Exhibit 1
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AGREEMENT REGARDING DIRECTOR COMPENSATION
This Agreement Regarding Director Compensation (this "Agreement"), dated as
of March 21, 2001, is entered into by and among Xxxx X. Xxxx ("Director") and
Xxxxxx Xxxxxxx Real Estate Investors III, L.P., Xxxxxx Xxxxxxx Real Estate Fund
III, L.P. ("MSREF"), MSP Real Estate Fund, L.P. ("MSP"), and MSREF III Special
Fund, L.P. (collectively, the "Funds").
RECITALS:
A. Pursuant to the Stock Purchase Agreement (the "Purchase Agreement"),
dated as of August 14, 1998, among Bluegreen Corporation ("Bluegreen") and the
Funds, each of MSREF and MSP (the "Designating Funds") has the right, subject to
certain conditions contained in the Purchase Agreement, to designate one
director on the management slate of nominees to Bluegreen's board of directors.
In addition to the foregoing, Bluegreen permitted the Designating Funds to
designate an additional nominee for election to the Bluegreen Board of
Directors.
B. The Designating Funds have been granted the right to designate directors
to Bluegreen's Board of Directors, among other reasons, in order to assure that
its investment in Bluegreen will constitute a qualifying venture capital
investment within the meaning of certain regulations issued by the U. S.
Department of Labor at 29 X.X.X.xx. 2510.3-101. Such right was not intended to
modify the economics to the Funds of their co-investment in Bluegreen.
C. Director is an employee of an affiliate of the Designating Funds.
D. The Designating Funds have designated Director as the additional nominee
for election to Bluegreen's board of directors, and Director is currently
serving as a member of the board of directors of Bluegreen.
E. In Director's capacity as a member of the board of directors of
Bluegreen, Director may receive certain compensation and benefits from
Bluegreen.
F. Director and the Funds desire to set forth their agreement that any such
compensation and benefits belong to the Funds.
NOW, THEREFORE, in consideration of the premises and agreements contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Ownership of Compensation. Director will hold any compensation and
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benefits he receives from Bluegreen in his capacity as a member of the board of
directors of Bluegreen ("Compensation") for the benefit of the Funds, and the
economic interest with respect to such compensation will, to the full extent
permitted by law, belong to the Funds. The Funds' interest in any Compensation
will be allocated among the Funds as follows: Xxxxxx Xxxxxxx Real Estate
Investors III, L.P.: 1.6433%; Xxxxxx Xxxxxxx Real Estate Fund III, L.P.:
35.4502%; MSP Real Estate Fund, L.P.: 28.3846%; and MSREF III Special Fund,
L.P.: 34.5219%.
2. Delivery of Compensation. Director will deliver to the Funds any
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Compensation he receives in the form of cash promptly after he receives any such
Compensation, as directed by the Funds. Director will hold any Compensation he
receives in the form of stock options, restricted stock awards, performance
shares, and other similar awards and benefits (collectively, "Awards") for the
benefit of the Funds and will use his best efforts, to the full extent permitted
by law, to provide the Company with the economic benefits and burdens of any
Award.
3. Director's Obligations.
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a. Director will not sell, assign, convey, pledge or otherwise
transfer any Compensation to any person other than the Funds without the
Funds' prior written consent. At the request of the Funds and for the
account of the Funds, Director will enforce any of his rights under any
Award or under any agreement evidencing Compensation or Director's right
thereto. Without the Funds' prior written consent, Director will not
terminate, modify, amend, renew or waive any right under any Award or any
agreement evidencing Compensation or Director's right thereto.
b. Without limiting the foregoing, Director will promptly take any
lawful action, including without limitation, the exercise or conversion of
any Award and the sale of the securities or other property underlying such
Award as the Funds may from time to time request with respect to any
Compensation. Director will deliver the proceeds of any such exercise,
conversion, sale or other action as directed by the Funds.
c. Director will vote or cause to be voted all shares of common stock
of Bluegreen he receives as Compensation (or that constitute proceeds of
any Compensation) and holds for the benefit of the Funds pursuant to this
Agreement as directed by the Funds.
d. To the extent permitted by applicable law, Director will deduct as
an ordinary and necessary business expense (or as is otherwise appropriate)
on his federal, state and local income tax returns an amount equal to the
Compensation delivered to the Funds pursuant to this Agreement.
4. Funds' Obligations. The Funds will (a) advance to Director any funds
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required for, or reasonably incurred by Director in connection with the exercise
or conversion of any Award or the taking of any other action requested by the
Funds pursuant to this Agreement, (b) reimburse Director for any costs Director
incurs in connection with taking any action requested by the Funds pursuant to
this Agreement that are not advanced to Director pursuant to clause (a) above,
and (c) reimburse Director for any federal, state and local income taxes
Director incurs (after taking into account any deduction contemplated by Section
3(c)) with respect to the Compensation, including any federal, state and local
income taxes Director incurs as a result of such tax reimbursement such that
Director will not incur any federal, state or local income tax as a result of
receiving or holding any Compensation that Director delivers to the Funds in
accordance with this Agreement.
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5. No Recourse Against Funds' Partners. Director agrees that no general
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partner or limited partner will have any personal liability with respect to this
Agreement and Director will look solely to the assets of the Funds with respect
to any rights he may have against any of the Funds pursuant to this Agreement.
Director hereby waives any rights he may have or hereafter obtain to assert any
claims based on this Agreement against any general partner or limited partner of
any of the Funds.
6. Miscellaneous.
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a. Notices. Any notice, request or other communication required or
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permitted hereunder will be in writing and will be deemed to have been duly
given (a) when received if personally delivered or if dispatched by
telecopy (confirmed in writing by mail simultaneously dispatched), (b)
within five days after being sent by registered or certified mail, return
receipt requested, postage prepaid, or (c) within one business day of being
sent by priority delivery by established overnight courier, to the parties
at their respective addresses set forth below:
(i) If to the Funds:
c/x Xxxxxx Xxxxxxx Real Estate Fund
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
(ii) If to Director:
Xxxx X. Xxxx
c/x Xxxxxx Xxxxxxx Real Estate Fund
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
or to such other address or addresses as any such party may from time to
time designate as to itself by like notice.
b. Entire Agreement. This Agreement supersedes any and all other
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agreements, either oral or written, between the parties hereto with respect
to the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter.
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c. Successors and Assigns. This Agreement will be binding upon and
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inure to the benefit of the parties hereto and their respective successors,
assigns, heirs, devisees and legatees.
d. Governing Law. The validity, interpretation, construction and
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performance of this Agreement will be governed by and construed in
accordance with the substantive laws of the State of New York, without
giving effect to the principles of conflict of laws of such State.
e. Severability and Reformation. If any provision of this Agreement is
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held to be illegal, invalid or unenforceable under any present or future
law, and if the rights or obligations of the parties under this Agreement
would not be materially and adversely affected thereby, such provision
shall be fully separable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part thereof, the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance therefrom, and, in
lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible, and the parties hereto request
the court or any arbitrator to whom disputes relating to this Agreement are
submitted to reform the otherwise illegal, invalid or unenforceable
provision in accordance with this Section 6(e).
f. Modification and Waiver. No provision of this Agreement may be
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modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the parties hereto. No waiver
by either party hereto at any time of any breach by the other party hereto
or compliance with any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time.
g. Captions. The captions used in this Agreement are designed for
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convenient reference only and are not to be used for the purpose of
interpreting any provision of this Agreement.
h. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
or by their respective duly authorized officers, all as of the date first
written above.
XXXXXX XXXXXXX REAL ESTATE
FUND III, L.P.
By: MSREF III, L.L.C., its general partner
By: MSREF III, Inc., its MS Member
By:
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Its:
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XXXXXX XXXXXXX REAL ESTATE
INVESTORS III, L.P.
By: MSREF III, L.L.C., its general partner
By: MSREF III, Inc., its MS Member
By:
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Its:
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MSP REAL ESTATE FUND, L.P.
By: MSREF III, L.L.C., its general partner
By: MSREF III, Inc., its MS Member
By:
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Its:
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MSREF III SPECIAL FUND, L.P.
By: MSREF III, L.L.C., its general partner
By: MSREF III, Inc., its MS Member
By:
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Its:
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DIRECTOR:
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Xxxx X. Xxxx
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