date by such
Person) and the denominator of which is the total number of shares of
Common Stock outstanding (determined (i) during the Commitment Period,
on a fully diluted basis assuming full exercise and conversion of all
outstanding options, warrants, rights and other securities which are
convertible or exchangeable shares of Common Stock and issuance of the
Maximum Shares, and (ii) after the Commitment Period, on a fully
diluted basis assuming full exercise and conversion of all outstanding
options, warrants, rights and other securities which are convertible or
exchangeable for shares of Common Stock).
(b) As used in this Section 4.12, the term "New
Securities" shall mean (i) any capital stock of the Company, (ii) any
rights, options or warrants to purchase any such capital stock, or to
purchase any securities of any type whatsoever that are, or may become,
convertible into or exercisable for any such capital stock, and (iii)
any securities of any type whatsoever that are, or may become,
convertible into or exercisable for any such capital stock; PROVIDED,
HOWEVER, that "New Securities" shall not include (A) shares of Common
Stock issued upon conversion or exercise of options, debentures, notes,
warrants or rights outstanding as of the date hereof, (B) securities
issued pursuant to the acquisition of another corporation or legal
entity by the Company by merger, consolidation, purchase of all or
substantially all of such other entity's assets, or acquisition
transaction in which the Company participates on an arm's length basis,
(C) securities (including options) issued in connection with any
director or employee stock option plan approved by the Board of
Directors of the Company (or any committee thereof) and the
shareholders of the Company, or any shares of Common Stock issued to
any employee or officer for his own investment and as part of a bona
fide compensation plan approved by the Board of Directors, (D) any
securities issued in replacement of, or as dividends attributable to,
any securities of the Company outstanding as of the date hereof, (E)
any securities issued to all holders of shares of Common Stock on a pro
rata basis, (F) any securities issued (including, without limitation,
any rights and any securities issued upon the exercise of such rights)
in connection with a shareholders rights plan approved by the Board of
Directors or (G) any securities issued upon conversion or exercise of
New Securities that Purchasers previously elected not to exercise their
purchase rights hereunder or as to which such purchase rights did not
apply.
(c) In the event the Company proposes to undertake an
issuance of New Securities, it shall give Purchasers and the Permitted
Transferees written notice of its intention to do so at least 20 days
prior to such issuance, describing the New Securities and the price and
terms upon which the Company proposes to issue the same (the "Original
Notice"). Each Purchaser and Permitted Transferee may purchase (i) such
number of New Securities up to such Purchaser's or Permitted
Transferee's proportionate share of such New
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Securities ("Full Amount") plus (ii) to the extent other Purchasers or
Permitted Transferees do not exercise their Full Amount, any additional
New Securities that the other Purchasers or Permitted Transferees
elected not to purchase in amount as agreed to by the Purchasers and
Permitted Transferees electing to purchase such additional New
Securities (it being understood that in no event shall the Company be
required to issue, in the aggregate, an amount of New Securities in
excess of the aggregate amount issuable if all Purchasers and Permitted
Transferees purchased their respective Full Amounts), for the price and
upon the terms and conditions pertaining to the issuance of the New
Securities (notwithstanding any changes that may be made to the terms
and conditions set forth in the Original Notice) by giving written
notice to the Company no later than 15 days after the date of receiving
the Original Notice ("Notice Date") identifying the number of New
Securities to be purchased. If any Purchasers or Permitted Transferees
elect to purchase any New Securities within such 15-day period, such
New Securities shall be issued and sold to each of them in accordance
with the terms and conditions pertaining to the issuance of the New
Securities (notwithstanding any changes that may be made to the terms
and conditions set forth in the Original Notice). Any New Securities
that the Purchasers and Permitted Transferees elected not to purchase
may be sold by the Company in accordance with the terms and conditions
pertaining to such issuance of New Securities.
(d) Notwithstanding anything to the contrary
contained in this Section 4.12, upon any purchase of any New Securities
by a Purchaser or Permitted Transferee pursuant to Section 4.12 on a
later date than the issuance of the New Securities that gave rise to
such Purchaser's or Permitted Transferee's purchase rights under
Section 4.12, (i) the purchase price shall be adjusted by subtracting
therefrom the value of any dividend or distribution received in respect
of such New Securities after the date of such issuance and prior to the
purchase by such Purchaser or Permitted Transferee hereunder, and (ii)
the purchase price and number of shares or amount to be purchased shall
be adjusted to reflect any stock split, stock dividend or other
combination or reclassification of the capital stock during such time.
(e) Upon written notice to the Company, each
Purchaser and Permitted Transferee, in their sole discretion, may
terminate all of its rights under this Section 4.12, or may suspend its
rights under this Section 4.12 for any period of time set forth in such
notice.
Section 4.13. ADJUSTMENTS. If during the Commitment Period,
the Company shall declare or pay a dividend on the Common Stock payable in
shares of Common Stock or in rights to acquire Common Stock, or shall effect a
stock split or reverse stock split, or a combination, consolidation or
reclassification of the Common Stock, then the Closing Share Price shall be
proportionately decreased or increased, as appropriate, to give effect to such
event.
Section 4.14. [Reserved].
Section 4.15. FINANCING FEES; ADVISORY FEES.
(a) Subject to any rights held by any Person existing
prior to the Closing Date (which the Company agrees it will not extend
beyond their current term), and except
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for a fairness opinion relating to the transactions contemplated by
this Agreement, for so long as Purchasers and Permitted Transferees
own, in the aggregate, at least the Minimum Interest, in the event that
the Board of Directors authorizes the Company to finance or refinance
the Company or any of the Company's assets either through debt or
equity offerings (other than securitizations of installment land and/or
timeshare receivables) and elects to utilize the services of any
investment or financial advisor or commercial (but excluding commercial
banking services that are incidental to such debt or equity offerings)
or investment banking firm in connection therewith, Morgan Stanley,
Dean Witter & Co. or any Affiliate or subsidiary thereof ("MSDW") shall
have the exclusive right to act as the Company's financial agent and
advisor and to manage such financings or offerings (provided that MSDW
has reasonable experience in the areas for which such services are to
be provided, and provided further that the Board of Directors, in its
reasonable judgement, has not determined that there exists any actual
or potential conflict of interest with regard to such representation
(but not including a conflict of interest that may exist as a result of
Purchasers' ownership interest in the Company)), and, as compensation
for such services shall be entitled to receive a fee equal to the then
current market rate for similar financings or offerings expressed as a
percentage of the aggregate gross proceeds received from such financing
or offerings, which fees are to be paid to MSDW at the closing of such
transaction. In connection with such services, the Company will enter
into a placement, underwriting or other engagement agreement with MSDW
or a subsidiary or Affiliate thereof, which shall contain terms and
conditions customary for that type of service.
(b) For so long as Purchasers and Permitted
Transferees own, in the aggregate, at least the Minimum Interest, in
the event the Company determines to sell all or substantially all of
the assets of the Company or of all of the Company Subsidiaries, or to
consolidate or merge into or with any other Person (whether or not the
Company continues as the Surviving Person), or to acquire all or
substantially all of the assets, business or securities of any other
Person and elects to utilize the services of an investment or financial
advisor or commercial (but excluding commercial banking services that
are incidental to such transactions) or investment banking firm in
connection therewith, MSDW shall have the exclusive right to act as
advisor and/or underwriter to the Company in connection with such
transactions (provided that the Board of Directors, in its reasonable
judgment, has not determined that there exists any actual or potential
conflict of interest with regard to such representation (but not
including a conflict of interest that may exist as a result of
Purchasers' ownership interest in the Company)), and, as compensation
for such services to be provided, MSDW shall be entitled to receive a
fee equal to the then current market rate for similar transactions,
which fees are to be paid to MSDW at the closing of such transaction.
In connection with such services, the Company will enter into a
placement, underwriting or other engagement agreement with MSDW or a
subsidiary or Affiliate thereof, which shall contain terms and
conditions customary for that type of service.
Section 4.16. SHAREHOLDER APPROVAL. The Company shall take all
action necessary in accordance with all Applicable Law and in accordance with
its Restated Articles of Organization and bylaws to convene a meeting of its
shareholders as soon as reasonably practicable after the date hereof (but in no
event later than the earlier to occur of (x) November 30, 1998, or (y) the
Threshold Date) to consider and vote upon the issuance of the shares of Common
Stock to be issued to Purchasers in accordance with this Agreement on or after
the Threshold Date. The Company, acting
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<PAGE> 44
through its Board of Directors, shall recommend to its shareholders the approval
of the issuance of the shares of Common Stock to be issued to Purchasers in
accordance with this Agreement, and shall use its reasonable best efforts to
obtain such approval of its shareholders.
Section 4.17. NOTICES OF PURCHASERS. Purchasers agree to
promptly notify the Company of the consummation of any Transfer to any Person
(including a Permitted Transferee) of any shares of Common Stock issued to
Purchasers under the terms of this Agreement. Purchasers further agree to
promptly notify the Company when the Purchasers and any Permitted Transferees
own less than the Required Interest, the Minimum Interest and the Permitted
Interest.
ARTICLE V.
CONDITIONS OF CLOSING
Section 5.01. CONDITIONS OF PURCHASE AT CLOSING. The
obligations of Purchasers to purchase the Common Stock to be purchased at the
Closing are subject to satisfaction or waiver of each of the following
conditions on or prior to the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of the Company contained in this
Agreement and the Ancillary Documents and in each certificate or
document delivered by the Company to Purchasers in connection with the
transactions contemplated hereby and thereby shall be true and correct
in all material respects on and as of the date of this Agreement or the
date of such Ancillary Documents, certificates or other documents, as
the case may be, and on and as of the Closing Date, with the same
effect as though made on and as of the Closing Date (except for
representations and warranties that speak as of a specific date other
than the Closing Date (which need only be true and correct in all
material respects as of such date)), and the Company shall have
performed all obligations and complied in all material respects with
all agreements, undertakings, covenants and conditions required
hereunder and thereunder to be performed by it at or prior to the
Closing.
(b) OPINION OF COUNSEL. Purchasers shall have
received at the Closing from Choate, Hall & Stewart counsel to the
Company, a favorable written opinion dated as of the Closing Date which
shall be to the effect set forth in EXHIBIT D hereto.
(c) NO INJUNCTION. There shall not be in effect any
order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits consummation of the
transactions contemplated hereby.
(d) REGULATORY APPROVALS. All Permits, Consents,
authorizations, orders and approvals of, and filings and registrations
with any Governmental Entity or any other Person required to be made or
obtained under any federal or state law, rule or regulation in
connection with the execution, delivery and performance of this
Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby on the Closing Date shall
have been obtained or made, and all statutory waiting periods
thereunder in respect thereof shall have expired, in each case, without
the imposition
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<PAGE> 45
of any terms or conditions which, either individually or in the
aggregate, are unduly burdensome to Purchasers or any of their
Affiliates or are such that, had they been known to Purchasers prior to
the date hereof, it is reasonable to conclude that Purchasers would not
have entered into this Agreement or the transactions contemplated
hereby.
(e) COMPANY CERTIFICATE. The Company shall have
delivered to Purchasers a certificate, dated the Closing Date, signed
by its chief executive officer and its chief financial officer, in form
and substance satisfactory to Purchasers to the effect that the
conditions set forth in this Section 5.01 hereof have been satisfied.
(f) REGISTRATION RIGHTS AGREEMENT. (i) The
Registration Rights Agreement shall have been executed and delivered by
the parties thereto and shall be in full force and effect and (ii) all
Consents, approvals, waivers, amendments, or authorizations required
under any agreements set forth in SCHEDULE 3.01(c) in connection with
the execution, delivery and performance by the Company of the
Registration Rights Agreement which are necessary in order for
Purchasers to have the full benefit or enjoyment of the provisions of
the Registration Rights Agreement shall have been obtained.
(g) PAYMENT OF EXPENSES. The Company shall have paid
to Purchasers the costs and expenses described in Section 7.07 hereof.
(h) APPOINTMENT OF PURCHASER DESIGNEES. The Purchaser
Designees shall have been appointed to the Board of Directors.
(i) SHAREHOLDER VOTING AGREEMENTS. The Shareholder
Voting Agreements shall have been executed and delivered by each Person
listed on SCHEDULE 5.01(i) hereof and shall be in full force and
effect.
(j) AMENDMENT OF BYLAWS. The Company's bylaws shall
have been amended to provide for a staggered board of directors in
accordance with EXHIBIT E hereto, such amendment shall be in form and
substance reasonably satisfactory to Purchasers and shall have been
approved by the Board of Directors, such amendment shall have been duly
filed if filing thereof is required by any Governmental Entity or the
New York Stock Exchange, such amended bylaws shall be in full force and
effect and copies of such amended bylaws shall have been delivered to
Purchasers.
(k) EXCHANGE LISTING. The maximum number of shares of
Common Stock which can be issued to Purchasers prior to the Threshold
Date (which shall be equal to 19.99% of the issued and outstanding
shares of Common Stock on the Closing Date (but excluding any shares of
Common Stock issued to Purchasers of the Permitted Transferees on the
Closing Date)), shall be approved for listing on the New York Stock
Exchange and the Pacific Stock Exchange subject to notice of issuance.
Section 5.02. CONDITIONS OF SALE AT CLOSING. The obligation of
the Company to sell and issue the Common Stock to be sold and issued at the
Closing is subject to satisfaction or waiver of each of the following conditions
on or prior to the Closing Date:
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(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of Purchasers contained in this
Agreement and the Ancillary Documents and in any certificates or other
documents delivered by Purchasers to the Company in connection with the
transactions contemplated hereby and thereby shall be true and correct
in all material respects on and as of the date of this Agreement or the
date of such Ancillary Documents, certificates or other documents, as
the case may be, and on and as of the Closing Date with the same effect
as though made on and as of the Closing Date (except for
representations and warranties that speak as of a specific date other
than the Closing Date (which need only be true and correct in all
material respects as of such date)), and Purchasers shall have
performed all obligations and complied in all material respects with
all agreements, undertakings, covenants and conditions required to be
performed by each of them at or prior to the Closing.
(b) NO INJUNCTION. There shall not be in effect any
order, decree or injunction of a court or agency of competent
jurisdiction with enjoins or prohibits consummation of the transactions
contemplated hereby.
(c) REGULATORY APPROVALS. All Permits, Consents,
authorizations, orders and approvals of, and filings and registrations
with any Governmental Entity or any other Person required to be made or
obtained under any federal or state law, rule or regulation for or in
connection with the execution, delivery and performance of this
Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby on the Closing Date shall
have been obtained or made, and all statutory waiting periods
thereunder in respect thereof shall have expired, in each case without
the imposition of any terms or conditions which, either individually or
in the aggregate, are unduly burdensome to the Company or any of its
Affiliates or are such that, had they been known to the Company prior
to the date hereof, it is reasonable to conclude that the Company would
not have entered into this Agreement or the transactions contemplated
hereby.
(d) EXCHANGE LISTING. The maximum number of shares of
Common Stock which can be issued to Purchasers prior to the Threshold
Date (which shall be equal to 19.99% of the issued and outstanding
shares of Common Stock on the Closing Date (but excluding any shares of
Common Stock issued to Purchasers of the Permitted Transferees on the
Closing Date)), shall be approved for listing on the New York Stock
Exchange and the Pacific Stock Exchange subject to notice of issuance.
(e) PURCHASERS' CERTIFICATE. Each Purchaser shall
have delivered to the Company a certificate, dated the Closing Date, in
form and substance satisfactory to the Company to the effect that the
conditions set forth in this Section 5.02 have been satisfied.
Section 5.03. CONDITIONS OF PURCHASE OF REMAINING SHARES. The
Purchasers' obligations to purchase the Remaining Shares on each Subsequent
Closing Date shall be subject to, in each case, satisfaction or waiver of each
of the following conditions on or prior to each Subsequent Closing Date:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of the Company contained in this
Agreement and the Ancillary Documents and
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<PAGE> 47
in each certificate or document delivered by the Company to Purchasers
in connection with the transactions contemplated hereby and thereby
shall be true and correct in all material respects on and as of the
Subsequent Closing Date, with the same effect as though made on or as
of the Subsequent Closing Date (except for representations and
warranties that speak as of a specific date other than such Subsequent
Closing Date (which need only be true and correct in all material
respects as of such date)), and the Company shall have performed all
obligations and complied in all material respects with all agreements,
undertakings, covenants and conditions required hereunder and
thereunder to be performed by the Company at or prior to the Subsequent
Closing Date.
(b) OPINION OF COUNSEL. Purchasers shall have
received at the closing of any sale and purchase of any Remaining
Shares (each a "Subsequent Closing") from Choate, Hall & Stewart or any
other counsel to the Company satisfactory to Purchasers, a favorable
written opinion dated as of the date of the Subsequent Closing which
shall be to the effect set forth in EXHIBIT D hereto.
(c) NO INJUNCTION. There shall not be in effect any
order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits consummation of the sale and
purchase of the Remaining Shares to be purchased by Purchasers at the
Subsequent Closing.
(d) COMPANY CERTIFICATE. The Company shall have
delivered to Purchasers a certificate, dated as of the Subsequent
Closing Date, signed by its chief executive officer and its chief
financial officer, in form and substance satisfactory to Purchasers to
the effect that the conditions set forth in this Section 5.03 hereof
have been satisfied.
(e) PAYMENT OF EXPENSES. The Company shall have paid
to Purchasers the costs and expenses incurred by Purchasers in
connection with the Subsequent Closing pursuant to Section 7.07 hereof.
(f) MATERIAL ADVERSE EFFECT. Since the Closing Date,
there shall not have been any change, event, occurrence or development
in the assets, business, properties, liabilities, business affairs,
condition (financial or otherwise), or results of operations of the
Company or any Company Subsidiary that has had or could reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect.
(g) MARKET. (i) Trading generally shall not have been
suspended or materially limited on or by, as the case may be, either
the New York Stock Exchange or the Pacific Stock Exchange, (ii) trading
of any securities of the Company or the Company Subsidiaries shall not
have been suspended on the New York Stock Exchange or the Pacific Stock
Exchange, (iii) a general moratorium on commercial banking activities
in New York shall not have been declared by either Federal or New York
State authorities and (iv) there shall not have occurred any outbreak
or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in any such case, in Purchasers' judgment, is
material and adverse to the Company.
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(h) EXCHANGE LISTING. The Remaining Shares to be
issued to Purchasers on the Subsequent Closing Date shall be approved
for listing on the New York Stock Exchange and Pacific Stock Exchange
(or such other national securities exchange or securities trading
system on which the Common Stock is listed) subject to official notice
of issuance and notice of results of the shareholder vote prior to the
Threshold Date.
(i) SHAREHOLDER APPROVAL. For any Remaining Shares to
be issued on or after the Threshold Date, the shareholders of the
Company shall have duly approved the issuance of such shares of Common
Stock pursuant to this Agreement (the "Required Shareholder Approval")
in accordance with Section 4.16 of the Agreement and all Applicable
Laws.
(j) REGULATORY APPROVALS. All Permits, Consents,
authorizations, orders and approvals of, and filings and registrations
with any Governmental Entity or any other Person required to be made or
obtained under any federal or state law, rule or regulation in
connection with the consummation of the transactions contemplated
hereby on such Subsequent Closing Date shall have been obtained or
made, and all statutory waiting periods thereunder in respect thereof
shall have expired, in each case, without the imposition of any terms
or conditions which, either individually or in the aggregate, are
unduly burdensome to Purchasers or any of their Affiliates or are such
that, had they been known to Purchasers prior to the date hereof, it is
reasonable to conclude that Purchasers would not have entered into this
Agreement or the transactions contemplated hereby.
Section 5.04. CONDITIONS OF SALE OF REMAINING SHARES. The
obligation of the Company to sell and issue any Remaining Shares is subject to
satisfaction or waiver of each of the following conditions on or prior to any
Subsequent Closing Date:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of Purchaser contained in this Agreement
and the Ancillary Documents and in each certificate or document
delivered by Purchasers to the Company in connection with the
transactions contemplated hereby and thereby shall be true and correct
in all material respects on and as of the Subsequent Closing Date with
the same effect as though made on and as of the Subsequent Closing Date
(except for representations and warranties that speak as of a specific
date other than such Subsequent Closing Date (which need only be true
and correct in all material respects as of such date)), and Purchasers
shall have performed all obligations and complied with all agreements,
undertakings, covenants and conditions required by each of them to be
performed at or prior to the Subsequent Closing Date.
(b) NO INJUNCTION. There shall not be in effect any
order, decree or injunction of a court or agency of competent
jurisdiction with enjoins or prohibits consummation of the sale and
purchase of the Remaining Shares to be sold and issued by the Company
at the Subsequent Closing.
(c) PURCHASERS' CERTIFICATE. Purchasers shall have
delivered to the Company a certificate, dated as of the Subsequent
Closing Date, in form and substance satisfactory to the Company to the
effect that the conditions set forth in this Section 5.04 have been
satisfied.
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(d) SHAREHOLDER APPROVAL. For any Remaining Shares to
be issued on or after the Threshold Date, the Required Shareholder
Approval shall have been obtained.
(e) REGULATORY APPROVALS. All Permits, Consents,
authorizations, orders and approvals of, and filings and registrations
with any Governmental Entity or any other Person required to be made or
obtained under any federal or state law, rule or regulation for or in
connection with the consummation of the transactions contemplated
hereby on such Subsequent Closing Date shall have been obtained or
made, and all statutory waiting periods thereunder in respect thereof
shall have expired, in each case without the imposition of any terms or
conditions which, either individually or in the aggregate, are unduly
burdensome to the Company or any of its Affiliates or are such that,
had they been known to the Company prior to the date hereof, it is
reasonable to conclude that the Company would not have entered into
this Agreement or the transactions contemplated hereby.
(f) EXCHANGE LISTING. The Remaining Shares to be
issued to Purchasers on the Subsequent Closing Date shall be approved
for listing on the New York Stock Exchange and Pacific Stock Exchange
(or such other national securities exchange or securities trading
system on which the Common Stock is listed) subject to official notice
of issuance and notice of results of the shareholder vote prior to the
Threshold Date.
ARTICLE VI.
[RESERVED]
ARTICLE VII.
MISCELLANEOUS
Section 7.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
covenants and agreements and all representations and warranties made herein or
in any Schedule or Exhibit hereto, or in any certificates or documents delivered
in connection with the Closing shall survive the Closing for a period of 18
months following each issuance of shares of Common Stock to Purchasers pursuant
to Sections 2.01 and 2.03 of this Agreement.
Section 7.02. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by overnight courier as follows:
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(a) If to Purchasers, to:
c/o Morgan Stanley Real Estate Fund III, L.P.
37th Floor
1585 Broadway
New York, New York 10036-8293
Phone: (212) 761-6084
Fax: (212) 761-0508
Attn: Mr. Michael Franco and
Mr. Michael Foster
With copies to:
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Phone: (214) 220-3939
Fax: (214) 969-5100
Attn: David J. Lowery, Esq.
(b) If to the Company, to:
Bluegreen Corporation
4960 Blue Lake Drive
Boca Raton, Florida 33431
Phone: (561) 912-8000
Fax: (561) 912-8100
Attn: Patrick E. Rondeau, Esq.
Mr. John F. Chiste
With a copy to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Phone: (617) 248-5000
Fax: (617) 248-4000
Attn: William P. Gelnaw, Esq.
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
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Section 7.03. ENTIRE AGREEMENT; AMENDMENT. This Agreement and
the Ancillary Documents and the documents described herein and therein or
attached or delivered pursuant hereto or thereto set forth the entire agreement
between the parties hereto with respect to the transactions contemplated by this
Agreement. Any provision of this Agreement may be amended or modified in whole
or in part at any time by an agreement in writing among the parties hereto
(provided that agreement by the Purchasers and the Permitted Transferee shall
only require agreement of the Purchasers and Permitted Transferees holding a
majority of the shares of Common Stock issued pursuant to this Agreement)
executed in the same manner as this Agreement. No failure on the part of any
party to exercise, and no delay in exercising, any right shall operate as a
waiver thereof nor shall any single or partial exercise by any party of any
right preclude any other or future exercise thereof or the exercise of any other
right. No investigation by Purchasers of the Company prior to or after the date
hereof shall stop or prevent Purchasers from exercising any right hereunder or
be deemed to be a waiver of any such right. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
Section 7.04. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same
instrument.
Section 7.05. GOVERNING LAW. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of Massachusetts
applicable to contracts made and to be performed in that State without giving
effect to the conflict of laws of that State.
Section 7.06. PUBLIC ANNOUNCEMENTS. Subject to each party's
disclosure obligations imposed by law and any stock exchange, the Company agrees
to provide Purchasers for their review all news releases and other public
disclosures that the Company anticipates distributing relating to this Agreement
and the transactions contemplated hereby prior to any dissemination of the same.
Purchasers shall also have the right to review and, before filing or other
public dissemination, approve (which approval will not be unreasonably withheld)
any statements made or information provided with respect to Purchasers or the
Permitted Transferees or the transactions contemplated by this Agreement,
including, without limitation, such statements intended to be included in any
future Securities Filings prepared by or on behalf of the Company. Subject to
its disclosure obligations imposed by law and the New York Stock Exchange or
Pacific Stock Exchange, the Company shall not use the name (or any derivative
thereof) of any Purchaser or Permitted Transferee in any news release or public
disclosures without the prior written consent of Purchasers.
Section 7.07. EXPENSES. The Company and the Company
Subsidiaries shall bear their own costs and expenses incurred in connection with
this Agreement and the Ancillary Documents and the transactions contemplated
hereby and thereby, including the fees and expenses of the Company's financial
advisors, accountants and counsel. Upon the Closing, the Company agrees to pay
or reimburse Purchasers on the Closing Date for all reasonable out-of-pocket
costs and expenses incurred by Purchasers arising in connection with Purchasers'
due diligence investigation of the Company, the preparation and negotiation of
this Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, all
filing fees, travel expenses and the reasonable fees and expenses of Purchasers'
counsel, accountants and consultants. On each Subsequent Closing Date, the
Company agrees to
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<PAGE> 52
pay or reimburse Purchasers for all reasonable out-of-pocket costs and expenses
incurred by Purchasers arising in connection with consummating the transactions
contemplated hereby, including, without limitation, all filing fees, travel
expenses and the reasonable fees and expenses of Purchasers' counsel,
accountants and consultants. In no event shall the Company's aggregate
reimbursement obligation for the foregoing exceed $250,000.
Section 7.08. INDEMNIFICATION.
(a) The Company agrees to indemnify and save harmless
Purchasers, each person who controls Purchasers within the meaning of
the Exchange Act (including the general partners thereof), and each of
the respective partners, officers, directors, employees, agents and
Affiliates of the foregoing in their respective capacities as such (the
"Purchaser Indemnitees"), to the fullest extent lawful, from and
against any and all actions, suits, claims, proceedings, costs,
damages, judgments, amounts paid in settlement (subject to Section
7.08(d)) and expenses (including reasonable attorneys' fees and
disbursements) (collectively, "Losses") relating to or arising out of
(i) any inaccuracy in or breach of the representations, warranties,
covenants or agreements made by the Company herein when made or deemed
made (provided that if the Company has disclosed in writing to
Purchasers any inaccuracy or breach of representations or warranties
prior to a Closing or Subsequent Closing and the Purchasers elect to
consummate the transactions at such Closing or Subsequent Closing, the
Company shall have no obligations to indemnify the Purchaser
Indemnitees for such inaccuracy or breach); (ii) any other conduct by
the Company or its employees or agents as a result of which, in whole
or in part, any Purchaser Indemnitee is made a party to, or otherwise
incurs any loss pursuant to, any action, suit, claim or proceeding
arising out of or relating to any such conduct; or (iii) any action or
failure to act undertaken by a Purchaser Indemnitee at the request of
the Company.
(b) The Company shall reimburse the Purchaser
Indemnitees for all reasonable out-of-pocket expenses (including
attorneys' fees and disbursements) as they are incurred in connection
with investigating, preparing to defend or defending any such action,
suit, claim or proceeding (including any inquiry or investigation)
whether or not a Purchaser Indemnitee is a party thereto.
(c) In the event that the foregoing indemnity is
unavailable to any Purchaser Indemnitee for any reason, the Company
agrees to contribute to any such Losses and will do so in such
proportion as is appropriate to reflect the relative fault of each
party in connection with the conduct which resulted in the Losses. The
parties agree that it would not be just or equitable if contribution
were determined by pro rata allocation or by any other method of
allocation which does not take account of relative fault and other
equitable considerations. The parties further agree that if and to the
extent that pro rata contribution were nevertheless considered by a
court, all Purchaser Indemnitees shall collectively be deemed to be one
person. No Purchaser Indemnitee shall in any event have liability to
the Company arising out of an inaccuracy in or breach of the
representations, warranties, covenants or agreements made by the
Company herein, other conduct by the Company or their employees or
agents, or any action or failure to act undertaken by a Purchaser
Indemnitee at the request of the Company.
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<PAGE> 53
(d) A Purchaser Indemnitee shall give written notice
to the Company of any claim with respect to which it seeks
indemnification promptly after the discovery by such party of any
matters giving rise to a claim for indemnification; PROVIDED that the
failure of any Purchaser Indemnitee to give notice as provided herein
shall not relieve the Company of its obligations under this Section
7.08 unless and to the extent that the Company shall have been
prejudiced by the failure of such Purchaser Indemnitee to so notify the
Company. In case any such action, suit, claim or proceeding is brought
against a Purchaser Indemnitee, the Company shall be entitled to
participate in the defense thereof and, to the extent that it may wish,
to assume the defense thereof, with counsel satisfactory to such
Purchaser Indemnitee, and after notice from the Company of its election
so to assume the defense thereof, the Company will not be liable to
such Purchaser Indemnitee under this Section 7.08 for any legal or
other expense subsequently incurred by such Purchaser Indemnitee in
connection with the defense thereof; PROVIDED, HOWEVER, that (i) if the
Company shall elect not to assume the defense of such claim or action
or (ii) if such Purchaser Indemnitee reasonably determines that there
may be a conflict between the positions of the Company and of Purchaser
Indemnitee in defending such claim or action, then separate counsel
shall be entitled to participate in and conduct the defense, and the
Company shall be liable for any legal or other expenses reasonably
incurred by Purchaser Indemnitee in connection with the defense. The
Company shall not be liable for any settlement of any action, suit,
claim or proceeding effected without its written consent; PROVIDED,
HOWEVER, that the Company shall not unreasonably withhold, delay or
condition its consent. The Company further agrees that it will not,
without Purchaser Indemnitee's prior written consent, settle or
compromise any claim or consent to entry of any judgment in respect
thereof in any pending or threatened action, suit, claim or proceeding
in respect of which indemnification may be sought hereunder (whether or
not any Purchaser Indemnitee is an actual or potential party to such
action, suit, claim or proceeding) unless such settlement or compromise
includes an unconditional release of Purchasers and each other
Purchaser Indemnitee from all liability arising out of such action,
suit, claim or proceeding.
(e) The obligations of the Company under this Section
7.08 shall survive the transfer of the shares of Common Stock or the
termination of this Agreement or the consummation of the transactions
contemplated hereby.
(f) The rights of Purchasers under this Section 7.08
shall be in addition to any liability that the Company might otherwise
have to Purchasers under this Agreement, at common law or otherwise.
Section 7.09. SUCCESSORS AND ASSIGNS. Subject to Applicable
Law and the provisions of Section 4.07, Purchasers may assign their respective
rights under this Agreement in whole or in part to any Permitted Transferee, but
no such assignment shall relieve any Purchaser of its obligations hereunder. No
transferee of Purchasers (or the Permitted Transferees) which is not a Permitted
Transferee shall have any rights under this Agreement. The Company may not
assign any of its rights or delegate any of its duties under this Agreement
without the prior written consent of Purchasers. Any purported assignment in
violation of this Section 7.09 shall be void.
Section 7.10. JURISDICTION. The courts of the State of New
York in New York County and the United States District Court for the Southern
District of New York shall have jurisdiction
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<PAGE> 54
over the parties with respect to any dispute or controversy between them arising
under or in connection with this Agreement and, by execution and delivery of
this Agreement, each of the parties to this Agreement submits to the
jurisdiction of those courts, including, but not limited to, the IN PERSONAM and
subject matter jurisdiction of those courts, waives any objections to such
jurisdiction on the grounds of venue or FORUM NON CONVENIENS, the absence of IN
PERSONAM or subject matter jurisdiction and any similar grounds, consents to
service of process by mail (in accordance with Section 7.02) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
Section 7.11. SPECIFIC PERFORMANCE. The Company acknowledges
that the rights granted to Purchasers in this Agreement are of a special, unique
and extraordinary character, and that any breach of this Agreement by the
Company could not be compensated for by damages. Accordingly, if the Company
breaches its obligations under this Agreement, Purchasers shall be entitled, in
addition to any other remedies that they may have, to seek enforcement of this
Agreement by a decree of specific performance requiring the Company to fulfill
its obligations under this Agreement.
Section 7.12. CAPTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Section 7.13. SEVERABILITY. Should any part of this Agreement
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties here to that
they would have executed the remaining portion of this Agreement without
including therein any such part or parts which may, for any reason, be hereafter
declared invalid.
Section 7.14. MUTUAL WAIVER OF JURY TRIAL. Because disputes
arising in connection with complex financial transactions are most quickly and
economically resolved by an experienced and expert person and the parties wish
applicable state and federal laws to apply (rather than arbitration rules), the
parties desire that their disputes be resolved by a judge applying such
Applicable Laws. Therefore, to achieve the best combination of the benefits of
the judicial system and of arbitration, the parties hereto waive all right to
trial by jury in any action, suit or proceeding brought to enforce or defend any
rights or remedies under this Agreement.
Section 7.15. EXCULPATION. Notwithstanding any provision
herein to the contrary, the liability of each Purchaser shall be limited to the
assets of such Purchaser and no partner, shareholder, officer, director,
employee or agent of Purchaser shall have any personal liability hereunder
(except to the extent provided under Applicable Law with respect to unlawful
distribution or fraudulent transfers or conveyances).
Section 7.16. OBLIGATIONS. All obligations of Purchasers under
this Agreement shall be joint and several.
Section 7.17. SCHEDULES. All references to a "Schedule" in
this Agreement shall refer to the schedules included in the letter from the
Company to Purchasers dated as of the date hereof which is hereby incorporated
herein by reference.
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[Signature Page Follows]
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<PAGE> 56
IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto or by their respective duly authorized officers, all as of the
date first above written.
BLUEGREEN CORPORATION
By: /s/ George F. Donovan
---------------------------------------
Name: George F. Donovan
Title: President and Chief Executive Officer
MORGAN STANLEY REAL ESTATE FUND
III, L.P.
By: MSREF III, Inc.
Its: General Partner
By: /s/ Michael J. Franco
---------------------------------------
Name: Michael J. Franco
Title: Vice President
MORGAN STANLEY REAL ESTATE
INVESTORS III, L.P.
By: MSREF III, Inc.
Its: General Partner
By: /s/ Michael J. Franco
---------------------------------------
Name: Michael J. Franco
Title: Vice President
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<PAGE> 57
MSP REAL ESTATE FUND, L.P.
By: MSREF III, Inc.
Its: General Partner
By: /s/ Michael J. Franco
---------------------------------------
Name: Michael J. Franco
Title: Vice President
MSREF III SPECIAL FUND, L.P.
By: MSREF III, Inc.
Its: General Partner
By: /s/ Michael J. Franco
---------------------------------------
Name: Michael J. Franco
Title: Vice President
54
<PAGE> 1
EXHIBIT 10.132
================================================================================
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
MORGAN STANLEY REAL ESTATE FUND III, L.P.,
MORGAN STANLEY REAL ESTATE INVESTORS III, L.P.,
MSP REAL ESTATE FUND, L.P.,
MSREF III SPECIAL FUND, L.P.
AND
BLUEGREEN CORPORATION
DATED AUGUST 14, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Definitions..............................................................................................1
2. Shelf Registration of Resales............................................................................3
3. Demand Registration......................................................................................5
4. Piggyback Registration...................................................................................7
5. Registration of Securities Other than Registrable Securities.............................................9
6. "Market Stand-Off" Agreement.............................................................................9
7. Registration Procedures..................................................................................9
8. Registration Expenses...................................................................................14
9. Indemnification.........................................................................................15
10. Rule 144................................................................................................17
11. Underwritten Registrations..............................................................................18
12. Miscellaneous...........................................................................................18
</TABLE>
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<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of August 14, 1998, by and among Morgan Stanley Real Estate Fund
III, L.P., a Delaware limited partnership, Morgan Stanley Real Estate Investors
III, L.P., a Delaware limited partnership, MSP Real Estate Fund, L.P., a
Delaware limited partnership and MSREF III Special Fund, L.P., a Delaware
limited partnership (collectively, "MSREF") and Bluegreen Corporation, a
Massachusetts corporation (the "Company").
RECITALS
WHEREAS, pursuant to the Securities Purchase Agreement dated August 14,
1998, by and among the Company and MSREF, MSREF has agreed to purchase shares of
the Company's Common Stock in an aggregate amount of up to $50,000,000; and
WHEREAS, to induce MSREF to purchase the shares of Common Stock to be
purchased thereunder, the Company has agreed to provide the registration rights
set forth in this Agreement; and
WHEREAS, the execution and delivery by the Company of this Agreement is
a condition to the obligation of MSREF to purchase any shares of Common Stock as
set forth in Section 5.01 of the Securities Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the respective meanings set forth below:
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York or Boca Raton, Florida are
authorized or obligated to close.
"CHANGE OF CONTROL" has the meaning in the Securities Purchase
Agreement.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Company.
"DEMAND NOTICE" has the meaning set forth in Section 3(a) hereto.
"DEMAND REGISTRATION" has the meaning set forth in Section 3(a) hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8(c) hereto.
"INDEMNIFYING PARTY" has the meaning set forth in Section 8(c) hereto.
<PAGE> 4
"LOCK-UP PERIOD" means the period commencing on the date hereof and
continuing until the earlier to occur of (i) the second anniversary of the date
hereof, or (ii) six months following the first date on which all shares of
Common Stock to be sold and issued to Purchasers under Sections 2.01 and 2.03 of
the Securities Purchase Agreement shall have been acquired by Purchasers, but
not earlier than the 18th month anniversary of the date hereof.
"LOSSES" has the meaning set forth in Section 8(a) hereto.
"NOTICE" has the meaning set forth in Section 3(b)(iii) hereto.
"PERMITTED TRANSFEREE" has the meaning set forth in the Securities
Purchase Agreement.
"PERSON" means an individual, corporation, partnership, association,
trust, limited liability company, joint venture or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PIGGYBACK REGISTRATION" has the meaning set forth in Section 4(a)
hereto.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
materials incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"PURCHASERS" means any Person comprising MSREF, any Permitted
Transferee, any bona fide financial institution to which any Purchaser has
transferred (including upon foreclosure of a pledge) shares of Common Stock in
accordance with Section 4.07 of the Securities Purchase Agreement for the
purpose of securing bona fide indebtedness of such Purchaser, and not more than
two other Persons to whom Purchaser or any Permitted Transferee has assigned its
rights hereunder and transferred shares of Common Stock if such Persons are
subject to the volume limitations and manner of sale provisions of Rule 144.
"REGISTRABLE SECURITIES" means (i) all the shares of Common Stock
beneficially owned by Purchasers as of the date hereof which have been issued to
Purchasers pursuant to the Securities Purchase Agreement (ii) all shares of
Common Stock which Purchasers have the obligation or right to purchase pursuant
to the Securities Purchase Agreement, and (iii) all of the shares of Common
Stock issued pursuant to the Securities Purchase Agreement and transferred to
Purchasers as permitted by the Securities Purchase Agreement and this Agreement,
until, in the case of any such security, (x) such security is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (y) such security may be disposed of by
Purchasers in accordance with Rule 144(k) (or any successor provision to such
Rule) under the Securities Act as confirmed in a written opinion of counsel to
the Company addressed to the Purchaser holding such securities, or (z) is sold
or is eligible for sale in the opinion of counsel reasonably satisfactory to the
Company and the Purchasers without
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<PAGE> 5
registration under the Securities Act and without any restrictions and in a
manner in which all transfer restrictions and restrictive legends with respect
thereto are or may be removed upon consummation of such sale.
"REGISTRATION STATEMENT" means any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement (including
post-effective amendments), all exhibits and all materials incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"REGISTRATION SUSPENSION PERIOD" has the meaning set forth in Section
2(b) hereto.
"RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder, as in effect from time to time.
"SECURITIES PURCHASE AGREEMENT" means that Securities Purchase
Agreement dated as of August 14, 1998 among MSREF and the Company.
"SPECIAL COUNSEL" has the meaning set forth in Section 6(a) hereto.
"SUBSIDIARY" means, with respect to any corporation (the "parent") any
other Person of which 50% or more of the shares of the voting stock are owned or
controlled, directly or indirectly, by the parent or one or more Subsidiaries of
the parent, or by the parent and one or more Subsidiaries.
"SUSPENSION NOTICE" has the meaning set forth in Section 2(b) hereto.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a
registration under the Securities Act in which securities of the Company are
sold to an underwriter or group of underwriters for reoffering to the public.
2. SHELF REGISTRATION OF RESALES.
(a) OBLIGATION TO FILE AND MAINTAIN. The Company will use its
reasonable best efforts to file with the SEC and cause to become effective no
later than the expiration of the Lock-Up Period or within 45 days following (i)
the occurrence of a Change of Control or (ii) receipt of a notice from the
Company of the execution by the Company of a definitive agreement with a Person
which will result in a Change of Control, a Registration Statement under the
Securities Act for the offering on a continuous or delayed basis in the future
of all of the Registrable Securities (the "Shelf Registration"). The Shelf
Registration shall be on an appropriate form and the Shelf Registration and any
form of prospectus included therein or prospectus supplement
3
<PAGE> 6
relating thereto shall reflect such plan of distribution or method of sale as
Purchasers may from time to time notify the Company, including the sale of some
or all of the Registrable Securities in a public offering. The Company shall use
its reasonable best efforts to keep the Shelf Registration continuously
effective for the period beginning on the date on which the Shelf Registration
is declared effective and ending on the first date that there are no Registrable
Securities (provided that the Company may terminate the effectiveness of a Shelf
Registration on the fourth anniversary of the date of effectiveness thereof plus
a number of days equal to the number of days in all Registration Suspension
Periods relating to such Shelf Registration). During the period during which the
Shelf Registration is effective, the Company shall supplement or make amendments
to the Shelf Registration, if required by the Securities Act or if reasonably
requested by Purchasers or an underwriter of Registrable Securities, including
to reflect any specific plan of distribution or method of sale, and shall use
its reasonable best efforts to have such supplements and amendments declared
effective, if required, as soon as practicable after filing.
(b) BLACK-OUT PERIODS OF PURCHASERS. Notwithstanding anything herein to
the contrary, (i) the Company shall have the right, by written notice to
Purchasers (the "Suspension Notice"), exercisable on not more than one occasion
during any one-year period, from time to time, to require Purchasers not to sell
under the Shelf Registration or to suspend the effectiveness thereof during the
period starting with the date 30 days prior to the Company's good faith
estimate, as certified in writing by an executive officer of the Company to
Purchasers, of the proposed date of filing of a Registration Statement or a
preliminary prospectus supplement relating to an existing shelf registration
statement, in either case, pertaining to an Underwritten Offering of equity
securities of the Company for the account of the Company, and ending on the date
90 days following the effective date of such Registration Statement or the date
of filing of such prospectus supplement, and (ii) the Company shall be entitled
to postpone or suspend (but not for a period exceeding 60 days per transaction)
the filing or effectiveness of a Registration Statement otherwise required to be
prepared and filed by it pursuant to this Section 2 on not more than one
occasion during any 12-month period if the Company determines, in its good faith
judgment, that such registration and offering or continued effectiveness would
interfere with any material financing, acquisition, disposition, corporate
reorganization or other material transaction involving the Company or any of its
subsidiaries or any preexisting negotiations, discussions or pending proposal
with respect to any such material transactions or public disclosure thereof
would be required prior to the time such disclosure might otherwise be required,
or when the Company is in possession of material information that it deems
advisable not to disclose in a Registration Statement (either, the "Registration
Suspension Period").
(c) SHELF REGISTRATIONS. A Shelf Registration under this Section 2
shall not be deemed to have been effected unless such registration becomes
effective pursuant to the Securities Act and is kept effective for a period of
at least four years, PROVIDED, HOWEVER, that no Registration Suspension Periods
or periods during which there is any stop order, injunction or other order of
the SEC or other governmental authority for any reason other than an act or
omission or Purchasers, shall count towards such four-year period.
(d) NOTICE. The Company shall give Purchasers prompt notice in the
event that the Company has suspended sales of Registrable Securities under
Section 2(b).
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<PAGE> 7
3. DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION. At any time and from time to time after
the earlier of (i) expiration of the Lock-Up Period, (ii) the occurrence of a
Change of Control or (iii) receipt of a notice from the Company of the execution
by the Company of a definitive agreement with a Person which will result in a
Change of Control, each Purchaser shall have the right by written notice
delivered to the Company (a "Demand Notice") to require the Company to register
the number of Registrable Securities requested to be so registered in accordance
with the provisions of the Securities Act (a "Demand Registration"), but in no
event fewer than would result in $10,000,000 of Registrable Securities being
registered or all Registrable Securities owned by the Purchaser delivering the
Demand Notice if it owns less than $10,000,000 of Registrable Securities;
PROVIDED, HOWEVER, that no Purchaser may deliver a Demand Notice until 120 days
after the effective date of the immediately preceding Demand Registration and no
Purchaser may deliver a Demand Notice within 180 days after the effective date
of a registration statement filed by the Company covering a firm commitment
underwritten public offering (PROVIDED THAT the Purchaser had the right to
participate in such offering under Section 4). The number of Demand
Registrations pursuant to this Section 3(a) will not exceed two; PROVIDED,
HOWEVER, that in determining the number of Demand Registrations to which
Purchasers are entitled there will be excluded (i) any Demand Registration that
is an Underwritten Registration if the managing underwriter or underwriters have
advised the Purchasers whose Registrable Securities are being registered in the
Demand Registration that the total number of Registrable Securities requested to
be included in the Demand Registration exceeds by more than 25% the number of
Registrable Securities that can be sold in that offering in accordance with the
provisions of this Agreement without materially and adversely affecting the
success of such offering, and (ii) any Demand Registration that does not become
effective or is not maintained effective for the period required pursuant to
Section 3(b), unless in the case of this clause (ii) the Demand Registration
does not become effective after being filed by the Company solely by reason of
the refusal to proceed by the holders of Registrable Securities unless (A) the
refusal to proceed is based upon the written advice of counsel relating to a
matter with respect to the Company or (B) the Purchasers that requested their
Registrable Securities to be included in the Demand Registration elect to pay
all registration and other expenses in connection with that Demand Registration.
The Company shall not be obligated to effect a Demand Registration (i) within 6
months of the effective date of a registration pursuant to Section 2 if there is
a registration effective pursuant to Section 2 at the time of the Demand Notice,
or (ii) within 120 days of the effective date of a previous Demand Registration
pursuant to this Section 3.
(b) FILING AND EFFECTIVENESS.
(i) The Company will file a Registration Statement relating to
any Demand Registration within 30 calendar days and will use its
reasonable best efforts to cause the Registration Statement to be
declared effective by the SEC within 90 calendar days of the date on
which the Company received the related Demand Notice. Each Demand
Notice must specify the number of Registrable Securities to be
registered and the intended methods of distribution of those
Registrable Securities. If Purchaser delivering the Demand Notice
specifies one particular type of Underwritten Offering, the method of
distribution will be that type of Underwritten Offering or a series of
that type of
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Underwritten Offerings during the period during which the Registration
Statement is effective.
(ii) In connection with a Demand Registration pursuant to
Section 3(a), the Company will keep the Registration Statement
effective for a period of not less than 180 days or such shorter period
which will terminate when all Registrable Securities covered by such
Registration Statement have been sold. If any Demand Registration is
requested to be effected as a "shelf" registration, the Company will
keep the Registration Statement filed in respect of that Demand
Registration effective for a period of up to one year from the date on
which the SEC declares that Registration Statement effective (subject
to extension pursuant to Section 6 hereof) or such shorter period which
will terminate when all Registrable Securities covered by that
Registration Statement have been sold pursuant to that Registration
Statement.
(iii) Within five Business Days after receipt of a Demand
Notice, the Company will serve written notice of its receipt of the
Demand Notice (the "Notice") to the other Purchasers and will, subject
to the provisions of Section 2(c), include in that Demand Registration
all Registrable Securities with respect to which the Company receives a
written request from any such other Purchaser for inclusion therein
within 15 calendar days after receipt of the Notice.
(c) PRIORITY ON DEMAND REGISTRATION. If any of the Registrable
Securities registered pursuant to a Demand Registration are to be sold in one or
more firm commitment Underwritten Offerings, the Company may also provide
written notice to other holders of its equity securities (other than Registrable
Securities), if any, who have piggyback registration rights with respect thereto
and will permit all of those holders who request to be included in the Demand
Registration to include any or all equity securities held by those holders in
that Demand Registration on the same terms and conditions as the Registrable
Securities. Notwithstanding the foregoing, if the managing underwriter or
underwriters of the Underwritten Offering to which that Demand Registration
relates advises the Company and the Purchasers whose Registrable Securities are
being registered that the total amount of Registrable Securities and securities
that the other equity security holders intend to include in that Demand
Registration is in the aggregate in excess of that number of securities which
can be sold in such underwritten offering without materially and adversely
affecting the success of such offering, then the Company will include in such
registration (i) first, up to the full number of the Registrable Securities
requested to be registered pursuant to Section 3(a) hereof to the extent such
Registrable Securities requested to be registered do not exceed the largest
number of securities which can be sold in such underwritten offering without
materially and adversely affecting such offering and (ii) second, to the extent
that the number of Registrable Securities requested to be registered pursuant to
Section 3(a) hereof is less than the number of securities which can be sold in
such underwritten offering without materially and adversely affecting such
offering, such number of shares of equity securities the Company requests to be
included in such registration and such number of other securities proposed to be
sold by any other Person (the securities to be included in such underwritten
offering by the Company and such other Persons to be allocated as agreed upon by
the Company and such other Persons) which, in the opinion of the managing
underwriter or underwriters, can be sold without materially and adversely
affecting such underwritten offering.
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(d) BLACK-OUT PERIODS OF PURCHASER. Subject to the conditions of this
Section 3(d), (i) the Company shall have the right, exercisable on not more than
one occasion during any one-year period, from time to time to require Purchasers
not to sell under the registration requested pursuant to this Section 3 or to
suspend the effectiveness thereof during the period starting with the date 30
days prior to the Company's good faith estimate, as certified in writing by an
executive officer of the Company to Purchasers, of the proposed date of filing
of a Registration Statement or a preliminary prospectus supplement relating to
an existing registration statement, in either case, pertaining to an
Underwritten Offering of equity securities of the Company for the account of the
Company, and ending on the date 90 days following the effective date of such
registration statement or the date of filing of such prospectus supplement, and
(ii) the Company shall be entitled to postpone or suspend (but not for a period
exceeding 60 days per transaction) the filing or effectiveness of a Registration
Statement otherwise required to be prepared and filed by it pursuant to this
Section 3 on not more than one occasion during any 12-month period if the
Company determines, in its good faith judgment, that such registration and
offering or continued effectiveness would interfere with any material financing,
acquisition, disposition, corporate reorganization or other material transaction
involving the Company or any of its subsidiaries or preexisting negotiations,
discussions or pending proposal with respect to any such material transaction or
public disclosure thereof would be required prior to the time such disclosure
might otherwise be required, or when the Company is in possession of material
information that it deems advisable not to disclose in a registration statement.
4. PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK. If at any time after the earlier of (i)
expiration of the Lock-Up Period, (ii) the occurrence of a Change of Control or
(iii) receipt of a notice from the Company of the execution by the Company of a
definitive agreement with a Person which will result in a Change of Control, the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering of any class of equity securities (other than a
registration statement (i) on Form S-4, S-8 or any successor form thereto or
(ii) filed solely in connection with an offering made solely pursuant to
employee benefit plans of the Company or in connection with an acquisition of
any Person), whether or not for its own account, then the Company will give
written notice of the proposed filing to the Purchasers as soon as practicable
but in any event at least 30 calendar days before the anticipated filing date of
such Registration Statement, which such notice will offer to Purchasers the
opportunity to register such amount of Registrable Securities as each Purchaser
may request (a "Piggyback Registration"). Subject to Section 4(b), the Company
will include in each Piggyback Registration all Registrable Securities with
respect to which the Company has received from any Purchaser written requests
for inclusion in that Piggyback Registration within 15 days of the giving of
such notice. Purchasers will be permitted to withdraw all or part of the
Registrable Securities from a Piggyback Registration at any time prior to the
effective date of the Piggyback Registration. The Company may at any time
terminate a Piggyback Registration in its sole discretion without liability,
provided that the offering to which such Piggyback Registration relates shall be
terminated in its entirety.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. The Company will cause the
managing underwriter or underwriters of a proposed Underwritten Offering to
permit the Purchasers that requested their Registrable Securities to be included
in the Piggyback Registration for such
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<PAGE> 10
offering to include therein all Registrable Securities requested to be so
included in the Piggyback Registration on the same terms and conditions as any
similar securities, if any, of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of the offering deliver
an opinion to the Company and Purchasers to the effect that the total amount of
securities which Purchasers, the Company and any other Persons having rights to
participate in that registration propose to include in the Underwritten Offering
exceeds the number of securities that can be sold in such offering without
materially and adversely affecting such offering, then:
(i) if the registration is a primary registration on behalf of
the Company, the Company will include therein (x) first, up to the full
amount of securities the Company proposes to sell that, in the opinion
of the managing underwriter or underwriters, can be sold in such
offering without materially and adversely affecting such offering, (y)
second, to the extent that the number of securities to be offered by
the Company is less than the number of securities which can be sold in
such offering without materially and adversely affecting such offering,
such number of shares of Registrable Securities requested to be sold
for the account of Purchasers which can be sold in such offering
without materially and adversely affecting such offering (provided that
if the number of such Registrable Securities requested to be registered
exceeds the number of securities which can be sold in such offering
without materially and adversely affecting such offering, then the
number of Registrable Securities to be included in such registration
shall be allocated pro rata among all Purchasers requesting inclusion
in such offering on the basis of the relative number of Registrable
Securities requested by each such Purchaser), and (z) third, to the
extent that the number of securities to be offered by the Company and
the number of Registrable Securities requested to be included in such
registration pursuant to Section 4(a) hereof are, in the aggregate,
less than the number of securities which can be sold in such offering
without materially and adversely affecting such offering, such number
of securities proposed to be sold for the account of any other Person
(other than the Company and Purchasers) which can be sold in such
offering without materially and adversely affecting such offering
(provided that if the number of such securities of such other Persons
requested to be registered exceeds the number of securities which can
be sold in such offering without materially and adversely affecting
such offering, then the number of securities of such other Persons
shall be allocated pro rata among all such Persons on the basis of the
relative number of securities each such Person has requested to be
included in such registration); and
(ii) if the registration is an underwritten secondary
registration on behalf of holders of securities of the Company other
than Purchasers, the Company will include therein: (x) first, up to the
full number of securities of the Persons exercising "demand"
registration rights that, in the opinion of the managing underwriter or
underwriters, can be sold in such offering without materially and
adversely affecting such offering, (y) second, to the extent the number
of securities to be offered by such Persons exercising "demand"
registration rights is less than the number of securities which can be
sold in such offering without materially and adversely affecting such
offering, such number of shares of Registrable Securities requested to
be sold for the account of Purchasers which can be sold in such
offering without materially and adversely affecting such offering
(provided that if the number of such Registrable Securities requested
to be registered
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<PAGE> 11
exceeds the number of securities which can be sold in such offering
without materially and adversely affecting such offering, then the
number of Registrable Securities to be included in such registration
shall be allocated pro rata among all Purchasers requesting inclusion
in such offering on the basis of the relative number of Registrable
Securities requested by each such Purchaser), and (z) third, to the
extent the number of securities to be offered by such Persons
exercising "demand" registration rights and the number of Registrable
Securities requested to be included in such offering pursuant to
Section 4(a) hereof are, in the aggregate, less than the number of
securities which can be sold in such offering without materially and
adversely affecting such offering, such number of securities proposed
to be sold for the account of any other Person (other than such Persons
exercising "demand" rights and Purchasers) which can be resold without
materially and adversely affecting such offering (provided that if the
number of such securities of such other Persons requested to be
registered exceeds the number of securities which can be sold in such
offering without materially and adversely affecting such offering, then
the number of securities of such other Persons shall be allocated pro
rata among all such Persons on the basis of the relative number of
securities each such Person has requested to be included in such
registration).
5. REGISTRATION OF SECURITIES OTHER THAN REGISTRABLE SECURITIES.
Without the prior written consent of Purchasers, the Company will not grant to
any Person the right to request the Company to register any securities of the
Company under the Securities Act unless the rights so granted are subject to the
prior rights of Purchasers set forth herein and, if exercised, would not
otherwise conflict or be inconsistent in any way with the provisions of this
Agreement. The Company agrees that it will not grant to any Person any rights
which obligate the Company to give such Person "most favored nations" benefits
with respect to the registration of any shares of equity securities of the
Company or any securities convertible or exercisable into shares of any equity
securities of the Company.
6. "MARKET STAND-OFF" AGREEMENT. Purchasers will not, to the extent
requested (by timely written notice) by the managing underwriter or underwriters
for any Underwritten Offering of the Company's capital stock (or any securities
issued by the Company that are exercisable to purchase, convertible into or
exchangeable for shares of capital stock of the Company), sell for Purchaser's
account, or otherwise transfer or dispose of any Registrable Securities (except
to the extent permitted in the Underwritten Offering) without the prior written
consent of the Company and/or managing underwriter or underwriters for such
period of time (not to exceed 90 days) from the effective date of the
registration statement relating to the Underwritten Offering as the Company
and/or managing underwriter or underwriters may specify. The Company may impose
stop-transfer instructions with respect to the Registrable Securities of
Purchasers until the end of that 90-day period in order to enforce these
restrictions. In no event, however, will Purchasers be required to enter into
more than one such agreement during any period of 12 consecutive months.
7. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations pursuant to Sections 2, 3 and 4, the Company will
effect those registrations to permit the sale of the Registrable Securities in
accordance with the intended method or methods of distribution of those
Registrable Securities, and pursuant thereto the Company will as expeditiously
as possible:
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(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by Purchasers in accordance
with the intended method or methods of distribution thereof, and cause each such
Registration Statement to become effective and remain effective as provided
herein; PROVIDED, HOWEVER, that not less than five Business Days before filing a
Registration Statement or Prospectus or any amendments or supplements thereto
(excluding documents that would be incorporated or deemed to be incorporated
therein by reference) the Company will furnish to the Purchasers whose
Registrable Securities are covered by that Registration Statement, counsel for
such Purchasers with respect to such registration ("Special Counsel") and the
managing underwriters, if any, copies of all documents proposed to be filed,
which documents will be subject to review by such Purchasers, the Special
Counsel and underwriters, and the Company will not file any Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(excluding any documents which, upon filing, would or would be incorporated or
deemed to be incorporated by reference therein) to which the Purchasers whose
Registrable Securities are covered by that Registration Statement, the Special
Counsel or the managing underwriter, if any, may reasonably object on a timely
basis;
(b) Prepare and file with the SEC any amendments and post-effective
amendments to each Registration Statement as may be necessary to keep the
Registration Statement continuously effective for the applicable period
specified in Sections 2 and 3; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the distribution of all securities covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in the Registration Statement as
so amended or to the Prospectus as so supplemented;
(c) Notify Purchasers, the Special Counsel and the managing
underwriters, if any, promptly, and (if requested by any of those Persons)
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the Registration
Statement or amendment has become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if at any
time the representations and warranties of the Company contained in any
agreement contemplated by Section 6(m) (including any underwriting agreement)
cease to be true and correct in any material respect, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the occurrence of any event which makes any statement made in
the Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
which requires the making of any changes in a Registration Statement, Prospectus
or document so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and,
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<PAGE> 13
in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated or that
is necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate;
(d) Use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment;
(e) If requested by the managing underwriters, if any, or Purchasers
whose Registrable Securities are being registered, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and Purchasers agree should be included therein
to comply with applicable law and (ii) make all required filings of the
Prospectus supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated in
the Prospectus supplement or post-effective amendment; provided, however, that
the Company will not be required to take any actions under this Section 6(e)
that are not, in the reasonable opinion of counsel for the Company, in
compliance with applicable law;
(f) Furnish to Purchasers, the Special Counsel and each managing
underwriter, if any, without charge, conformed copies of the Registration
Statement and each post-effective amendment or supplement thereto, including
financial statements (including schedules, all documents incorporated or deemed
incorporated therein by reference and all exhibits) as Purchasers may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by Purchasers;
(g) Deliver to Purchasers, the Special Counsel and the underwriters, if
any, without charge, as many copies of the Prospectus or Prospectuses relating
to those Registrable Securities (including each preliminary prospectus) and any
amendment or supplement thereto as those Persons may reasonably request; and,
subject to the last paragraph of this Section 6, the Company hereby consents to
the use of that Prospectus or each amendment or supplement thereto by Purchasers
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by that Prospectus or any amendment or supplement
thereto;
(h) Cooperate with Purchasers and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates will not bear any
restrictive legends; and enable the Registrable Securities to be in such
denominations and registered in such names as the managing underwriters, if any,
may request at least two Business Days prior to any sale of Registrable
Securities to the underwriters;
(i) Use its reasonable best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under the State
Securities or blue sky laws of such jurisdictions as Purchasers and or the
underwriters, if any, may reasonably request, and do any and all other acts and
things which may be reasonably necessary to consummate the disposition
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<PAGE> 14
in such jurisdictions of the Registrable Shares of Purchasers, except that the
Company shall not be required to qualify generally to do business, as a foreign
corporation in any jurisdiction where, but for the requirements of this clause
(i), it would not be obligated to be so qualified or consent to general service
of process in any such jurisdiction;
(j) Use its reasonable best efforts to cause the sale of Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States as may be necessary to enable the Purchasers or the underwriters,
if any, to consummate the disposition of such Registrable Securities;
(k) Upon the occurrence of any event contemplated by Section 6(c)(vi)
or 6(c)(vii) hereof, promptly prepare a supplement or post-effective amendment
to each Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the Purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(l) Use its reasonable best efforts to cause all Registrable Securities
covered by such Registration Statement to be (i) listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed or, if no similar securities issued by the Company are then so listed, on
the New York Stock Exchange or another national securities exchange if the
securities qualify to be so listed or (ii) authorized to be quoted on the Nasdaq
National Market System or the Nasdaq SmallCap Market if the securities qualify
to be so quoted; in each case, if requested by the holders of a majority of the
Registrable Securities covered by such Registration Statement or the managing
underwriters, if any;
(m) In the event of an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other actions in
connection therewith as may be requested by the managing underwriters in order
to expedite or facilitate the disposition of the Registrable Securities and, in
such connection, (i) make such representations and warranties to Purchasers
whose Registrable Securities are being registered and the underwriters with
respect to the business of the Company and its Subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in Underwritten Offerings and
confirm those representations and warranties if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters) addressed to Purchasers and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
Underwritten Offerings and such other matters as may be reasonably requested by
the managing underwriters; (iii) use its best efforts to obtain "comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountants of any
Subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data is, or is required to be, included in
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<PAGE> 15
the Registration Statement), addressed to Purchasers and each of the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "comfort" letters in connection with Underwritten
Offerings; and (iv) deliver such documents and certificates as may be reasonably
requested by Purchasers, the Special Counsel and the managing underwriters, if
any, to evidence the continued validity of the representations and warranties of
the Company and its Subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the underwriting
agreement or similar agreement entered into by the Company. The foregoing
actions will be taken in connection with each closing under such underwriting or
similar agreement as and to the extent required thereunder;
(n) Upon reasonable notice and at reasonable times during normal
business hours, make available for inspection by a representative of Purchasers,
any underwriter participating in any disposition of Registrable Securities and
any attorney or accountant retained by Purchasers or any underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company and its Subsidiaries, and cause the officers, directors and employees of
the Company and its Subsidiaries to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with such Registration Statement; PROVIDED, HOWEVER, that any records,
information or documents that are designated by the Company in writing as
confidential at the time of delivery of such records, information or documents
will be kept confidential by those Persons (and such Persons shall agree in
writing with the Company to keep the same confidential) unless (i) those
records, information or documents are in the public domain or otherwise publicly
available, (ii) disclosure of those records, information or documents is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, or (iii) disclosure of those records,
information or documents, in the written opinion of counsel to such Person
delivered to the Company, is otherwise required by law (including, without
limitation, pursuant to the requirements of the Securities Act);
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
calendar days after the end of any 12-month period (or 90 calendar days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts Underwritten Offering, and
(ii) if not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company, after the effective date of a
Registration Statement, which statements shall cover that 12-month period;
(p) Cause its officers and other appropriate employees to participate
in any presentations regarding any Underwritten Offering reasonably requested by
Purchasers or the managing underwriter or underwriters participating in the
disposition of those Registrable Securities, provided that so doing does not
unreasonably interfere with the business of the Company;
(q) Use its reasonable best efforts to take all of the steps necessary
or advisable to effect the registration of the Registrable Securities covered by
a Registration Statement contemplated hereby.
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The Company may require Purchasers to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing and the Company
may exclude from such registration the Registrable Securities of Purchasers if
Purchasers fail to furnish such information required by Applicable Law within a
reasonable time after receiving such request.
Each Purchaser will be deemed to have agreed by virtue of its
acquisition of Registrable Securities that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section
6(c)(ii), 6(c)(iii), 6(c)(v), 6(c)(vi) or 6(c)(vii), Purchasers will forthwith
discontinue disposition of their respective Registrable Securities covered by
the Registration Statement or Prospectus until Purchaser's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(k) hereof,
or until it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. If the Company gives any such notice, the time
period prescribed in Sections 2 and 3(b) will be extended by the number of days
during the time period from and including the date of the giving of that notice
to and including the date when each Purchaser of Registrable Securities covered
by such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 6(k) hereof or (y)
the written advice by the Company described above.
8. REGISTRATION EXPENSES.
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company will be borne by the Company whether or not
any of the Registration Statements become effective. Those fees and expenses
will include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) of compliance with state securities or "blue sky" laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing or photocopying any Prospectuses), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and, in the case of any Underwritten Offering, of the Special Counsel
for the Purchasers whose Registrable Securities are being registered, (v) fees
and disbursements of all independent certified public accountants referred to in
Section 6(m)(iii) (including the expenses of any special audit and "comfort"
letters required by or incident to such performance), (vi) fees and expenses of
any "qualified independent underwriter" or other independent appraiser
participating in an offering pursuant to Rule 2720(c) of the National
Association of Securities Dealers, Inc. Conduct Rules, (vii) Securities Act
liability insurance if the Company so desires that insurance, and (viii) fees
and expenses of all other Persons retained by the Company, but excluding
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities. In addition, the Company will
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange
on which similar securities issued by the Company are then listed and the fees
and expenses of any Person, including special experts, retained by the Company.
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(b) In connection with any Demand Registration or Piggyback
Registration under this Agreement, the Company will reimburse the Purchasers
whose Registrable Securities are being registered in such registration for the
reasonable fees and disbursements of not more than one Special Counsel, together
with appropriate local counsel, chosen by the Purchasers whose Registrable
Securities are being registered.
9. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company will, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each Purchaser whose Registrable Securities have been
registered pursuant to this Agreement, the officers, directors, partners,
stockholders, and agents and employees of each of them, each Person who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) any Purchaser and the officers, directors, partners, stockholders,
agents and employees of any such controlling Person, from and against all
losses, claims, damages, liabilities, costs (including, without limitation, the
costs of investigation and reasonable attorneys' fees and disbursements) and
expenses (collectively, "Losses"), as incurred, caused by, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, Prospectus or form of Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company will not be liable to any Purchaser to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if either (i) (A) such Purchaser failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such Purchaser of a Registrable Security to the
Person asserting the claim from which such Losses arise and (B) the Prospectus
would have completely corrected such untrue statement or alleged untrue
statement or such omission or alleged omission; (ii) such untrue statement or
alleged untrue statement, omission or alleged omission is completely corrected
in an amendment or supplement to the Prospectus previously furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, and such Purchaser thereafter fails to deliver such Prospectus as
so amended or supplemented prior to or concurrently with the sale of a
Registrable Security to the Person asserting the claim from which such Losses
arise; or (iii) such untrue statement or alleged untrue statement, omission or
alleged omission was contained in any information so furnished in writing by
such Purchaser to the Company expressly for use in such Registration Statement
or Prospectus and was relied upon by the Company in the preparation of such
Registration Statement, Prospectus or preliminary prospectus.
(b) INDEMNIFICATION BY PURCHASER OF REGISTRABLE SECURITIES. In
connection with any Registration Statement in which the Registrable Securities
of a Purchaser are being registered, each Purchaser will furnish to the Company
in writing such information as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus. Each Purchaser agrees
severally, but not jointly, to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors, officers, shareholders,
agents and employees, each Person who controls (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act) the Company, and the
directors, officers, shareholders, agents or employees
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of such controlling Persons, from and against all Losses caused by, arising out
of or based upon any untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment or
supplement thereto or in preliminary prospectus or arising out of or based upon
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the
extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Purchaser to the Company expressly for use in
such Registration Statement or Prospectus and was relied upon by the Company in
the preparation of such Registration Statement, Prospectus or preliminary
prospectus. In no event will the liability of any Purchaser under this Section
8(b) be greater in amount than the dollar amount of the proceeds received by
such Purchaser upon the sale of the Registrable Securities giving rise to the
indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this Section
8(c), such Person (the "indemnified party") will promptly notify the Person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, will retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and will pay the fees and disbursements of such counsel related to
such proceeding; provided that the failure of any indemnified party so to notify
the indemnifying party will not relieve the indemnifying party of its
obligations hereunder except to the extent that the indemnifying party is
actually prejudiced by such failure to notify. In any such proceeding, any
indemnified party will have the right to retain its own counsel, but the fees
and expenses of such counsel will be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying party shall have
failed within in a reasonable period of time to retain counsel reasonably
satisfactory to the indemnified party, or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that, unless there exists a conflict among indemnified
persons, the indemnifying party will not, in respect of the legal expenses of
any indemnified party in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all indemnified parties and
that all such fees and expenses will be reimbursed as they are incurred. The
indemnifying party will not be liable for any settlement of any proceeding
effected without its prior written consent, but if settled with such consent or
if there shall be a final non-appealable judgment for the plaintiff for which
the indemnified person is entitled to indemnification pursuant to this
Agreement, the indemnifying party agrees to indemnify the indemnified party from
and against any Loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it will be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
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request prior to the date of such settlement. No indemnifying party will,
without the prior written consent of the indemnified party, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this Section 8
is unavailable to an indemnified party under Section 8(a) or 8(b) in respect of
any Losses or is insufficient to hold harmless the indemnified party (other than
giving effect to the last sentence of Section 8(b)), then each applicable
indemnifying party, in lieu of indemnifying the indemnified party, will
contribute to the amount paid or payable by the indemnified party as a result of
the Losses, in the proportion as is appropriate to reflect the relative fault of
the indemnifying party or indemnifying parties, on the one hand, and the
indemnified party, on the other hand, in connection with the actions, statements
or omissions that resulted in the Losses as well as any other relevant equitable
considerations. The relative fault of the indemnifying party or indemnifying
parties, on the one hand, and the indemnified party, on the other hand, will be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or related to
information supplied by, the indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission and any other equitable
considerations appropriate in the relevant circumstances. The amount paid or
payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action
or proceeding. In no event will the obligation of a Purchaser under this Section
8(d) be greater in amount than the dollar amount of the proceeds (net of payment
of all expenses) received by such Purchaser upon the sale of the Registrable
Securities giving rise to the contribution obligation.
(e) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by PRO RATA allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8, in no event shall an
indemnifying party who is a Purchaser be required to contribute any amount in
excess of the dollar amount of the proceeds (net of payment of all expenses)
received by such Purchaser upon the sale of the Registrable Securities giving
rise to the contribution obligation over the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity, contribution and expense reimbursement obligations
of the Company hereunder will be in addition to any liability the Company may
otherwise have under this Agreement. The provisions of this Section 8 will
survive so long as Registrable Securities remain outstanding, notwithstanding
any transfer of the Registrable Securities by any holder thereof or any
termination of this Agreement.
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<PAGE> 20
10. RULE 144. The Company agrees that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner in accordance with the requirements of the Securities Act and Exchange
Act, and will cooperate with any Purchaser (including, without limitation, by
making any representations as any Purchaser may reasonably request), all to the
extent required from time to time to enable the Purchaser to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemptions provided by Rule 144. Upon the request of any Purchaser, the
Company will deliver to the Purchaser a written statement as to whether it has
complied with such filing requirements. If at any time the Company ceases to be
required to file reports under the Securities Act and the Exchange Act, the
Company will upon request of any Purchaser, make publicly available annual
reports and such other information, documents and other reports of the type
specified in Sections 13 and 15(d) of the Exchange Act.
11. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by any Shelf Registration or Demand Registration are to be sold in an
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will manage the offering shall be Morgan Stanley, Dean Witter &
Co. or a Subsidiary or Affiliate thereof ("MSDW") to the extent required by and
in accordance with Section 4.15 of the Securities Purchase Agreement and if such
provision does not apply, then as the Purchasers whose Registrable Securities
are being registered in such Shelf Registration or Demand Registration shall
select, provided that such investment banker or manager shall be reasonably
satisfactory to the Company. If any Piggyback Registration is an Underwritten
Offering, subject to the Company's agreement set forth in Section 4.15 of the
Securities Purchase Agreement, the Company will have the right to select the
investment banker or investment bankers and managers to administer the offering.
Each party hereto agrees that, in connection with any Underwritten Offering
hereunder in which it participates, it will undertake to offer customary
indemnification to the participatory underwriters.
12. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, and will not, on or after the date hereof, enter into any agreement with
respect to its securities which is inconsistent with the rights granted to the
holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions of this Agreement may
not be given, unless the Company has obtained the written consent of Purchasers.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
of this Agreement with respect to a matter that relates exclusively to the
rights of a Purchaser whose Registrable Securities are being registered pursuant
to a Registration Statement and that does not directly or indirectly affect the
rights of the other Purchasers may be given only by affected Purchasers;
PROVIDED, HOWEVER, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
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<PAGE> 21
(c) NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and delivered
personally, sent by overnight courier to the parties or sent by facsimile
(providing confirmation of transmission) at the following addresses or facsimile
numbers (or at such other address or telecopy number for a party as will be
specified by like notice):
(i) IF TO THE COMPANY:
Bluegreen Corporation
4950 Blue Lake Drive
Boca Raton, Florida 33431
Attention: Patrick E. Rondeau, Esq. and Mr. John F. Chiste
Facsimile: (561) 912-8100
WITH COPIES TO:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: William P. Gelnaw, Esq.
Facsimile: (617) 248-4000
(iii) IF TO PURCHASERS:
c/o Morgan Stanley Real Estate Fund III, L.P.
37th Floor
1585 Broadway
New York, New York 10036-8293
Attention: Mr. Michael Franco and Mr. Michael Foster
Facsimile: (212) 761-0508
WITH A COPY TO:
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: David J. Lowery, Esq.
Facsimile: (214) 969-5100
All notices will be deemed to be given only when actually received.
(d) OWNER OF REGISTRABLE SECURITIES. The Company will maintain, or will
cause its registrar and transfer agent to maintain, a stock book with respect to
the Common Stock, in which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may deem and treat the
Person in whose name Registrable Securities
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<PAGE> 22
are registered in the stock book of the Company as the owner thereof for all
purposes, including, without limitation, the giving of notices under this
Agreement.
(e) SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit of
and be binding upon the successors and assigns of each of the parties and will
inure to the benefit of each holder of any Registrable Securities. The Company
may not assign its rights or delegate its obligations hereunder and Purchasers
may assign their rights hereunder only to a Permitted Transferee in accordance
with the Securities Purchase Agreement or to the other Persons described in the
definition of "Purchasers" herein.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(g) HEADINGS. Article and Section headings in this Agreement are
included herein for convenience of reference only and will not constitute a part
of this Agreement for any other purpose.
(h) GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Massachusetts, without giving effect
to the principles of conflict of laws of that State that would apply the laws of
any other jurisdiction. Each of the parties to this Agreement hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the courts of the State of New York, and any appellate court
thereof, in any action, suit, or proceeding arising out of or relating to this
Agreement and any such action, suit or proceeding will be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein). Process in any such action, suit or proceeding may
be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 12(c) shall
be deemed effective service of process on such party.
(i) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement,
and supersedes all prior agreements and undertakings, both written and oral,
between the parties, with respect to the subject matter of this Agreement.
(j) ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, will be entitled
to recover reasonable attorneys' fees and related disbursements and expenses in
addition to any other available remedy.
(k) SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
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<PAGE> 23
(l) EXCULPATION. Notwithstanding any provision herein to the contrary,
the liability of each Purchaser shall be limited to the assets of such Purchaser
and no partner, shareholder, officer, director, employee or agent of Purchaser
shall have any personal liability hereunder.
[Signature Page Follows]
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<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BLUEGREEN CORPORATION
By: /s/ George F. Donovan
-------------------------------------------
Name: George F. Donovan
Title: President and Chief Executive Officer
MORGAN STANLEY REAL ESTATE FUND III, L.P.
By: MSREF III, Inc., its General Partner
By: /s/ Michael J. Franco
-----------------------------------
Name: Michael J. Franco
Title: Vice President
MORGAN STANLEY REAL ESTATE
INVESTORS III, L.P.
By: MSREF III, Inc., its General Partner
By: /s/ Michael J. Franco
-----------------------------------
Name: Michael J. Franco
Title: Vice President
MSP REAL ESTATE FUND, L.P.
By: MSREF III, Inc., its General Partner
By: /s/ Michael J. Franco
-----------------------------------
Name: Michael J. Franco
Title: Vice President
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<PAGE> 25
MSREF III SPECIAL FUND, L.P.
By: MSREF III, Inc., its General Partner
By: /s/ MICHAEL J. FRANCO
-----------------------------------
Name: Michael J. Franco
Title: Vice President
23
<PAGE> 1
EXHIBIT 10.133
================================================================================
VOTING AND COOPERATION AGREEMENT
by and among
MORGAN STANLEY REAL ESTATE FUND III, L.P.,
MORGAN STANLEY REAL ESTATE INVESTORS III, L.P.,
MSP REAL ESTATE FUND, L.P.,
MSREF III SPECIAL FUND, L.P.
and
CERTAIN SHAREHOLDERS OF
BLUEGREEN CORPORATION
Dated as of August 14, 1998
================================================================================
<PAGE> 2
VOTING AND COOPERATION AGREEMENT
This VOTING AND COOPERATION AGREEMENT (this "Agreement"), is made and
entered into as of August 14, 1998, by and among Morgan Stanley Real Estate Fund
III, L.P., a Delaware limited partnership ("MSREF III"), Morgan Stanley Real
Estate Investors III, L.P., a Delaware limited partnership ("MSREI"), MSP Real
Estate Fund, L.P., a Delaware limited partnership ("MSP") and MSREF III Special
Fund, L.P., a Delaware limited partnership ("MSREF Special") (MSREF III, MSREI,
MSP and MSREF Special are herein collectively referred to as "Purchasers") and
those shareholders of BLUEGREEN CORPORATION, a Massachusetts corporation (the
"Company"), who are signatories to this Agreement (collectively, the
"Stockholders").
RECITALS
A. Purchasers and the Company have entered into a Securities Purchase
Agreement dated as of August 14, 1998 (the "Purchase Agreement"), pursuant to
which the Purchasers have agreed to purchase from the Company and the Company
has agreed to sell and issue to the Purchasers during the Commitment Period a
number of shares of Common Stock up to the Maximum Shares upon the terms and
subject to the conditions set forth in the Purchase Agreement.
B. As of the date hereof, each Stockholder owns of record the number of
shares of the Common Stock and other securities exercisable or convertible into
shares of Common Stock set forth opposite the respective Stockholder's name on
SCHEDULE A attached hereto.
C. As a condition and inducement to the willingness of Purchasers to
enter into the Purchase Agreement, Purchasers have requested that each
Stockholder agree, and each Stockholder has agreed, to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. AGREEMENT TO VOTE SHARES. At any meeting of the shareholders of the
Company called to consider and vote upon the approval of the sale and issuance
of shares of Common Stock to Purchasers (and/or their Permitted Transferees)
under the Purchase Agreement (if such approval is sought) (and at any and all
postponements and adjournments thereof), and in connection with any action to be
taken in respect thereof by written consent of the shareholders of the Company,
each Stockholder shall vote or cause to be voted (including by written consent,
if applicable) all shares of Common Stock which such Stockholder has the power
to vote or in respect of which such Stockholder has the power to direct the vote
in favor of the sale and issuance of shares of Common Stock to Purchasers (or
their Permitted Transferees) under the Purchase Agreement.
2. BOARD REPRESENTATION. (a) For so long as Purchasers and any
Permitted Transferees own, in the aggregate, at least the Required Interest,
each Stockholder shall vote or cause to be voted
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<PAGE> 3
(including by written consent, if applicable) all shares of Common Stock which
such Stockholder has the power to vote or in respect of which such Stockholder
has the power to direct the vote in favor of the nominees (each a "Purchaser
Designee") to the Board of Directors of the Company designated by MSREF III and
MSP (or their Permitted Transferees) pursuant to the provisions of Section 4.10
of the Purchase Agreement, at any regular or special meeting of the shareholders
of the Company (including any adjournments thereof) called for the purpose of
electing directors of the Company, except the foregoing shall not apply to the
extent any Purchaser Designee has been elected to the Board of Directors and is
in a class of directors not currently standing for re-election.
(b) For so long as Purchasers and any Permitted Transferees
own, in the aggregate, less than the Required Interest but at least the Minimum
Interest, each Stockholder shall vote or cause to be voted (including by written
consent, if applicable) all shares of Common Stock which such Stockholder has
the power to vote or in respect of which such Stockholder has the power to
direct the vote in favor of the nominee to the Board of Directors of the Company
designated by MSP (or its Permitted Transferee) pursuant to the provisions of
Section 4.10 of the Purchase Agreement, at any regular or special meeting of the
shareholders of the Company (including any adjournments thereof) called for the
purpose of electing Directors of the Company.
(c) In the event any Purchaser Designee shall resign, or be
removed, or be unable to serve for any reason prior to the expiration of his or
her term as a director of the Company, in accordance with Section 4.10 of the
Purchase Agreement, MSREF III or MSP (or their Permitted Transferees), as the
case may be, shall have the right to notify the Board of Directors of a
replacement Purchaser Designee, and, to the extent the shareholders of the
Company shall be required to vote on the matter, each Stockholder shall vote or
cause to be voted (including by written consent, if applicable) all shares of
Common Stock which such Stockholder has the power to vote or in respect of which
such Stockholder has the power to direct the vote in favor of the replacement
Purchaser Designee to fill the unexpired term of the director nominee which such
new nominee is replacing. Each Purchaser Designee shall be reasonably acceptable
to the Company as provided in the Purchase Agreement.
(d) Each Stockholder agrees that he or it shall not take any
direct or indirect action to remove any Purchaser Designee from the Board of
Directors without cause.
(e) In order to effectuate the provisions of this Agreement,
each Stockholder hereby agrees that when any action or vote is required to be
taken by such person in his or its capacity as a stockholder pursuant to this
Agreement, such person shall, subject to compliance with the Company's Amended
and Restated Bylaws, use his or its reasonable best efforts to call, or cause
the appropriate officers and directors of the Company to call, a special or
annual meeting of the shareholders, as the case may be, or to the extent
permitted by law, to execute a written consent in lieu of any such meetings.
3. CONFORMITY OF CHARTER DOCUMENTS. Each Stockholder shall vote all of
the shares of Common Stock which such Stockholder has the power to vote or in
respect of which such Stockholder has the power to direct the vote, at any
regular or special meeting of shareholders of the Company (including by written
consent, if applicable), in a manner such that the Company's Restated Articles
of Organization and Amended and Restated Bylaws do not, at any time, conflict
with the provisions of this Agreement or the Purchase Agreement.
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<PAGE> 4
4. LIMITATION. It is expressly understood and agreed that this
Agreement solely relates to matters affecting the Stockholders in their
capacities as shareholders of the Company. Nothing contained herein shall in any
way be construed as being applicable to any actions which any Stockholder may
take in his capacity as a director of the Company.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
STOCKHOLDERS. Each Stockholder, severally but not jointly, represents, warrants
and covenants to Purchasers as follows:
(a) OWNERSHIP. Except as specified on SCHEDULE A, or as disclosed in
the Proxy Statement dated June 28, 1998 relating to the Company's 1998 Annual
Meeting of Shareholders, Stockholder is the sole record and beneficial owner
(unless otherwise indicated on SCHEDULE A) of the shares of Common Stock set
forth opposite such Stockholder's name on SCHEDULE A and has full and
unrestricted power to vote such shares of Common Stock (it being understood
that, with respect to options, convertible notes and debentures, no right to
vote the Common Stock shall exist unless and until the option, note or debenture
is exercised or converted, as applicable). As of the date hereof, Stockholder
does not own any other securities of the Company other than shares of Common
Stock set forth on SCHEDULE A and securities convertible into shares of Common
Stock as more fully described on SCHEDULE A.
(b) DUE AUTHORIZATION. Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Stockholder
and the consummation by Stockholder of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Stockholder. This
Agreement has been duly executed and delivered by Stockholder and constitutes
the valid and binding obligation of Stockholder, enforceable against Stockholder
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity.
(c) NO CONFLICTS. The execution and delivery of this Agreement by
Stockholder does not, and the consummation of the transactions contemplated by
this Agreement and compliance with the provisions of this Agreement will not,
conflict with, result in a breach or violation of, or default (with or without
notice or lapse of time or both) under, or give rise to a material obligation, a
right of termination, cancellation or acceleration of any obligation or a loss
of a material benefit under, or require notice to, or the consent of, any Person
under any agreement, instrument, undertaking, law, rule, regulation, judgment,
order, injunction, decree, determination or award binding on Stockholder, other
than any such conflicts, breaches, violations, defaults, rights or losses that,
individually or in the aggregate, would not (i) impair the ability of
Stockholder to perform his or its obligations under this Agreement or (ii)
prevent or delay the consummation of any of the transactions contemplated by
this Agreement.
(d) RELIANCE BY PURCHASERS. Stockholder understands and acknowledges
that Purchasers are entering into the Purchase Agreement in reliance upon
Stockholder's execution and delivery of this Agreement.
(e) NON-INTERFERENCE. Stockholder will not, during the term of this
Agreement, except as permitted by this Agreement, (i) grant any proxies or
powers of attorney with respect to any of his or its shares of Common Stock in
conflict with the provisions hereof, (ii) deposit any of his or
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<PAGE> 5
its shares of Common Stock into a voting trust or enter into a voting agreement
with respect to his or its shares of Common Stock, or (iii) take any action that
would make any representation or warranty contained herein untrue or incorrect
or have the effect of preventing such Stockholder from performing his or its
obligations under this Agreement.
(f) SURVIVAL. The representations, warranties and covenants of the
Stockholders set forth in this Section 4 will survive the execution and delivery
of this Agreement.
6. TRANSFERS. Subject to Applicable Law, each Stockholder may from time
to time sell, transfer or otherwise dispose ("Transfer") of his or its shares of
Common Stock (and any securities exercisable for or convertible into Common
Stock) and, provided the transferee is not a Related Person (as defined below),
such transferee shall acquire the shares of Common Stock (or other securities)
free and clear of the terms and conditions of, and shall not be bound or have
any obligations under, this Agreement. To the extent a Stockholder Transfers all
or any part of his or its shares of Common Stock (or other securities) to a
Related Person, such Related Person shall agree to be bound by the provisions of
this Agreement as though such transferee had been a party hereto. Upon Transfer
to a Related Person in accordance with this Agreement, to the extent of the
Transfer, each reference to the transferring Stockholder in this Agreement will
thereafter be deemed to include such Stockholder and each Related Person to whom
any shares of Common Stock were Transferred, and each such Stockholder and
Related Person, taken together, will thereafter have the rights and obligations
of the transferring Stockholder hereunder, without enlargement or diminution.
For purposes hereof, a Related Person means (i) a spouse, child (natural or
adopted), grandchild or parent of the Stockholder, (ii) any trust, the
beneficiaries of which include only the persons described in clause (i), or
(iii) any corporation or partnership, a majority of the economic and voting
interests in which are owned by the Stockholder or any person described in
clauses (i) or (ii).
7. LEGEND ON STOCK CERTIFICATES. If required by Applicable Law, each
certificate evidencing shares of Common Stock subject to this Agreement will be
stamped or otherwise imprinted with a legend in substantially the following
form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE VOTING
AND COOPERATION AGREEMENT, DATED AS OF AUGUST 14, 1998, BY AND AMONG
MORGAN STANLEY REAL ESTATE FUND III, L.P., MORGAN STANLEY REAL ESTATE
INVESTORS III, L.P., MSP REAL ESTATE FUND, L.P., MSREF III SPECIAL
FUND, L.P. AND CERTAIN SHAREHOLDERS OF BLUEGREEN CORPORATION (THE
"COMPANY"). A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
If required by Applicable Law, the Stockholders will cause the Company to
imprint such legends on certificates evidencing shares of Common Stock held by
each of them which were outstanding prior to the date hereof. The legend set
forth in the preceding paragraph shall be removed at such time as it is no
longer required by Applicable Law or a Stockholder no longer owns any shares of
Common Stock and shall not be placed on any certificates issued to a transferee
who is not a Related Person.
4
<PAGE> 6
8. TERM. This Agreement shall terminate at such time as Purchasers own
less than the Minimum Interest, and may be terminated by Purchasers at any time
upon notice by the Purchaser to the Company and the Stockholders.
9. MISCELLANEOUS.
(a) FEES AND EXPENSES. Each party hereto will pay its own expenses
incidental to preparing for, entering into and carrying out this Agreement and
the performance of its obligations hereunder.
(b) AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
(c) EXTENSION; WAIVER. Any agreement on the part of a party to waive
any provision of this Agreement, or to extend the time for any performance
hereunder, will be valid against the other parties only if set forth in an
instrument in writing signed on behalf of each such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise will not constitute a waiver of such rights.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, and is not intended to confer upon any Person
other than the parties any rights or remedies.
(e) GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, regardless of
the laws that might otherwise govern under applicable conflict of laws
principles thereof.
(f) SPECIFIC PERFORMANCE. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
and that such breach would cause the other parties hereto to sustain damages for
which they would not have an adequate remedy at law for money damages. It is
accordingly agreed that each party will be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of competent
jurisdiction, this being in addition to any other remedy to which it is entitled
at law or in equity. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity will be
cumulative and not alternative, and the exercise of any thereof by any party
will not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(g) SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provisions will be interpreted
to be only so broad as is enforceable.
5
<PAGE> 7
(h) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING.
(i) DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(j) COUNTERPARTS. This Agreement may be executed by facsimile signature
and in one or more counterparts, each of which shall be deemed an original, but
all of which together will be considered one and the same agreement.
(k) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement will be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns, provided that
Purchasers' rights under this Agreement may only be assigned to a Permitted
Transferee.
(l) ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party will be entitled to recover reasonable
attorneys' fees in addition to its costs and expense and any other available
remedy.
(m) FURTHER ASSURANCES. The parties hereto will do such further acts
and things necessary to ensure that the terms of this Agreement are carried out
and observed.
(n) AFTER-ACQUIRED SHARES. All of the provisions of this Agreement will
apply to and include all Common Stock and other voting securities of the Company
acquired by any Stockholder on and after the date hereof.
(o) DEFINED TERMS. Capitalized terms used herein that are not otherwise
defined herein have the meanings set forth in the Purchase Agreement.
[Signature page follows]
6
<PAGE> 8
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed as of the day and year first written above.
STOCKHOLDERS:
/s/ Joseph C. Abeles
--------------------------------
JOSEPH C. ABELES
SOPHIA ABELES
/s/ John F. Chiste
--------------------------------
JOHN F. CHISTE
/s/ George F. Donovan
--------------------------------
GEORGE F. DONOVAN
/s/ Ralph A. Foote
--------------------------------
RALPH A. FOOTE
/s/ L. Nicolas Gray
--------------------------------
L. NICHOLAS GRAY
/s/ Daniel C. Koscher
--------------------------------
DANIEL C. KOSCHER
/s/ F. M. Myers
--------------------------------
FREDRICK M. MYERS
/s/ Elizabeth L. Myers
--------------------------------
ELIZABETH L. MYERS
/s/ Patrick E. Rondeau
--------------------------------
PATRICK L. RONDEAU
7
<PAGE> 9
/s/ J. Larry Rutherford
------------------------------------------
J. LARRY RUTHERFORD
/s/ Stuart A. Shikiar
------------------------------------------
STUART A. SHIKIAR
/s/ Bradford T. Whitmore
------------------------------------------
BRADFORD T. WHITMORE
GRACE BROTHERS, LTD.
By: /s/ Bradford T. Whitmore
-------------------------------------
its General Partner
By: Bradford T. Whitmore
Its: General Partner
PURCHASERS:
MORGAN STANLEY REAL ESTATE
FUND III, L.P.
By: MSREF III, Inc.,
its General Partner
By: /s/ Michael J. Franco
--------------------------------------
Its: Vice President
MORGAN STANLEY REAL ESTATE
INVESTORS, III, L.P.
By: MSREF III, Inc.,
its General Partner
By: /s/ Michael J. Franco
--------------------------------------
Its: Vice President
8
<PAGE> 10
MSP REAL ESTATE FUND, L.P.
By: MSREF III, Inc.,
its General Partner
By: /s/ Michael J. Franco
-------------------------------------
Its: Vice President
MSREF III SPECIAL FUND, L.P.
By: MSREF III, Inc.,
its General Partner
By: /s/ Michael J. Franco
-------------------------------------
Its: Vice President
9
<PAGE> 11
SCHEDULE A
OWNERSHIP OF SECURITIES
<TABLE>
<CAPTION>
Number of Shares of Shares of Bluegreen
Name and Address Bluegreen Options to Purchase Shares of Corporation Common Stock
of Corporation Bluegreen Corporation Issuable upon Conversion
Stockholder Common Stock Common Stock Of Debentures And Notes
----------- ------------ ------------ -----------------------
<S> <C> <C> <C>
Joseph C. Abeles(1) 432,027 20,000 405,658
Sophia Abeles 11,574 0 36,407
John F. Chiste 0 161,140 0
George F. Donovan 102,074 781,538 0
Ralph A. Foote 13,832 142,185 0
L. Nicolas Gray 0 242,699 0
Daniel C. Koscher 1,218 363,878 0
Fredrick M. Myers 0 136,223 0
Elizabeth L. Myers 34,398 0 0
Patrick E. Rondeau 11,339 283,393 0
J. Larry Rutherford 0 30,000 0
Stuart A. Shikiar(2) 721,182 77,288 80,145
Bradford T. Whitmore 758,146 130,261 0
Grace Brothers, Ltd. 1,676,766 0 1,782,244
</TABLE>
- ------------------------
(1) Includes 50,000 shares and 16,018 shares of Common Stock issuable
upon conversion of $132,000 aggregate principal amount of Debentures held by
family trusts for which Mr. Abeles has full and unrestricted voting power.
(2) Includes 3,034 shares of Common Stock issuable upon conversion of
$25,000 aggregate principal amount of Debentures held by a family trust for
which Mr. Shikiar has full and unrestricted voting power.
