XXXXXXXX HOSPITALITY MANAGEMENT CORPORATION
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
AGREEMENT made as of this 30th day of April, 1992, by and among WMS
HOTEL CORPORATION ("WMS"), a Delaware corporation having its principal offices
at 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; XXXXXX X. XXXXXXX, as
nominee (the "Xxxxxxx Nominee"), having a business address at 000 Xxxxx Xxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000; XXXX X. XXXXXXX ("Xxxxxxx:) residing at x/x Xxxxxxx
Xxxxx Hotel & Casino, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000. (WMS, the
Xxxxxxx Nominee and Xxxxxxx are hereinafter collectively referred to as the
"Stockholders"); and XXXXXXXX HOSPITALITY MANAGEMENT CORPORATION ("WHMC"), a
Delaware corporation having its principal offices at El San Xxxx Hotel & Casino,
000 Xxxx Xxxx Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxx Xxxx 00000.
W I T N E S S E T H :
WHEREAS, the Stockholders and WHMC are parties to a stockholders'
agreement dated September 23, 1983, as amended August 20, 1986 (the "Original
Stockholders Agreement") among Xxxxxxxx Hotel Corporation, now known as WMS
Hotel Corporation, the Xxxxxxx Nominee, Xxxxxxx, Xxxxx International
Incorporated ("Newcorp.") and Xxxxxxx de America Central, Inc., now known as
Xxxxxxxx Hospitality Management Corporation; and
WHEREAS, the shares of common stock, without par value, of WHMC (the
"WHMC Stock") formerly issued to Newcorp. are now owned by and issued to the
Xxxxxxx Nominee; and
WHEREAS, immediately prior hereto WMS owns 500 shares of WHMC Stock;
the Xxxxxxx Nominee owns of record 400 shares of WHMC Stock and Xxxxxxx owns 100
shares of WHMC Stock; and
WHEREAS, Xxxxxxx owns 100 shares of Preferred Stock; and
WHEREAS, concurrently herewith WMS is purchasing 20 shares of WHMC
Stock from the Xxxxxxx Nominee and 30 shares of WHMC Stock from Xxxxxxx; and
WHEREAS, the Stockholders and WHMC desire to reflect the change in
ownership and provide for certain other changes to the Original Stockholders
Agreement; and
WHEREAS, the Stockholders and WHMC desire to amend and restated the
Original Stockholders Agreement to reflect such changes and accurately reflect
the current state of facts among the parties.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, and other valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree that the Original Stockholders Agreement
shall be amended and restated to read in its entirety as follows:
1. Definitions.
1.1 The following definitions shall be used in this Agreement:
1.1.1 An "affiliate" of, or a person "affiliated"
with a specified person, is a person that directly, or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with the person specified.
1.1.2 The "Condado" shall mean Xxxxxxx de Puerto Rico
Associates, Incorporated, as owner of the Condado Plaza Hotel & Casino.
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1.1.3 The "El San Xxxx" shall mean Xxxxxxx de San
Xxxx Associates as owner of the El San Xxxx Hotel & Casino.
1.1.4 "Original Stockholders Agreement" is defined in
the first recital paragraph of this agreement.
1.1.5 "Major Decisions" shall have the meaning set
forth in Section 2.3 hereof.
1.1.6 A "person" means an individual, corporation,
partnership or other legal entity.
1.1.7 "Preferred Stock" means the preferred stock,
without par value, of WHMC.
1.1.8 "Puerto Rico Gaming Authorities" means and
includes the Treasury of the Commonwealth of Puerto Rico and any other
governmental body or agency having authority over licensing of gambling in the
Commonwealth of Puerto Rico.
1.1.9 "WHMC Stock" means and includes the common
stock, without par value, of WHMC and all shares of stock issued in respect
thereof or in exchange therefor pursuant to any stock split or stock dividend or
distribution of capital or any recapitalization, reclassification, merger,
consolidation, combination of shares, sale of assets or split up or spin off.
2. Corporate Governance.
2.1 The full board of directors of WHMC shall consist of not
less than seven nor more than eight persons, as such number shall be determined
by WMS from time to time. Initially, as of the date hereof, the number of
directors shall be eight. So long as WMS shall
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be a holder of WHMC Stock, WMS shall have the right to designate four directors
if the total number of directors is seven and shall have the right to designate
five directors if the total number of directors is eight. So long as Xxxxxxx is
a holder of WHMC Stock and the Chief Operating Officer of WHMC and is able to
serve, he shall be a director. So long as the Xxxxxxx Nominee shall have the
right to designate the remaining two directors. If Xxxxxxx ceases to be a
director of WHMC because he resigns, ceases to be a holder of WHMC Stock, ceases
to be the Chief Operating Officer of WHMC or is unable to serve as a director of
WHMC, such vacancy shall be filled by a director designated by the Xxxxxxx
Nominee if he is then a holder of WHMC Stock and after such date, so long as the
Xxxxxxx Nominee is a holder of WHMC Stock, the Xxxxxxx Nominee shall be entitled
to designate the three members of the Board of Directors of WHMC not required to
be designated by WMS. The Xxxxxxx Nominee designees shall be either Xxxxxx X.
Xxxxxxx or Xxxxxxx X. Xxxxxxx, or both of them, so long as they are able to
serve. Any other Xxxxxxx Nominee designee must be approved by WMS, such approval
not to be unreasonably withheld. The Stockholders shall vote their shares of
WHMC Stock and otherwise use their best efforts to elect the designee of the
Stockholders as provided above.
2.2 Action by the Board of Directors of WHMC shall require a
simple majority vote except that commencing April 30, 1999, or such earlier date
as Xxxxx X. Xxxxxxxx shall cease to be Chairman of the Board of WHMC and
regularly exercise the functions of chief executive officer of WHMC (the "Super
Majority Date"), then action by the Board of Directors of WHMC with respect to
Major Decisions shall require an affirmative vote of 65% of the members of the
entire Board and, to the extent a vote of the stockholders of WHMC shall be
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required under the Delaware General Corporation Law to authorize or approve a
Major Decision, such authorization or approval shall require the affirmative
vote of 66-2/3% of the outstanding shares of WHMC Stock. Notwithstanding the
foregoing, following the date hereof, amendment, including repeal, of Article I,
Section 11, Article II, Sections 2 and 4, Article III, Section 5(a) and Article
V, Section 3 of the By-Laws of WHMC may be effected only by the affirmative vote
of the holders of 66 2/3% of the outstanding shares of WHMC Stock. The foregoing
specific Sections shall supersede and take priority over any provisions in the
By-Laws of WHMC or in the Certificate of Incorporation of WHMC which are
inconsistent with such Sections as they exist on the date hereof.
2.3 Major Decisions shall consist of any of the following
actions or transactions:
2.3.1 Amendment of the WHMC Certificate of
Incorporation or By- Laws.
2.3.2 The consolidation or merger of WHMC with any
other corporation except a wholly owned subsidiary of WHMC.
2.3.3 The sale, exchange, transfer, lease or
encumbrance of all or substantially all of the property or assets of WHMC.
2.3.4 The voluntary liquidation or dissolution of
WHMC.
2.3.5 The issuance of additional shares of WHMC
capital stock.
2.3.6 The purchase by WHMC of all or substantially
all of the assets or voting control, directly or indirectly, of another entity.
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2.3.7 The repurchase by WHMC of shares of its capital
stock including, without limitation, any decision to repurchase WHMC Stock other
than pursuant to any offer made or deemed made under Sections 4.9.1.2 and
4.9.2.1 of this Agreement.
2.3.8 The making or amendment of any employment
arrangements between WHMC and its key management employees including, without
limitation, Xxxxxxx.
2.3.9 The making or amendment of arrangements for the
compensation of WHMC directors by WHMC.
2.3.10 The incurrence by WHMC of indebtedness for
borrowed money in excess of $2,000,000 for any single item or $5,000,000 in the
aggregate (such excess being hereinafter referred to as "New Debt"). New Debt
and the foregoing $2,000,000 and $5,000,000 amounts shall not include any
indebtedness incurred by WHMC prior to the Super Majority Date, any refinancing
or such then existing indebtedness up to the principal amount outstanding on the
date of such refinancing and any indebtedness specifically approved by the Board
of Directors as New Debt.
2.3.11 The making or amendment of any financial or
other contractual arrangements with WMS Industries Inc. or any of its officers,
directors or majority owned subsidiaries.
2.3.12 The making of any loans or other financial
accommodations by WHMC to the El Conquistador Partnership L.P.
2.4 In order to effect the provisions of this Section 2,
concurrently herewith the Stockholders shall vote their shares of WHMC Stock and
otherwise use their best efforts to
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adopt the amendments to WHMC's By-Laws and Certificate of Incorporation in the
forms annexed hereto as Exhibits A and B.
2.5 WHMC shall and each of the Stockholders shall vote their
shares of WHMC Stock and otherwise use their best efforts to cause WHMC to
declare dividends on outstanding WHMC Stock in the following amounts, subject,
in each case, to the availability of sufficient cash to pay such dividends and
WHMC obtaining any necessary third party consents.
2.5.1 Concurrently herewith the Condado is paying
WHMC $2,350,000 on account of the existing intercompany account between the
Condado and WHMC. Upon the receipt of such payment, WHMC shall promptly declare
and pay a dividend on outstanding WHMC Stock for the full amount so received by
it on account of the existing intercompany indebtedness less an amount equal to
applicable tollgate taxes.
2.5.2 Commencing with the fiscal year ending June 30,
1992, at least once per year and no later than 120 days after the end of each
fiscal year of WHMC, WHMC shall declare and pay dividends on outstanding WHMC
Stock in an amount equal to (a) the amount required to be paid by WKA El Con
Associates to WHMC in respect of such fiscal year under the Loan and
Reimbursement Agreement, dated June 30, 1990, between WHMC and WKA El Con
Associates, so long as such loan remains outstanding and (b) after such loan has
been repaid, 50% of WHMC's net income in respect of such fiscal year as
reflected in its certified financial statements for such fiscal year less an
amount equal to applicable tollgate taxes.
2.5.3 In the event the existing financing for the El
San Xxxx is refinanced, it is anticipated that there will be sufficient amounts
available for the El San Xxxx
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to repay certain of the amounts it owes to WHMC. WHMC shall pay a dividend in an
amount at least equal to the lesser of $4,000,000 and the amount so repaid to
WHMC out of any refinancing proceeds from the El San Xxxx, either of such
amounts to be paid less an amount equal to applicable tollgate taxes.
2.5.4 WHMC shall declare and pay a dividend in the
amounts received by WHMC after the date hereof in respect of the Development Fee
paid by El Conquistador Partnership L.P. under the Development Services and
Management Agreement dated January 12, 1990 with WHMC, up to a maximum of
$1,755,000 less an amount equal to applicable tollgate taxes. Such dividends
shall be declared and paid as and when such amounts shall be received by WHMC or
as soon thereafter as practical.
2.6 The Preferred Stock has no voting rights except as
otherwise required by law. Xxxxxxx currently is the owner of 100 shares of
Preferred Stock constituting the only outstanding shares of Preferred Stock. If
for any reason required by law the Preferred Stock shall have the right to vote
in respect of any matter, Xxxxxxx shall vote his shares of Preferred Stock in
accordance with the instructions of WMS and Xxxxxxx hereby grants to WMS an
irrevocable proxy with respect to the Preferred Stock in the form annexed hereto
as Exhibit C.
3. Stockholders and Certificate Legends.
3.1 The holders of WHMC Stock and Preferred Stock and the
number of shares each has been issued, after giving effect to the sale of 50
shares of WHMC Stock to WMS are as follows:
Name Number
---- -------
WMS 550 Common Stock
Xxxxxxx Nominee* 380 Common Stock
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Xxxxxxx 70 Common Stock
Xxxxxxx 100 Preferred Stock
* See registered holders thereof on the signature pages of
this agreement.
3.2 So long as this Agreement shall be in effect, all
certificates representing shares of WHMC Stock and Preferred Stock now or
hereafter issued by WHMC to any of the Stockholders shall be marked with the
following legend:
"The shares of Stock evidenced by this Certificate
are and will be subject to, and cannot be transferred
except in accordance with, an agreement dated as of
April __, 1992, as amended from time to time, among
the Corporation and its stockholders (the
"Stockholders' Agreement"), a copy of which is on
file and may be obtained at the principal office of
the Corporation, which Stockholders' Agreement
provides, among other things, for restrictions on the
transfer of the shares of Stock of the Corporation."
Concurrently herewith the Stockholders are surrendering their current
certificates in order to have the foregoing legend inscribed thereon and to
delete reference to the Original Stockholders Agreement.
4. Restrictions on Transfers of Stock.
4.1 No Stockholder may sell, assign, transfer, pledge,
encumber, hypothecate, mortgage or in any manner dispose of all or any portion
of his or its WHMC Stock except as provided in this Agreement, and any such
attempted sale, assignment, transfer, pledge, encumbrance, hypothecation,
mortgage or other disposition (any or all of the foregoing being hereinafter
encompassed within the words "Dispose" or "Disposition") by a Stockholder of his
or its WHMC Stock, except as hereinafter provided, shall be null and void. For
purposes of this Section 4, Preferred Stock shall be deemed included within the
definition of WHMC Stock.
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4.2 WHMC shall issue no shares of WHMC Stock except as
otherwise provided in this Agreement.
4.3 No Disposition of WHMC Stock shall be made to any person
if (a) the Puerto Rico Gaming Authorities require such person to be qualified or
approved and such person has not been so qualified or approved prior to becoming
as stockholder or (b) such transfer would adversely affect any tax exemptions
granted to the Condado, the El San Xxxx or WHMC by the Commonwealth of Puerto
Rico.
4.4 In the event of any Disposition by reason of death of an
individual or merger or liquidation of a corporation, the transferee of the WHMC
Stock shall hold the WHMC Stock transferred subject to all of the obligations
and restrictions to which the transferor was subject and have all the rights of
the transferor hereunder.
4.5 WMS may Dispose of any or all of its WHMC Stock to any
affiliate of WMS (the "WMS Stockholder") notwithstanding any provision of
Article 4 of this Agreement except for Section 4.3. In addition, any WMS
Stockholder may Dispose of WHMC Stock to any other affiliate of WMS. Prior to
any Disposition pursuant to this Section 4.5, such WMS Stockholder shall become
a party to this Agreement and be bound by the terms hereof in the same manner
and to the same extent as WMS and thereafter any Disposition of all of the WHMC
Stock owned by WMS to a person other than WMS Stockholder shall include a
Disposition of all of the WMS Stock transferred to WMS Stockholders. All such
transferees shall be deemed included within the definition of Stockholder for
purposes of this Agreement, and shall have all of the rights and obligations
which WMS would have had under this Agreement as an owner of WHMC Stock.
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4.6 The beneficial owners of all of the shares of WHMC Stock
held of record by the Xxxxxxx Nominee must be either Xxxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxxx (collectively the "Koffmans") or any of their affiliates. All such
beneficial owners of WHMC Stock have agreed to be bound by the terms of this
Agreement and any such beneficial owner may Dispose of any or all of their
beneficial ownership of WHMC Stock to any affiliate of the Koffmans, any spouse
of the Koffmans, any children of the Koffmans or any trust or trusts for the
benefit of such children, notwithstanding any provision of Article 4 of this
Agreement except for Section 4.3. All of the foregoing are hereinafter referred
to as "Xxxxxxx Stockholders." Concurrently herewith the shares heretofore held
of record by the Xxxxxxx Nominee are being registered in the name of the
appropriate Xxxxxxx Stockholders as set forth on the signature pages of this
Agreement. In addition, Xxxxxxx Stockholders may Dispose of beneficial ownership
of WHMC Stock to other Xxxxxxx Stockholders. Prior to any Disposition pursuant
to this Section 4.6, such Xxxxxxx Stockholder shall agree in writing to be bound
by the terms of this Agreement in the same manner and to the same extent as the
Xxxxxxx Nominee and thereafter any Disposition of all of the WHMC Stock owned by
the Xxxxxxx Nominee to a person other than a Xxxxxxx Stockholder shall include a
Disposition of all the beneficial ownership of all of the WHMC Stock held by all
of the Xxxxxxx Stockholders. All Xxxxxxx Stockholders and their transferees
shall be deemed included within the definition of Stockholder for purposes of
this Agreement, and shall have all of the rights and obligations which the
Xxxxxxx Nominee would have had under this Agreement as owners of WHMC Stock.
4.7 Xxxxxxx may Dispose of any or all of his WHMC Stock to any
affiliate of Xxxxxxx, his spouse, any children of Xxxxxxx or any trust or trusts
for the benefit of such
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children, notwithstanding any provision of Article 4 of this Agreement except
for Section 4.3. All of the foregoing are hereinafter referred to as "Xxxxxxx
Stockholders." In addition, Xxxxxxx Stockholders may Dispose of WHMC Stock to
other Xxxxxxx Stockholders. Prior to any Disposition pursuant to this Section
4.7, such Xxxxxxx Stockholders shall become a party to this Agreement and be
bound by the terms hereof in the same manner and to the same extent as Xxxxxxx
and thereafter any Disposition of all of the WHMC Stock owned by Xxxxxxx to a
person other than an Xxxxxxx Stockholder shall include a Disposition of WHMC
Stock transferred to the Xxxxxxx Stockholders. All Xxxxxxx Stockholders and
their transferees shall be deemed included within the definition of Stockholder
for purposes of this Agreement, and shall have all of the rights and obligations
which Xxxxxxx would have had under this Agreement as an owner of WHMC Stock.
4.8 The Xxxxxxx Nominee, on behalf of the Xxxxxxx
Stockholders, and Xxxxxx xxx Dispose of 20 and 30 shares respectively of WHMC
Stock to WMS concurrently herewith; the Xxxxxxx Nominee may pledge to a
financial institution up to an aggregate of 20 shares of WHMC Stock as security
for loans to them, the proceeds of which will be used to satisfy their
obligations to the El Conquistador Partnership L.P. and certain related taxes;
and (iii) WMS may agree to purchase and may purchase from such financial
institution any of the shares so pledged upon such terms as WMS shall deem
acceptable.
4.9 If any of the Stockholders including any of the Xxxxxxx
Stockholders (the "Seller") shall receive a bona fide offer from a third party
to purchase any or all of its or his WHMC Stock which such Stockholder is
willing to accept, the Seller shall give notice (the "Notice") to WHMC and the
Non-Selling Stockholders (as hereinafter defined) stating its or his
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desire to dispose of such stock (the "Offered Stock"), the number of shares to
be Disposed of, the name and address of the proposed transferee (the "Designated
Transferee"), the price to be paid for such stock and the terms of payment
thereof (the "Offered Price and Terms") and all the other terms and conditions
of such proposed Disposition and such other information as WHMC or the
Non-Selling Stockholders shall request. For purposes of this Agreement, "Non-
Selling Stockholders" shall mean the Stockholders who are then holders of WHMC
Stock and who have not given notice of its or his desire to Dispose of its or
his WHMC Stock pursuant to this Section 4.9.
4.9.1 Except as provided in Sections 4.6, 4.7 and 4.8
of this Agreement, the Disposition of WHMC Stock by the Xxxxxxx Nominee
(including the Xxxxxxx Stockholders) and Xxxxxxx, shall be restricted as
follows:
4.9.1.1 If the Seller shall be Xxxxxxx
the Xxxxxxx Nominee shall thereupon have the option, but not the obligation,
exercisable by written notice to the Seller, given within 30 days of the Notice,
to purchase all or any part of the Offered Stock at a price and on terms equal
to the Offered Price and Terms.
4.9.1.2 If the Xxxxxxx Nominee does not
elect to exercise its option to purchase all of the Offered Stock from Xxxxxxx
or if the Seller shall be either the Xxxxxxx Nominee or a Xxxxxxx Stockholder,
WHMC shall thereupon have the option, but not the obligation, exercisable by
written notice to the Seller, given within 60 days of the Notice if Xxxxxxx is
the Seller and within 30 days of the Notice if the Xxxxxxx Nominee or a Xxxxxxx
Stockholder is the Seller, to purchase all or any part of the Offered Stock at a
price and on terms equal to the Offered Price and Terms. For purposes of WHMC
determining whether to exercise
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its option, the Stockholders shall vote their shares of WHMC Stock as directed
by WMS and the directors appointed by WMS shall constitute a quorum of the board
of Directors of WHMC and a majority thereof shall be entitled to determined
whether the option shall be exercised. If WHMC elects to exercise its option,
and if WHMC shall thereupon have insufficient surplus to permit it legally to
purchase the Offered Stock at the time of purchase, the Stockholders shall cause
a special meeting of the stockholders of WHMC to be called prior to such
purchase. At any such meeting, all of the Stockholders shall vote their shares
of WHMC Stock so as to create, to the extent permitted by law, a surplus large
enough to permit WHMC to make such purchase payment without requiring any
additional capital investments by any of the Stockholders.
4.9.1.3 If WHMC does not elect to
exercise its option to purchase all of the Offered Stock, WMS shall thereupon
have the option, but not the obligation, exercisable by written notice to the
Sellers within 90 days of the Notice if Xxxxxxx is the Seller and within 60 days
of the Notice if the Xxxxxxx Nominee or a Xxxxxxx Stockholder is the Seller, to
purchase all or any part of the Offered Stock not purchased by WHMC at the
Offered Price and Terms.
4.9.1.4 If the Notice shall be duly
given, and if the Xxxxxxx Nominee, WHMC and WMS together shall fail to exercise
their options to purchase all of the Offered Stock, then the Seller shall be
free to Dispose of all or such portion of the Offered Stock not purchased by the
Xxxxxxx Nominee, WHMC or WMS to the Designated Transferee at the Offered Price
and Terms, free of any restrictions or rights under this Agreement, and only if
(a) such transferee agrees to be bound by the provisions of this Agreement, (b)
such Disposition
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and such transferee shall be approved by the Puerto Rico Gaming Authorities, (c)
such transfer does not adversely affect any tax exemptions granted to Xxxxxxx or
WHMC by the Commonwealth of Puerto Rico and (d) such disposition shall be bona
fide and shall be consummated within 150 days after the giving of the Notice if
Xxxxxxx is the Seller and within 120 days of the Notice if the Xxxxxxx Nominee
or a Xxxxxxx Stockholder is the Seller. If all of the Offered Stock shall not be
so Disposed of by the Seller during such period, the portion thereof not
Disposed of shall again become subject to the terms of this Agreement in the
same manner as if no Notice had been given.
4.9.1.5 The closing for the sale of WHMC
Stock to WHMC or any of the Stockholders pursuant to this Section 4.9.1 shall be
at a time and place selected by the purchaser and reasonably convenient to the
Seller not more than 30 days after the giving of the notice of the decision to
so purchase.
4.9.2 Except as provided in Section 4.5 of this
Agreement, the Disposition of WHMC Stock by WMS shall be restricted as follows:
4.9.2.1 If WMS is the Seller, WHMC shall
have the option, but not the obligation, exercisable by written notice to WMS,
given within 30 days of the Notice to purchase all or any part of the Offered
Stock at the Offered Price and Terms. For purposes of WHMC determining whether
to exercise its option, the Stockholders shall vote their shares of WHMC Stock
as directed by the Xxxxxxx Nominee and the directors appointed by the Xxxxxxx
Nominee shall constitute a quorum of the Board of Directors of WHMC and a
majority thereof shall be entitled to determine whether the option shall be
exercised. If WHMC elects to exercise its option, and if WHMC shall thereupon
have insufficient surplus to permit it legally
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to purchase the Offered Stock at the time of purchase, the Stockholders shall
cause a special meeting of the stockholders of WHMC to be called prior to such
purchase. At any such meeting, all of the Stockholders shall vote their shares
of WHMC Stock so as to create, to the extent permitted by law, a surplus large
enough to permit it to make such purchase without requiring any additional
capital investments by any of the Stockholders.
4.9.2.2 If WHMC does not elect to
exercise its option to purchase all of the Offered Stock, the Xxxxxxx Nominee
shall thereupon have the option, but not the obligation, exercisable by written
notice to WMS within 60 days of the giving of the Notice, to purchase all or any
part of the Offered Stock at a price and on terms equal to the Offered Price and
Terms.
4.9.2.3 If the Notice shall be duly
given, and if WHMC and the Xxxxxxx Nominee together fail to exercise their
options to purchase all of the Offered Stock, then WMS shall be free to dispose
of all or such portion of the Offered Stock not purchased by WHMC or the Xxxxxxx
Nominee to the Designated Transferee at the Offered Price and Terms but only if
(a) such transferee agrees to be bound by the provisions of this Agreement, (b)
such Disposition and such transferee shall be approved by the Puerto Rico Gaming
Authorities, (c) such transfer does not adversely affect the tax exemptions
granted to Xxxxxxx or WHMC by the Commonwealth of Puerto Rico and (d) such
Disposition shall be bona fide and shall be consummated within 120 days after
the giving of the Notice. If all of the Offered Stock shall not be Disposed of
by WMS during such period, the portion thereof not Disposed of shall again
become subject to the terms of this Agreement in the same manner as if no Notice
had been given.
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4.9.2.4 The closing for the sale of WHMC
Stock to WHMC or the Xxxxxxx Nominee pursuant to this Section 4.9.2 shall be at
a time and place selected by the purchaser and reasonably convenient to the
Seller not more than 30 days after the giving of the notice of the decision to
so purchase.
4.10 If (a) the Seller or Sellers shall beneficially own 80%
or more of the WHMC Stock, (b) the offer described in the Notice is to purchase
all of the issued and outstanding shares of WHMC Stock and (c) the Non-Selling
Stockholders of WHMC do not exercise his or its right of first refusal pursuant
to Section 4.9 of this Agreement with respect to all of the WHMC Stock owned by
the Seller or Sellers, then the Non-Selling Stockholders shall sell all of their
shares of WHMC Stock to the Designated Transferee at a price and on terms equal
to the Offered Price and Terms.
5. Representations and Warranties.
5.1 WMS represents and warrants to each of the Xxxxxxx Nominee
and Xxxxxxx that:
5.1.1 WMS is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.1.2 The execution, delivery and performance by WMS
of this Agreement have been duly authorized by all necessary corporate action on
the part of WMS, and no further action or approval is required in order to
constitute this Agreement as the valid and binding obligation of WMS enforceable
in accordance with its terms.
5.1.3 This Agreement constitutes the legal, valid and
binding obligation of WMS, enforceable against WMS in accordance with its terms,
except as
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enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally.
5.1.4 WMS holds the WHMC Stock for its own account
and without a view to distribution other than in accordance with the provisions
of this Agreement and applicable securities laws.
5.2 The Xxxxxxx Nominee represents to WMS and Xxxxxxx
that:
5.2.1 This Agreement constitutes the legal, valid and
binding obligation of the Xxxxxxx Nominee, enforceable against the Xxxxxxx
Nominee in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors rights generally.
5.2.2 The Xxxxxxx Nominee holds the WHMC Stock for
its own account and without a view to distribution other than in accordance with
the provisions of this Agreement, its nominee agreement with the beneficial
owners of the WHMC Stock, a copy of which has previously been delivered to WHMC,
and applicable securities law.
5.3 Xxxxxxx represents to WMS and the Xxxxxxx Nominee
that:
5.3.1 This Agreement constitutes the legal, valid and
binding obligation of Xxxxxxx, enforceable against Xxxxxxx in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency and
other similar law affecting the enforcement of creditors rights generally.
5.3.2 Xxxxxxx holds the WHMC Stock for his own
account and without a view to distribution other than in accordance with the
provisions of this Agreement and applicable securities laws.
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6. Puerto Rico Gaming Authority Approvals; Tax Exemptions.
Each party hereto shall use its or his best efforts to obtain
and thereafter maintain all consents, approvals and authorizations which must be
obtained and maintained by such party in order to consummate the transactions
contemplated hereby, including all consents, approvals and authorization from
the Puerto Rico Gaming Authorities and the tax exemptions granted by the
Commonwealth of Puerto Rico to WHMC, the Condado and the El San Xxxx or any
other hotel owned by the Stockholders or their affiliates which is managed by
WHMC; provided that nothing contained in this Article 6 shall require any party
to consent to modify any provisions of this Agreement or any other document
referred to herein in any manner materially adverse to its or his best
interests.
7. Miscellaneous.
7.1 All of the representations, warranties, covenants and
agreements made by the parties to this Agreement shall survive for the full
period of any applicable statute of limitations.
7.2 This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes the Original
Stockholders Agreement. No change, modification, amendment, addition or
termination of this Agreement or any part thereof shall be valid unless in
writing and signed by or on behalf of the party to be charged therewith.
7.3 This Agreement may be executed in one or more
counterparts, and shall become effective when one or more counterparts has been
signed by each of the parties.
7.4 Any and all notices or other communications or deliveries
required or permitted to be given pursuant to any of the provisions of this
Agreement shall be deemed to
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have been duly given for all purposes if sent by certified or registered mail,
return receipt requested and postage prepaid, hand delivered or sent by
telegraph, telex or telephone facsimile as follows:
If to WMS Hotel Corporation, at:
c/o WMS Industries Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: President
with a copy to:
Xxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Xxxxxxx Nominee, at:
000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxx
with a copy to:
Kavinoky & Xxxx
000 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Xxxxxxx, at:
Condado Plaza Hotel & Casino
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Fax: (000) 000-0000
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with a copy to:
____________________________
____________________________
____________________________
or at such other address as any party many specify by notice given to the other
parties in accordance with this Section 7.4. The date of giving of any such
notice shall be the date of hand delivery, the date following the posting of the
mail or delivery to the telegraph company or when sent by telex or telephone
facsimile.
7.5 No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, either of similar or different nature, unless
expressly so stated in writing.
7.6 Should any clause, section or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
sections or parts of this Agreement which can be effected without such illegal
clause, section or part shall nevertheless continue in full force and effect.
7.7 This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York.
7.8 Each of WMS, the Xxxxxxx Nominee and Xxxxxxx consents to
the jurisdiction of the Courts of the State of New York and the United States
Court for the Southern District of New York with respect to any matter arising
with respect to this Agreement, shall subject himself or itself to the
jurisdiction of such courts and agrees that service of process upon
21
him or it may be made in any manner permitted by the laws of the State of New
York. Without limiting the generality of the foregoing, service of process will
be deemed sufficient if sent by registered or certified mail to WMS, the Xxxxxxx
Nominee and Xxxxxxx at the address for such persons, person or entity set forth
in Section 7.4 of this Agreement. In addition, the Xxxxxxx Nominee and Xxxxxxx
agree that the venue for any state court action shall be New York County.
7.9 This Agreement and the various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Agreement shall not be
assignable by any of the parties hereto any attempt to assign this Agreement
shall be void and of no effect.
7.10 The headings or captions under sections of this Agreement
are for convenience and reference only and do not in any way modify, interpret
or construe the intent of the parties or effect any of the provisions of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been made and executed
as of the date and year first above written.
WMS HOTEL CORPORATION
By: /s/
_____________________________________
Xxxxx X. Xxxxxxxx, Chairman
Xxxxxx X. Xxxxxxx, as Nominee
By: /s/
_____________________________________
Xxxxxx X. Xxxxxxx
By: /s/
_____________________________________
Xxxx X. Xxxxxxx
EMPIRE HOTEL CORP.
By: /s/
_____________________________________
XXXXXXXX HOSPITALITY
MANAGEMENT CORPORATION
By: /s/
_____________________________________
Xxxxx X. Xxxxxxxx, Chairman
23
Consented to By
Xxxxxxx Stockholders: No. of Shares Certificate No.
------------- ---------------
PUBLIC LOAN COMPANY, INC.
By: /s/ 27.5 6
______________________________________________
Xxxxxx X. Xxxxxxx
/s/ 10.0 6
______________________________________________
Xxxxxxxx Xxxxxxx
/s/ 10.0 6
______________________________________________
Xxxxxx X. Xxxxxxx
EMPIRE HOTEL CORP.
By: /s/ 332.5 3
______________________________________________
Xxxxxx X. Xxxxxxx, President
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