-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MupnPBM6TGexTG7mFRWphYYnlOhp9liqd8ta8kwGwI41X7wP9j9knSrVYvr4rjwW z2HitBvnoKE1fizFRGiGzQ== 0000927016-96-000129.txt : 19960423 0000927016-96-000129.hdr.sgml : 19960423 ACCESSION NUMBER: 0000927016-96-000129 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960422 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHANCELLOR CORP CENTRAL INDEX KEY: 0000724051 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 042626079 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-35065 FILM NUMBER: 96549231 BUSINESS ADDRESS: STREET 1: 745 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6177288500 MAIL ADDRESS: STREET 1: 745 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHANCELLOR CORP CENTRAL INDEX KEY: 0000724051 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 042626079 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 745 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6177288500 MAIL ADDRESS: STREET 1: 745 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02111 SC 13D/A 1 SCHEDULE 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2 )* ---------- CHANCELLOR CORPORATION - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.01 par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 1588 28 10 3 - -------------------------------------------------------------------------------- (CUSIP Number) Stephen G. Morison, Vice Chairman and Chief Executive Officer Chancellor Corporation, 745 Atlantic Avenue, Boston, Massachusetts 02111 (617) 728-8500 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 12, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for the reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes) Page 1 of 14 Pages SCHEDULE 13D - ------------------------------------- -------------------------------------- CUSIP No. 1588 28 10 3 Page 2 of 14 Pages ------------------------- ---------- --------- - ------------------------------------- -------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Stephen G. Morison - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 984,812 SHARES ----------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY --0-- EACH ----------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 984,812 WITH ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER --0-- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 984,812 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION Page 2 of 14 Pages SCHEDULE 13D - ------------------------------------- ------------------------------------- CUSIP No. 1588 28 10 3 Page 3 of 14 Pages ------------------------- ---------- --------- - ------------------------------------- ------------------------------------- - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Bruce M. Dayton - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 46,321 SHARES ----------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY --0-- EACH ----------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 46,321 WITH ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER --0-- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 46,321 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION Page 3 of 14 Pages SCHEDULE 13D - ------------------------------------ ------------------------------------ CUSIP No. 1588 28 10 3 Page 4 of 14 Pages ------------------------ ---------- --------- - ------------------------------------ ------------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Thomas W. Killilea - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 175,375 SHARES ----------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY --0-- EACH ----------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 175,375 WITH ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER --0-- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 175,375 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION Page 4 of 14 Pages SCHEDULE 13D - ------------------------------------- ------------------------------------- CUSIP No. 1588 28 10 3 Page 5 of 14 Pages ------------------------- ---------- --------- - ------------------------------------- ------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Richard D. Rizzo - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 27,000 SHARES ----------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,585,989 (only as to matters other than EACH election of directors) REPORTING ----------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 27,000 ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER --0-- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,612,989 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 25.7% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION Page 5 of 14 Pages This amended statement is being filed jointly by the persons named in Item 2 below (including Richard D. Rizzo, a new director who is being added by amendment hereto as of April 12, 1996, and Bruce M. Dayton and Thomas W. Killilea, who will cease to be reporting persons after the filing of this amendment) who are directors of Chancellor Corporation. Such persons, although filing jointly, had voting power over certain shares of stock only in their capacity as directors and do not acknowledge that they constitute a "group" within the meaning of Rule 13d-1 under the Securities Exchange Act of 1934 (the "Exchange Act"). Item 1. Security and Issuer. ------------------- (a) The name of the subject company is Chancellor Corporation, a Massachusetts corporation (the "Company"). The address of its principal executive offices is 745 Atlantic Avenue, Boston, Massachusetts 02111. (b) The class of securities to which this statement relates is the Common Stock, $.01 par value per share, of the Company. Item 2. Identity and Background. ----------------------- (a)-(c) The name and address of each person who is filing this statement (a "Reporting Person"), together with his title with the Company and principal occupation, are as follows:
Name and Address Title with Company Principal Occupation - --------------------- ------------------ ----------------------- Stephen G. Morison President, Chief Chief Executive Officer 745 Atlantic Avenue Executive Officer of the Company Boston, MA 02111 and a Director Bruce M. Dayton Director Senior Financial 745 Atlantic Avenue Consultant, Wingate Boston, MA 02111 Group of Companies Thomas W. Killilea Director Senior Vice President, 745 Atlantic Avenue Oppenheimer & Co. Boston, MA 02111 Richard D. Rizzo Director Principal, The Andover 12 Algonquin Avenue Capital Group, Inc. Andover, MA 01810
(d)-(e) None of the Reporting Persons, during the last five years, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor was he a party to a civil proceeding of a judicial or administration body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities Page 6 of 14 Pages subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each Reporting Person is a U.S. citizen. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- Substantially all of the shares beneficially owned by Mr. Morison are (i) shares awarded to him as an employee benefit or (ii) unexercised stock options shares over which he has voting power under a voting agreement. Mr. Morison paid no cash or other property for these shares. For a total of 173,312 shares owned outright by him, Mr. Morison paid a total of $24,100 in cash. Such amounts came from personal funds. If and when Mr. Morison exercises outstanding stock options, he would expect to use personal funds. Likewise, all of Mr. Rizzo's beneficially owned shares are option shares or shares over which he has voting power, with respect to which he has paid no cash or other property. Mr. Rizzo owns no shares outright and has not paid any amount for shares. Item 4. Purpose of Transaction. ---------------------- The Company has awarded shares to Mr. Morison and stock options to all three Reporting Persons and to other employees and directors of the Company from time to time in recognition of their services to the Company, as an incentive to their future efforts and as an inducement for them to remain in the Company's employment or to serve as directors. The Company entered into the Voting Agreement dated as of April 12, 1996 that is described in Item 6 below (the "Long-Term Voting Agreement") and its predecessor Interim Voting Agreement dated July 25, 1996 (the "Interim Voting Agreement") in order to provide for a mutually satisfactory set of arrangements for the election of directors and governance of the Company among its largest stockholder, Vestex Capital Corporation (together with its affiliates, "Vestex"), and its directors. The manner in which the shares covered by the Voting Agreement are to be voted is among the matters specified in such Agreement. This includes the election as directors of five persons designated by the Company's incumbent directors (other than affiliates of Vestex) or their successors (currently, the four Reporting Persons) and Mr. Rizzo's right individually to vote certain shares that are subject to the agreement in regard to matters other than the election of directors. These voting rights have been agreed upon in order to provide Company management and outside directors with a greater voice in the governance of the Company after Vestex's investment in the Company than they would have if there were no contractual provisions regarding the voting of Vestex's shares. Page 7 of 14 Pages As heretofore reported by the Company, at the time the Interim Agreement was signed Vestex had subscribed to purchase from the Company 5,000,000 shares of convertible preferred stock in December 1995, following which purchase Vestex would have held a majority of the Company's outstanding shares. The voting of such shares, together with those beneficially owned by Mr. Morison, would thereafter have been governed by a new long-term voting agreement. However, on September 25, 1995 Vestex defaulted in its obligations to the Company, and voting power over Vestex's 1,600,000 shares of Common Stock was therefore been transferred to the Reporting Persons pursuant to the terms of the Interim Agreement. On April 12, 1996 the Company entered into a revised recapitalization and stock purchase agreement with Vestex and issued 5,000,000 shares of Series AA Convertible Preferred Stock to Vestex. Concurrently, the parties entered into the Long-Term Voting Agreement in substitution for the Interim Voting Agreement. The Reporting Persons have no plans at present relating to (a) the acquisition by any person of additional securities of the Company or the disposition of securities of the Company (except that the Company is currently conducting a private offering of up to 4,000,000 shares of its Common Stock to certain private investors who are unaffiliated with the Company, the Reporting Persons and Vestex), (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries, (c) any sale or transfer of a material amount of assets of the Company or any of its subsidiaries, (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board (except for the right of each of (i) Vestex and (ii) the Reporting Persons to nominate, pursuant to the provisions of the Voting Agreement, one additional person to serve as a director of the Company and to nominate successors to certain directors); (e) any material change in the present capitalization (apart from the ongoing private offering of Common Stock) or dividend policy of the Company, (f) any other material change in the Company's business or corporate structure, (g) any changes in the Company's charter or bylaws or other actions which may impede the acquisition of control of the Company by any person, (h) causing any class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) any class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act, or (j) any action similar to any of those enumerated above. Page 8 of 14 Pages Item 5. Interest in Securities of the Issuer. ------------------------------------ (a) Each Reporting Person beneficially owns the following numbers of shares, following the issuance on April 12, 1996 of the 5,000,000 shares of Series AA Convertible Preferred Stock to Vestex and the transfer on April 12, 1996 of voting power as to matters other than the election of directors over 1,600,000 shares owned by Vestex from the Reporting Persons (subject to the terms of the Interim Voting Agreement) to Vestex (subject to the terms of the Long-Term Voting Agreement) and the transfer on April 12, 1996 of voting power as to matters other than the election of directors over 2,585,989 shares of Series AA Convertible Preferred Stock owned by Vestex to Mr. Rizzo (subject to the terms of the Long-Term Voting Agreement):
Number Nature of Percentage of Shares Beneficial Ownership of Class(1) --------- -------------------- ----------- Pro Mr. Morison Actual Forma(2) ----------- ------ -------- 549,312 Owned outright 5.0% 3.8% 435,500 Stock options exercisable within 60 days hereafter 4.0% 3.0% --------- ------ -------- 984,812 Total 9.0% 6.8% Mr. Dayton ---------- 38,821 Owned outright * * 7,500 Stock options exercisable within 60 days hereafter * * --------- ------ -------- 46,321 Total * * Mr. Killilea ------------ 125,375 Owned outright 1.2% * 50,000 Stock options exercisable within 60 days hereafter * ---------- * ------ -------- 175,375 Total 1.7% 1.2%
Page 9 of 14 Pages
Mr. Rizzo --------- 0 Owned outright 27,000 Stock options exercisable within 60 days hereafter * * 2,585,989 (3) Shares over which this 25.4% 7.1% Reporting Person has voting power as to matters other than the election of directors --------- ------ ------- 2,612,989 (3) Total 25.7% 7.4%
- ---------------------------------- * Less than 1% of such shares (1) Certain of the above percentages differ from each other because Securities and Exchange Commission rules require each individual's option shares to be separately included in the calculation of shares outstanding when expressing such individual's beneficial ownership in percentage terms. (2) Giving effect to the issuance and sale of an additional 4,000,000 shares of Common Stock that are currently being offered by the Company in a private placement, as if such shares had been issued and outstanding on April 12, 1996. (3) Subject to reduction to 1,001,989 shares and 1,028,989 shares, respectively, if all such 4,000,000 additional shares of Common Stock are sold. (b) Messrs. Morison, Dayton, Killilea and Rizzo have sole power to vote and to dispose of 984,812, 46,322, 175,375 and 27,000 shares set forth below their respective names (including shares which they may acquire through exercise of stock options). Mr. Rizzo has sole power to vote a total of 2,585,989 shares on all matters other than the election of directors, but has no power to dispose of such shares and no economic interest therein. (c) The Reporting Persons effected the following transactions in or relating to the Company's Common Stock during the past 60 days: (i) On April 12, 1996 Vestex purchased from the Company 5,000,000 shares of Series AA Convertible Preferred Stock; (ii) On April 12, 1996 the Reporting Persons ceased to have shared voting power with respect to the 1,600,000 shares Page 10 of 14 Pages owned by Vestex and 650,239 shares owned by certain employees; and (iii) On April 12 1996, Mr. Rizzo acquired voting power as to matters other than the election of directors with respect to 2,427,589 shares owned by Vestex. (d) The Reporting Persons do not know of any other person who has the right to receive or the power to direct the receipt of dividends from, or the proceeds of sale of, any shares referred to above. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect --------------------------------------------------------------------- to Securities of the Issuer. --------------------------- Interim Voting Agreement - ------------------------ The Company, Vestex, the Reporting Persons and the Company's employees entered into the Interim Voting Agreement on July 25, 1995. Pursuant to the Interim Voting Agreement, for so long as Mr. Morison was an officer or director of the Company following Vestex's default in its payment obligations to the Company (but in no event later than July 31, 2000), the employees agreed (a) to vote the subject shares for the election as directors of the nominees of the Company's continuing directors other than nominees of Vestex ("Continuing Directors") and (b) in other matters, to vote the subject shares as directed by Mr. Morison. Vestex agreed that, in the event that it defaulted in its obligation to purchase preferred stock from the Company, the Reporting Persons and Mr. Morison would assume similar voting control over the Common Stock owned by Vestex, and between September 25, 1995 and April 12, 1996 they did so. Long-Term Voting Agreement - -------------------------- The Long-Term Voting Agreement provides for the election of a Board of seven Directors, two of whom will be nominated by Vestex and five of whom will be Continuing Directors subject to election by the stockholders other than Vestex ("Minority Stockholders"). The Long-Term Voting Agreement also requires that, until April 12, 1998, certain issuances of stock, mergers, charter and by- law amendments and other transactions, in which Vestex has an interest which conflicts with or is distinct from that of the Company, will be subject to approval by the Continuing Directors or the Minority Stockholders ("Minority Approval"). The Long-Term Voting Agreement also provides that Mr. Rizzo, a new Continuing Director (or a successor jointly appointed by Vestex and the Company, or, failing such appointment, a successor selected by the Board of Directors of the Company) will be Page 11 of 14 Pages authorized to vote, in accordance with all applicable requirements of the Long- Term Voting Agreement and otherwise at his discretion, that number of shares owned by Vestex which from time to time exceed 39.6% of all shares of capital stock of the Company then outstanding. The Interim Voting Agreement has been superseded in its entirety by the Long-Term Voting Agreement. Continuing Directors. Stephen G. Morison, Bruce M. Dayton, Thomas W. -------------------- Killilea and Richard D. Rizzo will be the four initial Continuing Directors. Mr. Morison will be subject to re-election in 1996 and 1998, Mr. Rizzo in 1997 and 2000 and Messrs. Dayton and Killilea in 1996 and 1999. The Long-Term Voting Agreement provides that, at all elections of directors prior to the Annual Meeting of Stockholders to be held in the year 2001, the Company will nominate each of the initial Continuing Directors for re-election or, if any such Continuing Director does not choose to stand for re-election, a nominee designated by a majority of the Continuing Directors then in office. Vestex has agreed to vote all of its outstanding stock in favor of such nominees if they are unopposed. If any such nominee is opposed, Vestex will vote all of its outstanding stock in favor of the candidate who receives a plurality of the votes cast by the Minority Stockholders. Vacancies which occur among the Continuing Directors will be filled as designated by the remaining Continuing Directors. Minority Approval. Until April 12, 1998, the following types of ----------------- transactions will be subject to approval by either a majority of the Continuing Directors then in office or the holders of a majority of the shares of common stock held by Minority Stockholders: (i) any issuance or transfer by the Company of any stock or other securities of the Company to Vestex (other than the issuance of common stock pursuant to the conversion of Series AA Convertible Preferred Stock), (ii) any merger, consolidation or sale of assets involving the Company and Vestex, (iii) any action taken by the Company which results in a going private transaction subject to Rule 13e-3 under the Securities Exchange Act of 1934, or (iv) the payment to Vestex of any fee or other similar type of benefit (other than as contemplated in the Recapitalization Agreement, as amended by the Amendment and a related consulting agreement). Vestex has agreed not to attempt to commence or effect any of such transactions without first obtaining the necessary approval. The foregoing does not apply to any transaction in which Vestex does not have a conflict of interest, such as the issuance of securities to an unrelated purchaser (notwithstanding that Vestex would be entitled to receive a fee in connection with such transaction). The foregoing summary is qualified by reference to the Long-Term Voting Agreement, a copy of which is set forth as Exhibit 6 hereto. Page 12 of 14 Pages Item 7. Material to be Filed as Exhibits. -------------------------------- The following documents have been heretofore filed as Exhibits to this statement, or are being filed herewith: Exhibit Description ------- ----------- 1.* Amendment No. 3 to Recapitalization and Stock Purchase Agreement dated as of July 14, 1995 among the Company, Bruncor, Inc. and Vestex. 2.* Interim Voting Agreement dated as of July 25 among the Company, Vestex, Stephen G. Morison and the Company's other Employees. 3.* Form of contemplated long-term voting Agreement among the Company, Vestex, Steven G. Morison, Bruce M. Dayton and Thomas W. Killilea. 4.* Schedule 13D Agreement 5.** Amendment No. 4 to Recapitalization and Stock Purchase Agreement dated as of April 12, 1996. 6.** Voting Agreement dated as of April 12, 1996 among the Company, Vestex Corporation, Vestex Capital Corporation, Messrs. Morison, Dayton, Killilea and Richard D. Rizzo. 7.** Amended Schedule 13D Agreement * Heretofore filed. ** Filed herewith. Page 13 of 14 Pages SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: April 12, 1996 /s/Stephen G. Morison ----------------------- Stephen G. Morison ----------------------- Print Name Date: April 12, 1996 /s/Bruce M. Dayton ----------------------- Bruce M. Dayton ----------------------- Print Name Date: April 12, 1996 /s/Thomas W. Killilea ----------------------- Thomas W. Killilea ----------------------- Print Name Date: April 12, 1996 /s/Richard D. Rizzo ----------------------- Richard D. Rizzo ----------------------- Print Name Page 14 of 14 Pages EX-5 2 AMENDMENT NO. 4 STOCK PURCHASE AGREEMENT Exhibit 5 --------- AMENDMENT NO. 4 TO RECAPITALIZATION AND STOCK PURCHASE AGREEMENT THIS AMENDMENT NO. 4 TO RECAPITALIZATION AND STOCK PURCHASE AGREEMENT (this "Amendment"), dated as of this 11th day of April, 1996, by and between CHANCELLOR CORPORATION, a Massachusetts corporation (the "Company"), VESTEX CORPORATION, a Massachusetts corporation (the "Purchaser"), and VESTEX CAPITAL CORPORATION, a Massachusetts corporation (the "Assignee" and, together with the Purchaser, "Vestex"), amends, modifies and supplements that certain Recapitalization and Stock Purchase Agreement dated as of September 20, 1994 among the Company, the Purchaser and Bruncor Inc., a New Brunswick corporation ("Bruncor") (as amended by Amendment No. 1 to Recapitalization and Stock Purchase Agreement dated as of November 18, 1994, that certain letter agreement dated as of February 28, 1995 ("Amendment No. 2"), and Amendment No. 3 to Recapitalization and Stock Purchase Agreement dated as of July 14, 1995, each among the Company, the Purchaser and Bruncor, the "Agreement") as the Agreement relates to the Company and the Purchaser, but not as it relates to Bruncor. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to them in the Agreement. WHEREAS, the parties hereto wish to amend, modify and supplement the Agreement upon the terms and conditions set forth hereinbelow; - 2 - NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Preferred Stock; Purchase Price; Expenses; Closing Date. The Assignee ------------------------------------------------------- hereby agrees to pay to the Company, by bank check or wire transfer, and in addition to amounts previously paid by the Purchaser to the Company pursuant to the Agreement, $1,350,000.00 (the "Purchase Price"). Upon receipt of the Purchase Price, the Company shall issue and deliver to the Assignee 5,000,000 shares of Series AA Convertible Preferred Stock (the "Preferred Stock") having the terms and conditions set forth on Exhibit A hereto. Immediately upon --------- receipt of the Purchase Price, the Company shall reimburse to the Purchaser, by wire transfer, its costs and expenses in connection with due diligence, negotiation and closing the transactions contemplated hereby stipulated to be in the amount of $312,500.00. The payment by the Assignee to the Company of the Purchase Price, the reimbursement by the Company to the Purchaser of its costs and expenses, and the issuance by the Company to the Assignee of the Preferred Stock, shall take place at a closing (the "Preferred Stock Closing") to be held on the date of this Amendment (the "Closing Date"), or such later date - 3 - to which the parties may agree (the "Delayed Closing Date"), but in no event later than May 14, 1996 (the "Final Closing Date"), in any case, at 10:00 a.m. at the offices of the Company. If the Preferred Stock Closing does not occur on or before the Final Closing Date, the Agreement, as amended hereby, shall be null and void. 2. Common Stock Offering; Modification of Preferred Stock Closing. Vestex -------------------------------------------------------------- acknowledges that the Company is currently conducting an offering of up to 9,000,000 shares of its Common Stock (the "Common Stock Offering"). Notwithstanding anything contained herein to the contrary, the number of shares of Preferred Stock to be issued to the Assignee shall be reduced from 5,000,000 by that number of shares of Common Stock (if any) in excess of 4,000,000 for which subscriptions have been received by the Company on or before the Preferred Stock Closing, and the Purchase Price shall be reduced by $.27 per share for each share of Preferred Stock (if any) less than 5,000,000 issued to the Assignee at the Preferred Stock Closing. Upon the Preferred Stock Closing, the Common Stock Offering shall be terminated if subscriptions for 4,000,000 or more shares of Common Stock have then been subscribed for, or if fewer than 4,000,000 shares of Common Stock have then been subscribed for, the Common Stock - 4 - Offering shall be reduced to a maximum of 4,000,000 shares of Common Stock. 3. Other Closing Matters. At the Preferred Stock Closing, the Company, --------------------- the Assignee and/or the Purchaser (as the case may be) shall execute and deliver (a) a Registration Rights Agreement in the form attached hereto as Exhibit B, --------- (b) a Voting Agreement in the form attached hereto as Exhibit C, (c) Releases in --------- the forms attached hereto as Exhibit D, and (d) an Amendment to Consulting --------- Agreement in the form attached hereto as Exhibit E. --------- 4. Further Amendments to Agreement. The Agreement is hereby further ------------------------------- amended by eliminating the Escrow Agreement and any references thereto, it being agreed that the Purchase Price shall be immediately available to the Company for working capital purposes. The date by which the Company's current severance policies shall be terminated pursuant to Article V(n)(iv) of the Agreement is hereby amended to be the anniversary of the Preferred Stock Closing. 5. Revised Schedules. The Schedules to the Agreement are hereby revised ----------------- and restated in the forms attached hereto. - 5 - 6. Affirmation of Agreement. Except as modified, amended and supplemented ------------------------ hereby, the Agreement is hereby affirmed, ratified and approved as the legal, valid and binding agreement of the parties thereto, enforceable in accordance with its terms. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date and year first above written. CHANCELLOR CORPORATION VESTEX CORPORATION By: /s/ Stephen G. Morison By: /s/ Brian M. Adley ---------------------- ------------------ Title: CEO Title: CEO ------------------- --------------- VESTEX CAPITAL CORPORATION By: /s/ Brian M. Adley ------------------ Title: CEO --------------- [SCHEDULES AND EXHIBITS OMITTED] EX-6 3 VOTING AGREEMENT Exhibit 6 --------- VOTING AGREEMENT VOTING AGREEMENT, dated as of April 11, 1996 (the "Agreement"), is made by and among Chancellor Corporation, a Massachusetts corporation (the "Company"), Vestex Corporation and Vestex Capital Corporation, each a Massachusetts corporation (collectively, "Vestex"), each of those persons who are directors of the Company and who have entered into this Agreement (individually referred to as a "Director" and collectively referred to as the "Directors") and each of those persons who are employees of the Company and who have entered into this Agreement (individually referred to as an "Employee" and collectively referred to as the "Employees"). W I T N E S S E T H: ------------------- WHEREAS, the Company, Bruncor Inc., a New Brunswick corporation and an affiliate of the Company ("Bruncor"), and Vestex have entered into a Recapitalization and Stock Purchase Agreement dated as of September 20, 1994, as successively amended by four amendments (the "Recapitalization Agreement"), providing for, among other things, the purchase by Vestex of 1,600,000 shares of the Company's Common Stock (the "Common Shares") from Bruncor and the subsequent purchase by Vestex of 5,000,000 shares of the Company's Series AA Convertible Preferred Stock (the "Preferred Shares") from the Company (such transactions referred to as the "Purchases"); WHEREAS, it is the intention of the parties that, following the consummation of both the Purchases, the Board of Directors of the Company will consist of up to seven members, up to two of whom will be nominees of Vestex; and WHEREAS, it is the intention of the parties that upon consummation of the Purchases the business of the Company and its subsidiaries will continue to be conducted in the ordinary and usual course of its business with such changes as are determined by the Board of Directors of the Company; and WHEREAS, it is the intention of Vestex to preserve the goodwill of the Company and to allow the Company to maintain and expand the valuable business relationships established by it; and WHEREAS, the Company intends, subject to the continuing review of the Company's Board of Directors, to continue the Company's efforts to expand its business, and to permit the Company to operate its business under its current management and from its existing location and under its current corporate name; and WHEREAS, the parties understand the importance and desirability of maintaining an active public trading market for the Company's common stock; and WHEREAS, Vestex has no present intention of taking any action which would cause (a) the Company's common stock to cease to be quoted in the over-the- counter market by member firms of the National Association of Securities Dealers Inc. or (b) the Company to no longer be subject to Sections 12 or 13 of the Securities Exchange Act of 1934, as amended; and - 2 - WHEREAS, the parties intend that certain types of corporate transactions proposed to occur within two years following the consummation of the Purchases will require the approval of either (i) the holders of a majority of the outstanding shares of the Company's common stock not held by Vestex or its affiliates or (ii) a majority of those directors then in office who are not affiliates of Vestex and who either were directors of the Company prior to the Purchases or subsequently were elected as successor directors (A) with a plurality of the votes cast by the holders of the outstanding shares of the Company's common stock not held by Vestex or its affiliates or (B) by designation of a majority of the Continuing Directors then in office ("Continuing Directors"); and WHEREAS, the parties hereto wish to agree on certain other matters relating to the voting of certain shares of the Company's common stock and preferred stock held by Vestex and to the operation of the business of the Company following the consummation of the Purchases; NOW, THEREFORE in consideration of the mutual covenants and agreements set forth herein, the parties hereto hereby agree as follows: ARTICLE I --------- 1.1. Voting of Shares. ---------------- (a) In any and all elections of directors of the Company (whether at a meeting or by written consent in lieu of a - 3 - meeting) prior to the Company's 2001 Annual Meeting of Stockholders, Vestex, the Directors and the Employees shall vote or cause to be voted ("Vote") any and all Shares (as defined in Section 1.2 below) owned by it or its affiliates, or over which it or its affiliates have voting control, and otherwise use their respective best efforts, so as to fix the number of directors of the Company at seven and to elect directors as provided herein. Upon consummation of Vestex's purchase of the Preferred Shares, the Board shall consist of up to two members designated by Vestex (one of whom shall be subject to ratification by a majority of the directors theretofore in office ("Ratification")) and five members who shall be Continuing Directors (one of whom shall be subject to Ratification). The directors initially designated by Vestex are Brian M. Adley and another person yet to be designated (the "New Vestex Nominee"), and the directors initially designated by the Continuing Directors are Bruce M. Dayton, Thomas W. Killilea, Richard D. Rizzo, Stephen G. Morison and another person yet to be designated (the "New Non-Vestex Nominee"). The designation of the New Vestex Nominee and the New Non-Vestex Nominee and the designation of their respective successors shall require Ratification. Messrs. Dayton and Killilea and the New Vestex Nominee shall be subject to re-election at the Company's 1996 Annual Meeting of Stockholders (and, if re-elected in 1996) at the 1999 Annual Meeting of Stockholders, Messrs. Adley and Rizzo shall be subject to re-election at the Company's 1997 Annual Meeting of Stockholders (and, if re-elected in 1997) at the 2000 Annual - 4 - Meeting of Stockholders, and Mr. Morison (who would have been subject to re- election at the 1995 Annual Meeting of Stockholders, had such a meeting been held) and the New Non-Vestex Nominee shall be subject to re-election at the Company's 1996 Annual Meeting of Stockholders (and, if re-elected in 1996) at the 1998 Annual Meeting of Stockholders. All Shares subject to this Agreement shall be voted (i) at the 1996 Annual Meeting for the re-election of Messrs. Dayton, Killilea and Morison and, if they have by then been nominated and received Ratification, the New Vestex Nominee and the New Non-Vestex Nominee, for the respective terms specified above, (ii) at the 1997 and 2000 Annual Meetings for the re-election of Messrs. Adley (or other nominee of Vestex) and Rizzo, (iii) at the 1998 Annual Meeting for the re-election of Mr. Morison and for the election of one other nominee designed by a majority of the directors then in office (who may, but need not, be the New Non-Vestex Nominee, (or up to two Continuing Directors in substitution for them), and (iv) at the 1999 Annual Meeting for the re-election of Messrs. Dayton and Killilea (or up to two other Continuing Directors in substitution for them) and for one other nominee designated by a majority of the directors then in office (who may, but need not, be the New Vestex Nominee. At any re-election of a Continuing Director, the parties shall cast all of their votes in favor of such Continuing Director if he chooses to stand for re-election and is unopposed; in favor of the designee of a majority of the Continuing Directors then in office if such Continuing Director chooses not to stand for re-election and such - 5 - designee is unopposed; or, in the case of a contested election, in favor of the candidate who receives a plurality of the votes cast by the holders of the outstanding shares of the Company's common stock not held by Vestex or its affiliates. (b) The Company shall provide the Continuing Directors and Vestex with 30 days' prior written notice of any intended mailing of a notice to stockholders for a meeting at which directors are to be elected (except that only 10 days' prior notice shall be required prior to the 1996 Annual Meeting). Vestex, the Continuing Directors and the Board of Directors shall give written notice to all other parties to this Agreement, no later than 20 days prior to such mailing (3 days in the case of the 1996 Annual Meeting), of the persons designated by Vestex, by the Continuing Directors and by the entire Board, respectively, as nominees for election as directors. The Company agrees to nominate as directors the individuals designated, or to be designated, pursuant to Section 1(a). If Vestex or the Continuing Directors shall fail to give notice to the Company as provided above, it shall be deemed that the designees of Vestex or the Continuing Directors, as the case may be, then serving as directors shall be their designees for reelection. (c) Vestex shall not vote to remove any director designated by the Continuing Directors or by the entire Board, and the Continuing Directors shall not vote to remove any director designated by Vestex or by the entire Board, except upon (i) the written instruction of the party or parties who designated such - 6 - director or (ii) demonstration by clear and convincing evidence of bad faith or willful misconduct that has caused the Company substantial injury. In the event of any such removal, the vacancy shall be filled by a designee of Vestex, if the director whose removal occasioned the vacancy was a designee of Vestex, by a designee of the remaining Continuing Directors, if the director whose removal occasioned the vacancy was a Continuing Director, or by a designee of the entire Board, if the director whose removal occasioned the vacancy was a designee of the entire Board. 1.2. Shares. "Shares" shall mean and include any and all Preferred ------ Shares, Common Shares and other shares of capital stock of the Company, by whatever name called, which carry voting rights (including voting rights which arise by reason of default) and shall include any shares now owned or subsequently acquired by any party, however acquired, including without limitation stock splits and stock dividends. 1.3. Termination. This Agreement shall terminate in its entirety on ----------- the fifth anniversary of the date of this Agreement or on the day immediately prior to the date of the Company's 2001 Annual Meeting of Stockholders, whichever occurs first. 1.4. No Revocation. The voting agreements contained herein are ------------- coupled with an interest and may not be revoked, except by written consent of the Continuing Directors and Vestex. Each of the Continuing Directors and Vestex agrees not to take any action to amend any provisions of the Articles of Organization or the By-Laws of the Company relating to the election, removal or - 7 - indemnification of directors, or any other matter pertaining to the subject matter of this Agreement, as in effect upon consummation of the Purchases as contemplated by the Recapitalization Agreement, without the prior written consent of the Continuing Directors and Vestex. 1.5. Indemnification. In the event that any director elected --------------- pursuant to Section 1 of this Agreement shall be made or threatened to be made a part to any action, suit or proceeding with respect to which he may be entitled to indemnification by the Company pursuant to its Articles of Organization or By-Laws, or otherwise, he shall be entitled to be represented in such action, suit or proceeding by counsel of his choice and the reasonable expenses of such representation shall be reimbursed by the Company to the extent provided in or authorized by said Articles of Organization or By-Laws. The Company agrees that it shall comply with the provisions of Sections 7.04, 7.07 and 7.10 of the Recapitalization Agreement in regard to indemnification and directors' and officers' liability insurance. In consideration of entering into this Agreement, each party hereto acknowledges and agrees that, to the maximum extent permitted by applicable law, neither Mr. Rizzo, as the person entitled to direct the voting of the Shares to be Voted under Section 2.1, nor, should the entire Board succeed to the right to vote such Shares, any director, have any liability for monetary damages to Vestex or any other party based upon his acts or omissions or alleged acts or omissions in connection with the - 8 - voting of such Shares; and each such party, including without limitation Vestex, hereby irrevocably waives any right, claim or cause of action for money damages based upon the same. 1.6. Restrictive Legend. All certificates representing Shares owned ------------------ or hereafter acquired by Vestex or any transferee of Vestex bound by this Agreement shall have affixed thereto a legend substantially in the following form: "The shares of stock represented by this certificate are subject to certain voting agreements as set forth in a Voting Agreement by and among the registered owner of this certificate, the Company and certain other stockholders of the Company, a copy of which is available for inspection at the offices of the Clerk of the Company." 1.7. Transfers of Rights. Any transferee to whom Shares are ------------------- transferred by Vestex, whether voluntarily or by operation of law, shall be bound by the voting obligations imposed upon the transferor under this Agreement, and, subject to the provisions of Section 3.1 below, shall be entitled to the rights granted to the transferor under this Agreement, to the same extent as if such transferee were Vestex hereunder. ARTICLE II ---------- 2.1. Voting of Certain Shares Owned by Vestex. Commencing on the ---------------------------------------- date of this Agreement, the number of Preferred Shares specified herein (the "Shares to be Voted") shall be Voted as specified by Richard D. Rizzo (or, in the event Mr. Rizzo ceases to be a director of the Company or declines to Vote the Shares to - 9 - be Voted, as specified by a successor jointly appointed by Vestex and the Board of Directors or, in the absence of such an appointment, as specified by a majority of the entire Board of Directors). The number of Shares to be Voted shall be equal to the amount by which (a) all Shares owned of record or beneficially by Vestex and its affiliates shall exceed (b) 39.6% of the total number of shares of common stock and preferred stock of the Company then outstanding, without deeming shares underlying unexercised stock options or warrants to be outstanding. The Shares to be Voted shall be Voted for the election of directors in the manner provided in Section 1 and in respect of all other matters which may be presented for action by the Company's stockholders, whether at an Annual or Special Meeting or by written action, as designated by Mr. Rizzo (or by a successor or by a majority of the entire Board of Directors, as the case may be). The provisions of this Section 2.1 shall continue in effect for 18 months following the date of this Agreement, provided that they shall terminate if at any time during such 18-month period the number of shares referred to in clause (b) above exceeds the number of shares referred to in clause (a) above, so that there are no longer any Shares to be Voted. The number of Shares to be Voted shall increase or decrease automatically to the extent that changes in the number of shares referred to in clause (a) or (b) above shall occur from time to time. 2.2 Special Approval. Prior to April 11, 1998, any of the following ---------------- transactions: - 10 - (a) any issuance or transfer by the Company of capital stock or other securities of the Company to an interested stockholder, considering Vestex or any of its affiliates or associates (as defined in Mass. Gen. Laws c.110F, (S)3) as being interested stockholders for the purposes hereof, other than the issuance of common stock pursuant to the conversion of Preferred Shares; or (b) any merger, consolidation or sale of assets described in Mass. Gen. Laws c.110F, (S)3(c)(2), involving the Company and any interested stockholder, considering Vestex and each of its respective affiliates and associates as being an interested stockholder for the purposes hereof; or (c) any action taken by the Company which results in a going private transaction subject to Rule 13e-3 under the Securities Exchange Act of 1934; or (d) the payment to any interested stockholder of any fee or other benefit described in Mass. Gen. Laws c.110F, (S)3(c)(5), considering Vestex and each of its affiliates and associates as being an interested stockholder for purposes hereof, other than fees contemplated by the Recapitalization Agreement and the exhibits thereto; shall require the approval of either (i) a majority of the Continuing Directors then in office or (ii) the holders of a majority of the outstanding shares of the Company's Common Stock not held by Vestex or its respective affiliates; and the Company or Vestex shall not attempt to commence or effect any of such transactions without obtaining such approval. The - 11 - foregoing provisions do not apply to any transaction (such as the issuance of shares of capital stock to non-affiliates of Vestex or mergers with non- affiliates of Vestex) in which Vestex and its affiliates are not in a conflict of interest position. ARTICLE III ----------- 3.1. Assignment. The rights of Vestex hereunder may from time to ---------- time be assigned as a whole, but only if assigned together with any rights of Vestex under the Recapitalization Agreement, to any direct or indirect wholly- owned subsidiary of Vestex; provided, however, that any such assignment shall -------- ------- not relieve Vestex of its obligations hereunder. Vestex may also assign a portion of its rights hereunder to any purchaser of Shares which undertakes in writing to be bound by the obligations of Vestex hereunder, in which case all decisions to be made by Vestex and such other purchaser shall be made by the holders of a majority of the Shares outstanding from time to time. Notwithstanding any provision of this Agreement to the contrary, Vestex may, in its discretion, sell Shares, free and clear of the obligations imposed under this Agreement and without any benefit of the rights conferred under this Agreement: (a) in a public offering or in the public securities markets; or (b) in a private transaction to one or more purchasers which are not "affiliates" or "associates" (as defined in Mass. Gen. Laws c. 110F (S)3) of Vestex in an amount not exceeding 1,000,000 Shares to any one purchaser or "group" of purchasers (within the meaning - 12 - of Rule 13d-1 under the Securities Exchange Act of 1934, as amended); provided, -------- however, that Shares sold by Vestex in any transaction which is primarily - ------- intended as a device or artifice to avoid the obligations imposed by this Agreement, shall remain subject to such obligations and the benefits conferred by this Agreement. Other than as permitted by this Section 3.1, this Agreement shall not be assignable by any party hereto without the prior written consent of the other parties. 3.2. Notices. All notices and other communications hereunder shall be in ------- writing and shall be deemed to have been duly given (and shall be deemed to have been duly received if so given) if personally delivered or sent by telegram, cable, or telex, or by registered or certified mail, postage prepaid, addressed to the respective parties as follows: If to any Continuing Director, to him at the address listed below, with a copy to the Company and to Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, Attention: Edward Young, Esq. Brian M. Adley c/o Vestex Corporation 12 Waltham Street Lexington, Massachusetts 02173 Bruce M. Dayton 10 Dover Lane Lexington, Massachusetts 02173 Thomas W. Killilea 14 Union Wharf Boston, Massachusetts 02109 Stephen G. Morison Gingerbread Hill Marblehead, Massachusetts 01945 - 13 - Richard D. Rizzo 12 Algonquin Avenue Andover, Massachusetts 01810 If to the Company: Chancellor Corporation 745 Atlantic Avenue Boston, Massachusetts 02021 Attention: President With copies to Hale and Dorr, as provided above. If to Vestex: Vestex Corporation 12 Waltham Street Lexington, Massachusetts 02173 With copies to: Hinckley, Allen & Snyder One Financial Center Boston, Massachusetts 02111 Attention: Richard C. Arrighi, Esq. or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt. 3.3. Amendment; Modification. This Agreement may only be amended or ----------------------- modified by an instrument in writing signed by Vestex and the Continuing Directors then in office. 3.4. No Waiver of Rights. No failure or delay on the part of either party ------------------- in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises thereof or of any other right, power or privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available. - 14 - 3.5. Counterparts. This Agreement may be executed in any number of ------------ counterparts, and by separate parties on separate counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same instrument. 3.6. Agreement Binding on Successors and Assigns. Subject to the ------------------------------------------- provisions of Section 3.1 hereof, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Upon election, any additional persons besides the Directors who serve as Continuing Directors shall be added as parties to this Agreement. Each Director or other Continuing Director who ceases to serve as a director in accordance with the terms of this Agreement shall thereupon automatically cease to be a party to this Agreement. 3.7. Specific Performance. The parties hereto agree that irreparable -------------------- damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 3.8. Benefit of Recapitalization Agreement. Vestex agrees that each ------------------------------------- Continuing Director shall have the benefit of the terms and conditions of the Recapitalization Agreement that relate to - 15 - the future conduct of the business of the Company and the agreement of Vestex to use their best efforts to locate and obtain capital for the Company as though such terms and conditions were set forth herein as running from Vestex to each of the Continuing Directors. Each Continuing Director shall have the right to enforce such terms and conditions on his own behalf or on behalf of the Company against Vestex. 3.9. Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the laws of the Commonwealth of Massachusetts. 3.10. Entire Agreement, Assignability, Etc. This Agreement, together with ------------------------------------ the Recapitalization Agreement, including all exhibits and schedules thereto, (i) constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof (including, without limitation, insofar as it relates to agreements among the parties hereto as distinct from agreements between such parties and other persons not parties hereto, the Interim Voting Agreement dated as of July 25, 1995), (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder, and (iii) shall not be assignable by operation of law or otherwise. IN WITNESS WHEREOF, the parties hereto have duly executed or caused this Agreement to be duly executed under seal on the day and year first above written. /s/ Brian M. Adley ------------------------------- Brian M. Adley - 16 - /s/ Bruce M. Dayton ------------------------------- Bruce M. Dayton /s/ Thomas W. Killilea ------------------------------- Thomas W. Killilea /s/ Stephen G. Morison ------------------------------- Stephen G. Morison /s/ Richard D. Rizzo ------------------------------- Richard D. Rizzo CHANCELLOR CORPORATION By:/s/ Stephen G. Morison ---------------------------- President VESTEX CAPITAL CORPORATION VESTEX CORPORATION By: /s/ Brian M. Adley By: /s/ Brian M. Adley -------------------- ----------------------------- Title: President President The following persons have become additional parties to the foregoing Agreement as of the respective dates set forth below: - ---------------------------- date - ---------------------------- date ------------------------------- [New Vestex Nominee] ------------------------------- [New Non-Vestex Nominee] - 17 - EX-7 4 AMENDED SCHEDULE 13D AGREEMENT Exhibit 7 --------- AMENDED SCHEDULE 13D AGREEMENT ------------------------------ Pursuant to Rule 13d-1(f)(1)(iii) of the Securities and Exchange Commission, the undersigned* hereby agree to file a statement on Schedule 13D on behalf of each of them with respect to their interest in the common stock, $.01 par value, of Chancellor Corporation, a Massachusetts corporation.** EXECUTED as of this 12th day of April, 1996. /s/ Stephen G. Morison ------------------------------ Stephen G. Morison /s/ Bruce M. Dayton ------------------------------ Bruce M. Dayton /s/ Thomas W. Killilea ------------------------------ Thomas W. Killilea /s/ Richard D. Rizzo ------------------------------ Richard D. Rizzo __________________________ *: (including Richard D. Rizzo) **: Effective with the filing of the Amendment, Bruce M. Dayton and Thomas W. Killilea will cease to be Reporting Persons since they are no longer the beneficial owners of 5% or more of Chancellor Corporation's outstanding common stock. -----END PRIVACY-ENHANCED MESSAGE-----