XXXXXXX DE PUERTO RICO ASSOCIATES, INCORPORATED
STOCKHOLDERS' AGREEMENT
AGREEMENT made this 23rd day of September, 1983, by and among
XXXXXXXX HOTEL CORPORATION ("Xxxxxxxx"), a Delaware corporation having its
principal offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 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
the Condado Holiday Inn, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000.
(Xxxxxxxx, the Xxxxxxx Nominee and Xxxxxxx are hereinafter collectively referred
to as the "Stockholders"); and XXXXXXX DE PUERTO RICO ASSOCIATES, INCORPORATED
("Xxxxxxx"), a Delaware corporation having its principal offices at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxxxxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, Xxxxxxxx owns 800 shares of Common Stock, without par
value, of Xxxxxxx (the "Common Stock"), the Xxxxxxx Nominee owns 150 shares of
Common Stock and Xxxxxxx owns 50 shares of Common Stock;
WHEREAS, Xxxxxxxx owns 600 shares of Class A Preferred Stock,
without par value, of Xxxxxxx (the "Class A Preferred Stock");
WHEREAS, Xxxxxxxx owns 200 shares of Class B Series I Preferred
Stock, without par value, of Xxxxxxx and the Xxxxxxx Nominee owns 200 shares of
Class B Series II
Preferred Stock, without par value, of Xxxxxxx (the Class B Series I and II
Preferred Stock are hereinafter collectively referred to as the "Class B
Preferred Stock");
WHEREAS, Xxxxxxx has acquired all of the assets of Xxxxxxx de Puerto
Rico Associates, a Texas general partnership ("Associates"), pursuant to a
purchase agreement (the "Purchase Agreement"), dated the date hereof among
Xxxxxxx, Associates, Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx and Cenkoff Corp.,
a Delaware corporation;
WHEREAS, the assets acquired by Xxxxxxx pursuant to the Purchase
Agreement consist primarily of the Condado Holiday Inn and Casino (the "Hotel")
located in the Condado Beach area of San Xxxx, Puerto Rico;
WHEREAS, on the date hereof, Xxxxxxxx has loaned to Xxxxxxx
$3,000,000 evidenced by a promissory note dated the date hereof;
WHEREAS, on the date hereof, Xxxxxxxx has loaned Xxxxxxx an
additional $350,000 evidenced by a promissory note dated the date hereof and the
Xxxxxxx Nominee has loaned Xxxxxxx $350,000 evidenced by a promissory note dated
the date hereof on the same terms as such Xxxxxxxx loan;
WHEREAS, Xxxxxxxx, the Xxxxxxx Nominee and Xxxxxxx are certain of
the stockholders of Xxxxxxx de America Central, Inc., a Delaware corporation
("PAC"), and on the date hereof PAC entered into an Operating and Management
Agreement with Xxxxxxx for the supervision, direction and control of the
management and operation of the Hotel; and
WHEREAS, the parties hereto desire to promote the continuity and
stability of Xxxxxxx and the mutual interests of the parties hereto by providing
for the rights, obligations and restrictions set forth herein;
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NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree 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 A "person" shall mean an individual, corporation,
partnership or other legal entity.
1.1.3 The "Hotel" means the property commonly known as
the Condado Holiday Inn and casino in the Condado Beach area of San Xxxx, Puerto
Rico.
1.1.4 "Xxxxxxx Stock" means and includes the Common
stock, the Class A Preferred Stock and the Class B Preferred Stock.
1.1.5 "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 gaming in the
Commonwealth of Puerto Rico.
2. Corporate Governance.
The full board of directors of Xxxxxxx shall consist of five
persons, or such other number as shall be fixed pursuant to Article II, Section
2 of the By-Laws of Xxxxxxx, one of whom shall be a director designated by the
Xxxxxxx Nominee as long as the Xxxxxxx Nominee is a holder of Xxxxxxx Stock, and
one of whom shall be Xxxxxxx so long as he is a holder of Xxxxxxx Stock and the
Chief Operating Officer of the Hotel and is able to serve. If
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Xxxxxxx resigns as a director, is not a holder of Xxxxxxx Stock, is not the
Chief Operating Officer of the Hotel or is unable to serve as a director of
Xxxxxxx, such vacancy shall be filled by the Xxxxxxx Nominee and after such
date, so long as the Xxxxxxx Nominee is a holder of Xxxxxxx Stock, the Xxxxxxx
Nominee shall be entitled to designate two directors to the Board of Directors
of Xxxxxxx. 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 Xxxxxxxx, such approval not
to be unreasonably withheld.
3. Certificate Legends.
So long as this Agreement shall be in effect, all certificates
representing shares of Common Stock, Class A Preferred Stock or Class B
preferred Stock now or hereafter issued by Xxxxxxx 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 September 23, 1983 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 shares of Stock of the Corporation."
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 of any portion
of his or its Xxxxxxx 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
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hereinafter encompassed within the words "Dispose" or "Disposition") by a
Stockholder of his or its Xxxxxxx Stock except as hereinafter provided shall be
null and void.
4.2 Xxxxxxx shall issue no shares of Xxxxxxx Stock except as
otherwise provided in this Agreement.
4.3 No Disposition of Xxxxxxx 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 a stockholder or (b) such transfer would adversely affect any
tax exemptions granted to Xxxxxxx or PAC by the Commonwealth of Puerto Rico.
4.4 In the event of any Disposition by reason of death of an
individual or liquidation of a corporation, the transferee of the Xxxxxxx Stock
shall hold the Xxxxxxx Stock transferred subject to all of the obligations and
restrictions to which the transferor was subject and have all of the rights of
the transferor hereunder.
4.5 Xxxxxxxx may Dispose of any or all of its Xxxxxxx Stock to
any affiliate of Xxxxxxxx (the "Xxxxxxxx Stockholder") notwithstanding any
provision of Article 4 of this Agreement except for Section 4.3. In addition,
any Xxxxxxxx Stockholder may Dispose of Xxxxxxx Stock to any other affiliate of
Xxxxxxxx. Prior to any Disposition pursuant to this Section 4.5, such Xxxxxxxx
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 Xxxxxxxx and thereafter any
Disposition of all of the Xxxxxxx Stock owned by Xxxxxxxx to a person other than
a Xxxxxxxx Stockholder shall include a Disposition of all of the Xxxxxxx Stock
owned by Xxxxxxxx Stockholders. All such transferees shall be deemed included
within the definition of Stockholder
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for purposes of this Agreement, and shall have all of the rights and obligations
which Xxxxxxxx would have had under this Agreement as an owner of Xxxxxxx Stock.
4.6 The beneficial owners of all of the shares of Xxxxxxx
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 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 Xxxxxxx 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 Section 4.3. All of the foregoing are hereinafter referred to as "Xxxxxxx
Stockholders." In addition, Xxxxxxx Stockholders may Dispose of Xxxxxxx 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
hereof in the same manner and to the same extent as the Xxxxxxx Nominee and
thereafter any Disposition of all of the Xxxxxxx Stock owned by the Xxxxxxx
Nominee to a person other than a Xxxxxxx Stockholder shall include a Disposition
of all of the beneficial ownership of all of the Xxxxxxx 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 Xxxxxxx Stock.
4.7 Xxxxxxx may Dispose of any or all of his Xxxxxxx Stock to
any affiliate of Xxxxxxx, his spouse, any children of Xxxxxxx or any trust or
trusts for the benefit of such children, notwithstanding any provision of
Article 4 of this Agreement except Section
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4.3. All of the foregoing are hereinafter referred to as "Xxxxxxx Stockholders."
In addition, Xxxxxxx Stockholders may Dispose of Xxxxxxx Stock to other Xxxxxxx
Stockholders. Prior to any Disposition pursuant to this Section 4.7, such
Xxxxxxx 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 Xxxxxxx and thereafter
any Disposition of all of the Xxxxxxx Stock owned by Xxxxxxx to a person other
than an Xxxxxxx Stockholder shall include Disposition of all of the Xxxxxxx
Stock transferred to the Xxxxxxx Stockholders. All Xxxxxxx Stockholder and their
tranferees 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 Xxxxxxx Stock.
4.8 This Section 4.8 is intentionally left blank.
4.9 If any of the Stockholders or any of the Xxxxxxx
Stockholders, (the "Seller") shall receive a bona fide offer from an
unaffiliated third party to purchase any or all of its or his Xxxxxxx Stock
which such Stockholder is willing to accept, the Seller shall give notice (the
"Notice") to Xxxxxxx and the Non-Selling Stockholders (as hereinafter defined)
stating its or his 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 Xxxxxxx or the Non-Selling Stockholders shall request. For
purposes of this Agreement, "Non-Selling Stockholders" shall mean the
Stockholders who have not given notice of its or his desire to Dispose of its or
his Xxxxxxx Stock pursuant to this Section 4.9.
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4.9.1 Except as provided in sections 4.6 and 4.7 of this
Agreement, the Disposition of Xxxxxxx Stock by the Xxxxxxx Nominee 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 Xxxxxxx, 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, Xxxxxxx
shall thereupon have the option, but not the obligation, excisable 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
the Offered Price. For purposes of Xxxxxxx determining whether to exercise its
option, the Stockholders shall vote their shares of Xxxxxxx Stock as directed by
Xxxxxxxx. If Xxxxxxx elects to exercise its option, and if Xxxxxxx 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 Xxxxxxx to be called prior to such purchase. At any such
meeting, all of the Stockholders shall vote their shares Xxxxxxx Stock so as to
create, to the extent permitted by law, a surplus large enough to permit Xxxxxxx
to make such purchase payment without requiring any additional capital
investments by any of the Stockholders.
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4.9.1.3 If Xxxxxxx does not elect to exercise its
option to purchase all of the Offered Stock, Xxxxxxxx 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 the Offered Stock not purchased by Xxxxxxx at the Offered Price and
Terms.
4.9.1.4 If the Notice shall be duly given, and if
the Xxxxxxx Nominee, Xxxxxxx and Xxxxxxxx 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 purchased by the Xxxxxxx
Nominee, Xxxxxxx or Xxxxxxxx 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 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 PAC 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 Xxxxxxx Stock
to Xxxxxxx or any of the Stockholders pursuant to this Section 4.9.1 shall be at
a time and place
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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 Xxxxxxx Stock by Xxxxxxxx shall be restricted as
follows:
4.9.2.1 Xxxxxxx shall have the option, but not the
obligation, exercisable by written notice to Xxxxxxxx, 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 Xxxxxxx determining whether to exercise its option,
the Stockholders shall vote their shares of Xxxxxxx 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 Xxxxxxx and a majority thereof
shall be entitled to determine whether the option shall be exercised. If Xxxxxxx
elects to exercise its option, and if Xxxxxxx 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
Xxxxxxx to be called prior to such purchase. At any such meeting, all of the
Stockholders shall vote their shares of Xxxxxxx 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 Xxxxxxx 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
Xxxxxxxx within 60 days of the giving of the Notice, to purchase the Offered
Stock at a price and on terms equal to the Offered Price and Terms.
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4.9.2.3 If the Notice shall duly given, and if
Xxxxxxx and the Xxxxxxx Nominee together fail to exercise their options to
purchase all of the Offered Stock, then Xxxxxxxx shall be free to dispose of all
or such portion of the Offered Stock not purchased by Xxxxxxx 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 PAC 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
Xxxxxxxx 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.
4.9.2.4 The closing for the sale of Xxxxxxx Stock
to Xxxxxxx 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 Common Stock, (b) the offer described in the Notice is to
purchase all of the issued and outstanding shares of Common Stock and (c) the
Non-Selling Stockholders or Xxxxxxx do not exercise his or its right of first
refusal pursuant to section 4.9 of this Agreement, then the Non-Selling
Stockholders shall sell all of their shares of Common Stock to the Designated
Transferee at a price and on terms equal to the Offered Price and Terms and if
such offer does not provide
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for the purchase or redemption of all of the outstanding shares of Class A and
Class B Preferred Stock, Xxxxxxx shall redeem all such shares prior to the
closing of such sale.
5. Representations and Warranties.
5.1 Xxxxxxxx represents and warrants to each of the Xxxxxxx
Nominee and Xxxxxxx that:
5.1.1 Xxxxxxxx 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
Xxxxxxxx of this Agreement have been duly authorized by all necessary corporate
action of the part of Xxxxxxxx, and no further action or approval is required in
order to constitute this Agreement as the valid and binding obligation of
Xxxxxxxx enforceable in accordance with its terms.
5.1.3 This Agreement constitutes the legal, valid and
binding obligation of Xxxxxxxx enforceable against Xxxxxxxx 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.
5.1.4 Xxxxxxxx is acquiring the Common Stock, the Class
A Preferred Stock and the Class B Series I Preferred 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 Xxxxxxxx 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
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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 is acquiring the Common Stock
and the Class B Series II Preferred 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 Xxxxxxx Stock, a true
copy of which has previously been delivered to Xxxxxxx, and applicable
securities law.
5.3 Xxxxxxx represents to Xxxxxxxx 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 limited by bankruptcy, insolvency and other
similar law affecting the enforcement of creditors rights generally.
5.3.2 Xxxxxxx is acquiring the Common 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.
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 to Xxxxxxx and
PAC by the Commonwealth of Puerto Rico; provided that nothing contained in this
Article 6 shall require any party to consent to modify any provisions of this
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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. 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 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 or telex as follows:
If to Xxxxxxxx Hotel, at:
c/x Xxxxxxxx Electronics, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to:
Golenbock and Barell
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx X. Xxxxxxxxx, Esq.
If to the Xxxxxxx Nominee, at:
c/x Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxxxx & Diamond, P.C.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxxx, III, Esq.
If to Xxxxxxx, at:
Condado Holiday Inn
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
with a copy to:
Xxxxx Xxxxxxxx Xxxx, Esq.
Xxxxx Xxxxxxx Xxxxx 0000
Xxxx Xxx, Xxxxxx Xxxx 00000
or at such other address as any party may specify by notice given to other party
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.
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.
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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 Xxxxxxxx, the Xxxxxxx Nominee and Xxxxxxx consents
to the jurisdiction of the Courts of the State of New York and the United States
District 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 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 Xxxxxxxx, 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 and the
parties hereto and their respective successors and assigns. This Agreement shall
not be assignable by any of the parties hereto without the prior written consent
of all other parties hereto and any attempt to assign this Agreement shall be
void and of no effect.
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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.
17
IN WITNESS WHEREOF, this Agreement has been made and executed
as of the date and year first above written.
XXXXXXXX HOTEL CORPORATION
By: /s/_________________________________
E. XXXX XXXXX,
Vice President
By: /s/_________________________________
XXXXXX X. XXXXXXX
As Nominee
By: /s/_________________________________
XXXX X. XXXXXXX
XXXXXXX DE PUERTO RICO
ASSOCIATES, INCORPORATED
By: /s/_________________________________
XXXXXX X. XXXXXX
Chairman of the Board and President
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FIRST AMENDMENT TO
XXXXXXX DE PUERTO RICO ASSOCIATES, INCORPORATED
STOCKHOLDERS' AGREEMENT
FIRST AMENDMENT dated as of April 20, 1992 (the "First Amendment")
to XXXXXXX DE PUERTO RICO ASSOCIATES INCORPORATED STOCKHOLDERS' AGREEMENT dated
as of September 23, 1983 by and among WMS HOTEL CORPORATION, a Delaware
corporation ("WMS"); XXXXXX X. XXXXXXX, as Nominee (the "Xxxxxxx Nominee"); XXXX
X. XXXXXXX ("Xxxxxxx") (WMS, the Xxxxxxx Nominee and Xxxxxxx are hereinafter
collectively referred to as the "Stockholder"); and XXXXXXX DE PUERTO RICO
ASSOCIATES, INCORPORATED, a Delaware corporation ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, the Stockholders and Xxxxxxx are parties to a Stockholders'
agreement dated September 23, 1983 (the "Stockholders Agreement") among Xxxxxxxx
Hotel Corporation, now known as WMS, the Xxxxxxx Nominee, Xxxxxxx and Xxxxxxx;
and
WHEREAS, WMS owns 800 shares of common stock, without par value (the
"Xxxxxxx Stock"), of Xxxxxxx, the Xxxxxxx Nominee owns 150 shares of Xxxxxxx
Stock and Xxxxxxx owns 50 shares of Xxxxxxx Stock; and
WHEREAS, pursuant to that certain agreement dated as of April 20,
1992 (the "Master Agreement") among the Stockholders, Xxxxxxx and certain of
their affiliates, WMS is
purchasing 100 shares of Xxxxxxx Stock from the Xxxxxxx Nominee and 25 shares of
Xxxxxxx Stock from Xxxxxxx; and
WHEREAS, pursuant to the Master Agreement both the Xxxxxxx Nominee
and Xxxxxxx have agreed to indemnify WMS Industries Inc., and its affiliates
under certain circumstances (the "Indemnification Obligations"); and
WHEREAS, as security for their respective Indemnification
Obligations, the Xxxxxxx Nominee and Xxxxxxx have agreed to pledge, transfer and
assign to WMS Industries Inc. and give a security interest in certain of the
Xxxxxxx Stock that each of them owns; and
WHEREAS, the Stockholders and Xxxxxxx desire to amend the
Stockholders Agreement to reflect such changes in ownership, provide for the
pledge of Xxxxxxx Stock 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 Stockholders Agreement be
amended as follow:
1. All capitalized terms used herein and not otherwise defined shall
have the same meanings ascribed to such terms in the Stockholders Agreement.
2. The Stockholders Agreement is hereby amended by deleting Article
3 in its entirety and substituting in its place the following:
"3. Certificate Legends.
So long as this Agreement shall be in effect, all certificates
representing shares of Common Stock, Class A Preferred Stock or Class B
Preferred Stock now or hereafter issued by Xxxxxxx 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 September
2
23, 1983, 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.'"
3. The Stockholders Agreement is hereby further amended by adding a
new Section 4.11 to read as follows:
"4.11 (a) WMS may purchase 100 shares of Xxxxxxx Stock from the
Xxxxxxx Nominee on such terms as they may agree, such shares to
remain subject to all of the provisions of the Agreement to the same
extent as all other shares of Xxxxxxx Stock owned by WMS.
(b) WMS may purchase 25 shares of Xxxxxxx Stock from Xxxxxxx
on such terms as they may agree, such shares to remain subject to
all of the provisions of this Agreement to the same extent as all
other shares of Xxxxxxx stock owned by WMS."
4. The Stockholders Agreement is hereby further amended by adding a
new Section 4.12.1 to read as follows:
"4.12.1 (a) The Xxxxxxx Nominee may dispose of fifteen (15) shares
of Xxxxxxx Stock by pledging such shares, together with any shares
or dividends issued in respect thereof (the "Xxxxxxx Collateral"),
to WMS Industries Inc. as security for its Indemnification
Obligations.
(b) Xxxxxxx may dispose of seven and one-half (7.5)
shares of Xxxxxxx Stock by pledging such shares, together with any
shares or dividends issued in respect thereof (the "Xxxxxxx
Collateral"), to WMS Industries Inc. as security for his
Indemnification Obligation."
5. The Stockholders Agreement is hereby further amended by adding a
new Section 4.12.2 to read as follows:
"4.12.2 If WMS Industries Inc. shall foreclose on any portion of the
Xxxxxxx Collateral or Xxxxxxx Collateral or otherwise taking
possession of the Collateral in satisfaction of all or any portion
of the Indemnification Obligations (collectively, the "Collateral"),
such shares may (i) be registered in the name of WMS Industries
Inc., and WMS Industries Inc. shall agree in writing to be bound by
all of the provisions of this Agreement to the same extent as all
other parties
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hereto, or (ii) WMS Industries Inc. may Dispose of such shares to
WMS Hotel, and such shares shall remain subject to all the
provisions of this Agreement to the same extent as all other Xxxxxxx
Stock owned by WMS."
6. The Stockholders Agreement is hereby further amended by adding a
new Section 4.12.3 to read as follows:
"4.12.3 Notwithstanding anything to the contrary in this Article 4,
except for Section 4.3, as of the date hereof if the Collateral or
any portion thereof, is sold, transferred, assigned or disposed of
in any manner, to any third party, by reason of foreclosure or other
actions taken by WMS Industries Inc. to realize on the Collateral,
such sale, transfer, assignment or disposition shall be permitted
and such third party shall take the Collateral free and clear of any
restrictions or rights under this Agreement."
7. This First Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all of the counterparts shall together constitute one and the same
instrument.
8. The amendments set forth herein are limited precisely as written
and shall not be deemed to be a consent to any modification or waiver of any
other term or condition of the Stockholders Agreement or any other documents
referred to therein.
9. This First Amendment, including the validity hereof and the
rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the law of the State of New York, without giving
effect to the choice of law provisions thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective duly authorized officers or
representatives on the date first above written.
WMS HOTEL CORPORATION
By: /s/ ________________________________
Xxxxx X. Xxxxxxxx,
Chairman
By: /s/ ________________________________
XXXXXX X. XXXXXXX, as Nominee
By: /s/ ________________________________
XXXX X. XXXXXXX
XXXXXXX DE PUERTO RICO
ASSOCIATES, INCORPORATED
By: /s/ ________________________________
Xxxxx X. Xxxxxxxx,
Chairman and Chief Executive Officer
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