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EXHIBIT 10.12
SHAREHOLDERS' AGREEMENT
This Shareholders' Agreement, dated as of January __________, 1998, is
by and among Club Xxxxxx Resorts, Inc., a Nevada corporation (the Company),
Xxxxxxxx Associates, L.L.C. (Xxxxxxxx LLC), Xxxxxxx X. Xxxxxxxx, XX (Xxxxxxxx),
Xxxxxxx Xxxxxxx Funding Corp., a Delaware corporation (DE Funding and, together
with Xxxxxxxx and Xxxxxxxx, LLC, the Xxxxxxxx Parties), Xxxx XxXxxxxx
(XxXxxxxx), Greenmex LLC (Greenmex) and certain partners of CR Management
Company listed on Schedule I (the Raintree Shareholders and, together with
XxXxxxxx, the Xxxxxxxx Parties and Greenmex, the Shareholders).
In consideration of the mutual representations, covenants and
agreements contained herein, and certain other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. CAPITALIZATION OF THE COMPANY. Each Shareholder represents and
warrants to the Company and the other Shareholders that such Shareholder owns
the number of shares of Stock set forth on the signature pages hereto. The
Company represents and warrants to each Shareholder that as of the date hereof,
the authorized capital stock of the Company consists of 45,000,000 shares of
Stock of which only 10,701,300 are issued and outstanding, and 5,000,000 shares
of Preferred Stock, par value $.001 per share, of which 37,500 shares of Class A
Preferred are issued and outstanding.
2. RESTRICTION ON DISPOSITION. So long as this Agreement is in
effect, the Shareholders will not Transfer any shares of Stock which they
currently own or may hereafter acquire (the Shares), except in a Qualifying
Disposition or as otherwise provided in this Agreement; provided, however, the
Xxxxxxxx Parties may transfer any of their Shares without restriction, except as
provided in Section 4(d). Subject to this Agreement, the Shareholders shall be
entitled to exercise all rights of ownership of their Shares.
3. DEFINITIONS.
Affiliate - with respect to any Person (i) any Person directly or
indirectly controlling, controlled by or under management control with such
Person, or (ii) any officer, director, general partner, member or trustee of, or
Person serving in a similar capacity with respect to, such Person. For purposes
of this definition, the terms "controlling, "controlled by" or "under management
control with" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Board - defined in the Company's Articles of Incorporation, Bylaws or
other organizational documents.
Conversion Date - shall mean the earlier of (i) the date that the
Company closes a firm underwritten, public offering of its voting equity
securities pursuant to a Registration Statement filed with the Securities and
Exchange Commission and (ii) the date on which the Company shall close its
merger into another company that is not an Affiliate of any
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Shareholder or of the Company or shall effect a sale of all or substantially all
of its assets that is not an Affiliate of any Shareholder.
Person - any natural person, corporation, joint venture, trust,
partnership (general or limited), limited liability company, governmental body
(whether local, state or federal) or other entity.
Qualifying Disposition - any Transfer of Shares to an Affiliate of the
transferor or an employee of the transferor, or in the case of an entity holding
Shares, the Transfer by such entity of Shares to holders of interests in, or
employees of, such entity as of the date hereof.
ROFO Parties - the Raintree Shareholders, collectively, and Greenmex.
Stock - the Company's Common Stock, $.001 par value.
Transactions - the transactions arising under this Agreement.
Transfer - (i) any sale, assignment or transfer of Stock, (ii) a
transfer of an equity interest or a beneficial interest in a Person that holds
Stock, (iii) a pledge or hypothecation of Stock or any equity or beneficial
interest therein, (iv) a transfer of securities convertible into or exchangeable
for or other options or rights to acquire Stock or any equity or beneficial
interest therein, and (v) any other direct or indirect transfer or disposition
of the Stock or an equity or beneficial interest therein.
4. TRANSFERS
(a) Take Along Rights
(i) If any Raintree Shareholder (the Take Along Shareholder)
proposes to Transfer more than 5% of the issued and outstanding shares
of Common Stock to any Person (other than to another Shareholder or in
a Qualifying Disposition) (the Proposed Purchaser) in a Transfer that
is not a Qualifying Disposition, it shall provide a notice (the Take
Along Notice) of its intent to Transfer Shares and shall offer to each
other Shareholder other than Greenmex (each an Other Shareholder) the
right to participate in such sale. The Take Along Notice shall include:
a copy of the Proposed Purchaser's offer in writing stating its terms
and conditions, including the number and price per Share of the Shares
to be purchased, the method of payment and the proposed closing date
(which shall not be sooner than the end of 40 days after such Notice
has been given). Each Other Shareholder shall have 15 days after
delivery of the Take Along Notice to notify the Take Along Shareholder
as to how many shares such Other Shareholder desires to require the
Proposed Purchaser to purchase. Such indication of interest shall be
binding on the applicable Other Shareholder. 30 days after delivery of
the Take Along Notice, the Take Along Shareholder shall provide notice
to the Other Shareholders as to how many of their Shares shall be sold
in the proposed Transfer.
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(ii) The number of Shares each accepting Other Shareholder and
the Take Along Shareholder shall have the right to sell shall be
determined by solving the following equation for "X":
A X
--- = ---
B C
Where: "A" equals the number of Shares the applicable
Shareholder proposed to sell to the Proposed
Purchaser;
"B" equals the total number of Shares all of the
Other Shareholders and the Take Along Shareholder
requested to be sold to the Proposed Purchaser;
"C" equals the number of Shares the Proposed
Purchaser has agreed to purchase.
(ii) The Proposed Purchaser shall be required to purchase the
Other Shareholder's Shares at the same price per Share and upon the
same terms and conditions as the Take Along Shareholder's proposed
Transfer.
(b) Right of First Offer. If either ROFO Party desires to sell
(the Selling Party) its Stock (or any portion thereof) in a Transfer that is
not a Qualifying Disposition, then
(i) such ROFO Party shall first give notice to the other ROFO
Party (a Sale Notice) which shall constitute a request for an offer to
purchase the interest of the Selling Party by such other party. The
other ROFO Party shall have a period of 30 days thereafter to make a
written offer (the First Offer) to the Selling Party to purchase such
interest at the all-cash price set forth in the First Offer to the
Selling Party. If more than one Raintree Shareholder makes a bid, then
the highest bid shall be deemed to be the First Offer. If only one ROFO
Party makes a bid, then such bid shall be deemed to be the First Offer;
and
(ii) a First Offer shall be accepted or refused by the Selling
Party within 10 days after its receipt thereof. If the Selling Party
does not accept the First Offer from the other party within such 10-day
period, then the Selling Party may, within the ensuing 180-day period
(the Transferability Period), sell its interest to a third party but
only at a price which is higher than the First Offer. Failure by any
ROFO Party to respond to a Sale Notice within the period provided
herein shall constitute a waiver of all rights of such party under this
Section 4 but only with respect to the particular Sale Notice to which
such failure relates. If the Selling Party does not accept the First
Offer, does not consummate a sale at a higher price within the
Transferability Period and wishes to sell after the Transferability
Period, then the Selling Party shall be required to comply with the
foregoing procedures set forth in this Section 4.
(c) Expressly Permitted Transfers. Notwithstanding any other
provision contained herein, and without the provisions of Sections 4(a) or 4(b)
becoming applicable, a Shareholder may
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make a gift or donation to his spouse or any of his lineal descendants, to a
trust for any such persons' benefit, or a partnership, the ownership interests
in which are not readily transferable, owned by such persons, provided that such
donee agrees in writing (satisfactory to counsel for the Company) to take such
Shares subject to this Agreement. Any such transfer to a child who is then under
21 years old must be conditioned upon the transferor Shareholder retaining and
reserving for himself the right to do any act with respect to the transferred
Shares on behalf of such transferee that is permitted, authorized or required
hereby.
(d) Right of First Refusal.
(i) Each Xxxxxxxx Party agrees that it will give notice
(a Right of First Refusal Notice) to the Raintree Shareholders if it
receives a bona fide offer from any unaffiliated third party (a First
Refusal Proposed Purchaser) any part of the business of which (or any
part of the business of its Affiliate(s)) is in direct competition with
the Company's business (it being understood that a Person will be
deemed to be in direct competition with the Company if it is (i) in the
business of the Company anywhere in the world or (ii) in the business
of financing "timeshare" receivables or purchasing "timeshare"
receivables), that it intends to accept (a Third Party Competitor
Offer), to purchase its Shares. Each Right of First Refusal Notice
shall include the identity of the First Refusal Proposed Purchaser and
its Affiliates and an offer (the Right of First Refusal Offer) to sell
such Shareholders' Shares to the Raintree Shareholders at the same
price and on the same terms and conditions as is contained in the Third
Party Competitor Offer; provided that the Right of First Refusal Offers
shall include terms and conditions containing customary representations
and warranties and indemnification provisions. The Raintree
Shareholders shall have 30 days from the date the Right of First
Refusal Offer is deemed given (the Notice Period) to accept or reject
the Right of First Refusal Offer in writing. A Raintree Shareholder's
failure to provide the applicable Xxxxxxxx Party with notice of its
acceptance or rejection of the Right of First Refusal Offer within the
Notice Period shall be deemed to be a rejection. If any Raintree
Shareholders accept the Right of First Refusal Offer, during the Notice
Period it (or together with the other Raintree Shareholders, they)
shall make a binding offer in writing (the Acceptance) to purchase all
of the Shares contemplated to be sold by the applicable Xxxxxxxx Party.
(ii) Upon the expiration of the Notice Period, or upon
the earlier receipt of rejection of the Right of First Refusal Offer in
writing by all of the Raintree Shareholders, the applicable Xxxxxxxx
Party(ies) shall be released from their obligations under this Section
4(d) as to their Shares for a period of 60 days. The applicable
Xxxxxxxx Party shall then be entitled to sell all, and only all, of the
Shares offered by such Xxxxxxxx Party, and only pursuant to the Third
Party Competitor Offer. A Shareholder shall remain subject to this
Agreement to the extent it retains any Shares.
(iii) To the extent more than one Raintree Shareholder
exercises its rights under a Right of First Refusal Offer, such
Raintree Shareholders shall pro rate their rights to purchase Shares
hereunder based on their relative ownership of Shares.
5. PLEDGES. If any Shareholder desires to pledge or otherwise
encumber all or any part of his Shares as collateral for a loan, or otherwise,
he may do so only subject to this Agreement.
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6. BOARD OF DIRECTORS.
(a) As of and from today, the Company's Board of Directors
(the Board) shall consist of up to seven persons. The ROFO Parties and XxXxxxxx
agree to vote any shares of Stock they may now or hereafter beneficially own,
directly or indirectly, in favor of the election of Xxxx XxXxxxxx and the number
of persons nominated by the following Shareholders as members of the Board:
Raintree Shareholders 3
Greenmex 1
Raintree Shareholders (provided that 2 (the Independent Directors)
Greenmex shall have the right to
approve such directors, which approval
shall not be unreasonably withheld or
delayed; provided further that such
directors shall be "independent"
directors and that a director appointed
at the request of Jefferies & Co.,
shall be deemed to be an independent
director and reasonably acceptable to
Greenmex)
(b) Each ROFO Party shall cause its director(s) (other than
the Independent Directors) to vote in accordance with, and to cause the
transactions contemplated by the terms of this Agreement.
7. APPROVAL OF PRE-IPO FINANCING. Greenmex will have the right to
approve prior to the Conversion Date any financing arrangement the Company makes
(debt or equity) with any Person that is an Affiliate of a Raintree Shareholder;
provided that such approval shall not be unreasonably withheld or delayed.
8. ENFORCEMENT. The Shares shall not be Transferred on the
Company's books and no Transfer thereof shall be effective unless and until this
Agreement has been complied with, and in case of violation of this Agreement by
the attempted Transfer of the Shares without compliance with the terms and
provisions hereof, such Transfer shall be invalid and of no effect and the
Company and/or the Shareholders who are not attempting to transfer the Shares
shall have the right to compel the Shareholder who is attempting to transfer the
Shares, and/or the purported transferee, to transfer and deliver the same in
accordance with Section 4. Injunctive relief is the appropriate remedy for the
irreparable harm that would occur from a Transfer in violation of this
Agreement.
9. SPECIFIC PERFORMANCE. The parties hereto recognize that the
Stock cannot be readily purchased or sold on the open market and that it is to
the benefit of the Company and the Shareholders that this Agreement be carried
out; and for those and other reasons, the parties hereto would be irreparably
damaged if this Agreement is not specifically enforced in the event of a breach
hereof. If any controversy concerning the rights or obligations to purchase or
sell any Shares arises, or if this Agreement is breached, the parties hereto
hereby agree that remedies at law might be inadequate and that, therefore, such
rights and obligations, and this Agreement, shall be
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enforceable by specific performance. The remedy of specific performance shall
not be an exclusive remedy, but shall be cumulative of all other rights and
remedies of the parties hereto at law, in equity or under this Agreement.
10. FAILURE TO DELIVER STOCK. If a Shareholder (or its personal
representative) having become obligated to transfer its Shares hereunder shall
fail to deliver the certificates representing such Shares in accordance with
this Agreement, the purchaser of such Shares may, at its option, in addition to
all other remedies he may have, send to such Shareholder (or its personal
representative) by registered mail, return receipt requested, the applicable
purchase price for such Shares. Thereupon, the Company, upon written notice to
such Shareholder (or its personal representative), shall: (a) cancel on its
books the certificates representing the Shares to be sold, (b) issue in the name
of the purchaser, in lieu thereof, a new certificate representing such Shares,
and (c) deliver such new certificate to the purchaser, and thereupon all of the
rights of such Shareholder (or its personal representative) in and to said
Shares shall terminate.
11. RELEASE FROM AGREEMENT, TRANSFEREE AND FUTURE SHAREHOLDERS.
The Company and the Shareholders shall cause any transferee of any Shares
(including (i) under Section 4, (ii) in a Qualifying Disposition, or (iii) in
the case of the Xxxxxxxx Parties and their assigns, pursuant to permitted
transfers under Section 2 not covered by Section 4(d)) to execute a consent, in
the form attached as Exhibit A, to be bound by this Agreement pursuant to which
such transferee shall become a Shareholder; provided that any Shareholder (other
than a Xxxxxxxx Party (and not such parties' assigns unless in a Qualifying
Disposition)) holding less than 3% of the issued and outstanding shares of
Common Stock shall be automatically released from this Agreement, shall no
longer have any rights hereunder and shall have the legend on such Shareholders'
certificates with respect to this Agreement removed.
12. MISCELLANEOUS
(a) Endorsement. Upon the execution of this Agreement, each
certificate representing Shares shall be surrendered to the Company and the face
thereof shall be endorsed substantially as follows:
SEE REVERSE SIDE FOR RESTRICTIONS ON TRANSFER.
The reverse side of each such certificate shall be endorsed substantially as
follows:
THE TRANSFER OF THE SHARES OF STOCK EVIDENCED BY THIS
CERTIFICATE ARE SUBJECT TO THE SHAREHOLDERS' AGREEMENT, BY
AND AMONG THE COMPANY AND CERTAIN SHAREHOLDERS, DATED
[_____________], 1998. UPON WRITTEN REQUEST TO THE COMPANY
AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE,
THE COMPANY WILL FURNISH TO THE HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE A COPY OF SUCH SHAREHOLDERS' AGREEMENT.
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After endorsement the certificates shall be returned to the Shareholders, who,
shall, subject to the terms of this Agreement, be entitled to exercise all
rights of ownership of such Stock. All certificates representing shares of Stock
hereafter issued by the Corporation shall bear the same endorsement and be
subject to the terms of this Agreement.
(b) Notices. Any notice, consent or other communication
to be given under this Agreement by any party to any other party shall
be in writing and shall be either:
(i) personally delivered,
(ii) mailed by registered or certified mail, postage
prepaid with return receipt requested,
(iii) delivered by overnight express delivery service
or same-day local courier service, or
(iv) delivered by telex or fax (in either case with
follow up pursuant to (i), (ii) or (iii) above), to the
address set forth beneath the signature of the parties hereto,
or at such other address as may be designated by the parties
from time to time in accordance with this Section.
Notices delivered personally, by overnight express delivery
service or by local courier service shall be deemed given as of actual
receipt. Mailed notices shall be deemed given five business days after
mailing. Notices delivered by telex or fax shall be deemed given upon
receipt by the sender of the answerback (in the case of a telex) or
transmission confirmation (in the case of a fax).
(c) Tax Stamps; Negotiable Form. Whenever any of the
Shares are to be Transferred pursuant to this Agreement, the Person
selling such Shares shall affix to the stock certificates representing
such Shares any necessary documentary stamp taxes and shall deliver
such certificates in negotiable form for Transfer without necessity for
further endorsement.
(d) Binding Effect. This Agreement, including, but not
limited to, the rights and conditions contained herein in connection
with Transfer of the Shares, shall be binding upon each party that has
executed this Agreement (regardless of whether all parties have
executed this Agreement), together with their respective executors,
administrators, successors, personal representatives, heirs and
assigns.
(e) Governing Law and Venue. The parties acknowledge and
agree that this Agreement and the obligations and undertakings of the
parties hereunder will be performable in Xxxxxx County, Texas. This
Agreement shall be governed by, and construed in accordance with, the
laws of Nevada without reference to its choice-of-law principles. If
any action is brought to enforce or interpret this Agreement, venue for
such action shall be in Xxxxxx County, Texas.
(f) Severability. If any provision of this Agreement is
held to be unenforceable under current or future laws, such provision
shall be fully severable and this Agreement shall be construed and
enforced as if such unenforceable provision never comprised a part
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hereof; and the remaining provisions hereof shall remain in full force
and effect and shall not be affected by the unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such unenforceable
provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such unenforceable
provision as may be possible and be enforceable.
(g) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter hereof.
(h) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.
(i) Amendments. This Agreement may be amended, modified
or supplemented only by a written instrument executed by holders of 67%
of the Shares subject to this Agreement at the time of such amendment;
provided that any such amendment which does not affect all Holders
equally shall not be effective unless approved by all Holders not
equally affected; provided further that no amendment to Section 4(a) or
4(d) shall be effective without the consent of Xxxxxxxx LLC.
(j) Captions. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
any of the terms or provisions hereof.
(k) Termination of this Agreement. This Agreement shall
continue until, and shall terminate immediately upon: (i) execution of
a written agreement of termination by the ROFO Parties and Xxxxxxxx LLC
(or any of their assigns which is or are an Affiliate of the ROFO
Parties or of the Xxxxxxxx Parties), (ii) the Conversion Date, (iii)
the adjudication of the Company as bankrupt or insolvent by a court of
competent jurisdiction, (iv) the sale of all or substantially all of
the Company's assets to an unAffiliated third party(ies), (v) the
merger of the Company, other than with an Affiliate, in which the
Company is not the surviving corporation, (vi) the consolidation of the
Company with one or more other corporations that are not Affiliates of
any Shareholder or of the Company, or (vii) any time that only one
Shareholder owns Shares.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
CLUB XXXXXX RESORTS, INC. METRO MEXICO INVESTMENT PARTNERS
By: By:
------------------------------- -------------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxx Xxxxxx
Title: Chairman Title:
----------------------------------
ADDRESS ADDRESS
10,000 Memorial Dr. 0000 Xxxxxxxxx
Xxxxxxx, XX 00000 Xxxxxx, XX 00000
_____ Shares
XXXXXX X. XXXXXX XXXXXXX X. XXXX
By: By:
------------------------------- -------------------------------------
Name: Xxxxxx X. Xxxxxx, Individually Name: Xxxxxxx X. Xxxx, Individually
ADDRESS ADDRESS
1929 Olympia 00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
_____ Shares _____ Shares
XXXX XXXXXXXX S. XXXXXXX XXXXXXX FUNDING CORP.
By: By:
------------------------------- -------------------------------------
Name: Xxxx XxXxxxxx S., Individually Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXXXX XXXXXXX
x/x Xxxx Xxxxxx Resorts, Inc.
Xxxxxxx 1855 P.B. Col. Xxxxxxx ----------------------------------------
Xxxxxx, X.X. 00000
----------------------------------------
_____ Shares _____ Shares
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GREENMEX, LLC XXXXXXXX ASSOCIATES, L.L.C.
By: By:
------------------------------- -------------------------------------
Name: Name: Xxxxxxx X. Xxxxxxxx, XX
-----------------------------
Title: Title: Manager
----------------------------
XXXXXXX XXXXXXX
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 ----------------------------------------
----------------------------------------
_____ Shares _____ Shares
XXXXXXX X. XXXXXXXX, XX
By:
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx, XX, individually
ADDRESS
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_____ Shares
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EXHIBIT A
Consent
Having purchased shares of Common Stock of Club Xxxxxx Resorts, Inc.,
the undersigned hereby agrees that the Company's Shareholders' Agreement, the
form of which is attached as Exhibit A, shall bind it as if it had been a party
to such Shareholders' Agreement as of the date thereof.
NAME OF SHAREHOLDER
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
NUMBER OF SHARES
ADDRESS
A-1
