EXHIBIT 2
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STOCKHOLDERS' AGREEMENT
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Between
EQUIVEST FINANCE, INC.
and
R. XXXXX XXXXXX AND XXXXX XXXXXX
Dated as of August 24, 1998
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................................1
SECTION 1.01. Certain Defined Terms.....................................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS........................................4
SECTION 2.01. Capacity of the Stockholder...............................................................4
SECTION 2.02. Securities Act............................................................................4
SECTION 2.03. Lock-up Agreement.........................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY.................................................6
SECTION 3.01. Due Organization; Corporate Power and Authorization.......................................6
SECTION 3.02. No Conflicts; Required Filings and Consents...............................................7
ARTICLE IV TRANSFER OF SHARES........................................................................7
SECTION 4.01. General Restriction.......................................................................7
SECTION 4.02. Legends...................................................................................7
SECTION 4.03. Certain Information.......................................................................8
ARTICLE V REGISTRATION RIGHTS.......................................................................8
SECTION 5.01. Registration Upon Request.................................................................8
SECTION 5.02. Incidental Registration..................................................................11
SECTION 5.03. Registration Procedures..................................................................13
SECTION 5.04. Transfer of Registration Rights..........................................................16
SECTION 5.05. Preparation; Reasonable Investigation....................................................17
SECTION 5.06. Indemnification..........................................................................17
SECTION 5.07. Contribution.............................................................................19
ARTICLE VI CORPORATE GOVERNANCE.....................................................................20
SECTION 6.01. Initial Board Representation.............................................................20
SECTION 6.02. Continuing Board Representation..........................................................20
ARTICLE VII MISCELLANEOUS............................................................................21
SECTION 7.01. Expenses.................................................................................21
SECTION 7.02. Notices..................................................................................21
SECTION 7.03. Amendment................................................................................22
SECTION 7.04. Severability.............................................................................23
SECTION 7.05. Entire Agreement; Assignment.............................................................23
SECTION 7.06. Parties in Interest......................................................................23
SECTION 7.07. Specific Performance.....................................................................23
SECTION 7.08. Public Announcements.....................................................................23
SECTION 7.09. Governing Law............................................................................23
SECTION 7.10. Consent to Jurisdiction..................................................................24
SECTION 7.11. Headings.................................................................................24
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SECTION 7.12. Counterparts.............................................................................24
SECTION 7.13. Termination..............................................................................24
EXHIBIT A
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STOCKHOLDERS' AGREEMENT (this "Agreement") dated as of August 24,
1998 between EQUIVEST FINANCE, INC., a Florida corporation (the "Company"), and
R. Xxxxx Xxxxxx and Xxxxx Xxxxxx (the "Original Stockholders").
WHEREAS, the Company, ERC ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of the Company ("Merger Sub"), and
Eastern Resorts Corporation, a Rhode Island corporation ("ERC"), have entered
into an Agreement and Plan of Merger dated as of July 16, 1998 (the "Merger
Agreement"), which provides, upon the terms and subject to the conditions set
forth therein, for the merger of ERC with and into Merger Sub (the "Merger"),
with Merger Sub as the surviving corporation (the "Surviving Corporation");
WHEREAS, following the consummation of the Merger, each Original
Stockholder will own (beneficially or of record) the number of shares of common
stock, par value $0.05 per share, of the Company ("Company Common Stock") set
forth opposite such Original Stockholder's name on Exhibit A hereto; and
WHEREAS, it is a condition to the obligations of the parties
under the Merger Agreement that the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms have the following meanings:
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Xxxxxxx Stockholders" means, collectively, Xxxxxxx Management
and Development Corporation and Xxxxxxx Funding Group, Inc.
"Board of Directors" has the meaning set forth in Section 6.01.
"Commission" means the Securities and Exchange Commission, and
any successor commission or agency having similar powers.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Common Stock" has the meaning set forth in the recitals
to this Agreement.
"Company Securities" has the meaning set forth in Section
5.02(a)(ii).
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise.
"Delay Notice" has the meaning set forth in Section
5.01(a)(ii)(E).
"Disadvantageous Condition" has the meaning set forth in Section
5.01(a)(ii)(E).
"Encumbrance" means any pledge, lien, security interest,
mortgage, charge, claim, equity, option, proxy, voting restriction, right of
first refusal , limitation on disposition, adverse claim of ownership or use or
other encumbrance of any kind.
"ERC" has the meaning set forth in the recitals to this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Group" has the meaning comprehended by Section 13(d)(3) of the
Exchange Act and Rule 13d-5 thereunder.
"Initial Shares" has the meaning set forth in Section 5.03(e).
"Merger" has the meaning set forth in the recitals to this
Agreement.
"Merger Agreement" has the meaning set forth in the recitals to
this Agreement.
"Merger Sub" has the meaning set forth in the recitals to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the NASDAQ Small Capitalization Market.
"Nominating Committee" has the meaning set forth in Section
6.02(b).
"1998 Offering" means the first offering by the Company or the
bankruptcy estate for The Xxxxxxx Funding Group, Inc., Xxxxxxx Management &
Development Corp., and certain other related debtors of Company Common Stock
registered with the Commission commencing after the date hereof, other than any
offering registered on Form X-0, Xxxx X-0 or pursuant to any dividend
reinvestment plan.
"Offered Shares" means up to 1,500,000 shares of Company Common
Stock to be sold by one or both of the Original Stockholders in the 1998
Offering.
"Option Shares" has the meaning set forth in Section 5.03(e).
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"Original Stockholders" has the meaning set forth in the preamble
to this Agreement.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture or other entity,
as well as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act.
"Public Company" has the meaning set forth in Section 4.03(b).
"Recapitalization" means any stock split, dividend, distribution
or combination, or any recapitalization, merger, consolidation, exchange,
partial or complete liquidation or other similar reorganization or transaction
of, or with respect to, the capital stock of the Company.
"Registrable Securities" means all Shares held by Stockholders;
provided, however, that the Shares shall cease to be Registrable Securities when
and to the extent that (a) a registration statement with respect to such Shares
shall have been declared effective under the Securities Act and, if such
registration statement is not a "shelf" registration statement under Rule 415
under the Securities Act, such Shares shall have been disposed of pursuant to
such registration statement, (b) such Shares shall have been sold to the public
pursuant to Rule 144, or are eligible for sale to the public without volume or
manner of sale restrictions under, Rule 144(k), (c) such Shares shall have been
otherwise transferred and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company or (d)
such Shares shall have ceased to be outstanding.
"Registration Expenses" means all out-of-pocket expenses incident
to the Company's performance of or compliance with Article V, including, without
limitation, all registration and filing fees (including filing fees with respect
to the NASD), all fees and expenses of complying with state securities or "blue
sky" laws (including reasonable fees and disbursements of underwriters' counsel
in connection with such compliance and the preparation of any "blue sky"
memoranda or surveys), all printing expenses, all listing fees, all registrars'
and transfer agents' fees, the fees and disbursements of counsel for the Company
and of its independent public accountants, including, without limitation, the
expenses of any audits and/or "cold comfort" letters required by or incident to
such performance and compliance, and the reasonable fees and disbursements of
one outside counsel retained by the holders of a majority of the Registrable
Securities being registered (which shall be the only counsel retained by the
Stockholders with respect to any registration and which counsel shall be
reasonably satisfactory to the Company), but excluding underwriting discounts
and commissions and applicable transfer taxes, if any.
"Restricted Shares" means all Shares other than (a) Shares that
have been registered under a registration statement pursuant to the Securities
Act, (b) Shares with respect to which a Sale has been made in reliance on and in
accordance with Rule 144 or (c) Shares with respect to which the holder thereof
shall have delivered to the Company either (i) an opinion, in form and substance
reasonably satisfactory to the Company, of
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counsel, who shall be reasonably satisfactory to the Company, or (ii) a "no
action" letter from the staff of the Commission, in either case to the effect
that subsequent transfers of such Shares may be effected without registration
under the Securities Act or compliance with Rule 144.
"Rule 144" means Rule 144 (or any successor provision) under the
Securities Act.
"Sale" means any sale, assignment, transfer, distribution or
other disposition of Shares or of a participation therein, whether voluntarily
or by operation of law.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Sales Agreement" has the meaning set forth in Section
2.03(c).
"Share" means any share of Company Common Stock issued pursuant
to the Merger Agreement and any securities issued in respect thereof, or in
substitution therefor, in connection with any Recapitalization.
"Stockholders" means the Original Stockholders and any Person to
whom they transfer some or all of their Registrable Securities.
"Surviving Corporation" has the meaning set forth in the
Recitals.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby represents
and warrants to the Company as follows:
SECTION 2.01. Capacity of the Stockholder. Such Stockholder is an
individual and has all necessary right, capacity and power to enter into this
Agreement, to carry out his or her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Stockholder, and (assuming due authorization, execution and
delivery by the Company) this Agreement constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
SECTION 2.02. Securities Act. The Shares to be issued to such
Stockholder pursuant to the Merger Agreement are being acquired for investment
only and not with a view to any sale or distribution of the Shares or any part
thereof in violation of the Securities Act. Such Stockholder agrees at all times
to sell or otherwise dispose of all or any part of the Shares so acquired by
such Stockholder only pursuant to
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a registration, or exemption therefrom, under the Securities Act and in
compliance with applicable state securities laws. Such Stockholder is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act and has such knowledge and experience, or has consulted with
persons having knowledge and experience, in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Shares.
Such Stockholder has received all the information that such Stockholder deems
material to his or her evaluation of the business, assets, liabilities,
financial condition and results of operations of the Company and all the
information that such Stockholder has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Shares. Such
Stockholder has the ability to bear the economic risks of such Stockholder's
prospective investment and such Stockholder is able, without materially
impairing such financial condition, to hold the Shares for an indefinite period
of time and to suffer complete loss on such Stockholder's investment, in the
event such a loss should occur. Such Stockholder understands and has fully
considered for purposes of this investment the risks of this investment and
understands that (a) this investment is suitable only for an investor who is
able to bear the economic consequences of losing his or her entire investment,
in the event such a loss should occur; (b) the Shares represent a speculative
investment that involves a high degree of risk of loss under certain
circumstances; (c) there are substantial restrictions on the transferability of
the Shares and, accordingly, it may not be possible for such Stockholder to
liquidate his or her investment in the Shares in case of emergency; and (d)
there have been no representations as to the possible future value, if any, of
the Shares. Each Stockholder understands and acknowledges that the Shares will
not be registered under the Securities Act on the ground that the offering and
sale of securities contemplated by the Merger Agreement are exempt from
registration pursuant to Section 4(2) of the Securities Act, and that the
Company's reliance upon such exemption is predicated in part upon such
Stockholder's representations set forth in this Agreement.
SECTION 2.03. Lock-up Agreement.
(a) Commencing on the date hereof and continuing for a period
expiring on the first anniversary hereof, each Stockholder shall not, directly
or indirectly, offer for sale, sell or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future of), or reduce his or
her risk with respect to, any shares of Company Common Stock (other than the
Offered Shares) or sell or grant options, rights or warrants with respect to any
shares of Company Common Stock, without the consent of the Company. Such
Stockholder agrees to provide, upon request, written confirmation of this
agreement to the underwriters of the 1998 Offering. The restriction contained in
this Section 2.03(a) (but not any restriction imposed by Section 2.03(b)) shall
terminate in the event that R. Xxxxx Xxxxxx is no longer an officer or director
of the Company or any of its Subsidiaries.
(b) Each Stockholder agrees, if so required by the managing
underwriter in connection with any underwritten offering of shares of the
Company Common Stock (including the 1998 Offering and any registration pursuant
to Section 5.01 or 5.02) not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device that is designed
to, or could be expected to, result in the disposition
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by any person at any time in the future of) any shares of Company Common Stock
or sell or grant options, rights or warrants with respect to any shares of
Company Common Stock during the 7 days prior to and the 120 days after the
effective date of any registration statement with respect to such underwritten
public offering; provided, however, with respect to the 1998 Offering, the
Original Stockholders agree to be restricted for a period ending 180 days after
the effective date of the registration statement for the 1998 Offering. Such
Stockholder agrees to provide, upon request, written confirmation of this
agreement to the underwriters of any such underwritten offering. The obligation
of each Stockholder to agree to such a restriction shall terminate at such time
as the Stockholders as a group own less than 5% of the issued and outstanding
Company Common Stock and R. Xxxxx Xxxxxx is no longer an officer or director of
the Company or any of its Subsidiaries.
(c) The Company agrees, if so required by the managing
underwriter in connection with an underwritten offering of shares of the Company
Common Stock pursuant to Section 5.01 or 5.02 or, if requested by a Stockholder
in connection with a securities sales agreement entered into with any
representative of such Stockholder for the purposes of soliciting purchases of
Registrable Securities (a "Securities Sales Agreement") pursuant to any
registration under Section 5.01 or 5.02, to use its reasonable efforts to cause
each of its officers, directors and holders of more than 5% of the issued and
outstanding Company Common Stock not to, directly or indirectly, offer for sale,
sell, or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in any disposition by any person at
any time in the future of) any shares of Company Common Stock during the 7 days
prior to and the 120 days after the effective date of any registration statement
with respect to such underwritten public offering or Securities Sales Agreement.
The Company agrees to provide, upon request, written confirmation of agreements
by its officers, directors and 5% shareholders to abide by the terms hereof,
assuming the Company was able to cause such agreements as provided in the
previous sentence.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants to each Stockholder as
follows:
SECTION 3.01. Due Organization; Corporate Power and
Authorization. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by the Company have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement has been duly executed and
delivered by the Company and, assuming its due authorization, execution and
delivery by each Stockholder, constitutes a legal, valid and
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binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium and
other similar laws relating to creditors' rights and general principles of
equity.
SECTION 3.02. No Conflicts; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, (i)
conflict with or violate the Articles of Incorporation or By-Laws of the
Company, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or by which it or any of its
properties is bound, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of the Company pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company is a party or by which the Company
or any of its properties is bound, except, in the case of clauses (ii) and
(iii), for any such breaches, defaults or other occurrences that would not
prevent or delay the performance by the Company of its obligations under this
Agreement.
(b) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for such filings with the Commission, the NASD and any state
securities regulators required in connection with any public offering of
Registrable Securities and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay the performance by the Company of its obligations
under this Agreement.
ARTICLE IV
TRANSFER OF SHARES
SECTION 4.01. General Restriction . No Stockholder shall,
directly or indirectly, make or solicit any Sale of, or create, incur, solicit
or assume any Encumbrance with respect to, any Share, except in compliance with
the Securities Act and this Agreement.
SECTION 4.02. Legends.
(a) The Company shall affix to each certificate evidencing Shares
a legend in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE
IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS'
AGREEMENT DATED AS OF AUGUST 24, 1998, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION
OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE
ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN
COMPLIED WITH."
(b) In the event that any Shares shall cease to be Restricted
Shares, the Company shall, upon the written request of the holder thereof
(accompanied by an opinion, in form and substance reasonably satisfactory to the
Company, from legal counsel reasonably satisfactory to the Company, that such
Shares are no longer Restricted Shares), issue to such holder a new certificate
evidencing such Shares without the legend required by Section 4.02(a) endorsed
thereon.
SECTION 4.03. Certain Information. (a) So long as the Company
shall be a Public Company, it shall file in a timely manner all reports and
other information required to be filed by Section 13 or 15(d) under the Exchange
Act, as the case may be, and take such other actions as shall be reasonably
necessary in order that the conditions to the availability of Rule 144 in
connection with any Sale of Shares by a Stockholder shall be met.
(b) For purposes of this Agreement, the Company shall be deemed
to be a "Public Company" if, as of any date of determination, any shares of the
Company's capital stock are registered or required to be registered under the
Exchange Act .
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Registration Upon Request.
(a) Upon the written request of the holder or holders of
Registrable Securities requesting that the Company effect the registration under
the Securities Act of all or part of the Registrable Securities held by such
holder or holders and specifying the intended method or methods of disposition
of such Registrable Securities, the Company shall promptly give written notice
of such requested registration to all holders of
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Registrable Securities and thereupon shall use its best efforts to effect the
registration under the Securities Act, as expeditiously as is reasonable, of:
(i) the Registrable Securities that the Company has been so
requested to register by such holder or holders, for disposition in accordance
with the intended method of disposition stated in such request, and
(ii) all other Registrable Securities that the Company has been
requested to register by the holders of Registrable Securities by written
request delivered to the Company within 15 days after the giving of such written
notice by the Company (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent requisite to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities so to be registered; provided, however,
that:
(A) the Company shall not be required to effect any registration
pursuant to this Section 5.01 unless at the time of such request it
shall then be a Public Company;
(B) the Company shall not be required to effect any registration
pursuant to this Section 5.01 prior to the first anniversary of the date hereof;
(C) the Company shall not at any time be required to effect any
registration pursuant to this Section 5.01 unless the requests from holders of
Registrable Securities for such registration cover an aggregate number of shares
of Registrable Securities at least equal to 20% of the outstanding shares of
Company Common Stock issued as consideration pursuant to the Merger Agreement;
(D) if the Company has effected a registration pursuant to this
Section 5.01, the Company shall not be required to effect another registration
pursuant to this Section 5.01 until a period of 12 months shall have elapsed
from the effective date of the initial registration pursuant to this Section
5.01; and
(E) with respect to any registration statement filed, or to be
filed, pursuant to this Section 5.01, if the Board of Directors of the Company
determines that, in its judgment, it would (because of the existence of, or in
anticipation of, any material acquisition involving the Company or any of its
subsidiaries or any material financing activity, or the unavailability for
reasons substantially beyond the Company's control of any required financial
statements, or any other event or condition the disclosure of which would, in
the reasonable opinion of the Board of Directors of the Company,(1) be
materially disadvantageous to the Company or any of its subsidiaries taken as a
whole or (2) jeopardize the consummation of any such acquisition or financing
activity) be significantly disadvantageous (a "Disadvantageous Condition") for
such a registration statement to become effective, or to be maintained
effective, the Company shall, notwithstanding any other provision of this
Article V, be entitled, upon the giving of a written notice (a
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"Delay Notice") to such effect to each holder of Registrable Securities included
or to be included in such registration statement, to cause such registration
statement to be withdrawn and the effectiveness of such registration statement
terminated or, in the event no registration statement has yet been filed, shall
be entitled not to file any such registration statement, until, in the judgment
of the Board of Directors of the Company, such Disadvantageous Condition no
longer exists (notice of which the Company shall promptly deliver to the holders
of Registrable Securities with respect to which any such registration statement
has been filed, or was to have been filed); provided, however, that in no event
shall the Company be permitted to delay registration pursuant to this Section
(i) for a period exceeding 120 consecutive days or (ii) during any 12 month
period of time following the termination of any delay period; and provided,
further, that a holder of Registrable Securities may withdraw any registration
request made under this Section 5.01 in the event that such request is delayed
as permitted by the preceding clause for a period exceeding 45 days, in which
event the registration request will not count for purposes of the limit set
forth in paragraph (b) of this Section 5.01. Upon receipt of any notice of the
existence of a Disadvantageous Condition, such holders of Registrable Securities
selling such securities pursuant to an effective registration statement shall
forthwith discontinue use of the prospectus contained in such registration
statement and, if so directed by the Company, each such holder of Registrable
Securities shall deliver to the Company all copies, other than permanent file
copies then in such holder's possession, of the prospectus then covering such
Registrable Securities current at the time of receipt of such notice, and, in
the event that no registration statement has yet been filed, all drafts of the
prospectus covering such Registrable Securities. Notwithstanding the foregoing
provisions of this subparagraph (E), no registration statement filed and
subsequently withdrawn by reason of any existing or anticipated Disadvantageous
Condition as hereinabove provided shall count as the registration statement
referred to in the limitation in Section 5.01(b), or count against the
limitations in Section 5.01(a)(ii)(E).
(b) Anything herein to the contrary notwithstanding, the Company
shall not be obligated to file more than two effective registration statements
pursuant to this Section 5.01, each of which shall allow for the distribution of
Registrable Securities for at least 90 days and both of which must occur within
three years from the date hereof; provided, however, that such three years will
be extended for that amount of time that one or more registration statement are
delayed pursuant to Section 5.01(a)(ii)(E). In the event a registration
statement under this Section 5.01 does not remain effective for a period of 90
days or for such lesser period of time necessary to permit the distribution of
all of the Registrable Securities registered pursuant to a holder's request,
then the request shall not count for purposes of the limit set forth in this
paragraph (b).
(c) The Company shall pay all Registration Expenses in
connection with the registration of Registrable Securities effected by it
pursuant to this Section 5.01.
(d) In connection with any underwritten offering with respect to
which holders of Registrable Securities shall have requested registration
pursuant to this Section
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5.01, such holders shall have the right to select the managing underwriter with
respect to such offering; provided, however, if such holders select as managing
underwriter any institution other than Xxxxxxx Xxxxx Xxxxxx, Credit Suisse First
Boston Corporation, Xxxxxxx Xxxxx & Co. or Xxxxxx Xxxxxxx & Co. Incorporated
then such selection of managing underwriter shall require the consent of the
Company, which shall not be unreasonably withheld.
SECTION 5.02. Incidental Registration.
(a) If the Company at any time proposes to register (other than
pursuant to Section 5.01) any of its authorized but unissued shares of Company
Common Stock or any other shares of Company Common Stock under the Securities
Act on a form other than Form X-0, Xxxx X-0 or pursuant to any dividend
reinvestment plan and in a manner that would permit registration of Registrable
Securities for sale to the public under the Securities Act, it shall, on each
such occasion (including the occasion of the registration effected in connection
with the 1998 Offering), give prompt written notice to all holders of
Registrable Securities of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved in such
proposed registration (including, without limitation, whether or not such
registration will be in connection with an underwritten offering of Company
Common Stock and, if so, the identity of the managing underwriter and whether
such offering will be pursuant to a "best efforts" or "firm commitment"
underwriting). Upon the written request of any such holder of Registrable
Securities delivered to the Company within 15 days after such notice shall have
been given to such holder (which request shall specify the Registrable
Securities intended to be disposed of by such holder and the intended method of
disposition thereof), the Company shall use its best efforts to effect the
registration under the Securities Act, as expeditiously as is reasonable, of all
Registrable Securities that the Company has been so requested to register by the
holders of Registrable Securities, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered; provided, however, that:
(i) if, at any time after giving such written notice of its
intention to register any of such securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to each
holder of Registrable Securities that has requested to register Registrable
Securities and thereupon the Company shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection therewith
to the extent provided in Section 5.02(b)), without prejudice, however, to the
rights of any one or more holders to request such registration be effected as a
registration under Section 5.01;
(ii) if (A) the registration so proposed by the Company involves
an underwritten offering of the securities so to be registered, to be
distributed by or through one or more underwriters of recognized standing under
underwriting terms appropriate for such a transaction, and (B) the managing
underwriter of such underwritten offering
11
selected by the Company shall advise the Company that, in its judgment, the
number of securities proposed to be included in such offering by the Company
(for purposes of this Section 5.02(a), "Company Securities") and the number of
shares of Registrable Securities proposed to be included in such offering by the
holder or holders thereof should be limited due to market conditions, then the
Company shall promptly advise each such holder of Registrable Securities thereof
and may require, by written notice to each such holder accompanying such advice,
that, to the extent necessary to meet such limitation, all holders of
Registrable Securities proposing to sell shares of Registrable Securities in
such offering shall share pro rata in the number of shares of Registrable
Securities to be excluded from such offering, such sharing to be based on the
respective numbers of shares of Registrable Securities as to which registration
has been requested by such holders, and that the distribution of such
Registrable Securities as are so excluded be deferred (in case of a deferral as
to a portion of such Registrable Securities, such portion to be allocated among
such holders in proportion to the respective numbers of shares of Registrable
Securities so requested to be registered by such holders) until the completion
of the distribution of such securities by such underwriters, provided, however,
that Registrable Securities shall, if requested by the Stockholders, constitute
a minimum of 20% of the total amount of shares of Company Common Stock to be
sold in any offering;
(iii) the Company shall not be obligated to effect any
registration of Registrable Securities under this Section 5.02 that is
incidental to the registration of any of its securities in connection with any
merger, acquisition, exchange offer, dividend reinvestment plan or stock option
or other employee benefit plan;
(iv) with respect to the 1998 Offering, only an Original
Stockholder may include its Registrable Securities in such offering, subject to
the other limitations of this Agreement, and the Company shall not be obligated
to effect the registration of more than 1,500,000 Registrable Securities of any
Original Stockholder pursuant to this Section 5.02.
No registration of Registrable Securities effected under this Section 5.02 shall
relieve the Company of its obligation to effect registrations of Registrable
Securities upon the request of one or more holders pursuant to Section 5.01.
(b) There shall be no registration obligation pursuant to this
Section 5.02 with respect to shares of Company Common Stock that are not
Registrable Securities.
(c) The Company shall pay all Registration Expenses in
connection with each registration of Registrable Securities effected by it
pursuant to this Section 5.02.
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SECTION 5.03. Registration Procedures.
(a) If and whenever the Company is required to use its best
efforts to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 5.01 or 5.02, the Company shall:
(i) within 60 days after receiving the written request of the
holder or holders of Registrable Securities pursuant to Section 5.01(a) or
5.02(a) (or 45 days if the Company is eligible to file such registration
statement on Form S-3), prepare and file with the Commission on any appropriate
form a registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become effective;
(ii) prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
and other securities covered by such registration statement until the earlier of
(A) such time as all such Registrable Securities and other securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement and (B) the
expiration of 90 days from the date such registration statement first becomes
effective;
(iii) furnish to each seller of such Registrable Securities such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such
other documents as such seller may reasonably request in order to facilitate the
sale or disposition of such Registrable Securities;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities or "blue sky" laws of such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things that may be
necessary to enable such seller to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such registration
statement, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(v) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller, of a "cold comfort" letter signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, covering
substantially the same matters with respect to such
13
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters as such sellers may reasonably request;
(vi) immediately notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing or if it is necessary to amend or supplement such prospectus to
comply with law, and at the request of any such seller prepare and furnish to
such seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or securities, such prospectus shall
not include 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
not misleading in the light of the circumstances then existing and shall
otherwise comply in all material respects with law and so that such prospectus,
as amended or supplemented, will comply with law;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, beginning with the first month of the
first fiscal quarter after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
(viii) use its best efforts to list such securities on each
securities exchange or automated quotation system on which Shares are then
listed, if such securities are not already so listed and if such listing is then
permitted under the rules of such exchange, and provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such registration statement; and
(ix) issue to any underwriter to which any holder of Registrable
Securities may sell such Registrable Securities in connection with any such
registration (and to any direct or indirect transferee of any such underwriter)
certificates evidencing Shares without the legends described in Section 4.02.
(x) furnish counsel for the sole underwriter or lead managing
underwriter, if any, and for the holders of Registrable Securities copies of any
request by the Commission or any state securities authority for amendments or
supplements to a registration statement and prospectus or for additional
information:
14
(xi) use all reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement at the earliest
possible time;
(xii) upon request, furnish to the sole underwriter or lead
managing underwriter of an underwritten offering of Registrable Securities, if
any, without charge, at least one signed copy of each registration statement and
any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits; and
furnish to each holder of Registrable Securities, without charge, at least one
conformed copy of each registration statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(xiii) 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 lead managing underwriter, if any, and the
holders of the Registrable Securities being sold) addressed to each selling
holder covering the matters customarily covered in opinions requested in sales
of securities or underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters;
(xiv) deliver such customary documents and certificates as may
be reasonably requested by any holders of the Registrable Securities being sold
or by the managing underwriters, if any;
(xv) within a reasonable time prior to the filing of any
registration statement, any prospectus, any amendment to a registration
statement or amendment or supplement to a prospectus, provide copies of such
document to the holders of Registrable Securities and to counsel to such holders
and to the underwriter or underwriters of any underwritten offering of
Registrable Securities, if any;
(xvi) within a reasonable time prior to the filing of any
document which is to be incorporated by reference into a registration statement
or a prospectus, provide copies of such document to counsel for the holders; and
make such of the representatives of the Company as shall be reasonably requested
by such counsel available for discussion of such document; and
(xvii) make "road show" presentations and hold meetings with
potential investors, each at the Company's expense, and take such other actions
as shall be reasonably requested by the holders of Registrable Securities
covered by a registration statement.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company with such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by law
or by the Commission in connection therewith.
(b) If requested by the underwriters for any underwritten
offering of Registrable Securities on behalf of a holder or holders of
Registrable Securities pursuant
15
to a registration requested under Section 5.01, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain such representations and warranties by the Company and such other
terms and conditions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnities to the effect and to the extent provided in Section 5.06.
(c) To the extent requested and customary for the relevant
transaction, the Company shall enter into a Securities Sales Agreement with the
holders and such representative of the selling holders as holders of the
Registrable Securities covered by any Registration Statement shall choose and
providing for, among other things, the appointment of such representative as
agent for the selling holders for the purpose of soliciting purchases of
Registrable Securities, which agreement shall be customary in form, substance
and scope and shall contain customary representations, warranties and covenants.
(d) The Company agrees, if so required by the managing
underwriters in connection with an underwritten offering of Registrable
Securities pursuant to Section 5.01 or 5.02, not to effect any public sale or
distribution of any of its equity securities or securities convertible into or
exchangeable or exercisable for any of such equity securities during the 7 days
prior to and the 60 days after the effective date of any registration statement
with respect to such underwritten public offering, except as part of such
underwritten offering or except in connection with a stock option plan, stock
purchase plan, dividend reinvestment plan, savings or similar plan, or an
acquisition, merger or exchange offer or an offering pursuant to an exemption
from registration under the Securities Act.
(e) It is understood that in any underwritten offering of
Registrable Securities, in addition to the shares of Company Common Stock (the
"Initial Shares") the underwriters have committed to purchase, the underwriting
agreement may grant the underwriters an option to purchase a number of
additional shares (the "Option Shares") equal to up to 15% of the Initial Shares
(or such other maximum amount as the NASD may then permit), to cover over-
allotments. Nothing herein shall obligate the Company to provide the
underwriters such an option. Shares of Company Common Stock proposed to be sold
by the Company and the holders shall be allocated between Initial Shares and
Option Shares as agreed or, in the absence of agreement, pursuant to Section
5.02(a)(ii). The number of Initial Shares and Option Shares to be sold by
requesting holders shall be allocated pro rata among all such holders on the
basis of the relative number of Registrable Securities each such holder has
requested to be included in such registration.
SECTION 5.04. Transfer of Registration Rights. The registration
rights of the Stockholders under this Agreement with respect to any Registrable
Securities (but no other rights under this Agreement) may be transferred to any
transferee of such Registrable Securities who acquires at least 20% of such
Stockholder's shares of Registrable Securities in a transaction which does not
cause such Registrable Securities to cease to be Restricted Securities;
provided, however, that (a) transferring Stockholders shall give the Company
written notice at or prior to the time of such transfer stating the
16
name and address of the transferee and identifying the securities with respect
to which the rights under this Agreement are being transferred and (b) such
transferee shall agree in writing, in form and substance reasonably satisfactory
to the Company, to be bound as a Stockholder by the provisions of this
Agreement. Any transferee of Registrable Securities shall be entitled only to
such registration rights as have not been exercised by the holder or holders of
Registrable Securities prior to the time that such transferee acquired such
Registrable Securities.
SECTION 5.05. Preparation; Reasonable Investigation.
In connection with the preparation and filing of each registration statement
registering Registrable Securities under the Securities Act, the Company shall
give the holders of Registrable Securities on whose behalf such Registrable
Securities are to be so registered and their underwriters, if any, and their
respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
shall give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have issued a report on its financial
statements as shall be necessary, in the opinion of such holders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
SECTION 5.06. Indemnification.
(a) In the event of any registration of any equity securities of
the Company under the Securities Act, the Company shall, and hereby does, to the
fullest extent permitted by law, indemnify and hold harmless, in the case of any
registration statement filed pursuant to Section 5.01 or 5.02 (including in
connection with the 1998 Offering), the prospective seller of any Registrable
Securities covered by such registration statement, its directors and officers,
general and limited partners (and directors and officers thereof and, if such
prospective seller is a portfolio or investment fund, its investment advisors),
each other Person who participates as an underwriter in the offering or sale of
such securities, each officer and director of each such underwriter and each
other Person, if any, who controls such prospective seller or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any losses, claims, damages, liabilities and
expenses, joint or several, to which such prospective seller or any such
director, officer, partner, advisor or participating or controlling Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus included therein,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company shall reimburse such seller, and each
such director, officer, partner, advisor, underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them in
17
connection with investigating, preparing or defending against any such loss,
claim, liability, action or proceeding, whether commenced or threatened;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with (i) information concerning ERC, Eastern Resorts Company, LLC or the
Original Stockholders at any point prior to the Closing Date; provided that the
Original Stockholders shall have been provided with copies of such document
reasonably in advance of, but in no event less than 5 business days prior to,
the filing thereof, and the Company shall have made such changes as reasonably
requested by the Original Stockholders or (ii) written information furnished to
the Company for use in the preparation thereof by such prospective seller or
underwriter, as the case may be. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such prospective
seller or any such director, officer, partner, advisor, underwriter or
controlling Person and shall survive the transfer of such securities by such
prospective seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to Section
5.01 or 5.02, that the Company shall have received an undertaking satisfactory
to it from (i) the prospective seller of such securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
5.05(a), except that any such prospective seller shall not in any event be
liable to the Company pursuant thereto for an amount in excess of the net
proceeds of sale of such prospective seller's Registrable Securities so to be
sold) the Company, each officer and director of the Company, each such
underwriter of such securities, each officer and director of each such
underwriter and each other Person, if any, who controls the Company or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and (ii) each such underwriter of such securities, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 5.05(a)) the Company, each officer and director of the Company,
each prospective seller, its directors and officers, general and limited
partners (and directors and officers thereof and, if such prospective seller is
a portfolio or investment fund, its investment advisors), and each other Person,
if any, who controls the Company or any such prospective seller within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
with respect to any statement in or omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus included
therein, or any amendment or supplement thereto, if such statement or omission
was made in reliance upon and in conformity with written information furnished
by such prospective seller or such underwriter, as the case may be, to the
Company for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by such prospective
seller.
18
(c) Promptly after receipt by an indemnified party of notice of
the commencement of any action or proceeding (including any governmental
investigation) involving a claim referred to in Section 5.05(a) or (b), such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding provisions of this Section 5.05, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim (in which case, the indemnifying party shall not be liable for the fees
and expenses of more than one counsel (other than local counsel) for all sellers
of Registrable Securities, or more than one counsel (other than local counsel)
for the underwriters in connection with any one action or separate but similar
or related actions), the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof.
SECTION 5.07. Contribution. If the indemnification provided for
in Section 5.05 is unavailable to the indemnified party or parties in respect of
any losses, claims, damages or liabilities referred to therein, then each such
indemnified party and the Company shall contribute to the amount of such losses,
claims, damages or liabilities (a) as between the Company and the holders of
Registrable Securities covered by a registration statement, on the one hand, and
the underwriters, on the other, in such proportion as is appropriate to reflect
the relative benefits received by the Company and such holders, on the one hand,
and the underwriters, on the other, from the offering of the Registrable
Securities or, if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and such holders, on the one hand, and of the
underwriters, on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations, and (b) as between the Company, on the one
hand, and each holder of Registrable Securities covered by a registration
statement, on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of each such holder in connection with such
statements or omissions, as well as any other relevant equitable considerations.
The relative benefits received by the Company and such holders, on the one hand,
and the underwriters, on the other, shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and such
holders bear to the total underwriting discounts and commissions received by the
underwriters. The relative fault of the Company and such holders, on the one
hand, and of the underwriters, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material
19
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and such holders or by the underwriters. The
relative fault of the Company, on the one hand, and of each such holder, on the
other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the holders of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 5.07
were determined by pro rata allocation (even if the underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the next preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the next preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.07, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
holder were offered to the public exceeds the amount of any damages that such
holder 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)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Stockholder's obligation to contribute
pursuant to this Section 5.06 is several in the proportion that the proceeds of
the offering received by such Stockholder bears to the total proceeds of the
offering received by all the Stockholders and not joint.
ARTICLE VI
CORPORATE GOVERNANCE
SECTION 6.01. Initial Board Representation . As of the fifth
business day following the Effective Time, the Company shall (a) take such
action as may be necessary to increase the size of the Board of Directors of the
Company (the "Board of Directors") to five directors, and (b) fill the vacancy
thereby created by appointing R. Xxxxx Xxxxxx as a director .
SECTION 6.02. Continuing Board Representation. Until such time as
the Original Stockholders no longer beneficially own shares representing in the
aggregate at least 10% of the outstanding shares of Company Common Stock or 25%
of the
20
Original Stockholders initial holdings, if less, the Company covenants and
agrees as follows:
(a) except as contemplated by this Agreement, as otherwise
agreed to by the Stockholders, or required by applicable law or NASD rules, the
Company shall not take or recommend to its stockholders any action which would
result in any amendment to the By-Laws of the Company in effect on the date
hereof that would impose any qualifications to the eligibility of directors of
the Company to serve on any committee of the Board of Directors;
(b) the Company shall use its best efforts to cause the
Nominating Committee of the Board of Directors (the "Nominating Committee") (or
if the Nominating Committee makes no such recommendation, the Board of
Directors) to recommend R. Xxxxx Xxxxxx for election as a director; provided,
however, that if despite such best efforts, Xx. Xxxxxx is not elected by the
stockholders of the Company, the Company shall have no further obligations under
this Section 6.02(b) for the applicable year.
(c) Articles and By-laws; Fiduciary Duties. The obligations of
the Company set forth in this Section 6.02 are subject to compliance with the
provisions of the Company's Articles of Incorporation and the Company's By-laws,
and the fiduciary duties of the Board of Directors and the Nominating Committee
to the Company's stockholders.
(d) No Duty to Designate; Reduction of Board Representation.
Nothing contained in this Section 6.02 shall be construed as requiring the
Original Stockholders to designate any directors or, once designated and
elected, to require any director to continue to serve in office if such director
elects to resign.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with the transactions contemplated by
this Agreement shall be paid by the party incurring such costs and expenses.
SECTION 7.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or facsimile, by registered or certified mail (postage prepaid, return
receipt requested) or nationally recognized overnight courier service to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
7.02):
21
if to the Company:
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
Equivest Finance, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
General Counsel
Equivest Finance, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
if to a Stockholder:
R. Xxxxx Xxxxxx
Eastern Resorts Company
000 Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx, Xxxxx & Xxxxxxx, LLP
Watermill Center
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
SECTION 7.03. Amendment.
(a) Any term of this Agreement may be amended and the
observance of any such term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a writing executed
by the Company and each Stockholder.
(b) No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof nor
shall any single or
22
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 7.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.05. Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect thereto.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise), except that the Company may assign all or any of its rights and
obligations hereunder to any affiliate of the Company and subject to Section
5.04; provided, however, that no such assignment shall relieve the Company of
its obligations hereunder if such assignee does not perform such obligations.
SECTION 7.06. Parties in Interest. This Agreement shall be
binding upon and shall inure solely to the benefit of, and be enforceable by,
the parties hereto, the parties indemnified hereunder and their respective
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any person, other than the parties
hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities of any nature whatsoever under or by reason
of this Agreement.
SECTION 7.07. Specific Performance . The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 7.08. Public Announcements . Each party to this Agreement
shall use its reasonable best efforts to consult with the others before issuing
any press release or otherwise making any public statements with respect to this
Agreement or any transaction contemplated herein and shall not issue any press
release or make any such public statement prior to such consultation.
SECTION 7.09. Governing Law . This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
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SECTION 7.10. Consent to Jurisdiction.
(a) Each of the Stockholders and the Company hereby irrevocably
submits to the exclusive jurisdiction of the state courts of the State of New
York and to the jurisdiction of the United States District Court for the
Southern District of New York, for the purpose of any action or proceeding
arising out of or relating to this Agreement and each of the Stockholders and
the Company hereby irrevocably agree that all claims in respect to such action
or proceeding may be heard and determined exclusively in any New York state or
federal court sitting in the Southern District of New York. Each of the
Stockholders and the Company agree that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Each of the Stockholders and the Company irrevocably consent
to the service of the summons and complaint and any other process in any other
action or proceeding relating to this Agreement, on behalf of itself or its
property, by the personal delivery of copies of such process to such party.
Nothing in this Section 7.10 shall affect the right of any party to serve legal
process in any other manner permitted by law.
SECTION 7.11. Headings . The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 7.12. Counterparts . This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 7.13. Termination . This Agreement shall terminate with
respect to any Stockholder when such Stockholder no longer owns any shares of
Company Common Stock, and with respect to all parties hereto when the
Stockholders and their affiliates, as a group, no longer own any shares of
Company Common Stock.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officer thereunto duly authorized and each Stockholder has
caused this Agreement to be executed, or duly executed by an authorized
signatory, as of the date first written above.
EQUIVEST FINANCE, INC
By
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive
Officer
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--------------------------------------
R. Xxxxx Xxxxxx
Address:
--------------------------------------
Xxxxx Xxxxxx
Address:
25
Exhibit A
Name of Original Stockholder Number of Shares
---------------------------- ----------------
R. Xxxxx Xxxxxx 3,040,000
Xxxxx Xxxxxx 160,000
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